Michael Porter

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According to his biography at the International Speakers Bureau (ISP),[1] Michael Porter is the world's most sought after business guru and strategist, and the leading authority on competitive strategy and international competitiveness.

Biography

Michael Porter is the Harvard Business School's C. Roland Christensen Professor of Business Administration and via ISB has spoken to government and business audiences including AT&T, First Boston, and Procter & Gamble (other sources include: Porter has served as a strategy advisor to top management in numerous leading U.S. and international companies, among them Caterpillar, DuPont, Royal Dutch Shell, Scotts Miracle-Gro, SYSCO, and Taiwan Semiconductor Manufacturing Company. [2]). "Focusing on necessary strategies, he tailors his message to accommodate the unique needs of your audience".

The ISB tell us he is the author of 15 books and more than 50 articles, his Competitive Strategy: Techniques for Analyzing Industries and Competitors is the leading work in its field and in its 45th printing:

"A companion book, Competitive Advantage: Creating and Sustaining Superior Performance, is in its 19th printing. In his latest book, On Competition (Harvard Business School Publishing 1998), Porter has compiled 13 articles from the Harvard Business Review. Collectively, these pieces outline Porter's perspective on modern competition."

For ISB in 1990, Porter's The Competitive Advantage of Nations introduced a theory of how nations compete; both BusinessWeek and The Financial Times (which publish Porter's writing) named it as only 'one of' the top ten business books that year, perhaps Porter's competitiveness is slipping amongst the management priesthood.

In 1992, Porter wrote Capital Choices: Changing the Way America Invests in Industry, ISB meekly mention that he has written 'on the relationship between competitiveness and the environment.' His most recent initiative is "a study of economic development in America's inner cities", which Harvard Business Review published as "The Competitive Advantage of the Inner City."

Commission on Industrial Competitiveness

President Reagan appointed Porter to his 1983 Commission on Industrial Competitiveness, chairing the group's strategy committee. [3] The fruits of the painful restructuring in the private sector pushed by 'Reaganomics' has been described thus:

"The Fortune 500 cut 2.8 million employees from its payrolls; millions more accepted early retirement or pay cuts... Chrysler... implemented two major restructuring programs, through which it endured a large number of layoffs and many plant closings, in order to achieve low-cost operations. The U.S. steel industry... cut its work force by almost two thirds — over 200,000 jobs were eliminated between 1980 and 1997... U.S. newspapers described the anguished scenes found in steel towns across America. As a result of output restraints and the closings of steel plants, these communities had been turned to ghost towns. Many former steelworkers, still finding it hard to cope with the traumas of abrupt dismissal or early retirement, simply left. Dr. Michael P. Farrell, a State University of New York professor who studied the social consequences of such massive layoffs, noted in the Christian Science Monitor that family court cases, such as divorce, domestic violence, and child abuse, had gone up among steelmen." [4]

Prominent among the 'unproductive' uses of capital, and among the structures of American society, is the military system, which is a key factor in explaining the US economic decline.

"it seems likely that the decline in US competitive strength was attributable at least in part to the size and relative importance of the US military machine. The military role of the United States was indispensable in helping to police the postwar international system, but it also constituted an enormous drain on the productive capacity of the United States."[5]

US military expenditure reached $1,500 billion between 1981 and 1986. [6] But some forms of military expenditure goes to social scientists like Porter. ISB tell us that Porter "maintains an active role in economic policy with Congress, business and foreign governments...He is leading an effort to develop a regional strategy for the presidents of the seven Central American countries." Shades of Project Camelot there. [7]

Academic career

Porter joined Harvard Business School in 1973 and became one of the school's youngest tenured professors ever. Honored with numerous titles and awards, he earned Harvard's David A. Wells Prize in Economics for his research in industrial organization, two McKinsey Awards and many others.

He earned a B.S.E. with honors in aerospace and mechanical engineering from Princeton University in 1969, an M.B.A. with high distinction from Harvard Business School and a Ph.D. in Business Economics from Harvard University.

Porter's Harvard page mentions that his primary topics of concern are strategy in terms of:

  • competition
  • competitive advantage
  • competitive strategy
  • corporate strategy
  • economic development,

Additional topics include: corporate social responsibility, economic institutions, foreign direct investment, globalization, government and business, industry evolution, industry structure, IT strategy, philanthropy, political economy, strategic planning, strategy formulation, technological innovation, tradeoffs, value profit chain. [8]

At the Harvard Business School Porter runs the Institute for Strategy and Competitiveness, and hopefully this pays the full rate of tax for a business. The recycling of material here certainly puts big business to shame. In the 'Competitive Strategy' section, we have this exerpt:

"When it comes to philanthropy, executives increasingly see themselves as caught between critics demanding ever higher levels of "corporate social responsibility" and investors applying pressure to maximize short-term profits." [etc.] [9]

And in the 'Corporate Level Strategy', we have this exerpt:

"When it comes to philanthropy, executives increasingly see themselves as caught between critics demanding ever higher levels of "corporate social responsibility" and investors applying pressure to maximize short-term profits." [etc.] [10]

And in the 'Strategy for Philanthropic Organizations', we have this exerpt:

"When it comes to philanthropy, executives increasingly see themselves as caught between critics demanding ever higher levels of "corporate social responsibility" and investors applying pressure to maximize short-term profits." [etc] [11]

The same results appear in the 'Corporate Philanthropy' section [12] and it is the case with other material. The tone might be repetitive but it is upbeat, as in the case of the introduction to 'Capitalism and Social Progress':

"Economic policy and social policy have been largely separate agendas involving different participants. Many see the two as conflicting agendas because of the flaws in the capitalist system. However, there is no inherent conflict between capitalism and social needs. A productive and growing economy requires rising skill levels, a proliferation of new companies, safe working conditions, healthy workers who live in decent housing in safe neighborhoods, and a sense of opportunity. Social and economic policy must be integrated in addressing society’s ills and ensuring true progress."

Foundation Strategy Group

There may well be no inherent conflict between capitalism and social needs, but few argue that it meets these needs. Not everyone is a huge fan of the world's greatest business guru. 'Business Balls', has picked up on the effluvia of self-promotion here:

"separately he co-founded with Mark Kramer the Foundation Strategy Group (FSG) , 'a mission-driven social enterprise, dedicated to advancing the practice of philanthropy and corporate social investment, through consulting to foundations and corporations'. A prime example of someone operating at a self-actualization level if ever there was one." [13]

Possibly so but the organisation's disclaimer at the bottom of its site is interesting;

"Originally founded in 1999 by Mark R. Kramer and Professor Michael E. Porter as Foundation Strategy Group, LLC, we converted to nonprofit status in April 2006 to pursue a broader mission. We are an IRS-approved 501(c)(3) organization." [14]

Non-profit status. This seems odd given that there is 'no inherent conflict between capitalism and social needs.'

The board

There are some interesting people on the board of FSG:

Founder and Managing Director Mark R. Kramer is Senior Fellow in the Corporate Social Responsibility (CSR) Initiative at at Harvard's Kennedy School of Government, which is funded by the Chevron Corporation, The Coca-Cola Company, General Motors and Walter H. Shorenstein [15] with additional support from Abbott Laboratories, Booz Allen Hamilton, InBev, Pfizer, Inc., Shell Oil Company and the United Nations Industrial Development Organization (UNIDO).

Kyle Peterson: "Prior to joining FSG, Kyle served as a strategy consultant at OntheFrontier, a former Monitor Group company that focused on domestic and international economic development. While at OntheFrontier, Kyle researched and wrote a major regional economic study with Professor Michael E. Porter and led a competitiveness consulting project in Rwanda where he advised President Paul Kagame and his cabinet on the country's future economic strategy. Kyle was also the country director in Zimbabwe and Rwanda for Population Services International, a nonprofit social marketing organization [...] Kyle was also an account executive for Hill and Knowlton, serving nonprofit clients and the government of Kuwait; a communications advisor at Consumers Union; and a Peace Corps Volunteer in Sierra Leone. He was also an intern for the U.S. State Department..."

Center for Effective Philanthropy

Co-Founder and senior advisor, The Center for Effective Philanthropy, an organization dedicated to improving philanthropic performance. [16]

The Initiative for a Competitive Inner City

Founder, Chairman and CEO, The Initiative for a Competitive Inner City (ICIC), a private-sector initiative formed to catalyze inner-city business development across the country. This is run with funding partners Foley Hoag, the Bill & Melinda Gates Foundation, Inc. magazine (Co-founder with ICIC of the 'Inner City 100', mimicking the FTSE 100, dedicated to promoting an entrepreneurial spirit within inner city deprivation), Ewing Marion Kauffman Foundation ('renowned leader in entrepreneurship research'), Kansas City Benchmark Study and PricewaterhouseCoopers.

Affiliations

  • Fellow, the International Academy of Management (1985)
  • The Academy of Management (1988)
  • The Royal Swedish Academy of Engineering Sciences (1991)
  • Board member, Lotus Development Corporation, Alpha-Beta Technologies, Hyatt Legal Plans and Parametric Technology Corporation
  • Member, the Executive Committee of the Council on Competitiveness
  • Former Chair of the Strategy Committee, the President's Commission on Industrial Competitiveness

Further Reading

  • Porter is also marketed by Global Leaders who have even more fulsome praise in their biography. [17]
  • Porter M. (2003) The tax cut that could pay dividends, Financial Times, January 13. [18]

Here Porter defended George W. Bush's proposed elimination of the double taxation of dividends, arguing with no evidence whatsoever that:

"Sceptics who label the proposal a gimmick, or a tax break for the rich, fail to grasp the benefits of lower corporate taxes for everyone and miss the larger point. A dividend exemption, especially at the corporate level, would have sustained benefits for investors and workers alike. And it might just be a relief for managers, many of whom have felt trapped in a system that creates intense pressures to make questionable decisions."

Notes

  1. International Speakers Bureau Michael Porter
  2. 'Michael E. Porter - Biography', Harvard Business School website, accessed 1 May, 2009.
  3. Ronald Reagan, 'Executive Order 12428 - President's Commission on Industrial Competitiveness', The American Presidency Project website, 28 June, 1983. (Accessed 1 May, 2009)
  4. Ref needed.
  5. 'International trade and industrial competitiveness', United Nations University website, accessed 1 May, 2009.
  6. 'The US military economy', United Nations University website, accessed 1 May, 2009.
  7. Description of Project Camelot, Office of the Director of the Special Operations Research Office of the American University in Washington, D.C., 4 December, 1964. (United Nations University website accessed 1 May, 2009)
  8. 'Faculty & Research - Michael E. Porter', Harvard Business School website, accessed 1 May, 2009.
  9. 'Competitive Strategy', Harvard Business School website, accessed 1 May, 2009.
  10. Corporate Level Strategy', Harvard Business School website, accessed 1 May, 2009.
  11. 'Strategy for Philanthropic Organizations', Harvard Business School website, accessed 1 May, 2009.
  12. 'Corporate Philanthropy', Harvard Business School website, accessed 1 May, 2009.
  13. 'Porter's Five Forces Model', businessballs.com, accessed 1 May, 2009.
  14. 'About Us', FSG Social Impact Advisors website, accessed 1 May, 2009.
  15. 'Walter H. Shorenstein', Shorenstein website, accessed 1 May, 2009.
  16. Center for Effective Philanthropy website, accessed 1 May, 2009.
  17. 'Michael Porter', Global Leaders website, accessed 1 May, 2009.
  18. Michael Porter, 'The tax cut that could pay dividends', The Financial Times, 13 January, 2003. (Accessed 1 May, 2009)