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Strategic management of clusters: the case of the Chilean salmon industry

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DOCUMENTOS DE TRABAJO
Serie Gestión
STRATEGIC MANAGEMENT OF CLUSTERS:
THE CASE OF THE CHILEAN SALMON INDUSTRY
Carlos Vignolo F.
Gastón Held B.
Juan Pablo Zanlungo M.
Strategic Management of Clusters:
The Case of the Chilean Salmon Industry
Carlos Vignolo F. (+)
Gastón Held B. (++)
Juan Pablo Zanlungo M. (+++)
Paper to be presented at the
Second International Conference on Strategic Management in Latin America
Cosponsored by the School of Management, Catholic University of Chile (EAPUC) and the Journal of
Business Research
Santiago de Chile, January 4th to 5th, 2007
Track:
3. Strategy formulation and execution in Latin America:
Managing changes of strategy, structure and organization
(+) Associate Professor, Director of the Technologies for the Construction of Social Capital Program, Industrial
Engineering Department, University of Chile. Phone: (56 2) 978 4028; fax: (56 2) 689 7805; e-mail: cvignolo@dii.uchile.cl
(++) Adjunct Professor, Director of the MBA Program, Industrial Engineering Department, University of Chile. Phone:
(56 2) 978 4020; fax: (56 2) 689 2905; e-mail: gheld@dii.uchile.cl
(+++) Consultant, Part time Professor and Professional Associate, Industrial Engineering Department, University of
Chile. Phone & fax: (56 2) 378 0911; e-mail: jpzanlungo@kmt.cl
1
Strategic management of clusters: the case of the Chilean salmon industry
ABSTRACT
Over the last two decades the Chilean salmon cluster has shown remarkable development. However, it
is currently facing complex menaces that have become difficult to manage at the strategic level. This
article highlights the role of social capital in the cluster’s emergence and rapid growth and also in the
generation of the complex situation it is presently going through. A strong argument is made in the
paper about the crutial importance of the process of generation and administration of social capital, as
central part of the strategic management of clusters.
KEY WORDS: Cluster, strategic management, Chilean salmon industry, social capital
1. INTRODUCTION
The Chilean salmon industry has undergone an extraordinary economic evolution -by whatever
measure- in the last 20 years. It has grown rapidly from 1986 when it produced and exported US$ 5m
to its current worth of more than US$ 1,700m (2005). Today it is the largest producer of cultivated
salmon a position for which it competes with Norway with around a third of world production. In
this process Chilean entrepreneurs have competed with and replaced firms of countries with higher
relative development.
An outstanding feature is the essentially endogenous character of this processpushed by national and
local entrepreneurs with relatively little state participation. Within their region, they have developed
what is normally understood as a cluster -that is, a geographically concentrated complex of producers
2
that generate co-operation among themselves and facilitate the development of suppliers of previously
unavailable inputs and services, all this with a significant level of local innovation. This is a unique
occurrence in Chilean history.1
Despite this success, the Chilean salmon industry is having a number of social validation problems.
Certain practices, styles and ways of behaving are increasingly questioned by labor, environment and
political groups. Apart from the difficulties they imply for operations, these issues could potentially
affect its development, especially in export markets which are both well informed and demand
compliance with appropriate standards.
This paper’s main object is to present a number of related interpretative proposals about the salmon
cluster’s success and the challenges it currently faces as well as proposed actions to deal with them,
paying particular attention to social capital and its relation to strategic management. Given the scarcity
of hard information available, the scarce number of studies about this issue and the incipient literature
on clusters in countries similar to Chile, the paper does not pretend to establish definitive proposals but
rather an agenda for research and development on this industry, with a perspective which differs from
previous work done about it. From an examination of this experience and the increasing role given to
clusters in economic development, the paper proposes generic elements for long term strategic
management of these conglomerates as well as future research issues.
1 Montero, C. (2004).
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2. CONCEPTUAL FRAMEWORK AND MAIN INTERPRETATIONS
Strategic management and the construction of social capital keys to cluster development
The main conceptual premise of this paper is that the central factor for the sustainable and harmonious
development of enterprises -and human and social organization in general- is the social capital
endowment they can command. Our view of social capital is broad -it is understood as the capacity to
generate value in a social organization from interactions and the strengthening of its members’
potential energies and capacities around a common objective within a shared values framework.2,3 One
of the central thesis of this article is that social capital can be constructed in cultural contexts which
posses little, at high rates over relatively short periods of time.4
We argue that another key factor for the development of organizations is strategic management,
understood here as the set of conscious and deliberate design and execution processes -from the
generation of vision, mission and values to their implementation, follow up, evaluation and continuous
redesign of strategy, structure, policies and projects- that allow the system as a whole to evolve from its
initial situation in the desired direction over the long term.
As a corollary of the above, we postulate that the strategic management of every human organization
ought to have as one of its main concerns to assure an endowment of social capital closely related to
2 What Jim Collins would call a core ideology (in Built to Last, 1994).
3 From this perspective, social capital is made up of four components (Vignolo et al., 2002 and 2003):
i) Human capital: the capacity to act by the nodes of a social network (persons) and in particular the capacity to produce
value in collaboration with others.
ii) Relational capital: the quality of the collaborative network in which each person functions, in terms of quality and
quantify.
iii) Environmental capital: the quality of the social contexts in which people interact to produce value.
iv) Directional capital: the existence of a mission and a sense of mission that empowers, mobilizes and guides people and
organizations.
4 By conversational processes of “transformation in coexistence”, with direct interaction between people and emotional
participation. See for example, “Breakthrough leadership”, in the first special number in its 79 years of the Harvard
Business Review (Dec. 2001), which proposes to “break the interpersonal barriers that impede genuine human contact”.
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the complexity and dynamism of the organization and to the specific relevant context in which it
develops. We adopt in this analysis the premise that human organizations increase their complexity as
they evolve and grow.
Clusters are understood to be a group of geographically specific firms and institutions, with both
common and complimentary characteristics, linked by mutual dependence in the supply of specific
goods and services. It appears as an integrated production system, within which there is an important
network of relations where both co-operation and competition coexist. It is made up of a large range of
mainly specialized actors -intermediate or final goods and services producers; firms that supply inputs,
capital goods, financial services etc.; distribution channels or clients; training institutions; relevant
research organizations; and public organizations involved in the development of cluster activities. Their
permanent and varied interactions are crucial for the achievement of positive results -in terms of greater
productivity and innovation- and competitivity that allow the system to last over time.
Different stages of cluster development can be recognized, mainly by having as a reference the
traditional management practices of the business environment in which it evolves. The simple co-
existence of firms in a specific geographical location is not enough to constitute a cluster. Clusters
evolve over time, and dynamics of the interactions between the constituent actors may change.
Our view is that non market and non hierarchic relations are key in cluster development and
sustainability, and thus the importance of social capital. Trust is the glue that keeps clusters together. It
is also the main component and the clearest proxy indicator of social capital.
Our interpretation is that even more than economic, structural and rational factors, the construction of
social capital was a key factor in the emergence of the salmon cluster in Chile, and that the cluster’s
5
present difficulties are due mainly to its deterioration, which has not been properly accounted for -
among other things because there are no metrics- nor sufficiently compensated by improved strategic
management. Moreover, it can be argued that even the cluster’s strategic management capacity has
been weakened, in large part due to the deterioration of social capital among its leaders.
3. THE RISE AND FALL OF CHILE’S SALMON CLUSTER
Facts and an interpretation from the social capital perspective.
a) Facts
Chile’s salmon industry has experienced a very rapid and significant development over the last 25
years. In 2005 it exported 384,000 tons earning US$ 1,721 m., transforming the country into becoming
the largest trout exporter and second salmon exporter. Total investment over the same period was about
US$ 1,800 m. Salmon is Chile’s third most important and the main renewable export. The industry has
created around 53,000 direct and indirect jobs and has had an important impact on the region where it
develops (located around 1,000 km to the south of Santiago). This is an impressive outcome, when
taking into account that at the beginning of the1970s it hardly existed and that salmon is not a native
species; its production had to be learnt and adapted to Chile’s conditions.
Chile’s initial salmon production began in the early 1980s and averaged about 10 tons annually. In
1982, the Chile Foundation (Fundación Chile), a public-private institution for the promotion of new
productive sectors, established a pilot salmon production firm to show the commercial viability of this
activity. Production was mainly based on small companies with national investment, imitating foreign
technology (particularly from Norway and Great Britain). Growth was rapid: in 1989 output amounted
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to 10,000 tons (seventh world producer with 4% of the market); by 1994 it was 100,000 tons (second
world producer with 18% of the market); in 2000, production had reached 300,000 tons (27% of the
world market); in 2002 it reached 500,000 tons; and in 2005 it exceeded 600,000 tons, (38% of the
world’s farmed salmon and trout production).
Although foreign investment has always been part of the industry, it was not until 1999 that it
accounted for 18% of production when two important Norwegian companies acquired local firms.
Foreign investment has increased since then with the entrance of additional companies.
Co-operative relations between companies were established early. In 1986 the Chilean Salmon and
Trout Producers Association (Asociación de Productores de Salmón y Trucha de Chile) or APSTCH
A.G. was formed to co-ordinate the industry. From the start on the Association supported common
initiatives such as a national quality program (1987), phytoplankton monitoring (1988), seminars and
international promotion campaigns. Its leadership was instrumental in the creation (1995) of the
Institute for Salmon Technology (Instituto Tecnológico del Salmón or INTESAL), which co-ordinates
sector research and training. In 2002 the Association opened the membership to associated activities
such as packers, food producers, transport companies and others, and changed its name to Chilean
Salmon Industry Association (Asociación de la Industria del Salmón) or SalmonChile.
During its existence, the industry has had to face different charges concerning its commercial as well as
its sanitary and environmental practices. For example, North American producers complained about
dumping in 1997; environmental concerns have been raised by non governmental organizations
(NGOs) particularly since 2000; and recently restrictions on antibiotic use were imposed to meet the
norms of the main export markets. In response, the industry has been pro-active when faced with these
issues, mainly coordinated by SalmonChile. Among these responses was the signing of a clean
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production agreement with the government in 2002; the establishment of the Salmon of the Americas
(SOTA) alliance together with American producers to promote salmon consumption there; and from
2005, the development of an Integrated Management System (Sistema Integrado de Gestión) or SIGES,
a set of verifiable standards and procedures with international aknowledgement to guarantee a safe,
quality product in terms of food, labor and environment. In 2005, CORFO, the government
development agency, began a program to support the salmon cluster known as the Integral Territorial
Program (Programa Territorial Integrado or PTI).
The industry has experienced a growing number of mergers and acquisitions to achieve economies of
scale and vertical integration. Ten years ago there were over 100 salmon and trout firms – now there
are around 40. A similar process is occurring in other regions of the world, and has also had local
impacts due to the presence of foreign companies. A commercial sophistication has resulted in new
products with higher value added (for example, steaks fillets) and export market diversification. There
has also been an increase in investment diversification toward specific types of shell fish to take
advantage of economies of scope. However, on the other hand, questions about the industry’s
environmental and labor practices have intensified.
b) Interpretation
How is it possible that this development occurred so quickly and sucessfully in an industry mainly
associated with developed countries, without a significant state participation and in a cluster format in a
country historically marked by “foreign enclaves” and low trust levels 5, the glue of clusters?
5 “The World Values Survey 1995, 1997” (Institute for Social Research, U. of Michigan, 2000) shows the relatively lower
level of social capital in Chile compared to other countries, and “Panorama social de América Latina” (“Latin America’s
social panorama”) (PNUD, 2002) shows the negative internal distribution of social capital. Both studies build indicators
based on polls, which refer to people’s trust in others, interest in policy issues and associativity.
8
Main interpretations of this successful development have tended to focus on natural comparative
advantages (climate, oceanographic); favorable economic conditions (stable macro-economy, export
orientation, etc.); and the availability of cheap labor. Acknowledging these issues, in this essay we hold
that the main factors that concurred to allow this remarkable process are related to the field of
leadership, emotions, values and the dynamics of relations between cluster actors -that is, to the
territory of social capital- and that the salmon cluster is an interesting case of the trilogy ofideals,
values and emotions”.6
More specifically, we propose that the main elements that mark the rise of Chile’s salmon industry and
cluster are7:
i) the pioneering spirit of a group of entrepreneurs, mainly professionals who migrated from the
country’s center and settled in the salmon region, hoping to use the comparative advantage of
Chile’s southern oceans (aquaculture and fishing) and the policies that encouraged exports and
regional development.8
ii) the willingness and capacity to collaborate among themselves in this work, partly motivated by
their limited experience and knowledge of this activity, geographic isolation, the precariousness of
work conditions and the absence of dominant firms.
iii) a clear understanding of the positive and negative externalities that need to be internalized through
co-operation and permanent contact and communication.
iv) the need to collaborate in order to organize the minimum conditions necessary for them and their
families in education, health, recreation, and other fundamental services.
6 Proposed by Nonaka & Takeuchi in The Knowledge Creating Company (Oxford University Press, 1995) as the key
elements to explain innovation in Japanese firms.
7 This section has been much helped by Gutiérrez, J. R. (2004). Mr. Gutiérrez is the president of Multiexport, a major
producer, and past president of the Producers Association.
8 Not a few were hoping to abandon the stress and smog of Santiago, the capital city, where around 30 per cent of the
national population lives.
9
v) the need to unite and generate a critical mass to face shared challenges and threats such as their
commercial position in export markets, resolving administrative and legal issues with public
authorities, etc.
vi) the need for inputs and services, which led to the development of local suppliers.
vii) the need for “industrial workers” in a predominantly agricultural, cattle and small fishing region.
All this constitutes a foundational situation, in which the tendency to cooperate is high. The way to
address these needs and requirements is “dialoguing” (in Peter Senge’s sense). This generates trust,
mutual knowledge, relations, attitudes and a spirit which are the soul of a cluster. If the contextual
conditions allow, necessity is the mother of invention. In this case the needs created the cluster,
fundamentally through a pioneering spirit and the collaboration of the main leaders during the
industry’s early phases.
Initiatives such as the early creation of the Producers Association in 1986, the generic promotion
campaign of Chilean salmon in the USA pushed by the Association in 1994, and the creation of the
INTESAL in 1995, that may not come as a surprise to researchers from other countries, are very
infrequent in Chile, where associative practices have been historically very weak. So it is possible to
put forward the thesis that we are in the presence of a case of rapid social capital accumulation where,
additionally, the created associativity allowed tackling complex issues belo nging to the strategic
management domain, such as the joint positioning in previously non existent markets.
On the other hand, this pioneering situation and the entrepreneurial spirit, together with the
collaboration among founders, led to a management style that can be characterized by a focus on
“stakeholders” and a sense of mission, distinct from the traditional style aimed at “shareholders” and
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“profits”.9 Coexisting in the territory with relatively small communities was probably a fundamental
factor in generating also a “humane” style in the area of personnel management, in contrast to the more
traditional hierarchic and bureaucratic style, until today by far the most common in Chile.
4. TURNING POINT: THE INDUSTRIALIZATION OF THE INDUSTRY AND THE
DECLUSTERING OF THE CLUSTER
As the industry has successfully consolidated and matured, the nature of the cluster has changed. As
output continues to grow, the social capital of the cluster would appear to have diminished or at least
not to have grown at the required rates, in spite of the increasing needs for associativity linked to the
greater complexity and visibility of the sector.10 The industry faces numerous and increasingly
organized opponents with a capacity to influence regional, national and international opinion. A clear
demonstration of the growing weight of these positions is the recent special session called by the lower
house of Chile’s Congress (Cámara de Diputados) to discuss criticisms of salmon farming (an
infrequent practice in Chile) which then formed a Special Commission to investigate and propose
measures regarding these issues.
We propose, as a tentative hypothesis, that the following are the fundamental factors that explain the
deterioration of social capital and the public image of Chilean salmon farming:
9 Chaiton el al., 2000.
10 It is most likely that social capital has declined in absolute terms, however this cannot be proved because of the lack of
information.
11
a) Industrial organization
i) Increase in industrial concentration and significant increase in the average size of producing
firms through mergers and acquisitions.11
ii) Increase in vertical integration.12
iii) Incorporation of foreign companies integrated to final markets, aiming at low cost production
for the first stage of their value chains.
iv) Increase in entry barriers, by volume of capital required and access difficulties to marine
concessions, making it more difficult for smaller local entrepreneurs to participate in the
industry.
As a whole these factors have reduced the need for collaboration among producers,
“commercialized” relations with suppliers and “industrializedlabor relations.
b) Industrial dynamics, associated with the cluster’s national and international visibility.
i) The focus on rapid growth and size of the leading companies has created imbalance in their
relation with the environment, which has not been taken care of until recently as a main
strategic concern for them.
ii) The international significance acquired and the arrival of large Norwegian companies seem to
have meant a sort of “import” to Chile of developed countries detractors to salmon production
and an increase in the social responsibility standards expected from salmon companies.
11 In 1995, the ten largest firms accounted for 44.3% of exports, increasing to 50.7% in 2000 and then to 74.2% in 2005
(including firms with a common owners).
12 Both waters above and below. E.g., in 1993 25% of the main production companies owned their own hatcheries and 50%
their own commercial distribution channels; in 2003 the respective figures were 84 and 100% (Gutiérrez, J. R., 2004).
12
c) Cultural factors13
i) Envy. “Chaqueteo”, a common and generalized tendency to belittle peer’s achievements, is one
of Chile’s most negative cultural features; instead of the desire to learn and emulate, it often
derives in destructive comments or actions. It has to be considered seriously when trying to
explain the growing criticism to salmon industry, even within the entrepreneurial sector; its
relevance has very likely incresed because of the industry’s rapid and visible success.
ii) “Ego trip”.14 Another frecuent Chilean feature is the evolution towards egotism among
achievers in different domains. It is apparent that the tendency to cooperate, communicate
openly and trust each other has diminished among the initial salmon industry’s pioneers.
iii) Centralism. Chile is an authoritarian, hierarchical and centralized culture. As with many other
developing countries, the bulk of Chile’s economic activities, public institutions, quality
education and diverse cultural and recreational activities have been concentrated in the capital
city. We propose centralism has negatively affected recent cluster development in at least the
following ways:
! emigration to the capital of many of the business pio neers with their families, so breaking the
existing relationship between them, local communities and workers, company middle
management and trade union leaders.
! the weakness of regional governments to deal with specific requirements of a sector
becoming more and more distinct and complex when compared to other national regions.
Regional governments are dependent on central levels (for example, the definition of
priorities) and lack sufficient technical capacity and the minimum continuity over time
needed to build trust with the various actors that make up a cluster.
13 These points are exploratory. We think the factors mentioned here ought to be the subject of more research not only for the
salmon cluster but for clusters, strategic management and organizational development in general.
14 An idea used by Carver Mead, Emeritus Professor (Caltech) and himself an active participant in Silicon Valley’s
development, to explain business failure (Puerto Montt, January 2006). This refers to the way in which some business leaders
assign a particular role to their leadership for the company’s and even industry’s success and from which unfolds a generally
unfavorable change in leadership and management style.
13
d) Change in management style
The growth of firms and their consequent professionalization, that is the incorporation of a large
number of professionals frequently with no previous relation to the industry, has brought a change in
management style when compared to the founders. The new style is more traditional, hierarchic,
depersonalized, and influenced by profits and shareholders. This has affected the quality of relations
both with suppliers and workers.
All the above mentioned factors, and the loss of social capital that they imply, debilitate the cluster’s
strategic management capabilites in different ways:
make it increasingly more difficult to deal, design and agree on strategic issues, urgently needed
given increasing complexity of the cluster as a whole and of the challenges it faces.
lead the overall coordinating actions of SalmonChile to be more tactical-operational rather than
strategic, and more reactive than proactive, because it is easier to achieve such agreements among
members of industry and cluster, including Board of Directors members.
make important organizational issues fall into “blind spots” and therefore very difficult to take care
of. Two clear examples are:
o the current institutional decision structure does not consider the interests and contributions of all
stakeholders. SalmonChile is mainly a producer’s organization and although suppliers have been
able to become members for some years, they are not represented on the Board. Neither are
interested social groups -trade unions, environmental organizations or coastal communities part
of the Association. This obvious breakdown for cluster management has not gone into
SalmonChile’s agenda yet.
14
o the appointment of the principal decision makers (basically the SalmonChile Board) is mainly
based on their firms’ importance and their positions rather than their ability to face challenges or
their individual and complementary competencies. There are no defined accountability criteria.
5. TCSC AND THEIR APPLICATION TO THE SALMON CLUSTER. Successes and failures.
In 2004, the Salmon Industry Association signed a framework agreement with the University of Chile’s
Faculty of Physical Sciences and Mathematics for the Department of Industrial Engineering (DII) and
other academic units to collaborate in the identification and design of actions to face the industry’s
increasing strategic challenges.
From this grew the Program for Strengthening Social Capital in the Chilean Salmon Cluster (Programa
de Fortalecimiento del Capital Social del Cluster del Salmón) organized by the Program of Leadership
Abilities (Programa de Habilidades Directivas or PHD) and the Program of Technologies for the
Construction of Social Capital (Programa de Tecnologías de Construcción de Capital Social or
PTCCS). The program’s anchor is the Diploma in Leadership Abilities for the Salmon Cluster
(Diplomado de Habilidades Directivas para Líderes del Cluster del Salmón), whose main objectives
are:
to increase the interpersonal and leadership skills of those who play important roles in the sector’s
producing and supplier companies as well as the relevant national and regional public
organizations.
to create circumstances that increase trust, interpersonal relations and networks among participants.
15
to identify together the cluster’s limiting paradigms” (paradigmas encadenantes) and “major
breakdowns(quiebres maestros) and design actions and projects to deal with them, learning how
to transform problems into innovation opportunities.15
The first version of this innovative program for the construction of social capital took place between
April 2005 and January 2006. It was well evaluated by the nearly sixty participants, which included
important stakeholder representatives, among them the President of a leading company and the past
President of SalmonChile, the Undersecretary for Fisheries, the National Director of the National
Fishing Service (Servicio Nacional de Pesca ) -the sector’s monitoring agency- and many high level
company executives and public directors.16 This program confirmed the current weakness of the
cluster’s social capital, illustrated by the participants’ identification of “lack of trust”, “lack of a
common goal”, “poor communications”, etc. as “major breakdowns 17, and “success” a one of the main
limiting paradigms”.18
The Diploma was instrumental for the increase of trust, communication and the feeling of community
among participants. However it was not so successful in establishing participant owned long term
projects to tackle these failures. This directly relates to the problems that the cluster faces -lack of trust,
skepticism, and little commitment to common projects.
15 See www.phd.cl for more information.
16 Statements available at http://phd.cl/dhds/calendario.php.
17 Participants consensus on the main “major breakdowns” included: lack of capacity to anticipate and react to
protectionism in export markets; mistrust, lack of a shared vision and commitment in the cluster; vulnerability to increasing
food safety requirements, low educational level of labor, rigid and authoritarian culture as the main factors at industry level;
lack of integration, bureaucracy and overwhelming regulations at the public level; community’s criticism regarding social,
labor and environment practices, and lack of compatibility in the use of territory (small fishing and tourism).
18 As the main “habilitating paradigms” of the salmon cluster, participants identified the industry as a sustainable activity in
coexistence with others; consciousness of being an entrepreneurial and innovative industry; the contribution it makes
(salmon is healthy; the industry is the basis of regional development; it is competitive); and the worth of cooperation. The
main “limiting paradingms” identified were the lack of nacional technological development; low salaries; feeling of success;
and pollution generated by the industry.
16
The Program for the Strengthening of the Salmon Cluster considers a number of activities additional to
the Diploma, among which are local seminars, leadership and innovation workshops and thematic
roundtables. Recently the program’s progress has been weakened by a number of different factors,
among which is the recent change in Chile’s government with new public officials unfamiliar and
cautious with these initiatives, as well as changing the policy focus from economic growth to the
“social agenda”. As a result there is less public policy attention being paid to the social and political
sustainability of salmon farming. So too some of the largest firms have been reluctant to participate in
the program. All this would seem to confirm the unfavorable evolution of social capital which, in
addition to SalmonChile’s weakened awareness, will and capacity to intervene with a strategic
management perspective, could be affecting negatively the cluster’s management capacity and might
bring risks for its sustainability and projection over time.
6. CONCLUSIONS AND RECOMMEDATIONS
The case study, together with direct knowledge acquired from various activities with cluster
participants, is the basis of the following conclusions and future research suggestions.
a) The Chilean salmon cluster
Social capital played a central role in the initial stages of cluster development. However, it has not
evolved at a similar pace, which, together with the associated relatively low levels of trust, have
negatively affected the cluster’s strategic management capabilities and must be overcome to
properly face current challenges.
The current institutional structure does not represent all stakeholders and so reduces the
possibilities of joint actions, leads to conflicts, sometimes in extreme ways, and as a result limits
17
the potential for co-operation and innovation. Even if SalmonChile allowed the incorporation of
suppliers, these, being a larger number, have no participation in the board. Altogether, this situation
is generating a latent governance crisis and should be changed. One possibility is the design of an
overarching co-ordination structure of which SalmonChile would be an important component as
representative of producers.
b) Clusters in general
As cluster co-ordination depends mainly on goodwill and participant’s dispositions, rather than
compulsion, then an appropriate level of social capital (and trust) is necessary to allow effective
strategic management. Therefore encouraging social capital ought to be one of managements
central concerns. It should be considered that this need increases over time, as a result of the
cluster’s development and the evolution and increased complexity of the interrelations between
participants and with the cluster’s environment.
The satisfactory development of a cluster requires effective co-ordination capability of the main
actors with the sufficient legitimacy to make decisions for all. The leadership should be
representative of different interests, and skilled in managing challenges (including the articulation
of interests and actors). A cluster is a complex “business” that needs to be managed strategically.
Clusters present a broad range of industrial organization issues which arise as attractive research
themes. These could include:
o The convenience of absence of dominant firms in the early growth stages of clusters.
o The relationship between the development of a cluster and its main positive characteristics (co-
operation, innovation, etc.). It could be that when moving to mass production, the clusters
success itself results in a more traditional industrial structure (vertical and horizontal
integration, dominant players, and emphasis on costs, margins and shareholder value). This is
one possible interpretation of the recent experience of Chile’s salmon cluster.
18
Another future research issue refers to the evolution of strategic management needs and action
range as the cluster develops. A related issue to be considered are the changing requirements of
institutional arrangements in this process.
The experience acquired by DII in the salmon industry, together with previous work in different
companies, industries and regions in the country, has allowed to enrich and to tune the social capital
building technology (“sociotechnology”) and its integration with the theory on which it rests. Some
interesting results have been the confirmation of Diplomas as effective social capital building spaces,
whose contribution improves with a proper selection of participants to help the development of trust
and networks inside the respective organization or community; the convenience of considering follow-
up activities to keep up the relationships and new practices established, which tend to debilitate
influenced by traditional ways of doing things; and the convenience of including tools to measure
social capital, to allow a more precise evaluation of the contribution of these interventions and its
evolution over time. In clusters, where associative practices play a central role, sociotechnology’s
contribution to the establishment and strengthening of trust and relationships needed for their
development is of special interest.
Strategic management has a new and propitious field in clusters. Even more than in companies, where
it is also increasingly evident, new and more powerful paradigms are required that take into account
more than rational and structural dimensions. Cultural factors can no longer be ignored. Strategic
management of cluster requires to simultaneously and harmoniously deal with structure and culture.
The good news is that we know -or at least have good reasons to believe- that cultures, including social
capital, are capable of being transformed, which opens a fascinating new perspective to the practice of
strategic management.
19
New developments, paradigms and tendencies in management that focus on the emotional and spiritual
dimensions of human behavior will be of great help in dealing with these challenges. As Harvard
Business Review, following Peter Drucker’s seminal “Managing Oneself” 1996 paper, has repeatedly
highlighted in recent years, management of the future will need “…breaking through old habits of
thinking to uncover fresh solutions to perennial problems and alsobreaking through the
interpersonal barriers that we all erect against genuine human contact”.19
Especially for cluster understanding these developments will be of great importance. Clusters are over
all processes of building new realities through new connections among very different types of
organizations and human beings. A more human approach to management will therefory shed light and
facilitate cluster research and management.
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21
Centro de Gestión (CEGES)
Departamento de Ingeniería Industrial
Universidad de Chile
Serie Gestión
Nota : Copias individuales pueden pedirse a ceges@dii.uchile.cl
Note : Working papers are available to be request with ceges@dii.uchile.cl
2001
29. Modelos de Negocios en Internet (Versión Preliminar)
Oscar Barros V.
30. Sociotecnología: Construcción de Capital Social para el Tercer Milenio
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Koldo Echebarria Ariznabarreta
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Álvaro V. Ramírez Alujas
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35. Modelo de Diseño y Ejecución de Estrategias de Negocios
Enrique Jofré R.
36. The Derivatives Markets in Latin America with an emphasis on Chile
Viviana Fernández
37. How sensitive is volatility to exchange rate regimes?
Viviana Fernández
38. Gobierno Corporativo en Chile después de la Ley de Opas
Teodoro Wigodski S. y Franco Zúñiga G.
39. Desencadenando la Innovación en la Era de la Información y el Vértigo Nihilista
Carlos Vignolo
40. La Formación de Directivos como Expansión de la Conciencia de Sí
Carlos Vignolo
22
41. Segmenting shoppers according to their basket composition: implications for
Cross-Category Management
Máximo Bosch y Andrés Musalem
42. Contra la Pobreza: Expresividad Social y Ética Pública
Sergio Spoerer
43. Negative Liquidity Premia and the Shape of the Term Structure of Interest Rates
Viviana Fernández
2003
44. Evaluación de Prácticas de Gestión en la Cadena de Valor de Empresas Chilenas
Oscar Barros, Samuel Varas y Richard Weber
45. Estado e Impacto de las TIC en Empresas Chilenas
Oscar Barros, Samuel Varas y Antonio Holgado
46. Estudio de los Efectos de la Introducción de un Producto de Marca Propia en
una Cadena de Retail
Máximo Bosch, Ricardo Montoya y Rodrigo Inostroza
47. Extreme Value Theory and Value at Risk
Viviana Fernández
48.
Evaluación Multicriterio: aplicaciones para la Formulación de Proyectos de Infraestructura
Deportiva
Sara Arancibia, Eduardo Contreras, Sergio Mella, Pablo Torres y Ignacio Villablanca
49.
Los Productos Derivados en Chile y su Mecánica
Luis Morales y Viviana Fernández
50. El Desarrollo como un Proceso Conversacional de Construcción de Capital Social: Marco
Teórico, una Propuesta Sociotecnológica y un Caso de Aplicación en la Región de Aysén
Carlos Vignolo F., Christian Potocnjak C. y Alvaro Ramírez A..
51. Extreme value theory: Value at risk and returns dependence around the world
Viviana Fernández
52. Parallel Replacement under Multifactor Productivity
Máximo Bosch y Samuel Varas
53. Extremal Dependence in Exchange Rate Markets
Viviana Fernández
54. Incertidumbre y Mecanismo Regulatorio Óptimo en los Servicios Básicos Chilenos
Eduardo Contreras y Eduardo Saavedra
2004
55. The Credit Channel in an Emerging Economy
Viviana Fernández
56. Frameworks Derived from Business Process Patterns
Oscar Barros y Samuel Varas
57. The Capm and Value at Risk at Different Time Scales
Viviana Fernández
23
58. La Formación de Líderes Innovadores como Expansión de la Conciencia de Sí: El Caso del
Diplomado en Habilidades Directivas en la Región del Bío-Bío Chile
Carlos Vignolo, Sergio Spoerer, Claudia Arratia y Sebastián Depolo
59. Análisis Estratégico de la Industria Bancaria Chilena
Teodoro Wigodski S. y Carla Torres de la Maza
60. A Novel Approach to Joint Business and System Design
Oscar Barros
61. Los deberes del director de empresas y principales ejecutivos
Administración de crisis: navegando en medio de la tormenta
Teodoro Wigodski
62. No más VAN: el Value at Risk (VaR) del VAN, una nueva metodología para análisis de riesgo
Eduardo Contreras y José Miguel Cruz
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Nuevas perspectivas en la formación de directivos: habilidades, tecnología y aprendizaje
Sergio Spoerer H. y Carlos Vignolo F.
64. Time -Scale Decomposition of Price Transmission in International Markets
Viviana Fernández
65. Business Process Patterns and Frameworks: Reusing Knowledge in Process Innovation
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66.
Análisis de Desempeño de las Categorías en un Supermercado Usando Data Envelopment
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Máximo Bosch P., Marcel Goic F. y Pablo Bustos S.
67. Risk Management in the Chilean Financial Market The VaR Revolution
José Miguel Cruz
2005
68. Externalizando el Diseño del Servicio Turístico en los Clientes: Teoría y un Caso en Chile
Carlos Vignolo Friz, Esteban Zárate Rojas, Andrea Martínez Rivera, Sergio Celis Guzmán y
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La Medición de Faltantes en Góndola
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Programa de Formación en Ética para Gerentes y Directivos del Siglo XXI: Análisis de las
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72. Adjustment of the WACC with Subsidized Debt in the Presence of Corporate Taxes:
the N-Period Case
Ignacio Vélez-Pareja, Joseph Tham y Viviana Fernández
73. Aplicación de Algoritmos Genéticos para el Mejoramiento del Proceso de Programación del
Rodaje en la Industria del Cine Independiente
Marcel Goic F. y Carlos Caballero V.
24
74. Seguro de Responsabilidad de Directores y Ejecutivos para el Buen Gobierno Corporativo
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75. Creatividad e Intuición: Interpretación desde el Mundo Empresarial
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76. La Reforma del Estado en Chile 1990-2005. Balance y Propuestas de Futuro
Mario Waissbluth
77. La Tasa Social de Descuento en Chile
Fernando Cartes, Eduardo Contreras y José Miguel Cruz
78. Assessing an Active Induction and Teaming Up Program at the University of Chile
Patricio Poblete, Carlos Vignolo, Sergio Celis, William Young y Carlos Albornoz
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8
2.
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83. Strategic Management of Clusters: The Case of the Chilean Salmon Industry
Carlos Vignolo F., Gastón Held B., Juan Pablo Zanlungo M.
... During the commercial development process, the salmon industry faced different difficulties (sanitary crises, social conflicts, market problems, etc.) that affected the industry itself, the local communities and other actors directly or indirectly related to the activity. Some of these problems have been attributed, among other things, to a lack of good governance (Vignolo et al. 2007;Bustos-Gallardo 2017). Some of these problems still persist and are challenges to be faced by the industry. ...
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We identify and discuss the main problems and challenges in sustainable development faced by the salmon farming industry in Chile from a socio‐economic perspective. This perspective is broad, in that it includes how the industry interacts with society and the environment, but also limited, in that it only assesses the impact on different social groups and economic agents. First, we present a brief description of the structure and socio‐economic relevance of salmon farming in the country. Second, we identify and discuss the primary current issues in the sustainable development of salmon farming in Chile. Third, we identify and discuss the challenges for developing sustainable salmon farming in Chile, including regulatory design and sectoral management, options for future expansion of the industry, responses and adjustments in the face of climate change and climatic variability, and the proper handling and growth of public‐private cooperation and goods governance.
... As represented in Fig. 6.1, currently each barrio consists of concessions of different owners (firms) and products (species of salmon: coho, trout, salar (atlantic)), which means the barrios bring together various stakeholders with diverse interests. The decision-making process within the barrio can therefore be complex, particularly given the lack of trust and social capital within the industry (Vignolo et al. 2007). ...
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Institutions matter for development but there is no clear consensus on how existing institutions can be transformed to better accommodate economic activities in an inclusive and sustainable manner (Acemoglu and Johnson 2012). Institutions can be defined in various ways. In this chapter, we consider institutions as mechanism that shape agents’ behaviors: “a system of social factors that conjointly generate a regularity of behavior” (Greif 2006, 30). Here, a system is considered as the combination of ‘rules of the game’, norms, beliefs, routines, organizations, and interactions that influence the outcome and the behavior of the various agents involved. It is also “self-sustaining salient patterns of social interactions, as represented by meaningful rules that every agent knows and are incorporated as agents’ shared beliefs about how the game is played and to be played” (Aoki 2007, 6). The common point in the above statements is the idea that institutions are the mechanisms that determine the individuals’ behaviors as well as the outcomes of complex interaction among stakeholders.
... Hoy son solo unos 40. La sofisticación comercial a desarrollado productos de gran valor agregado y mercados de exportación muy diversos (Vignolo, Held, & Zanlungo, 2007). Del total de actividades del sector, que incluye la mitilicultura en un 3,6% (cultivo de choritos), pectinicultura un 0,9% (ostión) y el cultivo de algas en un 2%, solo la acuicultura ha alcanzado características de clúster (Desafíos estrategicos para la Acuicultura, 2009). ...
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Full-text available
This book is the first to analyze Chile’s salmon farming industry in discussing industrial development in terms of the management of public goods. The book highlights important aspects of learning and capacity development, environmental sustainability, institutions, and social welfare or inclusiveness. With aquaculture now providing almost half the global fish harvest, Chile’s salmon farming and processing industry stands out as a leader in the new “blue revolution”. Taking a holistic, historic approach to understanding the evolutionary development of the industry, the authors employ this strategy in the belief that policy discussions of economic activities have become highly segmented and often provide only a partial picture. Such segmentation is problematic for policy studies based on a complex web of interactions among numerous agents. The present volume untangles this web by considering the development of the Chilean salmon industry not only in holistic and historic terms but also from a socioeconomic point of view. The valuable book offers insightful lessons that can be applied to other natural resource-based sectors facing similar challenges in the course of development.
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Since the mid-1980s, the Chilean salmon industry has steadily increased its annual production, propelled by a rapidly growing world demand for seafood (Montero 2004). The rapid expansion in production volume came hand in hand with the development of new institutions and new forms of social interaction among industry associations, universities, research institutions and other bodies. However, we can also observe that even at this incipient stage, there were already some imbalances in the co-evolutionary process. Chile achieved a successful ‘catch up’ in terms of nearing the production capacity of Norway (the largest exporter of salmon in the world) at the beginning of the first decade of the 2000s. However, this catch up was not comprehensive in all areas, particularly when we consider the aspects of innovation, development of local technological capabilities, sustainable production via monitoring of sanitation and environmental conditions, and overall institutions in general. Thus the process of industrial growth might not have been as successful as first impressions would suggest.
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This study brings an organizational identity perspective to the debate regarding corporate social responsibility (CSR) and multinational corporations (MNCs). The basic proposition is that organizational identities warrant closer attention since they influence CSR strategies. It is further argued that a more explicit distinction between principles and practices, or between ‘being’ and ‘doing’, is needed when debating whether multiple organizational identities are required for MNCs operating in locations characterized by different stakeholder demands. In terms of identity construction, two translation processes are suggested to be pertinent; from hypernorms to organizational principles and the translation of organizational principles to practices. The first translation is relevant since ‘hypernorms’ alone do not create the distinctiveness needed for an organizational identity to develop and the second translation helps in explaining the ability to endorse local contracts. KeywordsChile-corporate social responsibility-multinational firms-organizational identity-Norway
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From an evolutionary economics perspective, trade performances can be explained by technology gaps, and differences in rates of technological accumulation are considered to be based on various factors including macroeconomic conditions, social/cultural environment, and industrial structure (Dosi, Pavitt and Soete, 1991). In their analysis, the firm's structural or organizational capability is considered as embedded in technology capability, as the key to determining trade performance. For this reason organizational and structural factors were not explicitly accounted for in their export performance model. In this paper, based on the governance literature, structural and organizational functions of firms as well as the external environment in which firms are situated are described to explain how these factors can also contribute to export performance, using the case of the Chilean salmon industry, which has grown rapidly towards world leadership over the past 20 years.
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This paper examines the influence of competitiveness councils on the microeconomic business environment. The paper explores how the structure and composition of such councils can influence their performance in improving the national business climate. Evidence comes from the experience competitiveness councils in two small European countries, Ireland and Croatia, and in the five countries of Central America. The paper presents conclusions and recommendations based upon CLACDS documents and the author's field research over a 2 year period.
Formación y desarrollo de un cluster globalizado: el caso de la industria del salmón en Chile
  • Cecilia Montero
Montero, Cecilia (2004): "Formación y desarrollo de un cluster globalizado: el caso de la industria del salmón en Chile". Serie Desarrollo Productivo Nº 145, CEPAL.
Expresividad Social y Ética Pública Sergio Spoerer 43 Negative Liquidity Premia and the Shape of the Term Structure of Interest Rates Viviana Fernández Evaluación de Prácticas de Gestión en la Cadena de Valor de Empresas Chilenas Oscar Barros
  • Pobreza Contra La
Contra la Pobreza: Expresividad Social y Ética Pública Sergio Spoerer 43. Negative Liquidity Premia and the Shape of the Term Structure of Interest Rates Viviana Fernández 2003 44. Evaluación de Prácticas de Gestión en la Cadena de Valor de Empresas Chilenas Oscar Barros, Samuel Varas y Richard Weber 45. Estado e Impacto de las TIC en Empresas Chilenas Oscar Barros, Samu el Varas y Antonio Holgado
Copias individuales pueden pedirse a ceges@dii.uchile.cl Note : Working papers are available to be request with ceges@dii.uchile
  • Centro De Gestión
Centro de Gestión (CEGES) Departamento de Ingeniería Industrial Universidad de Chile Serie Gestión Nota : Copias individuales pueden pedirse a ceges@dii.uchile.cl Note : Working papers are available to be request with ceges@dii.uchile.cl 2001 29. Modelos de Negocios en Internet (Versión Preliminar) Oscar Barros V.
La salmonicultura en Chile: el empuje que sobra y las confianzas que faltan " ( " Salmon industry in Chile: drive surplus and trust lack " ). Presentación realizada en el II Seminario " Chile, potencia alimentaria
  • C Vial
Vial, C. (2006): " La salmonicultura en Chile: el empuje que sobra y las confianzas que faltan " ( " Salmon industry in Chile: drive surplus and trust lack " ). Presentación realizada en el II Seminario " Chile, potencia alimentaria ", Septiembre de 2006, en su calidad de Presidente de SalmonChile.
Modernización de la Gestión Pública y Construcción de Capital Social: El Caso Chileno
  • Reforma Del
Reforma del Estado, Modernización de la Gestión Pública y Construcción de Capital Social: El Caso Chileno (1994-2000)
Construyendo capital social en la región de Aysén, Chile: hacia una interpretación del desarrollo como fenómeno conversacional
  • C Vignolo
  • C Potocnjak
Vignolo, C. y Potocnjak, C. (2002): "Construyendo capital social en la región de Aysén, Chile: hacia una interpretación del desarrollo como fenómeno conversacional" ("Building social capital in the Aysen region, Chile: towards an interpretation of development as a conversational phenomenon"), VII Congreso Internacional del CLAD, Portugal.
The schizophrenic corporation: corporate governance in a clustered world
  • A Chaiton
  • G Paquet
  • J Roy
  • C Wilson
Chaiton, A., Paquet, G., Roy, J. and Wilson, C. (2000): "The schizophrenic corporation: corporate governance in a clustered world". Discussion paper presented to the Competitiveness Institute 3 rd Annual Conference, Clusters in the New Millenium, Glasgow, Scotland, October 2000.