Journal of Strategy and Management

Ozbek, O. Volkan; Boyd, Brian

2020 Journal of Strategy and Management

doi: 10.1108/jsma-03-2019-0039

Corporate spin-offs have become more popular as a restructuring technique in recent decades. The market performance of these spun-off subsidiaries has been considered critical, as positive market signals are vital to the success of these newly independent firms. Drawing on both the stewardship and resource dependence theories, this study aims to examine how two critical governance characteristics (namely, CEO duality and board size) affect the change in the market valuation of spun-off subsidiaries. This study proposes that both board size and CEO duality of spun-off subsidiaries should positively influence the change in market valuation.Design/methodology/approachThis study used the SDC Platinum database to identify completed corporate US spin-offs between 2000 and 2014. To ensure consistency across spin-off events, this study included only those in which 100 percent of outstanding shares of spun-off subsidiaries were distributed. The study confirmed the SDC Platinum listings using online resources such as The Wall Street Journal and Lexis/Nexis. The study used weighted least square (WLS) regression to test all the proposed models.FindingsThis empirical analysis of 134 US-based spin-offs supported both main hypotheses. Furthermore, the analysis also finds that firm size has significant moderating effects on the link between governance structure and market performance.Originality/valueThese findings contribute to the governance literature on corporate spin-offs by advancing our understanding of the role of CEO and board characteristics in improving these subsidiaries' market valuation, as well as the moderating effect of the firm size.

Rajan, Rishabh; Dhir, Sanjay; Sushil,

2020 Journal of Strategy and Management

doi: 10.1108/jsma-10-2019-0184

The purpose of this study is to examine the existing literature and evaluate the theories, characteristics, context and methods of alliance termination research published from 1992 to 2019. This study also aims to identify the gaps in the literature and recognize directions for future research focusing on alliance termination research.Design/methodology/approachThe main research methods followed in this study are bibliometric review, citation analysis, co-citation analysis and cluster analysis.FindingsThe main findings of this study are the most cited articles, most productive journals and most productive countries. The results show that a total of 100 research articles were published between 1992 and 2019. The maximum number of publications were observed during 2011–2019. The article “Knowledge, bargaining power, and the instability of international joint ventures” (Inkpen and Beamish, 1997) was the most cited article and the “Academy of Management Review” was the most prominent journal, with 847 citations. The USA, France, the UK, Singapore and Canada are the most productive countries. The study also includes the analysis of the network of co-citation of references and co-occurrence of keywords in the context of alliance termination research.Originality/valueTo the best of authors’ knowledge, this study seems to be the first to perform bibliometric review and analysis in the area of alliance termination research. Therefore, it can help academicians and practitioners to identify the research trends and gaps in the alliance termination literature on which future research can be performed. Overall, this research paper leads to a better understanding of the alliance termination research and offers new insights into strategic management studies.

Ng, Desmond

2020 Journal of Strategy and Management

doi: 10.1108/jsma-07-2019-0120

According to behavioral research, aspirations influence a firm's search – exploitive and explorative – for solutions that satisfy a firm's goals. Yet, such goal seeking behavior is adaptive to a firm's past experiences and not to a manager's expectations of its firm's future. A manager's expectations are often explained in terms of their confidence in future events. The purpose of this study is to address the following research question: how does a manager's confidence influence its expectations of a firm's future performance and goals; and how do these future expectations influence a firm's exploitive/explorative search?Design/methodology/approachIn drawing on cognition and legitimacy research, a conceptual model was developed to explain the antecedents and outcomes of a firm's “forward-looking” aspirations. The antecedents to a firm's forward-looking aspirations are attributed to a manager's overconfidence – anchoring, confirmation and availability – biases. In using strategic legitimacy explanations, these biases introduce distinct types of forward-looking (exploitive/explorative) search that legitimize/de-legitimize a manager's forward-looking aspirations.FindingsA key finding of this study is that it introduces a strategic decision-making process in which a firm's exploitive/ explorative search is adaptive toward its forward-looking aspirations.Research limitations/implicationsThis forward-looking strategic decision-making process offers research implications to understand how a firm's future goals and expectations can offer new understandings of their past experiences and traditions and explains how a manager's overconfidence biases can influence the assessment of a firm's social aspirational groups.Practical implicationsIn addition, this study also offers practical implications in which illustrative examples are used to explain this study's forward-looking strategic decision-making process.Originality/valueA distinct contribution of this study is that it introduces a forward-looking orientation that has not been previously examined the backward focus of behavioral research.

Siddique, C. Muhammad; Siddique, Hinna Fatima; Siddique, Shama Urooj

2020 Journal of Strategy and Management

doi: 10.1108/jsma-10-2019-0185

This study has two primary objectives: (1) to shed light on the mechanism by which authoritarian leadership unfolds its impact on such critical aspects of subordinates' work lives as job satisfaction and in-role performance and (2) to identify the moderating conditions which place limits on the impact of authoritarian leadership on work outcomes.Design/methodology/approachData were collected on 552 supervisor-subordinate dyads from the United Arab Emirates. A series of research hypotheses were tested using a mixed-method statistical approach, including CFA and moderated hierarchical regression analysis.FindingsAs predicted, authoritarian leadership exerts negative impact on subordinates' job satisfaction and performance through poor quality LMX and weak employee organizational embeddedness. Both LMX and employee embeddedness mediated the negative relationship between authoritarian leadership and outcome measures while power distance moderated the relationship of authoritarian leadership with LMX and employee organizational embeddedness. Low power distance orientation was found to exacerbate the negative impact of authoritarian leadership on the quality of both LMX relationships and employee embeddedness.Research limitations/implicationsThe study shares limitations of most studies cast in the survey research design.Practical implicationsThe findings underscore the importance of work environment in nurturing high quality LMX relationships and employee organizational embeddedness to buffer the negative effect of authoritarian leadership on subordinates' job satisfaction and performance. In high power distance cultures where workplace inequality is largely rationalized, subordinates who perceive their leaders as authoritarian tend to show low job satisfaction and poor in-role performance. These findings illustrate the importance of management intervention in the early stage of recruitment and selection to attract managers receptive to egalitarian leadership approaches who can equip subordinates with appropriate resources to enhance their job satisfaction and performance outcomes.Originality/valueThe study offers valuable new insights into the mechanism by which authoritarian leadership influences work outcomes in a high-power distance culture. It represents first systematic effort in the Middle Eastern context to identify the conditions that mediate the linkage between authoritarian leadership and work outcomes. The study adds value to the literature by investigating the moderating role of power distance at the individual level of analysis. It detects significant differences in subordinates' perception of power inequality in the workplace in a culture viewed as a high-power distance culture and illustrates how such differences in turn shape the quality of LMX and employee organizational embeddedness.

Chaudhry, Smita

2020 Journal of Strategy and Management

doi: 10.1108/jsma-11-2019-0200

The paper seeks to understand the implications of partner opportunism for project relationships.Design/methodology/approachBased on the theoretical literature, the paper presents a conceptual model considering the perspective of the organization impacted by partner opportunism.FindingsThe model proposes that partner opportunism lowers willingness to engage by creating perception of loss. The undesirable impact of opportunism on perceived loss is less if the partner has made high relation-specific investments. Also, the negative impact of perceived loss on willingness to engage is less if the partner is difficult to substitute.Research limitations/implicationsThe model can be tested in the context of information technology (IT) relationships because of scope for opportunism in IT project relationships. Data can be collected through experimental vignettes.Originality/valueThe model contributes by investigating novel aspects of governance, behavioral consequences of opportunism and relation-specific investments in project relationships. The paper suggests that organizations can protect themselves against the ill effects of partner opportunism by enabling their stakeholders to invest substantial time and effort in the relationship and fortify relational quality and bonding.

Jancenelle, Vivien E.; Wei, Shuqin; Ang, Tyson

2020 Journal of Strategy and Management

doi: 10.1108/jsma-11-2019-0196

Joint ventures (JVs) are known to create value for their parent firms, in part due to the mutually beneficial sharing of information that occurs at the JV level. Market orientation (MO) is a well-documented strategic orientation that has received little attention in the JV literature, despite considerable research suggesting that MO has a positive effect on performance. This study posits that the MO skills contributed to a new JV by parent firms are likely to play a central role in a shareholder's assessment of the potential for success of a newly announced JV, thereby triggering changes in market value for parent firms.Design/methodology/approachComputer-Assisted-Text-Analysis (CATA) is used to calculate MO heterogeneity from annual reports, and event-study methodology is used to assess parent firm performance. The authors rely on a US sample of 82 public JV parents involved in 41 new equally-weighted JV formation announcements.FindingsThe authors find that heterogeneity on MO's behavioral components (customer orientation, competitor orientation, and coordination) is negatively related to parent performance, while heterogeneity on MO's profitability component is positively related to parent performance. However, the effect of MO's long-term focus heterogeneity on parent performance was not supported.Originality/valueThe results suggest that the benefits of information sharing in partnerships may be of a nuanced nature when it comes to MO. Although heterogeneity in profitability inclination created value for parent firms announcing a new JV; heterogeneity in customer, competitor and coordination market orientations did not appear to be rewarded by shareholders.