Michael Porter

Michael Eugene Porter (born May 23, 1947)[2] is an American academic known for his theories on economics, business strategy, and social causes. He is the Bishop William Lawrence University Professor at Harvard Business School, and he was one of the founders of the consulting firm The Monitor Group (now part of Deloitte) and FSG, a social impact consultancy. He is credited for creating Porter's five forces analysis, which is instrumental in business strategy development today.

For other people named Michael Porter, see Michael Porter (disambiguation).

Michael E. Porter
Born (1947-05-23) May 23, 1947
Ann Arbor, Michigan, United States
Alma materPrinceton University (BSE)
Harvard University (MBA, PhD)
ContributionsPorter hypothesis
Porter's five forces[1]
Porter's four corners model
Websitewww.isc.hbs.edu

Early life

Michael Porter's father was a civil engineer and Georgia Tech graduate who had gone on to a career as an army officer. Michael Eugene Porter received a BSE with high honors in aerospace and mechanical engineering from Princeton University in 1969, where he graduated first in his class and was elected to Phi Beta Kappa and Tau Beta Pi. He received an MBA with high distinction in 1971 from Harvard Business School, where he was a George F. Baker Scholar, and a PhD in business economics from Harvard University in 1973.

Porter said in an interview that he first became interested in competition through sports. He was on the NCAA championship golf squad at Princeton and also played football, baseball and basketball growing up.[3]

Porter credits Harvard professor Roland "Chris" Christensen with inspiring him and encouraging him to speak up during class, hand-writing Porter a note that began: "Mr. Porter, you have a lot to contribute in class and I hope you will." Porter reached the top of the class by the second year at Harvard Business School.[3]

At Harvard, Porter took classes in industrial organization economics, which attempts to model the effect of competitive forces on industries and their profitability. This study inspired the Porter five forces analysis framework for analyzing industries.[3]

Career

Michael Porter is the author of 20 books and numerous articles including Competitive Strategy, Competitive Advantage, Competitive Advantage of Nations, and On Competition. A six-time winner of the McKinsey Award for the best Harvard Business Review article of the year, Professor Porter is the most cited author in business and economics.[4]

Porter stated in a 2010 interview: "What I've come to see as probably my greatest gift is the ability to take an extraordinarily complex, integrated, multidimensional problem and get arms around it conceptually in a way that helps, that informs and empowers practitioners to actually do things."[3]

Competition among nations

Porter wrote "The Competitive Advantage of Nations" in 1990. The book is based on studies of ten nations and argues that a key to national wealth and advantage was the productivity of firms and workers collectively, and that the national and regional environment supports that productivity. He proposed the "diamond" framework, a mutually-reinforcing system of four factors that determine national advantage: factor conditions; demand conditions; related or supporting industries; and firm strategy, structure and rivalry. Information, incentives, and infrastructure were also key to that productivity.[5]

During April 2014, Porter discussed how the United States ranks relative to other countries on a comprehensive scorecard called "The Social Progress Index", an effort which he co-authored.[6] This scorecard rated the U.S. on a comprehensive set of metrics; overall, the U.S. placed 16th.[7]

Healthcare

Porter has devoted considerable attention to understanding and addressing the pressing problems in health care delivery in the United States and other countries. His book, Redefining Health Care (written with Elizabeth Teisberg), develops a new strategic framework for transforming the value delivered by the health care system, with implications for providers, health plans, employers, and government, among other actors. The book received the James A. Hamilton award of the American College of Healthcare Executives in 2007 for book of the year. His New England Journal of Medicine research article, "A Strategy for Health Care Reform—Toward a Value-Based System" (July 2009), lays out a health reform strategy for the U.S. His work on health care is being extended to address the problems of health care delivery in developing countries, in collaboration with Dr. Jim Yong Kim, Sachin H. Jain, and others at the Harvard Medical School and Harvard School of Public Health.

Consulting

In addition to his research, writing, and teaching, Porter serves as an advisor to business, government, and the social sector. He has served as strategy advisor to numerous leading U.S. and international companies, including Caterpillar, Procter & Gamble,[8] Scotts Miracle-Gro, Royal Dutch Shell, and Taiwan Semiconductor. Professor Porter once served on two public boards of directors, those of Thermo Fisher Scientific and Parametric Technology Corporation. He also plays an active role in U.S. economic policy, working with the Executive Branch and with Congress, and has led national economic-strategy programs in numerous countries. As of 2009 he was working with the presidents of Rwanda and South Korea.

In 1983 Michael Porter co-founded the Monitor Group, a strategy-consulting firm. Deloitte Consulting acquired the Monitor Group in 2013 through a structured bankruptcy proceeding.[9]

Non-profit

Michael Porter has founded three major non-profit organizations: Initiative for a Competitive Inner City – ICIC, founded in 1994,[10] and which he still chairs,[11] which addresses economic development in distressed urban communities; the Center for Effective Philanthropy, which creates rigorous tools for measuring foundation effectiveness; and FSG Social Impact Advisors, a leading non-profit strategy firm which he co-founded with Mark Kramer,[12] serving NGOs, corporations, and foundations in the area of creating social value. He also currently serves on the Board of Trustees of Princeton University.

Honors and awards

In 2000, Michael Porter was appointed Bishop William Lawrence University Professor at Harvard, the university's highest recognition awarded to Harvard faculty.[13]

Criticisms

Porter has been criticized by some academics for inconsistent logical argument in his assertions.[14] Critics have also labeled Porter's conclusions as lacking in empirical support and as justified with selective case studies. They have also claimed that Porter fails to credit original creators of his postulates originating from pure microeconomic theory.[4][15][16][17] Others have argued Porter's firm-level analysis is widely misunderstood and mis-taught.[18]

Work

Competitive strategy

US political competitiveness

Domestic health care
  • Porter, M.E. & Teisberg, E.O. (2006) "Redefining Health Care: Creating Value-Based Competition On Results", Harvard Business School Press, 2006.

Global health care
  • Jain SH, Weintraub R, Rhatigan J, Porter ME, Kim JY. "Delivering Global Health". Student British Medical Journal 2008; 16:27.
  • Kim JY, Rhatigan J, Jain SH, Weintraub R, Porter ME. "From a declaration of values to the creation of value in global health: a report from Harvard University's Global Health Delivery Project". Global Public Health. 2010 Mar; 5(2):181-8.
  • Rhatigan, Joseph, Sachin H Jain, Joia S. Mukherjee, and Michael E. Porter. "Applying the Care Delivery Value Chain: HIV/AIDS Care in Resource Poor Settings." Harvard Business School Working Paper, No. 09-093, February 2009.

Books and Commentaries on Research
  • Understanding Michael Porter: The Essential Guide to Competition and Strategy. Magretta, Joan. Boston: Harvard Business School Publishing, 2012.[20]
  • The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Kiechel, Walter III. Harvard Business School Publishing, Boston, 2010.[21]
  • The Porter Hypothesis After 20 Years: How Can Environmental Regulation Enhance Innovation and Competitiveness? Stefan Ambec, Mark A. Cohen, Stewart Elgie, and Paul Lanoie. Resources for the Future Discussion Paper, Washington DC, 2011.
  • Well-Designed Environmental Regulations will Strengthen Companies' Competitiveness: Reviewing the Porter Hypothesis. Mitsuhashi Tadahiro (ed.) Japan, 2008.
  • From Adam Smith to Michael Porter: Evolution of Competitiveness Theory y. Cho, Dong-Sung Cho and Hwy-Chang Moon. Asia-Pacific Business Series, Korea, 2000.[22]
  • “Retrospective: Michael Porter's Competitive Strategy.” Academy of Management Executive, May 2002, Vol.16, No.2
  • Perspectives on Strategy: Contributions of Michael E. Porter, F.A.J. van den Bosch and A.P. de Man (eds.), Kluwer Academic Publishers, Dordrecht, The Netherlands, 1997.
  • O Projecto Porter: A aplicação a Portugal 1993/94. Lisbon, Portugal: Ministério da Indústria e Energia, May 1995.

See also

References
  1. Porter, Michael (January 1, 2008). "The Five Competitive Forces That Shape Strategy". Harvard Business Review.
  2. date & year of birth, full name according to LCNAF CIP data
  3. Kiechel, Walter (2010). The Lords of Strategy. Harvard Business Press. ISBN 978-1-59139-782-3.
  4. Aktouf, Omar (January 24, 2008). "THE FALSE EXPECTATIONS OF MICHAEL PORTER'S STRATEGIC MANAGEMENT FRAMEWORK". Gestão & Planejamento - G&P. 1 (11). Retrieved January 27, 2019 – via revistas.unifacs.br.
  5. Porter, Michael E. Porter (1990). The Competitive Advantage of Nations. Free Press. ISBN 978-0-684-84147-2.
  6. "Michael Porter on GPS: Is the U.S. #1?". Retrieved January 27, 2019.
  7. "2018 Social Progress Index". 2018 Social Progress Index. Retrieved January 27, 2019.
  8. Playing to Win: How Strategy Really Works. Harvard Business Review Press.
  9. Compare: Prasad, Sakthi (November 8, 2012). "UPDATE 1-Monitor Company files for Chapter 11; Deloitte to buy assets". Market news. Reuters. Reuters. Retrieved June 17, 2018. U.S. consulting and advisory firm Monitor Company Group and its affiliates filed for Chapter 11 bankruptcy protection, court documents showed, and said it has agreed to sell its assets to global consultancy firm Deloitte.
  10. "Initiative for a Competitive Inner City".
  11. Initiative for a Competitive Inner City, Board, accessed 9 December 2019
  12. FSG, Our People, accessed 10 December 2019
  13. Colvin, Geoff (October 29, 2012). "There's No Quit in Michael Porter". Fortune. 166 (7): 162–166.
  14. Sharp, Byron; Dawes, John (1996), "Is Differentiation Optional? A Critique of Porter's Generic Strategy Typology," in Management, Marketing and the Competitive Process, Peter Earl, Ed. London: Edward Elgar.
  15. Speed, Richard J. (1989), "Oh Mr Porter! A Re-Appraisal of Competitive Strategy," Marketing Intelligence and Planning, 7 (5/6), 8–11.
  16. Yetton, Philip, Jane Craig, Jeremy Davis, and Fred Hilmer (1992), "Are Diamonds a Country's Best Friend? A Critique of Porter's Theory of National Competition as Applied to Canada, New Zealand and Australia," Australian Journal of Management, 17 (No. 1, June), 89–120.
  17. Allio, Robert J. (1990), "Flaws in Porter's Competitive Diamond?," Planning Review, 18 (No. 5, September/October), 28–32.
  18. Spender, J.-C., & Kraaijenbrink, Jeroen. (2011). Why Competitive Strategy Succeeds - and With Whom. In Robert Huggins & Hiro Izushi (Eds.), Competition, Competitive Advantage, and Clusters: The Ideas of Michael Porter (pp. 33-55). Oxford: Oxford University Press.
  19. Bedeian, Arthur G.; Wren, Daniel A. (Winter 2001). "Most Influential Management Books of the 20th Century" (PDF). Organizational Dynamics. 29 (3): 221–225. doi:10.1016/S0090-2616(01)00022-5.
  20. Magretta, Joan (2011). Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Review Press. ISBN 978-1422160596.
  21. Kiechel, Walter (2010). The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Harvard Business Review Press. ISBN 978-1591397823.
  22. Cho, Dong-Sung (2013). From Adam Smith to Michael Porter: Evolution of Competitiveness Theory. World Scientific Publishing Company. ISBN 978-9814407540.
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