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Journal of Strategy and Management

Publisher:
Emerald Group Publishing Limited
Emerald Publishing
ISSN:
1755-425X
Scimago Journal Rank:
25
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LitStream Collection
Curvilinearity in the performance feedback and R&D relationship

Jirásek, Michal

2020 Journal of Strategy and Management

doi: 10.1108/jsma-09-2018-0098

The question of how the firm responds to performance feedback forms the backbone of the behavioral theory of the firm. Although the literature works with goals aspirations and additional determinants of a firm’s search activity – proximity to bankruptcy and slack resources – the majority of the empirical research assumes the firm’s response to performance feedback to be linear with a spline at the aspiration level. The purpose of this paper is to study possible curvilinear properties of performance feedback itself that may yield insight on the behavior of firms responding differently from the theory’s predictions.Design/methodology/approachThe research uses data from exchange-listed German industrial firms followed from 2001 to 2015. It evaluates hypotheses using historical aspiration models with ROA as a measure of performance and with a spline specification. The fixed-effects panel data models serve as an estimation technique.FindingsThe research supports an inverted U-shape relationship between performance feedback and research and development (R&D) intensity for firms below their aspiration levels, and a U-shape relationship for firms above their aspiration levels.Originality/valueThe research is one of the first to directly study curvilinearity in performance feedback relationships. Arguably, there is no such a study directly focusing on a firm’s search as represented by R&D, despite the fact, that R&D forms the backbone of performance feedback research. Also, the population of German industrial firms is new in the literature.
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Building blocks for the development of an IoT business model

Almeida, Tatiana Domingues; Costa Avalone, Marianne; Fettermann, Diego Castro

2020 Journal of Strategy and Management

doi: 10.1108/jsma-07-2019-0130

Previous studies have identified a variety of Internet of Things (IoT) business models and have recognised the complexity related to the application of IoT technologies in business, along with the potential of the modularity concept application in organisational design. The purpose of this paper is to identify the main building blocks for the development of a business model canvas for companies that adopt the IoT in their business.Design/methodology/approachFirst, the authors carried a systematic literature review to identify theoretical, experimental and practical IoT business model canvas recorded in the literature. Then, the authors identified and analysed the characteristics of the building blocks present in these canvas using a statistical cluster technique. Based on the outcomes, the authors proposed a framework with standard and optional modules to allow flexible arrangements and suit different IoT business goals.FindingsThe results revealed that the IoT business model canvas recorded in the literature had been grossly designed to attend two drivers: manufacture and service organisations. Therefore, based on the frequency of building blocks present in IoT business model canvas recorded in the literature, it has been proposed two flexible frameworks which can be tailored to accommodate the immense variety of possibilities offered by IoT technologies in manufacture and service business.Practical implicationsThe business model frameworks proposed in this research can support entrepreneurs structuring new IoT businesses or upgrading existing businesses.Originality/valueThis research offers a comprehensive IoT business model framework with their respective building blocks built from an extensive literature review.
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LitStream Collection
Divestiture of prior acquisitions: competing explanations of performance

Amiri, Sina; King, David; DeMarie, Samuel

2020 Journal of Strategy and Management

doi: 10.1108/jsma-05-2019-0076

There are multiple perspectives of divestiture and its performance that require reconciliation. While research finds a positive market response to divestment announcement, divestiture of prior acquisitions are generally viewed negatively. The purpose of this paper is to develop and empirically test different explanations for the divestment of prior acquisitions.Design/methodology/approachThis research employs event study to capture market reaction at acquisition announcement and subsequent divestments in a sample of 69 public US high-technology acquisitions between 2003 and 2008 that were divested by 2015. Only initial acquisitions involving public firms were included from the Thomson One Banker SDC database. Public press releases and companies’ SEC filings were reviewed to track divestitures back to prior acquisitions. Ordinary least squared regression was used to estimate coefficients.FindingsResults indicate a positive relation between acquisition and divestiture performance around announcement dates. This finding rejects the correction of mistake explanation, suggesting that a negative stigma surrounding divestments is largely unwarranted and that investors reward capable acquirer’s divestiture decisions.Practical implicationsInvestors do not treat all information signals at divestiture equally. For example, acquisitions made by larger and more profitable firms, or acquisitions paid for with stock, are associated with lower return upon divestiture announcement.Originality/valueThis study finds that investors view divestiture as a proactive strategy, suggesting firms can improve performance by actively managing acquisitions and divestments to optimize their portfolio of businesses.
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An empirical examination of the relationship between managerial strategic thinking and absorptive capacity of the organization

Srivastava, Saurabh; D’Souza, Derrick

2020 Journal of Strategy and Management

doi: 10.1108/jsma-05-2019-0077

Recently, researchers have highlighted the limited attention that has been devoted to managerial capabilities as micro-foundational elements of absorptive capacity. Strategic thinking is one such managerial capability that guides managers during the development of organizational capabilities. The purpose of this paper is to empirically investigate the influence of managerial strategic thinking on the development of absorptive capacity.Design/methodology/approachData were collected using a sample of 324 senior-level and mid-level managers from the software industry. PLS-SEM was used to test the hypothesized relationships.FindingsStudy results indicate that managerial strategic thinking is positively related to absorptive capacity, as well as to each of its four components – acquisition, assimilation, transformation and exploitation.Originality/valueThe current study adopts a micro-foundations perspective and delves into the development and orchestration of organizational capabilities. This study is the first to empirically investigate the relationship between managerial strategic thinking and absorptive capacity. Prior literature on absorptive capacity has focused on its influence on phenomena that are downstream to absorptive capacity, e.g. innovation, new product development and firm performance. The research offers new insights into the relationship between absorptive capacity and managerial strategic thinking, a hitherto unexplored upstream phenomenon. Scholars have theorized that managerial strategic thinking plays a pivotal role in managerial decisions, making it a critical factor in developing the absorptive capacity of an organization. The authors believe that the empirical evidence of the theorized relationship offers valuable insights that will aid scholarly research on organizational capabilities.
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Evolving existence of assets and liabilities of foreignness

Ng, Lee Keng; Curran, Louise

2020 Journal of Strategy and Management

doi: 10.1108/jsma-04-2019-0050

The purpose of this paper is to explore the simultaneous evolution of LOF and AOF in the context of environmental protection (EP) companies from Europe in the Chinese market.Design/methodology/approachThe authors adopt a qualitative, case study approach, using interview data to explore the extent of liability of foreignness and how the FSAs of firms have changed from the time on market entry. The authors undertook 15 in-depth interviews with decision makers in six companies addressing their experience of foreignness during their long tenure in China. To control for sector-level effects, the authors focus on companies in the EP sector.FindingsThe authors found the evolving AOF of the firms were challenged to a significant extent that caused difficulties in reducing their LOF over time. The EP sector is dominated by state-owned enterprises that have unique organized structure preventing localized foreign firms from gaining access into the institutionalized network. This deeply quilted institutionalized network had a corrosive effect in the gradual erosion of the LOF manifested from unfair price strategy practice, forced collaborations, ostracization of project participations, operational barriers, prohibited and restricted market access. The research also uncovered the rebirth nature of LOF that caused AOF to lose its significance across bureaucracy and ownership changed.Research limitations/implicationsThe relatively small number of cases (six) limits the generalizability of the findings by the authors. However, the authors are convinced that, given that the case companies are generally large and have long experience in China, the conclusions made are well grounded. In addition, there was the high level of coherence in the reported experiences of the interviewees, providing further support for the findings.Practical implicationsThe experiences of these case study companies highlight that MNEs need to be vigilant and creative in constantly improving their FSAs so that the competitive distance between them and the local competitors remains substantial.Originality/valueVery few studies have explored both assets and liabilities of foreignness in the host country regulatory context using a case study-based qualitative approach, especially in emerging markets.
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Corporate governance and the impact to the R&D lab

Markus, Arjan; Swift, Tim

2020 Journal of Strategy and Management

doi: 10.1108/jsma-06-2019-0100

The purpose of this paper is to determine whether the strength of corporate governance influences the firm’s ability to retain their key knowledge workers or inventors.Design/methodology/approachThis paper links agency and innovation theory to develop the hypotheses. Agency theory predicts that the interests of employees are counter to those of firm owners. The authors predict that as shareholder power grows as corporate governance strengthens, inventors who are highly productive, and those who pursue risky but valuable exploratory innovation will leave the firm. Given prior scholarship in innovation theory establishing the critical contributions that new knowledge creation and exploratory innovation make to firms’ competitive advantage, the authors consider whether stronger firm-level corporate governance leads to the erosion of the firm’s competitive advantage. The hypotheses are empirically tested using generalized least squares estimation on a data set that combines data on firms, their patents and the governance provisions these firms adopt.FindingsUsing a 10-year sample of publicly traded US firms, the authors find that stronger corporate governance erodes the very foundation of a firm’s innovation capabilities. Stronger corporate governance reduces management job security, which makes managers more risk-averse. This heightened “managerial myopia” results in increased departures of highly valuable inventors employed by the firm. The authors show that these departing inventors are more productive inventors than those who remain and engage in more exploratory R&D than the remaining inventors at the firm.Originality/valueThe findings raise questions on the appropriateness of the adoption of governance provisions strengthening shareholder rights in firms pursuing innovation.
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LitStream Collection
Dealing with non-performers

van Dijk, Elkan; de Waal, André

2020 Journal of Strategy and Management

doi: 10.1108/jsma-07-2019-0127

Non-performance should be addressed urgently given the high associated costs: on average, 17 percent of management time is spent overseeing non-performing employees, thus distracting managers from important business issues and initiatives and, non-performers can reduce productivity by as much as 30–40 percent. Though many organizations recognize the importance of dealing effectively with non-performers, this remains difficult in practice for various reasons, including cultural aspects. The purpose of this paper is to answer the following question: What are some of the ways for managers in different national cultures to deal effectively with non-performers?Design/methodology/approachTo collect the necessary data, semi-structured interviews were conducted with managers of profit and non-profit companies in different countries. After the interviews were transcribed, key themes and patterns were identified by manual open coding. The collected data were disaggregated into conceptual units and provided with labels. After significant themes and issues were identified, axial coding was used to look for relationships between the data categories that had emerged from open coding.FindingsThere are two main culture-independent findings. First, clarity is needed when managers give assignments to and set expectations for employees. Thereafter, managers should monitor employee performance and give immediate feedback when employees make mistakes. Second, this feedback needs to take the form of true two-way dialogue between the manager and employees: the manager needs to listen to employees’ situation and what they want and need as development opportunities to progress. These findings in itself are not earth-shattering but still important for two reasons: the findings are culture-independent and can thus be seen as generic approaches for dealing with non-performers in many (most) cultural settings; and in practice the authors still see many managers ignoring these activities while dealing with non-performers, making them less effective than they could and should be. In this respect, the findings serve as a reminder not only of the fact that these activities still are the most effective in order to deal with non-performers, but also point out how important they are as they are effective in many cultural settings.Practical implicationsIn practical terms, the results should assist managers in various cultural settings to determine if there are non-performers in their organizations, identify the causes of their non-performance and apply interventions to effectively tackle the issue.Originality/valueThe research contributes to the literature by examining topics such as how to define non-performers, how they can be recognized from their behavior, what causes their non-performance and how national cultures influence the management of non-performers.
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Strategy: restoring the lost meaning

Khalifa, Azaddin Salem

2020 Journal of Strategy and Management

doi: 10.1108/jsma-09-2019-0158

The concept of strategy has lost its meaning. It is widely inflated and conflated with related notions and the consequences of that are unsettling for both practice and research. The purpose of this paper is to restore the lost meaning of strategy.Design/methodology/approachThe paper exposes the inadequacy of the current definitions of strategy. It, then, suggests a more robust one based on a list of necessary dimensions of a good definition derived from an extensive review of the literature and ends with triggers for further reflection.FindingsThe multidimensionality of the proposed definition better reflects the complex nature of the strategy concept and restores its lost meaning. This makes it more robust than previous definitions in protecting the integrity of the concept of strategy from the creeping of insignificant concerns and “surplus” meaning.Research limitations/implicationsThe new definition offers a new angle from which to reexamine the relationships between a number of usually paired concepts such as intention and action, planning and emergence, control and learning and formulation and execution.Practical implicationsThe newly proposed definition has the potential to trigger creativity and to limit the practice of bad strategy.Originality/valueThe proposed definition raises the standard of what strategy is, avoids the sources of confusion, and reduces the chances of ascribing surplus meaning to the strategy concept.
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Can senior management sustain engagement and identification to support learning? Designing communities and defining goals

Macpherson, Allan; Kiersch, Christa; Antonacopoulou, Elena

2020 Journal of Strategy and Management

doi: 10.1108/jsma-07-2019-0136

The purpose of this paper is to explore the premise that organizationally defined communities of practice can be a valuable strategic learning tool for management.Design/methodology/approachIt is a quantitative study in a single organization. The authors analyzed data from 1,082 employees using hierarchical (multi-level) linear modeling.FindingsManagement can support learning and influence engagement and identification by defining communities of practice and establishing goals, but this is not always successful. Engagement may be a short-term phenomenon, dependent significantly on the type of practice or project in which community members are allowed or decide, to participate. Identification, on the other hand, may need practices that support longer-term individual development aims allowing and supporting the achievement of personal ambition or competence.Research limitations/implicationsFuture studies of organizationally defined communities of practice could use established scales to measure leadership, engagement and identification.Practical implicationsWhen implementing this type of organizationally defined community of practice, attention to the types of practices or projects to which the employees can contribute seems to be most important.Originality/valueThe authors show that: the dynamics within communities of practice (CoP) designed by top management teams have an impact on CoP members’ identification and engagement; organizationally defined CoP may be part of a broader landscape of professional practice (LoP); engagement, objectives and practices, and not only identification and knowledgeability, are key to the dynamics of CoP and LoP; senior management’s leadership role in setting up successful CoP is equivocal.
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Open Access Collection
Strategic action fields of digital transformation

Peter, Marc K.; Kraft, Corin; Lindeque, Johan

2020 Journal of Strategy and Management

doi: 10.1108/jsma-05-2019-0070

The purpose of this paper is to capture the collective understanding of digital transformation (DT) across Swiss businesses and establish a reference framework based on the strategic action field (SAF) theory.Design/methodology/approachA number of Swiss associations provided their databases for an online survey. The large sample includes 2,590 participants from 1,854 organisations and delivered over 4,200 descriptions of DT, categorised into seven SAFs. A cross tabulation of SAF combinations by firm size identified 127 possible SAF combinations which constitute the common understanding of DT.FindingsThe data set allowed the identification of SAFs and the conceptualisation of DT based on a shared understanding. Drivers of digital transformation are: process engineering, new technologies and digital business development, supported by digital leadership and culture, the cloud and data, customer centricity and digital marketing.Research limitations/implicationsFor practitioners, the study provides the SAFs that should be considered for DT strategies. For academic scholars, a unique data set has allowed the study of DT by analysing action field combinations, revealing a nuanced constellation of SAFs. Limitations are the focus on Swiss organisations and a convenience sample for collecting the analysed data.Originality/valueFor the first time, the shared understanding of DT in Swiss businesses – based on SAFs – has allowed a conceptualisation of DT in order to provide guidance to businesses managers and employees.
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