Co‐evolution in Strategic Renewal Behaviour of British,Dutch and French Financial Incumbents: Interaction of Environmental Selection,Institutional Effects and Managerial Intentionality*

abstract How do incumbent firms and environments co‐evolve and how are firm‐level adaptation and selection at industry level interrelated? Can and do large established organizations renew themselves to adapt to their environment? Three single‐lens theories, relating to environmental selection, institutional theory, managerial intentionality, and a co‐evolutionary perspective are used to investigate strategic renewal of incumbent firms. We derive propositions and distinguish between three dimensions of strategic renewal and develop metrics to investigate our propositions in a multi‐level, multi‐country, longitudinal study of the European financial services industry. Our results provide the following insights. From an environmental selection perspective, we found incumbents have a preference for exploitation renewal actions. Country institutional environments appear to explain to what extent incumbents prefer internal and/or external renewal actions. Managerial intentionality seems to explain outlier behaviour and firm‐specific frequency and timing of renewal actions. From a co‐evolutionary perspective, interaction effects explain deviations from predictions derived from the single‐lens theories applied in this paper.     

数字经济时代下企业组织惯性的重构路径研究

组织惯性研究中"选择决定论"与"组织适应论"的视角冲突,割裂了企业对组织惯性的认知,难以形成相匹配的应对模式。文章从资源基础理论视角切入设计案例研究,研究发现企业组织惯性的重构路径会经历三个主要阶段:(1)组织外围结构先行演化,不断试错,形成可被纳入核心结构的能力;(2)基于形成的能力进行资源动员,丰富可能的资源和能力组合方案;(3)通过解构与重组惯性的方式构建动态调节机制。研究结论有助于丰富组织惯性和资源基础的研究文献,弥合了组织惯性研究的视角冲突,在组织变革中引入了管理者的资源管理能力;同时可为企业无法准确识别环境变化时提供一个处理组织惯性的可行指导方案,促使企业组织的成长演化过程向进化转变。     

ENTRE-U: An entrepreneurial orientation scale for universities

The development of a new scale, ENTRE-U, that measures the entrepreneurial orientation of university departments is described. Governments, industry, and funding organizations challenge universities to become more "entrepreneurial", often in the context of increasing the commercialization outcomes of publicly funded research. The extant literature on corporate entrepreneurial orientation (EO) suggests this orientation is beneficial when organizations face dynamic or hostile environments. However, the EO concept and related empirical research focus on firms in competitive markets. Little is known about the nature of EO in other organizational contexts. ENTRE-U was developed to facilitate empirical research on EO within public universities. Interviews and a follow-up focus group with faculty members from departments in computer science, health science, and engineering at Canadian Universities elicited items for the new scale. A survey of university department heads provided data for statistical development of the scale. ENTRE-U consists of four dimensions – research mobilization, unconventionality, industry collaboration, and perception of university policies – that successfully predict department involvement in commercialization activities. Implications of the findings and opportunities for research using the ENTRE-U scale are discussed.     

Automatic‐renewal contracts with heterogeneous consumer inertia

Automatic contract renewals are a common feature in consumer markets. Since these contracts renew automatically unless a consumer actively cancels, firms can use them to exploit consumer inertia. As a source of inertia I study limited attention and investigate how firms use contract renewal to sell to consumers with different degrees of inattention. In monopolistic markets, adverse selection of more‐attentive consumers limits the exploitation of naively inattentive consumers. When signing a contract, naively inattentive consumers overestimate their future probability to make an active cancellation decision. To exploit this mistake, the monopolist wants to target these consumers with large prices after contracts renew. These back‐loaded contracts, however, adversely attract more‐attentive consumers who cancel more often when choosing these exploitative contracts. To mitigate adverse selection, monopolists focus less on exploiting naively inattentive consumers. Adverse selection induces fewer consumer mistakes and can increase efficiency. I show that competition mitigates adverse selection, which induces firms to focus more on exploitation with more back‐loaded pricing. I discuss implications for recently implemented policies on automatic‐renewal contracts.     

To change or not to change–antecedents and outcomes of strategic renewal in SMEs

Companies need to constantly renew themselves to remain competitive in rapidly changing market environments, regardless of their size or age. Even though strategic renewal is a crucial factor for sustainable success of organizations, it is only an emergent area in literature. This article examines potential antecedents of strategic renewal and impact on firm performance. Based on 104 companies’ responses to a structured questionnaire, the empirical findings demonstrate that strategic renewal positively impacts firm performance, and that entrepreneurial orientation and organizational learning are antecedents. From a practical managerial viewpoint, our results suggest that firms following a strategic renewal approach can increase the long-term success of their organizations: Firms that are entrepreneurially oriented and willing to learn can successfully manage strategic renewal.     

Failure to Mobilize in Reliability‐Seeking Organizations: Two Cases from the UK Railway*

abstract There is a considerable line of research on organizations dealing with large scale, intrinsic hazards. We know a good deal, as a result, about both the causation of catastrophic failure and its avoidance. Past work has explained failure in terms of (for example) structural vulnerabilities and organizational degradation – and reliability in terms of collective mindfulness, rigorous enculturation and high levels of social redundancy. This paper presents a study, based on a qualitative analysis of two disastrous collisions on the UK railway, of organizations that are strongly reliability seeking yet ultimately experience catastrophic failure. It argues that these cases implicated an organizational incapacity to mobilize systemic reform. The possibility of the two failures had been well‐known in the organizations before their occurrence, but this knowledge could not be converted into modification. A model is presented to explain how processes of systemic reform co‐exist with a set of phenomena that tend to undermine them. It is these that need to be the principal focus of efforts at managing catastrophic failure risks.     

Resources,Knowledge and Influence: The Organizational Effects of Interorganizational Collaboration*

ABSTRACT Inter‐organizational collaboration has been linked to a range of important outcomes for collaborating organizations. The strategy literature emphasizes the way in which collaboration between organizations results in the sharing of critical resources and facilitates knowledge transfer. The learning literature argues that collaboration not only transfers existing knowledge among organizations, but also facilitates the creation of new knowledge and produce synergistic solutions. Finally, research on networks and interorganizational politics suggests that collaboration can help organizations achieve a more central and influential position in relation to other organizations. While these effects have been identified and discussed at some length, little attention has been paid to the relationship between them and the nature of the collaborations that produce them. In this paper, we present the results of a qualitative study that examines the relationship between the effects of interorganizational collaboration and the nature of the collaborations that produce them. Based on our study of the collaborative activities of a small, nongovernmental organization (NGO) in Palestine over a four‐year period, we argue that two dimensions of collaboration – embeddedness and involvement – determine the potential of a collaboration to produce one or more of these effects.     

Mechanisms for sharing knowledge in project-based organizations

Organizations need to effectively combine and utilize knowledge resources that are distributed amongst the employees and groups in the firm. This paper examines the use of knowledge-sharing mechanisms to leverage the learning, experience and expertise of employees accumulated across projects. I specify a framework that classifies the knowledge-sharing mechanisms used by project-based organizations. Prior research tends to examine only one dimension of knowledge-sharing mechanisms – personalization versus codification. Personalization mechanisms are often assumed to be more ad hoc and informal, and codification mechanisms are assumed to be formal and involve the use of electronic databases. In this paper, personalization versus codification and individualization versus institutionalization are highlighted as two distinct dimensions of knowledge-sharing mechanisms. Individualized knowledge-sharing mechanisms are informal and unstructured, while institutionalized knowledge-sharing mechanisms are formal and embedded in organizational routines and structure. A framework is presented to show how the two dimensions interact. Based on empirical case studies in two project-based organizations, the paper examines if there are suitable configurations of knowledge-sharing mechanisms for organizations with different characteristics. The study contributes to research by providing a more nuanced classification of knowledge-sharing mechanisms, and provides guidance to managers about the types of knowledge-sharing mechanisms that should be adopted based on the size, geographical dispersion and task nature of organizations.     

Sources of Fidelity in Purposive Organizational Change: Lessons from a Re-engineering Case

ABSTRACT The debate between adaptation and inertia hinges on whether theorists believe that organizations can effect purposive organizational change in which the realized structures match the planned structures. To date, research on organizational change has yielded few insights into the conditions under which such change occurs. This longitudinal case study of a re‐engineering programme at a medium‐sized bank examined the conditions under which elements of the planned structure were faithfully implemented. Elaborating a model of change fidelity, this paper argues that the features of the design elements themselves, attributes of the change process, and general contextual factors affect the likelihood that planned changes will occur.     

Herbert A. Simon on What Ails Business Schools: More than ‘A Problem in Organizational Design’

We critically examine Herbert Simon's 1967 essay, ‘The business school: a problem in organizational design’. We consider this essay within the context of Simon's key ideas about organizations, particularly those closely associated with the ‘Carnegie perspective’ on organizations and how they influenced the reinvention of American business schools in the post‐Second World War era, and were deeply influenced by the post‐War context and also were appropriated by the Ford and Carnegie Foundations to reform business school teaching and research. We argue that management educators misappropriated Simon's concept of an intellectually robust and relevant research and educational agenda for business schools that has in part contributed to the intellectual stasis that now characterizes business education research and its capacity to inform management practice.     

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.     

Really changing the course: the limitations of environmental management systems for innovation

The paper broadens the scope of environmental management system (EMS) research by describing how EMSs can contribute to inertia in present production systems. In conjunction with other factors this inertia can inhibit dramatic shifts toward more sustainable technologies and systems. Our approach builds upon technological lock‐in theory, which focuses on market coordination and technological interdependencies as generators of inertia in technological systems. Building on this framework, we call attention to previously under appreciated non‐market social forces and institutional structures that can further reinforce lock‐in. We argue that the co‐evolutionary mechanisms that generate increasing returns for physical technologies may also be applied to social technologies, such as management systems. The paper describes the emergence of ‘EMS lock‐in’ as a path dependent evolution occurring within the context of the larger quality management paradigm. While EMS may initially produce improvements in environmental performance, EMS may also constrain organizational focus to the exploitation of present production systems, rather than exploring for superior innovations that are discontinuous. The paper questions the enthusiastic private and public sector support for EMS implementation and instead recommends an ambidextrous management approach that integrates foresight and broader stakeholder collaboration. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

The forgotten employees? The experiences of expatriate staff returning to the UK

This article reports on the experiences of a group of expatriate UK managers and professionals who have recently returned to the UK from foreign assignments. A brief review of the literature in this field is presented and the findings of a questionnaire survey of 124 ‘returnees’. The data show that many expatriates face difficulties upon their return in terms of their career prospects, psychological well-being and general adaptation to life back home. The paper goes on to suggest ways in which these transitions can be managed more effectively by organizations and individual employees. It concludes by proposing directions for future research.     

Iterative Project Processes Within Temporary Multi‐Organizations in Construction: The Self‐, Eco‐, Re‐Organizing Projects

Theory‐based studies claim that informal processes interfere with the formal mechanisms and structures of projects in the construction sector. These processes structure and transform multi‐organizations. This four‐year case study reveals empirical evidence about how processes effectively evolve over time and affect formal mechanisms and structures. The results show: (1) the significant differences between what is planned and what actually unfolds in project processes; (2) how iterative processes overshadow linear ones; (3) how informality and “iterativity” eventually end up as self‐, eco‐, and re‐organizing projects and organizations, confirming that projects (re)create the very processes and structures that initiate them.     

INEQUALITY AND HAPPINESS

In recent years there has been an accumulation of empirical evidence suggesting that individuals dislike inequality. The literature has built upon estimating the degree of this dislike as well as its causes. The use of self‐reported measures of satisfaction or well‐being as a proxy for utility has been one of the empirical strategies used to this end. In this survey, we review the papers that estimate or examine the relationship between inequality and self‐reported happiness to conclude that inequality correlates negatively with happiness in Western societies. Some of the surveyed papers identify particular sources of heterogeneity on preferences over inequality. The evidence for non‐Western societies is more mixed and less reliable. Notwithstanding that, trust in the institutions seems to play an important role in shaping the relationship between income inequality and subjective well‐being. We conclude with suggestions for further research.     

Promoting organizational learning and self‐renewal in Taiwanese companies: The role of HRM

This study identifies key characteristics of human resource management (HRM) practices that contribute to promoting positive learning attitudes and creating a self‐renewal organizational climate. We use a behavioral perspective to develop a framework to show the relationships among learning‐oriented HRM, positive learning attitudes, and a self‐renewal organizational climate. Structural equation analysis is applied to empirically test the relationships and the path model suggests that a learning‐oriented HRM plays an important role in either directly creating a self‐renewal organizational climate or indirectly facilitating positive learning attitudes that foster organizational self‐renewal. © 2004 Wiley Periodicals, Inc.     

A Capabilities Perspective on the Evolution of Firm Boundaries: A Comparative Case Example from the Portuguese Moulds Industry*

ABSTRACT The issue of vertical firm boundaries continues to attract interest both for economics and management research. The transaction cost economics approach, emphasizing transaction‐specific assets and opportunism in order to explain discrete ‘make‐or‐buy’ decisions, dominates the literature. Nevertheless, alternative perspectives, developed under the guise of the capabilities, competence or knowledge‐based theories of the firm, have gained attention recently. They focus on the evolutionary dynamics of boundaries in the context of the division of labour among firms in an industry and on what is to be divided and co‐ordinated – i.e. productive knowledge. The conceptual links between this line of research, which some refer to as neo‐Marshallian, and the Industrial Networks approach are explored in this paper. The paper emphasizes both a vision of firms as sets of direct and indirect capabilities, developed and combined in different ways over time, and the connectedness between inter‐firm relationships. The discussion is illustrated with the cases of two firms, which are contrasted in terms of the dynamic evolution of their boundaries. The analysis made supports the argument that firms’ vertical boundaries reflect their relationships with specific counterparts and the way they address through time the division and integration of knowledge through the configuration of direct and indirect, counterpart specific, capabilities.     

The Peripheral Halo Effect: Do Academic Spinoffs Influence Universities' Research Income?

Extant literature has drawn attention to the ‘halo effect’ of the good reputation of a core organizational activity on the outcome of a peripheral activity. We contribute to the literature on organizational reputation by illustrating a halo effect in the opposite direction – from the periphery to the core. We show that developing a reputation for a peripheral activity (in our context, universities' social impact via spinoffs) may have positive spillovers for core organizational activities (in our context, university research), a phenomenon we term the ‘peripheral halo effect'. We also show that this effect is more prominent for high‐status than for low‐status organizations. Our research also contributes to the academic‐entrepreneurship literature by revealing that spinoff portfolios can generate income for universities not only directly via equity positions but also indirectly via reputational benefits.     

The Theory of Knowledge Spillover Entrepreneurship*

abstract The prevailing theories of entrepreneurship have typically revolved around the ability of individuals to recognize opportunities and then to act on them by starting a new venture. This has generated a literature asking why entrepreneurial behaviour varies across individuals with different characteristics while implicitly holding constant the external context in which the individual finds herself. Thus, where the opportunities come from, or the source of entrepreneurial opportunities, is also implicitly taken as given. By contrast, in this paper an important source of entrepreneurial opportunities is identified – knowledge and ideas created in an incumbent organization. By commercializing knowledge that otherwise would remain uncommercialized through the start‐up of a new venture, entrepreneurship serves as a conduit of knowledge spillovers. According to the theory of knowledge spillover entrepreneurship, a context with more knowledge will generate more entrepreneurial opportunities. By contrast, a context with less knowledge will generate fewer entrepreneurial opportunities. Based on a data set linking entrepreneurship to the knowledge context, empirical evidence is provided that is consistent with the proposition that entrepreneurial opportunities are not exogenous but rather systematically created by investments in knowledge by incumbent organizations.     

Innovation and corporate sustainability: An investigation into the process of change in the pharmaceuticals industry

Although there has been considerable research effort directed at refining the content of corporate environmental performance, e.g. corporate environmental reporting and accounting, there has been relatively little empirical investigation to date on the process of corporate eco‐change. This research reports on the quantitative and qualitative results of a survey of German and UK pharmaceuticals firms, which evaluated the significance of the various incentives, both intra‐firm and external to the organization, that have stimulated eco‐change. We find that, although the industry is one that has been characterized by voluntary agreements and proactive behaviour in the past, regulation still remains the main driver for sustainability improvements. New technology is the second most important driver. Stakeholder dialogue and inter‐firm cooperation were both revealed to be relatively weak forces for eco‐change. The study also tested the validity of the conventional neo‐classical economic world‐view of innovation in firms versus a more radical co‐evolutionary one. The former assumes that firms respond only to profit signals and do so efficiently, whereas the latter assumes that change is path dependent; i.e., the firms’ norms and routines and past experiences are influential. We find that, although the neo‐classical perspective stands up to our empirical investigation of eco‐innovation to some degree, the co‐evolutionary approach better captures the complexity of the corporate eco‐change process. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment