Revisiting exercise of power strategies from the perspective of information processing

The digitization of channel management changes how firms acquire, interpret, and analyze information, which needs to be considered when evaluating the efficacy of exercising power strategies on interfirm cooperation. Drawing insights from the three mechanisms of interorganizational information processing capability, we identify contingent factors that may affect the relationship between firms' exercise of power strategies and interfirm cooperation at the firm (i.e., IT capability), dyadic (i.e., relationship quality), and network (i.e., network density) levels. We analyzed data sampled from 288 manufacturing firms and found that manufacturers' IT capability weakens the negative effect of exercising coercive power and the positive effect of exercising noncoercive power on interfirm cooperation. At the dyadic level, relationship quality between manufacturer and distributor weakens the negative effect of exercising coercive power on interfirm cooperation. Finally, at the network level, distributors' network density strengthens the positive effect of exercising noncoercive power on interfirm cooperation. Our findings contribute to the marketing channel literature by shedding new light on the effects of the exercise of power on interfirm cooperation in this digital era and offer actionable managerial insights.     

An investigation into the role of IT integration,relationship predictability and routinization in interfirm relationships: From the structuration perspective

Recognizing the influence of information technology (IT) in interfirm buyer–seller relationships, the authors draw on structuration theory and its extension as a theoretical basis for understanding the benefits of IT in customer relationships. The authors propose that IT integration gives rise to certain factors in interfirm relationships, i.e., predictability and routinization, which facilitate high quality relationships, i.e., those characterized by reciprocity and stability, which in turn enhance firm performance. Hypotheses are tested on data collected from 152 firms. The results show that relationship predictability is critical in linking IT integration to positive relationship outcomes, and that routinization reinforces the impact on those outcomes.     

Interfirm coopetition,interfirm knowledge creation,and collaborative innovation performance: The moderating roles of environmental competitiveness and dysfunctional competition

This paper investigates whether and how interfirm coopetition—the combination of cooperation and competition—affects collaborative innovation performance in competitive environments. We address this issue by introducing interfirm knowledge creation as a mediating mechanism based on knowledge creation theory and by examining the moderating effects of environmental competitiveness and dysfunctional competition. The hypotheses are tested using survey data from a sample of 170 Chinese high-tech firms. The results show that interfirm knowledge creation mediates the impact of interfirm coopetition on collaborative innovation performance. Furthermore, the findings indicate that the positive relationship between interfirm coopetition and interfirm knowledge creation is stronger under higher levels of environmental competitiveness but weaker under higher levels of dysfunctional competition. The positive relationship between interfirm knowledge creation and collaborative innovation performance is more evident under higher levels of environmental competitiveness. These findings enrich the interfirm coopetition literature, contribute to knowledge creation theory by extending it to the interfirm context, and provide a better understanding and useful advice for enterprise managers and government officials.     

Growing with the market: How changing conditions during market growth affect formation and evolution of interfirm ties

Research Summary: Market conditions are known to matter for firm performance and growth. This study explores how changing levels of uncertainty and competition affect interfirm ties of entrepreneurial firms as markets transition from nascent to growth stage. Tracing six entrepreneurial game publishers during the growth stage of the U.S. wireless gaming market, the findings reveal that in a growth stage market, as uncertainty decreases, certain ties of entrepreneurial firms are terminated. First, existing partners may cut ties and become competitors after entering the market directly. This is a “winner's curse” as more successful firms are more likely to entice their partners to enter the market directly. Second, ties may be terminated as prominent firms that are “overwhelmed” with too many partners cut ties with low to mediocre performance, while their remaining partners enter a positive spiral of tie strength and performance. Finally, as uncertainty decreases, new firms may enter the market as competitors to prominent firms. While entrepreneurial firms with high‐ and low‐performing ties to prominent partners may find ties with these new entrants attractive, those with mediocre ties to few prominent partners find this move too risky and wait for a first mover to legitimate it. Overall, the findings show that changing levels of uncertainty and competition in growth stage markets can have different consequences for firms due to heterogeneity in their ties and power relative to partners. The findings provide several contributions to literature regarding the relationship among interfirm ties, firm performance, and market evolution. Managerial Summary: Based on interviews at six entrepreneurial game publishers in the United States and their partners, this study shows how changing levels of uncertainty and competition in growing markets can have different consequences for firms based on the different types of alliances in their portfolio and their power relative to partners. The findings highlight the importance of managing partners differently based on alliance type and goal of the partner. They advocate remaining flexible in alliance management as information asymmetries, intentions and bargaining power of partners can change and lead to abrupt alliance dissolution. They show that alliance portfolio management goes beyond a firm's capability of managing individual alliances, and provide a tool for managers to evaluate their alliance portfolios and take the necessary precautions.     

Country—specific advantage and international cooperation

This paper tests the hypothesis that country-specific advantage embedded in firms of a particular nationality is a motivation for international interfirm cooperation. A sample of domestic and international cooperative relationships formed by Japanese firms in the commercialization of biotechnology is used to identify factors which differentiate domestic from foreign partners. The findings support our hypothesis that country-specific advantage is a significant variable in explaining differences between cooperative relationships with partners of different countries. The results of this study indicate that interfirm cooperation has implications for the international competitiveness of both firms and nations in high technology industries.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

Investing in guanxi: An analysis of interpersonal relation-specific investment (RSI) in China

This study contributes to a more comprehensive understanding of relation-specific investment (RSI) in interfirm exchanges by introducing a construct for interpersonal RSI. Drawing on economic sociology and qualitative findings, we examine interorganizational RSI and interpersonal RSI as distinct constructs and uncover their roles in relationship performance. In particular, our study focuses on the Chinese interfirm context, in which interpersonal RSI, based on the indigenous practice of guanxi (cultivating social connections), is known as guanxi investment. We adopt a qualitative approach to explore the elements of guanxi investment, and then develop a behavioral measurement scale as a tool for further research. We employ an empirical survey to test and affirm the validity of the scale. The results confirm that in addition to their respective effects, interorganizational and interpersonal RSIs exert an interactive effect on interfirm relationship performance. We offer managerial implications for firms that operate in China.     

Influence of the standardization of a firm's productive process on the long-term orientation of its supply relationships: An empirical study

Firms able to manage their supply relationships adequately, which is seen as a first step to success, will be able to exploit important competitive advantages. Many works have previously analyzed these supply relationships in very different contexts and considered the influence of various factors. The influence of the standardization of the productive process on the temporal orientation of interfirm relationships has been analyzed in some depth with respect to sales activities, but rather less in the relationships that standardized firms establish with their suppliers.In an attempt to fill this gap in the literature, the current work analyzes the possible influence of the standardization of the firm's productive process on the long-term orientation of firm-supplier relationships. Specifically, we use a sample of Spanish firms to analyze the moderating effect of this variable on this temporal orientation. Dividing the total sample into two subsamples - “standardized firms” versus “non-standardized firms” - we obtain interesting results and implications about the effects of trust, communication, cooperation, satisfaction and commitment on the long-term orientation of these relationships.     

Interfirm Modularity and Its Implications for Product Development*

Industries characterized by interfirm modularity, in which the component products of different firms work together to create a system, are becoming increasingly widespread. In such industries, the existence of a common architecture enables consumers to mix and match the products of different firms. Industries ranging from stereos, cameras, and bicycles to computers, printing, and wireless services are now characterized by interfirm modularity. While the increasing presence of this context has been documented, the implications for the product development process remain underdeveloped. For the present study, in‐depth field‐based case studies of seven firms experiencing an environment of interfirm modularity were conducted in order to deepen understanding of this important phenomenon. What unique challenges did this context pose and why? What solutions did firms experiment with, and which seemed to work? Based on an inductive process of data analysis from these case studies, three primary categories of challenges raised by this environment were identified. First, firms were frustrated at their lack of control over the definition of their own products. The set of features and functions in products were constrained to a great extent by an architecture that the firm did not control. Second, while an environment of interfirm modularity should in theory eliminate interdependencies among firms since interfaces between products are defined ex‐ante, the present study found, ironically, that interdependencies were ubiquitous. Interdependencies continually emerged throughout the product development process, despite efforts to limit them. Third, firms found that the quantity and variegated nature of external relationships made their management exceedingly difficult. The sheer complexity was daunting, given both the size of the external network as well as the number of ties per external collaborator. Partners with whom control over the architecture was shared often had divergent interests—or at least not fully convergent interests. The solutions to these challenges were creative and in many cases counter to established wisdom. For instance, research has suggested many ways for a firm to influence architectural standards. While the firms in the present sample followed some of this advice, they also focused on a more neglected aspect of architecture—the compliance and testing standards that accompany modules and interfaces. By concentrating their efforts in a different area, even smaller firms in this sample were able to have some influence. Instead of focusing on the elimination of interdependencies, it was found that firms benefited from concentrating on the management of interdependencies as they emerged. Finally, while layers of management and “bureaucracy” are often viewed as unproductive, these firms found that adding structure, through positions such as Relationship Manager, was highly beneficial in handling the coordination and control of a wide range of external relationships.     

Corporate venturing initiation: the examination of interfirm adaptation,sensemaking, and strategic reactiveness

The innovative outcomes of an ongoing collaborative relationship can encourage new corporate venturing. We propose that, during or after collaborative relationships, firms initiate new corporate ventures depending on the factor of interfirm adaptation, the mediating role of sensemaking, and the moderating factor of strategic reactiveness. The objectives of the analysis are achieved through the mediated moderation model this article describes; drawing on insights from the collective cognitive perspective, the study indicates that corporate ventures are initiated when interfirm adaptation interacts with a higher level of strategic reactiveness and with sensemaking as a mediator. The research findings provide important new implications for the broader domain of social cognitive theory.     

Why Do Firms Enter a New Product Market? A Two‐Dimensional Framework for Market Entry Motivation and Behavior

What are the energetic forces that induce established firms to enter new product markets? While most previous research has explained the economic profits expected from a new product market as firms' distinctive motivation for market entry, some recent studies also emphasize interfirm competition and benchmarking activities as another important factor that motivates firms' new market entry. To explain the established firms' diverse new product market entry behaviors, this study presents a two‐dimensional scheme of entry motivation in terms of the degrees of target market profit focus and competitor focus. The first dimension captures the economic motivation of firms' new market entry that ranges from focusing on the direct expected profits from the target market to considering more strategic/indirect benefit incentives. The second dimension captures the degree of firms' external motivation for entry affected by competitors that ranges from independent entry decisions to fully competitor‐oriented entry decisions. Using multiple‐industry survey data, the current study empirically verifies that these two entry motivation dimensions explain a great portion of actual firms' new product market entry behaviors and that they are independent of each other. Subsequently, this study validates that firms' operational size and their environmental factors like perceived technological uncertainty and competitive intensity upon new market entry affect the degrees of the two dimensions of firms' new product market entry motivation. More specifically, large firms less emphasize target‐market profits than small firms, and when perceived technological uncertainty is high, potential market entrants become less target market profit focused but more competitor focused. Under a highly competitive new market condition, firms focus on both target‐market profits and competitors. Based on the analysis of new market entry motivation dimensions, the current study proposes a new typology of established firms' market entry behaviors. The suggested typology represents the four different types of new product market entrants and examines specific characteristics and entry strategies for each type of potential entrants. This entry‐motivation framework should provide a deeper understanding of the backgrounds of entry behaviors and assist firms in developing appropriate entry strategies and in advantageously responding to rival firms' actions with regard to entry.     

Innovation strategy and sanctioned conflict: a new edge in innovation?

Teamwork and harmony are worthy objectives, but a healthy dose of conflict also plays an important role in fostering innovation. In their pursuit of teamwork and harmony, companies run the risk of suppressing the creative tension that brings vitality to new-product development (NPD) efforts. Furthermore, a firm's choice of innovation strategy may have a significant effect on the organization's capability for managing conflict. Using results from a survey of 290 marketing and R&D managers from U.S. firms in the electronics industries, Barbara Dyer and X. Michael Song explore the link between strategy and conflict, and the effect this link has on NPD success. Their study examines the following issues: the influence of business strategy on specific conflict-handling behaviors; the relationship between those conflict-handling behaviors and positive conflict outcomes; and the relationship between constructive conflict and new-product success. The study classifies firms predominantly pursuing a more aggressive NPD strategy as prospectors and less aggressive firms as defenders. Three conflict-handling mechanisms are identified: integrating behaviors, forcing behaviors, and avoiding behaviors. Compared to the prospector firms, the defender firms in this study perceived significantly higher levels of conflict in their organizations. In handling conflict, the prospector firms perceived a higher level of integrative behavior than the defender firms. The defenders perceived higher levels of forcing and avoiding conflict behaviors. The study identifies a strong, positive relationship between integrative behaviors and constructive conflict. Positive relationships are also identified between constructive conflict and the success of cross-functional relationships, as well as between constructive conflict and NPD business success. For the firms in this study, the results indicate that strategy is associated with the conflict-handling mechanisms the firm uses. For example, the results suggest that an NPD manager in a prospector firm will encounter high use of integrative behaviors, a high number of complex conflicts, a relatively low level of perceived conflict, a high level of formalization, and frequent exchanges of written and verbal communication among the firm's personnel. The results suggest that managers may help to create an environment conducive to NPD success by assessing their firms' strategies, emphasizing integrative conflict-handling behaviors, and employing formalization of organizational procedures.     

Effects of entrepreneurial marketing on new ventures' exploitative and exploratory innovation: The moderating role of competitive intensity and firm size

EM is a strategic orientation that draws on seven elements: proactiveness, opportunity-focus, risk-taking orientation, innovation orientation, customer satisfaction orientation, value creation and resource leveraging. These elements reinforce each other in a synergistic manner. We investigate how EM affects a new venture's exploitative and exploratory innovation activities. To identify conditions under which EM is more or less effective, we analyze the relationship between EM and exploitative and exploratory innovation under conditions of high and low environmental competitiveness and high and low levels of firm size. Based on survey data from 146 German new ventures up to ten years old in the B2B sector, our results provide evidence of a significant and positive effect of EM on exploitative and exploratory innovation. We find, further, that under conditions of high competitive intensity, the effects of EM on exploratory innovation strengthen, while low levels of competitive intensity do not affect the relationship between EM and exploratory innovation. Our results also show that for larger firms, the positive effects of EM on exploitative innovation are weaker, while for smaller firms, those effects are stronger.     

Triadic embeddedness,sources of relational rents,and interfirm performance

Interorganizational research has largely ignored how dyadic relationships are embedded in a wider network context. Responding to this research gap, we study how triadic embeddedness – cooperating firms structurally and mutually embedded in a network of triads – affects the sources of relational rents and interfirm performance. Using a unique combination of interfirm network- and survey data, we find that triadic embeddedness affects two sources of relational rents – relationship learning and trust-based governance. Learning and trust-based governance, in turn, increase two indicators of interfirm performance – cost reductions and end-product enhancements. The study contributes to a broader understanding of the relational view by showing that triadic embeddedness has direct positive effects on the sources of relational rents and indirect positive effects on interfirm performance.     

Relationship marketing and contract theory

The theoretical foundation of contracts and their limitations in governing exchange between firms is a current area of research in economics and business. The relationship marketing approach in business-to-business markets focuses on aspects in interfirm exchange that contracts cannot deal with efficiently. However, the ability to use contractual forms of governance where possible is crucial to the enhanced scope of relationship marketing management. We argue that contracts and relationships are complementary and that contracts provide an evolving governance structure for relationships. We examine the evolution of interfirm exchange theories in this framework and illustrate the convergence between contract theory and relationship marketing management, with examples from procurement in the supply chain, capacity reservation contracts, and program management.     

Development of Trust: A Study of Interfirm Relationships in Vietnam

The radical political and economic reforms sweeping through former socialist countries during the last decade have opened rich opportunities for privately owned businesses to emerge and develop. Since the market institutions and infrastructures in these countries are largely underdeveloped, private firms in transition economies rely extensively on interfirm partnerships. This raises the question of how—in the absence of institutions that legitimate markets, contracts, and private property—managers of new business ventures develop new relationships. This paper addresses this issue through analysis of multiple subcontracting relationships formed at a private garment company in Vietnam. This analysis suggests that firms in transition economies develop interfirm trust in ways that are quite different from their counterparts in more highly developed economies.     

Coping with time pressure in interfirm supply chain relationships

In today's evolving marketplace, firms must increasingly focus on developing responsiveness to meet customer demands. In the pursuit of such rapid response to customer needs, firms often demand that other members of their supply chain reduce cycle times of key business activities. Although tight deadlines are commonly imposed by customers, little is known about how supplier firms respond to such time pressure. Therefore, the purpose of this research was to learn more about the phenomenon of time pressure in interfirm relationships and determine how firms cope with this common situational constraint. Grounded theory methodology was utilized to discover a time pressure coping strategies taxonomy that is driven by evaluative criteria such as the frequency, magnitude, and attribution of time pressure. The model that emerged from this research provides information about the potential costs of leveraging interfirm relationships in order to achieve supply chain responsiveness.     

Connecting Interfirm and Intrafirm Collaboration in NPD Projects: Does Innovation Context Matter?

Interfirm collaboration is an important strategy for firms to generate new products and services. Whereas existing research emphasizes the importance of interfirm collaboration engagement to realize synergistic benefits in interfirm NPD projects, it remains surprisingly silent on the potential impact of intrafirm relational processes and how they can impact the interfirm setting. In this article, we therefore explore the impact of intrafirm collaboration engagement on the relationship between interfirm collaboration engagement and new product development (NPD) performance in interfirm NPD projects. Relying on insights from information processing theory, the authors hypothesize that intrafirm collaboration engagement increases firms' capacity to process complex information flows in the case of extensive interfirm collaboration engagement. Moreover, it is expect that the added value of extensive intrafirm collaboration engagement depends on the innovation objective (i.e., incremental versus radical new product development) of the interfirm NPD project. In particular, we hypothesize that the positive moderating impact of intrafirm collaboration engagement on the relationship between interfirm collaboration engagement and NPD performance is stronger for radical interfirm projects than incremental interfirm projects. Analyzing 195 interfirm NPD projects, a negative interaction effect between interfirm and intrafirm collaboration engagement is observed in radical interfirm NPD projects, whereas significant interactions between them remain absent in incremental interfirm NPD projects. Jointly, these findings provide first evidence that intrafirm relational processes can substantially impact partners' ability to realize relational rents in interfirm settings. Moreover, the negative interaction effect between interfirm and intrafirm collaboration engagement points to potential trade‐offs between inward‐looking and outward‐looking absorptive capacity.     

Choosing governance modes for external technology sourcing

This study examines the effect of uncertainty on governance mode choice of interfirm relationships in new business development (NBD). We combine transaction cost economics and real options reasoning, arguing that in the early stages of NBD, where technological and market uncertainty are very high, companies are better off using governance modes that are reversible and involve a low level of commitment. When uncertainty has decreased as a result of prior R&D investments, transaction costs considerations become dominant and companies will shift towards governance modes that are less reversible and more hierarchical. We argue that technological distance leads to less hierarchical governance modes and prior cooperation between firms leads to subsequent choices for more hierarchical modes. Finally, we propose that higher exogenous uncertainty leads to less hierarchical governance modes.     

企业间领导力:一种理解联盟企业行为与战略的新视角

资源异质性所引起的联盟企业之间的非对等地位,使得少数企业拥有了凌驾于联盟伙伴之上的领导能力,即核心企业对成员企业的影响力,本文称之为企业间领导力。企业间领导力的形成伴随着核心企业网络位置向网络中心迁移,并最终取得网络认同。网络能力构成了企业间领导力的基础,而网络结构和网络规则能够促进能力向领导力转化。在一致性认知和合法性认知的作用下,基于网络能力而形成的网络主导地位得以被联盟伙伴接受,最终催生企业间领导力。基于此,中国企业联盟建构策略包括:发展系统设计能力、深化迂回生产链的技术分工、强化联盟企业间非对称性依赖关系。