Stages of Organizational Transformation in Transition Economies: A Dynamic Capabilities Approach

How do organizations previously dominated by the state develop dynamic capabilities that would support their growth in a competitive market economy? We develop a theoretical framework of organizational transformation that explains the processes by which organizations learn and develop dynamic capabilities in transition economies. Specifically, the framework theorizes about the importance of, and inter‐relationships between, leadership, organizational learning, dynamic capabilities, and performance over three stages of transformation. Propositions derived from this framework explain the pre‐conditions enabling organizational learning, the linkages between types of learning and functions of dynamic capabilities, and the feedback from dynamic capabilities to organizational learning that allows firms in transition economies to regain their footing and build long‐term competitive advantage. We focus on transition contexts, where these processes have been magnified and thus offer new insights into strategizing in radically altered environments.     

The Role of Human Resource Management in Strategy Making

Among the strategy scholars, there is general consensus that responsive‐integrative strategy making is essential for ensuring a competitive advantage in contemporary dynamic environments. What is the role of HR in this process, and how can HR support responsive‐integrative strategy making? To answer these questions, we use illustrative experiences from Chr. Hansen, a global supplier of bioscience‐based ingredients to the food, health, and animal feed industries. We argue that HR's strategic role lies in providing support for both centralized and decentralized strategy making by offering aspirations for strategic decisions and by gathering various sources of inspiration for strategy discussions. © 2013 Wiley Periodicals, Inc.     

An empirical investigation of scheduling performance criteria

Planning and scheduling significantly influence organizational performance, but literature that pays attention to how organizations could or should organize and assess their planning processes is limited. We extend planning and scheduling theory with a categorization of scheduling performance criteria, based on a three-stage survey research design. Particularly, the results show that, next to schedule quality, the planning process factors timeliness, flexibility, communication, and negotiation are important performance criteria, and especially so in organizations that are faced with high levels of uncertainty. The results suggest that organizational and behavioral aspects of planning and scheduling cannot be mitigated with advanced models and software that solely focus on good schedules. Rather, high quality schedules and high quality scheduling processes need to be facilitated simultaneously to attain high planning and scheduling performance.     

Green Practices and Organizational Design as Sources of Strategic Flexibility and Performance

Green competences are dynamic capabilities based on practices (green practices), routines and structures that can be used to detect opportunities, make the most of them and use them to transform organizations. With this in mind, we explore the relationships between environmental management, organizational performance, and organizational processes and practices. We identify three key constructs related to green competences: (1) hybrid structures, (2) environmental best practices and (3) strategic flexibility, a key variable connecting structural design and green practices to organizational performance. We propose that the implementation of specific organizational structures characterized by the inclusion of market‐driven control practices within hierarchies (internal hybrids) could enhance firms' environmental responsiveness and deployment of green best practices. In addition, we suggest that green practices and structures are positively related to the development of strategic flexibility, driving above‐average returns in dynamic environments. To test these hypotheses, we use data from the European aviation industry. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

CONTINGENCIES AFFECTING STRATEGY FORMULATION AND EFFECTIVENESS: AN EMPIRICAL STUDY

Recent attempts at clarifying the strategy formulation problem have centred around managerial perceptions of environmental uncertainty (the need for information) and perceptions of the need for internal change. This research empirically tests one such formulation, a four quadrant model incorporating these two perceptual variables. Data sources were sixty-two longitudinal case studies involving a variety of organizations and environments. Characteristics of strategy making in each quadrant and differences between successful and unsuccessful organizations were examined through quantification of nine strategic variables for each case. Results indicated each quadrant differed from the others on a number of important strategic properties including risk taking, role performance of the key policy-maker(s), degree of innovation, extent of futurity in planning, and success of the organization. Second, strategic properties which predicted differences in success within each quadrant included perception of uncertainty, maximizing versus satisficing behaviour, innovation, futurity of planning, and role performance of the policy-maker. Third, successful firms in each quadrant tended to follow a strategic mode appropriate for the conditions. The four successful modes were adaptive planning, planning, adaptive entrepreneurial, and entrepreneural or stress mode. Motivational aspects of these results and implications for future research are discussed.     

Capabilities in Motion: New Organizational Forms and the Reshaping of the Hollywood Movie Industry*

abstract This paper looks at the evolution of capabilities in the Hollywood movie industry in the aftermath of the transition from a studio era dominated by integrated hierarchies to a post‐studio era dominated by flexible hub organizations supplied by networks of resource providers. Adopting a dynamic capabilities perspective we argue that two industry capabilities – mobilizing and transforming capabilities – play a crucial role in assembling and transforming resource bundles into feature films. We further argue that the transition to new organizational forms shifts the co‐evolutionary process, with practices and routines that make up mobilizing capabilities changing faster and becoming more important to box office success than practices and routines that make up transforming capabilities. We test our hypotheses using a sample of 400 films split between the studio and post‐studio eras. The results support our hypotheses, pointing to the influence of centralized control versus dispersed access to resources. The strategy of integrated hierarchical organizations depends on ownership of resources that reduces incentives to develop mobilizing capabilities, and increases incentives to develop transforming capabilities. The advent of new organizational forms, by contrast, increases returns to new practices and routines that mobilize resources at the expense of returns on exploring practices and routines that make up transforming capabilities.     

Management strategy and HR in international mergers: choice,constraint and pragmatism

The article combines consideration of the range of contextual factors that impact on management strategy and HR in the post‐merger period (such as corporate structures and cultures, pressures from shareholders and regulatory and legal environments at national and international level) with an examination of the interests and power of various groups of actors within the firm. Specifically, we apply a framework which integrates the insights of market‐based, institutionalist and micro‐political approaches. We locate our analysis within the relevant international HRM literature, most notably recent debates concerning multinational corporation (MNC) merger dynamics. International mergers and acquisitions provide particularly useful scenarios through which to explore the interdependence between choice and constraint, illustrated here by processes of negotiation, compromise and balance across a range of issues in several case study organisations. The key areas highlighted concern: (1) the integration of HR strategies, and (2) processes of post‐merger rationalisation.     

The Practice and Process of Delivering Integration through Strategic Planning

This paper explains how strategic planning is able to deliver strategic integration within organizations. While communication and participation within planning processes are perceived to have an integrative effect, we argue that these effects are unlikely to arise simply from bringing people together. Rather, we suggest that, given the varying interests of actors in different business units, integration will only arise from active negotiations and compromises between these actors. The paper is based upon a case of strategic planning in a multinational that was attempting to develop greater strategic integration across Europe. Drawing upon an activity theory framework, we examine how a common strategy emerges over time through modifications to the planning process and to different actors' roles within it. The findings are used to develop a process model that shows how different business unit characteristics of planning experience and relative power shape different experiences of communication and participation activities and different processes for achieving integration. The paper concludes with a discussion of how this process model contributes to the literature on strategic planning, political processes of strategy-making, and strategy-as-practice.     

Leading for Long‐Term Performance: Matching the Behavior to the Situation

Is there one right way to lead, or does it all “depend?” The right answer will inform the right leadership development strategy. A recent study by McKinsey & Co. using survey data collected from 165 organizations and over 365,000 respondents globally suggests that the answer is both. Two types of behavior sets emerged from organizations that enjoyed higher member perceptions of leadership effectiveness and attained higher levels of organizational health (the latter predicts long‐term financial and operational performance). We combined these into a model that prescribes a set of “baseline” behaviors that should always be evident, complemented by another set of behaviors (“situational behaviors”) that should be differentially emphasized depending on the level of organizational health. Both the content of the behavior and its relative emphasis are critical to either set. The current paper combines these into a model of organization‐wide leadership and concludes with action implications for organizations’ leadership development strategy.     

Performance effects of using an ERP system for manufacturing planning and control under dynamic market requirements

Enterprise resource planning (ERP) systems have a controversial reputation. Critics say that even if ERP systems may be beneficial for organizations operating in stable conditions, they are surely detrimental to organizations that face dynamic market requirements. This is because ERP systems are said to impose such procedures and constraints on organizations that make business processes inflexible to change. In contrast, proponents argue that the information-processing capabilities of ERP systems are crucial for organizations that face dynamic market requirements and also that the criticized procedures and constraints actually support process reengineering. These two contradictory arguments are often found in practitioner literature, but both of them can also be supported by management theory. The central tenets of the Organic Theory of organization design imply that ERP systems should be detrimental when market requirements change frequently, whereas the principles of Rigid Flexibility Theory suggest that they should be advantageous. In this study, we use cross-sectional data from 151 manufacturing plants to determine which argument is more applicable in the context of manufacturing planning and control. The results strongly favor the use of ERP systems under dynamic market requirements. To facilitate the reconciliation of the two contradictory arguments, we discuss how the results may have been influenced by two contextual factors: the predominantly technical nature of the studied organizational system and the tight interdependence of the studied activities.     

Balancing provision of relief and recovery with capacity building in humanitarian operations

Several humanitarian organizations today find themselves thinly stretched in multiple protracted relief and recovery operations around the world. At the same time, the need for humanitarian relief and recovery operations is forecasted to increase dramatically in the next decades. Hence, humanitarian organizations will face increased challenges to provide assistance (e.g., assessing needs, moving the displaced, tending the wounded, restoring water and sewage systems) while trying to build and maintain capacity (e.g., hiring and training people, capturing lessons learned, structuring organizational processes). In this paper we develop a formal simulation model that quantifies the tradeoff that exists between providing assistance and building capacity in humanitarian organizations. We explore in our model the performance of two polar resource allocation strategies: one focusing on relief and recovery efforts and another focusing on capacity building. When humanitarian organizations cannot retain the knowledge gained in the field, a strategy that emphasizes relief and recovery is not enduring and leads to a better-before-worse behavior. However, if humanitarian organizations can retain a large fraction of the lessons learned in the field, they can achieve more enduring performance with a relief and recovery strategy. Nevertheless, high stress levels, caused by relief requirements significantly above those which can be made available by the organization, increase personnel turnover and limit the fraction of learning that the organization can retain, imparing a relief and recovery strategy. Our work sheds light on the tradeoff that humanitarian organizations face between providing relief and building capacity in stressful and demanding environments.     

Political Hybrids: Tocquevillean Views on Project Organizations

ABSTRACT For the past decade, project organization has become increasingly central to management and organization studies, particularly as these seek to discern the contours of post‐modern organizations. Yet, these contours frequently seem to be sighted without bearings on the current realities of project management. In this paper we take such bearings, using data derived from detailed qualitative, ethnographic enquiry into the experience of project management. From this data we construct the contours of project management more sharply. Rather than being a harbinger of an autonomous and more democratic future, free from extant bureaucratic organization controls, we find that project management has distinct modalities of control that we outline in the paper: reputational, calculative, and professional. Indeed, rather than foreshadowing a future transformational form, we find traces of a much older design: that of de Tocqueville.     

Response to haar's comment— and the beat goes on: Corporate downsizing in the twenty‐first century

Corporate downsizing continues to be a major strategy used by organizations to cope with a dynamic and turbulent global marketplace. A fundamental assumption made by executives is that this strategy improves the financial health of the corporation. De Meuse, Vanderheiden, and Bergmann (1994) examined several indices of financial performance over a five‐year period and found that firms employing downsizing experienced a deterioration in financial performance rather than an improvement. Haar (1999) questioned the findings of this study, asserting that if a company's risk level would have been included in the analysis, their results could have been different. In the present investigation, risk was incorporated in the original analysis. Again, the findings strongly indicate that downsizing was not an effective corporate strategy for enhancing the financial performance of corporations. © 1999 John Wiley & Sons, Inc.     

Formation of the information systems strategy: in a global financial services company

Over the past few decades, the potential of information systems (IS) to support organizational activities and help them gain competitive advantage has been widely recognized. At the level of strategy, there is a genre of organizational activities dedicated to realizing this potential. Methods known broadly as strategic information planning have been constructed to support such activities in organizations but these methods have not lived up their promises. Meanwhile, the use of evolutionary approaches in the application of IS in organizations have also received some attention. This paper describes and analyzes a case study of the evolution of the IS strategy within LeaseHold NV, a Dutch global leasing company. The study reveals that no IS planning was used. Instead, concepts of organizational evolution are found to be useful in analyzing the development of the IS strategy at LeaseHold.     

Muddy Waters: The Political Construction of Deliberative River Basin Governance in Brazil

Over the last two decades, numerous international conferences and organizations have espoused managing water as an economic good, involving participatory forums in systems of decentralized management at the river‐basin level. In the 1990s, Brazil adopted such a model. More than a simple transfer of power from the national to the local level or from bureaucratic to deliberative decision‐making, however, this process requires multi‐directional power transfers among a variety of policy arenas and actors and among national, state, municipal and river‐basin institutions, as well as a complex — and ongoing — negotiation over the meanings of both water pricing and participation. Focusing on the politics of reform legislation in the state of São Paulo and nationally, the article examines how political‐institutional features of federalism and executive‐legislative relations constrained the passage of reform legislation, and how pro‐reform actors attempted to surmount such institutional limitations with networking strategies and by fostering incremental changes in practices on the ground.     

DECENTRALIZED PLANNING FOR SUSTAINABLE DEVELOPMENT: The Case of Indonesia*

The government of Indonesia frequently has stressed the need for decentralization to achieve effective regional development, but yet has hesitated to proceed because of fears that such action would undermine national unity and disrupt centrally defined national priorities. Furthermore, the entrenched bureaucratic hierarchy, reinforced by the persistence of patrimonialism, would have to surrender its planning and decision making authority to popularly constituted bodies. This paper examines this dilemma and argues that deconcentration of planning and implementation functions to lower administrative levels does not constitute decentralization. The analysis concludes by suggesting that collaboration between government and non-governmental organizations might be the appropriate means for encouraging popular participation for sustainable development.     

Absorptive Capacity in a Non-Market Environment

Abstract

Improved performance by public sector organizations is a political imperative in numerous countries. There are particular challenges in turnaround of poorly performing organizations. Theoretical explanations of the performance trajectories of public organizations, and especially the causes of failure, highlight the importance of knowledge processes, often from an organizational learning perspective. Absorptive capacity provides an alternative way of theorizing the relationships between organizational performance and knowledge processes, derived from the resource-based view of the firm and the broader concept of dynamic capabilities. The article reviews the conceptual, theoretical, and methodological implications of applying absorptive capacity to the performance of public organizations. It concludes that the approach has value and presents a number of propositions to be tested through empirical study, alongside some more general challenges for researchers who wish to study the concept further. The high political salience of public organizations' performance, and the costs of failure, mandates a major research effort on these issues.     

Differences in leadership behaviour and influence between public and private organizations in Greece

This paper aims at comparing certain managerial aspects which seem to affect and account for the differences in organizational performance between public and private organizations in Greece.

By presenting empirical evidence concerning leadership behaviour and influence in both types of organizations, it becomes apparent that leadership quality is not necessarily the problem in public organizations. A number of leadership substitutes and neutralizers such as bureaucratic controls, external political influence and the limited positive reward power which leaders seem to possess have to be removed in order to enhance the role of leadership in public sector organizations.     

Post‐Formation Processes in Eastern and Western European Joint Ventures*

abstract This study examines the post‐formation processes that firms use to create successful international joint ventures (IJVs). Scholars have suggested that IJV performance is dependent on the post‐formation processes firms institute to overcome barriers to success created by differences in national culture, trust, ownership positions and control mechanisms. Based on a longitudinal study of eight eastern/western European IJVs, our study provides insights into these post‐formation processes, how these processes relate to each other, and how they relate to managers’ evaluations of IJV success.     

Public and Private Management: What’s the Difference?

Critics of New Public Management argue that differences between public and private organizations are so great that business practices should not be transferred to the public sector. In this paper the theoretical arguments on the differences between private firms and public agencies are reviewed, and 13 hypotheses are identified on the impact of publicness on organizational environments, goals, structures and managerial values. Evidence from 34 empirical studies of differences between public agencies and private firms is critically evaluated. Only three of the publicness hypotheses are supported by a majority of the empirical studies: public organizations are more bureaucratic, and public managers are less materialistic and have weaker organizational commitment than their private sector counterparts. However, most of the statistical evidence is derived from studies that use narrow measures of publicness and fail to control for other relevant explanatory variables. Whether the existing evidence understates or overstates the distinctiveness of public agencies is therefore unclear. A research agenda and methods are identified for better comparisons of management in public and private organizations.