Journal of Strategy and Management

Cavazos, David E.; Rutherford, Matthew

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-01-2016-0005

PurposeThe purpose of this paper is to apply firm aspiration theory to explore how firms respond to government product ratings.Design/methodology/approachLongitudinal examination of nine automobile manufacturers during National Highway Traffic and Safety Administration crash tests in the USA.FindingsFirms take specific external actions to influence the political mechanisms that support ranking schemes when product ratings are below those of rivals and when previously highly rated products decline. In addition, firms receiving rankings above those of their competitors are found to be less likely to take such action, even when their overall ratings declined. Similarly, firms seeing improvements in previously low-rated products will take fewer actions aimed at influencing the political mechanisms that support rating schemes.Originality/valueThe primary contribution of this research is in establishing when firm product ratings will result in actions to influence external ratings criteria. Previous research has shown that firms respond to organizational ratings by taking action aimed at improving subsequent performance. The current research builds on such work by applying aspiration theory in an effort to predict and explain when and why certain ratings will attract firm attention to the external mechanisms that support such ratings.

de Waal, André A.; de Boer, Freke A.

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-03-2016-0020

PurposeThere is a growing debate and research stream on the influence of national culture on the type and nature of management control systems (MCSs) used by organizations in the country. A specific case is the management control of projects executed in a multicultural international environment. The purpose of this paper is to describe the findings of a study into the role of national cultures in controlling a project which a multinational undertook in four countries.Design/methodology/approachBased on project management control literature a theoretical MCS for international projects is developed. Subsequently, the influence of national culture on this system is discussed, using Hofstede’s cultural dimensions. Then the theoretical system is applied on the project the multinational case company executed in four countries (Austria, Finland, India, and Russia).FindingsA key finding is that different national cultures do require different types of control, but that this effect is neutralized by the culture of the multinational which is the same all over the world and which supersedes national cultures. This makes it possible to implement a standardized project management control framework.Originality/valueThe research yielded a conceptual project management control framework which in practice seemed to be useful for controlling not only the process and progress but also the product (end result) of a project in a multicultural environment.

Joshi, Maheshkumar; Jha, Sanjeev

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-06-2014-0041

PurposeExtant research suggests that managing strategic change has become a key managerial function and this duty encompasses changes in organizational product-market boundaries and organizational structure among many related organizational activities. The need to achieve strategic change arises because of major shifts in the external environment and the subsequent need for the organization to remain viable and competitive in the changed environment. Therefore, the purpose of this paper is to investigate if middle managers are likely to adopt authoritative style while implementing strategic change when they sense organizational survival.Design/methodology/approach“Sensemaking” literature led to development of the authors’ hypotheses and these were tested using the responses of 117 middle managers. The authors used survey-based instrument to collect data and used regression analysis to explicate the responses of the middle managers.FindingsResults indicate that when middle managers sense that the survival of the organization is at stake, they are likely to choose an authoritative style. The authors also investigated the moderating role of organizational commitment, strategic posture of the top management team, and hostile business environment on the relationship between perception of survival urgency and the choice of authoritative implementation style. Only organizational commitment moderates this relationship.Research limitations/implicationsThe authors’ data collection was survey based and the authors used a single source for each questionnaire and this process may lead to possibilities of mono-method bias. However, steps were taken to reduce the resultant mono-method bias. The respondents are from a variety of industries and future research may focus on one specific industry.Practical implicationsThe first implication of this study allows us to expand research focus on the adoption of authoritative style, a research area that is not explored very much. The second implication of the study is that middle managers tend to focus on their emotions when it comes to implementing strategic changes. Using arguments from sensemaking the authors show that the perception of need for survival or the perception that business environment is hostile will determine how strategic change could be implemented. Middle managers must be treated as more than just the implementers of the directives/fiats/orders/edicts that originate from the top.Social implicationsRole of middle managers in strategic change management is critical and the authors suggest that the perception of organizational survival at risk leads to choice managerial style by middle managers.Originality/valueThe authors have combined ideas from both the strategic management and organizational development fields to understand successfully the implementation of strategic change in a survival urgency situation. In the past, the strategic management literature focused primarily on understanding strategy formulation process, and the process of implementation was generally neglected. The respondents are from a variety of industries. The analysis indicate that membership to any one firm was not impacting the results obtained by the authors and as such allows for results to generalized.

Kline, William; Kotabe, Masaaki; Hamilton, Robert D.; Balsam, Steven

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-02-2016-0015

PurposeThe purpose of this paper is to examine how executive pay schemes influence managerial efficiency, which the authors measure as the risk-adjusted firm performance.Design/methodology/approachThe authors utilized hierarchical regression to test the hypotheses.FindingsThe authors find that as options constitute a higher percentage of total compensation packages, subsequent firm risk-adjusted performance declines. The authors also find an inverse relationship between TMT stock ownership and risk-adjusted performance.Research limitations/implicationsThe findings suggest that the firm stakeholders should reconsider the likely influence of option-based incentives and equity holdings on the risk-adjusted performance.Originality/valueMost executive compensation research focuses on either the pay-to-performance or pay-to-risk links. However, in this paper, the authors combine both the performance and risk dimensions simultaneously.

Martynov, Aleksey

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-01-2016-0003

PurposeThe purpose of this paper is to fill the theoretical void in the discussion of effects of alliance portfolios on firm performance by studying the moderating role of a firm’s strategic positioning.Design/methodology/approachA fixed effects, autoregressive panel model on a comprehensive, longitudinal sample of large and medium-sized publicly traded companies in the USA.FindingsThe effect of alliance portfolios on firm performance is conditional on the firm’s strategic positioning.Research limitations/implicationsThe results may not be applicable to firms outside the USA or small firms.Practical implicationsExecutives should craft their alliance portfolios while considering the strategic positioning of their firms.Originality/valueThis paper presents the first study of alliance portfolios that uses a comprehensive, multi-industry sample while considering firms’ strategic positioning. The paper is the first to jointly study characteristics of alliance portfolios and firm strategies.

Kumar, Anupam; Cantor, David E.; Grimm, Curtis M.; Hofer, Christian

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-11-2015-0089

PurposeThe purpose of this paper is to build and test theory regarding how rivalry in environmental management (EM) affects a focal firm’s environmental image and financial performance.Design/methodology/approachThe theory is tested with an original panel data set of 2,776 focal-rival dyad pairs. Measures of environmental signals are developed from content analysis of corporate sustainability reports. Environmental performance data are drawn from the Newsweek US 500 Green Rankings database. Financial performance data are drawn from COMPUSTAT.FindingsThe main findings are that focal firm signals have a positive and significant impact on both focal firm environmental image and financial performance. Rival firm signals have a negative effect on focal firm environmental image. Surprisingly, rival firm signals have a positive impact on focal firm financial performance.Practical implicationsThis paper can serve as a testament to the value of monitoring rival firm strategies and signaling to counter the impact of rival signals in the environmental domain. Environmental practices can be a source of competitive advantage for firms, and failure to compete in this space can place the firm at a competitive disadvantage.Originality/valueThis study makes several contributions to the EM literature. Leveraging competitive dynamics and the institutional viewpoints, this study builds theory with regard to how signals of competitive EM activity among a focal firm and its rivals affect environmental image and financial performance.

Mueller, Julia; Abecassis-Moedas, Celine

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-08-2014-0073

PurposeMany industries are increasingly affected by or even invite the participation of external stakeholders in the innovation process. The concepts of open innovation use the ideas of external stakeholders to foster innovation and make the firms more competitive. However, little research has considered whether evaluations from external stakeholders also serve as a source for open innovation and, and if so, in which way they are integrated into the innovation process. Thus, the purpose of this paper is to explore how external evaluations influence the innovation process in the creative industries.Design/methodology/approachThe authors conducted an explorative qualitative study using a mixture of an inductive and deductive research design. The authors interviewed 14 artists in order to understand how external evaluations are integrated in the innovation process.FindingsThe paper formulates propositions on factors that influence whether and how external evaluations are a resource for the innovation process in micro-firms. The factors are the situation of the individual that is evaluated, the external evaluator’s credibility, the content of the evaluation, and the potential impact of the evaluation on the individual evaluated.Originality/valueThis paper provides exploratory insights into a so far neglected source of open innovation and its external evaluations in micro-firms in the creative industries.