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Showing papers by "Stockholm School of Economics published in 2003"


Journal ArticleDOI
TL;DR: The authors empirically examined the decision to transfer the capability to manufacture new products to wholly owned subsidiaries or to other parties and found that the less codifiable and the harder to teach is the technology, the more likely the transfer will be to wholly-owned operations.
Abstract: Firms are social communities that specialize in the creation and internal transfer of knowledge. The multinational corporation arises not out of the failure of markets for the buying and selling of knowledge, but out of its superior efficiency as an organizational vehicle by which to transfer this knowledge across borders. We test the claim that firms specialize in the internal transfer of tacit knowledge by empirically examining the decision to transfer the capability to manufacture new products to wholly owned subsidiaries or to other parties. The empirical results show that the less codifiable and the harder to teach is the technology, the more likely the transfer will be to wholly owned operations. This result implies that the choice of transfer mode is determined by the efficiency of the multinational corporation in transferring knowledge relative to other firms, not relative to an abstract market transaction. The notion of the firm as specializing in the transfer and recombination of knowledge is the foundation to an evolutionary theory of the multinational corporation.

3,354 citations


Journal ArticleDOI
TL;DR: In this article, the authors explored heterogeneity in how firms have achieved high growth and identified seven different types of firm growth patterns related to firm age and size as well as industry affiliation.

1,275 citations


Journal ArticleDOI
TL;DR: It is the responsibility of model developers to conduct modeling studies according to the best practicable standards of quality and to communicate results with adequate disclosure of assumptions and with the caveat that conclusions are conditional upon the assumptions and data on which the model is built.

1,127 citations


Journal ArticleDOI
TL;DR: In this paper, the authors investigated the relationship between MNC subsidiary HRM practices, absorptive capacity and knowledge transfer, and found that both ability and motivation are needed to facilitate the transfer of knowledge from other parts of the MNC.
Abstract: Based on a sample of 169 subsidiaries of multinational corporations (MNCs) operating in the USA, Russia, and Finland, this paper investigates the relationship between MNC subsidiary HRM practices, absorptive capacity and knowledge transfer. First, we examine the relationship between the application of specific HRM practices and the level of the absorptive capacity. Second, we suggest that absorptive capacity should be conceptualized as being comprised of both employees’ ability and motivation. Further, results indicate that both ability and motivation (absorptive capacity) are needed to facilitate the transfer of knowledge from other parts of the MNC.

1,026 citations


Journal ArticleDOI
TL;DR: In this article, the authors discuss how the interior processes of a project are influenced by its historical and organizational context and suggest that future research on project management needs to extend its temporal scope, analyzing how project practices evolve through history over prior, present, and future projects, as well as its organizational scope.

1,019 citations


Journal ArticleDOI
TL;DR: In this article, the authors argue that business planning is an important precursor to action in new ventures, by helping firm founders to make decisions, to balance resource supply and demand, and to turn abstract goals into concrete operational steps.
Abstract: Many prior researchers have criticized business planning, arguing that it interferes with the efforts of firm founders to undertake more valuable actions to develop their fledgling enterprises. In this paper, we challenge this negative view of business planning, arguing that business planning is an important precursor to action in new ventures. By helping firm founders to make decisions, to balance resource supply and demand, and to turn abstract goals into concrete operational steps, business planning reduces the likelihood of venture disbanding and accelerates product development and venture organizing activity. Empirically, we examine 223 new ventures initiated in the first 9 months of 1998 by a random sample of Swedish firm founders and provide support for our hypotheses. Copyright © 2003 John Wiley & Sons, Ltd.

912 citations


Journal ArticleDOI
TL;DR: In this article, the authors make a contribution to the theory of development of the internationalization process of Born Globals and propose that models emphasizing knowledge and networks are suitable for this purpose.

810 citations


Journal ArticleDOI
Abstract:  In this article, we use the theory of planned behaviour to develop a model of small business managers’ growth aspirations and the level of growth achieved. We empirically test this model on a large longitudinal data set of small firms using hierarchical regression. Consistent with previous findings and others’ assumptions, we find that small business managers’ aspirations to expand their business activities are positively related to actual growth. However, the relationship between aspirations and growth appears more complex than stated. It depends on the level of education and experience of the small business manager as well as the dynamism of the environment in which the business(es) operates. Education, experience and environmental dynamism magnify the effect that one’s growth aspirations have on the realization of growth.

592 citations


Journal ArticleDOI
TL;DR: In this paper, the authors focus on the Third Party Logistics (TPL) business and how their different strategies develop over time with a special focus on how they balance between general problem solving capability and the degree of customer adaptation.

591 citations


Journal ArticleDOI
01 May 2003-Bone
TL;DR: Hip fracture was a more common cause for mortality than pancreatic or stomach cancer and interventions that decreased hip fracture rate by, say, 50% would avoid 0.75% or more of all deaths.

522 citations


Journal ArticleDOI
TL;DR: In this paper, the authors suggest a framework for analyzing strategic factor market imperfections and suggest that a strategic opportunity exists whenever prices fail to reflect the value of a resource's best use.
Abstract: As emphasized by Barney (1986), any explanation of superior profitability must account for why the resources supporting such profitability could have been acquired for a price below their rent-generating capacity. Building upon the literature iti economics on coordination failures and incomplete markets, we suggest a framework for analyzing such strategic factor market inefficiencies. Our point of departure is that a strategic opportunity exists whenever prices fail to reflect the value of a resource's best use. This paper examines the challenges of imputing a resource's value in the absence of explicit price guidance and suggests the likely characteristics of strategic opportunities. Our framework also suggests that the discovery of strategic opportunity is often a matter of 'serendipity' and access to relevant idiosyncratic resources. This latter observation provides prescriptive advice, although the analysis also explains why more detailed guidance has to be firm specific.

Journal ArticleDOI
TL;DR: In this article, the authors explore the nature of organizational settings where a large extent of the operations is organized as simultaneous or successive projects and analyze why the resource allocation syndrome is the number one issue for multi-project management.

Posted Content
01 Jan 2003
TL;DR: In this paper, the authors suggest a framework for analyzing strategic factor market inefficiencies and suggest that the discovery of strategic opportunity is often a matter of serendipity and access to relevant idiosyncratic resources.
Abstract: As emphasized by Barney (1986), any explanation of superior profitability must account for why the resources supporting such profitability could have been acquired for a price below their rent generating capacity. Building upon the literature in economics on coordination failures and incomplete markets, we suggest a framework for analyzing such strategic factor market inefficiencies. Our point of departure is that a strategic opportunity exists whenever prices fail to reflect the value of a resource's best use. This paper examines the challenges of imputing a resource's value in the absence of explicit price guidance and suggests the likely characteristics of strategic opportunities. Our framework also suggests that the discovery of strategic opportunity is often a matter of serendipity and access to relevant idiosyncratic resources. This latter observation provides prescriptive advice, although the analysis also explains why more detailed guidance has to be firm specific.

Journal ArticleDOI
TL;DR: This paper examined the relationship between expected consequences of growth on the one hand, and overall attitude toward growth, and concluded that noneconomic concerns may be more important than expected financial outcomes in determining overall attitude towards growth.
Abstract: This study focuses on small business managers’ motivation to expand their firms. More specifically, we examine the relationships between expected consequences of growth on the one hand, and overall attitude toward growth on the other. Data were collected in three separate studies over a ten–year period using the same measuring instrument. The results suggest that noneconomic concerns may be more important than expected financial outcomes in determining overall attitude toward growth. In particular, the concern for employee well–being comes out strongly. We interpret this as reflecting a concern that the positive atmosphere of the small organization may be lost in growth. We conclude that this concern may be a cause for recurrent conflict for small business managers when deciding about the future route for their firms.

Journal ArticleDOI
TL;DR: In this paper, the authors examine how firm characteristics, legal rules, and financial development affect corporate finance decisions and show that institutions play an important role in determining the extent of agency problems, in particular, in countries with good creditor protection, it is easier for firms investing in intangible assets to obtain loans.
Abstract: This paper examines how firm characteristics, legal rules, and financial development affect corporate finance decisions. In contrast to the existing literature, I use data on unlisted companies to show that institutions play an important role in determining the extent of agency problems. In particular, I find that in countries with good creditor protection, it is easier for firms investing in intangible assets to obtain loans. The protection of creditor rights is also important for ensuring access to long-term debt for firms operating in sectors with highly volatile returns. Ceteris paribus, firms are more leveraged in countries where the stock market is less developed. Unlisted firms appear more indebted than listed companies even after controlling for firm characteristics such as profitability, size, and the ability to provide collateral. Finally, institutions that favor creditor rights and ensure stricter enforcement not only are associated with higher leverage, but also with greater availability of long-term debt.

Journal ArticleDOI
TL;DR: In this paper, the authors experimentally assesses the contributions of user involvement in companies and find that user involvement is beneficial for innovation, however, the research findings regarding its benefits for innovation are contradictory.
Abstract: Although user involvement is frequently practiced in companies, the research findings regarding its benefits for innovation are contradictory. This article experimentally assesses the contributions ...

Journal ArticleDOI
TL;DR: In this paper, the authors examined the link between organizational culture and effectiveness for foreign-owned firms operating in Russia operating in a transition economy and argued that effectiveness in Russia relies more on adaptability and flexibility than it does in the United States.
Abstract: This paper examines the link between organizational culture and effectiveness for foreign-owned firms operating in Russia. Beginning with a model of organizational culture developed in the United States, the paper presents a multimethod analysis of culture and effectiveness in a transition economy. We argue that effectiveness in Russia relies more on adaptability and flexibility than it does in the United States. Furthermore, the legacy of the Communist era forces firms in Russia to deal with a workforce with a unique time perspective and a unique set of subcultures that often undermine attempts at coordination and integration. We first explore these ideas using survey data on 179 foreign-owned firms operating in Russia and compare the results to those obtained for firms in the United States. We then present four case studies designed to ground the results in the Russian context, and to document cultural dynamics not captured by the model.

Journal ArticleDOI
TL;DR: In this paper, a dual longitudinal case methodology, including a single in-depth study combined with a multiple retrospective study, involving four multinational companies, was used to evaluate how managers create and develop strategy in practice.
Abstract: Although strategy process research has provided careful and in-depth descriptions and examinations of strategy, micro-level processes and activities have been less commonly evaluated, especially as regards strategy creation and development. This paper examines how managers create and develop strategy in practice. A dual longitudinal case methodology, including a single in-depth study combined with a multiple retrospective study is used, involving four multinational companies. The findings show a twofold character of strategy creation, including fundamental different strategy activities in the periphery and centre, reflecting their diverse location and social embeddedness. Strategy making in the periphery was inductive, including externally oriented and exploratory strategy activities like trial and error, informal noticing, experiments and the use of heuristics. In contrast, strategy making in the centre was more deductive involving an industry and exploitation focus, and activities like planning, analysis, formal intelligence and the use of standard routines.

Journal ArticleDOI
TL;DR: In this paper, the authors investigate the role of the top-down nature of Swedish policies in promoting the commercialization of university-generated knowledge and argue that it is likely to be true in part due to an academic environment that discourages academics from actively participating in the commercialisation of their ideas.

Journal ArticleDOI
TL;DR: The authors show that the available sample of organizations usually undersamples failure, and that this bias frequently implies that the organizational theories of managers and other observers of organizations will be systematically biased, which can contribute to a variety of false beliefs about effective management.
Abstract: Organizations learn from other organizations. However, the observations available to them are typically a biased sample. The organizations that can be observed at any point in time are the survivors of a selective process that has eliminated a large fraction of the underlying population. In addition, there is a strong tendency to focus on successful organizations in books and the business press. As a result, the available sample of organizations usually undersamples failure. This paper shows that such undersampling of failure can contribute to a variety of false beliefs about effective management. Simply by observing existing organizations, laymen may get a misleading picture of the determinants of corporate performance. In particular, risky practices, even if they are unrelated to performance in the full population of organizations, may seem to be positively related to performance in a sample of survivors. I argue that this bias frequently implies that the organizational theories of managers and other observers of organizations will be systematically biased. Observations of existing organizations will show that unreliable, uninformed practices and practices that involve concentrated resource allocation are superior to reliable, informed practices or practices that involve diversified resource allocation. I show that this implies that observations of existing organizations will produce compelling but potentially misleading evidence for the significance several common managerial practices.

Journal ArticleDOI
TL;DR: In this article, the authors study the inflation uncertainty reported by individual forecasters in the Survey of Professional Forecasters 1969-2001 and find that disagreement is a better proxy of inflation uncertainty than what previous literature has indicated, and that forecasters underestimate inflation uncertainty.

Journal ArticleDOI
TL;DR: In this article, the authors examine the nature and the generation, dissemination and translation of knowledge in large, global management consulting organizations and argue that a fruitful understanding of knowledge management in management consulting requires attention to the relations between the different elements that represent different kinds of knowledge.
Abstract: This article examines the nature and the generation, dissemination and translation of knowledge in large, global management consulting organizations. The knowledge system in consulting organizations is modelled as consisting of three interacting knowledge elements: methods and tools, providing a common language and knowledge structure; cases, carrying knowledge in a narrative form; and the experience of individual consultants that is essential for the adaptation of methods, tools and cases to the specific consulting project.A number of recent studies have characterized knowledge-management strategies as focusing on either articulate knowledge or tacit knowledge. We argue that a fruitful understanding of knowledge management in management consulting requires attention to the relations between the different elements that represent different kinds of knowledge. Based on case studies in Andersen Consulting (now Accenture) and Ernst & Young Management Consulting (now Cap Gemini Ernst & Young) these knowledge e...

Journal ArticleDOI
TL;DR: These questions are investigated using data from Europe's largest IT services and management consulting company to suggest a positive relationship between boundary spanning communication and creativity and general performance and a negative relationship between a reliance on colocated coworkers as knowledge sources and creativity.
Abstract: With the global penetration of internet technologies, individuals may now cross organizational boundaries to communicate efficiently with others in various networks of practice regardless of time and space. Thus, when looking for help in solving work tasks, knowledge workers may just as easily contact individuals in rival firms across the globe as a coworker sitting at the next desk. As a result, management faces questions such as 1) how should firms manage employees' knowledge-sourcing activities when they span both intraorganizational and extra-organizational boundaries, and 2) what is the relationship between different knowledge-sourcing activities and individual performance? Grounded in the knowledge-based view of the firm, we investigate these questions using data from Europe's largest IT services and management consulting company. Our results provide evidence that organizations should support boundary spanning and participation in both internal and external networks of practice. Results suggest I) a positive relationship between boundary spanning communication and creativity and general performance and 2) a negative relationship between a reliance on colocated coworkers as knowledge sources and creativity.

Journal ArticleDOI
TL;DR: It is found that unemployment significantly increases therisk of suicides and the risk of dying from "other diseases" but has no significant effect on cancer mortality, cardiovascular mortality or deaths due to "other external causes" (motor vehicle accidents, accidents and homicides).

Journal ArticleDOI
TL;DR: It is concluded that trust may be an element in models explaining risk perception, but it is not as powerful as often argued in the risk perception literature.
Abstract: The relationship between trust and risk perception was investigated, within and across four European countries (Sweden, Spain, United Kingdom, and France). Survey data were collected in 1996; total number of respondents was approximately 1,000 (United Kingdom and Spain), 1,350 (France), and 2,050 (Sweden). Trust was a significant predictor of perceived risk within countries, but the strength of the relationship varied from weak (Spain and France) to moderate (United Kingdom and Sweden). General trust was also a significant source of variation in perceived risk among countries, but much of the variation in perceived risk remained unexplained. Correlations between trust and risk perception also varied depending on the type of risk (i.e., nuclear risks were more influenced by trust) and trust measure (i.e., general trust explained perceived risk better than specific trust). It is concluded that trust may be an element in models explaining risk perception, but it is not as powerful as often argued in the risk perception literature.

Journal ArticleDOI
TL;DR: In this paper, the so-called time-varying smooth transition autoregressive (TV-STAR) model is used both for describing simultaneous nonlinearity and structural change and for distinguishing between these features.
Abstract: Nonlinear regime-switching behavior and structural change are often perceived as competing alternatives to linearity. In this article we study the so-called time-varying smooth transition autoregressive (TV-STAR) model, which can be used both for describing simultaneous nonlinearity and structural change and for distinguishing between these features. Two modeling strategies for empirical specification of TV-STAR models are developed. Monte Carlo simulations show that neither of the two strategies dominates the other. A specific-to-general-to-specific procedure is best suited for obtaining a first impression of the importance of nonlinearity and/or structural change for a particular time series. A specific-to-general procedure is most useful in careful specification of a model with nonlinear and/or time-varying properties. An empirical application to a large dataset of U.S. macroeconomic time series illustrates the relative merits of both modeling strategies.

Journal ArticleDOI
TL;DR: In this article, the authors examined the relationship between a bundle or system of human resource practices and firm performance and the processes through which these HR practices affect organizational outcomes and found that employee skills, attitudes and behaviours play a mediating role between HR systems and firm outcomes in multinational corporations.
Abstract: The purpose of this study is to examine the relationship between a bundle or system of human resource (HR) practices and firm performance and the processes through which these HR practices affect organizational outcomes. Using a sample of fifty-two Japanese multinational corporation subsidiaries operating in the United States and Russia, we examine the impact of HR systems on firm performance mediated by employee skills, attitudes and motivation in an attempt to shed light on the so-called ‘black box’ through which HR practices lead to firm performance. The results support the notion that employee skills, attitudes and behaviours play a mediating role between HR systems and firm outcomes in multinational corporations. These findings illustrate the varying impact of synergistic systems of HR practices and their generalizability in different national contexts.

Journal ArticleDOI
TL;DR: This article found that plants with any foreign ownership are far less likely to close than wholly-owned domestic plants and that the lower probability of shutdown is a result of the larger size of foreign plants rather than their nationality of ownership.
Abstract: In recent years, international capital flows of all types have increased dramatically and most governments have been actively encouraging inflows of direct investment. However, concerns remain that reliance on foreign multinationals may be a risky development strategy as foreign firms are likely to be less rooted in the local economy and may be quicker to close down production. This paper asks whether foreign owners are more likely to close plants than domestic owners. In Indonesia, plants with any foreign ownership are far less likely to close than wholly-owned domestic plants. However, the lower probability of shutdown is a result of the larger size of foreign plants rather than their nationality of ownership. Controlling for plant size and productivity, we find that foreign plants are significantly more likely to close than comparable domestic establishments.

Journal ArticleDOI
TL;DR: In this article, an empirical study was conducted to explore whether ordinary users can contribute novel service ideas regarding mobile telephony, and it was found that the service innovations suggested by the users were more creative and useful than those suggested by professional developers.
Abstract: Past research has demonstrated that industrial customers can, in effect, bring about product innovation among their suppliers. However, little seems to be known as to whether consumers are also potential inventors of new services. Presents results from an empirical study with the objective of exploring whether ordinary users can contribute novel service ideas regarding mobile telephony. An experimental approach was used to compare the characteristics of new services suggested by ordinary users with services suggested by professional developers. It was found that the service innovations suggested by the users were more creative and useful than those suggested by the professionals. On the other hand, the suggestions of the professionals were deemed easier to produce. Concludes with a discussion on the contributions and limitations of user involvement, wherein the organisational role of the users involved is discussed. Also makes a proposal regarding how to further investigate the potential of the user as a co‐worker in the innovation process.

Posted Content
TL;DR: In this paper, the authors conclude that there is potential for significant "spillover effects" from FDI into host countries, and identify some limitations of this potential to do with the stock of human capital, the interest in local firms of promoting skills transfer and the competition environment.
Abstract: After a review of the literature, we conclude that there is potential for significant “spillover effects” from FDI into host countries. However, we identify some limitations of this potential to do with the stock of human capital, the interest in local firms of promoting skills transfer and the competition environment. We suggest comparing conditions and effects between regions, particularly between East Asia and Latin America, where transfer in the former has been more consistent than in the latter. We propose further that an analysis of the type of FDI flowing to different regions and countries could provide clues to the potential for maximising the gains to local skills accumulation. Finally, studies are needed which examine the nature of skills provided by FDI, and ways in which training institutions, business schools, for example, can complement in-service training by firms in FDI host countries.