Using information‐processing theory to understand planning/performance relationships in the context of strategy

This study reveals the importance of viewing planning processes within the context of strategic orientation. Information‐processing theory is used to examine the differences in planning processes given variable strategy content in the banking industry. Findings suggest that banks implementing different strategies require their planning systems to focus on different kinds and amounts of information. Moreover, the relationship between planning and bank performance is clarified when information requirements of a specific strategy are considered. It appears the strategy moderates the relationship between planning and performance. Copyright © 1999 John Wiley & Sons, Ltd.     

Internet companies' growth strategies: determinants of investment intensity and long‐term performance

To exploit first‐mover advantages, pioneers may be motivated to amass customers before rivals enter the market. Likewise, when they enjoy increasing returns due to network effects, static scale economies, or learning effects, companies have incentives to invest aggressively in growth. This paper presents econometric analysis of factors that determined the intensity of Internet companies' investments in growth, and analyzes the long‐term performance consequences of such investments. Results indicate that first movers spent significantly more on upfront marketing than non‐pioneers. Contrary to expectations, however, firms in markets that exhibited increasing returns did not spend more on their early customer acquisition efforts than other sample companies. Although the typical sample company did not earn positive long‐term returns, heavy early investments in growth were nevertheless economically rational. In most cases, reducing marketing outlays would have worsened a bad outcome, consistent with an inverted ‘U’ relationship between long‐term returns and upfront marketing spending. Thus, the typical sample company invested in marketing, ex ante, at levels close to those that would have maximized returns, observed ex post. Copyright © 2006 John Wiley & Sons, Ltd.     

When is more better? The impact of business scale and scope on long‐term business survival,while controlling for profitability

Empirical research shows that larger businesses tend to survive longer than smaller companies. Little research, though, shows whether size confers survival advantages in addition to the survival benefits of baseline profitability. Moreover, no prior research attempts to disentangle the benefits of organizational capital that accrue from greater scale from those that arise from greater business scope. Thus, we lack a conceptual understanding of the underlying benefits of business size for long‐term survival. We expect business scale and business scope to reflect organizational capital that offers survival benefits, where we conceptualize scale in terms of annual sales revenue and scope in terms of product line breadth and sub‐sector participation within a related business context. We first argue that greater business scale and business scope each enhance long‐term survival, independent of baseline profitability, owing to greater availability of financial resources, organizational routines, and external ties. We then argue that the benefits of scale are greatest for multi‐product businesses, stemming from positive interactive effects of breadth and depth. We find support for these hypotheses with data from 618 firms that operated in the U.S. medical sector between 1978 and 1995. Copyright © 2007 John Wiley & Sons, Ltd.     

The impact of work‐life programs on firm productivity

This research examined the adoption of work‐life programs and the impact of work‐life programs on firm productivity. Human resource executives in a national sample of 658 organizations provided survey data on firm characteristics and work‐life programs. In these 658 organizations, the percentage of professionals and the percentage of women employed were positively related to the development of more extensive work‐life programs. Productivity data were obtained from CD Disclosure for 195 public, for‐profit firms. Significant interaction effects indicated that in these 195 firms work‐life programs had a stronger positive impact on productivity when women comprised a larger percentage of the workforce and when a higher percentage of professionals were employed. Copyright © 2000 John Wiley & Sons, Ltd.     

Cross‐border acquisitions and the asymmetric effect of power distance value difference on long‐term post‐acquisition performance

Research summary : Inconclusive findings about the effect of national cultural differences on post‐acquisition performance may be created by the failure to distinguish among the different cultural dimensions and the asymmetry of cultural differences. To demonstrate a different approach, this study focuses on one dimension of national cultural values—power distance value (PDV) and develops a framework for the asymmetric effect of PDV differences in creating two types of conflicts. The analysis of 2,115 cross‐border acquisitions in the global information technology industry shows that PDV differences undermine the long‐term post‐acquisition performance of acquirers. This effect is stronger when acquirers are higher than targets in PDV than when the opposite is the case. This asymmetric effect of PDV difference depends on national status difference, business relatedness, and acquisition experience. Managerial summary: National cultural differences can create “cultural clashes” to undermine the value creation by cross‐border acquisitions. During integration, individuals react to the acquirer–target hierarchy according to their respective power distance value (PDV): the extent to which they value equality (low PDV) or hierarchy (high PDV). PDV divergence results in two types of conflicts, depending on whether acquirers are higher or lower than targets in PDV. The two types of conflicts vary in the magnitude of their harmful effect on post‐acquisition performance. Both types of conflicts are more detrimental when acquirers are higher than targets in country status and when individuals need to interact more intensely. Acquisition experience can both help and harm post‐acquisition performance. These findings offer important implications for managing cross‐border acquisitions. Copyright © 2016 John Wiley & Sons, Ltd.     

The impact of strategic dissent on organizational outcomes: A meta‐analytic integration

Research summary: Strategic dissent represents divergence in ideas, preferences, and beliefs related to ideal and/or future strategic emphasis. Conventional wisdom in strategic management holds that such differences in managerial cognitions lead to higher‐quality strategic decisions, and thus to enhanced firm performance. However, 4 decades of empirical research have not provided consistent findings or clear insights into the effects of strategic dissent. Hence, we analyze the relative validity of predictions about these effects from both social psychological theories of group behavior and information processing perspectives on decision‐making. Then, we conduct a meta‐analytic path analysis (MASEM) based on current empirical evidence. Synthesizing data from 78 articles, we put to rest the notion that strategic dissent leads to positive outcomes for organizations and estimate how negative its effects actually are. Managerial summary: Top management teams (TMTs) set the tone and direction for their firms in important ways. Top managers, however, often disagree over fundamental issues related to strategy. Such strategic dissent affects how important decisions are made, and thus how the firm performs. In more specific terms and contrary to popular belief, strategic dissent creates not only dysfunctional relationships among top managers, but also disrupts the process by which these managers exchange, discuss, and integrate information and ideas in making strategic decisions. In short, firms have not yet generated value through numerous perspectives, ideas, and opinions among their top managers. We discuss interventions that could prove helpful in efforts to benefit from having diverse cognitions in a TMT.