Showing papers in "British Journal of Management in 2009"

Dynamic capabilities: An exploration of how firms renew their resource base

Abstract: The aim of this paper is to extend the concept of dynamic capabilities. Building on prior research, we suggest that there are three levels of dynamic capabilities which are related to managers' perceptions of environmental dynamism. At the first level we find incremental dynamic capabilities: those capabilities concerned with the continuous improvement of the firm's resource base. At the second level are renewing dynamic capabilities, those that refresh, adapt and augment the resource base. These two levels are usually conceived as one and represent what the literature refers to as dynamic capabilities. At the third level are regenerative dynamic capabilities, which impact, not on the firm's resource base, but on its current set of dynamic capabilities, i.e. these change the way the firm changes its resource base. We explore the three levels using illustrative examples and conclude that regenerative dynamic capabilities may either come from inside the firm or enter the firm from outside, via changes in leadership or the intervention of external change agents.

Dynamic Capabilities: Current Debates and Future Directions

Abstract: The field of dynamic capabilities has developed very rapidly over the last ten years. In this paper we discuss the evolution of the concept, and identify two major current debates around the nature of dynamic capabilities and their consequences. We then review recent progress as background to identifying the contributions of the seven papers in this special issue, and discuss the relative merits of qualitative and quantitative studies for investigating dynamic capabilities. We conclude with recommendations for future research arguing for more longitudinal studies which can examine the processes of dynamic abilities over time, and for studies in diverse industries and national contexts.

Examining the Antecedents and Consequences of Corporate Reputation: A Customer Perspective

Abstract: This paper extends previous work to examine the antecedents and customer-related consequences of corporate reputation for one important stakeholder group, customers, and within a special service sector where product and corporate associations are synonymous. We begin by linking the concept of corporate reputation to related concepts. Then, using structural equation modelling on customer survey data (n=511), we examine the impact of customer satisfaction and trust on corporate reputation, as well as how corporate reputation affects customer loyalty and word of mouth behaviour. The management implications of these results are discussed.

Making Boards Effective: An Empirical Examination of Board Task Performance

Abstract: Despite the increasing attention of management scholars to boards of directors, there is still scant evidence on the antecedents of board task performance. The lack of significant results seems to be due to some theoretical and methodological choices followed by scholars, i.e. the almost exclusive reliance on agency theory and the use of demographic data. Following the call for dismantling the fortresses dominating past studies, this paper contributes to opening the ‘black box’ of boards of directors, developing a conceptual model that considers the impact of board members' diversity, commitment and critical debate on board task effectiveness in performing its service and control tasks. We collected primary data through a questionnaire survey, and we tested the model controlling for board, firm and industry characteristics. Our findings suggest that (i) the predictors we identified, and particularly the board members' commitment, are far more important than board demographics to predict board task performance; (ii) firm and industry contexts exert a significant influence on board task performance; (iii) predictors have a different impact on specific sets of tasks. Thus, our findings support the idea that several board characteristics and contingencies at both industry and firm level must be acknowledged in board design.

The Prevalence of Destructive Leadership Behaviour

Abstract: This study investigates the prevalence of the four types of destructive leadership behaviour in the destructive and constructive leadership behaviour model, in a representative sample of the Norwegian workforce. The study employs two estimation methods: the operational classification method (OCM) and latent class cluster (LCC) analysis. The total prevalence of destructive leadership behaviour varied from 33.5% (OCM) to 61% (LCC), indicating that destructive leadership is not an anomaly. Destructive leadership comes in many shapes and forms, with passive forms prevailing over more active ones. The results showed that laissez-faire leadership behaviour was the most prevalent destructive leadership behaviour, followed by supportive–disloyal leadership and derailed leadership, while tyrannical leadership behaviour was the least prevalent destructive leadership behaviour. Furthermore, many leaders display constructive as well as destructive behaviours, indicating that leadership is not either constructive or destructive. The study contributes to a broader theoretical perspective on what must be seen as typical behaviour among leaders.

The Evolving Firm: How Dynamic and Operating Capabilities Interact to Enable Entrepreneurship

Abstract: In this study, we expand our understanding of firm evolution by focusing on how operating and dynamic capabilities interact through endogenously led changes. The focus on endogenous change complements the current emphasis in the literature on how dynamic capabilities help firms cope with the risk of core rigidities following an exogenous shock. Our comparison of two collaborating firms shows that, at the operating capability level, firms build absorptive capacity in value networks during their product development experiences and this learning needs to be captured at the product portfolio planning level. When this learning is captured and transformed, product portfolio planning acts as a dynamic capability reconfiguring operating capabilities based on beliefs about follow-on entrepreneurial opportunities. Under conditions of endogenous change, dynamic capabilities are guided by a proactive entrepreneurial logic, complementing the need for reactive adaptive responses in circumstances of exogenous change. A key implication is that dynamic capabilities have a more expansive and critical role in the adaptation of firms than previously considered. Our theorizing shows how interactions between dynamic and operating capabilities build the adaptive capacity of the organization.

From resource base to dynamic capabilities: An investigation of new firms

Abstract: Despite the numerous observations that dynamic capabilities lie at the source of competitive advantage, we still have limited knowledge as to how access to firm-based resources and changes to these affect the development of dynamic capabilities. In this paper, we examine founder human capital, access to employee human capital, access to technological expertise, access to other specific expertise, and access to two types of tangible resources in a sample of new firms in Sweden. We empirically measure four dynamic capabilities and find that the nature and effect of resources employed in the development of these capabilities vary greatly. For the most part, there are positive effects stemming from access to particular resources. However, for some resources, such as access to employee human capital and access to financial capital, unexpected negative effects also appear. This study therefore provides statistical evidence as to the varying role of resources in capability development. Importantly, we also find that changes in resource bases have more influential roles in the development of dynamic capabilities than the resource stock variables that were measured at an earlier stage of firm development. This provides empirical support for the notion of treating the firm as a dynamic flow of resources as opposed to a static stock. This finding also highlights the importance of longitudinal designs in studies of dynamic capability development. Further recommendations for future empirical studies of dynamic capabilities are presented.

International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India*

Abstract: We investigate the impact of business group affiliation on the relationship between international diversification and firm performance for emerging economy firms. We develop the theoretical arguments based on an integration of the literature on international diversification with the institutional theory perspective. We argue for a U-shaped relationship between international diversification and firm performance, and suggest that a firm's affiliation to a business group moderates the relationship between international diversification and firm performance. Based on a sample of Indian firms, we find that firm performance is positively related to the degree of internationalization, while business group affiliation reduces the positive effect of internationalization on firm performance.

Drivers of Corporate Social Responsibility: the Role of Formal Strategic Planning and Firm Culture

Abstract: Scholars have paid considerable attention to studying the relationship between corporate social responsibility (CSR) and firm performance. Yet, little empirical research demonstrates what actually shapes or drives CSR. This paper builds a case that formal strategic planning is one such driver in that it creates awareness of and formulates responses to stakeholder demands for CSR. However, exploring single variable relationships is problematic, as other important endogenous factors need to be considered in explaining CSR. Specifically, firm culture is identified as influencing a firm’s orientation towards the responsible treatment of stakeholders. One such cultural factor, humanistic culture, is argued to have a positive effect on CSR. By studying a sample of heterogeneous firms in Australia, results demonstrate that a formal strategic planning effort is positively linked to CSR. Further, a humanistic culture positively impacts CSR, after accounting for a firm’s formal planning efforts.

Leadership Styles as Predictors of Self-reported and Observed Workplace Bullying

Abstract: The connection between leadership or management style, on the one hand, and perceptions of bullying, on the other, has received little attention within bullying research. Hence, the aim of this study is to examine the relationship between subordinates' ratings of their immediate superiors' behaviours, and both perceived exposure and claims of observations of bullying at work. Based on a sampling process which emphasized randomness and representativeness, the responses from 5288 respondents in Great Britain taking part in a nationwide study on psychosocial issues at work were included in the analysis. Bullying correlated with all four leadership styles measured. Yet, ‘non-contingent punishment’ emerged as the strongest predictor of self-perceived exposure to bullying, while autocratic leadership was the strongest predictor of observed bullying. Hence, while observers particularly associate bullying with autocratic or tyrannical leader behaviour, targets relate bullying more to non-contingent punishment, i.e. an unpredictable style of leadership, where punishment is meted out or delivered on leaders' own terms, independent of the behaviour of subordinates. In addition, laissez-faire leadership emerged as a predictor of self-reported as well as observed bullying. Thus, leadership styles seem to play an important but complex role in the bullying process.

Investing with Prejudice: the Relationship Between Women's Presence on Company Boards and Objective and Subjective Measures of Company Performance

Abstract: This paper presents a comprehensive archival examination of FTSE 100 companies in the period 2001–2005, focusing on the relationship between the presence of women on company boards and both accountancy-based and stock-based measures of company performance. Consistent with work by Adams, Gupta and Leeth this analysis reveals that there was no relationship between women’s presence on boards and ‘objective’ accountancy-based measures of performance (return on assets, return on equity). However, consistent with ‘glass cliff’ research there was a negative relationship between women’s presence on boards and ‘subjective’ stock-based measures of performance. Companies with male-only boards enjoyed a valuation premium of 37% relative to firms with a woman on their board. Results support claims that women are found on the boards of companies that are perceived to be performing poorly and that their presence on boards can lead to the devaluation of companies by investors. Yet the findings also indicate that perceptions and investment are not aligned with the underlying realities of company performance.

Corporate Reputation and Women on the Board

Abstract: In this paper, we investigate the determinants of corporate reputation, derived from the assessments of managers and market analysts, of a sample of large UK firms. Along with the influences of a variety of firm attributes, we find a reputational effect associated with a female presence at board level. This effect varies across sectors and demonstrates the influence of a firm's stakeholder environment in determining whether a female presence on the board enhances or harms the reputation of the firm. The pattern that emerges indicates that the presence of women on the board is favourably viewed in only those sectors that operate close to final consumers. We argue that the nature of this effect reflects an imperative for equality of representation that highlights the need to reflect gender diversity among customers. ABSTRACT FROM AUTHOR

Proactivity Directed Toward the Team and Organization: the Role of Leadership, Commitment and Role-breadth Self-efficacy

Abstract: Employees' proactive behaviour is increasingly important for organizations seeking to adapt in uncertain economic environments This study examined the link between leadership and proactive behaviour We differentiated between organizational leadership and team leadership and proposed that transformational leadership by team leaders would enhance commitment to the team, which would predict team member proactivity In contrast, transformational leadership by leaders of the organization would enhance commitment to the organization, which we expected to predict organization member proactivity Transformational leadership on both levels was expected to increase employees' role-breadth self-efficacy, the confidence necessary to engage in proactive behaviour Our results demonstrate the importance of leadership as an antecedent of proactive work behaviour and suggest that leadership at different levels influences proactivity via different mediators Transformational team leaders seem to facilitate proactivity by increasing employees' confidence to initiate change Transformational organizational leaders on the other hand increase proactivity by enhancing employees' commitment to the organization

Dynamic Marketing Capabilities in Science‐based Firms: an Exploratory Investigation of the Pharmaceutical Industry

Abstract: This paper investigates how market knowledge can benefit science-based firms. By reviewing the literature on dynamic capabilities and recent empirical works on the impact of market knowledge on technological innovation, we derive the concept of dynamic marketing capabilities and explore its validity through a qualitative study of high-performing pharmaceutical firms. We provide a description of key variables involved in market knowledge creation and release, and highlight how these activities support the creation of new products and the changes in the new product development process. We discuss our results by pointing out that dynamic marketing capabilities can contribute to a more granular understanding of management practices and performance heterogeneity in science-based settings and conclude our work by identifying its limitations and providing fruitful directions for future research on this topic.

Employee Volunteering and Social Capital: Contributions to Corporate Social Responsibility

Abstract: As employee volunteering (EV) is increasingly regarded as a means of improving companies’ community and employee relations, we investigate the contribution of EV to corporate social responsibility, specifically whether and how it contributes to social capital. We investigate the dynamics of EV in three UK companies. We explore the social relations and resources which underpin social capital creation; the roles of opportunity, motivation and ability in bringing the actors together and enhancing their capacity for cooperation; and the ways in which alternative EV modes inform the different dimensions of social capital – networks, trust and norms of cooperation. Our paper contributes to our understanding of EV and the factors that enable it to create social capital. Finally we assess the contribution of EV to the overall corporate social responsibility agenda of companies.

Cooperation and knowledge transfer within buyer-supplier relationships: The moderating properties of trust, relationship duration and supplier performance

Abstract: This paper examines the effect of relational factors on knowledge transfer within strategic buyer–supplier exchange. Prior research examining inter-firm knowledge transfer has focused almost exclusively on horizontal forms of governance such as strategic alliances and joint ventures, whilst research on vertical forms, such as buyer–supplier relationships, is limited. We test the effect of four important relational properties: cooperation, trust, relationship duration and supplier performance. Quantitative data, gathered from 104 UK manufacturing firms in eight industry sectors, are used to analyse the hypothesized relationships through a moderated hierarchical regression model. Our study provides support for the importance of considering relational factors in the transfer of knowledge at the inter-organizational level. In particular, the results indicate that knowledge transfer is positively influenced by the extent of cooperation, but that this relationship is moderated by the level of trust and the performance of the supplier firm. Managerial implications for these findings and future directions for research are then offered.

Measuring Dynamic Capabilities: Practices and Performance in Semiconductor Manufacturing

Abstract: Research on dynamic capabilities emphasizes the importance and role of organizational routines in explaining interfirm differences in performance. While performance differences are well documented, few empirical analyses explore the processes inside organizations that lead to dynamic capabilities or attempt to define and measure their performance effects. This paper examines one type of dynamic capability - the development and introduction of new process technologies in semiconductor manufacturing. This dynamic capability is an important source of competitiveness in the semiconductor industry, given the short product lifecycles, rapid price declines, and rapid technological advances that define the industry. Because much of the knowledge that underpins semiconductor manufacturing is idiosyncratic, firm-level R&D organization and information technology practices that facilitate problem solving and learning-based improvement provide important and enduring advantages. We derive models of the rate of improvement in manufacturing yield (i.e. the quality of production) and cycle time (i.e. the speed of production) following the development and introduction of new process technologies in manufacturing facilities, and test the empirical specifications of these models. The ways in which semiconductor manufacturers accumulate experience and articulate and codify knowledge within the manufacturing environment build new process development and introduction dynamic capabilities that improve performance.

Organizational Learning Capability and Job Satisfaction: an Empirical Assessment in the Ceramic Tile Industry*

Abstract: Organizational learning capability has been considered an essential issue of an organization's effectiveness and potential to innovate and grow. Although its positive effects on organizations and employees are generally assumed, there is no empirical evidence of its positive association with employee attitudes such as job satisfaction. This paper aims to investigate the relationship between organizational learning capability and job satisfaction through the questionnaire responses of 157 employees from eight companies in the Spanish ceramic tile industry. Results suggest that organizational learning capability and job satisfaction are strongly linked.

Are Female Executives Over-represented in Precarious Leadership Positions?

Abstract: We use a sample of CEO appointments at US corporations over the years 1992–2004 to test the ‘glass cliff’ hypothesis, which posits that females are appointed to leadership positions at firms that are in a precarious financial condition. Our analysis utilizes three measures of stock-price-based financial performance and two distinct control samples of appointments of males to the CEO position. We find that corporate performance preceding CEO appointments tends to favor females, implying that females (males) are appointed to the CEO position largely at times when the firm is in relatively better (worse) financial health. Disaggregating the data by appointments in up versus down markets, at high-risk versus low-risk firms, and by calendar time yield similar conclusions. There appears to be no glass cliff facing female CEOs at US firms. Our findings suggest a need for additional research to identify where and for what types of positions this phenomenon is prevalent.

The Coexistence of Competition and Cooperation between Networks: Implications from Two Taiwanese Healthcare Networks*

Abstract: The issue of coopetition, the coexistence of cooperation and competition, has recently come to the fore in the strategic management field. Previous coopetition research has focused on the intra-organizational level, inter-organizational level and triad level, but less attention has been paid to coopetition at the network level. The purpose of this paper is to address the coexistence of competition and cooperation between networks, and to depict how networks with different structures interact with each other. Drawing from a detailed case study of two healthcare networks in Taiwan, we demonstrate how they first initiated competition, followed by cooperation and then coopetition. From our analysis of this example of network coopetition, we develop three propositions that address the forces driving competition and cooperation and the different structures that allow competition and cooperation to coexist. We found that two organizations will compete and cooperate simultaneously when each organization has complementary but distinctly different sets of resources and when the field of competition is distinctly separate from the field of cooperation. In addition, two networks will find it easier to balance competition and cooperation when each network has compatible but distinctly different structures. We argue that the simultaneous existence of cooperation and competition is not dependent on closeness to the customer, as previously suggested in the literature, but on the balance between the forces for cooperation and for competition. We suggest from this research that networks can maintain the balance between competition and cooperation when they act using different structures. Finally, we discuss the implications of the value of competition and then coopetition at multiple levels of analysis and the implications for future research from a practical perspective.

Understanding Business Process Management: Implications for Theory and Practice

Abstract: Draft version published as a discussion paper. Final version published in British Journal of Management © British Academy of Management. Available online at http://onlinelibrary.wiley.com/

Creative search and strategic sense-making : missing dimensions in the concept of dynamic capabilities

Abstract: In this paper we discuss the role of managerial agency in creating and shaping dynamic capabilities. We argue that dynamic capability is a phenomenon that enables a deviation to take place from the knowledge that otherwise would have arisen cumulatively from experiential learning. In addition we argue that to create major changes in patterns of knowledge accumulation managers need to be purposefully and creatively engaged. Such agency is identifiable in two cognitive processes we call creative search and strategic sense-making. We show how these processes differ in respect to their temporal orientation and relationship to uncertainty and by adopting a process perspective we demonstrate how creative search, strategic sense-making and experiential learning are complementary. This notion of complementarity implies that these processes, notwithstanding their contrasting characteristics, coexist together and serve to offer an explanation for how knowledge progresses at a firm level. Variance is introduced into the framework proposed through the identification of factors that influence the coexistence of creative search and strategic sense-making. The argument developed is illustrated through the use of an emergent technology context.

The Influence of Top Management Teams in the Strategic Orientation and Performance of Small and Medium-sized Enterprises

Abstract: Department of Management, University of Valencia (Spain), Av. de los Naranjos s/n., 46022 Valencia, SpainCorresponding author email: alejandro.escriba@uv.esIdentifying which factors affect firms’ performance is a critical issue in strategic man-agement research. This paper addresses the influence of managerial team over thebehaviour and performance of small and medium-sized enterprises (SMEs). By treatingtop management team (TMT) characteristics as predictors of a firm’s strategicorientation, we seek to provide a more complete understanding of how thecharacteristics of managerial teams shape decision-making processes and SMEs’behaviours in order to successfully compete in low munificent environments. Based onprimary data regarding managerial characteristics and firms’ behaviours of a sample of295 SMEs, our results confirm that a firm’s strategic orientation plays a mediating rolein explaining how TMT characteristics determine SMEs’ performance.

Corporate Reputation: Do Board Characteristics Matter?

Abstract: BSH Bosch und Siemens Hausgeraete GmbH, Carl-Wery-Str. 34, 81739 Munich,GermanyEmail: mmusteen@mail.sdsu.edu; ddatta@uta.edu; benedict.kemmerer@bshg.comOur study draws on institutional and signalling theories to postulate relationshipsbetween board characteristics and corporate reputation. Based on a sample of 324 firmsfeatured in Fortune’s list of most admired corporations in the USA, our findingsindicate that board characteristics significantly influence the assessment of firmreputation by the business community. Specifically, we found that firms with a greaterproportion of outside directors and those with larger boards exhibited better reputationthan those with smaller boards and a higher proportion of insiders. In addition, weobserved an inverted-U relationship between the average tenure of outside directors andcorporate reputation. However, contrary to expectations, our findings indicate anegative association between independent leadership structure (i.e. absence of duality)and corporate reputation.

Measurement of Perceived Organizational Readiness for Change in the Public Sector

Abstract: Using the act frequency approach we developed and operationalized two constructs: perceived organizational readiness for change and perceived organizational unreadiness for change. Using a sample drawn from five Canadian public sector organizations, it was found that perceived readiness for change can be conceptualized with three sub-constructs: commitment of senior managers to the change, competence of change agents, and support of the immediate manager. Perceived unreadiness for change had two sub-constructs: poor communication of change and adverse impact of change on work. Using structural equation modelling techniques, the measurement scales of all these constructs were tested for reliability and validity using job stress and perceived organizational support as outcome variables.

Knowledge Accession and Knowledge Acquisition in Strategic Alliances: The Impact of Supplementary and Complementary Dimensions

Abstract: This paper advances the concepts of knowledge accession and knowledge acquisition in strategic alliances by identifying supplementary and complementary dimensions to these knowledge transfer modes. Complementary knowledge transfer reflects the similarity of knowledge that the partners have and is conducted in pursuit of higher efficiency and productivity to enhance partner firms' existing competitiveness. Supplementary knowledge transfer occurs when partners each possess distinctive core competences and the information that is acquired or accessed increases the business scope of partners. As knowledge accession entails knowledge amalgamation that does not involve organizational learning, costs associated with the transfer process are lower and trust is easier to establish than in the case of knowledge acquisition. The paper reviews the implications of these transfer modes on trust building in alliances and their costs implications and presents a number of propositions for further exploration.

Building Organizational and Scientific Platforms in the Pharmaceutical Industry: A Process Perspective on the Development of Dynamic Capabilities

Abstract: In this paper, we examine the process of dynamic capability development in a large pharmaceutical firm. Using interviews with multiple managers at different organizational levels, we developed two narratives of the process of developing two separate dynamic capabilities in the same firm. We focus on three areas that prior research has shown to be critical in the early stages of the process of implementing new strategic initiatives: the cognitive orientations of key personnel, managerial action undertaken within the firm, and the firm’s internal and external contexts. We provide evidence that managers undertake specific initiatives based on their own particular cognitive orientations, and that senior managers play a major role in the development of capabilities by imprinting the organization with their specific cognitive orientation and then orchestrating the multilevel organizational routines necessary for actualization of a capability. These replicable actions by senior management during the early stages of capability development can lead to the development of a capability that is not initially in the cognitive frames of lower level employees. Finally, we will show that internal and external contingencies have a profound impact on the decision to develop a capability, and to discontinue its development. Our findings thus suggest that the process of developing new capabilities shares common elements with other strategic initiatives.

Cooperation, Trust and Performance – Empirical Results from Three Countries

Abstract: Reverting to the resource-based view of strategic management and cooperation theory, we provide argumentation for the value of two critical resources to cooperating firms: cooperation experience and maxim-based trust. The results of a large-scale survey in three European countries (Austria, Slovenia and the Czech Republic) reveal an important fact: although cooperation experience contributes to business performance, the contribution of maxim-based trust to success is significantly higher. As a result, corporate success depends not only on the quantity of cooperation experience, but also – and to an even greater extent – on the quality of cooperation with regard to the form of coordinative power established within the cooperation arrangement. Given that maxim-based trust has been identified as a feasible coordination mechanism in cooperation relationships, it might therefore be freed from its frequent characterization as utopian and out of touch with reality.

Competitive Strategies and Firm Performance: a Comparative Analysis of Pure, Hybrid and ‘Stuck‐in‐the‐middle’ Strategies in Spanish Firms

Abstract: The purpose of this study was to examine the viability of hybrid competitive strategies, which combine differentiation and cost elements, and their impact on organizational performance in comparison to pure strategies and ‘stuck-in-the-middle’ combinations. Previous studies have focused above all on US data. The analysis carried out in this paper has centred on a multisectorial sample of 164 Spanish firms. The findings show that a large number of the organizations use different types of hybrid strategies and also that such strategies tend to be associated with higher levels of firm performance, particularly those strategies which place emphasis on a greater number of strategic dimensions, and specifically on innovation differentiation.

Competing and Cooperating Similarity in Global Strategic Alliances: An Exploratory Examination

Abstract: We used two variables, competing similarity and cooperating similarity, in developing a comprehensive model that forces a simultaneous treatment of partner characteristics and partner capabilities in global strategic alliances. An empirical test of this model on a sample of 70 global strategic alliances indicated mixed support for our hypotheses, and suggested that competing similarity has a negative effect and cooperating similarity has a positive effect on alliance outcomes. Findings also show that deliberate ‘relational efforts’ mitigate the frictional effects of differences in partner characteristics.