Strategic groups as reference groups: Theory,modeling and empirical examination of industry and competitive strategy

Previous studies on strategic groups have mainly focused on their static characteristics in order to test the theory of strategic groups and intraindustry performance differences (Porter, 1979; Cool and Schendel, 1988; Fiegenbaum and Thomas, 1990). In contrast, this study takes a longitudinal, dynamic perspective and describes the forces driving strategic group membership and structural evolution. It proposes that a strategic group acts as a reference point for group members in formulating competitive strategy. A partial adjustment model of strategic mobility is then developed which incorporates the idea of a strategic group as a reference group. It models strategic change in an industry both within and across strategic groups. The model is tested in the context of an in-depth industry analysis of the more significant firms in the insurance industry over the 1970-84 time period. The results suggest that strategic groups act as reference points for firm strategies and that predictions of future firm strategies and industry/group structures may also be successfully derived.     

Competitive positioning within and across a strategic group structure: the performance of core,secondary, and solitary firms

Drawing from economic and cognitive theories, researchers have argued that firms within an industry tend to cluster together, following similar strategies. Their positioning in strategic groups, in turn, is argued to influence firm actions and firm performance. We extend this research to examine performance implications of competitive positioning not just among but also within groups. We find that performance differences within groups are significantly larger than across groups, suggesting that some firms within groups develop better resource or competitive positions. We also find that secondary firms within a group outperform both core firms within the group and solitary firms, the latter being those not belonging to any multifirm strategic group. This suggests that secondary firms may be able to effectively balance the benefits of strategic distinctiveness with institutional pressures for similarity. We conclude that the primary implication of strategic groups does not relate to the ability of firms to create stable, advantageous market segments through collusion. Instead, strategic groups represent a range of viable strategic positions firms may stake out and use as reference points. Moreover, our results concerning secondary firms indicate that firm positioning within a group structure can have performance implications. Copyright © 2002 John Wiley & Sons, Ltd.     

Competitive forces and strategic choice decisions: an experimental investigation in the United States and Japan

Managers operate in a complex, uncertain environment and tend to form simplified models in order to cope with this environment and make competitive strategic decisions (i.e., cost‐leadership, differentiation, or focus). In this study, we use an experimental design to examine the strategic choice decision‐making process in firms located in the United States and Japan. We develop several main‐effect propositions regarding managerial selection of competitive strategies, depending on the competitive forces (buyer power, threat of substitutes, threat of new firm entry, and high intensity of rivalry) they are facing. We propose a main effect due to country of origin: Japanese managers prefer a cost‐leadership strategy more than American managers do. We also propose several interaction effects regarding cross‐national differences in strategy selection between Japanese and U.S. managers. To test our propositions, we collected experimental data from 316 U.S. executives and 459 Japanese executives. We assessed relative impacts of the competitive forces on strategic decision‐making using a multilevel regression analysis. The research findings indicated that high buyer power and high substitution threat were associated with a preference for cost‐leadership strategies, and Japanese managers were significantly more likely to prefer a cost‐leadership strategy than U.S. managers. We also found that, under conditions of high buyer power, U.S. managers were less likely than Japanese managers to enter a market with a differentiation or focus strategy. We found little support for other interaction hypotheses, suggesting points of similarity between U.S. and Japanese managers. We conclude with a discussion of theoretical and managerial implications of our results. Copyright © 2002 John Wiley & Sons, Ltd.     

Calls on high-technology: Japanese exploration of venture capital investments in the United States

The strategic logic of Japanese high-technology venture capital investment reveals the existence of an implicit call option, or ‘shadow option’, on new technology. This option is exercised by further investment in product development, manufacturing and distribution. The process is described with reference to a comparative study of Japanese and U.S. venture capital firms. Similarities and differences between the two groups are reported, and a conceptual model of Japanese option strategy is formulated. The implications for our understanding of Japanese strategy and for strategic management theory are discussed.     

Strategic groups,competitive groups and performance within the U.K. pharmaceutical industry: Improving our understanding of the competitive process

Strategic group research originated in the 1970s and a number of notable studies centered on the U.S. pharmaceutical industry. Results were, however, conflicting. This paper explores the nature of strategic groups in the U.K. pharmaceutical industry. The study confirms the presence of between six and eight strategic groups across the period studied, 1998–2002. The study also demonstrates a statistically significant relationship between these strategic groups and performance using three performance measures. The paper then compares strategic groups with competitive groups and concludes that the distinction is important and may explain the contradictory findings in earlier strategic group research. Copyright © 2007 John Wiley & Sons, Ltd.     

The effect of own-firm and other-firm experience on foreign direct investment survival in the United States, 1987–92

We argue that foreign firms operating in a host country generate information spillovers that have potential value for later foreign direct investment. We test two predictions. First, we expect foreign direct investments by firms with experience in a host country to be more likely to survive than investments made by first-time entrants. Second, foreign direct investments will be more likely to survive the greater the foreign presence in the target industry at the time of investment, subject to two contingencies. The first contingency is that the relationship will be weak or nonexistent among firms with no experience in the host country, because these firms have difficulty evaluating and taking advantage of the information spillovers. The second contingency is that the presence of other foreign firms will not affect investment survival among firms that already have a presence in the target industry and undertake expansion. These firms already possess general information about the target industries and are unlikely to gain additional benefit from information spillovers. We find supportive evidence based on the survival to 1992 among 354 U.S. investments undertaken by foreign firms in manufacturing industries during 1987. © 1997 John Wiley & Sons, Ltd.     

Strategy implementation: A comparison of face-to-face negotiations in the peoples republic of China and the United States

Crucial to every business alliance are the face-to-face negotiations that occur during the formulation and maintenance of the commercial relationship. Our study of American and Chinese businesspeople in simulated intracultural negotiations suggests both similarities and differences in style. For example, negotiators in both cultures were more successful when taking a problem-solving approach. Alternatively, the Chinese negotiators tended to ask many more questions and to interrupt one another more frequently than their American counterparts. Such subtle differences in style may cause problems in Sino-American negotiations, which may, in turn, sour otherwise fruitful commercial alliances.     

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.     

Software firm turnarounds in the 1990s: An analysis of reversing decline in a growing,dynamic industry

Investigations into management actions that reverse organizational decline have produced inconsistent findings. Prior studies have focused on the value of retrenchment actions versus strategic actions to engineer a performance turnaround. These studies, however, have generally not controlled for the cause of firm decline, overlooking a major theoretical contingency. Examining prepackaged software firms in the 1990s, we test the association of strategic and retrenchment actions in facilitating turnarounds in a munificent industry. The results show that measures of strategic actions—new product introductions, strategic alliances, and acquisitions—were positively associated with turnarounds. Conversely, measures of retrenchment actions—layoffs, asset reductions, and product withdrawals—were negatively associated with performance recovery. Our results suggest declining firms in munificent industries cannot retrench their way back to prosperity. Copyright © 2013 John Wiley & Sons, Ltd.     

Aux armes, citoyens: Cyber security and regulation in the United States

Government policy for cyber security in the United States relies on voluntary and cooperative action by the private sector and has, until now, explicitly rejected the use of mandate or regulation. This stands in contrast to other defense and homeland security issues, such as those involving border protection or transportation, where government intervention is the norm. The decision to rely on voluntary action for cyber security reflects influential trends in security policies, deregulation, and the government's relation to the Internet that continue to shape US policy even after the attacks of September 11. The result is an ineffectual policy that underestimates the role of government.     

Testing metric equivalence in cross‐national strategy research: an empirical test across the United States and Japan

We propose a conceptual and analytical framework for assessing metric equivalence in cross‐national strategy research. We illustrate this framework by testing the equivalence of measurement models for a set of strategy constructs across the United States and Japan. Results of a two‐group LISREL analysis conducted on a data set of 447 interorganizational relationships reveal that some constructs have strong cross‐national equivalence, while others need content respecification or reconceptualization. We discuss implications and offer suggestions about how to conduct empirical strategy research in cross‐national settings. Copyright © 1999 John Wiley & Sons, Ltd.     

Asymmetric rivalry between strategic groups: response,speed of response and ex ante vs. ex post competitive interaction in the spanish bank deposit market

The objective of this study is to examine asymmetric rivalry between strategic groups in a given industry. Two research hypotheses argue for the existence of asymmetric rivalry in the sense that strategic groups of small companies have a greater degree of response but a slower speed of response to the actions of strategic groups of large companies, than vice versa. To test this, we use an ex post approach that examines the news releases published on the strategic actions and reactions of firms. A third hypothesis compares ex ante competitive expectations with ex post asymmetric rivalry between strategic groups. To test this, we compare ex post news on actions/reactions with an ex ante approach that estimates conjectural variations. The empirical application carried out on bank deposits in the Spanish market defines strategic groups in terms of size due to the historical and institutional conditions of the industry (deregulatory change). The results obtained show that rivalry patterns between strategic groups in terms of company size can be predicted as asymmetric in the sense that smaller bank strategic groups have a greater degree of response (Stackelberg ‘leader–follower’ competitive interaction), and a slower speed of response to the actions of larger bank strategic groups than is found the other way around. Moreover, ex ante expectations of aggressiveness on the part of larger strategic groups characterize greater ex post reactions from the smaller‐size strategic groups. Therefore, the size distribution of strategic groups is valuable to research on complex industries with deregulation changes. Copyright © 2005 John Wiley & Sons, Ltd.     

Manufacturing environments in South Korea,Japan and the United States of America: A note

This paper reports a comparative analysis of the manufacturing facilities and the degree of automation of major manufacturing corporations in South Korea, Japan and the United States. We suggest that South Korea is behind Japan and the United States in manufacturing technology, but is aggressively incorporating automated equipment or processes into the manufacturing system.This project has been supported by a grant from the Korea Chamber of Commerce and Industry.     

The Extent of Occupational Segregation in the United States: Differences by Race,Ethnicity, and Gender

This paper studies occupational segregation by ethnicity/race and gender by following a new approach that facilitates multigroup comparisons and econometric analyses to take into account group characteristics. The analysis shows that segregation is particularly intense in the Hispanic and Asian populations (the situation being more severe for the former given its higher concentration in low‐paid jobs). A distinctive characteristic of Hispanics is that segregation is higher for men than for women although females are more concentrated in low‐paid jobs. Segregation neither for women nor for African and Native Americans is reduced by taking human capital variables into account.     

Different but Similar: Geothermal Energy and the Role of Politics in Germany, Iceland and the United States

This article looks into the role of the state in geothermal energy development. Based on the findings in three countries studied, it demonstrates that the demand for political intervention is strongly tied to the state of the technological and industry development. While government’s most important role in the early stages is R&D-support and regulatory guidelines, the relevance of market-based instruments and network support kicks in later. Between these two phases is a period where both ‘toolkits’ of political intervention (direct investment and indirect support efforts) have to be provided by state actors. Furthermore, the project timeline has to be kept in mind. Supporting project economics alone is not sufficient if project-internal barriers exist that cannot be overcome without specific support. The installation of an insurance scheme for dry wells in Germany and a similar mechanism in Iceland can be regarded as outstanding examples of this. However, it is important to note that geothermal energy generally will not be developed without strong public support in all development phases. The common cross-case barriers alone are sufficient for project developers and investors to be cautious about entering the industry. But if governments engage with the right instruments at the right time, there is reason to say that geothermal energy can provide a contribution to the energy turn towards renewable energies in many parts of the world, even apart from high-enthalpy regions.     

New Venture Performance in China,Japan, and the United States: The Impact of Formalized Market Information Processes

New venture companies, starting from small entities comprising entrepreneurs and their teams, start to grow in scale by instigating formalized processes to enhance management efficiency. This includes the use of formalized processes for collecting and disseminating market information. Despite the fact that utilizing market information is one of the fundamental factors of market orientation, little is known about the way market information is processed in new venture companies. The first aim of this research was to investigate the impact of formalized market information acquisition and utilization on new venture performance. The second objective was to investigate the effect of organizational formalization on the acquisition and utilization of market information in new venture firms. The final goal was to explore the extent to which these relationships vary in different cultural contexts. Based on an extensive literature review and interviews with managers in China, Japan, and the United States, a conceptual framework is developed that relates formalized market information processes to new venture performance in the three countries. The conceptual model is tested with data collected from 453 new venture companies in these countries. The results suggest that the use of a formalized process of market information utilization has a positive effect on new venture performance regardless of country. The analysis also indicates that the effect of organizational formalization, in general, differs between countries. Organizational formalization is associated with increased formalized utilization of market information only in the United States; the relationship does not apply in the two Asian countries studied. Taken together, these results suggest that in the Asian countries, organizational formalization improves information collection, while in the United States, it also improves the utilization of information throughout the organization. One implication of these results may be the potential of added benefits accruing to organizational formalization in new ventures in countries with high levels of individualism and/or high levels of power distance, where organizational power is concentrated in formal vertical reporting relationships, as opposed to informal horizontal peer‐to‐peer networks.     

The Role of the Senior HR Executive in Japan and the United States: Employment Relations, Corporate Governance, and Values

Based on an original survey of senior human resources (HR) executives, this paper provides empirical data for a comparison of HR management structures and practices in Japan and the United States. In both countries, the headquarters HR function has shrunk and employment decisions have become more decentralized in recent years. However, because the pace of change has been more rapid in the United States, the gap with Japan has widened. Significant differences persist in other areas, such as the HR executive's role in strategic decisions, perceived power of the HR function, executive values, and the consequences of these values for organizational outcomes and corporate governance.     

Current and Future Uses of the Computer: Industrial R&D in the United States

This study of 158 organizations sought to depict current uses of computers in R&D. A survey of senior R&D management by the Industrial Research Institute identifies a number of salient features. Routine computer use is becoming a characteristic of scientists, engineers, and managers. Yet characteristics of usage differ markedly by size of R&D unit and by line of business. Moreover, patterns of responses suggest on-going changes toward the time when R&D will be strongly coloured by the context of an integrated, intelligent computer environment. This implies new roles and skill requirements for R&D managers, professionals, and support staff.     

Striker Replacements in the United States,Canada, and Mexico: A Review of the Law and Empirical Research A Review of the Law andEmpirical Research

The debate on striker replacements is marked by considerable passion and controversy, with many unions and workers' rights advocates proposing legal prohibitions and employers and “free market” advocates generally opposing such prohibitions. In this article we go beyond the rhetoric and examine the nature and extent of striker replacement laws across North America. We also examine the research evidence on this issue and make suggestions for future research.