Journal of Strategy and Management

Wang, Liang

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-10-2015-0084

PurposeThe purpose of this paper is to theorize how the industry life cycle unfolds differently across places and how economic agglomeration varies over time.Design/methodology/approachThe paper relies on literature review and conceptual analysis.FindingsIt generates a dynamic geographic concentration model (i.e. an industry’s degree of geographic concentration drops in the growth stage, rises in the mature stage, and drops again in the new growth stage) and a localized industry life-cycle model (i.e. temporal dynamics differ between the center and the periphery).Originality/valueIt makes contribution by theorizing that the extent to which an industry is geographically concentrated changes over time, and by demonstrating how an industry’s center and periphery may experience different temporal dynamics.

Yarbrough Jr, Earl; Abebe, Michael; Dadanlar, Hazel

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-07-2016-0043

PurposeThe purpose of this paper is to empirically examine the link between board of director composition and firm performance. Specifically, the paper argues that board political experience influences the firm’s internationalization strategy as directors with significant political experience provide guidance, resources, and network access that enhance the firm’s international presence. The authors also posit that board political connections would be more helpful for firms operating in high-regulation industries.Design/methodology/approachThe authors tested the predictions using data from 156 large US firms. Data on directors’ background were gathered from SEC proxy filings, while data pertaining to internationalization were obtained from Compustat and Mergent Online databases. Hierarchical moderated regression analysis was employed to empirically test the hypothesized relationships.FindingsThe findings provide strong support for the positive relationship between board political experience and the degree of firm internationalization. Contrary to the authors’ predictions, the level of industry regulation does not seem to significantly affect this relationship.Research limitations/implicationsFirms aggressively pursuing international strategy could benefit from having directors on their board with robust political experience. One of the limitations of the study is that the types of international activities for firms is not specified in the study as it might be in the form of joint-venture capacity, strategic alliances or for firms that might be born-global.Originality/valueThis study makes original contribution to the on-going research on board political activity and firm performance through internationalization strategy. The findings suggest that having directors’ with political experience is an important asset in influencing firm’s corporate strategy.

Carriger, Michael

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-08-2016-0049

PurposeMuch has been written in both the management and finance literatures about the impact of downsizing on the financial health and market valuation of companies. However, surprisingly little attention has been paid to the frequency of downsizing and the impact of frequent downsizings. The purpose of this paper is to look at trends in downsizing, asking the question are companies that downsize once more likely to downsize again. The paper also looks at the impact of frequent downsizing, asking the question are frequent downsizers differentially impacted compared to less frequent downsizers.Design/methodology/approachCompanies that appeared on the Fortune 500 in 2014 and were also on the list in 2008 were assessed for the impact of repeat downsizings on financial measures (profitability, efficiency, debt, and revenue) and market valuation. A trend analysis was conducted to assess the trend in downsizing and repeated downsizing from 2008 through 2014. A series of univariate analysis of variances were conducted to assess the impact of repeated downsizings on the financial and market valuation indicators.FindingsFindings indicate that companies that downsize between 2008 and 2009 were more likely to downsize again in future years. And this repeat downsizing happened at a higher rate than would be expected by the percentage of companies that initially downsized. Findings also indicate that multiple downsizings had a significantly negative impact on the company’s financial performance as measured by two profitability ratios (return on assets and return on investment) and a borderline significant negative impact on the company’s market valuation as measured by stock equity, regardless of industry or initial financial health of the company.Originality/valueTwo competing theories were considered and the evidence found here support both. However, the “band-aid solution” theory, that downsizing may function as a band-aid addressing the symptoms that lead to the downsizing but not the underlying disorder or cause may be a more parsimonious explanation for the results here. It is hoped that these findings will inform both scholars and practitioners, giving both a clearer picture of the impact of multiple downsizings on corporate performance.

Haj Youssef, Moustafa Salman; Christodoulou, Ioannis

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-04-2016-0029

PurposeThe purpose of this paper is to broaden the national-level construct of managerial discretion and to investigate the effect of cultural practices on executive discretion.Design/methodology/approachBased on a sample of six Arabian countries and using a panel of prominent cross-cultural scholars who provided 262 discretion scores for the sample countries, the authors replicate and extend the national framework of Crossland and Hambrick (2011) in a new cultural context. The cultural dimensions were measured using survey responses of middle managers based on House et al.’s (2004) cultural practices scale.FindingsThe authors extend the national-level framework of managerial discretion and find that an encompassing array of cultural practices plays a crucial role in shaping the degree of discretion provided to CEOs. The authors empirically demonstrate that power distance, future and performance orientation, along with gender egalitarianism and assertiveness have positive relationships with managerial discretion. However, institutional collectivism, uncertainty avoidance and humane orientation negatively affect the degree of discretion provided to CEOs.Originality/valueThe study fills a gap in the literature regarding the national-level framework of managerial discretion. The results indicate that executives can take idiosyncratic and bold actions to the extent to which the cultural environment allows them to do so. Also, the authors discover new national-level antecedents of managerial discretion that have not been considered in earlier studies and confirm the context dependency of this concept.

Kumar, Amit; Dutta, Swarup Kumar

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-07-2016-0047

PurposeThe purpose of this paper is to understand how firms affiliated to business groups (BGs) are able to improve their innovation capability (IC) when engaged in coopetition (collaboration between competing firms). This study aims to explore the relationship between coopetitive relationship strength (CRS), the extent of tacit knowledge transfer (TKT) and IC as well as examine the moderating effect of both BG affiliation and coopetitive experience.Design/methodology/approachThe paper examines inter-firm relationships within the empirical context of Indian manufacturing and service firms, by adopting (ordinary least square) regression analysis to test the various hypotheses. The central thesis is that the TKT in coopetition constitutes an important driver to the IC.FindingsThe paper provides some evidence that inter-firm CRS influences the extent of TKT, and the extent of TKT affects firm IC. The results support that firms in coopetition gain more if their coopetitive partner has a BG affiliation. In absence of a BG affiliation of any of the coopetitive partners, the buildup of TKT reduces as CRS is increased.Research limitations/implicationsAdditional large-sample of data may attempt to validate relationships. The study, however, did not consider all enablers that are critical for TKT. Despite these limitations, analysis provides important and novel perspectives.Practical implicationsThe paper contributes to develop executives’ practices in understanding potential benefits of coopetitive relationship. The implications of this research are important for managers seeking understanding of the management of coopetition.Originality/valueThe paper makes a modest attempt to investigate the various scenarios of the presence or absence of the moderation of BGs and its impact on CRS in the buildup of TKT. This is the first attempt to link coopetition to the TKT in the BG literature. This study also contributes to our understanding of coopetition in a non-western context.

Lamb, Nai Hua; Butler, Frank; Roundy, Philip

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-02-2016-0010

PurposeScholars are devoting increasing attention to understanding a specific type of strategic initiative in family firms: corporate social responsibility (CSR). Prior studies have focused on the strengths of family firms’ CSR performance. However, to more fully understand family firms and their engagement in CSR, a granular approach is needed that teases apart the strengths and concerns of CSR performance and examines the specific dimensions that comprise CSR performance. Thus, the purpose of this paper is to theorize about six negative (i.e. concern-oriented) dimensions of family firms’ CSR performance.Design/methodology/approachTo examine the interrelationship between a firm’s percentage of family ownership and its CSR concerns, a sample of 71 public firms from Fortune 500 companies was constructed. The sample includes 13 years of firm-level data spanning 1994-2006 and represents over 600 firm-year observations.FindingsAs predicted, a higher percentage of family owners’ equity is positively related to diversity-oriented CSR concerns and negatively related to employee relations and environmental CSR concerns. However, the percentage of equity owned by family members is not associated with community, product quality and safety, and corporate governance CSR concerns.Originality/valueThe paper addresses substantive omissions in existing research on the influence of family ownership on CSR performance.

Goldman, Ellen F.; Schlumpf, Karen S.; Scott, Andrea Richards

2017 Journal of Strategy and Management

doi: 10.1108/JSMA-02-2017-0012

PurposeThe purpose of this paper is to describe the process used to develop and test the Individual Behavioral Assessment Tool for Strategic Thinking.Design/methodology/approachThe instrument was developed using literature that identifies practices in use in organizations to assess strategic thinking competency and recommendations of scholars and practitioners to define strategic thinking and suggest how it could be assessed. Processes defined in the literature to develop competency measurements, both generally and for leadership and strategic management concepts specifically, were applied. A Delphi panel of experts reviewed the initial draft of the instrument which, with their refinements, was administered to participants in an executive leadership program.FindingsCronbach’s α and principal component analysis indicated that the instrument is internally consistent and unidimensional. Rasch analysis suggested a possible reduction in items that maintains good overall instrument performance.Research limitations/implicationsThe study provides methodology for developing a measurement tool that fuses practice and theory. Further applications of the instrument across organizational levels and in single sectors would enhance its generalizability.Practical implicationsThe instrument provides a consistent tool for use by practitioners to identify gaps in their own or another’s strategic thinking behaviors, specify a job-specific competency model, and direct professional development.Originality/valueThe instrument fills a gap in the theoretical literature by extending the descriptions of strategic thinking to include a comprehensive set of required individual behaviors. As such, it is the first theoretically based instrument to detail the specific competencies required to think strategically.