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Douglas Chun, assistant professor of management, discusses firm strategies, societal norms and cognitions of the American Auto Industry between 1968 and 2008 in the President’s Dining Room Monday. Chun asserted that when sales decline, American automakers shift plans and actions to match societal probabilities. The lecture is part of the ongoing faculty lecture series. / photo by Julian Mininsohn
Jennifer Jackson
Staff Writer
Douglas Chun, assistant professor of management, presented “Firm Strategy, Societal Norms and Cognition: The American Auto Industry Between 1968 and 2008” to an audience of 20 students and faculty as part of the faculty lecture series Monday in the President’s Dining Room.
In this study, Chun wanted to know how changing cognitive frames of society affect managerial cognitions and impact the strategies of the auto industry.
He explained before studying the auto industry, one must first understand institutionalism, cognition and strategy and how they relate to firms.
“I wanted to identify how institutionalism and strategy cognition are linked,” Chun said.
Chun said that in institutionalism, institutional forces outside of the firm limit strategic choice. The primary factors of a strategic formulation and actions of a firm are the cognitions of top management.
Within the firm, organizational existence is dependent upon the ability to obtain and maintain the approval of society.
Since the firm’s environment is ever changing, it can fall behind in societal changes in standards and cognitions.
Chun said a firm’s symbolic representation of the environment and understanding of how things should be are based on biases and past experiences of the firm.
The U.S. auto industry is constantly trying to keep up with the standards of society to stay in business and make profit.
Chun concentrated on the fuel economy aspect of the U.S. auto industry for his study.
“I thought it was an interesting topic to research,” Chun said. “I noticed that car companies started paying more attention to miles per gallon.”
In 1975 the Corporate Average Fuel Economy standard was introduced, and later enforced in 1978. This standard was introduced to improve the average fuel economy of American automobiles; it has been raised multiple times since.
Automotive manufacturers in the United States are in constant competition with foreign companies and with meeting the fuel economy standards.
According to Chun’s research, when faced with increasing pressure from fuel economy standards and continued success in sales, American automotive manufacturers will adhere to the fuel economy regulations at a minimal level.
On the contrary, when faced with declining sales, American automakers will change their manufacturing strategy and actions to match society’s expectations.
When society became concerned with fuel economy, automotive manufacturers adhered to this by marketing their vehicles with a concentration on how many miles per gallon it could get.
“I found it interesting that they emphasize whether a vehicle is hybrid or not in order to sell better in the poor economy,” Jessica Cervantes, junior psychology major, said.
In order to remain competitive in the automotive market, manufacturers must put into consideration the implications of society.
“It makes me question the societal considerations of the American auto industry,” Ashley Hoffman, sophomore legal studies major, said.
Jennifer Jackson can be reached at jennifer.jackson2@laverne.edu.