Journal of Strategy and Management

Brahmana, Rayenda Khresna; You, Hui Wei; Kontesa, Maria

2021 Journal of Strategy and Management

doi: 10.1108/jsma-10-2019-0186

This research aims to examine the moderating role of CEO power on the relationship between retrenchment strategy and firm performance by framing the relationship under an agency theory, and power circulation theory.Design/methodology/approachThis study focuses on a sample of 319 non-financial public listed companies in Malaysia from the year 2011–2016 and estimates the model under two-step GMM panel regression to eliminate the endogeneity issue.FindingsThe results show that the retrenchment strategy increased firm performance. Meanwhile, greater CEO power changes that retrenchment effect into increased performance. This study also indicates the CEO power strengthens the relationship between firm performance and retrenchment. However, CEO power does not have any effect on the performance of low retrenchment, and the performance of big firm size.Research limitations/implicationsThe findings show that the higher CEO power cause higher firm performance and higher retrenchment. This research suggests that CEO power can make retrenchment strategy works and the decision made can affect the firm performance significantly.Originality/valueThis study examines the effect of CEO power on the performance of retrenchment strategy implementation by contesting agency theory, power circulation theory, and resource-based view theory within the emerging country context.

Jukka, Tapio

2021 Journal of Strategy and Management

doi: 10.1108/jsma-12-2019-0224

This paper examined the relationship between TMT demographic properties and firm performance using diversity and level variables and measuring differing constructs of firm performance representing divergent strategies.Design/methodology/approachStructural equation modelling was used to test the relationships between TMT demographic properties and firm performance measured as return on net operating assets (RNOA), and its disaggregates profit margin (PM) and asset turnover (ATO). Data were from 89 Finnish firms during the years 2008–2011, resulting in 320 observations.FindingsTMT team tenure had associations with RNOA through both PM and ATO while TMT age, age diversity, firm tenure, firm tenure diversity and team tenure diversity showed paths through ATO. TMT firm tenure diversity showed effects in opposing directions through PM and ATO.Practical implicationsThe results help to understand and apply the separate effects of age, firm tenure and team tenure on TMT and firm performance. These results also provide explanations on how these TMT properties affect firm performance in diverse types of firms pursuing different strategies.Originality/valueThe results suggest that both diversity and level in a measured TMT demographic property are linked with firm performance, and the effect can be in differing directions. These links go through differing paths when using disaggregated operational firm performance measures. Also, diversity in top management is not always beneficial since it can cause separation or conflict impairing performance.

Khalifa, Azaddin Salem

2021 Journal of Strategy and Management

doi: 10.1108/jsma-04-2020-0092

To unravel three strategy-related concepts, frequently confused as one, by introducing the new concept of nonstrategy and proposing a novel threefold classification of strategy, nonstrategy and no strategy.Design/methodology/approachBuilding on some key insightful definitions of strategy, the paper infers five essential attributes of strategy. These, in turn, are used to introduce the new concept and classification.FindingsThe paper makes clear distinction between the different concepts of strategy, nonstrategy and no strategy that are usually confused in the literature.Research limitations/implicationsThe paper calls for a reexamination of what strategy is, how it can be better operationalized, how it should be distinguished from nonstrategy and no strategy and how strategy evolution and drift can be tracked.Practical implicationsThe paper clarifies what constitutes strategy, gives practitioners directions on how to strategize and warns against the potential of malpractice that produces nonstrategy.Originality/valueThe introduction of the new concept of nonstrategy and the development of a new classification that distinguishes three concepts that are usually confused as one.

R L, Manogna; Mishra, Aswini Kumar; Sinha, Abhishek Kumar

2021 Journal of Strategy and Management

doi: 10.1108/jsma-12-2019-0210

The preference of firm internationalization is shaped by different groups of owners and the institutional environment in which the firm operates. Past studies have largely ignored the heterogeneity among the controlling groups in influencing the internationalization decision in emerging economy firms.Design/methodology/approachIn this study, the authors draw understanding from behavioral risk perspective and institutional theory to inspect the risk perceptions and propensities of various ownership groups such as lending institutions, domestic mutual funds and foreign institutional investors (FIIs). Empirical analysis was conducted from a sample of 2695 unique BSE-listed nonfinancial Indian firms during 2005−2019 period using Tobit panel regression analysis.FindingsThe findings reveal that firms' international investments are impacted differently by ownership share of different types of institutional investors after controlling for firm-level resources and capabilities. While lending institutions and FIIs are supportive of foreign investments by firms, domestic mutual funds are not supportive of this strategic decision on foreign investment.Research limitations/implicationsFurther, our results show that family ownership, measured in terms of family shareholding, negatively moderates the lending institutions toward internationalization and does not impact the FIIs and mutual fund investor's decision regarding the foreign investments.Originality/valueTo the best of the author's knowledge, the current paper is the first to address the risk perceptions of various ownership groups on firm's international outlook in an emerging economy context with the latest data. This practical perspective helps the organizations in managing the ownership holdings.

Gorondutse, Abdullahi Hassan; Arshad, Darwina; Alshuaibi, Ahmad Said

2021 Journal of Strategy and Management

doi: 10.1108/jsma-03-2020-0064

Although the significance of small and medium enterprises (SMEs) in influencing economic growth is recognized, the performance of SMEs all over the world including Nigeria is unanticipated. Thus, this research aims to investigate the effect of strategic flexibility by moderating the effects of sustainability strategy on the SMEs' performance in Nigeria from a business strategy perspective.Design/methodology/approachThe hypotheses of the study were tested using personally administered survey questionnaires; the study obtained 486 valid questionnaires, which were evaluated using SmartPLS algorithm and bootstrapping functions.FindingsThe research findings were established using SmartPLS algorithm and bootstrapping functions. According to the results, the research constructs have a satisfactory convergent and discriminant validity. Equally, the overall model has a very high predictive relevance. The study established a strong positive influence of strategic flexibility on the SMEs’ performance. In addition, the study also established the moderating influence of sustainability strategy on the constructs.Research limitations/implicationsThe research is explorative and designed to yield results and to be generalizable. Future research is thus encouraged to confirm or contradict the results of this study in a different context.Practical implicationsThe research findings may be beneficial to policymakers and academics. It can particularly be useful in understanding strategic flexibility, its influence on the performance of SMEs and whether it can fit between the sustainability and strategic direction of a business enterprise.Originality/valueThis study fulfils an identified need to study strategic flexibility and its influence on the performance of SMEs using a dynamic perspective specifically in the context of emerging economies such as Nigeria.

Franco, Mário; Haase, Heiko

2021 Journal of Strategy and Management

doi: 10.1108/jsma-01-2020-0012

This study aims to identify the main reasons for forming a cooperation agreement in the context of small and medium-sized enterprises (SMEs) and understand the role of reputation in this business process.Design/methodology/approachTo achieve these objectives, a qualitative research approach was adopted, specifically the case study method. The context of analysis studied here was formed of five SMEs (cases) located in an inland region of Portugal. Data-collecting instruments were individual interviews and documentary analysis, and the data treatment technique was content analysis.FindingsFrom the results obtained, it is concluded that SMEs have different reasons for entering a cooperation agreement and that the criterion of reputation, in the partner selection process, was quite frequently mentioned. In addition, the study found trust to be another important criterion when choosing a partner. This means that besides the resources a partner may possess, the most important aspect is that there should be mutual trust.Practical implicationsThis study seeks to help SME managers to characterise and understand the phenomenon of cooperation and show the main criteria to consider when choosing their partner(s).Originality/valueThis study is innovative because it will help to characterise and understand business cooperation in SMEs and contribute to choosing a suitable partner, so that SMEs can achieve good performance, major market expansion and improve relations with their partners, in an increasingly competitive environment.

Meisinger, Norman; Moldaschl, Manfred

2021 Journal of Strategy and Management

doi: 10.1108/jsma-06-2020-0149

For nearly three decades, numerous scholars have searched for a robust relationship between firm performance and organizational ambidexterity—so far with questionable results. The aim of this short essay is thus to critically examine the performance of applied performance measurements.Design/methodology/approachAfter discussing methodological issues and revealing a conceptually neglected “level” distinction in organizational ambidexterity studies, we contribute to conceptual clarity as to whether exploration and exploitation ought to be conceived as continuous or orthogonal.FindingsFirst, even if the dichotomy of exploration and exploitation is orthogonally conceptualized, at least one trade-off, either on the level of the explanans or the level of the explanandum, can be bypassed but cannot conceptually be denied. Second, we conclude that explaining overall firm performance with the relation of just two variables (exploration and exploitation)—referring to the inherently conflicting title of this paper, “Reduced to the Max”—is a hazardous endeavor.Research limitations/implicationsBased on these insights, future research may benefit from studying organizational ambidexterity and firm performance more qualitatively and paying more attention to the declared level distinction.Originality/valueThe paper reveals a crucial neglect of level and provides an answer to one of the core questions of organizational ambidexterity research: that of continuity vs orthogonality.

Darling, Chris; Venkitachalam, Krishna

2021 Journal of Strategy and Management

doi: 10.1108/jsma-08-2019-0156

Extant literature on strategic environment analysis confirm broad evidence of studies on competences in the context of private sector organizations. Nevertheless, there is a growing interest and evidence of strategic competence in public sector organizations seeking to deliver improved performance. This paper attempts to determine the strategic competences of a National Health Service (NHS) unit for better organizational performance.Design/methodology/approachBased on the qualitative analysis of empirical evidence collected in a UK based NHS case study organization, we arrive at a strategic competence performance framework for the health unit using research carried out through interviews with employees and partner organization members.FindingsBy examining a UK-based qualitative case study, the proposed framework puts forward four strategic competence pillars vital for delivering organizational performance and effectively managing the environment of NHS unit's operations. The four strategic competences that are identified to foster NHS unit's performance are strategic leadership, staff engagement, knowledge transfer and partnership working.Originality/valueThe study examines the environment in which a UK based NHS health unit operates and identify the different strategic competences to deliver organizational performance.