The economic modeling of strategy process: ‘clean models’ and ‘dirty hands’

We argue that our model of learning in alliances ( Khanna, Gulati and Nohria, 1998 ) is an economic model of strategy process. We discuss implications of this view for the strategy process vs. content debate, for the appropriate testing of models of strategy process, and for the role of economics in helping understand strategy process. We propose that the ‘clean models’ from economics and ‘dirty hands’ of traditional process inquiries offer research designs that are complementary rather than incompatible ( Hirsch, Michaels and Friedman, 1987 ). Copyright © 2000 John Wiley & Sons, Ltd.     

Porter's ‘competitive advantage of nations’: An assessment

Porter's Competitive Advantage of Nations is an important book which bridges the gap between strategic management and international economics while contributing substantially to both. Porter's analysis of the impact of national environment on international competitive performance demonstrates the potential for the theory of competitive strategy to rescue international economics from its slide into refined irrelevance, while simultaneously broadening the scope of the theory of competitive strategy to encompass both the international dimension and the dynamic context of competition. Nevertheless, the breadth and relevance of Porter's analysis have been achieved at the expense of precision and determinancy. Concepts are often ill defined, theoretical relationships poorly specified, and empirical data chosen selectively and interpreted subjectively.     

The ‘new public management’ and the reform of public services to agriculture in adjusting economies: the role of contracting

This paper outlines the conditions under which contracting of different types succeeds in the provision of public services to agriculture. It observes that performance contracting has been widely attempted in adjusting countries but generally with little success, since it is demanding of resources, flexibility and motivation in government under conditions where these are scarce. Examples are drawn from agricultural marketing. Given the largely private nature of the services to agriculture currently provided by the state, the long-term reform strategy should be market development. Contracting out and management contracting may have a role in this strategy, particularly in better managed adjusting economies.     

Rational heuristics: the ‘simple rules’ that strategists learn from process experience

While much research indicates that organizational processes are learned from experiences, surprisingly little is known about what is actually learned. Using a novel method to measure explicit learning, we track the learned content of six technology‐based ventures from three diverse countries as they internationalize. The emergent theoretical framework indicates that firms learn heuristics. These heuristics have a common structure centered on opportunity capture and are learned in a specific developmental order. This results in a deliberately small, yet increasingly strategic, portfolio of heuristics. Broadly, we contribute to the psychological foundations of strategy by highlighting the rationality of heuristics as strategy, capability creation as the cognitive transition from novice to expert heuristics, and simplification cycling as a critical dynamic capability for sustaining competitive advantage. Copyright © 2011 John Wiley & Sons, Ltd.     

Environmental analysis units and strategic decision-making: A field study of selected ‘leading-edge’ corporations

In response to increasing environmental change many corporations have developed specialized environmental scanning units. Previous research reveals conflicting findings regarding the viability of these units for introducing environmentally relevant information into strategic decision processes. A field study was conducted on 10 ‘leading-edge’ corporations. The results show continuing experimentation with alternative administrative structures and the vulnerability of units that are not tightly linked with strategic planning processes.     

Performance feedback and middle managers’ divergent strategic behavior: The roles of social comparisons and organizational identification

Research Summary: What drives middle managers to search for new strategic initiatives and champion them to top management? This behavior—labeled divergent strategic behavior—spawns emergent strategies and thereby provides one of the essential ingredients of strategic renewal. We conceptualize divergent strategic behavior as a response to performance feedback. Data from 123 senior middle managers overseeing 21 multi‐country organizations (MCOs) of a Fortune 500 firm point to social performance comparisons rather than historical comparisons in driving divergent strategic behavior. Moreover, managers’ organizational identification affects whether they attend to organizational‐ or individual‐level feedback. These results contribute to research on performance aspirations and strategy process by providing a multilevel, multidimensional framework of performance aspirations in middle management driven strategic renewal. Managerial Summary: Middle managers are essential actors in strategic renewal. Their unique positions offer insights into operations alongside knowledge of strategy. In contrast to typical assessments of managerial performance with reference to a prior year, this research shows that performance comparisons relative to peers and other organizational units better motivate managers’ divergent strategic behavior. Our results also show that managers who identify with the firm are more attentive to organizational rather than individual performance discrepancies. Thus, our study unveils an important approach for organizations aiming to spark strategic renewal.     

The moderating influence of strategic orientation on the strategy formation capability–performance relationship

An effective strategy formation capability is a complex organizational resource—a dynamic capability that should lead to superior performance. Strategy scholars have examined the strategy formation capability from many perspectives. However, no study has examined a comprehensive model of strategy formation in the context of the firm's strategic orientation. We develop and examine such a model. The results show that strategic orientation moderates the relationship between different elements of the strategy formation capability and performance. Copyright © 2006 John Wiley & Sons, Ltd.     

The kill programme: an ethnographic study of ‘dirty work’ in a slaughterhouse

It has been argued that ‘dirty work’ is characterised by strong occupational and workgroup cultures. This literature has mainly focused on direct workers, but this article largely attends to indirect ‘dirty’ workers, specifically meat inspectors, through ethnographic research conducted in a UK slaughterhouse. Four arguments are developed; the first is that ‘dirty workers’ may not all display group cohesiveness; indeed, individualisation may be more evident depending upon the technology used, internationalisation and employment conditions. Second, there is complexity and diversity within ‘dirty work’ and even single occupations can contain considerable variety, rendering generalisations problematic. Third, we argue that much greater attention needs to be given to the wider contextual issues affecting ‘dirty work’, specifically changing labour markets, itinerant labour, economic conditions and technologies. Finally, we argue that stigmatised work may become more so if it is equated with the low wage economy and/or undercutting conditions of employment through exploiting migrant labour.     

The salience of ‘culture’s consequences’: the effects of cultural values on top executive commitment to the status quo

While top executives are argued to play a central role in strategic adaptation, evidence suggests that they are not equally open to organizational change. This study extends earlier investigation of the determinants of top executive commitment to the status quo (CSQ) to the international arena, examining the influence of cultural values on executive open-mindedness toward change. Using data from a survey of top managers in 20 countries, analyses reveal that values of individualism, uncertainty avoidance, power distance, and long-term orientation are significantly related to executives’ adherence to existing strategy and leadership profiles. Further, while confirming earlier findings that industry tenure is positively related to strategy CSQ, results show that tenure does not significantly affect leadership CSQ once cultural values are controlled. In summary, the findings reveal that culture has an important impact on executive mindsets, as demonstrated by the fact that executives of differing cultural background are not equally open to change in organizational strategy and leadership profiles. Second, the findings suggest that executives’ views of appropriate leadership profiles reflect the imprint of cultural socialization moreso than professional experience. Finally, and more broadly, the study offers empirical support for the view that values figure prominently in shaping executives’ strategic and leadership orientations. © 1997 by John Wiley & Sons, Ltd     

‘Double marginalization’ problems: evidence from the Korean fixed-to-mobile service market

In this paper, examination of the possibility of a ‘double marginalization’ problem existing in the Korean telecommunication industry is conducted and suggestions are made for the provision of a new scheme to eliminate this possibility by changing the pricing system for fixed-to-mobile calls. Based on five key economic characteristics in the Korean mobile market, a simple model for double marginalization in the telecommunication market is introduced. Evidence was found to suggest that a double marginalization problem is likely to exist within Korea's telecommunication industry as it is presently structured, and that this problem is further likely to have an adverse effect on the industry by inflating the price of fixed-to-mobile calls. Two alternatives are proposed to effectively remedy this double marginalization issue. It is also shown that prices of fixed-to-mobile calls could be lowered by changing the caller pays principle into a receiver pays principle.     

The constitution of ‘third workspaces’ in between the home and the corporate office

This study analyses the constitution of commercially provided work spaces situated in between the home and the corporate office. These new workspaces are enabled by digital network technologies. Theoretically, this new category of contemporary business spaces is conceptualised as ‘third workspaces’, with reference to the work of Oldenburg (1989), Soja (1996) and Lefebvre (1991 [1974]). Empirically, these workspaces are explored in two ethnographic case studies dealing with recently founded and successful third workspace providers. The grounded theory resulting from these case studies addresses the role of the material settings, the technologies, the work ideologies as well as the user practices. Overall this study offers an analytical framework for studying and managing third workspaces, and highlights the ambiguities in the constitution of third workspaces between the design and management on the one hand and the user practices on the other.     

The concept of ‘impartition’ policies: A different approach to vertical integration strategies

The inverse of vertical integration, ‘impartition’, is defined as an entrepreneurial behaviour which consists in casting other firms (partners) for different parts of its overall system of activities. A firm imparts when, in order to allocate its own resources to activities more congruent with its strategic objectives, it contracts out instead of doing in-house. This concept also involves a cooperative attitude towards partners for a mutual profit based on external synergies. The developed pattern has a large range of applications: subcontracting, proxy agreements, agency contracts, international production sharing, product mandating, franchising, licensing and a growing number of intangibles. The use of the impartition leverage may amplify the strategic power of a firm and its capacity for fast growth. In response to severe worldwide competition and accelerating technological and social changes, four overall principles underlie an impartition policy: high turnover, organizational flexibility, strategic mobility and external synergies. In conclusion the author insists on the necessity of mastering the art of resources management.     

‘Keep out’ signs: the role of deterrence in the competition for resources

To explain resource heterogeneity, past research focuses on how rivals' resources are hidden from firms and firms accordingly have difficulties accessing them. We argue that resource heterogeneity may also arise when firms are deterred from a technological space upon being shown what resources rivals already possess within that space. To illustrate this deterrence effect, we use patent reexamination certificates, which indicate strategic stakes within a technological space without materially disclosing additional details of the underlying technologies and hence avoid the confounding effect of attracting competition through disclosure. We demonstrate how rivals' reexamination certificates within a technological space induce a firm to subsequently allocate less inventive effort in that space, based on two mechanisms—indications of rivals' developmental speed and exclusionary ability. We further develop these two mechanisms by arguing that the deterrence effect is stronger when rivals' speed is enhanced by their downstream capabilities, or when rivals' exclusion is enhanced by their litigation experiences. Findings suggest that a firm's path of resource accumulation evolves through avoidance of rivals' paths, and deterrence may constitute a viable alternative theory of resource heterogeneity. Copyright © 2010 John Wiley & Sons, Ltd.     

Necessity as the mother of ‘green’ inventions: Institutional pressures and environmental innovations

Drawing on institutional theory and innovation literature, we argue that greater regulatory and normative pressures concerning environmental issues positively influence companies' propensity to engage in environmental innovation. Analysis of environment‐related patents of 326 publicly traded firms from polluting industries in the United States suggests that institutional pressures can trigger such innovation, especially in those firms displaying a greater deficiency gap (i.e., firms polluting relatively more than their industry peers). Moreover, we find that this effect is stronger when asset specificity is high, and that the availability of resources plays different roles depending on the type of pressures (regulatory vs. normative).Copyright © 2012 John Wiley & Sons, Ltd.     

‘When the Going Gets Tough’ . . . : Recession and the Resilience of Workplace Partnership

Drawing on longitudinal research in an engineering multinational corporation, this article considers the resilience of workplace partnership under conditions of retrenchment. In line with extant literature, the twin influences of trade union power and competitive strategy are seen to significantly shape the durability of partnership. Beyond these determinants, trust and managerial skill and political sensitivity are deemed important moderators. The findings nonetheless suggest that the favourable alignment of these factors may not represent a sufficient bulwark in those situations where the axis of partnership is local, within the context of otherwise centrally coordinated industrial relations.     

Enterprise logic: explaining corporate attention to stakeholders from the ‘inside‐out’

Why are some firms more effective than others at addressing stakeholder concerns? Conventional stakeholder theories focus on variables in the external environment and cannot adequately explain variance across firms operating in the same context. Our matched‐pair study of eight global corporations goes inside the firm and investigates the role of managerial cognition on corporate attention to stakeholders. We find that top management's conceptualization of the firm's relationship with society—which we name enterprise logic—prompts distinct foci of attention and potentially constrains how well a single firm can simultaneously attend to multiple stakeholders. These findings highlight the value of an ‘inside‐out’ perspective, centered on managerial cognition, in explaining why some firms address stakeholder concerns more effectively than their peers. Copyright © 2012 John Wiley & Sons, Ltd.