Enhanced descriptions from Syndetics:

Medicine and business management share certain similarities, writes John Kay. For centuries, the theories behind medical practice were mostly nonsense. Doctors simply applied fashionable nostrums, bleeding one patient, starving another, and sometimes the patient got better, sometimes not. The prestige of a doctor rested more on the social rank of his patients and the confidence of his assertions than on the evidence of his cures. Much the same can be said of present-day management gurus. But there is one difference between medicine and management, Kay adds. In the last 100 years, medicine has been transformed by science. Management has not.
In The Business of Economics, Kay argues that it is economics that can provide the science that management presently lacks, that economics is the natural backbone of business management. In the many insightful and lively pieces collected here, Kay looks at the application of economics to the central strategic issues facing firms--their choice of activities and markets. He is particularly interested in microeconomics, the study of markets, industries, and firms, and is on the other hand highly critical of macroeconomics, economic modeling, and economic forecasting (which he says is inevitably wrong). He is especially illuminating on the recently developed resource-based theory of strategy, which attempts to explain the success or failure of a firm in terms of its "distinctive capabilities" (the factors which differentiate them from others in the same market and which cannot be easily reproduced by competitors even when recognized.) For instance, BMW's highly skilled work force, due to Germany's high level of general education, is hard to reproduce by competitors in other countries. Kay shows how BMW exploited its highly skilled labor force (opposed to low-wage foreign workers or robots found in many other auto plants) to get a large share of the market for up-scale, high-performance cars. Among the many other topics discussed in this idea-rich book are Saatchi & Saatchi's dismal attempt to globalize in the 1980s, Honda's great success selling low-end motorcycles in the U.S., the fare of the Eurotunnel, and the reason why race-car driver Nigel Mansell makes seventy-five times as much money a year as Britain's Prime Minister, John Major.
Described in Business Age as the "most important business analyst in Britain bar none," John Kay is renowned for his incisive, entertaining, and controversial columns in the Financial Times of London. In addition, he is a regular commentator on radio and TV, and is in much demand as a speaker and consultant. In The Business of Economics, he shares his thoughts on a wide range of issues facing businesses today. His clear and down-to-earth writing style informs, challenges, and entertains, and his rigorous and clever analysis of the corporate world offers insights into the business problems and decisions faced by executives and managers every day.

Table of contents provided by Syndetics

• Preface (p. v)
• I Economics in Business (p. 1)
• Chapter 1 Economics and Business (p. 3)
• Chapter 2 The Failures of Forecasting (p. 9)
• Chapter 3 Economic Models (p. 14)
• Chapter 4 Uses and Abuses of Economics (p. 20)
• Chapter 5 Can There Be a Science of Business? (p. 26)
• Ii Competitive Advantage (p. 33)
• Chapter 6 The Structure of Strategy (p. 35)
• Chapter 7 Competitive Advantage (p. 50)
• Chapter 8 Adding Value (p. 57)
• Chapter 9 No Free Lunches (p. 64)
• Chapter 10 The Competitive Advantage of Nations (p. 69)
• Iii Corporate Personality Shareholders And Stakeholders (p. 81)
• Chapter 11 Relationships and Commitments (p. 83)
• Chapter 12 Contracts or Relationships (p. 89)
• Chapter 13 Corporate Governance (p. 105)
• Chapter 14 The Customer Corporation (p. 122)
• Chapter 15 Inclusive Economies (p. 137)
• IV Using Economics (p. 149)
• Chapter 16 Applying Economics (p. 151)
• Chapter 17 The Strategic Audit (p. 163)
• Chapter 18 Pricing the Tunnel (p. 175)
• Chapter 19 The Media Revolution (p. 188)
• Chapter 20 Firms and Industries (p. 193)
• References (p. 207)
• Index (p. 211)

Reviews provided by Syndetics

CHOICE Review

Kay, noted columnist for the Financial Times, applies microeconomic analysis to contemporary business and economic issues in a thought-provoking collection of his essays, articles, and lectures. Divided into four sections ("Economics in Business," "Competitive Advantage," "Corporate Personality: Shareholders and Stakeholders," and "Using Economics"), the work provides important insight and historical perspective on corporate strategic decision theory. The chapters, without the traditional graphics or mathematical computations associated with econometrics, solidify the validity and importance of traditional economic thought to organizational success. The writing style is succinct. Minimal familiarity with economics, marketing, and finance is necessary to understand the subtlety of the discussion. The author makes excellent use of current examples and provides reference notes. Required reading for all upper-division undergraduate and graduate business students. Recommended for academic and professional collections. S. R. Kahn; University of Cincinnati

Booklist Review

Kay seemingly only offers the scholarly proposition that scientific economic principles can and should be applied to management, but this book will attract a wider audience because of who the author is and his unabashedly provocative arguments. Besides running a well-regarded consulting firm, Kay left the London School of Economics to bring management studies to staid Oxford University, where business is not universally considered to be an appropriate pursuit. To complicate the issue, Kay has agreed to accept a $31 million donation from a Syrian-born arms dealer for the construction of a building for the school, and he is a major adviser to Tony Blair, Britain's opposition Labor Party head. This book is a collection of his newspaper columns as well as essays, lectures, and more scholarly articles. These individual pieces have been combined to make a rather coherent argument, one that suggests that microeconomics ("the study of markets, industries, and firms") should take priority over macroeconomics ("the analysis of monetary and fiscal policies") in the study of management. --David Rouse

Author notes provided by Syndetics

John Kay is Visiting Professor of Economics at the London Business School and Chairman of London Economics, a leading consulting firm whose clients include many blue-chip companies. He is also director of several public companies, the author of numerous books, including Why Firms Succeed, and a frequent commentator on business and economic affairs on both radio and television.