Social power bases of marketing executives: The relationship with organizational climate

This research paper reports the results of a mailed questionnaire study of 343 marketing executives. The purpose of the research was to investigate whether or not a relationship exists between organizational climate (i.e., specific conditions in the organizational environment of the firm) and the particular social power base of the marketing executive. Results indicate that the three desirable power bases—expert, referrent, and legitimate—are correlated with all four of the organizational climate dimensions studied—reward orientation, personnel policies, MBO orientation, and status orientation. The undesirable power base—coercive power—was correlated with none of these dimensions.     

The Dynamics of Motivation in New Organizational Forms

This paper discusses the impact of the dynamics of motivation on new organizational forms that are suited to forge value-creating knowledge transfers in teams and between organizational units and functions. Our aim is to develop the management of motivation as a source of distinctive firm competences. We argue that motivation is an endogenous variable and introduce it as a crucial link into the theory of the firm. Balancing intrinsic and extrinsic motivation helps to overcome social dilemmas in firms that are not solvable by hierarchical authority. Integrating the dynamics of motivation is a step to a more comprehensive theory of organization. It links organizational economics to the knowledge-based perspective.     

Law‐abiding organizational climates in developing countries: The role of institutional factors and socially responsible organizational practices

The institutional environment of developing countries may lead firms to engage in unlawful firm conduct, which is a pervasive problem in this context. Our paper examines the effectiveness of organizational practices for ensuring that firms adhere to the law in the light of pressures from the institutional environment to be unlawful. Using the lens of anomie theory, we investigate: (a) the negative effect of aspects of the institutional context—regulatory burden and lack of industry munificence—on a law‐abiding climate, a type of organizational climate related to unlawful conduct, and (b) the role of socially responsible organizational practices in combating these negative effects. Survey data were collected from 118 firms and analysed using OLS moderated regression. Our results indicate that a manager's perceptions of regulatory burden and lack of industry munificence are negatively related to the extent to which the firm has a law‐abiding climate. Furthermore, our findings shed light on the ability of socially responsible practices to countervail this effect. While the negative effect of perceived regulatory burden on law‐abiding climate weakens when codes of ethics are used more extensively by a firm, it strengthens when firms hold a CSR certification. The latter finding may be due to the lack of enforcement associated with the specific certification considered in our study.     

Liquidity,exchange listing,and common stock performance

The liquidity of securities—the relationship between volume of trading and changes in market price—has won increasing recognition as an element of investment strategy in recent years. Relatively high liquidity is deemed to be a desirable characteristic of a stock, especially for the institutional investor, who typically trades in large volume. Thus, firms can generally be expected to seek means of enhancing the liquidity of their shares. One of the supposed means of accomplishing this is by listing one's stock on a national securities exchange. This paper examines the relationship of common stock liquidity to both exchange listing and price behavior during major up and down movements in the market. Our conceptual and empirical analyses indicate that liquidity is linked to price behavior; and we suggest that the view held by at least some corporate officers—that exchange listing increases liquidity—may be erroneous. More specifically, it appears that when the amount of firm capitalization is taken into account, exchange listing does not result in greater stock liquidity.     

EXAMINATION OF A PATH MODEL RELATING INFORMATION TECHNOLOGY INFRASTRUCTURE WITH FIRM PERFORMANCE

This article draws on the resource‐based view of the firm to investigate the mechanisms through which information technology (IT) impacts firm performance. Research suggests that the relationship between IT and firm performance may be both direct and indirect. In this study, a path model is tested that proposes a firm's IT infrastructure resources as having both a direct impact on organizational performance, as well as an indirect effect that is propagated through its impact on an intermediate organizational resource, a firm's logistics information system (LIS). The results suggest that positive firm performance may be derived directly from an organization's superior IT infrastructure, as well as indirectly, through its enabling impact on LIS's. These findings contribute to our understanding of the nature of the relationship between IT and firm performance by exploring the value of IT at both the process and organizational levels.     

Facilitators of organizational innovation: The role of life-cycle stage

One of the most serious challenges facing an entrepreneurial company, particularly a high-technology firm, is knowing how to manage innovation as the organization evolves. Macro-level facilitators/inhibitors of innovation—i.e., organizational and environmental conditions of a firm that promote or restrain innovation such as the structure of an organization, its incentive system, resources provided by its environment, or its ways of analyzing firm-external information—and their relationship to the innovativeness of the firm are considered in this study.Two basic arguments have been put forward previously as to why the innovativeness of an organization may change as it evolves. First, it has been suggested that facilitators of innovation change over time and so will firm innovativeness. That is, the relationship between the facilitator and innovation stays unchanged but the facilitator itself is transformed, causing changes in firm innovativeness as it develops. For instance, it has been suggested that mature firms become less innovative because their structure becomes overly formalized to perform other functions more efficiently, which then stifles innovative processes. Second, other researchers have proposed that the relationship between a facilitator and innovation changes as firms evolve; for instance a formal structure may support innovation in a younger firm because it allows the entrepreneur to focus her energy, whereas it may suppress innovation later since it inhibits an innovator's interaction with other environments. The results of our analysis, using data from 326 U.S. firms in different stages of their development and involved in many kinds of high-tech industries, support the second theory.However, the results for the relationships of the individual facilitators to innovation were not always as expected. We found that formally structured young firms were less innovative than informal ones and that in older organizations, formalization had no negative impact on innovation. This finding possibly can be explained with micro-level facilitators of innovation: younger firms may have more entrepreneurial personnel whose ability for innovation is more inhibited through a formal structure than the more “seasoned” employees in older, larger firms. However, this finding implies that the concern for formal structures with respect to firm innovativeness does not necessarily apply as typically assumed.Of similar significance was our finding with respect to the relationship between financial incentives and innovation. It has been suggested that younger rather than older firms use incentives such as equity to encourage an innovative environment. Results of this research, however, show that innovation is associated with stock incentives especially in older firms. This may be an indication for older firms to use differentiated incentives that reflect the individual's contribution to the firm to retain innovative personnel, whereas start-ups might rely on the excitement of working in a new venture as an incentive for innovative behavior.More in line with expectations were the results for how firms process external information. Environmental scanning and data analysis were positively associated with innovation, and this more so in older firms, presumably because they have become more remote from developments outside the organization. This result confirms the notion that much innovation by a firm is initiated externally. However, the results also indicate that the conditions of the environment itself are of lesser importance to firm innovativeness than the firm's active pursuit of information from its environment. An often discussed implication of these findings is that the boundaries of a firm must be permeable, at least from the outside in, and systematic information gathering from customers, competition, research institutions, etc. may be necessary to the success of a firm that depends on its product development. This seems especially important for older firms.As expected, the centralization of power in an organization also affected innovation. Centralization correlated positively with innovation in new ventures and negatively in older firms. This indicates the importance of the entrepreneur and strong leader in a start-up. It also suggests, though, that as the firm matures, this person has to give up some of her control and may have to relinquish the job at the head of the organization to someone else.Finally, there are some more general implications of this work to managers involved with organizational innovation. First, reliance on past experience may be detrimental to future performance. Whereas a firm evolves through different stages, means that have facilitated innovation earlier may be detrimental to it now or tomorrow, and vice versa. Second, copying successful strategies for innovation from other firms may not necessarily work—not because their implementation was worse but because the conditions of the other firm, for instance its evolutionary stage or its micro-level facilitators, were different.Researchers who study innovation should consider including life-cycle stage as a potential moderating variable. Factors that facilitate innovation at some point during an organization's evolution actually hinder it in another. Also, factors that were unimportant to innovation at the inception of a firm may facilitate it in later stages. This study supports the conclusion that the consideration of contingency factors, such as life-cycle stage, may enhance the development of a theory of organizational innovation.     

The impact of media coverage on IPO stock performance

This study uses signaling theory to examine the role of media coverage on IPO stock performance. Specifically, it investigates how coverage in credible financial media and the tone of media coverage about an IPO firm before and after its listing influence its stock performance. Results show that coverage in credible financial media about an IPO firm significantly impacts its stock price. Additionally, the findings show that uncertainty in the tone of media coverage about an IPO firm adversely influences its stock price. Overall, these findings contribute to signaling theory by addressing the impact of uncertain signals on investor behavior. Moreover, the findings reported in this study also contribute to the growing organizational literature on media by emphasizing the need for scholars to examine the content of media coverage, and specifically the role of uncertain media coverage, on firm-level variables.     

The Effect of Stakeholder Preferences, Organizational Structure and Industry Type on Corporate Community Involvement

This paper analyses the relationships between corporate community involvement activities, the organizational structures within which they are managed, the firm's industry and evolving stakeholder attitudes and preferences in a sample of 148 U.K. based firms who have demonstrated a clear desire to be socially responsible. The research highlights significant associations between the allocation of responsibility for community involvement within the firm, its industry and the extent of its community involvement activities. Consistent with the view that managerial structures may play a significant role in the implementation of community initiatives, the results identify significant variations in community involvement policies across alternative organizational forms. However, important similarities in corporate community policies across alternative structures are also shown to exist suggesting that corporate community involvement activities may be influenced by the preferences of societal stakeholders.     

Modular assembly in the car industry—an analysis of organizational forms’ influence on performance

In modular assembly, car manufacturers can choose to assemble the modules internally or to outsource the units assembling the modules. These module assembly units (MAUs) can be located inside or outside the assembly plants. This paper analyzes the conditions provided for MAU performance by ownership and location, the constitutive dimensions of a MAU's organizational form. Based on a case study at Volvo and theoretical arguments, the paper shows that organizational forms provide different conditions for MAU performance. It is concluded that no organizational form is best and that different forms should be used. It is also concluded that companies must control MAUs, which influences how the conditions provided by different organizational forms can be utilized.     

Age,order of entry,strategic orientation,and organizational performance

This paper proposes an empirical test of several hypotheses linking age, order of entry, and strategic orientations to a firm's performance. Three strategies are defined: cost-leadership strategy, innovative differentiation, and marketing differentiation. The aim is to show that the impact on performance of both age and each of the three strategic orientations may differ according to a firm's order of entry into an industry.Following Lieberman and Montgomery's (1998) evaluation of their major contribution on first mover advantage, we emphasize three points. First, we develop and test hypotheses related to early and late followers' strategic orientations, broadening the scope of traditional studies on pioneers. Second, the model combines the dimensions of a firm's age, order of entry, and strategic orientations, as well as industry conditions (stage of the industry, environmental unpredictability, and technology diffusion), to establish a contingent model of performance analysis. Finally, the empirical study deals chiefly with organizational performance and not market share, which is considered a typical advantage accruing to pioneers.In addition, the scope of the study (582 French manufacturing firms) provides the means to fill a void in empirical studies because it is a broad cross-sectional test on non-U.S. data. The firms are mainly private, small to medium-sized, and single or dominant business firms. Therefore, our assumptions must be understood as particularly applicable to this type of firm.The results reveal important lessons for practitioners. First, we did not find a first-mover advantage in terms of organizational performance. In addition, pioneers' organizational performance is enhanced by the cost leader strategy—contrary to our assumption emphasizing innovative differentiation for these firms. Second, early followers' performance benefits from innovative differentiation and marketing differentiation. Finally, late entrants developing a cost leader strategy have a significantly higher performance. All groups considered, late followers are the firms most sensitive to environmental uncertainty and age effects.Our study clarifies the impact of a firm's age and strategic orientations on its performance depending on the firm's order of entry. The implications of these results are particularly relevant for practitioners and entrepreneurs. First, a cost leadership strategy seems to be a guarantee for a pioneer to increase its organizational performance. New ventures should therefore take into consideration the fact that newness and innovative differentiation might not be the best strategic orientations for high performance in the long run. Second, as a second mover, however, developing a superior product and being able to market it efficiently appear to be the enhancing factors of firm performance. Third, for both pioneers and early followers, age does not significantly reduce their performance. However, the longer a firm waits before entering, the greater is the negative effect of age on its performance. This is due to the difficulty of resisting competitive erosion, because pioneers and early followers drive the changes in the industry. The identification of these effects should help managers and stakeholders to make more effective entry decisions to sustain a firm's advantage, leading to better performance and higher probability of survival.     

Organizational Structure and Performance in Dutch small Firms

The relationship between organizational structure and performance in small firms has received relatively limited attention over the last few decades. In understanding small firm performance this seems to be a serious omission. In this paper, we first present the rationale for including organizational structure in the analysis of small firm performance. Then, from the literature on organizational theory, we retrieve several dimensions that may be postulated to describe organizational structures of small firms. Based on the study of a stratified sample of 1411 Dutch small firms we show that nine structure stereotypes can be delineated. We further investigate the relevance of the empirical taxonomy by looking at the relationship with firm performance in terms of sales growth, profitability and innovativeness. Eventually, we conclude that organizational structure indeed matters and that it deserves to be taken into account in models and future analysis of small firm performance.     

Responding to the challenges of global markets: Change,complexity, competition and conscience

In developing global marketing strategy to compete in world markets, managers must address the challenges of constant change, increased complexity and intense competition, while, at the same time, responding to calls of conscience. However, the appropriate response to these challenges depends on the stage of involvement in international markets, i.e., whether the firm is just entering international markets, is aggressively expanding its international presence or attempting to rationalize far-flung operations. The paper suggests how a firm should respond to these challenges, and shows how using different tools such as information systems technology, creating new organizational forms providing administrative and organizational flexibility, and effective resource deployment at various stages of the value chain can help a firm to cope with them.     

Stock options,restricted stock,salary, or bonus? Managing CEO compensation to maximize organizational performance

CEO pay has gone through remarkable changes over the past two decades. The most striking new features have been the increased use of stock options in the early 2000s, and of restricted stock since then. Both forms of stock-based compensation are intended to resolve the agency problem that occurs when CEOs do not act in the best interests of stockholders, but each has its advantages and limitations. In this instalment of Organizational Performance, we discuss the history of their use and similarities and differences between the two, and argue that both are often overused. Bonuses based on strategic goals, on the other hand, may be underused. We conclude with a contextual approach to guide boards of directors in making choices among the forms of CEO compensation—stock options, restricted stock, salary, and bonus—to incentivize CEOs to work toward maximizing organizational performance. Briefly, stock options are most appropriate for growth firms, and restricted stock for stable firms. Both forms of stock-based compensation are more appropriate for new than for long-tenured CEOs.     

Category membership,identity control,and the reevaluation of prosocial opportunities

We extend current knowledge on prosocial organizing by explaining how membership in organizational categories lead entrepreneurs to reevaluate their firms' activities and opportunities. Through a qualitative study of 46 firms that pursued B Corp certification, we developed an identity control model of prosocial opportunity. Our findings suggest that joining a prosocial category catalyzes identity-driven reflexivity, which can alter the firm's engagement in prosocial activity. This identity-driven process occurs in tandem with evaluations of opportunity viability and attractiveness, the potential for intra-organizational conflict, and the relative power and position that category legitimacy affords the firm. Our findings contribute to literature streams on prosocial organizing, identity, and categories.     

Are Alternative Organizational Forms the Solution to Limit Excessive Managerial Discretion?

Modern corporations have been widely accused of promoting values of managerial autonomy that can result in managerial waste and opportunistic behaviour, leading organizational theorists to suggest the adoption of alternative organizational forms that should normatively and structurally limit such autonomy. However, this mixed-methods study of an alternative organizational form – income trusts (1995–2005) – finds that income trusts were also characterized by excessive managerial autonomy. Managers strategically used the income trust form in discretionary ways such as by providing little information on important decisions to external parties, limiting investors’ right to oppose managerial actions and retaining firm earnings to a great extent. Thus, the article concludes that alternative organizational forms do not necessarily promote an ethical business culture since they are unable to overcome deeply institutionalized values of managerial autonomy.     

Internationalization of retailing operations

International retail operations may be defined as the operation, by a firm or alliance, of shops, or other forms of retail distribution, in more than one country. Such operations have an extensive history. Motives for retailers to operate internationally are considered. Theoretical explanations have not been well developed but a potentially useful framework exists with the transaction cost paradigm. International operations may be achieved within several different organizational structures with some firms adopting different approaches for different markets. The empirical evidence of international retail activity lacks a sound survey base but some tentative generalities are drawn.     

Labor process control in modern organizations: Subtle effects of structure

Labor process control in today's work organizations is more subtle and sophisticated than in previous eras. Mechanisms such as personnel selection, training and socialization, organizational technology, organizational architecture, organizational structure, and organizational ideology and languages produce strong compliance pressures, often without appearing part of an intricate control network. Studies of organizational control intellectually grounded in systems theory have focused on processes designed to correct the occasional “deviant” action, leaving unfocused mechanisms which tend to ensure routinely compliant behavior. This article identifies subtle controlling influences resulting from the structuring of organizations. Three major dimensions of organizational structure—specialization, hierarchy of authority, and formalization—are analyzed to determine their effects on patterns of employee compliance. Although modern organizational control processes such as structural design subtly produce powerful compliance pressures on employees, conflict in organizations between capital and labor is not suppressed. Workplace struggles are an inevitable aspect of modern organization and emerge even within the confines of sophisticated controls.     

Individual and organizational learning from inter‐firm knowledge sharing: A framework integrating inter‐firm and intra‐firm knowledge sharing and learning

Literature has highlighted but not explored links between knowledge sharing and learning at inter‐firm and intra‐firm levels. Using the single case of an aviation refuelling company as the basis for our research methodology and collecting data through 34 semi‐structured interviews, we develop a framework that integrates knowledge sharing and learning at inter‐firm and intra‐firm levels. We show that intra‐firm knowledge sharing capabilities facilitate the diffusion of inter‐firm learning within organizations. Moreover, inter‐firm trust manifests in different forms that affect individual and organizational learning. The purpose of collaboration determines what a firm learns or discards. The findings are important for organizations facing a shortage of skills. © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

Management's Worldview: Four Critical Points about Reality,Language, and Knowledge Building to Improve Organization Performance

From the perspective of hindsight, many researchers have ascribed plausible reasons as to why various firms have prospered and others failed. Some have gone further and worked at understanding how a specific management viewed the world at the time decisions were being made. But, the real challenge is to make progress toward useful guideposts so management can develop a worldview that better equips them to improve firm performance in the future. Without such guideposts, organizational computing, analytics (i.e., fact-based problem solving), and other modern initiatives may lose their way or not reach their full potential for improving firm performance. In the direction of useful guideposts, this article advances four points about reality, language, and knowledge building, which have been underutilized as a means to develop insights for solving business problems and constructing viable strategies. The rationale for these four complementary points is explained in terms of the management decisions behind the growth of Walmart, the successful restructuring of IBM, and the eventual bankruptcy of Kmart. Ideally, leaders should be mindful of these points and strive to ingrain them in the firm's culture. Doing so can lead to improved effectiveness in both strategies and the systems to implement those strategies—ultimately paying dividends in terms of firm performance.     

Individual,Organizational, and Institutional Determinants of Formal and Informal Inter‐Firm Cooperation in SMEs

Inter‐firm cooperation has been considered an important strategy for SMEs to overcome competitive difficulties. Despite the relevance of this strategy there are no studies that jointly consider how entrepreneurs' characteristics, organizational factors, and institutional features influence SMEs to establish cooperative agreements. In order to bridge this gap, we analyze what factors at these three levels explain inter‐firm cooperation and whether formal and informal inter‐firm agreements are explained by different factors. Our research is based on a survey of 1,587 Spanish SMEs and the results show that individual, organizational, and institutional factors contribute to jointly shape the decisions concerning inter‐firm cooperation.