Strategic groups: Theory,research and taxonomy

This paper discusses the concept of strategic groups, focusing upon the importance of intra-industry strategic groupings in understanding differences across firms within an industry. The problems involved in identifying strategic groups within industries are examined through a comprehensive review of recent studies. It is demonstrated that much of the research has used surrogates for elements of a firm's strategic direction, e.g. vertical integration, product range, R & D expenditure, to suggest bases by which creative and sustainable groups are formed. The authors argue that certain theoretical concepts such as mobility barriers, isolating mechanisms and controllable variablesprovide much firmer bases for identifying strategic groups within industries. Thus, taxonomies for understanding the nature of strategic group formulation can be developed. Implications of the strategic group concept for such strategic issues as the structure-performance linkage, firm mobility, patterns of rivalry, industry evolutionand firm growthare then examined. The paper concludes by indicating fruitful directions for strategic group research in the context of the strategic management field.     

Planning system characteristics and planning effectiveness

The nature of the multivariate relationship between six characteristics of planning systems and three different conceptualizations of planning effectiveness is examined using canonical correlation analysis. The analysis indicates that the organizational context of planning—captured here by two key characteristics—resistance to planning and resources provided for planning—is the dominant impact on planning system effectiveness, broadly construed. While individual design elements of the planning system such as use of techniques and external orientation do influence effectiveness, the contextual dimensions appear to be overriding. Implications for further research on planning systems and directions for future extensions of this study are discussed.     

Corruption and market attractiveness influences on different types of FDI

Previous studies have proposed that a compensatory model predicts the level of foreign direct investment (FDI) in a country; FDI levels are a result of ‘trade‐offs’ between the positive effect of market attractiveness and the negative influence of corruption. In contrast, we hypothesize and find that the compensatory relationship only holds for market‐seeking investment; for resource‐seeking FDI the model appears to be noncompensatory. Greater market attractiveness mitigates the negative impact of corruption on market‐seeking investment, but the ability of market attractiveness to mitigate the negative impact of corruption on resource‐seeking FDI quickly disappears as corruption levels increase. Implications and future research directions are discussed. Copyright © 2008 John Wiley & Sons, Ltd.     

Managerial discretion and internal alignment under regulatory constraints and change

This paper investigates the effects of regulatory constraints and their relaxation on managerial discretion and internal fit in the context of the U.S. airline industry. Our results suggest that when managers' discretion is limited in one realm of choice, they compensate by using their greater level of discretion in some other arena to achieve internal fit. We show that the pursuit of fit matters, in the sense of having measurable efficiency consequences, and that fit trumps ‘best practice,’ at least in this context. In this respect, our findings provide a validation of the contingency perspective on internal fit. The ability to achieve fit under changing conditions may express a dynamic managerial capability necessary for adaptive organizational change. Copyright © 2007 John Wiley & Sons, Ltd.     

Diversification,vertical integration,and industry analysis: New perspectives and measurement

Vertical integration, diversification, and industry analysis are fundamental topics in strategic management content research. We develop the conceptualization of these issues by exploring their nature as well as their correct measurement. Toward these ends, we conduct an extensive analysis of the COMPUSTAT II data base and the TRINET data base in all three research contexts. In addition to these two data bases, we also evaluate the Census of Manufacturers, S&P's Financial Dynamics, S&P's Industry Surveys and Dun and Bradstreet's Industry Norms and Key Business Ratios, for purposes of industry analysis. Important contributions include our identification of the potential of COMPUSTAT 11 data to distinguish within-stage forward and backward vertical integration, and between-stage forward and backward vertical integration, as well as our recommendations for the protection of the integrity of studies based on the COMPUSTA T II and TRINET data bases.     

Price-Performance Competition and the Merger Guidelines

While analysis of competition among differentiatedproducts has evolved under the revisions to theMerger Guidelines since 1982, it remains adhoc. This paper argues that price and performancecompetition among differentiated products is the rulerather than the exception and proposes methods toexplicitly analyze both forms of competition. Themethods address price and performance competition indemand and supply, explicitly incorporatingcompetitive responses as called for by the 1992 Guidelines. Empirical implementation is discussed for a specificmarket.     

Do source of mailing and monetary incentives matter in international industrial mail surveys?

To date there has been only a handful of studies on response rates of industrial mail surveys in the international setting. These studies have essentially dealt with either source of mailing effects or monetary incentives, and not a single study has dealt with both issues. Further, the results have been equivocal. In an attempt to resolve these equivocal findings, the authors report the results of a study wherein the impact of source of mailing effects and two types of monetary incentives on industrial mail survey response rates were investigated. Specifically, the hypotheses that a monetary incentive is better than a mailing effects incentive, a prize giveaway is better than a dollar incentive, and joint effects is better than only domestic mailing effects in enhancing response rates, were tested. Six hundred randomly selected Indian companies were systematically assigned to one of four groups, with a mailing size of 150 for each group. The four groups were the dollar incentive group, the prize giveaway group, the joint effects group, and a control group. The results indicate that the prize giveaway type of monetary incentive yielded a response rate of 25% that was significantly higher than the 7% of either the joint effects or the control group. Considering that prize giveaway had the least cost per response, it clearly appears superior to the other two tactics in enhancing response rates. More importantly, because joint effects fared no better than the control group in terms of response rates, it is difficult not to conclude that any attempt to sensitize respondents to a joint, domestic and foreign, affiliation in the context of research sponsorship would likely be a wasted effort.     

Firm‐specific human capital,organizational incentives,and agency costs: Evidence from retail banking

This paper explores conflicting implications of firm‐specific human capital (FSHC) for firm performance. Existing theory predicts a productivity effect that can be enhanced with strong incentives. We propose an offsetting agency effect: FSHC may facilitate more‐sophisticated ‘gaming’ of incentives, to the detriment of firm performance. Using a unique dataset from a multiunit retail bank, we document both effects and estimate their net impact. Managers with superior FSHC are more productive in selling loans but are also more likely to manipulate loan terms to increase incentive payouts. We find that resulting profits are two percentage points lower for high‐FSHC managers. Finally, profit losses increase more rapidly for high‐FSHC managers, indicating adverse learning. Our results suggest that FSHC can create agency costs that outweigh its productive benefits. Copyright © 2013 John Wiley & Sons, Ltd.     

Real options and MNE strategies in Asia Pacific

Asia Pacific offers a lot of promising growth opportunities, but it also presents high levels of uncertainty for multinational enterprises (MNEs). In this paper, we introduce real options theory as a theory of investment under uncertainty, and we discuss its implications for MNEs and their strategies with a focus on the emerging economies in Asia Pacific. We suggest that MNEs must recognize the various sources of uncertainty, as well as the various options embedded in their investments, and real options theory can help them structure and design their investments to benefit from uncertainty. In particular, MNEs need to develop the dynamic capabilities of managing real options in their investments to respond to the evolving economic and institutional environment in the region. This paper also provides several implications for policy makers in Asia Pacific to stimulate investment activities in the region and to help their firms venture successfully in the international market place.

Technology versus Design Innovation's Effects on Sales and Tobin's Q: The Moderating Role of Branding Strategy

This research investigates the impacts on firm performance of (1) technology versus design innovation and (2) their potentially synergistic interaction. Synergies could arise from complementarities, in particular the utilization of technology innovation as a platform for design innovations. Both sales and Tobin's q are examined as dependent performance variables, with sales tapping consumer responses and Tobin's q reflecting investor responses. Moderation by branding strategy (i.e., Corporate Branding versus Mixed Branding versus House of Brands) is analyzed because innovation may impact performance differently depending on branding strategy. Advertising effects, the number of new product introductions, their interaction, R&D expenditures, operating margins, and firm size are also modeled as covariates. The results show that all main and interaction effects are significant in at least one of the branding groups, and that moderation of model paths by branding strategy was pervasive. Overall, except for technology innovation → Tobin's q, Corporate Branding coefficients for technology innovation, design innovation, and their interaction were almost always significantly different from Mixed Branding and House of Brands coefficients, which were not significantly different from each other. Since Mixed Branding and House of Brands proved very similar, these groups were combined under “Non‐Corporate.” First, for technology innovation, the impact on both sales and Tobin's q for Corporate Branding was less than or equal to Noncorporate. Noteworthy was that the technology innovation → Tobin's q relationship was equal across all branding strategies; technology innovation appears to be key for investors. Second, for design innovation, the impact for Corporate Branding was positive while for Noncorporate it was null; the same pattern was observed for sales and Tobin's q. Third, for the interaction, the impact for Corporate Branding was significantly less than the positive impacts for Noncorporate. For Noncorporate, the marginal impact of design innovation on sales or Tobin's q increased with the level of technology innovation. For Corporate Branding however, there was no interaction in the case of sales and a negative interaction for Tobin's q. Thus, the marginal impact of design innovation on Tobin's q decreased with increasing levels of technology innovation. These decreasing marginal effects could reflect limits to corporate brand name extensions, as perceived by investors.     

醋酸丁酯合成工艺设计及控制

为了对醋酸丁酯的合成工艺过程进行优化控制,在Aspen Plus稳态模拟的基础上,利用Aspen Dynamics软件对醋酸丁酯的合成进行动态模拟,建立了醋酸丁酯合成工艺流程模型。在Aspen Dynamics软件中设定不同的控制结构,并引入进料流量干扰,通过改变醋酸丁酯的纯度和灵敏板的温度来检验不同控制结构的性能。结果表明,通过CS4控制,可以很好地解决产品纯度的波动问题。     

Japanese horizontal keiretsu and the performance implications of membership

Our study investigates the effect of Japanese horizontal keiretsu group membership on firm risk and return. Like prior studies, our results show that horizontal keiretsu membership has a negative effect on firm profitability. However, we find that horizontal keiretsu networks are likely to increase the gap between targeted and realized returns, which we call the outcome–aspiration gap. Moreover, in contrast to prior studies, our results indicate that keiretsu membership does not enable member firms to reduce risks by smoothing profitability. Instead, our findings provide evidence that is counter to the conventional notion that Japanese horizontal keiretsu allows their member firms to trade off profits for reduced risk.

Strategic human capital management in the context of cross‐industry and within‐industry mobility frictions

Research Summary: We develop and test a theory examining how frictions that restrict mobility across industries and frictions constraining mobility within an industry can co‐occur to effectively isolate individual human capital, ultimately changing the firm's make‐versus‐buy decision for human capital. Empirically, we demonstrate that when cross‐industry frictions in the form of limited skill transferability and within‐industry frictions in the form of noncompete enforceability are both present, employees exhibit longer tenures, firms hire workers with less initial experience, firms change the amount and nature of training provided, and wages marginally increase. These findings suggest that sufficiently strong and complementary mobility frictions shift the emphasis of firms’ human capital management practices toward internal development of human capital relative to acquisition on the external market. Managerial Summary : In the face of frictions to employee mobility both within and across industries, which we capture empirically using measures of noncompete enforceability and limited skill transferability across industries, firms tend to hire less experienced workers, such workers exhibit longer tenures, and firms invest more in their training, particularly in the development of new skills. Our findings imply that for firms operating under such complementary frictions, better hiring and internal development capabilities are particularly important for performance, while those firms without such capabilities may benefit from considering ways to circumvent the mobility frictions, including moving out of the focal state or lobbying for different noncompete laws.     

Pragmatism, Pedagogy and Philosophy A Model of Thought and Action in Action in Primary Technology and Science Teacher Education

This article reports on one outcome from a three-year study with pre-service primary teachers at Goldsmiths' College, University of London. The purpose of the study was to evaluate the influence of participants' prior educational experience and beliefs about the relationship between design & technology (D&T) and science on their lesson planning for these subjects during school placements. Data from the study support a three-domain model of pre-service teachers' thinking and action. When operating within the pragmatic domain, participants are primarily concerned with survival in the classroom, resulting in short-term planning which may contradict their epistemological and curricular beliefs. In the pedagogical domain, the focus shifts from the pre-service teacher themselves and their immediate survival to the learning potential of the activities they plan. There is evidence that some participants have progressed to operating within a philosophical domain, leading to clasroom practice which reflects and re-conceptualises pre-service teachers' core beliefs about the nature of, and relationship between, D&T and science. This revised version was published online in July 2006 with corrections to the Cover Date.     

Context matters: Diversity's short‐ and long‐term effects in fortune's “best companies to work for”

Research summary: Previous research has examined the racial diversity‐productivity relationship in corporations with an evident high commitment to minority programs, Fortune's “Best Companies for Minorities.” To assess generalizability, we replicate this research using a different context of high organizational‐employee value congruence, Fortune's “Best Companies to Work For.” We are not able to find evidence for the curvilinear relationships previously found, but do uncover a linear negative relationship between racial diversity and short‐run performance. Managerial summary: Using Fortune's “Best Companies for Minorities,” previous research found that racial diversity affected both firm productivity and Tobin's q. To see if we could find these results in a different group of firms, we replicate this research using a sample drawn from Fortune's “Best Companies to Work For.” The former sample is distinguished by high commitment to minority programs, while the one used here stresses high congruence of values between the organization and all its employees. We are unable to replicate the relationships previously found, however, but do find that increasing racial diversity had a negative effect on firm productivity. Copyright © 2016 John Wiley & Sons, Ltd.     

Characterizing the Real Roots for P,A, and F with Applications to Environmental Remediation and Home Buying Problems

Historically, work on multiple roots for the internal rate of return (PW = 0) equation focuses on tests for the root's uniqueness and interpreting the meaningfulness of computed roots. Instead, this article starts with problems that consist of P, A, and F cash flows. Then for all possible values of these cash flows, this article develops the boundary conditions for no, single, and multiple real roots of either positive or negative sign.

The results of characterizing these roots are applied to two examples as a foundation for conclusions about those multiple root problems and hypotheses about other problems with multiple roots. The first example is an important class of resource development projects that may require significant expenditures for environmental remediation at the conclusion of operation. The second example of buying versus leasing a home is often used to demonstrate the value of economic analysis to students.     

The individual vs. the group? Individualization and collectivity among students in collaborative design

The various modes in which individuals relate to the collectivity of a group have been fruitfully explored in research on group dynamics. The present paper applies a phenomenological interview approach to understand how this dynamic relationship plays out among design students in a collaborative design situation. Through deep-interviews with the members of a temporary design group, a number of dimensions for this relationship were uncovered. These individual-group characteristics related to instrumentality of engagement, experience of ambivalence and threat and finally to the process of individualization in which the group enabled an individual “design self”. After having presented the theoretical underpinnings and the empirical results of this study, the paper ends with suggesting a synthesis perspective of the individual-group relation in collaborative design.     

Resource ambidexterity through alliance portfolios and firm performance

Research summary : Partner resources can be an important alternative to internal firm resources for attaining dual and seemingly incompatible strategic objectives. We extend arguments about managing conflicting objectives typically made at the firm level to the level of a firm's alliance portfolio. Specifically, will a balance between revenue enhancement and cost reduction attained collectively through partner resources accessed via a firm's various alliances be similarly beneficial for firm performance? Additionally, how do strategic attributes of alliance portfolio configuration, specifically alliance portfolio size and partner resource scope, condition the balance‐performance relationship? Based on data from the global airline industry, we find support for the balance‐performance relationship, though such balance is less beneficial for firms in the case of access to a broader resource scope per partner . Managerial summary : Increasing revenue and reducing costs simultaneously can potentially enhance firm competitiveness. We highlight that an alliance strategy can be an important alternative to internal resources for attaining such dual strategic objectives, particularly when partner resources accessed through alliances are treated collectively as portfolios. We examine the importance of balancing product‐market extending and efficiency‐improving partner resources in the global airline industry as well as the impact of two alternate strategies for accessing resources through alliances: fewer partners with more resources per partner or more partners with fewer resources per partner. We find that resource balance at the portfolio level helps airlines improve performance. Our results also suggest that managers should be cautious of accessing too many resources through just a few partners . Copyright © 2015 John Wiley & Sons, Ltd.     

The Excellence phenomenon: Issues and implications

The biggest selling management book in history,In Search of Excellence, and its sequel,A Passion for Excellence have stirred up a controversy among practitioners and academics alike regarding the nature of excellence and how to achieve it. The following review article summarizes the main points of the books, and looks at some of the issues and implications that are raised. An attempt is also made to discuss the relevance of the excellence books to Asian readers.     

Joint product management strategies for E. coli O157 and feedlot profits

The objective of this study was to investigate the associations of management strategies on Escherichia coli O157 and feedlot profits. Management practices that affect cattle performance were identified using ordinary least squares regressions, while a negative binomial regression was used to identify management practices that were associated with E. coli O157 prevalence. Findings support the hypothesis that E. coli O157 occurrences in the feedlot were not directly associated with cattle performance in the feedlot, which suggests potential for a downstream production externality problem. General categories of management strategies were associated with cattle performance and E. coli O157 occurrences and were consistent with past research. As implementation of enhanced food safety regulations potentially shift responsibility of ensuring safety of the food supply from a government based agency onto private firms, a portion of the costs of E. coli O157 outbreaks is likely to shift to feedlots in the future.