Recipes of success : the case of pulp and paper industry 1989-2015

Author Nguyen Ngoc Duy Khoa Tittle of thesis Working title: Recipes of Success: The case of pulp and paper industry (1989-2015) Reconceptualizing the causal link between strategy choices and market dynamics: A case of global pulp and paper industry. Discipline International Business and Entrepreneurship Type of work Master’s thesis Time (month/year) May 2017 Number of pages 89 Abstract Explaining the variation in competitive positioning actions across firms in the face of environmental change has long inspired debates in the field of strategic management. Despite the importance of these questions, little effort has been done to examine the complex interdependencies among industry, organizational attributes, and strategic actions that potentially underlie the organizational performance in one model without controlling one or more of the three factors. Most of the studies on competitive dynamics primarily have focused on independently exploring the effects of organizational characteristics or the industry structure on competitive actions and reactions, which, in turn, impact performance. Such causality is also difficult to model and hence has been has largely ignored previously, probably due to the limitations in the correlation-related and variance decomposition approach. The research interest here is therefore to reinvestigate the causally complex relationships between environmental context, strategy choices, firm-level characteristics, and performance outcomes. This was achieved by mainly employing the configurational approach, fuzzy set Qualitative Comparative Analysis (fsQCA) (Ragin, 1987, 2000, 2007, 2008), a novel configurational method that overcomes important limitations of traditional correlational approaches. The analyses were performed based on a unique set of data collected from over 200 firms in the global pulp and paper industry, accounting for approximately 1,400 cases over a range of 27 years (1989-2015). Overall, this thesis attempts to integrate time into QCA, to include possible strategic actions other than exploration and exploitation actions, and to advance the causal complexity literature in the field of strategic management. The empirical findings identify various pathways to success, i.e. positive profitability, as well as to non-success, i.e. non-positive returns. The aggregated recipes of success include the Regenerator, the Renewer, and the Conqueror while the paths to non-success cover the Early Consolidator, the Excessive Consolidator, and the Late Explorer. It is clear that there is no single formula or formula with a single strategy to success, and the configurations are not static. Nonetheless, the results reveal that the number of successful pathways appear getting less. In other word, it might be relatively more difficult to be profitable nowadays as compared to the past, partly due to several turbulences and changes. In addition to strategies such as exploitation and acquiring external resources, size and degree of diversification are also among the core conditions that lead to positive performance. It is also implied that on top of financial strength and scale, winning organizations are the ones who are flexible and ready to change with preparation of multiple strategic options on hand.