Research or practice: the debate goes on

Summary If research is superior to practice the difference does not appear to be in the process that is used. Inquiry and problem-solving are, in fact, based on the same process, decision-making. Both involved the use of an analysis-synthesis-evaluation sequence, both may involve deduction, but they also have the same inductive flaws, and both produce results that are of great benefit to mankind. Thus, if there is a difference, it must have something to do with the skills the individual brings to the process.Competent decision makers analyze and define the situation that exists, distinguish problems from symptoms and identify the problems that should be considered. They think creatively as they generate options using brainstorming, synectics, and lateral thinking. They use logic to test the ideas involved in each step of the process, make assumptions, test inferences, interpret statements, and evaluate arguments. They demand evidence for claims that are made and think critically as they weigh, reconcile, and assess arguments using dialogue, discussion, and debate. And they apply appropriate values and ethics before they make decisions. These are the skills that should be taught in schools for if there is any superiority, it is not intrinsic to the process, it is within the decision maker.This paper was first presented at a conference of the American Society of Mechanical Engineers     

On the flexibility of flexible functional forms: An empirical approach

This paper analyzes empirically the ability of the Translog and Generalized Leontief functional forms to approximate Constant Elasticity of Substitution utility functions. Although these flexible forms provide a good local approximation they do not always provide a good approximation over a range of observations. Hence the finding in practice of observations for which the regularity conditions required by economic theory are not satisfied need not imply the absence of an underlying utility-maximizing process, but may simply reflect the inability of the flexible form to approximate the true utility function over the range of the data.     

Assessing a Measurement of Organizational Preparedness for Corporate Entrepreneurship

Research has shown that the manifestation of corporate entrepreneurship is an important strategy for the success of private‐ and public‐sector organizations. The Corporate Entrepreneurship Assessment Instrument (CEAI) is an instrument that was developed to measure the key internal organizational factors that influence a firm's entrepreneurial activities and outcomes. The present research employs three studies to assess the content, construct, and convergent validity of the CEAI using a well‐established framework for scale development and refinement. The CEAI was found to be a relatively stable instrument, although the factor structure that emerged varied slightly from the original instrument. In sum, as a result of our analyses, a more parsimonious and psychometrically sound set of items for each factor was derived yielding an 18‐item instrument based upon the original 48‐item measure. Our studies of the CEAI present a timely contribution toward advancing research in the area of organizational preparedness for corporate entrepreneurship.     

Too much of a good thing? Absorptive capacity,firm performance,and the moderating role of entrepreneurial orientation

Absorptive capacity (ACAP) refers to a firm's ability to acquire, assimilate, transform, and exploit new knowledge. Research has yet to acknowledge the possibility of limits to the financial returns of this important strategic construct. This study suggests an inverted‐U shaped relationship between ACAP and financial performance. Based on data from 285 technology‐based small and medium enterprises, we observe gains within three prospective, secondary measures of growth to diminish beyond lower levels of ACAP, even turning negative and becoming harmful beyond intermediate levels. We find that entrepreneurial orientation (EO) moderates the ACAP‐performance relationship, enhancing financial gains at lower levels of ACAP and mitigating the decline in financial performance at higher levels of ACAP. Further, with higher EO, higher ACAP can be achieved before financial returns diminish.Copyright © 2012 John Wiley & Sons, Ltd.     

Expect the unexpected: examining the shaping role of entrepreneurial orientation on causal and effectual decision-making logic during economic crisis

ABSTRACT

While many firms operate in dynamic environments, the competitive conditions faced by firms during an economic crisis are especially unstable and turbulent. We examine firm strategic decision-making in this distinctive context and investigate the question of whether causal and effectual logic provide similar paths to performance during such challenging economic times. Further, we examine the potential impact that a firm’s level of entrepreneurial orientation (EO) has upon the relationship between managers’ predominant decision-making logic and their firm’s overall performance in this crisis. To test these relationships, we employ a robust national random sample of 447 Russian small and medium-sized enterprises (SMEs) collected from 2015 to 2016 during a period of economic crisis. Our results indicate that EO plays an important moderating role, shaping the nature of the relationships between managers’ decision-making logic and financial performance. Moreover, additional analysis identifies the presence of a non-linear relationship between both logics and the performance of SMEs.     

In Pursuit of Greatness: CEO Narcissism,Entrepreneurial Orientation,and Firm Performance Variance

Building upon the perspective that narcissism is a leadership trait with both ‘bright’ and ‘dark’ sides, the present study examines the question of whether companies led by narcissistic CEOs exhibit higher levels of entrepreneurial orientation (EO). Moreover, this research examines whether EO partially explains why narcissistic CEO‐led firms experience greater variability in firm performance. Using survey data collected from 173 CEOs, and an archival measure of firm performance variance, we find support for our model. These findings offer an improved understanding of how CEO narcissism influences performance variance, and why the firms they lead may even, at times, be viewed as on a path to success. Study implications are discussed.     

What is the relationship between investor protection legislation and target takeover returns? Evidence from Europe

We show that investor protection legislation is an important determinant of the returns of target companies that are subject to takeovers within Europe. Announcement and post-announcement returns are higher in strong investor protection countries, which indicates that bidders are forced to offer larger premiums when the original offer is made, and are more likely to have to revise their offer higher before a takeover is successful. This is consistent with targets having relatively greater bargaining power in strong investor protection environments. Our findings are robust to the inclusion of common determinants of takeover returns.     

Labour supply and commuting time: An empirical study

We estimate a simple labour supply model that incorporates commuting time in a utility maximizing framework. Housing prices are assumed to vary with commuting time, and the elasticity of housing prices with respect to the latter is estimated to be about 10 percent. Using this elasticity estimate the price of commuting time averaged over all individuals is $3.22 while the wage rate is $4.72; thus commuting time is implicitly valued at about two-thirds of the wage rate on average. As far as work hours are concerned, almost all individuals are on the backward bending part of their labour supply curve.