Showing papers in "Journal of Strategy and Management in 2018"

Rethinking sustainability strategies

Abstract: Purpose The purpose of this paper is to provide both theorists and practitioners with a conceptual framework that links sustainability strategies more closely with Porter’s generic strategies. The intent of this approach is to establish sustainability, fundamentally, as a strategic process. The proposed models set a strategic context to tie sustainability, to mediating variables, such as innovation and technology, while also linking them to generic strategies (low cost leader, differentiation, and focus) and firm financial performance in a causal chain. The proposed model gives rise to conclusions about the effectiveness of sustainability strategies that are consistent with emerging research about the role of radical innovation in sustainability. Design/methodology/approach The paper proposes two conceptual frameworks designed to link sustainability with business strategy. These models are rooted in evolving understandings of business strategy arising from Porter’s original explanations of generic strategies and sources of competitive advantage. The first model is a causal model that links drivers, such as type of competitive strategy and mode of innovation, to competitive outcomes and firm financial performance. The second model describes how different modes of technology development, in sustainability initiatives, cause changes in firm competitive and financial outcomes. Findings The conclusions arising from the model-based insights suggest that conventional continuous and incremental improvement sustainability practices hold the potential to pose strategic risks to some firms – depending on their core business strategy. By contrast, the model provides a logical, yet, less known, rationale that suggests radical innovation in sustainability practices may pose fewer strategic risks. It may also offer relatively more competitive and financial advantages than well-established programs relying on incremental innovation. Research limitations/implications Although the proposed conceptual frameworks are rooted in strategic management theories, the proposed models and expected outcomes have not yet been empirically tested or validated. However, initially, these models appear to have more face validity in explaining breakthrough sustainability success stories, such as Nike, than do competing explanations. Most importantly, the counter-intuitive finding that radical innovation is likely to be more effective in driving both sustainability and financial outcomes is a topic for future investigation. Practical implications The proposed models and accompanying rationale have direct implications for practitioners. They provide practitioners with a road map to logically and deductively frame sustainability strategies based on their current business strategy. Practitioners are often hindered by the lack of high-level guidance for making the transition from operationally focused sustainability tactics to strategies than are congruent with current business strategies. The current paradigm of using incremental sustainability strategies on an ad hoc basis does not always provide neutral outcomes regarding financial effects and competitive advantage – they may yield negative effects. Social implications The importance of sustainability strategies and management practices cannot be overstated. On a global scale, evidence indicates that most corporate sustainability programs are ineffective at slowing the rate of global forces offsetting sustainability. The proposed models and strategic management approach are intended to dramatically increase the effectiveness of sustainability improvement by closely aligning them with corporate strategies. Historically, companies have struggled to make the leap from randomly using eco-efficiency tools to making sustainability a key component of their business strategy. Originality/value This paper integrates a number of diverse lines of inquiry from the strategic management literature into a counter-intuitive approach for integrating sustainability into a firm’s core business strategy. The proposed conceptual frameworks can be used, prospectively, to design new sustainability strategies, or it can be used, analytically (retrospectively), to understand reasons for failure or under-performance in sustainability initiatives.

Despotic leadership and organizational deviance: The mediating role of organizational identification and the moderating role of value congruence

Abstract: Drawing on the social exchange theory, the purpose of this paper is to examine the relationship between despotic leadership and employee’s organizational deviance. Specifically, the authors take a relational approach by introducing employee’s organizational identification as the mediator. The moderating role of value congruence in the relationship between despotic leadership and organizational deviance is also considered.,Data were collected from 15 universities in Turkey. The sample included 1,219 randomly chosen faculty members along with their department chairs. Hierarchical multiple regression analysis was conducted to test the proposed model.,The results of this study supported the positive effect of despotic leadership on employee’s organizational deviance as well as the mediating effect of employee’s organizational identification. Moreover, when the level of value congruence is high, the relationship between organizational identification and organizational deviance is strong, whereas the effect is weak when the level of value congruence is low.,The findings of this study suggest that educational administrators in the higher education should be sensitive in treating their subordinates, as it will lead to positive interpersonal relationship, which, in turn, will reduce organizational deviance. Moreover, they should pay more attention to the buffering role of value congruence for those subordinates with high distrust and showing organizational deviance.,This study contributes to the literature on workplace deviance by revealing the relational mechanism between despotic leadership and employee organizational deviance. The paper also offers a practical assistance to employees in the higher education and their leaders interested in building trust, increasing leader-employee relationship and reducing organizational deviance.

Empirical investigation of relationship patterns between competitive advantage and superior performance

Abstract: The purpose of this paper is to empirically investigate the relationship patterns between competitive advantage and superior performance.,This study empirically investigates the aforementioned relationship patterns using a cross-sectional, self-administered survey methodology.,The results indicate that there are four relationship patterns between competitive advantage and superior performance. In addition, this study provides empirical evidence of the reasons, underpinning the relationship pattern of competitive advantage without superior performance as well as the relationship pattern of superior performance without competitive advantage.,This study contributes to our knowledge that competitive advantage is neither a necessary nor a sufficient condition for superior performance.,In finding support that there can be cases of underperformance despite competitive advantage and superior performance despite the absence of competitive advantage, the study’s findings are useful to practicing managers involved in the strategic management process of their firms.,This study fills an important gap in the empirical research, by responding to the literature call to test the possible relationship patterns between competitive advantage and superior performance. In addition, this study formally introduces the relationship pattern of competitive advantage without superior performance, and the relationship pattern of superior performance without competitive advantage that until now were largely ignored by the existing literature in the field of strategic management.

The world’s most innovative companies: a meta-ranking

Abstract: Purpose The purpose of this paper is to develop a meta-ranking of the world’s most innovative firms, which underscores the importance of external perceptions of innovativeness and of an innovation-based view on firm performance, including product, service, process, business model, management and organizational innovation. Design/methodology/approach This is an exploratory empirical paper, which integrates the results of five rankings of the world’s most innovative companies. Findings The five innovation rankings include a variety of companies based on different methods and strategic focus. This variety underscores the importance of a meta-ranking, whose multiple aggregation methods lead to consistent results. Only the following 11 companies are mentioned in at least three rankings, leading to a list of the 11 most innovative companies in the world: Amazon, Apple, Tencent, Google/Alphabet, Netflix, SpaceX, Tesla, Microsoft, IBM, Intel and General Electric. Overall, the meta-ranking is dominated by US companies from various industries with firms from China gaining importance. Originality/value The paper contributes to research into innovation antecedents and consequences by illustrating the importance of innovation perceptions. The meta-ranking highlights the need for pursuing different types of innovation, following the innovation-based view on firm performance with first-order and second-order innovations. Moreover, the results deepen our understanding of digital transformation and of capturing value from innovation in the digital economy because a considerable portion of the leading innovators has a business model emphasizing artificial intelligence and digital platforms, which have led to the generation of new and to the disruption of established markets.

Enhancing corporate reputation through corporate philanthropy

Abstract: Purpose The purpose of this paper is to examine factors affecting the relationship between annual changes in the amount of corporate foundation giving and changes in corporate reputation. The factors investigated included the existing corporate reputation and the economic conditions. Design/methodology/approach Published data were obtained for 77 US corporations during both an upward and downward economic trend. Data for corporate foundation giving were obtained from IRS tax records while data on corporate reputation were obtained from the Reputation Institute’s RepTrak scores. Findings Linear mixed model analyses demonstrated that a firm’s prior reputation moderates the relationship between corporate philanthropy and changes in corporate reputation during a downward trend. That is, changes in corporate charitable giving and corporate reputation covaried positively for firms with an existing favorable reputation. However, for firms with an unfavorable reputation, there was an inverse relationship between changes in corporate giving and corporate reputation. The interaction between the variables was prevalent only during an economic downturn. Practical implications The findings provide firms with relevant information on conditions that affect how changes in charitable giving are likely to impact corporate reputation. Originality/value This study is the first to look at the effects of annual changes in corporate charitable giving on corporate reputation and adds to the research literature by demonstrating the complexity of the relationship by identifying two key factors that should be taken into considerations when developing annual budgets for charitable giving.

Board demographic diversity: a review of literature

Abstract: Purpose The purpose of this paper is to synthesize the diverse literature on board demographic diversity and to provide avenues for future research. Design/methodology/approach The study provides a comprehensive literature review of theoretical and empirical studies published in leading management journals from 1989 to 2015. Findings The literature review revealed several aspects that are related to board demographic diversity. These aspects have been classified into: definitions and types of board diversity, dimensions of board demographic diversity, measurement and outcomes of board diversity, reasons for existing conflicting empirical findings about the relationship between board diversity and firm dynamics, and research on mediators and moderators. Originality/value Issues pertaining to board demographic diversity identified in this paper have theoretical and practical implications, and include avenues for future research.

Acquired, transferred and integrated knowledge: a study of M&A knowledge performance

Abstract: The acquisition of knowledge through mergers and acquisition (MA and transferred knowledge and integrated knowledge in the post-merger stage. The application of the model is illustrated in a case study of technology M&A, which includes data collected from annual reports before and after the merger.,The model recommends acknowledging the differences between the acquired knowledge, transferred knowledge and integrated knowledge when examining the relationship between knowledge and performance in M&As. In addition, the model suggests considering several factors that influence future knowledge integration in the pre-merger stage. Ignoring the three categories and the factors may be the reason for the reports of previous studied stating that the acquisition of knowledge-based resources is associated with negative announcement returns to the acquiring firm.,The paper presents new procedures to measure knowledge, collecting data on R&D employees by using annual reports. In addition, the paper suggests adding “in-process R&D” as an “Acquired Knowledge” measure.

Empirical investigation of the relationship between organizational factors and organizational commitment in service organizations

Abstract: The purpose of this paper is to investigate the influence of organizational factors such as culture, leadership, structure and top management support on organizational commitment in Bangladeshi service sector.,This study is based on empirical findings administered on 217 managerial personnel in the service organizations based in Bangladesh.,Findings of this study reveal that among the variables that are hypothesized in this study; team orientation, stability, transformational leadership, transactional leadership, decentralization, formalization and top management support have an influence on organizational commitment.,This study has identified and integrated factors that can influence organizational commitment in Bangladeshi service sector. Larger sample size including multiple country or culture may bring more explanatory power, comparability and increased generalizability.,The outcome of this study will help business managers to identify and understand the organizational factors that can influence organizational commitment.,This study extends current research on organizational commitment by identifying and integrating the organizational factors and providing a simplistic model for the relationship between organizational factors and organizational commitment in the context of Bangladeshi service organizations.

PhD scientists in the boardroom: the innovation impact

Abstract: The purpose of this paper is to evaluate the impact that PhD scientists serving on the board of directors of firms conducting hard science have on the RD PhD board members with denser professional networks are more valuable as board members.,This paper provides practical advice to innovative firms on how to create a governance process that simultaneously improves monitoring and boosts the innovative performance.,This study is the first one to suggest that innovative firms can improve R&D monitoring and boost innovative output at the same time, and the first to investigate the role that PhD scientists can serve on the board of firms engaging in hard science.

Does deliberate learning lead to dynamic capability? The role of organizational schema for Kodak, 1993-2011

Abstract: Purpose The process of building dynamic capabilities remains understudied, although deliberate learning is posited to be the key to developing and maintaining dynamic capabilities in turbulent environments. Based on the case study of Kodak’s responses to the shift from traditional to digital technology in the imaging industry (1993-2011), the purpose of this paper is to examine the role of managerial cognition in building dynamic capabilities. Design/methodology/approach The paper employs case study and qualitative method approach. Findings The results reveal that, when facing environmental turbulence, deliberate learning is subject to routine disruptions through entrepreneurial activities, and these organizational routines and activities are determined by organizational schema. Organizational schema itself is updated as a result of managers’ ongoing interpretation of the organization’s fit with the environment. The study findings contribute to the organizational studies and management literature by highlighting the role of managerial cognition into the microfoundation of dynamic capabilities. Originality/value The results demonstrate managerial cognition, and organizational schema in particular, as a microfoundation of dynamic capability.

Outlining new product development research through bibliometrics: analyzing journals, articles and researchers

Abstract: Purpose New product development (NPD) is a noteworthy field that has attracted the attention of scholars for its relevance for firm success. Based on bibliometric indicators and spatial distance network analysis, the authors outline the general structure overview of NPD research through the last 40 years of scientific production; identify and categorize key articles, authors, journals, institutions, and countries related to NPD research; identify and map the research subareas that have mostly contributed to the construction of NPD intellectual structure. The paper aims to discuss these issues. Design/methodology/approach The work uses the Web of Science Core Collection and the visualization of similarities viewer software. The analysis searches for all the documents connected to NPD available in the database. The graphical visualization maps the bibliographic data in terms of bibliographic coupling and co-citation. Findings The general NPD citation pattern evidences a construction of knowledge and learning, as evidenced in different subjects, such as biology or physics. Relevant contributions and contributors are highlighted as journals, articles, researchers, countries and institutions in overall NPD research and in its constituent subfields. Five subareas related to the NPD field based on journals and authors network are identified: marketing; operations and production; strategy; industrial engineering and operations; and management. Originality/value This paper contributes to the NPD literature by offering a global perspective on the field by using bibliometric data graphical networks, providing insights about the influence of individual actors and its contributions to build bridges between the different subfields of research in NPD.

Innovation growth from knowledge transfer in international strategic alliances

Abstract: The purpose of this paper is to conduct a literature review on knowledge transfer and international strategic alliances to propose a research framework based on the theory of dynamic capabilities. A qualitative and quantitative review has been conducted to find out the past research patterns, emerging trends, and research gaps.,The qualitative review of more than 300 articles identified by keyword search, reference, and citation search has resulted in 130 most relevant articles. Citation analysis is performed on these studies, their journals, and authors by leveraging the international platforms of SCImago Journal Ranking, Google Scholar, and ResearchGate.,The study enlists the highly cited studies, their journals, and authors with possible explanations for being highly cited. Criticisms of dynamic capabilities theory have been explained, and a research framework for the application of this theory in the context of international strategic alliances to fill the research gap has been proposed.,Currently, various bibliometric studies are growing in number. This study is not only a review study, but also proposes a research framework to fill the identified research gap.

Outsourcing and firm performance: a meta-analysis

Abstract: Purpose In the extant literature, the effect of outsourcing activities on the firm performance has been an area of interest for several decades; yet, the body of knowledge lacks a holistic view of this phenomenon. The potential outcomes of outsourcing and its impact on firm performance have not been aggregated in the literature. The purpose of this paper is to conduct a meta-analysis of 51 empirical results using 24 articles to examine the relationship between these variables and firm performance. The authors discuss the extant literature and examine which type of outsourcing has the greatest influence on firm performance. The authors also present the limitations and future opportunities. Theoretical and managerial implications are discussed to highlight which outsourcing functions would be fiscally beneficial for firms. Design/methodology/approach This paper takes a granular approach by looking at different outsourced functions in the both the manufacturing and service industry. Using meta- analysis, this paper combined the quantitative study data from several selected studies in an effort to increase power, improve the effect size and resolve the uncertainty about the effects of outsourcing activities on firm performance measures. Findings The authors found that outsourcing enhances the firm performance. When outsourcing functions were studied individually, only IT outsourcing had significant effects on firm performance in comparison to other forms of outsourcing. This might be attributed to the fact that IT outsourcing is less costly to implement in the organization compared with other forms of outsourcing. Originality/value This paper is the first paper that uses a meta-analytic approach to investigate the relationship between outsourcing and performance measures based on past empirical studies that have used both primary and secondary data.

Acquisition integration flexibility: toward a conceptual framework

Abstract: The purpose of this paper is to develop the role of integration flexibility as a mediator of acquisition performance and demonstrate how this capability varies across firms.,The study develops a conceptual framework of anticipated relationships by building on existing but so far unintegrated acquisition research.,The study suggests integration flexibility provides an explanation for variance in acquisition performance. The study identifies drivers behind acquisition integration flexibility in acquirer characteristics, deal characteristics and integration management. The authors further specify the positive and negative impact of several key factors commonly discussed in acquisition research.,Integration flexibility stands out as a novel explanation for acquisition performance. Still, the benefits from flexibility are not universal and developed logic suggests it represents a dynamic capability for acquirers. Our framework helps predict which acquirers and deals are more likely demonstrating this capability, thus contributing to predict acquisition performance.,Acquisitions often take place in dynamic environments and reportedly often fail. Predicting and developing acquisition integration flexibility stands out as an important task for acquiring management.,Annual global acquisition values are on par with the GDP of large industrial nations (e.g. Germany) and failures for reasons of lacking acquisition integration flexibility contributes to value destruction harming not only firms, but society at large. Improved integration flexibility likely mediates this risk.,Making an acquisition to adapt to environmental change implicitly assumes greater integration that can limit flexibility. While our argument builds on key concepts from acquisition research these so far have remained unconnected in relation to acquisition integration flexibility. The authors develop factors influencing this important capability and show how it mediates acquisition performance. This links acquisition antecedents with integration or phases typically treated separately.

Corporate social responsibility in a burgeoning industry: a stakeholder analysis

Abstract: Purpose The purpose of this paper is to investigate the extent and significance of involvement of craft brewery operators in their community through the lens of the stakeholder theory (ST). In addition, differences between forms of involvement and demographic characteristics of operators and breweries are examined. Design/methodology/approach As many as 218 operators of predominantly micro-craft breweries across the USA participated in an online questionnaire designed to gather their perceptions. Findings While paying taxes was participants’ main perceived form of contribution, providing an artisan-made product, the significance of the craft brewery as a community “hub”, and that of increasing the number of leisure alternatives also emerged. A further 52.8 per cent of participants indicated contributing US$100,000 or more to the community annually. Statistically significant differences were revealed, for instance, based on craft breweries’ production volume, and the level of financial contribution. Various associations between operators’ perceived contributions and the ST theses were established in regard to cooperative interests (descriptive), stakeholder management (instrumental), and moral principles (normative). Originality/value First, by examining corporate social responsibility (CSR) in the craft brewing industry and among predominantly smaller firms, the study addresses two under-researched areas. Second, a refinement of the ST in the context of the craft brewing industry is proposed, highlighting the links between ST-based theses and the findings. Third, the study contributes to three different types of literature: micro and small business, craft brewing entrepreneurship, and CSR.

The role of cooperative alliances in internationalization strategy: Qualitative study of Portuguese SMEs in the textile sector

Abstract: From the network approach, the purpose of this paper is to provide empirical evidence about the role of international cooperative alliances (CAs) in the decision of small- and medium-sized enterprises (SMEs) to internationalize and remain in the external market.,To fulfill the proposed objective, qualitative research was carried out through analyzing two SMEs (case studies) in the Portuguese textile sector. Data collection was based on structured interviews, direct observation and some documental analysis.,The results show that the analyzed SMEs internationalized immediately after their creation, with this decision not being influenced by CAs but rather by the founder’s role and above all by a saturated domestic market.,Alliances are determinant in subsequent developments in the foreign market, allowing SMEs to reach new markets, increase their market share and consolidate their name in the international market. Thus, managers/entrepreneurs should adopt strategies that stimulate the firm’s expansion in the external market, prioritizing the formation of CAs with international partners.,This study suggests that none of the dominant models can exclusively explain the internationalization process of the studied SMEs. Therefore, this research has implications for the recent stream of literature that argues for a holistic view of internationalization models, considering the arguments of all models instead of only one.

Iterative prototyping of strategy implementation workshop design

Abstract: The purpose of this paper is to demonstrate how a strategy implementation workshop design can be developed and tested while minimizing the time spent on developing the design.,This multiple case study at a diesel engine company shows how iterative prototyping can be used to structure the design process of a strategy implementation workshop.,Strategy implementation workshop design can be developed in resource-constrained environments through iterative prototyping of the workshop design. Each workshop iteration can generate value in its own right and at the same time the workshop design can be optimized until the final, most effective, design is found which can then be rolled out.,In a strategy-as-practice perspective, this study shows how scholarly attention to micro-level strategy praxis at a company can be enlightening to strategy consultants who need to conduct strategy implementation workshops.,By selecting an iterative modular workshop design, the strategy consultant has at his/her disposal a strategy tool that is easily adaptable to organizational practice and one for which s/he can draw on his/her experience as well as add to his/her knowledge base.,Introducing iterative prototyping in an organizational context can facilitate fast yet structured development of a rigorous workshop design. Strategy consultants are provided with empirical examples of how an iterative prototyping process can be structured across multiple workshops.

Predictors of corporate survival in the US and Australia: an exploratory case study

Abstract: The purpose of this paper is to investigate the relationship of financial ratios and non-financial factors of successful and failed corporations in the USA. Specifically, the authors provide evidence on whether financial ratios and non-financial factors can be jointly included as indicators to improve the predictive capacity of organisational success or failure in different countries and sectors.,The paper utilises a mixed method exploratory case study focussing on listed corporations in the US and Australian manufacturing, agriculture, finance and property sectors.,The financial ratio findings demonstrate that (with the exception of the failed Australian manufacturing sector) the integrated multi-measure (IMM) ratio approach consistently provides a higher classification rate for the failed and successful groups than those provided by an individual measure. In all cases the IMM method scored higher for US companies (with the exception of the failed Australian property sector). The findings also show that irrespective of the country location or sector, non-financial factors such as board composition and managements’ involvement in organisational strategy impact on a corporation’s success or failure.,The findings reveal that non-financial factors occur prior to financial ratios when attempting to predict organisational success or failure and the IMM approach enables a more thorough examination of the predictive ability of financial ratios for US and Australian organisations. This intuitively indicates that when combined with financial ratios, non-financial factors may be a useful predictor of corporate success or failure across countries and sectors.,Sound internal processes and the identification of both financial ratios and non-financial factors can be utilised to improve the reliability of financial failure models, enable corrective and preventative steps to be implemented by management and potentially reduce the costs of failure for US and Australian organisations.

Do We Have to Downsize – Does the Empirical Evidence Suggest any Alternatives?

Abstract: Given a growing literature indicating that downsizing is not an effective way to address financial decline, having either little impact or negative impact on the financial health or market valuation of financially troubled companies, what is the alternative for those companies in financial trouble? Three sets of alternatives to downsizing are available to companies suffering financial trouble: strategies addressing personnel/fix costs, strategies focused on addressing cost cutting/variable costs and strategies addressing strategic planning/revenue. Although alternatives to downsizing have been identified, little research has been conducted comparing the impact of downsizing vs alternatives to downsizing on firm performance. The paper aims to discuss this issue.,This present study looked solely at strategies focused on addressing personnel/fix costs. Focusing primarily on forced attrition (downsizing) vs temporary attrition and/or natural attrition, this research attempts to determine whether specific groupings of alternatives to downsizing are more effective at addressing financial decline that companies find themselves in as compared to downsizing. This included relying on temporary attrition, natural attrition or doing nothing at all.,The research presented here indicates that various alternatives to downsizing have an immediate positive impact on measures of profitability and a positive long-term impact on one measure of efficiency: revenue per employee. Evidence shows that temporary attrition leads to better financial outcomes than natural attrition than forced attrition or downsizing.,The research presented here indicates that various alternatives to downsizing have an immediate positive impact on measures of profitability and a positive long-term impact on one measure of efficiency: revenue per employee. This has implications for managers put in the position of having to make a decision whether to downsize or not.

The elephant in the room of mutual forbearance: How a multi-market firm develops the motivation for forbearance

Abstract: Purpose The purpose of this paper is to explain how a multi-market firm develops the motivation to forbear from competition. Design/methodology/approach A two-way fixed effects model with Driscoll and Kraay standard errors investigates the research question with panel data collected from the US scheduled passenger airline industry. Findings The results demonstrate that although the interaction of multi-market contact with strategic similarity impairs a firm’s forbearance from competition, the same interaction promotes it as firm performance deteriorates, supporting the hypotheses. Research limitations/implications Performance explains not only how forbearance emerges out of coincidental multi-market contact but also reconciles the mixed evidence for the impact of the two-way interaction between multi-market contact and strategic similarity on forbearance. Practical implications Antitrust authorities should pay more attention to low performing firms than to high performing firms in their investigations. Also, managers of multi-market firms should identify multi-market rivals with low performance as targets for the initiation of forbearance. Originality/value This study revises the mutual forbearance theory to align it with the accumulating empirical evidence that otherwise refutes its assumption and thereby improves theory’s descriptive and predictive power.

How to strike a balance between CEO compensation and strategic risk? A longitudinal analysis

Abstract: The purpose of this paper is to examine the relationships between CEO ownership, stock option compensation, and risk taking. The authors include important CEO power variables as moderators.,The paper uses a longitudinal regression analysis. In addition, the paper includes interactional plots for further interpretation.,The results indicate that CEO ownership reduces risk taking, while there is a partial support that stock options increase risk taking. CEO tenure is a powerful moderator that decreases risk taking in both CEO ownership and CEO stock option scenarios. Board independence, counter to the hypothesis in this paper, may encourage risk taking.,The findings in this paper provide support for the inclusion of CEO power variables in CEO compensation studies. However, the study examines large publicly traded companies; thus, all findings may not be applicable to small- and medium-sized companies.,Scholars have encouraged more complex CEO compensation models and the authors have examined both main effect and interaction models.

When implementation falters: the challenge of having peripheral issues stick in organisations

Abstract: Purpose The purpose of this paper is to study a class of issues that in spite of recognised needs and explicit managerial demands have proven hard to have “stick” in organisations (information security is used as an example). It offers a theory-driven rationale why superficially different issue areas can indeed be considered as instances of the identified class, and builds on complexity leadership theory (CLT) to explain how the related strategic challenges can be explained and possibly alleviated. Design/methodology/approach A. Kenneth Rice’s notion of organisations’ “primary task” is used to home in on its opposite that is here labelled “peripherality”. Existing strands of organisation research that can be related to this notion are then revisited to ground the fundamental concept theoretically. The CLT is finally used to provide a detailed understanding of the underlying dynamics. Findings The paper explains how and why certain issue areas seem resistant to common managerial intervention methods even though it would seem that organisational members are in fact favouring proposed changes (a state that would normally increase the chances of success). It also offers ideas how these challenges may fruitfully be approached. Originality/value Problems related to the suggested “peripherality” class of issues have thus far been approached as wholly unrelated (and for that reason as idiosyncratic). The proposed framework offers a hitherto never attempted way systematically to link these challenges – and so structure and concentrate discussion about possibly common remedies.

The need for requisite variety to support growth: an organizational life cycle perspective

Abstract: Purpose Drawing on the “Giffoni Experience” case study, the purpose of this paper is to establish a conceptual link between requisite variety and organizational life cycle. The law of requisite variety states that – to be viable – a system should be able to achieve the minimum number of states which are required to deal with environmental uncertainty. Design/methodology/approach A descriptive case study approach was taken, which allowed a holistic analysis of the subject being investigated. Multiple sources and different techniques were used to collect relevant data, including: document analysis, unstructured interviews with key informants, and participant observation. Findings The development of requisite variety is intended to fill the gap between organizational adaptability and increased environmental complexity. The process of requisite variety generation is influenced by the organizational life cycle stages, turning out to be reactive in the early phases of life and proactive in the maturity ones. Ultimately, the development of requisite variety makes the organization able to establish a co-evolving relationship with the environment, which paves the way for greater organizational adaptability and effectiveness. Research limitations/implications The research findings are not generalizable; besides, the exploratory nature of this study did not allow to point out a consistent relationship between requisite variety and the organizational life cycle. Originality/value To the authors’ knowledge, this is one of the first attempts to examine requisite variety adopting the conceptual lenses of organizational life cycle. Empirical research works dealing with requisite variety are uncommon and generally overlooked by management scholars and practitioners.

Gold for now and the golden years: Effects of CEO stock options and retirement pay on cross-border acquisitions

Abstract: Purpose The purpose of this paper is to draw from regulatory focus theory, to examine the effects of the “gain/no gain” nature of stock options and retirement pay on the decision to engage in cross-border acquisitions. The moderating effects of managerial discretion arising from the external industry context and internal organizational leadership structure are also examined. Design/methodology/approach The authors employ random effects negative binomial regression analysis with a longitudinal (2006–2016) data set of US public companies operating in four industries with differing levels of industry discretion: the oil and gas, paper and packaging, aerospace and defense, and telecommunications. Findings The findings indicate that both CEO in-the-money stock options and retirement pay are positively related to cross-border acquisition activity. The results also demonstrate that managerial discretion, arising from the firm’s external industry context, accentuates the positive relationship between both the value of CEO in-the-money stock options and retirement pay with cross-border acquisition activity. Practical implications The findings provide implication for practice as understanding how retirement pay and stock options, both of which make up a substantial portion of overall CEO pay in the USA, motivate cross-border acquisition activity, may improve decisions by executives. The evidence also provides guidance to boards of directors who are charged with the responsibility of creating CEO compensation contracts. Originality/value The paper fills important gaps in the existing research on the influence of compensation elements on firm outcomes, by offering a novel explanation for how in-the-money stock options and retirement pay affect CEOs’ motivations to engage in cross-border acquisitions.

True exogenous shock or just a scapegoat: Making sense of crises – the case of the 2008/2009 global banking crisis’ impact on manufacturing industries

Abstract: Sensemaking models generally lack an objective determinant to distinguish between CEO fault and changes in systematic risk caused by exogenous negative shocks like a banking crisis. The interdisciplinary approach of this paper combines attribution theory with econometric time series analyses to provide an objective measure of exogeneity and persistence of a negative shock to an organization. The purpose of this paper is to address the exploratory research question, of how scapegoating by managers can be avoided by the use of an objective and empirical measurement and if the recent financial crisis can be seen as an exogenous shock to manufacturing firms.,By testing for stationarity with a structural break with an econometric time series analysis, the model helps to reduce agency costs during organizational crisis by effectively determining crisis causation and avoid scapegoating by managers.,By combining the sensemaking models of Haleblian and Rajagopalan (2006), Staw (1980), and Weick (1988), an integrated model of sensemaking in performance crises under the specific context of simultaneously occurring external crises is provided. By applying the authors approach the results suggest that the financial crisis of 2008/2009 has true exogenous adverse effects on US manufacturing firms.,The interdisciplinary approach encourages the integration of econometric time series analysis as an objective determinant in sense making models.

Location preemption by oligopolists: evidence from the Singapore supermarket industry

Abstract: Purpose The purpose of this paper is to investigate whether new store locations by two incumbent supermarket chains in Singapore were consistent with a preemptive strategy. Design/methodology/approach The methodology involved collecting store location data and using a geographical technique (Thiessen polygons) for inferring the existence of a preemptive strategy. Findings The analyses revealed that while NTUC Fairprice’s (the dominant incumbent) new store location strategy was consistent with a preemptive strategy, the second ranked player’s (Cold Storage) was not. Being the dominant incumbent, NTUC Fairprice had the incentive (protect its dominant position) as well as ability (scale, low costs and a merchandise mix that appealed to the mass market) to adopt a preemptive strategy. Cold Storage, on the other hand, lacked both the incentive (appeal to the narrow expatriate segment) and the ability (scale or low costs) to follow a preemptive location strategy. Research limitations/implications The analyses did not distinguish between the opening of large vs small stores because the data on store sizes were not available. The analyses focused on an earlier time period because the implementation of the analytical technique (construction of polygons) was more feasible during the timeframe. Practical implications The paper identifies conditions under which it may be appropriate for firms to follow a preemptive strategy. Originality/value The paper adopts a highly appropriate methodology (Thiessen polygons) that takes into account the locations of own as well as competitor’s stores for analyzing the new store locations by supermarket chains. The paper’s conclusions about the conditions under which preemptive strategies are likely to be adopted can be useful to future researchers as well as managers.