Strategic Organization recent issues

Information-mediated network effects: network composition and customer benefit in the presence of information asymmetry

Sasson, A., Fjeldstad, O. — Mon, 16 Nov 2009 02:52:32 PST

This article advances a novel information-mediated network effect argument that is particularly relevant in industries where information asymmetry may prevent customers from obtaining full service benefits. The article presents and tests the argument that customers’ access to capital is a function of the network of other customers affiliated with their bank, hence an economic network effect. Co-affiliation in a bank by actors from a credit-seeking firm’s network increases the amount and quality of the information available pertinent to that firm and hence provides the firm with the opportunity to access capital more closely aligned with its true credit-worthiness. Contrary to intuition but in line with economic network theory, the study shows that very low levels of co-affiliation also increase a firm’s credit availability. Such information-mediated network effects is empirically studied in a sample of 613 small and medium-size firms and their bank affiliations. There are significant implications for customers’ choice of banks and major bank policy choice implications associated with segmentation and customer recruitment.

The changing nature of competition in the US manufacturing sector, 1950--2002

Thomas, L.G., D'Aveni, R. — Mon, 16 Nov 2009 02:52:32 PST

Recent work in several disciplines has established that the volatility of performance for US firms has greatly increased over the last 50 years. Yet, it is the differences in durable performance of firms that have been the primary focus of inquiry in competition and business strategy. This study documents the sharply increased within-industry heterogeneity of returns in the US manufacturing sector from 1950 to 2002, and links these changes to the documented increases in volatility. The evidence supports a broad, monotonic shift towards a new, more dynamic form of competition, which some have called hypercompetition.

Striving toward the future: aspiration--performance discrepancies and planned organizational change

Labianca, G., Fairbank, J. F., Andrevski, G., Parzen, M. — Mon, 16 Nov 2009 02:52:32 PST

Interest has been growing in understanding how organizations’ aspiration levels affect their planning for future organizational change. Previous research has not specified whether organizations use direct competitors or other comparable organizations as referents for forming their aspirations. In this study, it is argued that organizations form their social aspirations based on two types of interorganizational comparisons: competitive and striving. In competitive comparisons, an organization compares its current performance against that of its current direct competitors. When relative performance is poor, these organizations plan more extensive and more radical change. However, the study shows that organizations that are performing well relative to competitors do not necessarily become inertial, as theory suggests. Rather, organizations engage in striving comparisons by comparing their current performance against the performance of organizations to which they strive to be like in the future. The analyses show that organizations with large striving discrepancies are driven to more extensive and more radical change, even if they are performing well compared to current competitors. The study examined this interplay between competitive and striving discrepancy in explaining organizational change on a sample of 131 AACSB accredited business schools.

Heterogeneous resources and the financial crisis: implications of strategic management theory

Agarwal, R., Barney, J. B., Foss, N. J., Klein, P. G. — Mon, 16 Nov 2009 02:52:32 PST

Why and how do theory groups get ahead in organization studies? Groundwork for a model of discursive moves

Moldoveanu, M. — Wed, 12 Aug 2009 08:08:00 PDT

This article puts forth a model of academic discourse as a set of discursive moves occurring in a three-dimensional space (substantive, methodological and conceptual). The model is used to make sense of the dynamics of the intellectual landscape of organizational research, and to answer the question: When different theory groups (groups of scholars sharing a common set of discursive commitments) vie to explain a particular phenomenon or solve a problem relevant to the study of organizations, which — if any — is likely to become dominant in the literature and why? The article applies the model primarily to competitive interactions among certain types of theory groups. However, the article also shows how the model can be applied to understand both competitive and non-competitive interactions among theory groups, and both teleological and communicative intentions on the part of the movers.

Why do top management teams look the way they do? A multilevel exploration of the antecedents of TMT heterogeneity

Nielsen, S. — Wed, 12 Aug 2009 08:08:00 PDT

While individual-level social psychological processes may promote top management team (TMT) homogeneity, a number of organizational and environmental factors pose requirements for increasing TMT heterogeneity. These opposing mechanisms lead to different predictions regarding the outcome of the TMT selection process. This article investigates the interactions between the different level factors influencing TMT heterogeneity in order to determine under what conditions pressures towards heterogeneity prevail over the tendency towards homosocial reproduction. Based on a panel dataset of 165 Swiss listed companies, the results of hierarchical linear model (HLM) analyses provide support for attraction—selection—attrition (ASA) and similarity— attraction tendencies. Newly appointed TMT members were more likely to be similar to the rest of the team when the prior degree of homogeneity in the TMT was high. However, this tendency was lower in firms with a high degree of internationalization or facing dynamic industry environments. At the same time, munificent industries amplify tendencies towards TMT homogeneity.

Resource-partitioning processes in the audit industry

Boone, C., Meuwissen, R., van Witteloostuijn, A. — Wed, 12 Aug 2009 08:08:00 PDT

This article argues that organizational ecology would benefit from comparative studies since the trajectories of organizational populations depend on the resource conditions under which these dynamics unfold. By comparing different settings, the boundary conditions of theories are determined and explanations sharpened. The article reports the results of a comparative study that starts from resource-partitioning processes that explain the counter-intuitive association between market concentration and the rise of specialist organizations. The authors set up an empirical study in the Belgian audit industry, comparing the findings with those of a study of the Dutch audit industry. Contrary to the Dutch setting, this study finds that the failure rate of small (large) organizations increases (decreases) with market concentration in the Belgian setting. The findings suggest that the shape of the resource space and the strength of exploitation economies mould market structure dynamics in predictable ways, and clarify the conditions necessary to trigger resource-partitioning.

Rethinking institutional distance: strengthening the tie between new institutional theory and international management

Phillips, N., Tracey, P., Karra, N. — Wed, 12 Aug 2009 08:08:00 PDT

Under the spotlight: institutional investors and firm responses to the Council of Institutional Investors' Annual Focus List

Ward, A. J., Brown, J. A., Graffin, S. D. — Wed, 15 Apr 2009 06:43:17 PDT

This article looks at how a negative third-party quality signal, in the form of external monitoring of firm performance by an investor group, prompts a response from both institutional investors and the firms publicly identified as poor performers. Using a sample of 93 firms placed on the Focus List of the Council of Institutional Investors from 2000 to 2005 and a comparison group of 96 firms in the bottom quartile in stock performance from the S&P500, the authors find that institutional investors respond to this negative third-party signal by reducing their holdings in firms that received this public repudiation. However, this reduction in holdings is moderated by the independence of the board of the targeted firm. This result suggests institutional investors pay particular attention to the governance characteristics of underperforming firms. Lastly, the authors found that targeted firms with more independent boards respond by increasing the intensity of incentives of the CEO, thus signaling their responsiveness to investor concerns.

Learning from broadcasts of project participation: selection of second-tier actors during project-venture formation in the movie industry, 1931--40

Schwab, A. — Wed, 15 Apr 2009 06:43:17 PDT

The disintegration of project ventures after task completion creates challenges for the retention and transfer of knowledge to future projects. Consequently, it is not clear to what degree and under what conditions learning across projects occurs in project-venture settings. This study argues that the industry-wide broadcasting of project participants' identities plays a key role in supporting performance-outcome learning during the formation of project-venture teams. In a stratified random sample of 233 US movie projects between 1931 and 1940, performance-outcome learning affected the selection of second-tier participants. Such learning, however, was conditional on the industry-level availability of both project participant information and project performance for prior projects. Industry-wide broadcasting of participants' identities by individual projects in the form of on-screen credits was sufficient to enable this form of performance-outcome learning in the movie industry. The emergence of the internet has created similar industry-wide broadcasting opportunities for other project-venture systems.

Technology licensing strategies: the interaction of process and content characteristics

Lichtenthaler, U., Ernst, H. — Wed, 15 Apr 2009 06:43:17 PDT

Industrial firms increasingly license their technological knowledge exclusively or in addition to its application inside the organization. Given the relative lack of prior research, this study uses qualitative data from interviews in 25 industrial firms to examine the role of strategy process and content characteristics in technology out-licensing. Following a mixed methods design, the study further uses quantitative data from a survey of 136 firms to test multiple hypotheses relating a firm's licensing performance to two process characteristics of corporate licensing strategies, i.e. formalization and integration, and to two strategy content issues, i.e. openness and activeness. The findings provide support for the combined explanatory power of strategy process and content variables, which strongly interact in their effect on licensing performance. The results help to understand the discrepancies between the success of some pioneering firms in technology licensing and the managerial difficulties of many others.

Strategy tools as boundary objects

Spee, A. P., Jarzabkowski, P. — Wed, 15 Apr 2009 06:43:17 PDT

Editorial: the seven year itch

Fri, 06 Feb 2009 08:39:00 PST

Exploration and exploitation: internal variety and environmental dynamism

Kim, T., Rhee, M. — Fri, 06 Feb 2009 08:39:01 PST

This article proposes that specific features of environmental dynamism and the notion of internal variety should be taken into consideration in response to caveats in prior research on choice or balance between exploration and exploitation and its implications for organizational performance. The study extends March's exploration—exploitation model by (1) conceptualizing and varying two dimensions — amplitude and frequency — of environmental dynamism and (2) articulating the notion of internal variety in an organization. Results from the simulation models show how a combination of organizational practices shapes internal variety, which in turn influences an organization's level of knowledge over time amid a changing environment.The study's findings suggest that the level of internal variety, along with the mechanisms by which each practice influences internal variety, affect adaptations of organizational knowledge. Managing internal variety through a combination of strong complementary practices, rather than anchoring on moderate levels of those practices, can achieve the balance between exploration and exploitation.

Strategic organization of R&D: the choice of basicness and openness

Cassiman, B., Valentini, G. — Fri, 06 Feb 2009 08:39:01 PST

Through a stylized model of the R&D process, this article shows how the strategic organization of R&D should simultaneously consider the choice of the type of R&D to be performed (basicness) and the organization of R&D, which includes the choice about the exposure of the R&D project to knowledge from outside the firm (openness).The authors identify how each of these decisions affects the expected benefits and costs (production, transaction and coordination costs) of R&D projects, and formally derive how these decisions interact.The fact that these decisions are customarily allocated to different agents with misaligned objectives pushes top management to strategically adjust the R&D strategy (i.e. the type of R&D performed) in order to affect the organization of the R&D project, an often times decentralized decision taken by a project manager. From the model, the authors develop several implications for theory, explain some observed empirical regularities in the management of R&D and derive novel testable implications.

Assessing the dynamic capabilities view: spare change, everyone?

Arend, R. J., Bromiley, P. — Fri, 06 Feb 2009 08:39:01 PST

Understanding dynamic capabilities: progress along a developmental path

Helfat, C. E., Peteraf, M. A. — Fri, 06 Feb 2009 08:39:01 PST