Building capabilities to manage strategic alliances

Recently, academics have attributed a large part of alliance success to a firm's ability to successfully manage its alliances, also called its level of alliance management capability. We contribute to this growing body of literature by (1) verifying the impact of alliance management capability on alliance performance and (2) analyzing the drivers of alliance management capability. We measure this capability through four types of alliance learning processes and study how each of these processes affects alliance outcome. Furthermore, we take into account several possible drivers of alliance management capability such as organizational culture, commitment of the top team, alliance experience and the alliance function. We refine the results by examining how these factors affect each of the four learning processes underpinning alliance management capability. Our research model will be tested on a sample of 189 Belgian companies using PLS. We find that the commitment of the top management team is the most critical factor in explaining success with alliances.     

Competing in the new economy: the effect of intellectual capital on corporate entrepreneurship in high-technology new ventures

Intellectual capital (IC) offers a potential source of sustainable competitive advantage and is believed to be the font from which technological development and economic growth may spring. This study proposes a three-dimensional framework for describing and measuring a firm's IC that includes human capital, intellectual property, and reputational capital. Drawing upon the resource-based view of the firm, it is argued that in high-technology new ventures (HTNVs) IC assets offer a unique source of advantage that facilitates entrepreneurship by reducing the risk and increasing the returns from investments in innovation and venturing. This paper reports the results of an empirical study of 237 HTNVs in the US that issued an initial public offering between 1994 and 1998. It is found that these firms' top management team human capital diversity and organizational reputation are of greatest significance for their entrepreneurial performance. Interestingly, these factors far outweigh the insignificant effect observed for intellectual property on subsequent innovation and venturing activities. The implications for theory and practice are discussed.     

The microfoundations of open innovation: CEO overconfidence and innovation choices

How to successfully drive open innovation (OI) has been an important issue. However, the existing literature on the determinants of OI mainly focuses on organizational and contingent factors, and the “human side” of it is still not well understood, which also motivates us to explore it more deeply. This paper attempts to link upper echelon theory with OI research using data from a large sample of Chinese listed companies to investigate how the overconfident tendency of the CEO affects his or her preference for different OI modes. At the same time, what role do other top management team (TMT) members play in this process. The results show that overconfident CEOs favor market and organization-oriented OI over technology-oriented OI, and TMT governance can moderate such relationship, that is, as the level of TMT governance increases, the preference of overconfident CEOs for market and organization-oriented OI will be weakened, avoiding the negative effect of excessive adoption of such activities on firm performance. By focusing on the human side of OI, this paper adds to the literature on the impact of strategic leadership, namely the influence of key individual CEO and other executives within the organization on OI management, which is also a response to the emphasis that more attention should be paid to the microfoundations of OI in the future.     

What Makes a Family Firm Innovative? CEO Risk‐Taking Propensity and the Organizational Context of Family Firms

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk‐oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation‐related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium‐sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk‐taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium‐sized family firms operating in manufacturing industries, the results show that CEO risk‐taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk‐taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk‐taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk‐taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm‐specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.     

Resource orchestration in practice: CEO emphasis on SHRM,commitment‐based HR systems,and firm performance

In order to be effective, managers at all levels of the firm must engage in resource management activities, and these efforts are synchronized and orchestrated by top management. Using a specific type of strategic resource, commitment‐based human resource systems, we examine the effect of CEO resource orchestration in a multi‐industry sample of 190 Korean firms. Our results demonstrate that CEO emphasis on strategic HRM is a significant antecedent to commitment‐based HR systems. Furthermore, our results also suggest that CEO emphasis on strategic HRM has its primary effects on firm performance through commitment‐based HR systems. This finding underscores the importance of middle managers in operationalizing top management's strategic emphasis, lending empirical support to a fundamental tenet of resource orchestration arguments. Copyright © 2013 John Wiley & Sons, Ltd.     

Domain‐Relevant Commitment and Individual Technical Innovation Performance

Individual innovators play a critical organizational role in that they generate and often champion technology and product ideas. Amidst an ongoing stream of organizational and team innovation research, few empirical studies focus on differences in individual innovation performance despite the importance of the individual innovator to a firm's innovation efforts. Based on goal commitment theory, we introduce a new domain‐relevant commitment construct and develop a conceptualization of conditional indirect effects. Our model suggests that relevant individual abilities enhance commitment to technical innovation and innovation performance while also insulating against the impact of situational variables, making employees' commitment to innovation performance less dependent upon context. Hypotheses are tested using two sources of data and a sample of 339 R&D professionals from a Fortune 100 industrial firm. Results suggest that commitment to innovation is a key motivational factor in explaining individual technical innovation performance. Situational characteristics impact motivation differently for individuals with lower vs. higher ability levels, even in this context in which truly low‐ability individuals, in the absolute sense, have been screened out by the employment selection process. The relationship between commitment and innovation performance is strengthened by higher levels of individual ability.     

Top management team functional diversity and organizational innovation in China: The moderating effects of environment

While conflicts (cognitive and affective) have been considered as important process variables to better understand the mixed findings on the relationship between top management team functional diversity and organizational innovation, such an input‐process‐outcome model is still incomplete without considering the environmental factors. This study was formulated to assess the importance of both competitive and institutional environments in moderating such upper echelon effects within a transition economy. The chief executive officers and chief technology officers of 122 Chinese firms were surveyed and both competitive uncertainty and institutional support were found to shape top management team decision making processes and their outcomes. Copyright © 2012 John Wiley & Sons, Ltd.     

高层管理团队认知研究综述

自1984年Hambrick和Mason提出高层梯队理论以来,学术界掀起了对高层管理团队研究的热潮,近来对高层管理团队认知成为学者们研究的热点并取得了大量的研究成果。通过对这些成果进行综述,探讨认知派别、共享心智模型、社会认知等认知理论对企业战略决策进而对组织绩效的影响,分析已有研究中存在的局限并提出从人力资本的视角,将高层管理团队的认知特征与人力资本的产权与积累状况联系起来,明确高层管理团队认知特征与战略决策之间的作用机制。     

The effect of upper echelons’ compensation on firm internationalization

This paper is built upon previous work concerning how three factors—an upper echelon’s compensation, the total compensation level of a chief executive officer (CEO), and compensation gaps between a CEO and a top management team (TMT)—affect a firm’s international expansion level. Using longitudinal data (2000–2005) from 528 publicly listed firms in Taiwan as our sample, we found that CEO total compensation level and TMT total compensation were positively related to firms’ international expansion level, and that the larger the compensation gap between CEO and TMT, the higher the given firm’s international expansion level. The implications that these findings have for future research are discussed.     

Top management team compensation: the missing link between CEO pay and firm performance?

In this research we discuss the relationship between CEO and top management team (TMT) member compensation, and explore the implications of TMT pay for firm performance. Specifically, we suggest that firm performance may benefit due to agency and group behavioral issues when top management team member pay is aligned—alignment is defined as the degree to which TMT member pay reflects (1) shareholder interests and (2) key political and strategic contingencies within the firm. In support of our theorizing, we found CEO pay to be related to TMT pay; TMT compensation, in turn, predicted performance (i.e., return on assets and Tobin's q) when aligned with shareholder interests and internal contingencies. Moreover, the effect of CEO pay on future firm performance was dependent on top team pay. Copyright © 2002 John Wiley & Sons, Ltd.     

A multilevel analysis of the role of interactional justice in promoting knowledge-sharing behavior: The mediated role of organizational commitment

Knowledge sharing behavior has received increased attention in the context of business due to its important role in enhancing organizational competitive advantage. This study aimed to identify possible predictors of knowledge sharing behavior and its underlying mechanisms from a multilevel perspective. The results showed that interactional justice positively related to knowledge sharing behavior both at the individual and the team levels. And organizational commitment took a mediated role between them. This study is the first to highlight the role of organizational commitment and interactional justice in knowledge sharing behavior, enriching current understanding of organizational knowledge management and providing further suggestions as how managers can improve knowledge sharing behavior in their organizations.     

How does the second-order learning process moderate the relationship between innovation inputs and outputs of large Korean firms?

We investigate how the second-order learning process moderates the relationship between innovation performance and two types of knowledge seeking behavior, namely exploration and exploitation. We reinvestigate the second-order learning process of the top 100 Korean firms from 1997 to 2007 by capturing CEO turnover, board turnover, and R&D alliances. We argue that the current findings about exploration and exploitation should be reclassified in terms of innovation input and output. We suggest that researchers investigate the organizational learning process to understand the link between innovation inputs and outputs. Our empirical results show that while innovation inputs are not related to exploratory outputs, the second-order learning process reshapes the relationship between both exploration/exploitation type innovation inputs and exploratory innovation outputs, and that the new focus of organizational learning process can refine current innovation literature.     

Managing innovative R&D teams

Successful R&D groups not only generate innovative ideas, but also transfers these newly created concepts through the organizational system for economic gain. While innovation is not a random process, managers often argue that R&D performance is hard to measure and even more difficult to manage. An exploratory field study into technology-oriented R&D environments determines the principle factors that influence innovation-based performance of R&D teams. The results identify specific barriers and drivers to innovative team performance and provide insight into the type of an organizational environment and managerial leadership that is conducive to innovative R&D team performance. The data further suggest that many of the performance variables have their locus outside the R&D organization. Yet, managerial leadership style, both at the R&D team level and at senior management, has significant impact on creativity that ultimately affects R&D performance.     

The presence of a separate COO/president and its impact on strategic change and CEO dismissal

This study focuses on the leadership structure at the very top of a firm. Specifically, it examines how the presence of a COO/president, who is separate from the CEO, affects strategic change and CEO dismissal. With longitudinal data on the tenures of 207 CEOs, results suggest that the presence of a separate COO/president increases the magnitude of strategic change under conditions of low firm performance but it decreases the magnitude of strategic change under conditions of high firm performance. In addition, the presence of a separate COO/president increases the likelihood of CEO dismissal under conditions of low firm performance, and this effect is stronger when the magnitude of strategic change is high; but it has no impact on the likelihood of CEO dismissal under conditions of high firm performance. These results suggest that the impact of the presence of a separate COO/president on strategic change and CEO dismissal varies across different organizational contexts. Copyright © 2006 John Wiley & Sons, Ltd.     

Dynamic managerial capabilities: Configuration and orchestration of top executives' capabilities and the firm's dominant logic

This paper contributes to the understanding of the executive team dynamic managerial capabilities by developing theory about the interplay between the firm's dominant logic and dynamic managerial capabilities (including managerial human capital, social capital, and cognition). We underscore the criticality of the two key CEO‐level functions: configuration and orchestration of senior executive team dynamic capabilities. We develop theory on how these functions create and sculpt the management team's absorptive capacity, which in turn shapes the team's adaptive capacity. We present theory about the distributed nature of efforts for organizational renewal where CEO's dynamic managerial capabilities in concerto with senior executive managerial capabilities will drive top management's ability to revitalize the firm's dominant logic and to achieve evolutionary fit. Copyright © 2012 John Wiley & Sons, Ltd.     

Corporate elites and corporate strategy: how demographic preferences and structural position shape the scope of the firm

This study combines elements of the upper echelons and agency perspectives to resolve some of the ambiguity surrounding how corporate elites affect corporate strategy. We propose and test the notion that while differences in individual characteristics of corporate elites may imply different preferences for particular corporate strategies such as diversification and acquisitions, these basic preferences, when situated in different agency contexts (e.g., CEO, outsider director, non‐CEO top management team member), generate very different strategic outcomes. Our detailed empirical findings, based on extensive longitudinal governance and corporate strategy data from large U.S. corporations, also highlight the pitfalls of using aggregate units of analysis (e.g., board of directors or top management team) when studying the influence of corporate elites on corporate strategy. Copyright © 2004 John Wiley & Sons, Ltd.     

Radical innovation through internal corporate venturing: Degussa's commercialization of nanomaterials

Internal corporate venturing enables radical innovation within established firms in mature markets. Without effectively designed and managed internal corporate ventures, the organizational constraints of established firms will strongly favour incremental innovation over radical innovation. This paper investigates the evolution of a successful internal corporate venture within a large, incumbent chemical firm, now known as Evonik Degussa, to reveal the challenges, organizational design, and management strategies of their commercialization of radical nanomaterials technology. The commercialization of nanomaterials technology is of great interest to incumbent materials and chemical firms and to independent ventures, but the radical, generic, and capital intensive nature of nanomaterials technology requires organizational and managerial innovation. This case study demonstrates a model to enable growth through radical innovation in nanomaterials, while taking advantage of an incumbent firm's capabilities and complementary assets. Organizational strategies include incubation from a risk-adverse culture, relatively long timelines for evaluation, and a high-level steering committee. Managerial strategies focus on product development, risk reduction, and active risk management.     

Organizational relationship termination competence: A conceptualization and an empirical test

Most firms are involved in a number of customer relationships that drain the firm's resources. However, many firms are hesitant to address this problem. This paper investigates customer relationship termination at the organizational level. We develop and analyze the organizational dimensions of organizational termination in order to improve our understanding of the management of termination. The impact of these termination dimensions on the percentage of unwanted customers is developed and tested using PLS on data gathered from a cross-sectional survey of more than 800 sales representatives. We find that a firm's percentage of unwanted customers decreases significantly as acceptance of termination increases, if the firm's definition of unwanted customers is well understood, and if a firm has clear termination routines. In addition, general focus on profitability and external constraints on relationship termination are found to significantly affect a firm's relationship termination competence. The findings suggest that managers should regard termination as a legitimate option in customer relationship management. In order to decrease the number of unwanted customers, managers must accept termination as a valid option, clearly define the types of customers that the organization does not want to serve, and implement termination routines within the organization.     

The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration

This study uses a managerial learning framework to build and test a model of the decisionmaking process that drives decisions to strategically reorient an organization. The model examines the effects of past performance, managerial interpretations, and top management team characteristics on the likelihood of strategic reorientation in two distinct environmental contexts. The results indicate that poor past performance, environmental awareness, top management team heterogeneity, and CEO turnover increased the likelihood of reorientation. There are some differences in the ways in which these variables affect reorientation across the two environmental contexts. Poor past performance was more strongly associated with reorientation in the stable environment than in the turbulent environment. The tendency to make external attributions for poor performance outcomes decreased the likelihood of reorientation in the turbulent environment, but not in the stable environment.