Corporate responsibility and financial performance: the role of intangible resources

This paper examines the effects of a firm's intangible resources in mediating the relationship between corporate responsibility and financial performance. We hypothesize that previous empirical findings of a positive relationship between social and financial performance may be spurious because the researchers failed to account for the mediating effects of intangible resources. Our results indicate that there is no direct relationship between corporate responsibility and financial performance—merely an indirect relationship that relies on the mediating effect of a firm's intangible resources. We demonstrate our theoretical contention with the use of a database comprising 599 companies from 28 countries. Copyright © 2009 John Wiley & Sons, Ltd.     

Dancing with the stars: Benefits of a star employee’s temporary absence for organizational performance

Research Summary: While research has focused primarily on stars as individual contributors, we examine organizational situations where stars must work closely with non‐stars. We argue that, in such situations, building teamwork around a star is an exercise in learning under complexity. In response, organizations prioritize interactions involving the star to simplify learning. This simplification, however, creates organizational myopia. We claim that a star’s temporary absence helps the organization overcome myopia by triggering a search for new routines. When he returns, the organization may combine these new routines with pre‐absence routines to improve teamwork and performance. We exploit injuries to star players in the National Basketball Association as an exogenous shock and find that on average, teams perform better after a star’s return than before his absence. Managerial Summary: This study examines the effect of the temporary absence of a star employee on organizational performance. We find evidence that a star employee’s temporary absence helps the organization overcome an over‐reliance on the star and improve teamwork. Improved teamwork, in turn, enables the organization to perform better upon the star’s return than it did prior to his absence. This result suggests that organizations might want to revisit the tendency to view stars as too valuable to lose, even for a short time. In particular, organizations may want to pull stars from ongoing projects and encourage them to attend professional development programs. A star’s temporary absence and return from such a program improves not only the star’s skills but also the organization’s teamwork.     

Guanxi and organizational dynamics: organizational networking in Chinese firms

This paper focuses on the utilization of guanxi, which is an important cultural and social element in China, and the impact of guanxi on firm performance. Although guanxi is embedded in every aspect of Chinese social life, companies demonstrate different needs and capacity for guanxi cultivation. Chinese firms develop guanxi as a strategic mechanism to overcome competitive and resource disadvantages by cooperating and exchanging favors with competitive forces and government authorities. We develop an integrative framework theorizing guanxi utilization according to institutional, strategic, and organizational factors, and we explore the impact of guanxi on firm performance, primarily sales growth and net profit growth. Our findings, based on a survey of 128 firms in central China, provide strong support that institutional, strategic, and organizational factors are critical determinants of guanxi with competitive forces. However, only institutional and strategic factors are significant for guanxi utilization with government authorities. In general, guanxi leads to higher firm performance, but is limited to increased sales growth, and has little impact on profit growth. Guanxi benefits market expansion and competitive positioning of firms, but does not enhance internal operations. Copyright © 2001 John Wiley & Sons, Ltd.     

The leveraging of interfirm relationships as a distinctive organizational capability: a longitudinal study

In this paper we present a study of the structure of three lead firm‐network relationships at two points in time. Using data on companies in the packaging machine industry, we study the process of vertical disintegration and focus on the ability to coordinate competencies and combine knowledge across corporate boundaries. We argue that the capability to interact with other companies—which we call relational capability—accelerates the lead firm’s knowledge access and transfer with relevant effects on company growth and innovativeness. This study provides evidence that interfirm networks can be shaped and deliberately designed: over time managers develop a specialized supplier network and build a narrower and more competitive set of core competencies. The ability to integrate knowledge residing both inside and outside the firm’s boundaries emerges as a distinctive organizational capability. Our main goal is to contribute to the current discussion of cooperative ties and dynamic aspects of interfirm networks, adding new dimensions to resource‐based and knowledge‐based interpretations of company performance. Copyright © 1999 John Wiley & Sons, Ltd.     

Managerial social capital,strategic orientation,and organizational performance in an emerging economy

This study replicates and extends previous research focusing on China, to a sub‐Saharan African emerging economy environment. Specifically, the study directly replicates the impact of social capital derived from the micro‐managerial networking relationships and ties with top managers at other firms and government officials on macro‐organizational performance using data from Ghana. This study further extends previous work by examining the impact of social capital derived from managerial social networking relationships and ties with community leaders on organizational performance. It examines how the relationship between social capital and organizational performance is contingent on an organization's competitive strategic orientation. The findings suggest that social capital developed from managerial networking and social relationships with top managers at other firms, government officials (political leaders and bureaucratic officials), and community leadership enhance organizational performance. The findings from the contingency analyses reveal some interesting trends. The impact of social capital on organizational performance differs between firms that pursue the different competitive strategies (low‐cost, differentiation, and combination of low‐cost and differentiation) and those who do not pursue those strategies. Copyright © 2007 John Wiley & Sons, Ltd.     

Explaining interfirm cooperation and performance: toward a reconciliation of predictions from the resource‐based view and organizational economics

Interfirm cooperation and its performance implications are examined in the context of two widely cited theoretical approaches to organizations. Broadly speaking, the resource‐based view suggests that firms seek to capitalize on and increase their capabilities and endowments, whereas organizational economics asserts that firms focus on minimizing the costs of organizing. Although these perspectives agree on managers’ likely actions in many areas, their predictions diverge when interfirm cooperation is considered. We take a step toward reconciling these differences by positing that firms place resource‐based concerns in front of considerations from organizational economics when deciding whether or not to engage in interfirm cooperation. We examined this prediction using data from 94 publicly held restaurant chains. The results support our integrated view, but also suggest that giving primacy to resource concerns detracts from the performance of some firms. We derive several implications of these findings in an effort to guide subsequent inquiry. Copyright © 1999 John Wiley & Sons, Ltd.     

Niche width revisited: organizational scope,behavior and performance

Although strategy research typically regards firm scope as a positional characteristic associated with performance differences, we propose that broad contemporary scope also provides insight into the routines that govern firm behavior. To attain broad scope, firms must repeatedly explore outside the boundaries of their current niche. Firms with broad niches therefore operate under a set of routines that repeatedly propel them into new market segments, expanding their niche. These niche expansions, however, involve risky organizational changes, behavior that disadvantages generalists relative to specialists, despite the positional value of broad scope. Empirical analyses of machine tool manufacturers and computer workstation manufacturers support this conjecture: (i) generalists introduce new products at a higher than optimal rate, thereby increasing their exit rates; and (ii) generalists also more frequently launch new models with novel features or targeted at new consumer segments rather than improving only incrementally on existing products, further accelerating their odds of failure. After adjusting for these behavioral differences, broad niche widths reduce exit rates, suggesting that they provide positional advantages. The paper discusses how this phenomenon may help to explain the diversification and multi‐nationality discounts. Copyright © 2006 John Wiley & Sons, Ltd.     

A resource‐based perspective on human capital losses,HRM investments,and organizational performance

Reversing the focus on human capital accumulations in the resource‐based literature, the authors examine the issue of human capital losses and organizational performance. They theorize that human capital losses markedly diminish the inimitability of human capital stores initially, but that the negative effects are attenuated as human capital losses increase. They argue further that these effects are more dramatic when human resource management (HRM) investments are substantial. As predicted, Study 1 shows that the human capital losses (voluntary turnover rates)‐workforce performance relationship takes the form of an attenuated negative relationship when HRM investments are high. Study 2 shows stronger curvilinear effects of voluntary turnover rates on financial performance via workforce productivity under these conditions. Implications for resource‐based theory and strategic HRM are addressed.     

Pay dispersion and workforce performance: moderating effects of incentives and interdependence

The compensation literature is replete with arguments, but lacking in empirical tests, regarding the effects of pay dispersion on organizational outcomes. Pay dispersion may increase effort and provide incentives for high workforce performance levels, but may also inhibit cooperation and goal orientation among employees. Drawing on several theoretical perspectives (individual motivation, institutional theory, organizational justice, and neoclassical economics), this study predicts that pay dispersion will be associated with higher levels of workforce performance when accompanied by formal individual incentive systems and independent work, while pay compression is desirable in the absence of individual incentive systems and when work is interdependent. Survey research studies in two industrial sectors (the motor carrier and concrete pipe industries) were conducted to address these issues. Interactive regression results were generally supportive of the predictions across several measures of workforce performance (accident rates, safety violations, and productivity). Implications of these studies for strategy implementation in terms of compensation theory and practice are addressed. Copyright © 2002 John Wiley & Sons, Ltd.     

企业环境绩效与经济绩效的动态关系模型

企业环境绩效与经济绩效的关系是企业战略管理研究领域里一个比较新的研究对象。现有的研究除方法和数据方面的缺陷外,主要问题是理论模型的解释力不强。本文认为组织能力是企业环境绩效与经济绩效之间内在联系的纽带,一个基于企业组织能力的环境绩效评估体系能够对企业改善环境绩效产生持续的激励作用。据此提出“基于组织能力的企业环境绩效”的理论模型,旨在从环境管理能力建设的角度来讨论企业环境绩效评估的基础方法和原则。     

The curvilinear relationships between responsive and proactive market orientations and new product performance: A contingent link

Recent research has defined market orientation as two dimensions, responsive and proactive market orientations, and further argued that an inverted U-shaped relationship exists between each of these two market orientation dimensions and new product performance. However, empirical evidence has not confirmed such a nonlinear relationship. This study argues that the curvilinear relationship between the two dimensions of market orientation and new product performance may depend on external environmental characteristics. A total of 107 new product development programs in five high tech industries constitute the analytical sample. Hierarchical regression analysis reveals that under a high level of technological turbulence, responsive market orientation becomes detrimental to new product performance beyond a certain level; the relationship between proactive market orientation and new product performance is an inverted U-shaped under a low level of technological turbulence or competitive intensity. Results also indicate that responsive and proactive market orientations are important determinants of new product performance. These findings sharpen the understanding of the relationship between market orientation and new product performance.     

IT competency and firm performance: is organizational learning a missing link?

Many companies have developed strategies that include investing heavily in information technology (IT) in order to enhance their performance. Yet, this investment pays off for some companies but not others. This study proposes that organization learning plays a significant role in determining the outcomes of IT. Drawing from resource theory and IT literature, the authors develop the concept of IT competency. Using structural equations modeling with data collected from managers in 271 manufacturing firms, they show that organizational learning plays a significant role in mediating the effects of IT competency on firm performance. Copyright © 2003 John Wiley & Sons, Ltd.     

Does market orientation matter?: a test of the relationship between positional advantage and performance

A recent series of articles in the Strategic Management Journal has discussed the potential value of an organization developing a market orientation in its quest to achieve success. We posit that market orientation can enhance success, but that its potential value should not be considered in isolation. Specifically, we draw on the resource‐based view of the firm to suggest that four capabilities—market orientation, entrepreneurship, innovativeness, and organizational learning—each contribute to the creation of positional advantages for some firms. The data used are drawn from 181 large multinational corporations (MNC). The results indicate that positional advantages arising from the confluence of market orientation, entrepreneurship, innovativeness, and organizational learning have a positive effect on MNC performance (five‐year average change in ROI, income, and stock price). Overall, the results support the contention that market orientation can enhance success, albeit within the context of other important phenomena. Copyright © 2001 John Wiley & Sons, Ltd.     

CEO tenure and organizational performance: an intervening model

While CEO job tenure is seen as influencing firm performance, the intervening mechanisms that govern this influence have remained largely unexplored. Given that individuals in the firm most closely influenced by the CEO are members of the top management team (TMT), we focus on the CEO‐TMT interface as one important intervening mechanism. Specifically, our tested model suggests that CEO tenure indirectly influences performance through its direct influences on TMT risk‐taking propensity and the firm's pursuit of entrepreneurial initiatives. Results from structural equation modeling are consistent with this model and support its associated hypotheses. In the discussion, we trace the implications of our study for research and practice. Copyright © 2007 John Wiley & Sons, Ltd.     

The impact of organizational learning on relationship orientation, logistics service effectiveness and performance

The paper investigates the effects of organizational learning on inter-firm relationship orientation in the logistics service provider-client interaction. A conceptual model is developed and four research hypotheses are empirically examined using structural equation modelling. The data were collected via a survey of Hong Kong based logistics service providers. The results indicate that organisational learning has a positive influence on relationship orientation as well as on the improvement of logistics service effectiveness and firm performance. Theoretical, managerial and research implications are discussed.     

Creating value in the face of declining performance: firm strategies and organizational recovery

Firms that have failed to meet the performance expectations of investors must seek new ways of creating value or face the loss of financial support. Using resource‐based arguments, we find that valuable and difficult‐to‐imitate strategies that recombine the firm's existing stock of resources to create new products, processes, or technologies have a positive effect on organizational recovery as measured by investors' expectations. Similarly, acquiring new resources through mergers or acquisitions also has positive effects on investors' expectations. In contrast, valuable and difficult‐to‐imitate strategies that provide the firm with access to new resources through alliances or joint ventures do not affect investors' expectations of performance. We also find that taking actions that are not valuable and difficult‐to‐imitate either have no effect on performance or may lead to further performance declines. Lastly, our results show that valuable and difficult‐to‐imitate strategic actions that use existing resources in new ways contribute the most to organizational recovery. Copyright © 2007 John Wiley & Sons, Ltd.     

Organizational knowledge networks and local search: The role of intra‐organizational inventor networks

Research summary : While firms tend to build on their own knowledge, we distinguish between depth and breadth of local search to investigate the drivers of these behaviors. Given that inventors in a firm carry out the knowledge creation activities, we strive to identify inventors responsible for these behaviors by employing the notion of an intra‐firm inventor network. A longitudinal examination of 14,575 inventors from four large semiconductor firms using patent data supports our hypotheses that the reach of inventors in the intra‐firm network and their span of structural holes have independent and interactive effects on these two types of local search behaviors. These findings have implications for research on exploitation and exploration, organizational knowledge, knowledge networks, and micro‐foundations. Managerial summary : Large amounts of knowledge may reside within firm boundaries, and managers are interested in understanding who may leverage this knowledge to generate novel ideas. We focus on collaborations among knowledge workers to address this question. Using the collaborations among all knowledge workers in a firm, we show that those who have higher reach to all others and those who form bridges to connect unconnected groups of workers tend to leverage not only more organizational knowledge, but also knowledge that is more dispersed in the organization. Managers could use these insights to shape the use of organizational knowledge by firm inventors, and also to make decisions about granting or withholding access to internal knowledge platforms for knowledge workers. Copyright © 2016 John Wiley & Sons, Ltd.     

Organizational differences,relational mechanisms,and alliance performance

In studying the antecedents of alliance performance, one stream of research has underscored the alignment between partners' characteristics whereas another has concentrated on relational mechanisms such as mutual trust, relational embeddedness, and relational commitment. We integrate these two perspectives by examining how congruence of the partners' cultures and organizational routines facilitates the emergence of relational mechanisms in non‐equity alliances. Our analysis of 420 non‐equity alliances in the information technology industry demonstrates how differences in partners' internal task routines undermine relational mechanisms that in turn impact alliance performance. Partners who acknowledge their latent differences can overcome some of these negative consequences. We advance alliance research by studying the performance implications of alliance partners' organizational differences and by demonstrating how these effects are mediated by relational mechanisms. Copyright © 2012 John Wiley & Sons, Ltd.     

Organizational configurations and performance: the role of statistical power in extant research

The relationship between organizational configurations and performance has been a frequent albeit controversial subject of research in the field of strategic management. Many studies have failed to find a link between configurations and performance, leading prominent researchers to question the value of the concept of organizational configurations. Before the concept can be discarded, however, other plausible explanations for the lack of findings should be examined. This paper examines the possible role of statistical power. Specifically, it may be that the sample sizes in many studies are too small to detect relationships between configurations and performance when such links are, in fact, present. Analysis of 24 tests of the configurations–performance link revealed that only 8 percent had samples large enough to detect all important relationships. Thus, there is reason to suspect that insufficient statistical power may help to explain extant results. Given these findings, suggestions are presented for improving the ability of configurational studies to detect relationships. Copyright © 1999 John Wiley & Sons, Ltd.     

Organizational ownership,competitive intensity,and firm performance: an empirical study of the Indian manufacturing sector

Emerging countries are using privatization as a key strategy in their drive to become free market economies. Although these ownership changes are rapidly gaining prominence, the academic literature has been equivocal about the performance benefits of private vs. state ownership. The lack of clarity in findings can be largely traced to the underspecification of the models that prior studies have examined. Specifically, prior studies have mostly ignored the central role of competitive rivalry. This paper proposes a model that centers around the interactive, inseparable effects of ownership and competitive rivalry on firm performance. Results of the empirical examination set in India show that competitive intensity moderates the relationship between ownership and performance. Copyright © 2001 John Wiley & Sons, Ltd.