Richard Langlois challenges conventional
thinking of how businesses are structured

Photo by Lanny Nagler

Richard Langlois, professor of economics in the College of Liberal Arts and Sciences, spends his time thinking about how businesses are organized. His seminal research into the economics of organization has led the way in challenging conventional thinking and exploring new ideas about the subject.

“One way you can think about organization is that we assume there is a thing called the firm and then we ask the question, what can we do to make it run better, be more profitable, more successful?” says Langlois, who serves as UConn’s director of undergraduate economics.

“In some ways I’m asking a more fundamental question, which is—why should these things be organized inside firms at all?”

Langlois explores how modern corporations moved from working within the context of industrial corporations — controlling all aspects of their business — to specialized entities connected by markets and networks.

His writings place the work of Joseph Schumpeter and Alfred Chandler — two of the last century’s most important analysts of the modern corporation, who focused on vertically integrated businesses — into a larger theoretical frame- work in the context of business history.

One of Langlois’s most recent papers, “Organizing the Electronic Century,” challenges one of Chandler’s last major works, which describes the emergence of the electronics industry and argues that large companies such as RCA led economic growth.

Langlois takes the position that for some technologies, large companies with research and development laboratories effectively might have slowed economic growth because they controlled the patents and intellectual property for electronic devices.

This, he says, discouraged innovation.

“The radio was a lot like the personal computer; there were hobbyists and it was easy to assemble. It was almost like a modular system,” Langlois says.

“RCA owned all the patents for the radio. That actually limited innovation because you had no incentive to invent a better piece for the radio. No one would buy it because even if they used your piece, they still had to pay RCA for the other pieces.”

Looking at classic, vertically integrated companies such as IBM and Standard Oil (today’s ExxonMobil) demonstrates the change in how businesses are now organized, he explains.

In the oil industry, Standard Oil owned everything from the oil exploration and oil refinery businesses to gas stations. Companies such as IBM made their own transistors, built computers and developed operating systems.

Today, large corporations in the computer industry are separate businesses — Microsoft writes software, Intel makes processors and Dell assembles the computer.

“When you think about globalization, there are real issues of how firms are organized,” he says.

“The division of labor is organized among several multinational companies all over the world. I’m making the argument that in the U.S. multinational corporations emerged because markets weren’t working very well.”

Globalization is part of the reason for this change in the organization of economic activity. “In the 19th and early 20th centuries,” says Langlois, “vertical integration had advantages because markets were relatively sparse and borders protected by geography and tariffs. Often large integrated firms were ahead of the markets.”

Langlois explains that after a quarter century of post World War II recovery, the economies of Japan and Germany returned to the world market, creating increased competition for American products.

Reforms in India and China and the former Soviet Union created markets that previously were not available, developing thicker and stronger markets around the world.

The turbulence of globalization also made the economy more unpredictable.

“If the economy is entrepreneurial, it should be unpredictable,” he says. “Forty years ago, who would have predicted iPods and the Internet. Science fiction writers didn’t think about personal communicators until “Star Trek.”

People are going to come up with innovations in organizational forms. We’ve seen it in financial instruments before. Things get tried, if they don’t work, they don’t last very long.”

Since arriving at UConn in 1983, Langlois has established an international reputation for his scholarship on business history, the role of transactions costs, the organization of production and the new institutional economics.

His undergraduate degree at Williams College and his master’s at Yale were awarded in physics.

He earned both a master’s and doctorate in economic systems at Stanford University. He credits such an unusual path to economics as part of his different approach to looking at the subject.

“Not coming from a traditional background has something to do with it,” says Langlois, who began his academic career at New York University.

“And part of it is that UConn allowed me to keep doing what I was doing and publish books instead of publishing in journals, which is the usual expectation for faculty.”

Langlois, who received the 2007 Faculty Excellence in Research Award from the UConn Alumni Association, continues to be sought out for his innovative views on business organization.

He attended a conference in Japan late last year with a group of international scholars who are examining new forms of business organization. They plan to collaborate on what will become the Oxford Handbook of Business Groups.

— Kenneth Best

Monitoring bridge safety in Connecticut

UConn engineers continue to break new ground in monitoring the safety of bridges, even as safety issues have gained new attention following the collapse of a bridge spanning the Mississippi River last summer during evening rush hour in Minneapolis.

Technicians install a wireless sensor array to the underside of the Gold Star Bridge over the Thames River in New London.

John DeWolf, professor of civil and environmental engineering in the School of Engineering, has spent more than two decades on field research involving the monitoring of bridges in Connecticut after the 1983 collapse of the bridge on I-95 crossing over the Mianus River in Greenwich.

His studies involve quantifying metrics that reduce the subjective nature of the inspections and enhance bridge safety.

One of the new systems DeWolf and his team have deployed is the first of its kind: a wireless sensor array that relies on solar panels for its power source, allowing the team to keep an array in place and capture critical data over long periods.

Currently, sensors are powered by batteries that must be replaced periodically.

The solar array is being tested on the Gold Star Bridge, a pair of steel truss bridges that carry about 117,000 vehicles daily over the Thames River on both I-95 and Route 1 between Groton and New London.

DeWolf and his research team have used from 12 to 52 sensors on any one bridge.

The arrays may include a combination of tilt meters, accelerometers, strain gauges and thermocouples that measure tilt, vibration, strain and temperature at various locations on a bridge.

“We have learned a great deal about how bridges perform over time,” he says.

“Our field research has allowed us to develop techniques for structural health monitoring of bridges that can be applied broadly to assess the bridge infrastructure.”

DeWolf currently has custom-tailored, long-term monitoring arrays installed on six bridges that are part of the Connecticut interstate network.

His objective with these studies is to better understand how bridges perform and degrade over time, under different weather and temperature conditions, and with varying use and to develop assessment guidelines that can be applied uniformly and universally.

This seismic map of the southwest coast of Japan is part of the research gathered by UConn geologist Tim Byrne, associate professor with the Center for Integrative Geosciences in the College of Liberal Arts and Sciences, who was a member of a scientific expedition that spent six weeks on a drilling ship in the Nankai Trough Seismogenic Zone.

The scientists are participating in a long-term expedition that will take seismic images, examine the composition of sediments, collect core samples to study, position sensors on the ocean floor, and search for faulting zones in Japan, where there are thousands of earthquakes every month.

In early 2009, Byrne will be a co-chief scientist on another three-month stage of the work.

Connecticut residents have a lack of understanding about long-term care issues, according to findings in the state’s first long-term care needs assessment in more than 20 years, conducted by researchers at the UConn Health Center.

“People aren’t planning for their future needs,” says Julie Robison, assistant professor of medicine and a leader of the UConn research team that conducted “The Connecticut Long-Term Care Needs Assessment,” authorized by the General Assembly.

“They aren’t planning because they don’t understand what long-term care is, who needs it, how much it costs, who pays for it or what choices are available to them.”

Most of the more than 6,000 residents who responded to the statewide survey believe eventually they will need long-term care, but few say they can afford it and though their life savings could quickly be drained, few are planning ahead.

The average 30-month nursing home care stay — just one part of the equation — is $272,000, says Robison. Compounding that, many people erroneously believe long-term care refers exclusively to nursing home care, particularly for older adults.

However, planning for long-term care should encompass services and support needed for extended periods by people of all ages who need help due to a disability or chronic illness.

Nationally, 10 to 15 million Americans currently need long-term care services and support. Government estimates suggest the number could nearly double to 27 million by 2050.

UConn researchers say the same pattern holds true for Connecticut. More than 188,000 state residents 40 years of age and older currently require long-term care, and the number is expected to jump nearly 30 percent, to 240,238, by 2030.

Connecticut’s Medicaid program already spends more than $2.2 billion a year on long-term care services.

The full survey and executive summary is available on the Connecticut Commission on Aging Web site.

A new interdisciplinary center for research in mathematics education has been established, combining the expertise of mathematics faculty in the College of Liberal Arts and Sciences (CLAS) and the Neag School of Education.

UConn’s Center for Research in Mathematics Education was developed by Tom DeFranco, associate dean of the Neag School, and Charles Vinsonhaler, professor emeritus of mathematics in the math department of CLAS, who sought to create “a bridge between two cultures.”

The seed for the center was planted more than 10 years ago when DeFranco and Vinsonhaler, then-chair of the math department, began discussing and working on issues in mathematics education.

They collaborated to write a book on mathematical problem solving, taught an innovative course on mathematics pedagogy to math department teaching assistants, co-authored research articles, and jointly secured grant funding.

Most important, says DeFranco, their collaboration resulted in the establishment of a “mathematics education presence” within the math department.

DeFranco, a professor in the Neag School who holds a joint appointment in CLAS, is director of the new center, which he hopes will blend the math department’s orientation toward content and the Neag School’s focus on pedagogy and performance for those training to teach mathematics.

DeFranco and Vinsonhaler believe that by drawing upon the expertise of faculty in both the Neag School and the department of mathematics, the center can improve the teaching and learning of mathematics throughout the University, as well as in the state of Connecticut.

The center’s mission focuses on putting together a comprehensive research agenda to enhance “the quality of mathematics curriculum, instruction and assessment,” DeFranco says.