Journal of Strategy and Management

Goldman, Ellen; Scott, Andrea Richards

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-07-2015-0059

PurposeThis paper investigated the competency models used by organizations to assess the strategic thinking ability of their leaders, managers, and other employees. Design/methodology/approachA basic interpretive study was conducted with human resource executives across a broad range of large organizations. Participants were interviewed, and competency models in use were shared, reviewed and discussed. The model development process was also explored in depth. Findings were verified via member checks and triangulation. FindingsModels in use either identify strategic thinking as a stand-alone competency, or embed it under three different areas. Most cover one or more executive levels, stating varying expectations for strategic thinking by job title or level, or differentiating strategic thinking performance levels. The models include descriptions of strategic thinking behaviors that cross seven categories of strategy development, implementation and organizational alignment. Research limitations/implicationsThe study provides indications of potential generalizations that should be considered with more organizations across sectors. Practical implicationsThe findings provide practitioners with format and content examples to enhance the assessment of strategic thinking in existing competency models, as well as process considerations for model development/revision. The findings also identify how competency model components are used across the spectrum of talent management activities. Originality/valueThe study fills a gap in the literature by providing empirically-based identification of the strategic thinking behaviors organizations consider essential competencies and how they are assessed. In so doing, the study provides a glimpse of how strategic thinking is used in practice and across a range of strategic management activities. In addition, the study links strategic thinking to the competency development literature, illustrating details of competency model development for strategic thinking, and identifying opportunities for related theory development in both domains.

Lichtenthaler, Ulrich

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-05-2015-0035

PurposeThis article builds on a capability-based view to develop a conceptual framework and propositions that examine the role of a firm’s primary type of alliances, i.e., exploration or exploitation, in the determinants and impact of alliance portfolio capability.Design/methodology/approachThis is a conceptual research article, which builds on prior conceptual and empirical management research. FindingsRegarding determinants, capability-based arguments indicate that firms with an emphasis on exploration alliances have higher levels of alliance portfolio capability. However, a focus on exploration alliances aggravates the development of alliance portfolio capability through alliance experience and a dedicated alliance function. Regarding impact, alliance portfolio capability may positively affect a firm’s alliance, innovation, and financial performance. While alliance portfolio capability is assumed to have an equally positive effect on alliance performance for all types of alliance portfolios, a relative focus on exploration alliances is expected to limit the positive effects of alliance portfolio capability on innovation and subsequent financial performance. Originality/valueThese new conceptual arguments help to reconcile inconsistent earlier findings, and they deepen our understanding of interfirm differences in alliance portfolio capability and performance.

Yang, Yi; Chen, Tianxu; Zhang, Lei

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-03-2015-0023

PurposeFrom the attention based view, the study attempts to examine how structural autonomy of a corporate venture capital (CVC) program influences its CVC managers’ investment decisions with regard to investment portfolio diversification. Design/methodology/approachThis study collects data from VentureXpert, Compustat and the US Patent Office. The final sample consists of 868 CVC portfolio-year observations from 1990-2004. Panel linear regressions and hierarchical linear regressions are used in the analysis.FindingsThe major finding of this study reveals that that structural autonomy of a CVC program is significantly related to its investment portfolio diversification. In addition to the direct effect, we also find that CVC structure autonomy moderates the relationship between corporate investor’s strategic attention and its CVC portfolio diversification. Specifically, when the autonomous level of a CVC program is high, the negative relationship between its parent’s relative growth potentials and CVC portfolio diversification will become positive, and the positive relationship between its parent’s business diversification and CVC portfolio diversification will become negative.Originality/valueThe CVC literature has suggested the impact of CVC portfolio diversification on value creation for corporate investors (e.g., Yang et al. 2014); however, few studies have investigated why some corporate investors diversify their portfolio of venture companies while others do not. To fill such a gap, this study identifies antecedents of CVC portfolio diversification such as CVC structural autonomy and corporate investor’s strategic attention as well as their interactive impacts. The finding also provides valuable managerial implications on CVC program designs.

Butler, Timothy David; Armstrong, Craig; Ellinger, Alex; Franke, George

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-07-2015-0058

PurposeThis paper explores the relationship between being a “Great Place to Work” (GPTW) and firm performance. While lists such as the “Fortune 100 best places to work” were initially regarded solely as publicity vehicles for ranked firms, researchers have since tried to untangle the relationship between being a GPTW and firm performance, often by focusing on HRM systems and practices. In contrast, our study focuses on the valuable, rare, costly-to-imitate, and organization-exploitability aspects of being a (1) trustworthy employer, (2) place where workers take pride in their work and (3) enjoy the people with whom they work. Design/methodology/approachThis study uses four distinct samples of firms drawn from Fortune’s Best Companies to Work For, Glassdoor.com’s Employees’ Choice Awards, Careerbliss.com’s 50 Happiest Companies in America, and Achievers.com’s 50 Most Engaged Workplaces Awards databases in a longitudinal design to compare performance attributes of listed firms to their respective industry peer groups.FindingsBeing a great place to work is associated with greater productivity, growth potential, and higher operating profits.Research limitations/implicationsSome GPTW firms are privately held and were excluded from analysis.Practical implicationsRather than focusing on individual HRM practices and techniques, employers may realize greater performance improvements by focusing on building a reputation as a trustworthy employer and fostering an environment where employees take pride in their work and enjoy working with each other.Originality/valueOther GPTW studies have focused on HRM practices as antecedents to performance outcomes, which may not accurately reflect the attributes of the GPTW construct. This study focuses squarely on the underlying attributes of being a GPTW: employer trustworthiness, worker pride, and camaraderie and how they affect firm performance.

Kunsch, David W.; Schnarr, Karin; Rowe, Glenn

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-09-2015-0075

PurposeUsing resource dependency theory, we examine what elements in the business environment may be associated with the formation and continuance of cartels. Design/methodology/approachWe employ a unique dataset of 148 cartel data points from the 1970s to 2008 which have at least one American company involved to quantitatively test causal relationships. We also interview key class action antitrust attorneys for their views and opinions on the impact of these environmental factors on cartel formation and continuance.FindingsWe find statistically significant relationships between the pursuit and maintenance of industry profits and the dynamism in the industry, and illegal behaviour as represented through price-fixing by business cartels. We find that in the attorneys’ opinion, it is also the pursuit of individual corporate profits and munificence that are associated with these cartels.Practical implicationsThis research furthers our understanding of organizational deviance which is critical given its impact on organizations, individuals, regulators, law enforcement, and the general public. Originality/valueThis research is a first step in considering cartel activity in a way that encompasses external influences in a new and innovative manner and as a tool to help researchers and practitioners better understand how organizational deviance, as manifested through illegal corporate activity, can be anticipated, identified and prevented.

Anwar, Jamil; Hasnu, SAF

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-09-2015-0071

PurposeThe purpose of this paper is to investigate the strategy-performance relationship in a multi-industry setting for joint stock firms operating in Pakistan using Miles and Snow typology. The impact of firm size and industry on performance along with strategy is also investigated. The empirical research evidence on strategy-performance relationship for Miles and Snow typology is updated as well.Design/methodology/approachScoring methodology is applied for identification of strategic types, including the reactor strategy. The consistency of the firms over time is also checked. Seven year archived financial data of 320 Pakistani joint stock firms from 12 industries are used for analysis. Descriptive statistics and ANOVA is used for analysis.FindingsHybrid strategies are practiced by firms rather than pure strategies. The distribution of strategic types is uneven. There are mixed results for performance difference among strategic types for different industries and firm size. Defending and analyzing strategies are better than the prospecting strategies. Reactors performed better in some industries as well. Originality/valueProposed scoring methodology can be applied to identify all strategic types including reactors in the longitudinal studies. This can be replicated for other typologies or strategic group classifications. The process for identification of reactor strategy through a consistency check is a unique contribution to the literature, especially when archived financial data is used.

Jancenelle, Vivien; Storrud-Barnes, Susan F.; Iaquinto, Anthony L; Buccieri, Dominic

2016 Journal of Strategy and Management

doi: 10.1108/JSMA-11-2015-0093

PurposeThis study focuses on investor reactions to unanticipated changes in income, and whether those reactions can be mitigated by managerial discussion. We investigate how top-management team certainty and optimism during post-earnings announcement conference calls can serve as corrective actions and add back firm value in times of unexpected changes in firm-specific risk. Design/methodology/approachThe research question is tested empirically in the context of large, publicly traded, U.S. firms’ quarterly earnings announcements, and their subsequent post-earnings announcement conference calls. We use the advanced content analysis software DICTION to measure the levels of managerial certainty and optimism displayed during post-earnings announcement conference calls, and event-study methodology to measure investors’ reactions.FindingsResults indicate that earnings surprises are negatively associated with firm value, but that this relationship is mitigated positively by displays of managerial certainty and optimism during post-earnings announcement conference calls.Originality/valueThis work uses an innovative research design to study top-management team rhetoric in post-earnings announcement conference calls, and how specific discussions mitigate investors’ negative reactions to increases in firm-specific risk. Our study highlights the importance of top-management team certainty and optimism for value creation in times of change in firm-specific risk, and the importance of rhetoric as a tool for corrective action.