pinecone/core-2020-05-10-deduplication huggingface dataset:
Uncovering the hidden costs of offshoring: The interplay of complexity, organizational design, and experience

This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experience and a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity
Parenting Advantage in the MNC: An Embeddedness Perspective on the Value Added by Headquarters

What determines the value an MNC's headquarters adds to its own affiliates? In this paper, we shed light on this question by linking the embeddedness view of the multinational corporation to the literature on parenting advantage. We test our hypotheses on an original dataset of 124 manufacturing subsidiaries located in Europe. Our results indicate that the external embeddedness of the MNC is an antecedent to headquarters' value creation. We find that headquarters' investments into their own relationships with the subsidiaries' contexts are positively related to the value added by headquarters. Furthermore, this relationship is stronger when the subsidiary itself is strongly embedded. We discuss implications for the MNC literature, embeddedness research, and the literature on parenting and headquarters' roles. (authors' abstract
How Much to Make and How Much to Buy? Explaining Plural Sourcing Strategies

While many theories of the firm seek to explain when firms make rather than buy, in practice, firms often make and buy the same input—they engage in plural sourcing. We argue that explaining the mix of external procurement and internal sourcing for the same input requires a consideration of complementarities across and constraints within modes of procurement. We create analytical foundations for making empirical predictions about when plural sourcing is likely to be optimal and why the optimal mix of internal and external sourcing may vary across situations. Our framework also proves useful for assessing the possible estimation biases in transaction level make-or-buy studies arising from ignoring complementarities and constraints
From core to periphery and back: A study on the deliberate shaping of knowledge flows in interfirm dyads and networks

We study 892 Italian motorcycle industry projects carried out via 184 different buyer–supplier and supplier-supplier relationships to provide evidence on the knowledge dynamics occurring in dyads and networks and to understand the underexplored but important (perhaps even dominant) leading role that some firms play in the evolution of networks and interfirm learning processes. We develop a multiphase model which, from a multilevel perspective addressing different relational subsets, suggests how firms can best organize to generate and exchange knowledge efficiently. We argue that extant theoretical perspectives can profitably draw on our findings to strengthen their dynamic components and help them explain the widely diffused ‘exploring through partner’ strategies more effectivel
Clear and Present Danger: Planning and New Venture Survival amid Political and Civil Violence

Although entrepreneurs constitute a key economic driving force for many countries, they often face unstable environments due to violence and civil unrest. Yet, we know very little about how environments characterized by high levels of political and civil violence affect new venture processes and survival. Moreover, it is unclear whether standard theories about organizational strategy, such as planning, hold true in such environments. We explore these issues using a sample of 730 new ventures in Colombia from 1997 to 2001. We find that political and civil violence decreases firm survival, increases the benefits of incremental (operational) planning, and decreases the benefits of comprehensive (strategic) planning
Attributional tendencies in cultural explanations of M&A performance

This is the authors’ accepted and refereed manuscript to the article. LOCKED until 2015-08-01 due to copyright restrictions.This paper focuses on managers' attributions of M&A performance. Our analysis indicates that there is a linear association between performance and attributions to cultural differences, which is moderated by prior experience. Furthermore, our results suggest that there is a curvilinear association between performance and attributions to managers' actions, but we found no support for the moderating effect of experience for this association. By substantiating these attributional tendencies, our results contribute to research on M&As and studies on attribution more generally. In particular, our study helps to put cultural differences in perspective and cautions researchers and practitioners alike to avoid simplistic explanations of M&A performance2, Forfatterversjo
The contingent effects of top management teams on venture performance: Aligning founding team composition with innovation strategy and commercialization environment

How does the relationship between founding team composition and venture performance depend on the venture's strategy and business environment? Using data from a novel survey of 2,067 firms, we show that while diverse founding teams tend to exhibit higher performance, this is not universally true. We find that founding teams that are diverse are likely to achieve high performance in a competitive commercialization environment. On the other hand, technically focused founding teams are aligned with a cooperative commercialization environment and when the enterprise pursues an innovation strategy. These results are robust to corrections for endogenous team formation concerns. The findings suggest that ventures cannot ignore founding team composition and expect to later professionalize their top management teams to align with their strategy and environment.Ewing Marion Kauffman FoundationMIT Entrepreneurship CenterMack Center for Managing Technological Innovatio
Politically connected boards and top executive pay in Chinese listed firms

This is the peer reviewed version of the following article: CHIZEMA, A. ... et al., 2015. Politically connected boards and top executive pay in Chinese listed firms. Strategic Management Journal, 36 (6), pp. 890-906, which has been published in final form at http://dx.doi.org/10.1002/smj.2253. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.Drawing on social comparison theory, this study examines the relationship between politically connected boards and top executive pay. Moreover, given the socialist orientation of China, tests are also carried out to establish the relationship between politically connected directors and pay dispersion across the firm. We find a negative association between politically connected boards and top executive pay. We also find that politically connected boards are negatively associated with pay dispersion, i.e., the higher the number of political directors on the board the smaller the gap between top executive pay and average employee pay. Finally, our study shows that politically connected directors weaken the pay-performance link. These findings have important theoretical, policy, and managerial implications
The Impact of Corporate Social Responsibility on Investment Recommendations: Analysts' Perceptions and Shifting Institutional Logics

We explore the impact of corporate social responsibility (CSR) ratings on sell-side analysts' assessments of firms' future financial performance. We suggest that when analysts perceive CSR as an agency cost, due to the prevalence of an agency logic, they produce pessimistic recommendations for firms with high CSR ratings. Moreover, we theorize that over time, the emergence of a stakeholder focus, and the gradual weakening of the agency logic, shifts the analysts' perceptions of CSR ratings and results in increasingly less pessimistic recommendations for firms with high CSR ratings. Using a large sample of publicly traded U.S. firms over 15 years, we confirm that in the early 1990s, analysts issue more pessimistic recommendations for firms with high CSR ratings. However, in more recent years analysts progressively assess these firms less pessimistically, and eventually they assess them optimistically. Furthermore, we find that more experienced analysts and analysts at higher-status brokerage houses are the first to shift the relation between CSR ratings and investment recommendation optimism. We find no significant link between firms' CSR ratings and analysts' forecast errors, indicating that learning is unlikely to account for the observed shifts in recommendations
Corporate governance and IPO underpricing in a cross-national sample: A multilevel knowledge-based view

Prior studies of IPO underpricing, mostly using agency theory and single-country samples, have\ud
generally fallen short. In this study, we employ the knowledge-based view (KBV) to explore\ud
underpricing across 17 countries. We find that agency indicators are insignificant predictors,\ud
board of director knowledge limits underpricing, and external knowledge both substitutes for and\ud
complements internal board knowledge. This third finding suggests that future KBV studies\ud
should consider how internal and external knowledge states interact with each other. Our study\ud
offers new insights into the antecedents of underpricing and extends our understanding of\ud
comparative governance and the KBV of the firm
Motivation and sorting of human capital in open innovation

This paper studies how business models can be designed to tap effectively into open innovation labor markets with heterogeneously motivated workers. Using data on open source software, we show that motivations are diverse, and demonstrate how managers can strategically influence the flow of code contributions and their impact on project performance. Unlike previous literature using survey data, we exploit the observed pattern of project membership and code contributions-the "revealed preference" of developers-to infer the motivations driving their decision to contribute. Developers strongly sort along key dimensions of the business model chosen by project managers, especially the degree of openness of the project license. The results indicate an important role for intrinsic motivation, reputation, and labor market signaling, and a more limited role for reciprocity
Effect of scenario planning on field experts' judgment of long-range investment decisions

We present the results of three field experiments demonstrating the effect of scenario planning on field experts' judgment of several long-range investment decisions. Our results show, contrary to past findings, that the use of multiple scenarios does not cause an aggregate increase or decrease in experts' confidence in their judgment. Rather, expert judgment changes in accordance with how an investment fares in a given scenario: it becomes more favorable if the investment is found to be useful for a particular scenario used by the expert, and vice versa. This scenario-induced change is moderated by the expert's confidence in his/her judgment before using the scenario. Finally, our results show that field experts prefer more flexible options to make specific long-range investments after using multiple scenarios.National Research Council (U.S.). Transportation Research Board (National Cooperative Highway Research Program grant, project 20-83(1)
Modularity and Intellectual Property Protection

Modularity is a means of partitioning technical knowledge about a product or process. When state-sanctioned intellectual property (IP) rights are ineffective or costly to enforce, modularity can be used to hide information and thus protect IP. We investigate the impact of modularity on IP protection by formally modeling the threat of expropriation by agents. The principal has three options to address this threat: trust, licensing, and paying agents to stay loyal. We show how the principal can influence the value of these options by modularizing the system and by hiring clans of agents, thus exploiting relationships among them. Extensions address screening and signaling in hiring, the effects of an imperfect legal system, and social norms of fairness. We illustrate our arguments with examples from practice
Capability erosion dynamics

The notion of capability is widely invoked to explain differences in organizational performance, and research shows that strategically relevant capabilities can be both built and lost. However, while capability development is widely studied, capability erosion has not been integrated into our understanding of performance heterogeneity. To understand erosion, we study two software development organizations that experienced diverging capability trajectories despite similar organizational and technological settings. Building a simulation-based theory, we identify the adaptation trap, a mechanism through which managerial learning can lead to capability erosion: well-intentioned efforts by managers to search locally for the optimal workload balance lead them to systematically overload their organization and, thereby, cause capabilities to erode. The analysis of our model informs when capability erosion is likely and strategically relevant
Fit by adaptation or fit by founding? A comparative study of existing and new entrepreneurial cohorts in China

Extant research provides ambiguous views on the network adaptability of existing ventures and new ventures during environmental change. Applying an institutional perspective, this research aims to provide a clearer picture by comparing the adaptation and network configurations of existing vs new entrepreneurial cohorts during China's institutional change after 1992. The qualitative and quantitative analyses show that the existing cohort of entrepreneurs display network inertia, in that they largely maintain strong tie–based political and market networks; the new cohort instead demonstrate better adaptation by establishing fewer political networks but more weak and diverse market networks. This comparative research unpacks the institutional mechanisms underlying such differences, and serves as a ground for future investigations dealing with the strategic actions of different entrepreneurial cohorts that are largely neglected in previous studies
Customer-specific synergies and market convergence

We use an analytical model to study the effects of customer-specific synergies – i.e. synergies that arise when firms sell multiple products to the same customers. At the firm level, we show that the profitability of a customer-specific synergy depends upon cross-market correlation of customer preferences, differs when the synergy is cost-based versus differentiation-based, and can be negative even when the synergy is kept proprietary to a single firm. We also show that returns to imitating such a synergy may decline as it strengthens. At the industry level, we find that exploiting customer-specific synergies causes endogenous market convergence at a point that depends upon whether the synergy is cost-based or differentiation-based and whether it is imitated
When Can You Trust ‘Trust'? Calculative Trust, Relational Trust, and Supplier Performance

Our research empirically assesses two distinct bases for trust: calculative trust, based on a structure of rewards and penalties, versus relational trust, a judgment anchored in past behavior and characterized by a shared identity. We find that calculative trust and relational trust positively influence supplier performance, with calculative trust having a stronger association than relational trust. Yet, important boundary conditions exist. If buyers invest in supplier-specific assets or when supply side market uncertainty is high, relational trust, not calculative trust, is more strongly associated with supplier performance. In contrast, when behavioral uncertainty is high, calculative trust, not relational trust, relates more strongly to supplier performance. These results highlight the value of examining distinct forms of trust. Copyright © 2015 John Wiley & Sons, Ltd.postprin
Monitoring Global Supply Chains

Firms seeking to avoid reputational spillovers that can arise from dangerous, illegal, and unethical behavior at supply chain factories are increasingly relying on private social auditors to provide strategic information about suppliers' conduct. But little is known about what influences auditors' ability to identify and report problems. Our analysis of nearly 17,000 supplier audits reveals that auditors report fewer violations when individual auditors have audited the factory before, when audit teams are less experienced or less trained, when audit teams are all-male, and when audits are paid for by the audited supplier. This first comprehensive and systematic analysis of supply chain monitoring identifies previously overlooked transaction costs and suggests strategies to develop governance structures to mitigate reputational risks by reducing information asymmetries in supply chains. Firms seeking to avoid reputational spillovers that can arise from dangerous, illegal, and unethical behavior at supply chain factories are increasingly relying on private social auditors to provide strategic information about suppliers’ conduct. But little is known about what influences auditors’ ability to identify and report problems. Our analysis of nearly 17,000 supplier audits reveals that auditors report fewer violations when individual auditors have audited the factory before, when audit teams are less experienced or less trained, when audit teams are all-male, and when audits are paid for by the audited supplier. This first comprehensive and systematic analysis of supply chain monitoring identifies previously overlooked transaction costs and suggests strategies to develop governance structures to mitigate reputational risks by reducing information asymmetries in supply chains
External Corporate Governance and Financial Fraud: Cognitive Evaluation Theory Insights on Agency Theory Prescriptions

Agency theory suggests that external governance mechanisms (e.g., activist owners, the market for corporate control, securities analysts) can deter managers from acting opportunistically. Using cognitive evaluation theory, we argue that powerful expectations imposed by external governance can impinge on top managers' feelings of autonomy and crowd out their intrinsic motivation, potentially leading to financial fraud. Our findings indicate that external pressure from activist owners, the market for corporate control, and securities analysts increases managers' likelihood of financial fraud. Our study considers external governance from a top manager's perspective and questions one of agency theory's foundational tenets: that external pressure imposed on managers reduces the potential for moral hazard
I can do that alone..or not? How idea generators juggle between the pros and cons of teamwork

__Research summary:__ The advantages of working with a team to develop an idea are well established, but surprisingly, little is known about why some idea generators ignore these advantages by developing their ideas alone. To answer this question, we study two important trade-offs. First, working with a team provides access to additional resources but also leads to increased coordination costs. Second, sharing the risks and costs of developing an idea necessitates sharing the potential rewards of a successful idea. We use unique data on idea generators and their submission of ideas to an innovation program in a large European company between 1996 and 2008 to show how the two different trade-offs affect the decision of idea generators to collaborate with a team.  \ud
__Managerial summary:__ Organizations usually form teams to develop and execute innovative ideas. When people have the choice, however, will they also form a team or will they develop ideas alone? By studying idea generators and their voluntary submissions of breakthrough ideas to an innovation program, we find that the success rate is much higher for team ideas. Although teamwork has important benefits, idea generators will often develop incremental ideas alone and only accept increased coordination costs for developing radical ideas-this is even more so when they have prior team experiences. Moreover, only when idea generators were successful before and-even more so-when they developed that idea alone, will they be more open to sharing the rewards and risks of developing another idea with a team
Technological and Organizational Designs for Realizing Economies of Substitution

Today's industrial landscape is characterized by rapid change and systemic technologies. Rapid
change results in ever shorter product life cycles that demand continual innovation from firms.
The systemic nature of technologies makes it difficult, if not impossible, for any one firm to
manufacture all components of a technological system. We propose that these challenges be
met by designing technological systems that have the potential to yield economies of substitution.
Additionally, we propose that these economies be realized by adopting the network mode of
governance. We examine the network mode at three levels-intrafirm, interfirm, and
institutional-to illuminate the inherent tension between cooperation and competition at each
level, and to explore the implications of this tension for industrial dynamics.Information Systems Working Papers Serie
Why do some multinational corporations relocate their headquarters overseas?

This paper examines the decision by a multinational corporation (MNC) to relocate business unit or corporate HQ overseas. We argue that business unit HQs move overseas in response to changes in the internal configuration of their unit’s activities, whereas corporate HQs move overseas is response to the demands of external stakeholders, such as overseas shareholders, capital markets, and global customers.  Using data on 125 business unit HQs and 35 corporate HQs, we test and find broad support for these arguments.  The research highlights important differences between corporate- and business-level strategy, and it suggests ways in which the theory of the MNC needs to be reconsidered
What to do next?  The case for non-predictive strategy

The article of record as published may be found at http://dx.doi.org/10.1002/smj.555Two 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