Journal of Strategy and Management

Feng Hsu Liu

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-10-2012-0056

Purpose – The purpose of this paper is to examine whether original equipment manufacturing (OEM) suppliers can affect the development of buyer competence by manipulating two environmental factors: the development of competence in OEM supplier's external business relationships and the competitive pressure of the OEM supplier environment. Design/methodology/approach – The sample population consisted of 1,000 OEM suppliers in the Taiwanese information technology (IT) industry. Partial least squares analysis was used to examine the causal relationships among the variables. Findings – The empirical results revealed that the pressure of the external environment pushes OEM suppliers to develop competence through external business relationships. This competence in turn affects the development of buyer competence. Furthermore, OEM supplier impact on buyer competence development is positively associated with the importance of OEM supplier in outsourcing relationship. Originality/value – The paper empirically examines whether the impacts of the OEM supplier derived from different sourced environments play distinct roles in the development of the OEM supplier's power.

Jarle Aarstad

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-03-2013-0018

Purpose – Many networks take a small‐world structure, with a high degree of clustering and shortcut ties that reduce the path‐length between the clusters. It can be argued that small‐world networks have benefits that are simultaneously related to network closures and the spanning of structural holes, but research on the network members’ performance is nonetheless inconclusive. The purpose of this paper is to argue that the concept of resource idiosyncrasy can explain the mixed findings. Firm idiosyncratic resources are not easily generalizable across enterprises. Design/methodology/approach – Industries may vary in terms of resource idiosyncrasy, and the paper elaborates how this can moderate shortcut ties’ effect on performance in an inter‐firm network. Findings – If resource idiosyncrasy predominates in an industry, the paper proposes that inter‐firm shortcut ties may increase performance, whereas shortcut ties may decrease performance if non‐idiosyncratic resources predominate. Originality/value – Applying the concept of resource idiosyncrasy as a moderating variable, the paper aims to explain shortcut ties’ effect on performance in an inter‐firm network. The theory advanced here can have practical implications and also motivate future empirical studies to gain further knowledge about small‐world networks’ effect on performance.

André de Waal; Ruben Orij; Jantien Rosman; Marijke Zevenbergen

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-05-2013-0029

Purpose – The diamond industry used to be a stable sector. However, the market for diamonds is changing rapidly due various developments, putting margins in the entire diamond industry under severe pressure. Consequently diamond retailers have begun to search for new methods that could help them improve their performance. This paper aims to evaluate whether the high‐performance organization (HPO) framework can be used to help diamond retailers achieve better results. Design/methodology/approach – The HPO framework was applied at two actors in the diamond industry value chain, a dealer and an intermediate, in order to identify the HPO factors that most influence the results of these companies. Special attention was paid to the matching of the characteristics of the HPO framework and the characteristics influencing the success of partnerships. Findings – The research results show that the HPO framework can be used to identify the improvements needed to increase the level of performance of all players in the diamond industry value chain. Originality/value – The results of this study fill a gap in current academic and management literature on the diamond industry as little research has been done into the factors that cause sustainable high performance in this sector. The results can also be used by managers of diamond retailers to increase company results and to cooperate more closely in the diamond industry value chain.

Ritu Srivastava; Ajai Prakash

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-03-2013-0017

Purpose – Cross‐border mergers and acquisitions (M&A) have given the opportunity to the emerging market multinationals to add value while implementing the strategy of internationalization. The Indian pharmaceutical firms are also adopting this strategy and the purpose of this paper is to determine the evidence of value creation for their international M&A activity. Design/methodology/approach – In total, 30 cross‐border M&A are examined for value addition through accounting (PAT as percentage of net worth, PAT as percentage of capital employed, research and development (R&D) expenses as percentage of operating expenses) and shareholder return (cumulative abnormal returns) measures of the acquirer firm ex‐ante and ex‐post M&A. The difference in mean values of the variables after the M&A event is determined through Student's t ‐test. The time horizon selected for accounting variables was five years and the abnormal stock market returns were calculated using domestic market model with the event window being 40 days. Findings – The results indicate no statistically significant difference in the mean values of all the measures except R&D expenses as percentage of operating expenses for the acquirer Indian firms before and after the M&A event. The mean values of abnormal returns were less than those before the M&A activity. Research limitations/implications – The study does not include a control group of Indian firms engaged wholly in domestic M&A activity or those firms who have not merged or acquired at all. Practical implications – The study may point out toward no significant ex‐ante value creation in terms of the selected profit measures but it suggests the probability of the strategy being adopted as a solution to problems like the transfer of tacit knowledge in case of technology led competitive advantages in the pharmaceutical industry and the rise of R&D activity. Originality/value – The Indian pharmaceutical industry has been experiencing waves of international M&A activity since 2005 after the implementation of Product patent Act, 2005. However, little research has been done on the sector to understand the value creating implications of such corporate strategic decisions.

Rajendra Prasad Mohanty; Prince Augustin

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-01-2013-0011

Purpose – This paper traces the historical evolution and growth trajectory of the automotive and farm equipment sector, which is a very significant entity of the Mahindra & Mahindra (M&M) group. The purpose of this paper is to understand and provide a pragmatic framework through which the authors can see what were the internal and external factors and the spirit of the contemporary times that led to the changes in the nature of the group. Design/methodology/approach – The “Greiner curve” model has been applied to interpret the evolutionary growth of the group and strategic trajectory explaining characteristics in its different phases. Findings – M&M initially went through its share of learning and grew through pragmatic and, orchestrated entrepreneurial risk. The group made a very successful transition from a proprietorship model to a professionally managed group. It is found that rapid growth has been possible through innovation led collaboration. The group is increasingly organizing its innovation activities around the development of responses to specific challenges. Research limitations/implications – This study suffers from methodological limitations associated with a stage model that the estimated length of the time the organizations will stay in a phase is not known. It is unclear whether passage through all stages is necessary; or whether, in some circumstances, one or more stages may be omitted, and if variations in sequencing can occur. The data for the initial years was not available in primary form and the paper had to depend entirely on the secondary sources. Practical implications – Various strategies adopted by the group from time to time have practical implications for Indian economy. The group has faced many challenges, but challenge‐led collaboration‐driven approach represents a new type of innovation process that contrasts with other methods of business strategies and provides a sharper focus for managerial and technical issues and brings together stakeholders with diverse interests, expertise and perspectives. Originality/value – This study is a unique attempt in India to trace the evolution of the strategic interventions in the context of a major business group, which is considered to be a symbolic representation of Indian economic history. The paper has got both academic as well as managerial utility.

Abby Ghobadian; Nicholas O’Regan

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-12-2013-0066

Purpose – The purpose of this paper is to demonstrate how strategy is developed and implemented within a subsidiary of a global organization, the relationship between subsidiary and headquarters and the need for continuous change and adaption to remain relevant. Furthermore, this case study describes a successful process of invention and adoption. Design/methodology/approach – The paper draws on documentary evidence and a semi‐structured interview with Jill McDonald CEO and President of McDonald's Northern Europe Division with responsibility for the UK, Sweden, Finland, Denmark, Norway and the Republic of Ireland. Management research rarely captures the views of the top executive, yet the top executives have a broad picture and are key strategic decision makers. Findings – The case study and interview offers a unique insight into factors contributing to McDonald's unprecedented success (it has paid an increased dividend for the past 37 years). It also sheds light on its successful internationalization strategy. Originality/value – The case study draws on published material and augments this with an in‐depth interview with the Chief Executive. Very few case studies offer insight into the thinking of a Chief Executive managing a subsidiary of a global organization. Its value lies in the lessons that managers and students of management can draw on the approach adopted by a highly successful global organization.