Strategic Management Theory Offers Fresh Take on the Economic Crisis
The recent financial crisis and resulting global economic downturn has been the most defining global economic event since the Great Depression. Now research which appears in the November issue of Strategic Organization, published by SAGE, illustrates new ideas and philosophies in economics from strategic management, uncovering the micro-level underpinnings of the macro-level events we witness today.
Macroeconomics experts have used traditional theories to understand the causes of the economic crisis and offer new schemes and ideas for recovery. These discussions about fiscal and monetary policy dominated much of the conversation about the crisis and what to do about it, according to one of the authors Peter Klein, from the Division of Applied Social Sciences, University of Missouri.
Klein and his co-authors argue that macroeconomics is not equipped to offer full solutions to this crisis. Its basic assumption is that factors of production, firms, and industries in the economy are homogeneous and interchangeable. Research in strategic management has consistently shown that the assumption that the economy is made up of homogeneous or interchangeable factors of production is incorrect. (more…)
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