bluuebunny/crossref_metadata_2025 huggingface dataset:
The deterrent to dubious corporate behavior: Profitability, probability and safety recalls
Authors: Marcus Alfred
Published: June 2007

In response to findings of abnormal stock market reactions following such dubious corporate behaviors as bribery, fraud, and the production of hazardous products, some researchers have argued that the stock market reaction is a sufficient deterrent to these behaviors so that additional regulation is not necessary. In this paper we examine stock market returns as a deterrent to dubious behavior in the production of defective automobiles. Relying on a broader range of assumptions about managerial behavior than are used in previous studies, we question the efficacy of the market as an instrument of social control.
Implementing competitive strategies at the business unit level: Implications of matching managers to strategies
Authors: Govindarajan Vijay
Published: June 2007

This paper argues that, for superior performance, it is necessary to attune the choice of the general manager to the strategy of the business unit (SBU). Data from 121 SBUs indicate that SBU competitive strategy interacts with several managerial orientations (functional background, locus of control, and problem‐solving style) to influence SBU effectiveness. The theoretical and practical relevance of these findings are discussed, as are directions for future research.
The impact of diversification strategy on risk‐return performance
Authors: Chang Yegmin , Thomas Howard
Published: June 2007

This study examines the impact of diversification strategy on risk and return in diversified firms. Following an assessment of previous research on strategic risk, relationships between risk, return, and diversification strategy are hypothesized. Regression analysis shows that differences in risk‐return performance among diversified firms are more closely associated with structural factors associated with markets and businesses than with the particular diversification strategy chosen. Returns also influence the choice of diversification strategles which, in turn, do not get rewarded with higher profits. A curvilinear risk‐return relationship is also observed which is consistent with previous theoretical suggestions. Implications for the strategic management of risk are then drawn.
Research notes and communications sources of competitive data for the management strategist
Authors: Young Murray A.
Published: June 2007

Timely use of print and electronic information on corporate and industry performance requires knowing where to look, what to expect, and what the limitations of the data are. This article summarizes the most generally available, low‐cost sources of information on suppliers, resellers, and competitors. Particular attention is paid to sources providing the business strategist with insight into actual and potential sources of competitive advantage.
Research notes and communications strategic process effects on consensus
Authors: Wooldridge Bill , Floyd Steven W.
Published: June 2007

Strategy research has not shown a consistent relationship between consensus in the top management team and organizational performance. This paper attempts to explain these findings by providing a description of how the strategic process affects consensus. Synoptic and incremental processes are compared in terms of their effects on the scope, content, and degree of consensus. In addition, two dimensions of consensus, shared understanding and commitment, are considered. Implications for research are addressed.
Doing a deal: Merger and acquisition negotiations and their impact upon target company top management turnover
Authors: Walsh James P.
Published: June 2007

This research investigates the effects of merger and acquisition negotiations on subsequent target company top management turnover. Three attributes of the companies and seven attributes of the merger and acquisition transactions are examined. The results indicate that the primary impact of negotiations is evident in the fourth year after a settlement date. When a buyer approaches an unrelated company that has been subject to previous takeover interest with a merger proposal, and an agreement is reached, the target'S management team is likely to experience abnormally high turnover 4 years later. Additional research ideas are suggested to help explain the sizeable turnover rates in the 3 years immediately following a merger or acquisition.
Internal differentiation within multinational corporations
Authors: Ghoshal Sumantra , Nohria Nitin
Published: June 2007

This paper argues that the internal structure in complex, multi‐unit organizations such as a multinational corporation (MNC) is not homogeneous throughout the organization, but is systematically differentiated so as to ‘fit’ the different environmental and resource contingencies faced by the different national subsidiaries. Based on a survey of 66 of the largest European and North American MNCs, yielding data on 618 cases of headquarters‐subsidiary relations, it is shown that the different contextual conditions faced by the different subsidiaries of the MNC can be meaningfully classified into four generic situations. Furthermore, for each of these situations the exchange relation between the MNC headquarters and the subsidiary is characterized by a ‘fit’ governance structure consisting of a different combination of structural elements such as centralization of authority, formalization of rules and systems, and normative integration of members. Following the existing literature, these ‘fit’ structures are labeled in this paper as hierarchical, federative, clan and integrative. The multinational is then described as an internally differentiated organization in which each headquarters‐subsidiary link corresponds to one or the other of these administrative forms.
Determinants of tender offer post‐acquisition financial performance
Authors: Fowler Karen L. , Schmidt Dennis R.
Published: June 2007

The present study extends previous research efforts and examines relationships between commonly discussed strategic acquisition factors and long‐term financial performance measures of acquiring firms. The factors of interest include relative size, previous acquisition experience, organizational age, industry commonality, contested versus uncontested acquisitions, and percentage of stock acquired. The financial performance measures include both accounting and capital market data for the 4‐year period preceding acquisition activity and the 4‐year period following such activity. The study presents bivariate and multivariate analyses for 42 industrial manufacturing firms that engaged in the tender offer form of acquisition. The findings indicate that, on the average, post‐acquisition financial performance improved significantly for organizations that had previous acquisition experience, acquired a higher percentage of a target, or were older. Post‐acquisition performance decreased significantly for acquiring firms when target firms contested an acquisition.
Research notes and communications a note on global strategies
Authors: Kogut Bruce
Published: June 2007

This article augments, as well as takes issue with, the recent review by Ghoshal on international competition. The central question is what changes strategically when a firm moves from domestic to overseas competition. In analyzing this question, it is shown that there exists a neglected line of relevant research by two schools of thought: the Cambridge (Massachusetts) axis and internalization theory. The recent focus of research is described as understanding the multinational corporation as a network competing on its flexibility and the transfer of acquired capabilities across borders.
Changing generic strategies: Likelihood, direction, and performance implications
Authors: Zajac Edward J. , Shortell Stephen M.
Published: June 2007

This study argues for greater research attention to the issue of changing generic strategies over time. The study proposes two sources of theoretical tension relating to changing strategies: (1) the notion of equally viable generic strategies versus particularly appropriate strategy/environment combinations, and (2) the relative influence of process (ability to change strategies) versus content (desire to change strategies) issues. Questions relating to these tensions are then examined empirically in an industry‐specific analysis of the likelihood, direction, and performance implications of an organization'S changing its strategy in response to an environmental shift. The findings suggest that changes in generic strategy are not rare, and that organizations do not perceive generic strategies to be equally viable in different environments across time. Performance differences were also found across generic strategies, but not between firms that changed their strategy versus those that did not.
The learning curve, technology barriers to entry, and competitive survival in the chemical processing industries
Authors: Lieberman Marvin B.
Published: June 2007

This paper evaluates entry and survival rates in a sample of 39 chemical product industries. The analysis focuses on learning‐based cost advantages potentially held by incumbent firms. A logit model of entry gives no evidence that entry decisions were sensitive to the cumulative production lead held by incumbents. Entry was facilitated by the fact that for most products, technology was available from a range of sources. A hazard function model reveals that entrant survival rates were unrelated to order of entry or source of process technology. However, survival was adversely affected when the leading incumbent held a large cumulative output advantage or when entrants built plants of sub‐optimal scale. Thus, a large incumbent lead in production experience did not deter new entry but did reduce the entrant'S probability of survival.
Global corporate competition: Who's winning, who's losing, and the R&D factor as one reason why
Authors: Franko Lawrence G.
Published: June 2007

This study summarizes the major changes over the period 1960–86 in the shares of world markets of the world'S leading American, European and Asian corporations based in 15 major industries. It relates the differential sales growth rates of the gaining and losing firms to national trends in industrial competitiveness, to employment change and to long‐term returns to shareholders. One principal determinant of firms' global growth rates, and thence gains and losses in ‘world market share’, corporate research and development (R&D) intensity, is examined and tested on an 83‐firm, six‐industry subset of the overall data base. The proportion of corporate sales revenues allocated to commercially oriented R&D emerges as a, perhaps the, principal indicator of subsequent sales growth performance relative to competition over 5–10‐year periods. Insofar as many U.S. and U.K. firms have lost global market share relative to Asian and European competitors over the past two decades, a significant contributory factor would appear to have been negligence on the part of many U.S. and U.K. firms of investment in technology as a factor determining strategic, competitive advantage.
Mobility barriers and strategic groups
Authors: Mascarenhas Briance , Aaker David A.
Published: June 2007

A procedure for identifying strategic groups based on mobility barriers is recommended and illustrated. The strategic groups identified were observed to exhibit group membership stability and differences in profitability.
A systematic comparative analysis and synthesis of two business‐level strategic typologies
Authors: Segev Eli
Published: June 2007

Two important business‐level strategic typologies were systematically evaluated, analyzed and compared in this study: Porter'S Overall Cost Leadership, Differentiation, Focus, and ‘Stuck in the Middle’ generic competitive strategies, and Miles and Snow'S Defender, Prospector, Analyzer, and Reactor types of organizational adaptation. On the basis of strategic theory, and following a pilot study, 31 strategic variables were evaluated by judges on a seven‐point maximum‐minimum scale, for each strategy, within its typology. Analysis of variances and concordance among judges regarding the ranking of the strategies on each variable were examined, and a strategic profile was built for each strategy. Proximities between strategies of the two typologies were analyzed using monotonic multidimensional scaling. The analysis indicated similarities and differences between the two typologies. A synthesis of the two typologies is suggested along two dimensions: internal consistency of the strategy, and level of proactiveness.
Business strategy, market structure and risk‐return relationships: A structural approach
Authors: Cool Karel , Dierickx Ingemar , Jemison David
Published: June 2007

A structural model is proposed which integrates and extends previous findings on the interrelations between risk—return outcomes, market share, firm conduct attributes, and inter‐firm rivalry. It is argued that the relative impact of market share and firm conduct attributes on risk—return outcomes depends on the intensity of rivalry. The empirical setting is commerical banking in Indiana (1975–79). Latent variable path analysis (partial least‐squares) is used to estimate the model. The effect of market share is found to be quite important, even when possible ‘spurious’ effects due to differences in individual firm attributes are controlled for. Given consistent indications of oligopolistic coordination found in various parts of the model, it is inferred that the measured effect of market share reflects the exercise of market power.
Research on corporate diversification: A synthesis
Authors: Ramanujam Vasudevan , Varadarajan P.
Published: June 2007

Diversification has emerged as a central topic of research in strategic management. Although this topic has been widely and intensively studied by scholars from other areas such as industrial organization economics, financial economics, organization theory, and marketing, a synthesis of these diverse streams of research is lacking. This paper attempts such a synthesis with a view to fostering further strategic management research in this area by taking a multi‐disciplinary perspective on diversification. A wide‐ranging search of the literature led to the development of an overarching research framework that facilitates the classification of a vast body of literature. Proceeding from the framework, a critique of the literature is performed with a particular emphasis on studies by strategic management researchers. Five key conceptual and methodological problems are identified and discussed. Suggestions are offered for future research on diversification.
The psychological context of strategic decisions: A test of relevance to practitioners
Authors: Bateman Thomas S. , Zeithaml Carl P.
Published: June 2007

A number of authors argue that research in the organizational sciences must produce results that are both rigorous and relevant. These results should go beyond the obvious, yielding unexpected variation in our understanding of organizational phenomena. A recent paper published in this journal by the authors reported the results of a laboratory experiment examining the effect of several psychological influences on strategic decisions. This note reports the results of a survey in which executives and MBA sudents were asked to predict the results of the experiment. Although the respondent predictions were consistent, their overall set of predictions was inaccurate.
The design school: Reconsidering the basic premises of strategic management
Authors: Mintzberg Henry
Published: June 2007

Among the schools of thought on strategy formation, one in particular underlies almost all prescription in the field. Referred to as the ‘design school’, it proposes a simple model that views the process as one of design to achieve an essential fit between external threat and opportunity and internal distinctive competence. A number of premises underlie this model: that the process should be one of consciously controlled thought, specifically by the chief executive; that the model must be kept simple and informal; that the strategies produced should be unique, explicit, and simple; and that these strategies should appear fully formulated before they are implemented. This paper discusses and then critiques this model, focusing in particular on the problems of the conscious assessment of strengths and weaknesses, of the need to make strategies explicit, and of the separation between formulation and implementation. In so doing, it calls into question some of the most deep‐seated beliefs in the field of strategic management, including its favorite method of pedagogy.
Ceo selection, succession, compensation and firm performance: A theoretical integration and empirical analysis
Authors: Zajac Edward J.
Published: June 2007

This study seeks to extend and unify a set of research issues relating to CEO selection, succession, compensation, and firm performance. The study offers a model of these issues from a combined agency and organizational perspective, and tests the model using archival data and perceptual data from survey responses from 118 CEOs of the largest U.S. corporations. The results suggest that several CEO issues are significant predictors of variation in firm performance, supporting the paper's arguments for (1) a reinterpretation of the insiderfoutsider CEO distinction, (2) the relevance of CEO succession planning, and (3) the importance of CEOs' perceptions of the linkage between their personal wealth and firm wealth.
The strategy process, middle management involvement, and organizational performance
Authors: Wooldridge Bill , Floyd Steven W.
Published: June 2007

This paper reports the results of a study investigating the strategic involvement of middlelevel managers in 20 organizations. The results suggest that involvement in the formation of strategy is associated with improved organizational performance. Consensus among middle‐level managers, defined as strategic understanding and commitment, is related to involvement in the strategic process but not to organizational performance. Implications for research and the management of the strategic process are discussed.
Corporate mergers, stockholder diversification, and changes in systematic risk
Authors: Chatterjee Sayan , Lubatkin Michael
Published: June 2007

Strategic management literature suggests a relationship between systematic risk and the relatedness of merging firms. This is tested for a sample of 120 large mergers by controlling for the systematic risk of the target firm, correcting for possible problems of heteroskedasticity, and estimating shifts in risk over daily as well as monthly time horizons. Finally, the influence of leverage is considered. The findings highlight a performance distinction between corporate diversification and stockholder diversification in instances of related and unrelated mergers.
PIMS and the FTC line‐of‐business data: A comparison
Authors: Marshall Cheri T. , Buzzell Robert D.
Published: June 2007

The PIMS data base and the FTC Line‐of‐business data base have both been widely used in industrial organization research and business strategy research. However, both data bases have been criticized because of their sample compositions, their measurement methodologies, and the underlying data structures. This study was designed to explore the issues that have been raised about the two data sets by comparing findings produced by them. Since criticism of the two data sets are dissimilar, it is highly unlikely that comparable results would be obtained if the quality of either or both data sets was deficient. This study shows that the data sets generally produce highly comparable descriptive and relational results. However, a number of disagreements do arise, and these are traced to idiosyncratic causes, rather than to the kinds of systematic shortcomings suggested by critics.
Merger motives and merger prescriptions
Authors: Trautwein Friedrich
Published: June 2007

The article surveys theories of merger motives and relates them to prescriptions for merger strategies. The theories of merger motives can be classified into seven groups. Those theories arguing with private information, managerial empire‐building or process influences are better supported by evidence than those tracing mergers back to efficiency gains or monopoly power. The explanations of mergers in terms of raider activity or macroeconomic disturbances carry the least plausibility. Strategy authors have discussed mergers with respect to the choice of acquisition mode, entry mode, and integration mode. The prescriptions on all three topics are dominated by the efficiency theory of mergers. For this reason they are dangerous guides for participants in merger processes. On the other hand they provide an efficient language for communicating one's position. The research in merger motives should be redirected from the efficiency theory to explanations that build on decision processes, conflicting goals, and ambiguous private information.
A reanalysis of miller and friesen's life cycle data
Authors: Drazin Robert , Kazanjian Robert K.
Published: June 2007

This paper reanalyzes Miller and Friesen's (1984a) life cycle dana by statistically assessing their conclusions regarding the life cycle imperative. Three separate models were tested: a three‐phase model, a four‐phase model and a five‐phase model. Using the del procedure for the prediction analysis of cross‐classification tables, a sensitivity analysis showed that there is support for the life cycle progression hypothesis, but only when firms that stay in the same phase are not treated as errors. When firms that stay the same are increasingly weighted as errors, del values drop significantly. In general, the three‐ and four‐phase models show better support for the life cycle hypothesis than the five‐phase model originally used by Miller and Friesen.
Middle managers and strategy: Microdynamics of inclusion
Authors: Westley Frances R.
Published: June 2007

This paper examines the role of middle management in strategic processes in bureaucratic organizations. There is evidence of extensive dissatisfaction among middle managers, who often perceive that they are excluded from strategic processes. This exclusion is de‐energizing, inefficient, and in the end, expensive. Although an element of exclusion is probably inevitable, the extent to which it occurs varies across organizations. This suggests that both exclusion and its consequences can be alleviated. An application of microsociological theory to this problem focuses attention on discrete communications about strategic generalities between superior and subordinate. This paper argues that middle managers may either be excluded or included in such ‘strategic conversations’, but inclusion does not guarantee satisfaction. When included they may emerge energized or de‐energized around strategic issues, depending on several important factors. Finally, the paper discusses the implications of these dynamics for more macro level processes, in particular, strategy as allocation of resources and strategy as interpretative schema. A set of propositions as to the likelihood of increasing or decreasing feelings of inclusion and motivation, and of sustaining such feelings over time, concludes this discussion.
Strategic types, distinctive marketing competencies and organizational performance: A multiple measures‐based study
Authors: Conant Jeffrey S. , Mokwa Michael P. , Varadarajan P. Rajan
Published: June 2007

A new, multi‐item scale for operationalizing Miles and Snow's (1978) strategic typology— defenders, prospectors, analyzers, and reactors—is proposed and field‐tested in this paper. Relatively pure strategic types, identified as those organizations classified similarly using both the newly developed, multi‐item scale and the traditionally employed paragraph approach, are used to analyze the relationship between strategic types, distinctive marketing competencies, and organizational performance. Results of analysis suggest that while the marketing competencies of prospector organizations are superior to those of analyzer, defender, and reactor organizations, all three stable archetypes perform equally well in terms of profitability and outperform reactors. The newly developed strategic types scale performs well and appears to possess significant managerial and research potential. It is theoretically anchored, easily administered, and possesses diagnostic value to both strategists and their organizations.
Diversification strategy and performance in Canadian manufacturing firms
Authors: Nguyen The Hiep , Séror Ann , Devinney Timothy M.
Published: June 2007

In a study of the interrelationships between firm diversification, market power, and performance, Montgomery (1985) presents empirical evidence in support of the hypotheses that highly diversified firms will have lower market shares in their respective markets than less diversified firms and that the strategy of diversification does not contribute to firm profitability. The present paper re‐examines these results with attention to the special characteristics of the open Canadian economy in a sample of Canadian manufacturing firms. The authors report evidence in support of the hypothesis that diversification in technologically related activities results in economies of scope and greater firm performance.
Corporate linkages and organizational environment: A test of the resource dependence model
Authors: Boyd Brian
Published: June 2007

Two competing models of corporate boards are presented. Management control proposes that the board is a rubber stamp for management, and plays a minor role in strategic management, while resource dependence asserts that the board is a tool used to manage environmental uncertainty. A structural model was developed to determine whether corporate boards respond to different types of environmental uncertainty, using data on 147 companies from nine industry groups. It was found that boards tended to be smaller in a more uncertain environment, while having an increased number of interlocks. This relationship was stronger in high‐performing firms.
Sources of value creation in acquisitions: An empirical investigation
Authors: Seth Anju
Published: June 2007

This study provides a conceptual framework and an empirical methodology to assess the relative importance of different sources of value creation in acquisitions. The empirical results indicate that value creation in related acquisitions is associated with economic efficiencies hypothesized to arise both from economies of scale and scope and from operating efficiencies, and with market power. In unrelated acquisition, where such efficiencies are not expected to be present, value creation occurs nevertheless and is associated with the coinsurance effect. Finally, it is shown that financial diversification effects do not play a role in value creation in either type of acquisition.
New venture strategies: An empirical identification of eight ‘archetypes’ of competitive strategies for entry
Authors: McDougall Patricia , Robinson Richard B.
Published: June 2007

Previous literature on competitive strategies for new ventures differs significantly on the appropriate domain breadth for new ventures, niche versus aggressive coverage. While this study does not address normatively the appropriateness of either approach, it reveals eight distinct ‘archetypes’ of competitive strategy for entry with both niche and broad strategies represented. In this study 247 new venture CEOs from the information processing industry were asked to describe their venture's competitive strategy for entry using twenty‐six competitive methods. Factor and subsequent cluster analysis uncovered these eight different ‘archetypes’: (1) aggressive growth via commodity type products to numerous markets with small customer orders; (2) aggressive growth via price competitive new products to large customers; (3) aggressive growth with narrow, special products priced competitively to a few larger buyers; (4) controlled growth with broad product range to many markets and extensive backward integration; (5) controlled growth via premium priced products sold directly to consumers; (6) limited growth in small niches offering a superior product and high customer service; (7) average growth via steady development of new channels, brand/name ID, and heavy promotion; and (8) limited growth selling infrequently purchased products to numerous markets with some forward integration.
Diversification, vertical integration, and industry analysis: New perspectives and measurement
Authors: Davis Rachel , Duhaime Irene M.
Published: June 2007

Vertical integration, diversification, and industry analysis are fundamental topics in strategic management content research. We develop the conceptualization of these issues by exploring their nature as well as their correct measurement. Toward these ends, we conduct an extensive analysis of the COMPUSTAT II data base and the TRINET data base in all three research contexts. In addition to these two data bases, we also evaluate the Census of Manufacturers, S&P's Financial Dynamics, S&P's Industry Surveys and Dun and Bradstreet's Industry Norms and Key Business Ratios, for purposes of industry analysis. Important contributions include our identification of the potential of COMPUSTAT 11 data to distinguish within‐stage forward and backward vertical integration, and between‐stage forward and backward vertical integration, as well as our recommendations for the protection of the integrity of studies based on the COMPUSTA T II and TRINET data bases.
Asset specificity, firm heterogeneity and capital structure
Authors: Balakrishnan Srinivasan , Fox Isaac
Published: June 2007

This paper presents an empirical investigation of the importance of specialized assets and other unique characteristics of a firm in explaining the variance in capital structure across firms. The results show that firm‐specific effects contribute most to the variance in leverage, suggesting a strong link between strategy and capital structure.
An empirical investigation of the effect of corporate charter antitakeover amendments on stockholder wealth
Authors: Mahoney James M. , Mahoney Joseph T.
Published: June 2007

This paper tests competing theoretical explanations for the passage of corporate charter antitakeover amendments. The managerial entrenchment hypothesis suggests that antitakeover amendments are adopted by incumbent management to obtain job security at stockholders' expense. An alternative hypothesis is that antitakeover amendments are proposed in order to enable the management of the target firm to extract a higher price from the bidding firm and thereby benefit stockholders. Our event study from a sample of 409 firms that adopted antitakeover amendments in the 1974–88 period indicates a strongly negative effect on stockholder wealth, in support of the managerial entrenchment hypothesis that antitakeover amendments are adopted by managers at the expense of stockholders.
Strategic assets and organizational rent
Authors: Amit Raphael , Schoemaker Paul J. H.
Published: June 2007

We build on an emerging strategy literature that views the firm as a bundle of resources and capabilities, and examine conditions that contribute to the realization of sustainable economic rents. Because of (1) resource‐market imperfections and (2) discretionary managerial decisions about resource development and deployment, we expect firms to differ (in and out of equilibrium) in the resources and capabilities they control. This asymmetry in turn can be a source of sustainable economic rent. The paper focuses on the linkages between the industry analysis framework, the resource‐based view of the firm, behavioral decision biases and organizational implementation issues. It connects the concept of Strategic Industry Factors at the market level with the notion of Strategic Assets at the firm level. Organizational rent is shown to stem from imperfect and discretionary decisions to develop and deploy selected resources and capabilities, made by boundedly rational managers facing high uncertainty, complexity, and intrafirm conflict.
Rivalry, strategic groups and firm profitability
Authors: Cool Karel , Dierickx Ingemar
Published: June 2007

An analysis of the U.S. pharmaceutical industry during the period 1963–82 finds that a substantial decline in industry profitability is not explained by changes in the number and size distribution of firms, in segment interdependence and in strategic distance. In contrast, declining industry profitability is strongly associated with increasing rivalry. This increasing rivalry is associated with changes in strategic group structure and a concomitant shift from within group rivalry to between group rivalry.
Top executive commitment to the status quo: Some tests of its determinants
Authors: Hambrick Donald C. , Geletkanycz Marta A. , Fredrickson James W.
Published: June 2007

Some top executives are more committed to the status quo—particularly to their organization's current strategy and leadership profile—than are others. Most empirical research on upper echelons treats psychological phenomena as a ‘black box’—the unobserved intervening mechanisms—that causes associations between more observable executive characteristics and organizational outcomes. In contrast, this paper attempts to directly examine the determinants of an important element of an executive's psychological orientation—commitment to the status quo (CSQ). We focus on a select set of variables which have been posited in prior research as determinants of executive CSQ, but which have not been directly tested for such a relationship. Based on a large‐scale survey methodology, results suggest that an executive's tenure in an industry is a pronounced determinant of CSQ, and has significantly more impact than organizational tenure. As expected, the firm's current performance was found to be positively related to CSQ; this relationship was stronger in high‐discretion than in low‐discretion industries. Finally, the project reaffirms a well known human tendency: incumbent CEOs tend to believe that their eventual successors should be just like them.
A theory of global strategic alliances: The case of the global auto industry
Authors: Burgers Willem P. , Hill Charles W. L. , Kim W. Chan
Published: June 2007

The theory articulated in this paper suggests that the desire to reduce demand and competitive uncertainty are two separate, important motives for alliance formation. Taking this as a starting point, we predict the configuration of horizontal alliances that we might expect to observe within an industry when firms experience these uncertainties to different degrees. An empirical test of this theory using data from the global auto industry yields results consistent with the view (1) that alliances are a device for reducing both the uncertainties that arise from unpredictable demand conditions and those that arise from competitive interdependence, and (2) that variation of demand uncertainty and competitive uncertainty across firms explains differentials in both the intensity and structure of their horizontal alliance activity.
Construct validity of some unweighted product‐count diversification measures
Authors: Lubatkin Michael , Merchant Hemant , Srinivasan Narasimhan
Published: June 2007

Construct validities are assessed for three simple‐to‐compute, unweighted, SIC‐based continuous diversification measures and a recently proposed two‐dimensional, SIC‐based categorical diversification measure. Two of the three continuous measures are found to correspond strongly to Rumelt's categorical measures, suggesting that these two objective and easy‐to‐calculate measures are better suited for large sample, strategy research than has previously been assumed. No support is found for the two‐dimensional measure.
Business strategy, technology policy and firm performance
Authors: Zahra Shaker A. , Covin Jeffrey G.
Published: June 2007

This paper presents a study of the relationships among select business strategy dimensions, technology policy dimensions, and firm performance. The research sought to identify how these variables interrelate at the bivariate and multivariate levels. Data were collected from 103 manufacturing‐based firms representing 28 mature industries. Results show that technology policy choices vary widely across firms with different business strategies, and that business strategy affects the strength of the relationship between firm performance and particular technology policies.
Why managers divest—Evidence from New Zealand's largest companies
Authors: Hamilton Robert T. , Chow Yuen Kong
Published: June 2007

Chief Executives from New Zealand's largest companies were surveyed to distinguish divesting and nondivesting companies, and to identify the relative importance of the factors and motives which led to the divestment of 208 business units in the period 1985 through 1990. The divesting companies were considerably larger and faster growing than nondivestors. The typical divestment was motivated by the need to convert unattractive assets into liquid form which could then be held to strengthen the balance sheet, or reinvested in either the core business or new areas.
Scope, timing and strategic adjustment in emerging markets: Manufacturer strategies and the case of MRI
Authors: Teplensky Jill D. , Kimberly John R. , Hillman Alan L , Schwartz J. Sanford
Published: June 2007

This study examines the realized strategies of all domestic manufacturers in a growing, high technology, industrial market characterized by high levels of regulatory, demand, and technological uncertainty. These manufacturers have behaved quite differently and experienced varying levels of success in the market. A typology of entry strategies grounded in an intensive analysis of these data is presented. Specifically, it addresses the timing and scope of a firm's entry into the market, strategic adjustments over time, and the impact of these decisions on the firm's performance. It is proposed that these strategies represent trade‐offs between the risks of resource commitment and competitive preemption. Specific, testable hypotheses based on this typology are also provided.
Global, national and resource‐based strategies: An examination of strategic choice and performance in the vehicle components industry
Authors: Carr Christopher
Published: June 2007

For an industry facing both internationalization and impending maturity, available strategic prescriptions suggest four options which are at variance with each other. To assess the validity of competing strategic prescriptions, the outcomes of these four options are examined empirically by means of a longitudinal study of the vehicle components industry. Rather than going for strategies based on market domination, large British vehicle component companies would generally have performed better had they concentrated on resource‐based priorities; market domination has generally only proved feasible in national markets, and the outcomes of such strategies have proved little short of disastrous. Explanations are explored through a case study of one British national market leader and through international comparisons from Germany, the U.S.A. and Japan, which highlight the importance of manufacturing policies as primary sources of sustainable competitive advantage.
Stock market reactions to related diversification moves by service firms seeking benefits from information asymmetry and economies of scope
Authors: Nayyar Praveen R.
Published: June 2007

Service firms may seek benefits from information asymmetry and economies of scope by diversifying. Each source of benefit is based on different underlying mechanisms and each is affected differently by implementation difficulties and service characteristics. Previous research, however, has not analyzed the relative performance effects of these two very different sources of benefits for related diversified service firms. Thus, this paper uses an integrative framework including these aspects to examine the relative performance effects of benefits from information asymmetry and economies of scope in service firms.
Innovative productivity and returns to scale in the pharmaceutical industry
Authors: Graves Samuel B. , Langowitz Nan S.
Published: June 2007

This study shows that firms in the pharmaceutical industry experience decreasing returns to scale in R & D as the level of R & D expenditures rises. The paper presents the results of our study of the innovative output of 16 pharmaceutical firms over a 19 year period. Given the strong correlation between R & D budgets and firm size, our study suggests the wave of mergers in the industry may yield less innovative productivity than managers expect.
A framework linking intangible resources and capabiliites to sustainable competitive advantage
Authors: Hall Richard
Published: June 2007

This article is concerned with the role of intangible resources in business strategy. In particular it is concerned with identifying the intangible sources of sustainable competitive advantage. Sustainable competitive advantage results from the possession of relevant capability differentials. Regulatory and positional capabilities are concerned with intangible assets; functional and cultural capabilities are concerned with competencies. A framework linking intangible resources to capabilities has been devised and is used as the basis of a new technique for identifying the relative contribution which the different intangible resources make to competitive advantage. The results of the use of this technique in six case studies are reported.
Generalized vs. specific locus of control expectancies of chief executive officers
Authors: Boone Christophe , De Brabander Bert
Published: June 2007

Hodgkinson (1992) recently advocated in this journal that measures of generalized control expectancies, such as the well known Rotter I‐E scale (Rotter, 1966), are not suited to study the relationship between the locus of control beliefs of Chief Executive Officers (CEOs) on the one hand and strategic, structural and performance variables on the other hand. According to Hodgkinson (1992) a more specific scale, measuring strategic control expectancies, should be used in future research. We argue and empirically illustrate that such a methodology will not lead to interesting research results in the ‘strategic leadership’ domain. More specifically, measures of firm‐specific control expectancies are likely to be influenced by the CEO's perception of the situational context of the firm and are therefore not indicative of fundamental personality differences between CEOs. Consequently, such measures cannot give an answer to the basic research question whether and why the personality of CEOs plays an important role in explaining organizational behavior and performance.
Doubts about the conceptual and empirical status of context‐free and firm‐specific control expectancies: A reply to boone and de brabander
Authors: Hodgkinson Gerard P.
Published: June 2007

Boone and De Brabander (1993) contend mat Hodgkinson's (1992) strategic locus of control scale will not lead to interesting research results and that researchers should continue to adopt the well known Rotter (1966) I‐E scale. Central to their argument is the assertion that responses to domain‐specific control expectancy scales, such as the strategic locus of control scale, largely reflect actors' perceptions of their current circumstances, whereas responses to the I‐E scale are a function of stable personality differences. In this reply the literature on the locus of control construct is briefly reviewed, in order to show that the accumulated empirical research evidence does not support the notion of generalized control expectancies as a simple unidimensional personality trait, but points overwhelmingly to the conclusion that control expectancies are more appropriately construed as a multidimensional, domain‐specific, cognitive variable shaped by the combined effects of disposition, prior learning experiences, reinforcement histories and current circumstances. The rationale for the development of the strategic locus of control scale is further explained, in order to clarify a number of other misconceptions.
The limits of growth of the multidivisional firm: A case study of the U.S. oil industry from 1930‐90
Authors: Ollinger Michael
Published: June 2007

Some scholars (Chandler, 1977; Penrose, 1959) believe that firms grow by transferring inimitable marketing, production, and research skills from one line of business to another. Extending this view and emphasizing the role of the central office of a multidivisional firm to transfer administrative skills, Williamson (1975) argues that competition among business units within the firm mimics a competitive capital market and leads to an effcient allocation of resources. Coase (1937), however, argues that firm size is limited by the costs of organizing diverse transactions and Chandler (1991) claims that growth is constrained by the technical and marketing expertise of the top managers. The purpose of this paper is to demonstrate that the scope of the multidivisional firm is limited by the transferability of firm‐specific skills and the efficiency of capital markets. Support comes from a case study of 19 oil companies over the 1930–90 period.
Creating corporate entrepreneurship
Authors: Stopford John M. , Baden‐Fuller Charles W. F.
Published: June 2007

This paper demonstrates how the various types of corporate entrepreneurship–individual managers, business renewal and Schumpeterian, or industry, leadership–share five ‘bundles’ of attributes. Each type can exist in one firm, though at different times as the common attributes change their role and relative importance. External and internal triggers for change are examined for a sample of 10 firms in 4 European industries. The data suggest a provocative conclusion: troubled firms in hostile environments can shed past behaviors, adopt policies fostering entrepreneurship and accumulate innovative resource bundles that provide a platform on which industry leadership can be built.
The effects of industry growth and strategic breadth on new venture performance and strategy content
Authors: McDougall Patricia Phillips , Covin Jeffrey G. , Robinson Richard B. , Herron Lanny
Published: June 2007

A sample of 123 independent new ventures was classified into four industry growthlstrategic breadth categories. High growth industry environments were found to provide a favorable environment for new ventures to achieve sales growth; however, the highest sales growth rates were exhibited by new ventures pursuing broad breadth strategies in high growth industries. One‐way ANOVA and contrast tests were also used to identify whether specific strategic variables varied across the four industry growth/strategic breadth combinations. New ventures in high growth industries chose to enter on a larger, more aggressive scale and placed more emphasis on new product development than those entering low growth industries. Broad breadth strategy ventures had higher levels of advertising and promotion expenses and placed greater emphasis on the dominance of marketing expertise in their top management team, developing new channels of distribution, and on brand name recognition. Ventures pursuing focus strategies emphasized specialty products and were less cost conscious.
Executive succession: Organizational antecedents of ceo characteristics
Authors: Datta Deepak K. , Guthrie James P.
Published: June 2007

Based on 195 succession events in Business Week 1000 firms, this study examines the organizational antecedents of CEO demographic characteristics. Study findings suggest that antecedent conditions of lower firm profits and firm growth are associated with the selection of outsider CEOs. Additionally, R&D intensity is associated with the selection of CEOs having technical functional backgrounds and higher levels of education.