United we stand,divided we fall: historical trajectory of strategic renewal activities at the Scandinavian Airlines System, 1946–2012

Although the second half of the twentieth century saw the rise and fall of ‘multi-flag companies’ (MFCs) in the civil aviation industry, our understanding of how some managed to buck the trend and achieve longevity remains limited. This article advances business history and strategic management research by examining the strategic renewal activities of Scandinavian Airlines (formerly Scandinavian Airlines System [SAS]) during the period 1946–2012. The study sheds light on the key roles of private and state owners, rivals as well as banks, in critical financial phases are discussed in terms of longevity in the company. The longevity of the business stems from the leaders’ ability to develop as anticipated and respond to change in their competitive arena in close interaction with the owners. Thus, incumbent firms that strategically renew themselves prior to or during market reform, such as deregulation, enhance their chances of developing the size of their networks and revenue streams. Our main contribution to business history and strategic management literatures is the development of context-specific stages, which shed light on the evolution of strategic renewal activities and shifts from older processes and routines towards customer service and efficiency.     

Positioning Southwest Airlines through employee branding

As the field of employee branding has begun to unfold, more and more executives have become interested in how this process can help them achieve a competitive advantage for their organizations. This article explains how employee branding works and how it can be utilized to position the organization in the minds of customers, employees, and other stakeholders. A contextual analysis of its use as a source of sustainable competitive advantage at Southwest Airlines is presented. Finally, key success factors are identified for those who wish to make employee branding a strategic focus within their organizations.     

Managing digital business platforms: A continued exercise in balancing renewal and refinement

Central to the evolution of a digital business platform is the organization’s ability to balance exploration (renewal) and exploitation (refinement) simultaneously. Drawing on prior research—including digital platforms, contradictory tensions, and organizational ambidexterity—and our own experience investigating digital business platforms in organizations, this article provides insights into how executives can manage this evolution successfully. More specifically, we present a framework recognizing three pairs of organizational capabilities (i.e., identifying-nourishing, expanding-legitimating, and augmenting-embedding) that enable balancing renewal and refinement of the platform over time. We close by providing critical managerial practices that executives can use in anticipating, adjusting, and evaluating the evolution of a digital business platform over time, including its initiation, development, and growth.     

Genre and Postemergency Contexts: The Nexus of Strategic Communications

This article explores why organizations choose to enact public relations discourse genres after an emergency situation —organizational crises, disasters, and issues—has been resolved. In the aftermath of emergency situations, we argue that organizational communicators employ discourse messages according to five governing “commitments,” which corporate officials use to shape postemergency messages the way they do. This essay, then, is not so much a retrospective analysis of what happened in selected emergency situations but, rather, is more a prospective explanation about how to use these five governing commitments when anticipating emergencies that could happen. Organizational learning and organizational renewal are addressed accordingly. In this argument we draw upon literature in linguistics, rhetorical theory, and organization studies. Examples of postemergency situations are used to bridge theory and practice to show how what was done retrospectively can be done prospectively to prepare for communication during postemergency contexts.     

The Methods Used to Implement an Ethical Code of Conduct and Employee Attitudes

Media reporting of recent business scandals, ranging from systemic accounting fraud to individual executive greed, has shed new light on the urgent need for organizational ethics in corporate America. The essay argues that organizational ethics can foster virtuous organizations by developing their sense of stewardship and integrity. This approach can inspire the ethical decision-making processes and standards of conduct for personnel throughout the organization. Another crucial role for organizational ethics is to regain lost trust and to recover the confidence of our communities, whether we are discussing the business community or the health care community. Corporate America and organizations in health care need to win back the respect of skeptical customers, disheartened patients, and distrusting communities. But this task can be accomplished properly only when organizations and their business practices have a renewed commitment to ethics. The essay discusses how organizational ethics can permeate the entire organization in order to instill trust and confidence among its constituencies. Although the focus of the essay is upon the role of organizational ethics in health care, the argument also applies to the renewal of business practices in corporations across the nation.     

Internal Marketing at Continental Airlines: Convincing Employees that Management Knows Best

Maintaining a high level of customer service quality is necessary for success, particularly for firms in service industries, but employees need to be motivated to provide it. Management can provide the motivation through the use of compensation schemes and internal marketing. In this paper we examine profit sharing compensation schemes that reward employees for achieving customer service objectives. We discuss how such schemes should be implemented, and explain why management needs to convince employees through internal marketing programs about the benefits of its scheme. We obtain the optimal amount of profit that the firm should share with employees, and the optimal effort it should spend on internal marketing. Finally, we relate the analysis to a successful scheme implemented by Continental Airlines.     

A Strategic Social Action Framework: Theorizing and analyzing the alignment of social media affordances and organizational social action

Social media is a relatively new and dynamic field dealing with the development and use of social media technologies by individuals and more recently by organizations. Although several frameworks and models have been proposed for studying social media, most provide only limited insights into the complex social activities that are supported by the strategic usage of social media in organizational settings. In this article, we take up this challenge and introduce a Strategic Social Action Framework for analyzing social media technologies and their strategic usage in and by organizations. This framework is based on Habermas’ theory of social action and the idea that social media platforms serve as sets of rules and resources that mediate strategic organizational (inter-)actions involving these platforms. We demonstrate the value of the framework by theoretically delineating the appropriateness of the framework to specific social media tools, as well as by empirically analyzing the strategic use of two publicly available social media platforms—Facebook and Twitter—by three large airlines—Delta, KLM Royal Dutch Airlines, and JetBlue. Our findings reveal that when implementing social media in organizational contexts, developers and managers should critically evaluate (a) the need for supporting a rich variety of action types, (b) the possible role of social media support in the specific action situation, and (c) the strategic alignment of social media affordances and specific social action categories. Finally, we discuss theoretical and practical implications as well as directions for future research.     

An essential stupidity-based review of the Deepwater Horizon disaster

Though more than a decade has passed, there are compelling reasons to revisit the Deepwater Horizon disaster, the most expensive nonnuclear industrial disaster in history. It serves as an exemplar of what organizations should not do. Recent tragedies in Nigeria and Florida also demonstrate how organizations might avoid the risk of being overtaken by readily predictable events. In this article, we look to advance research on risk mitigation and decision-making as we create a more succinct view of how managers create—and might prevent—inaptitude. To this end, we look at how the evolving concept of stupidity is defined in recent research and how it manifested in the critical case of the Deepwater Horizon drilling rig. We present five proposals for organizations looking to address and avoid potentially unwise decisions that may lead to the next disaster.     

Social signaling and interorganizational relationships: Lessons learned from the professional sports industry

In today’s connected economy, interorganizational relationships are increasingly important. Whether government-to-government, political party-to-political party, business-to-business, department-to-department, or some other interorganizational pairing, these relationships can provide organizations with signals used to identify and better respond to changes in their environment and in their interorganizational relationships. This enables astute organizations to not only understand how others will interpret the social signals they send, but also to shape those signals in ways that will improve their interorganizational relationships. We illustrate this herein, using the public and readily recognizable relationships involved with labor relations in the professional sports industry. We show how social signals can explain the way organizations change and adapt to their environments, and how these changes send messages to related organizations. Finally, we provide a set of recommended advice for managers based on this case analysis.     

Using Amazon Mechanical Turk and other compensated crowdsourcing sites

Crowdsourcing is becoming recognized as a powerful tool that organizations can use in order to get work done, this by freelancers and non-employees. We conceptualize crowdsourcing as a subcategory of outsourcing, with compensated crowdsourcing representing situations in which individuals performing the work receive some sort of payment for accomplishing the organization's tasks. Herein, we discuss how sites that create a crowd, such as Amazon Mechanical Turk, can be powerful tools for business purposes. We highlight the general features of crowdsourcing sites, offering examples drawn from current crowdsourcing sites. We then examine the wide range of tasks that can be accomplished through crowdsourcing sites. Large online worker community websites and forums have been created around such crowdsourcing sites, and we describe the functions they generally play for crowdsourced workers. We also describe how these functions offer opportunities and challenges for organizations. We close by discussing major considerations organizations need to take into account when trying to harness the power of the crowd through compensated crowdsourcing sites.     

Creating disciples: The transformation of employees into trainers

Business realities demand that organizations place a strategic emphasis on developing knowledge workers and becoming a learning organization. Numerous programs of organizational change and renewal must also be undertaken to keep firms competitive. This requires ongoing training for all employees to succeed in today's global marketplace. While external consultants and professional staff are often called upon to provide this training, many organizations are turning to their own employees as an effective, lower cost alternative. There are several benefits to using this strategy, but significant support must be provided to realize these benefits. Herein, we describe a systematic process to turn novice employee trainers into a powerful force for organizational change. By transforming employees into disciples, organizations can give training the impact it needs.     

The European Union's aging population: Challenges for human resource management

The European Union (EU)'s aging population is leading to a workforce that is rapidly aging and gradually beginning to shrink. Businesses will have to prepare for an older workforce that will have different priorities compared to the historically younger workforce. In this article, we examine the aging population of the EU and analyze how organizations can best manage the transition to a workforce that is rapidly aging. We explain how the changing demographic outlook translates into challenges for acquiring and retaining talent, and how employers can best manage this transition. We provide examples of organizations that have implemented human resource policies to make their workplaces more elderly friendly and their workforces more efficient. We conclude by pointing out some steps that organizations can take to better integrate older workers and help make their aging workforces more productive.     

Positive Organizational Ethics: Cultivating and Sustaining Moral Performance

We present this special issue on positive organizational ethics (POE) to highlight those pursuing positive subjective experiences, positive attributes of individuals and groups, and positive practices that contribute to ethical and virtuous behavior in organizations. Although prior research has offered some insight in this area, there is still much to be learned about how to cultivate and sustain ethical strength in different types of organizations and how goodness can emerge from and in spite of human failings. After describing the positive movement, we position POE as a discrete area of inquiry within the broader positive behavioral sciences, at the intersection of positive behavioral studies and business ethics. After defining our terms and purpose for creating the POE domain, we introduce the articles in this special issue. The introduction concludes with suggested topics for future research.     

Dysfunctional executive behavior: What can organizations do?

Much has been made of dysfunctional executive behavior in recent years. As such, the purpose of this article is to assist organizations in the design of executive work. To better construct a work environment that diminishes self-serving and unethical behavior, we propose that organizations structure an executive's work around three factors: the accountability environment, managerial discretion, and relationship composition. These factors are used to describe how organizations can better design executives’ work so as to promote more desirable executive behavior. We describe how these factors should be calibrated, as well as how they affect each other.     

How host organizations prepare for and learn from expatriate assignments

This article reveals what goes on inside host organizations prior to and during expatriate assignments. On the basis of analyzing organizational documents and conducting 43 interviews with host country nationals (HCNs) and expatriates in 30 Vietnamese organizations that host external foreign assignments, we provide a detailed account of HCNs' experiences and unearth sophisticated preparation and management activities designed to maximize these organizations' learning. We depict what we call “a host organization lifecycle” and extract five lessons: (a) host organizations prepare carefully in advance to learn as much as possible from expatriates; (b) HCNs experience quite dramatic adjustments and burdens during expatriates' placements; (c) mutual trust between expatriates and HCNs is a prerequisite for HCNs' learning; (d) most of HCNs' learning occurs informally via interactions with expatriates or observing how they work; (e) host organization managers actively manage HCN–expatriate relationships. Our findings outline a “wish list” of practices that expatriate‐using organizations could consider deploying for expatriate assignments that focus on the benefit of the host organization' development.     

Perspectives on strategic internationalization: Developing capabilities for renewal

While strategic renewal has increasingly received interest from strategy scholars (Agarwal and Helfat, 2009, Baden-Fuller and Volberda, 1997, Capron and Mitchell, 2009, Crossan and Berdrow, 2003, Gulati and Puranam, 2009, Huff et al., 1992), its gains from internationalization are less understood. We draw on both internationalization and strategy literature to investigate what is known about ‘if’ and ‘how’ firms renew their capabilities through internationalization. We anticipate that the scope of internationalization has an inverted U-shape effect on the firm's ability to create alternatives for renewal, thus allowing for the development of renewal capabilities. Yet we also draw attention to the factors that may represent limitations of the role of internationalization for strategic renewal. Internationalization strategies related to location, timing and venture mode decisions are antecedents to capability renewal strategies, uncovered as linear vs. non-linear renewal paths.     

Tough on criminal wealth? Exploring the link between organized crime’s asset confiscation and regional entrepreneurship

This paper addresses the question “How does the fight against organized crime affect regional entrepreneurship?” We focus on asset confiscation in relation to alleged connections of their owners with organized crime, a highly debated policy measure against organized crime. Extending work on institutions and regional entrepreneurship, we propose that confiscation has contrasting effects on regional entries. On the one hand, confiscation of economic assets associated with criminal organizations’ legitimate activities in a region reduces competition and triggers renewal, fostering new entries. On the other hand, seizure of criminal organizations’ operational assets weakens their ability to exercise sovereignty, creating an institutional vacuum that lowers founding rates. Our results, based on a longitudinal study of Italian provinces between 2009 and 2013, provide support for both hypotheses. We also find that the negative effect associated with the confiscation of operational assets is mitigated when local governments have policies facilitating asset redeployment.     

When do spinouts benefit from market overlap with parent firms?

We examine how market overlap with parent organizations impacts the performance of startups founded by the former employees of these incumbent firms. Building on knowledge inheritance and competitive dynamics theories, we propose that the degree to which the operating markets of spinouts overlap with their parent organizations has a curvilinear relationship with their likelihood of survival. Market overlap is beneficial to spinouts because it reduces uncertainty during the early stages of new venture development. However, substantial market overlap may spark hostile actions by the parent organizations, thereby creating disruptive competition that may lower the likelihood of spinouts' survival. Furthermore, we hypothesize that the previous hierarchical position of founders in parent organizations moderates the overlap–performance relationship. Using a sample of European biotech spinouts and their parent firms, we find support for our hypotheses.     

Exploring the role of internationalization knowledge in fostering strategic renewal: A dynamic capabilities perspective

Internationalization knowledge (IK) is important to successfully enter and develop competitive strategies abroad. Yet, how IK is advanced and improved across the multinational enterprise (MNE), and how this contributes to the MNE’s strategic renewal is less understood. This analysis is based on an in-depth case study of Microsoft International to explore how IK is advanced, improved, and integrated across the enterprise. Our findings suggest that IK plays a critical role in fostering strategic renewal of an MNE. More specifically, sensing, seizing, and transforming capabilities jointly provide the necessary basis that enable IK to facilitate strategic renewal. We contribute to the literature by (1) explicating three categories of IK and their hierarchical relationship; (2) reveal how three distinct capabilities required by MNEs capture and integrate the three categories of IK across the enterprise; and, (3) offering that strategic renewal is triggered by routines based on the development and integration of IK.