Journal of Strategy and Management

Alakent, Ekin ; Ozer, Mine

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-04-2013-0028

Purpose – Organizational legitimacy is greatly influenced by firm corporate social responsibility (CSR) records. An organization with a poor CSR record can either try to improve its practices or attempt to manipulate institutional norms and belief systems in order to convince the society that its practices are acceptable. The authors argue that firms’ corporate political strategies (CPS) – attempts by firms to influence public policy outcomes in a favorable way – can be very effective in shaping legitimacy norms and offsetting negative public image. The purpose of this paper is to draw on institutional theory and propose that firms with negative CSR records consider investing in political strategies necessary in order to construct new legitimate standards in line with their strategies. Design/methodology/approach – The authors test the hypotheses on 348 manufacturing firms using data from “The Center for Responsive Politics.” MSCI (formerly known as KLD) and COMPUSTAT. Research methodology used to test hypotheses is hierarchical ordinary least square regression analysis. Findings – The authors find that firms with high CSR concerns invest more in CPSs. In addition, the results indicate that organizational visibility and organizational slack positively moderate this relationship. In other words, visible firms and firms with high organizational slack invest more in CPSs if they are facing CSR concerns compared to firms that are less visible and with less organizational slack. Research limitations/implications – In this paper, the authors focus on the corporate governance dimension of CSR. Although focussing on the negative corporate governance practices gives us an opportunity to have a more focused approach, there are other important aspects of CSR such as environmental practices, employment issues, and accounting practices that are not addressed in this study. Practical implications – This paper can serve as a testament to the value of investing in political strategies to the practitioners. The results indicate that firms can manage their image and reputation through political spending and this is especially true for firms that are more visible and have more organizational slack. Originality/value – Much of the previous literature explores the relationship between market factors such as financial status of the firm and political strategies. This paper contributes to the literature by showing that other non-market forces such as poor social standing can also motivate companies to invest in political strategies.

Dangol, Ramesh ; Kos, Anthony

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-02-2014-0010

Purpose – The purpose of this paper is to propose a new way to distinguish a firm’s dynamic capabilities from operational capabilities. Design/methodology/approach – Conceptual paper/literature review. Findings – Current literature on dynamic capabilities posits that dynamic capabilities are those firm capabilities that can induce change in other capabilities, while operational capabilities are static. Distinguishing between these capabilities in this manner is not helpful because changes occur continuously in all capabilities to at least some extent. In addition, empirical studies show that even task-level operational capabilities can change on their own and can induce change in other capabilities. In contrast to focussing on the presence or lack of change to determine if a capability is dynamic or operational, this paper distinguishes between them by determining a priori the expected nature of the outcome. By focussing on the outcomes of change rather than the changes themselves, this paper proposes that capabilities should be considered operational if they produce outcomes that can be predicted using probability distribution while those capabilities that produce outcomes that cannot be predicted using probability distribution should be considered dynamic. Research limitations/implications – Future research on dynamic capabilities should not only investigate whether or not change is occurring, but the outcome of change to understand whether a change is precipitated by dynamic or operational capabilities. Originality/value – Existing dynamic capabilities literature is unclear about how to distinguish between dynamic capabilities from operational capabilities. Previous research attempts to distinguish these capabilities by arguing dynamic capabilities are those firm capabilities that can induce change in other capabilities, while operational capabilities are static and do not induce change. This is not particularly helpful. A clear distinction between dynamic and operational capabilities could facilitate further advancement of the dynamic capability literature; this study makes a rudimentary effort to distinguish between them.

Leitner, Karl-Heinz

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-02-2014-0015

Purpose – The purpose of this paper is to study the nature of the strategy formation and its impact on firm performance in relation to market development and product innovation. Design/methodology/approach – The paper is based on an empirical study of 91 Austrian SMEs which covers a time period of ten years. Strategy formation was captured by an analysis of strategic intentions and corresponding actions in two surveys carried out in 1995 and 2003. Findings – The study finds no direct association between strategy formation and performance, though, emergent strategists had less often a growth orientation. Taking into account industry dynamics, shows, contrary to our expectations, that companies which employed an emergent market development strategy achieved higher sales growth in stable than in dynamic industries. Originality/value – The question of the superiority of planned vs emergent strategies has a long debate in strategy formation literature. The authors contribute to this question by investigating the role of different information sources for the formation of market and product innovation strategies and its impact on the performance in different environments over a ten-year time period.

Kumar Panda, Debadutta

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-12-2013-0071

Purpose – The purpose of this paper is to igvestigate how strategic orientation influences managerial networks in Indian SMEs and the role competitive intensity as a moderator. Design/methodology/approach – Structured pre-tested questionnaire was employed to gather information from 147 top managers from Indian SMEs. Statically models were used for internal and external validation, hypothesis testing and data analysis. Findings – The study results support the positive significant influence of strategic orientation including market orientation (customer orientation, competitor orientation and inter-functional orientation), technology orientation and entrepreneurship orientation on managerial network (business and political networks) building in Indian SMEs. Originality/value – This study is one of the few studies on the subject line in Indian context, and among the first few studies in the Indian SME sector.

Najmaei, Arash ; Rhodes, Jo ; Lok, Peter

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-11-2013-0063

Purpose – The purpose of this paper is to explore and explain how market and technological knowledge gained by executives interact in a complementary fashion to form the knowledge structure of their business model which in turn enable them to make sense of underlying complexities surrounding management of strategic courses of action. Design/methodology/approach – Unitizing, categorizing, and classifying (UCC) in conjunction with pattern-matching (power and proof quotes) as qualitative methods were used to analyse a series of semi-structured interviews with eight executives from five small manufacturing firms in Australia. Findings – It was found that executives’ business modelling knowledge structure defined as the knowledge base that underpins their business models is developed from four interactions that exist between their market and technological knowledge. Particularly, executives can learn about technological aspects of their business model from market knowledge they acquire and also learn about marketing issues of their business model from technological knowledge they acquire. This interactive nature offers novel insights into versatility and fungibility of executives’ knowledge as a strategic resource that defines how business models evolve and shows how executives use knowledge as a non-rivalrous resource in different ways for developing different business models. Research limitations/implications – This study is limited in scope to: first, the context of executive of Australian small manufacturing firms and second, limited sources of data. Practical implications – This study offers important implications for business modelling and strategic formulation of practicing managers. It particularly contributes to a fuller understanding of how executives’ learning contributes to the cognitive formation of business models. It also helps executives gain new insights into the importance of various types of knowledge and the complementary nature of their interactions in the development of novel mental models as a key managerial competency in today’s dynamic markets. Originality/value – The conceptual framework developed and findings reported in this study have not been previously studied and offer novel insights into the literature on knowledge-based management, competitiveness, and business modelling.

Amankwah-Amoah, Joseph

2014 Journal of Strategy and Management

doi: 10.1108/JSMA-01-2014-0009

Purpose – Although strategic persistence remains a key issue in change management and strategy literature, the understanding of strategic persistence in the face of other businesses’ failure remains limited. The purpose of this paper is to examine factors that determine strategic persistence in the face of other businesses’ failures. Design/methodology/approach – Through a review and synthesis of the multiple streams of research, the paper provides a number of explanations for strategic persistence. The study complements the analysis with illustrative cases of failed companies. These led to development of an integrated framework of explanations for strategic persistence in the wake of other businesses’ failures. Findings – The analysis led to identification of individual, firm-specific and environmental factors rooted in past events (i.e. past successes, prior commitment and decisions by the top-management team), present circumstances (i.e. nature of the failure) and future outlook (i.e. paradox of success, looming threats and opportunities), which foster strategic persistence. The paper uncovered that persistence may also stem from factors such as “paradox of success” and “too much invested to quit”. Research limitations/implications – The paper suggests that organisations can learn from others’ failures without compromising their values by drawing on the expertise released by failed firms. The study also identified various mechanisms through which organisations can learn from the failure of others and factors that constrain them from doing so. Originality/value – The theorisation and conceptualisation of the literature accommodates the multiple and contrasting perspectives of the subject such as the environmental buffers and paradox of success.