Journal of Business Strategy

Vince Bruni‐Bossio; Norman T. Sheehan

2013 Journal of Business Strategy

doi: 10.1108/JBS-11-2012-0070

Purpose – As a result of the many governance failures in the past decade, new legislation, increased regulation, and best practices have been adopted by boards in an effort to improve corporate governance. Unfortunately, not all of the changes, such as increasing the number of external directors, have favorably impacted the quality of board governance. While having the majority of external directors on a board increases the board's independence from the CEO, these external directors lack inside directors' understanding of the firm's operations, customers and business model. The board members' lack of understanding presents a key challenge to CEOs, as their tenures depend on keeping their boards informed about the firm's business model. If CEOs are to succeed in this new governance climate, they need to find a way to effectively explain the business model to external directors in order to educate them, access their competencies, and ensure their long term support. The purpose of this paper is to examine the role of the strategy map to communicate the firm's business model to the board. Design/methodology/approach – The paper used the authors' experiences, a review of the literature, and a case study as a basis for making recommendations presented in the article. Findings – Outside directors may struggle to understand the firm's business model. While some may argue this is not the CEO's problem as it is the board's role to govern and management's job to manage, the authors argue it is an important issue for CEOs for two reasons: First, if the board does not understand the impact of changes to a firm's business model then CEOs are not fully leveraging their boards' expertise. Second, if CEOs do not keep the board adequately informed about the business model it hinders, rather than helps CEOs from building open and transparent relationships with their boards. By ensuring that directors receive the right information about the organization's business model and then have the opportunity to have a constructive dialog regarding the quality of the business model, CEOs can build trusting relationships with their boards and thus ensure they succeed over the longer term. Originality/value – Recent governance failures have demonstrated a need for better communication between boards and CEOs. This is one of the first papers to examine the role of the strategy map to communicate the firm's business model to the board.

Stephan M. Liozu; Andreas Hinterhuber

2013 Journal of Business Strategy

doi: 10.1108/JBS-09-2012-0043

Purpose – The purpose of this paper is to identify a set of specific activities and a set of competencies associated with above‐average firm performance. Design/methodology/approach – Quantitative survey of 748 respondents. Findings – It was found that four key competencies differentiate high performing from low performing companies: organizational confidence; pricing capabilities; organizational change capacity; and championing behaviors by top management. The research also identifies a set of specific activities that are linked with superior firm performance: activities directed at the improvement of pricing effectiveness (e.g. trainings, pricing tools; pricing performance reviews); improvements in product differentiation and product quality (e.g. through innovation and research aimed at identifying and creating customer value); increased sense of organizational confidence (e.g. optimism, resilience, “can do”‐attitude); improved support of top management; improved ability to stick to list prices and minimization of discounting behaviors; and finally, enhanced cultural adaptability to respond to changing market conditions. Research limitations/implications – Through a quantitative research design, the authors document the link between pricing capabilities, organizational confidence and superior firm performance. Practical implications – The authors identify both specific activities, as well as higher order competencies, practising managers need to develop in order to increase firm performance via pricing. Taking a hypothetical company as example, the authors' data show that, on average, a one point improvement on a seven‐point scale in organizational confidence leads to a 4 per cent improvement in return on sales. Originality/value – Our research highlights which organizational competencies drive firm performance. Specifically this research is the first quantitative survey which documents a positive relationships between organizational confidence and firm performance.

Brian L. King

2013 Journal of Business Strategy

doi: 10.1108/JBS-11-2012-0064

Purpose – The purpose of this paper is to examine certain venture capital (VC) practices that conventional company managers might adopt to improve effectiveness when faced with increasing competition. Design/methodology/approach – Based on current VC research, the paper isolates certain practices that are particularly effective in hypercompetitive contexts. Findings – If managers see their companies differently – not as monolithic entities but rather as a combination of different business models, some nascent, some mature, a portfolio of current opportunities with potential offshoots – managers can implement practices to increase the company's ability to survive and potentially thrive in a hypercompetitive environment. Originality/value – Venture capitalists guide companies through important transitions in turbulent contexts. This article isolates and analyses their practices, so as to allow them to be transposed to a more conventional business context.

Maria Kakarika

2013 Journal of Business Strategy

doi: 10.1108/JBS-06-2012-0020

Purpose – The purpose of this paper is to answer the following question: how should start‐ups be staffed and how should they manage issues of team diversity? Design/methodology/approach – The paper approaches diverse entrepreneurial teams in terms of three meaningful types, each with different assumptions, thus suggesting that their effects are complex. Findings – The article concludes that entrepreneurs need to consider three key dimensions of diversity and form teams that are: moderate in diversity of opinions; high in diversity of expertise; and low in diversity of power. Originality/value – The paper offers a set of practical recommendations to entrepreneurs, outlining how they can compose their teams and manage different dimensions of diversity; and to venture capitalists, suggesting how to assess team diversity as a critical factor in entrepreneurial teams.

Peter Ross; Michael Blumenstein

2013 Journal of Business Strategy

doi: 10.1108/JBS-10-2012-0061

Purpose – The purpose of this paper is to analyse the impact of Cloud technologies on management practices and business strategies. It considers the role of human resource management (HRM) departments in supporting the organisational changes required for the introduction and integration of Cloud business strategies. Design/methodology/approach – The study uses a qualitative exploratory research approach. It utilises the resource view of the firm and transaction costs economics (TCE) to support the analysis. It synthesises the literature with the qualitative interview data. Findings – Cloud business models require organisations to focus on the nexus of business strategies and information and communication technology (ICT) capabilities. HRM departments can play a positive role in this process by better integrating ICT sections into business decision‐making processes. Cloud technologies may further change ICT worker functions and roles. Research limitations/implications – Qualitative research approaches may limit the generality of the findings. However they allowed for an in‐depth analysis of complex Cloud related data that quantitative approaches may not have elicited. Practical implications – The paper outlines a strategic “holistic” approach for organisations shifting to Cloud‐based business models. Social implications – The paper examines the likely impacts of Cloud technologies on potential ICT worker redundancies. Originality/value – The Cloud as the nexus of ICT and business and the potential role of HRM in facilitating shifts to Cloud business models have been under‐researched areas to date. The paper is therefore of value to ICT, HRM and business strategy focused academics and practitioners.

John Ben Prince; Neeraj Dwivedi

2013 Journal of Business Strategy

doi: 10.1108/JBS-11-2012-0063

Purpose – The purpose of this paper is to establish sufficient potential for a novel perspective that could enhance understanding of the rationale behind voluntary disclosures. In this paper, the authors seek to provide an integrated view from different disciplines that points to a new dimension. This dimension is expected to promote a better understanding of voluntary disclosures in corporate governance. Design/methodology/approach – The authors use the conceptual underpinnings of agency theory and integrate several perspectives from different disciplines. Through the support of simple matrices and a conceptual figure, an interesting finding is proposed that could help provide a new way of looking at voluntary disclosures. Findings – The established view holds that due to information asymmetry between the shareholders and the management, voluntary disclosures are more meaningful for the shareholders of the firm. The authors, however, suggest that since information asymmetry is already embedded in several roles and strategic actions of the board, it leads to the development of a third dimension in understanding voluntary disclosures. Originality/value – Information asymmetry has been well understood as one of the key aspects of the agency theory. The authors' strive to apply this phenomenon while looking at the roles of the board and the strategic actions that result therein. The result is an enhanced understanding of the motivations behind voluntary disclosures.