Showing papers in "Strategic Management Journal in 2004"
Abstract: We link the exploration–exploitation framework of organizational learning to a technology venture's strategic alliances and argue that the causal relationship between the venture's alliances and its new product development depends on the type of the alliance. In particular, we propose a product development path beginning with exploration alliances predicting products in development, which in turn predict exploitation alliances, and that concludes with exploitation alliances leading to products on the market. Moreover, we argue that this integrated product development path is moderated negatively by firm size. As a technology venture grows, it tends to withdraw from this product development path to discover, develop, and commercialize promising projects through vertical integration. We test our model on a sample of 325 biotechnology firms that entered 2565 alliances over a 25-year period. We find broad support for the hypothesized product development system and the moderating effect of firm size. Copyright © 2004 John Wiley & Sons, Ltd.
1,821 citations
TL;DR: In this paper, it is argued that, in some circumstances, adopting the effectiveness of business processes as a dependent variable may be more appropriate than adopting overall firm performance as a dependant variable.
Abstract: A growing body of empirical literature supports key assertions of the resource-based view. However, most of this work examines the impact of firm-specific resources on the overall performance of a firm. In this paper it is argued that, in some circumstances, adopting the effectiveness of business processes as a dependent variable may be more appropriate than adopting overall firm performance as a dependent variable. This idea is tested by examining the determinants of the effectiveness of the customer service business process in a sample of North American insurance companies. Results are consistent with resource-based expectations, and they show that distinctive advantages observable at the process level are not necessarily reflected in firm level performance. The implications of these findings for research and practice are discussed along with a discussion of the relationship between resources and capabilities, on the one hand, and business processes, activities, and routines, on the other. Copyright © 2003 John Wiley & Sons, Ltd.
1,787 citations
TL;DR: In this article, the authors identify the sources of wide and persistent variations in learning performance in the semiconductor manufacturing industry and find that acquiring human capital with prior industry experience from external sources significantly reduces learning performance.
Abstract: This paper seeks to identify the sources of wide and persistent variations in learning performance in the semiconductor manufacturing industry. In the resource-based view of the firm, human capital is frequently assumed to contribute to competitive advantage due to its inimitability based on its intangible, firm-specific, and socially complex nature. Consistent with this view, we find that investments in firm-specific human capital have a significant impact on learning and firm performance. More specifically, human capital selection (education requirements and screening), development through training, and deployment significantly improve learning by doing, which in turn improves performance. However, we find that acquiring human capital with prior industry experience from external sources significantly reduces learning performance. We also find that firms with high turnover significantly underperform their rivals, revealing the time-compression diseconomies that protect firm-specific human capital from imitation. These results provide new empirical evidence of the inimitability of human capital. Copyright © 2004 John Wiley & Sons, Ltd.
1,292 citations
TL;DR: The aim of this paper is to identify the works that have had the greatest impact on strategic management research and to analyze the changes that have taken place in the intellectual structure of this discipline.
Abstract: The aim of this paper is to identify the works that have had the greatest impact on strategic management research and to analyze the changes that have taken place in the intellectual structure of this discipline. The methodology is based on the bibliometric techniques of citation and co-citation analysis which are applied to all the articles published in the Strategic Management Journal from its first issue in 1980 through 2000. Copyright © 2004 John Wiley & Sons, Ltd.
1,274 citations
TL;DR: The authors employ meta-analytic techniques to empirically assess the impact of the most commonly researched antecedent variables on post-acquisition performance, and find robust results indicating that acquiring firms' performance does not positively change as a function of their acquisition activity, and is negatively affected to a modest extent.
Abstract: Empirical research has not consistently identified antecedents for predicting post-acquisition performance. We employ meta-analytic techniques to empirically assess the impact of the most commonly researched antecedent variables on post-acquisition performance. We find robust results indicating that, on average and across the most commonly studied variables, acquiring firms' performance does not positively change as a function of their acquisition activity, and is negatively affected to a modest extent. More importantly, our results indicate that unidentified variables may explain significant variance in post-acquisition performance, suggesting the need for additional theory development and changes to M&A research methods. Copyright © 2003 John Wiley & Sons, Ltd.
1,246 citations
TL;DR: In this paper, the authors take stock of the large body of extant research and provide a systematic assessment of empirical evidence and conclude that a more thorough empirical grounding of the theory's foundation is crucial to its future development, and offer several strategies for doing this.
Abstract: Transaction cost economics (TCE) is one of the leading perspectives in management and organizational studies, yet debate continues regarding its empirical support. In this paper, we take stock of the large body of extant research and provide a systematic assessment of empirical evidence. In all, 308 statistical tests from 63 articles, selected according to a set of clear criteria, were examined across various dimensions. We assess not only the level of empirical support for the theory, but also the degree of paradigm consensus present in the empirical literature. Our analysis shows that results are mixed: while we found support in some areas (e.g., with regard to asset specificity), we also found considerable disagreement on how to operationalize some of TCE's central constructs and propositions, and relatively low levels of empirical support in other core areas (e.g., surrounding uncertainty and performance). We conclude that a more thorough empirical grounding of the theory's foundation is crucial to its future development, and offer several strategies for doing this. Copyright © 2003 John Wiley & Sons, Ltd.
1,093 citations
TL;DR: It is found that knowledge codification strongly and positively influences acquisition performance, while experience accumulation does not, and increasing levels of post-acquisition integration strengthen the positive effect of codification.
Abstract: This paper introduces a knowledge-based view of corporate acquisitions and tests the post-acquisition consequences on performance of integration decisions and capability-building mechanisms. In our model, the acquiring firm decides both how much to integrate the acquired firm and the extent to which it replaces this firm's top management team. It can also learn to manage the post-acquisition integration process by tacitly accumulating acquisition experience and explicitly codifying it in manuals, systems, and other acquisition-specific tools. Using a sample of 228 acquisitions in the U.S. banking industry, we find that knowledge codification strongly and positively influences acquisition performance, while experience accumulation does not. Furthermore, increasing levels of post-acquisition integration strengthen the positive effect of codification. Finally, the level of integration between the two merged firms significantly enhances performance, while replacing top managers in the acquired firm negatively impacts performance, all else being equal. Implications are drawn for both organizational learning theory and a knowledge-based approach to corporate strategy research. Copyright © 2004 John Wiley & Sons, Ltd.
1,035 citations
TL;DR: In this paper, the influence of network structure and content on managerial performance was investigated in the context of middle managers in a European telecommunications company, and it was found that access to heterogeneous knowledge is of equal importance for overall managerial performance and of greater importance for innovation performance.
Abstract: This study deals with individual managerial performance, both overall and in generating innovation. While prior work has demonstrated a relationship between network structure and managerial performance, inadequate attention has been paid to network content. We consider several micro-social processes that might account for differences in managerial performance, taken from economic sociology and studies of managers' exploitation of their social networks and derived from work in psychology on the genesis of ideas. We compare the influence of these mechanisms on managerial performance using a sample of 106 middle managers in a European telecommunications company. Our findings suggest that, while network structure matters, access to heterogeneous knowledge is of equal importance for overall managerial performance and of greater importance for innovation performance. Copyright © 2004 John Wiley & Sons, Ltd.
979 citations
TL;DR: The authors argue that science alters inventors' search processes, by leading them more directly to useful combinations, eliminating fruitless paths of research, and motivating them to continue even in the face of negative feedback.
Abstract: A large body of work argues that scientific research increases the rate of technological advance, and with it economic growth. The precise mechanism through which science accelerates the rate of invention, however, remains an open question. Conceptualizing invention as a combinatorial search process, this paper argues that science alters inventors' search processes, by leading them more directly to useful combinations, eliminating fruitless paths of research, and motivating them to continue even in the face of negative feedback. These mechanisms prove most useful when inventors attempt to combine highly coupled components; therefore, the value of scientific research to invention varies systematically across applications. Empirical analyses of patent data support this thesis. Copyright © 2004 John Wiley & Sons, Ltd.
937 citations
TL;DR: It is found that the use and reporting of SEM often have been less than ideal, indicating that authors may be drawing erroneous conclusions about relationships among variables.
Abstract: Structural equation modeling (SEM) is a powerful, yet complex, analytical technique. The use of SEM to examine strategic management phenomena has increased dramatically in recent years, suggesting that a critical evaluation of the technique's implementation is needed. We compared the use of SEM in 92 strategic management studies published in nine prominent journals from 1984 to 2002 to guidelines culled from methodological research. We found that the use and reporting of SEM often have been less than ideal, indicating that authors may be drawing erroneous conclusions about relationships among variables. Given these results, we offer suggestions for researchers on how to better deploy SEM within future inquiry. Copyright © 2004 John Wiley & Sons, Ltd.
792 citations
TL;DR: The paper finds that the technological richness of the MNC, the subsidiary's knowledge linkages to host country firms, and the technological diversity within the host country have a positive impact on innovation.
Abstract: This paper studies the influence of external knowledge on innovation in subsidiaries of multinational firms. The focus on subsidiaries is especially interesting since they are simultaneously embedded in two knowledge contexts: (a) the internal multinational corporation (MNC) comprised of the headquarters and other subsidiaries; and (b) an external environment of regional or host country firms. We develop hypotheses to suggest that the extent of influences of these contexts on subsidiary technological innovation depends on the characteristics of the knowledge network (technological richness and diversity) and the knowledge linkages of the subsidiary with other entities. The study uses patent citation data pertaining to innovations by foreign subsidiaries of U.S. semiconductor firms to test these hypotheses. The paper finds that (a) the technological richness of the MNC, (b) the subsidiary's knowledge linkages to host country firms, and (c) the technological diversity within the host country have a positive impact on innovation. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this paper, Wang et al. found that outsider directors do make a difference in firm performance, if such performance is measured by sales growth, and that they have little impact on financial performance such as return on equity (ROE).
Abstract: Do outside directors on corporate boards make a difference in firm performance during institutional transitions? What leads to the practice of appointing outside directors in the absence of legal mandate? This article addresses these two important questions by drawing not only on agency theory, but also resource dependence and institutional theories. Taking advantage of China's institutional transitions, our findings, based on an archival database covering 405 publicly listed firms and 1211 company–years, suggest that outsider directors do make a difference in firm performance, if such performance is measured by sales growth, and that they have little impact on financial performance such as return on equity (ROE). The results also document a bandwagon effect behind the diffusion of the practice of appointing outsiders to corporate boards. The article not only highlights the need to incorporate multiple theories beyond agency theory in corporate governance research, but also generates policy implications in light of the recent trend toward having more outside directors on corporate boards in emerging economies. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this paper, the authors explore an alternative response to hazards of R&D cooperation: reduction of the "scope" of the alliance, where partners choose to limit the scope of alliance activities to those that can be successfully completed with limited (and carefully regulated) knowledge sharing.
Abstract: Participants in research and development alliances face a difficult challenge: how to maintain sufficiently open knowledge exchange to achieve alliance objectives while controlling knowledge flows to avoid unintended leakage of valuable technology. Prior research suggests that choosing an appropriate organizational form or governance structure is an important mechanism in achieving a balance between these potentially competing concerns. This does not exhaust the set of possible mechanisms available to alliance partners, however. In this paper we explore an alternative response to hazards of R&D cooperation: reduction of the ‘scope’ of the alliance. We argue that when partner firms are direct competitors in end product or strategic resource markets even ‘protective’ governance structures such as equity joint ventures may provide insufficient protection to induce extensive knowledge sharing among alliance participants. Rather than abandoning potential gains from cooperation altogether in these circumstances, partners choose to limit the scope of alliance activities to those that can be successfully completed with limited (and carefully regulated) knowledge sharing. Our arguments are supported by empirical analysis of a sample of international R&D alliances involving electronics and telecommunications equipment companies. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: The results of a multivariate analysis indicate that organizational performance can be well explained by six intangible organizational elements and the interactions among them, which need to be taken into account in any cost effective development.
Abstract: Despite the growing awareness of the importance of researching core strategic resources and activities, the work that has been done to date has largely taken the form of anecdotal reports and case study analysis. We have yet to see large-sample studies demonstrating how organizational elements, independently, complementarily and interactively, may or may not enhance the organization's performance. Moreover, little attention has been given to researching this topic in public sector organizations. The present study aims to bridge this gap by examining the impact of a set of independent intangible organizational elements and the interactions among them on a set of objective organizational performance measures in a sample of local government authorities in Israel. The results of a multivariate analysis indicate that organizational performance (measured by self-income ratio, collecting efficiency ratio, employment rate, and municipal development) can be well explained by six intangible organizational elements (managerial capabilities, human capital, internal auditing, labor relations, organizational culture, and perceived organizational reputation) and the interactions among them, which need to be taken into account in any cost effective development. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors examine the emergence of resources in chemical firms and find that path-creating search that generates resource heterogeneity is a response to idiosyncratic situations faced by firms in their local searches.
Abstract: In this paper, we examine the emergence of resources. Our analysis of technological capability acquisition by global U.S.-based chemical firms shows that the emergence of resources is inherently evolutionary. We find that path-creating search that generates resource heterogeneity is a response to idiosyncratic situations faced by firms in their local searches. Two such idiosyncratic situations—technology exhaustion and expansion beyond national markets—trigger firms in our sample to create unique innovation search paths. We also find that along a given path firms experiment in order to find the correct investment—in fact, some organizations seem to take a step backward for two steps forward—further demonstrating the evolutionary nature of the resource creation process. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: This article examined how managerial growth logics combine with financial and human resource slack to influence the short-term revenue growth of a sample of 112 manufacturing firms drawn from a unique database provided by the Ewing Marion Kauffman Foundation.
Abstract: We examine how managerial growth logics combine with financial and human resource slack to influence the short-term revenue growth of a sample of 112 manufacturing firms drawn from a unique database provided by the Ewing Marion Kauffman Foundation. Our results provide evidence that firms pursuing product expansion logics generally grow more slowly than firms that are not expanding their product base, but that financial slack positively moderates this relationship. We also find that human resource slack enhances short-term market expansion, but slows down short-term product expansion. We discuss the implications of these results for resource-based views of growth. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors explore firms' motivations to invest in a new option and find, based on an analysis of a large sample of patents by firms active in the pharmaceutical industry, that their investments in R&D are consistent with the logic of real options reasoning.
Abstract: Real options reasoning (ROR) is a conceptual approach to strategic investment that takes into account the value of preserving the right to make future choices under uncertain conditions. In this study, we explore firms' motivations to invest in a new option. We find, based on an analysis of a large sample of patents by firms active in the pharmaceutical industry, that their investments in R&D are consistent with the logic of ROR. We identify three constructs—scope of opportunity, prior experience, and competitive effects—which have an influence on firms' propensity to invest in new R&D options and which could usefully be incorporated in a strategic theory of investment. Copyright © 2003 John Wiley & Sons, Ltd.
TL;DR: The link between a firm's organization of research - specifically, its choice to operate a centralized or decentralized R&D structure - and the type of innovation it produces is explored and it is found that control over research budgets complements direct authority relations in contributing to innovative impact.
Abstract: We explore the link between a firm's organization of research—specifically, its choice to operate a centralized or decentralized R&D structure—and the type of innovation it produces. We propose that by reducing the internal transaction costs associated with R&D coordination across units, centralized R&D will generate innovations that have a larger and broader impact on subsequent technological evolution than will decentralized research. We also propose that, by facilitating more distant (‘capabilities-broadening’) search, centralized R&D will generate innovations that draw on a wider range of technologies. Our empirical results provide support for our predictions concerning impact, and mixed results for our predictions concerning breadth of search. We also find that control over research budgets complements direct authority relations in contributing to innovative impact. We propose several extensions of this research. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: It is found that the effectiveness of managerial information provision depends on the degree to which potential adopters have information from other sources, and that information from previous adopters and past events reduces the effect of information provision, while experience with related practices amplifies it.
Abstract: Theories of absorptive capacity propose that knowledge gained from prior experience facilitates the identification, selection, and implementation of related profitable practices. Researchers have investigated how managers may develop absorptive capacity by building internal knowledge stocks, but few have focused on the distribution of this knowledge within the firm and the role managers play in administering information to organizational subunits. In this paper, we explore the degree to which managers can develop absorptive capacity by directly providing information to agents in the organization that might potentially adopt a new practice. We find that the effectiveness of managerial information provision depends on the degree to which potential adopters have information from other sources. We find that information from previous adopters and past events reduces the effect of information provision, while experience with related practices amplifies it. Our research helps clarify when absorptive capacity may provide a sustained competitive advantage. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this paper, the authors deal with inter-temporal economies of scope that firms achieve by redeploying resources and capabilities between related businesses over time, as firms exit some markets while entering others.
Abstract: The question of whether corporations add value beyond that created by individual businesses has engendered much debate in recent years. Some of this debate has focused on the pros and cons of related vs. unrelated diversification. A standard explanation of the benefits of related diversification has to do with the ability to obtain intra-temporal economies of scope from contemporaneous sharing of resources by related businesses within the firm. In contrast, this paper deals with inter-temporal economies of scope that firms achieve by redeploying resources and capabilities between related businesses over time, as firms exit some markets while entering others. The transfer of resources due to market exit distinguishes our treatment of inter-temporal economies of scope from standard intra-temporal economies of scope. In addition, these inter-temporal economies can benefit from a decentralized and modular organizational structure. This ability to obtain inter-temporal economies of scope via organizational modularity and recombination suggests that corporations do not necessarily need a high degree of coordination between business units in order to benefit from a strategy of related diversification. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this paper, the authors investigate the roles played by observable corporate governance characteristics as indirect indicators of new firms' potential qualitative differences and find that firm market valuation was strongly associated with corporate governance characteristic (e.g., executive and director stock-based incentives, institutional and blockholder stock ownership, board structure, and venture capital participation).
Abstract: New business models combined with a lack of objective operating data result in significant information asymmetry and uncertainty in the valuation of new firms in emerging markets. Information asymmetry increases the risks of both adverse selection and moral hazard. When traditional differentiators of firm quality are lacking, such as in emerging economic sectors, markets may turn to secondary information sources to filter and sort firms. We investigate the roles played by observable corporate governance characteristics as indirect indicators of new firms' potential qualitative differences. Markets may sort firms based on such characteristics because they are perceived to be correlated with desired but unobservable characteristics and actions and they lower the risks of both adverse selection and moral hazard. Our study of publicly traded U.S. Internet firms found that firm market valuation was strongly associated with corporate governance characteristics (e.g., executive and director stock-based incentives, institutional and blockholder stock ownership, board structure, and venture capital participation). In addition, firm age moderated how markets used some quality proxies to determine firm valuation during the post-IPO period. Copyright © 2003 John Wiley & Sons, Ltd.
TL;DR: This article introduced the construct of CEO celebrity to explain how the tendency of journalists to attribute a firm's actions and outcomes to the volition of its CEO affects such a firm, and developed a model developed here, where journalists celebrated a CEO whose firm takes strategic actions that are distinctive and consistent by attributing such actions and performance to the firm's CEO.
Abstract: This theoretical article introduces the construct of CEO celebrity in order to explain how the tendency of journalists to attribute a firm's actions and outcomes to the volition of its CEO affects such firm. In the model developed here, journalists celebrate a CEO whose firm takes strategic actions that are distinctive and consistent by attributing such actions and performance to the firm's CEO. In so doing, journalists over-attribute a firm's actions and outcomes to the disposition of its CEO rather than to broader situational factors. A CEO who internalizes such celebrity will also tend to believe this over-attribution and become overconfident about the efficacy of her past actions and future abilities. Hubris arises when CEO overconfidence results in problematic firm decisions, including undue persistence with actions that produce celebrity. Copyright © 2004 John Wiley & Sons, Ltd.
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TL;DR: This article examined the extent to which country effects explain the variation in the performance of foreign affiliates and found that country effects are as strong as industry effects, following affiliate effects and corporate effects, while corporate and affiliate effects tend to be more critical in explaining the variation of foreign affiliate performance in developed countries, whereas country and industry effects are more salient in developing countries.
Abstract: Previous studies have explored the predictors of business unit performance in multiple-business firms and investigated the extent of the effect of industry, corporate, and business unit on the performance of a business unit. These studies have focused almost exclusively on examining performance differences within a single country, thus treating country effects as external to business unit performance. In contrast, this study focuses on multinational corporations and examines the extent to which country effects explain the variation in the performance of foreign affiliates. Our findings show that country effects are as strong as industry effects, following affiliate effects and corporate effects. Our results also suggest that corporate and affiliate effects tend to be more critical in explaining the variation in foreign affiliate performance in developed countries, whereas country and industry effects are more salient in developing countries. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors argue that new products will be more successful when a firm possesses the appropriate stocks of technological and product-market experience, and that the value of any one type of experience may be enhanced by the presence of another.
Abstract: The growth and development of a firm depend on its ability to introduce new products over time. To do this successfully, it requires technological knowledge, the ability to combine knowledge elements into valuable new products, and the complementary assets that facilitate the manufacturing, sales, and distribution of those products. We argue that these all develop as a function of a firm's experience in its technological and product-market domains. Moreover, given the prospect of complementarities among technological and product-market experience, the value of any one type of experience may be enhanced by the presence of another. Therefore, new products will be more successful when a firm possesses the appropriate stocks of technological and product-market experience. We test this idea by analyzing whether pharmaceutical firms' experience in their technological and product-market domains confer early advantages to their new product offerings, and lead to higher initial sales levels. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors examine the integration of eight technology acquisitions, and find that acquired managers play a key role in achieving expected and serendipitous value, in promoting the realization of these two types of value, acquired leaders maintain the advantages of both integration and autonomy.
Abstract: Merger and acquisition activity is a critical means by which technology firms obtain the resources needed to compete in global markets. Effective implementation is essential to making these acquisitions successful, yet prior research on the implementation process has yielded paradoxical findings. I argue that a closer examination of the role of the acquired managers helps to resolve the implementation dilemmas found in prior research, which has focused on the role of the acquiring firm. I use grounded theory-building techniques to examine the integration of eight technology acquisitions, and find that acquired managers play a key role in achieving two types of value: expected and serendipitous. In promoting the realization of these two types of value, acquired leaders maintain the advantages of both integration and autonomy. Moreover, these leaders enable their organizations to simultaneously experience two often-conflicting forms of change: exploration and exploitation. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors identify two sources of potential interactions among real options investments and analyze the effects of investments that are fungible across project options, showing that under different conditions multiple options can be subadditive (due to redundancies in outcomes) or super-additive due to fungible inputs.
Abstract: Firms invest in exploration-oriented activities to seek competitive advantage and in response to changing environments. Real options formulations represent an emerging strand of thinking on such investments. In this paper we begin with the observation that firms often simultaneously invest in multiple exploration projects. We identify two sources of potential interactions among these real options investments. First, we investigate the effects of correlations between the outcomes in different options. Second, we analyze the effects of investments that are fungible across project options. We show that under different conditions multiple options can be sub-additive (due to redundancies in outcomes) or super-additive (due to fungible inputs). We test the implications of our model with data from the biotech industry and find supporting evidence. Our model and results have some interesting implications for the exploration literature and real options lens. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors examined the impact of firm and industry-specific factors on profitability, using census data on Greek manufacturing at the firm level, particular attention is given to strategy effects based on a modification of Porter's typology.
Abstract: The present study examines the impact of firm and industry-specific factors on profitability, using census data on Greek manufacturing At the firm level, particular attention is given to strategy effects Based on a modification of Porter's typology, these effects are captured through different forms of both ‘pure’ and ‘hybrid’ strategies Industry effects are represented using industry concentration, entry barriers, and growth Hypotheses are developed taking into account both previous research and the particular idiosyncrasies of the national context The results obtained provide important insights on specific determinants of firm profitability With respect to strategy, results confirm the hypothesis that hybrid strategies are clearly preferable compared to pure ones In addition, it was found that the more generic strategy dimensions are included in the strategy mix, the more profitable the strategy is, provided that one of the key ingredients is low cost Industry-level effects, although weaker, show strong impact of industry entry barriers Moreover, the findings suggest that while both sets of factors significantly contribute to firm profitability, firm-specific factors explain more than twice as much profit variability as industry factors Copyright © 2003 John Wiley & Sons, Ltd
TL;DR: This paper explored the relationships among four fundamental determinants of intra-firm competence transfers that have hitherto been analyzed only separately: formal organization structure, informal relations, geographical distance, and relatedness of competencies across subsidiaries.
Abstract: This paper explores the relationships among four fundamental determinants of intrafirm competence transfers that have hitherto been analyzed only separately: formal organization structure, informal relations, geographical distance, and relatedness of competencies across subsidiaries. Using a data set consisting of 4840 dyads between new product development teams and subsidiaries that were potential targets for competence transfers in a high-technology multinational company, we find that these determinants interact in surprising ways to explain different patterns of transfers. Results revealed that teams preferred to approach people they knew rather than people who knew related technologies well. They also showed that teams steered away from spatially distant subsidiaries that had related competencies and that the negative effect of large spatial distances could be overcome through established informal relations. These findings indicate that studying one of the determinants separately can yield biased results, as their net effect may change when the moderating effects of the other determinants are considered. Research on synergies, integration, technology transfers, and geographical and cultural differentiation in multinational enterprises therefore needs to be broadened by analyzing multiple determinants of competence transfers. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: The insider ownership model provides results that confirm the convergence-of-interest and the entrenchment effects, even though Spanish insiders get entrenched at higher ownership levels than their U.S. and U.K. counterparts.
Abstract: This paper provides new evidence on the way in which ownership influences firm value. Unlike previous studies, the empirical evidence obtained from our ownership concentration model supports not only the monitoring but also the expropriation effects. Additionally, the insider ownership model provides results that confirm the convergence-of-interest and the entrenchment effects, even though Spanish insiders get entrenched at higher ownership levels than their U.S. and U.K. counterparts. Copyright © 2004 John Wiley & Sons, Ltd.
TL;DR: In this paper, the authors combine elements of the upper echelons and agency perspectives to resolve some of the ambiguity surrounding how corporate elites affect corporate strategy and propose and test the notion that while differences in individual characteristics of corporate elites may imply different preferences for particular corporate strategies such as diversification and acquisitions, these basic preferences, when situated in different agency contexts, generate very different strategic outcomes.
Abstract: This study combines elements of the upper echelons and agency perspectives to resolve some of the ambiguity surrounding how corporate elites affect corporate strategy. We propose and test the notion that while differences in individual characteristics of corporate elites may imply different preferences for particular corporate strategies such as diversification and acquisitions, these basic preferences, when situated in different agency contexts (e.g., CEO, outsider director, non-CEO top management team member), generate very different strategic outcomes. Our detailed empirical findings, based on extensive longitudinal governance and corporate strategy data from large U.S. corporations, also highlight the pitfalls of using aggregate units of analysis (e.g., board of directors or top management team) when studying the influence of corporate elites on corporate strategy. Copyright © 2004 John Wiley & Sons, Ltd.