Showing papers in "Strategic Management Journal in 2006"
TL;DR: Using a large-scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U-shape) related to performance.
Abstract: A central part of the innovation process concerns the way firms go about organizing search for new ideas that have commercial potential. New models of innovation have suggested that many innovative firms have changed the way they search for new ideas, adopting open search strategies that involve the use of a wide range of external actors and sources to help them achieve and sustain innovation. Using a large-scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U-shape) related to performance. Copyright © 2005 John Wiley & Sons, Ltd.
5,167 citations
TL;DR: In this article, the authors investigated the relationship between financial and social performance in SRI funds and found a curvilinear relationship, suggesting that two long-competing viewpoints may be complementary.
Abstract: A central and contentious debate in many literatures concerns the relationship between financial and social performance. We advance this debate by measuring the financial–social performance link mutual funds that practice socially responsible investing (SRI). SRI fund managers have an array of social screening strategies from which to choose. Prior studies have not addressed this heterogeneity within SRI funds. Combining modern portfolio and stakeholder theories, we hypothesize that the financial loss borne by an SRI fund due to poor diversification is offset as social screening intensifies because better-managed and more stable firms are selected into its portfolio. We find support for this hypothesis through an empirical test on a panel of 61 SRI funds from 1972 to 2000. The results show that as the number of social screens used by an SRI fund increases, financial returns decline at first, but then rebound as the number of screens reaches a maximum. That is, we find a curvilinear relationship, suggesting that two long-competing viewpoints may be complementary. Furthermore, we find that financial performance varies with the types of social screens used. Community relations screening increased financial performance, but environmental and labor relations screening decreased financial performance. Based on our results, we suggest that literatures addressing the link between financial and social performance move toward in-depth examination of the merits of different social screening strategies, and away from the continuing debate on the financial merits of either being socially responsible or not.
936 citations
TL;DR: In this article, the role of network knowledge resources in influencing firm performance was examined and it was shown that a firm that uses the identical supplier network as competitors and purchases similar inputs from the same plants achieve a competitive advantage through that network.
Abstract: This study examines the role of network knowledge resources in influencing firm performance. More specifically: Can a firm that uses the identical supplier network as competitors and purchases similar inputs from the same plants achieve a competitive advantage through that network? In a sample of U.S. automotive suppliers selling to both Toyota and U.S. automakers, we found that greater knowledge sharing on the part of Toyota resulted in a faster rate of learning within the suppliers' manufacturing operations devoted to Toyota. Indeed, from 1990 to 1996 suppliers reduced defects by 50 percent for Toyota vs. only 26 percent for their largest U.S. customer. The quality differences were found to persist within suppliers because the inter-organizational routines and policies at GM, Ford, and Chrysler acted as barriers to knowledge transfers within suppliers' plants. These findings empirically demonstrate that network resources have a significant influence on firm performance. We also show that some firm resources and capabilities are relation-specific and are not easily transferable (redeployable) to other buyers or networks. This result implies that a firm may be on its production possibility frontier for each customer but the productivity frontier will be different for each customer owing to constraints associated with the customer's network. Copyright © 2006 John Wiley & Sons, Ltd.
934 citations
TL;DR: This paper argues for the independence of prediction and control, that the pursuit of successful outcomes can occur through either predictive or control oriented approaches, and develops and highlights control oriented approach to open new avenues for dealing with the uncertainty inherent to the question of what organizations should do next.
Abstract: Two prescriptions dominate the topic of what firms should do next in uncertain situations: planning approaches and adaptive approaches. These differ primarily on the appropriate role of prediction in the decision process. Prediction is a central issue in strategy making owing to the presumption that what can be predicted can be controlled. In this paper we argue for the independence of prediction and control. This implies that the pursuit of successful outcomes can occur through control-oriented approaches that may essentially be non-predictive. We further develop and highlight control-oriented approaches with particular emphasis on the question of what organizations should do next. We also explore how these approaches may impact the costs and risks of firm strategies as well as the firm's continual efforts to innovate. Copyright © 2006 John Wiley & Sons, Ltd.
640 citations
TL;DR: This paper builds upon and advances Mitchell, Agle, and Wood's stakeholder saliency and identification framework by defining saliency in terms of actions, not perceptions, and proposing that power, legitimacy, and urgency arise out of the nature of stakeholder–request–firm triplets.
Abstract: In this paper, we explore the conditions under which secondary stakeholder groups are likely to elicit positive firm responses. To this end, we build upon and advance Mitchell, Agle, and Wood's (1997) stakeholder saliency and identification framework by defining saliency in terms of actions, not perceptions, and by proposing that power, legitimacy, and urgency arise out of the nature of stakeholder–request–firm triplets. To test this framework, we build a unique dataset of over 600 secondary stakeholder actions within the United States, all concerning environmental issues over the period 1971–2003. Copyright © 2006 John Wiley & Sons, Ltd.
591 citations
TL;DR: This paper empirically analyzes the assumptions underlying the theory of resource-based theory from an inductive perspective and identifies the main trends within the theory and their diffusion among the leading management-oriented journals.
Abstract: Papers published on the resource-based theory (RBT) have made clear its widespread application, heterogeneity, and usefulness as a strategic approach. This paper empirically analyzes the assumptions underlying the theory from an inductive perspective. The paper differs from previous works by identifying the main trends within the theory and by noting their diffusion among the leading management-oriented journals. Three main trends are shown to coexist within RBT: the resource-based view, the knowledge-based view, and the relational view. Copyright © 2006 John Wiley & Sons, Ltd.
576 citations
TL;DR: In this paper, the authors argue that although technologies of rationality seem to be effective instruments of exploitation in relatively simple situations and to derive their adaptive advantage from those capabilities, their ventures in more complex explorations seem often to lead to huge mistakes and thus unlikely to be sustained by adaptive processes.
Abstract: Technologies of model-based rationality are the core technologies of strategic management, having largely replaced earlier technologies that placed greater reliance on traditional practice or on communication either with the stars or with the gods. The technologies used by organizations in their pursuit of intelligence can be imagined to change over time as a result of responding to the successes and failures associated with the technologies. Although technologies of rationality seem clearly to be effective instruments of exploitation in relatively simple situations and to derive their adaptive advantage from those capabilities, their ventures in more complex explorations seem often to lead to huge mistakes and thus unlikely to be sustained by adaptive processes. Whether their survival as instruments of exploratory novelty in complex situations is desirable is a difficult question to answer, but it seems likely that any such survival may require hitchhiking on their successes in simpler worlds. Survival may also be served by the heroism of fools and the blindness of true believers. Their imperviousness to feedback is both the despair of adaptive intelligence and, conceivably, its salvation. Copyright © 2006 John Wiley & Sons, Ltd.
537 citations
TL;DR: The study suggests that the type of external knowledge sourced determines the likelihood of creation of breakthrough innovation and suggests that technologically distant knowledge of national origin has a curvilinear effect and technologically proximate knowledge of internationalorigin has a positive effect on breakthrough innovation.
Abstract: How are breakthrough innovations created? Our study suggests that the type of external knowledge sourced determines the likelihood of creation of breakthrough innovation. We characterize the external knowledge utilized on two dimensions: its technological space and geographic origin. We draw on the concepts of local search and national innovation systems to identify critical knowledge inputs. We hypothesize that external knowledge characterized by technological distance or proximity and the national or international context can have a differential impact on breakthrough innovation. This is due to the contradictory implications of its value created by distance and to absorptive capacity limitations in effectively utilizing knowledge from a different context. To test our hypotheses we use patent data from the U.S. biotechnology industry. Our findings suggest that technologically distant knowledge of national origin has a curvilinear effect and technologically proximate knowledge of international origin has a positive effect on breakthrough innovation. However, simultaneous exploration along technologically and geographic dimensions is not useful to generating breakthrough innovation; technologically distant knowledge of international origin does not have a significant impact. Copyright © 2006 John Wiley & Sons, Ltd.
526 citations
TL;DR: In this paper, the authors examine why firms differ in levels of R&D investment intensity by developing and testing a theory of direct and interaction effects of top management team and board outsider composition on research investment intensity.
Abstract: This paper examines why firms differ in levels of R&D investment intensity by developing and testing a theory of direct and interaction effects of top management team and board outsider composition on R&D intensity. The theory is tested in a longitudinal sample of technology-intensive firms that completed an initial public offering. The results indicate that both top management team composition and board composition have direct and additive effects on R&D investment intensity. Also, monitoring by outsider directors does not constitute a universally effective governance mechanism with regard to a firm's R&D investment strategy. Firms opt for lower levels of R&D investment intensity when their outsider-rich board interacts with a team of managers who have high levels of (1) firm tenure, (2) shared team-specific experience, or (3) functional heterogeneity. When a firm's competitiveness relies on sustained R&D investments, it is important to note these interaction effects and make adjustments to promote a healthy dialogue between managers and the board. Adjustments could be made to the management team composition (e.g., initiating management turnover to reduce firm tenure) or to the bundle of governance mechanisms (e.g., partially substituting board monitoring with other mechanisms). Copyright © 2006 John Wiley & Sons, Ltd.
523 citations
TL;DR: In this article, the authors adopt a multi-theoretic approach to investigate the differential impact of foreign institutional and foreign corporate shareholders on the performance of emerging market firms and find that the previously documented positive effect of foreign ownership on firm performance is substantially attributable to foreign corporations that have, on average, larger shareholding, higher commitment, and longer-term involvement.
Abstract: We adopt a multi-theoretic approach to investigate a previously unexplored phenomenon in extant literature, namely the differential impact of foreign institutional and foreign corporate shareholders on the performance of emerging market firms. We show that the previously documented positive effect of foreign ownership on firm performance is substantially attributable to foreign corporations that have, on average, larger shareholding, higher commitment, and longer-term involvement. We document the positive influence of corporations vis-a-vis financial institutions with respect to domestic shareholdings as well. We also find an interesting dichotomy in the impact of these shareholders depending on the business group affiliation of firms
513 citations
TL;DR: In this article, the authors explore why some facilities accrue greater costs when adopting an environmental management system (EMS) and why costs vary among three different ownership structures: publicly traded facilities, government facilities and privately owned enterprises.
Abstract: This research explores why some facilities accrue greater costs when adopting an environmental management system (EMS) and why costs vary among three different ownership structures. Using survey data of organizations that documented their EMS adoption costs over a 3-year period, the results show that publicly traded facilities had stronger complementary capabilities prior to EMS adoption and therefore lower adoption costs. By contrast, government facilities and privately owned enterprises had fewer capabilities and accrued higher EMS adoption costs. The development of organizational capabilities and resources therefore appears to be a function of both organizational exploitation of imperfect or incomplete market factors, and the institutional context of these decisions. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: It is argued that the top management team (TMT) of a firm can serve as a powerful signal to investors that can in turn enable a firm to gain legitimacy.
Abstract: Young firms going public are dependent upon the decisions of investors for a successful public offering. Yet convincing investors to invest is not easy, as young firms have limited track records and, thus, face challenges associated with gaining legitimacy in their respective industries. This paper examines ways in which select information about firms undertaking an initial public offering (IPO) can affect investor decisions. Building upon recent research on upper echelons and signaling theory, we propose that the composition of a firm's top management team can signal organizational legitimacy that in turn affects investor decisions. In the context of young firms undertaking an IPO, such signals are critical, especially when objective measures of firm quality are not easily available. We introduce a typology of signals of organizational legitimacy to elaborate on our hypotheses. Analyses of a comprehensive set of data on the career histories of the top management teams of young biotechnology firms show that investor decisions are affected by the extent to which a firm's top management team has employment affiliations with prominent downstream organizations (e.g., pharmaceutical companies), with a diverse range of organizations, and upon the role experience of one key member of the top management team—the Chief Scientific Officer. We assess and find that these effects are not mediated by the prestige of a firm's lead underwriter. We conclude with a discussion of the implications of our study for strategy research on upper echelons and organizational legitimacy. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors argue that the opportunities for adaptive learning are limited because a CEO assumes office with a relatively fixed paradigm that changes little thereafter; inertia limits the speed at which an organization can align itself with a new CEO's paradigm; and for any within-paradigm learning to occur, the external environment must be stable enough so that the cause-effect relationships that CEOs glean today remain relevant tomorrow.
Abstract: Scholars have characterized CEO tenures as life cycles in which executives learn rapidly during their initial time in office, but then grow stale as they lose touch with the external environment. We argue, however, that the opportunities for adaptive learning are limited because (1) a CEO assumes office with a relatively fixed paradigm that changes little thereafter; (2) inertia limits the speed at which an organization can align itself with a new CEO's paradigm; and (3) for any within-paradigm learning to occur, the external environment must be stable enough so that the cause–effect relationships that CEOs glean today remain relevant tomorrow. In a longitudinal study of 98 CEOs in the relatively stable branded foods industry and 228 CEOs in the highly dynamic computer industry, we found results that strongly supported our hypotheses. In the stable food industry, firm-level performance improved steadily with tenure, with downturns occurring only among the few CEOs who served more than 10–15 years. In contrast, in the dynamic computer industry, CEOs were at their best when they started their jobs, and firm performance declined steadily across their tenures, presumably as their paradigms grew obsolete more quickly than they could learn. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors investigated international marketing strategy for a specific product or line within subsidiaries of U.S., Japanese, and German multinational corporations operating in the U.K. and found that the degree of strategy standardization is significantly related to similarity between markets with respect to regulatory environments, technological intensity and velocity, customs and traditions, customer characteristics, a product's stage in its life cycle, and competitive intensity.
Abstract: This study addresses a long-standing debate in the literature regarding the appropriateness and performance consequences of marketing strategy standardization vs. adaptation. Much of the relevant literature represents the headquarters' viewpoint and broadly assesses antecedents of standardization or adaptation across widely varying markets. Using strategic fit as the theoretical platform for analysis, the study investigates international marketing strategy for a specific product or line within subsidiaries of U.S., Japanese, and German multinational corporations (MNCs) operating in the U.K. The results indicate that degree of strategy standardization is significantly related to similarity between markets with respect to regulatory environments, technological intensity and velocity, customs and traditions, customer characteristics, a product's stage in its life cycle, and competitive intensity. On the critical question of performance consequences, the findings suggest that superior performance results from strategy standardization only to the extent that there is fit or coalignment between the MNC's environmental context and its international marketing strategy choice. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: The hypothesis is that balancing vertical integration and strategic outsourcing in the pursuit of taper integration enriches a firm's product portfolio and product success, and in turn contributes to competitive advantage and thus to overall firm performance.
Abstract: Most prior research has focused on vertical integration or strategic outsourcing in isolation to examine their effects on important performance outcomes. In contrast, we focus on the simultaneous pursuit of vertical integration and strategic outsourcing. Our baseline proposition is that balancing vertical integration and strategic outsourcing in the pursuit of taper integration enriches a firm's product portfolio and product success, and in turn contributes to competitive advantage and thus to overall firm performance. We derive a set of detailed hypotheses, and test them on a unique and fine-grained panel of longitudinal data documenting over 3,500 product introductions in the global microcomputer industry. The results provide strong support for the notion that carefully balancing vertical integration and strategic outsourcing when organizing for innovation helps firms to achieve superior performance. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this article, a measure of technological diversity based on citation-weighted patents is proposed to indicate a firm's opportunity for corporate diversification based on economies of scope in valuable knowledge assets, defined for both single-and multibusiness firms, and is not correlated with more fundamental aspects of diversification, such as the number of businesses in the corporate portfolio.
Abstract: Previous findings that related diversification creates value have been called into question over concerns about methodology and measures. Reviewing existing theory to consider how a firm's knowledge base interacts with its product market activity, I address several of these concerns by creating a measure of technological diversity based on citation-weighted patents. The measure indicates a firm's opportunity for corporate diversification based on economies of scope in valuable knowledge assets, is defined for both single- and multibusiness firms, and is not correlated with more fundamental aspects of diversification, such as the number of businesses in the corporate portfolio. Evidence from a large sample of firms shows the positive relationship between diversification based on technological diversity and market-based measures of performance, controlling for R&D intensity and capital intensity as further indicators of the type of assets underlying diversification. Results hold when controlling for the endogeneity of diversification and performance in a cross-sectional sample or when controlling for unobserved factors using panel data. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors extend the added-value approach to business strategy by introducing an explicit treatment of how firms create value for consumers and characterize how consumer heterogeneity and marginal utility from performance improvements on the demand side interact with resource heterogeneity and improving technologies on the supply side.
Abstract: We develop an approach to analyzing the sustainability of competitive advantage that emphasizes demand-side factors We extend the added-value approach to business strategy by introducing an explicit treatment of how firms create value for consumers This allows us to characterize how consumer heterogeneity and marginal utility from performance improvements on the demand side interact with resource heterogeneity and improving technologies on the supply side Using this approach, we address a variety of questions including whether technology substitutions will be permanent or transitory; the sequence in which new technologies attack different market segments; how rents from different types of resources change over time; whether decreasing marginal utility and imitation give rise to similar rent profiles; the extent of synergies within a firm's resource portfolio; the emergence of new generic strategies; and the conditions that support strategic diversity in a market Our focus on consumer utility and value creation complements the traditional focus in the strategy literature on competition and value capture Copyright © 2006 John Wiley & Sons, Ltd
TL;DR: The results show that strategic orientation moderates the relationship between different elements of the strategy formation capability and performance.
Abstract: An effective strategy formation capability is a complex organizational resource—a dynamic capability that should lead to superior performance. Strategy scholars have examined the strategy formation capability from many perspectives. However, no study has examined a comprehensive model of strategy formation in the context of the firm's strategic orientation. We develop and examine such a model. The results show that strategic orientation moderates the relationship between different elements of the strategy formation capability and performance. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this paper, a model for understanding the link between first mover advantages and political resources is proposed, and three case studies suggest that the causal relationship between political resources and FMAs is a complex one; while non-market strategies can be used successfully by first movers, they can also be used by late movers to neutralize FMAs.
Abstract: While the currently prevailing conceptual framework of first mover advantages (FMAs) specifies various market mechanisms through which first movers can gain pioneering benefits, it is incomplete by failing to consider the role of political resources in creating FMAs. In this context, this article aims to add the political mechanism to the current classification of FMA mechanisms. The article further serves as a window to an understanding of the long-term process of acquiring, sustaining, and exploiting firm-specific political resources in international business, which has been neglected in prior studies on business–government relations. Detailed analysis of three case studies suggests that the causal relationship between political resources and FMAs is a complex one; while non-market strategies can be used successfully by first movers, they can also be used by late movers to neutralize FMAs. The article proposes a model for understanding the link between FMAs and political resources.
TL;DR: In this paper, the authors hypothesize that a firm's reputation is shaped by its own market actions and the actions of its industry rivals, and they find that the total number of market actions, the complexity of its action repertoire, the time lag in rivals' responses to its actions, and the similarity of its repertoire with those of its rivals positively affect its reputation.
Abstract: Drawing on signaling theory, we hypothesize that a firm's reputation is shaped by its own market actions and the actions of its industry rivals. We view market actions as signals that convey information about the underlying competencies of firms and influence stakeholder evaluations of them. We find that the total number of a firm's market actions, the complexity of its action repertoire, the time lag in rivals' responses to its actions, and the similarity of its repertoire with those of its rivals positively affect its reputation. These results suggest that a firm's reputation is influenced both by its own actions and by its rivals' actions. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors argue that the presence of multiple technology holders, which compete in the market for technology, changes such a trade-off and triggers more aggressive licensing behavior and find that the rate of technology licensing displays an inverted U-shaped relationship with the number of potential technology suppliers and is negatively related to the licensor's market share and to the degree of technology-specific product differentiation.
Abstract: The licensing of technology entails a trade-off: licensing payments net of transaction costs (revenue effect) must be balanced against the lower price–cost margin and/or reduced market share implied by increased competition (profit dissipation effect) from the licensee. We argue that the presence of multiple technology holders, which compete in the market for technology, changes such a trade-off and triggers more aggressive licensing behavior. To test our theory, we analyze technology licensing by large chemical firms during the period 1986–96 for 107 chemical products. We find that the rate of technology licensing displays an inverted U-shaped relationship with the number of potential technology suppliers and is negatively related to the licensor's market share and to the degree of technology-specific product differentiation. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: It is found that presumptive adaptation stalls network growth while a conservative approach to adaptation, which basically entails close adherence to the original practice, results in remarkably rapid network growth.
Abstract: Adaptation almost invariably accompanies the cross-border transfer of firm-specific practices. The existing literature contains two conflicting approaches to adaptation. The first, more traditional approach, following institutional, motivational, and pragmatic efficiency considerations, presumes that a modified practice can be fine tuned, stabilized, and institutionalized without consulting a working example and that practices should thus be adapted as quickly as possible to create fit with the local environment. The second approach argues, instead, for the need to maintain the diagnostic value of the original practice by adapting cautiously and gradually. In this paper, we report an in-depth field investigation of the relationship between presumptive adaptation, adaptation that removes the diagnostic value of the original practice, and transfer effectiveness. The setting is the transfer of franchising knowledge across borders. We investigate how adherence to recommended practices affects the rate of network growth in the host country. We find that presumptive adaptation stalls network growth while a conservative approach to adaptation, which basically entails close adherence to the original practice, results in remarkably rapid network growth. We conclude that presumptive adaptation of knowledge assets could be detrimental to performance. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors examined the hypothesis that licensing strategies that directly engage the inventor increase the likelihood and degree of commercialization success and found that the likelihood of success depends on the degree to which the licensee engages the inventor during the development phase.
Abstract: A significant portion of knowledge generated by university inventors remains latent (uncodified but codifiable), even though this information is valuable to firms that have licensed their inventions and famously strong incentives exist to disseminate academic findings widely. However, the licensee may access and exploit this latent knowledge by engaging the inventor during the development phase. This paper examines the hypothesis that licensing strategies that directly engage the inventor increase the likelihood and degree of commercialization success. While this may seem somewhat apparent, firms in the sample under investigation vary substantially in the degree to which they engage the inventor: one third of the sample does not engage the inventor at all. On the other hand, the hypothesis might seem surprising given the norms of open science under which university labs are expected to operate. Regression analyses based on a unique dataset of 124 license agreements associated with inventions from MIT support the hypothesis and generate results that are robust to a variety of controls. Copyright © 2005 John Wiley & Sons, Ltd.
TL;DR: It is shown that increased product modularity enhances reconfigurability of organizations more quickly than it allows firms to move activities out of hierarchy, and that modularity is a more multi-faceted concept than previously recognized.
Abstract: The tacit assumption that increased product modularity is associated with advantageous increases in organizational modularity underlies much of the literature on modularity. Previous empirical investigations of this assumption, few in number, have faced numerous confounding factors and generated conflicting results. I build a causal model for the relationship between product and organizational modularity, which I test using a distinctive empirical setting that controls for confounding factors present in previous studies. I find support for only part of the assumed relationship, showing that modularity is a more multifaceted concept than previously recognized. In particular, increased product modularity enhances reconfigurability of organizations more quickly than it allows firms to move activities out of hierarchy. The paper contributes to the emerging stream of research that focuses on the previously underappreciated costs of designing and maintaining a modular organization. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: This paper distinguishes the disruptiveness concept from other established innovation constructs, such as radicalness and competency destroying, and presents nomological validity of the disruptivity construct, thus establishing its predictive validity.
Abstract: Strategic management scholars have long explored the broad topic of innovation, a cornerstone in creating competitive advantage. Any attempt at theory construction in this area must encompass reliable and valid measures for key innovation characteristics. Yet, with respect to an important construct, i.e., disruptiveness of innovations, there has been relatively little academic research. Without formalizing the disruptiveness concept with a reliable and valid measure, it is difficult to conduct rigorous research to uncover the causes of the innovator's dilemma and identify mechanisms to help incumbents develop such innovations. In this paper, we develop a scale for the disruptiveness of innovations. We collected data from senior executives (vice president or general manager level) at 199 strategic business units (SBUs) in 38 Fortune 500 corporations and performed a series of analyses to establish the reliability and validity of the disruptiveness scale. The reliability measures, exploratory factor analysis, confirmatory factor analysis, and subsequent statistical tests strongly support our measure. Further, we also present nomological validity of the disruptiveness construct, thus establishing its predictive validity. Thus, this paper distinguishes the disruptiveness concept from other established innovation constructs, such as radicalness and competency destroying. Finally, we discuss the significance of our results and how this study might be useful to other researchers. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: The findings are that acquired and internally developed units serve different roles in the process of change, and that firms perceive reconfiguration to be beneficial.
Abstract: This paper explores changes in organizational structure and distinguishes between units' origins. Unit reconfiguration is the addition of units to, deletion of units from, and recombination of units within the firm. This study compares the reconfiguration of internally developed vs. acquired units, explores what forms of unit recombination are common, and observes whether firms pursue recombination before divestiture. Theoretical support is drawn from the dynamic capabilities perspective, research on modular organizational systems, and strategy–structure literature. The findings are that acquired and internally developed units serve different roles in the process of change, and that firms perceive reconfiguration to be beneficial. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: It is argued that there are benefits and detriments associated with speed of integration and in some situations speed may be highly beneficial whereas in others it may be harmful to the success of a merger or acquisition.
Abstract: Previous research on mergers and acquisitions (M&A) has neglected the issue of speed of post merger integration (PMI) by and large. This paper argues that there are benefits and detriments associated with speed of integration. Thus, in some situations speed may be highly beneficial whereas in others it may be harmful to the success of a merger or acquisition. It is argued that the benefits and detriments of
speed of integration depend on the magnitude of internal and external relatedness
between the merging firms prior to the merger or acquisition. Results from a survey of 232 horizontal mergers and acquisitions show that speed is most beneficial when external relatedness is low and at the same time internal relatedness is high. In contrast, speed is highly detrimental in the case of low internal and high external relatedness.
TL;DR: In this article, the SOEs of today have substantially transformed to approximate a configuration desired by the Chinese government when it began the SOE transformation a couple of decades ago to make them globally competitive.
Abstract: This paper raises the question and provides empirical evidence regarding the status of the evolution of the state-owned enterprises (SOEs) in China today. In this study, we compare the SOEs to domestic private-owned enterprises (POEs) and foreign-controlled businesses (FCBs) in the context of their organizational cultures. While a new ownership form, many of the POEs evolved from former collectives that reflect the traditional values of Chinese business. Conversely, the FCBs are much more indicative of the large global MNCs. Therefore, we look at the SOEs in the context of these two reference points. We conclude that the SOEs of today have substantially transformed to approximate a configuration desired by the Chinese government when it began the SOE transformation a couple of decades ago to make them globally competitive. The SOEs of today appear to be appropriately described as China's economic dynamic dynamo for the future. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: In this paper, a multilevel approach was used to both estimate the relative importance of industry, corporate, and business segment effects on firm performance, as well as to demonstrate how it enables the investigation of specific strategic factors within each class of effects.
Abstract: We utilized a multilevel approach to both estimate the relative importance of industry, corporate, and business segment effects on firm performance, as well as to demonstrate how it enables the investigation of specific strategic factors within each class of effects. Our results confirmed previous findings suggesting that although business segment effects carry the most relative importance, industry and corporate effects are also important. Among the findings regarding specific factors, we found that industry concentration and munificence, as well as the resource environment provided by corporate parents, impact performance. These findings suggest that investigators should consider both industry and corporate environments when examining performance. Copyright © 2006 John Wiley & Sons, Ltd.
TL;DR: The definitive version of this article is available at www3.interscience.wiley.com. Copyright John Wiley & Sons [Full text of the article is not available in the UHRA] as discussed by the authors.
Abstract: ‘The definitive version is available at www3.interscience.wiley.com '. Copyright John Wiley & Sons [Full text of this article is not available in the UHRA]