Journal of Strategy and Management

Azaddin Salem Khalifa

2012 Journal of Strategy and Management

doi: 10.1108/17554251211247553

Purpose – The purpose of this paper is to argue for the need to redefine a mission statement, to develop a clearer definition and show its advantages and limitations. Design/methodology/approach – The paper shows the literature's lack of agreement on the definition of the mission statement and whether it should be defined as a stand‐alone statement or as a broader model. It then demonstrates the discrepancy between these definitions and the actual mission statements of exemplary organizations. This is followed by proposing a new definition of a mission, demonstrating how it is rooted in good practice, and presenting its benefits and limitations. Findings – There are found to be widely varied definitions and models of the mission statement. These are typically complex (composed of many parts) and are not reflected in the mission statements of many exemplary organizations. The need is clear for a more focused definition. Research limitations/implications – The basic argument is mainly built on conceptual discussions and unsystematic evidence. Therefore, there is a need for more empirical studies to substantiate that argument. The paper discusses the research implications of the proposed definition. Practical implications – The proposed definition of the mission statement may prove helpful both conceptually and practically. This definition focuses the attention of practitioners on purpose and commitment independent from other related concepts. The paper shows the impact of the proposed definition on the process, participants, and outcome of developing a mission statement. Originality/value – The paper offers a focused definition of mission statement and shows its relevance to both theory and practice.

Andreas Hinterhuber; Giulia Hinterhuber

2012 Journal of Strategy and Management

doi: 10.1108/17554251211247562

Purpose – Current research on industrial management strategy is mostly directed at industrial end customers. In doing so, current research overlooks one critical constituency – industrial retailers, i.e. companies selling products manufactured by industrial manufacturers to other companies using these products to create a finished product or service. Since the current literature states that retailers are mostly interested in category profit margins and profitability (regardless of specific brands), it is not clear whether industrial retailers value brands at all. The purpose of this paper is to determine the importance of industrial brands versus other purchase criteria for industrial distributors. Design/methodology/approach – Three studies are conducted to examine the importance of brands vis‐à‐vis other purchase criteria for industrial retailers and end users. In a longitudinal study employing conjoint analysis the authors find that industrial brands have a larger impact on industrial retailer choice than product price or margin. Findings – First, these results suggest that industrial brands are a strong purchase driver also for industrial retailers (and not just industrial end users). Second, industrial marketing managers are thus well advised to invest in brand building to positively impact industrial retailer choice, rather than reducing prices or increasing product margins as the prevailing literature suggests. In conclusion, these studies seem to suggest that retailers use brands not only as associative or predictive cues of product performance, but also as predictive indicator of a product's expected future profitability. Research limitations/implications – From a theoretical point of view, the authors’ studies suggest that industrial brands not only transmit cues to prospective end‐customers, but also send cues to intermediaries – such as industrial retailers – which influences their decision‐making processes. The strong importance B2B retailers place on brands as key purchase factor is an indicator that retailers use brands not only as associative or predictive cues of product performance, but also as predictive indicator of a product's expected future profitability (i.e. profit margins and asset turnover), which positively affects retailers’ own profitability. The results of this study are also an indication that the relationship between industrial manufacturers and industrial retailers are probably driven more by considerations of cooperation than by considerations of conflict. Practical implications – As a managerial implication, it is suggested that industrial marketing executives should invest in brand building to positively impact industrial retailer choice, rather than reducing prices or increasing product margins, as the prevailing literature suggests. Originality/value – In this paper, three separate empirical studies are conducted to examine the role of brands in industrial management practice.

R.K. Srivastava

2012 Journal of Strategy and Management

doi: 10.1108/17554251211247571

Purpose – The purpose of this paper is to describe the role of brand equity on mergers and acquisition (M&A) in the pharmaceutical sector; also to emphasize the various strategies and the benefits incurred in the arena of M&A in this sector. Design/methodology/approach – The author studies two major mergers in recent years, i.e. the Daiichi‐Ranbaxy and the Pfizer‐Wyeth deals. Brand equities were calculated. This study applied the “RKS” model developed by the author and Inter‐brand model for calculation of brand equity. The results obtained after the application of the two models were analysed for financial‐based decisions. Findings – The study captures the perceived importance of brand equity factors to M&A decision making. Although this strategy carries a high price tag, it offers quick returns, including access to new markets or a stronger position in current markets. A study on the recent acquisition and mergers in the pharmaceutical industry indicates that there is consolidation in medical devices, generic and consumer health segments of the healthcare industry. Originality/value – The paper studies two recent mergers which indicate that often these decisions are based on emotion rather than rationality. Therefore, it is suggested that managers should be more rational while taking decisions on mergers or acquisition.

Arindam Das; Sheeba Kapil

2012 Journal of Strategy and Management

doi: 10.1108/17554251211247580

Purpose – The purpose of this paper is to provide an understanding of different explanations in mergers and acquisitions (M&A) research that deal with M&A performance. After five decades of M&A research, the findings on M&A performance are diverse and sometimes inconsistent with each other. The explanatory variables studied in the empirical works reflect primarily on researchers’ approach, construct, measurement techniques and data availability, leading to inconsistencies among the findings. In order to understand how researchers have measured M&A performance so far, the gaps in existing work and to identify the scope of future work, the authors conduct a systematic review of empirical M&A research on explaining M&A performance. Design/methodology/approach – This research has been carried out as a structured assessment of past literature. The findings from selected research works have been categorized, grouped and summarized to discern a meta‐analytic view of the work carried out to date. Findings – The M&A performance measures are diverse owing to heterogeneous views on what constitutes M&A performance and organization performance. They are categorized under Accounting Measures, Market Measures and Other Measures, including subjective assessments. The explanatory variables found in the studies are extensive and can be categorized under Deal Characteristics, Managerial Effects, Firm Characteristics and Environmental Factors. Originality/value – The paper extracts some key trends in M&A performance studies carried out in empirical works over two decades. The findings help to identify drawbacks and set an agenda for future work.

Anand Prakash; Sanjay Kumar Jha; Rajendra Prasad Mohanty

2012 Journal of Strategy and Management

doi: 10.1108/17554251211247599

Purpose – The purpose of this paper is to propose the idea of linking the use of the Monte Carlo simulation with scenario planning to assist strategy makers in formulating strategy in the face of uncertainty relating to service quality gaps for life insurance business, where discontinuities always remain for need‐based selling. Design/methodology/approach – The paper reviews briefly some applications of scenario planning. Scenario planning emphasizes the development of a strategic plan that is robust across different scenarios. The paper provides considerable evidence to suggest a new strategic approach using Monte Carlo simulation for making scenario planning. Findings – The paper highlights which particular service quality gap attribute as risk impacts most and least for the possibility of occurrences as best case, worst case, and most likely case. Research limitations/implications – This study suffers from methodological limitations associated with convenience sampling and anonymous survey‐based research. Practical implications – The approach using Monte Carlo simulation increases the credibility of the scenario to an acceptable level, so that it will be used by managers and other decision makers. Social implications – The paper provides a thorough documentation on scenario planning upon studying the impact of risk and uncertainty in service quality gap for making rational decisions in management of services such that managers make better justification and communication for their arguments. Originality/value – The paper offers empirical understanding of the application of Monte Carlo simulation to scenario planning and identifies key drivers which impact most and least on service quality gap.

Maritana Sedysheva

2012 Journal of Strategy and Management

doi: 10.1108/17554251211247607

Purpose – The purpose of this paper is to propose a conceptual approach to determining an optimal strategy development process and controlling of the defence spending, by utilizing the decision‐making system adopted in the Republic of Estonia. Design/methodology/approach – The author offers a part of the Balanced Scorecard model named “Management and Control Perspective” as one of the improvement tools for the system of planning military expenditures and effective utilization of budgetary funds. Findings – The results show that the Balanced Scorecard application, using the “utility function”, will allow the Estonian Defence Forces to overcome important barriers to strategy implementation by interrelation of military planning and budgeting processes. Research limitations/implications – One suggestion for further research might be established as a way of improvement and development of methods directed to application of the utility function in the decision‐making process. This approach will improve calculations of strategic perspective plans and will reveal the essence of the budgetary policy on the whole by taking into consideration expenses features of the business and non‐profit organizations. Practical implications – By using the Balanced Scorecard the paper offers a new strategic method of planning and controlling the military expenditure in the Estonian Defence Forces. Originality/value – The present paper provides direct evidence of the alternative methods forecast measures and the possibility of using mathematical models in the strategic planning process.