Peculiarities of public sector clients in service innovations

This paper analyses knowledge-intensive business service firms and their innovation activities in the context of federal government procurement with empirical evidence from Swiss information technology firms. The paper contributes to the growing literature on knowledge-intensive business services by expanding the concept to also capture public sector clients. It focuses in particular on the ways in which having a public sector client influences a knowledge-intensive business service firm’s ability to innovate, opportunities for interactive learning with their clients, and ways in which having a public sector client allows a firm to diversify. The paper shows that having a federal agency as a client is quite different from a private sector client particularly with regard to multi-party systems on the client side, the importance of informal interactions, and the role of public reputation.     

The perceived usefulness of knowledge supplied by foreign client networks

The network surrounding a firm's foreign clients has large influence on its ability to act in the market. How firms can utilize the knowledge supplied by client networks is therefore of great importance to their business with clients. Many studies show the usefulness of foreign clients and suppliers, whereas less attention has been given to the usefulness of knowledge supplied by clients’ network, such as clients’ clients, clients’ supplementary suppliers and competitors to the firm. This study contributes to international business research on networks by investigating the knowledge supplied by client networks for a firm doing business with a specific foreign client on a sample of 494 firms. A LISREL analysis demonstrates that knowledge supplied by client networks is more useful the more experienced the firm. Client networks are also more useful the more knowledge the firm has of its client, the more the firm needs knowledge of its clients and suppliers, the higher the cost of the client relationship, and the more standardized the product. A major conclusion is that the client network knowledge is more useful the further a firm's collaboration with the client, presumably as a result of the new, and more embedded business that the firm develops with the client. Implications are that client networks are resources that can be important competitive advantages for the internationalizing firm.     

Professional Service Quality

Abstract

Many of the services that are directed to business clients involve work by professionals who are employed by and/or own a supporting practice. To date, little attention has been directed to the possibility that the large variations in the size and nature of these firms may be reflected in the quality of services they produce. Further, no attempt has be made to delineate those quality factors that clients associate with the firm and those that are associated with the individual professional. This article reports the results of an empirical study designed to investigate the perceived relative influence of the individual, the practice, and several client variables as they affect the delivery of service quality.     

University services for fostering creativity in high-technology firms

Innovation is commonly hailed as a fundamental factor in ensuring long-term firm survival, which is, in turn, used as a way of measuring business success. This article proposes that creativity is a vital element in the path towards innovation and discusses good practice for publicly funded services designed to support and advise potential and nascent entrepreneurs. It describes the model used by the Ideas Institute for Business Development and Creation and presents three case studies where personalised, individually tailored mentoring has marked the difference in ensuring a competitive edge for its client firms by stimulating creative intelligence among entrepreneurs and by providing the necessary tools to embark upon the road to continuous innovation.     

Multinational Corporations and the Transforming Operational Environment in China

China and the multinational corporations (MNCs) have had a long period of close relationship. In locating operations in China, MNCs beneficially followed the principle of least‐cost location. However, China's economic and business environment has been undergoing a striking transformation. The Chinese economy is losing some of its beneficial emerging‐market traits. Many foreign business enterprises and MNCs have experienced deep erosion of profits. This article first focuses on the growing importance of China and the Chinese markets for foreign business firms and MNCs. The sheer size of the market naturally draws them in. Next, it dwells on the challenges that have evolved over the years and the budding new business environment, often referred to as “the new normal.” Many MNCs realize the need to adapt to the new operating environment in China. This article proposes a list of adaptive and coping measures for the foreign enterprises and MNCs. © 2015 Wiley Periodicals, Inc.     

Digital transformation: Five recommendations for the digitally conscious firm

Digital transformation is one of the key challenges facing contemporary businesses. The need to leverage digital technology to develop and implement new business models forces firms to reevaluate existing capabilities, structures, and culture in order to identify what technologies are relevant and how they will be enacted in organizational processes and business offerings. More often than not, these profound changes require firms to revisit old truths as they develop strategies that thread the needle between beneficial innovation and harmful disruption. This article uses the Internet of Things (IoT) as a backdrop to demonstrate the concerns associated with transformative technologies and offers five recommendations as to how firms can develop the strategies needed for digital transformation and become digitally conscious: (1) Start small and build on firsthand benefits; (2) team up and create competitive advantage from brand recognition; (3) engage in standardization efforts; (4) take responsibility for data ownership and ethics; and (5) own the change and ensure organization-wide commitment. As such, this article shows that digital transformation should be a top management priority and a defining trait of corporate business strategy, and that by becoming digitally conscious, firms may get a head start on their transformation journey.     

Corporate Social Responsibility in Challenging and Non-enabling Institutional Contexts: Do Institutional Voids matter?

The extant literature on comparative Corporate Social Responsibility (CSR) often assumes functioning and enabling institutional arrangements, such as strong government, market and civil society, as a necessary condition for responsible business practices. Setting aside this dominant assumption and drawing insights from a case study of Fidelity Bank, Nigeria, we explore why and how firms still pursue and enact responsible business practices in what could be described as challenging and non-enabling institutional contexts for CSR. Our findings suggest that responsible business practices in such contexts are often anchored on some CSR adaptive mechanisms. These mechanisms uniquely complement themselves and inform CSR strategies. The CSR adaptive mechanisms and strategies, in combination and in complementarity, then act as an institutional buffer (i.e. ‘institutional immunity’), which enables firms to successfully engage in responsible practices irrespective of their weak institutional settings. We leverage this understanding to contribute to CSR in developing economies, often characterised by challenging and non-enabling institutional contexts. The research, policy and practice implications are also discussed.     

Social manufacturing: When the maker movement meets interfirm production networks

New business models harnessing the power of individuals have already revolutionized service industries and digital content production. In this study, we investigate whether a similar phenomenon is taking place in manufacturing industries. We start by conceptually defining two distinct forms of firm-individual collaboration in manufacturing industries: (1) social cloud manufacturing, in which firms outsource manufacturing to individuals, and (2) social platform manufacturing, in which firms provide manufacturing services to individuals. We then empirically investigate the nature of firm-individual collaboration within these forms, focusing on the role of individuals. We find that the individuals are often makers who view their participation primarily as a hobby and are driven mainly by nonmonetary benefits, that the design process often involves both parties, and that the two forms of collaboration exploit different enabling technologies. Our findings suggest that firms working with individuals can potentially reap multiple benefits, including fresh ideas, broader design support, and quick delivery times. This article contributes to an improved understanding of how firms can build potentially disruptive business models in manufacturing industries by leveraging individuals, thereby adding to the emerging stream of literature on social manufacturing.     

Internationalization of Chinese Firms: What Role Does Guanxi Play for Overcoming Their Liability of Outsidership in Developed Markets?

This article explains how managers of Chinese firms can use guanxi when entering and expanding in developed markets. The empirical basis for the investigation is formed by interviews with 29 managers at 17 Chinese business‐to‐business firms internationalizing to Europe. The results generated are twofold. On the one hand, existing guanxi was largely irrelevant for initially entering the European market. On the other hand, Chinese firms managed to successfully overcome the liability of outsidership by building new guanxi‐like relationships with their Western business network partners after a certain period of time. Six propositions give insights on the process for Chinese firms to become insiders in the business networks of developed countries. The propositions were combined into two comprehensive models that give implications for future research and for management practice. © 2016 Wiley Periodicals, Inc.     

Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? <Emphasis Type="Italic">Clarifications,Exceptions and Implications</Emphasis>

Corporate social responsibility (CSR) is increasingly becoming a popular business concept in developed economies. As typical of other business concepts, it is on its way to globalization through practices and structures of the globalized capitalist world order, typified in Multinational Corporations (MNCs). However, CSR often sits uncomfortably in this capitalist world order, as MNCs are often challenged by the global reach of their supply chains and the possible irresponsible practices inherent along these chains. The possibility of irresponsible practices puts global firms under pressure to protect their brands even if it means assuming responsibilities for the practices of their suppliers. Pressure groups understand this burden on firms and try to take advantage of the situation. This article seeks to challenge the often taken-for-granted-assumption that firms should be accountable for the practices of their suppliers by espousing the moral (and sometimes legal) underpinnings of the concept of responsibility. Except where corporate control and or corporate grouping exist, it identifies the use of power as a critical factor to be considered in allocating responsibility in firm–supplier relationship; and suggests that the more powerful in this relationship has a responsibility to exert some moral influence on the weaker party. The article highlights the use of code of conducts, corporate culture, anti-pressure group campaigns, personnel training and value reorientation as possible sources of wielding positive moral influence along supply chains.     

Are supply-chain relationships more influenced by buyer-supplier relationships or the business environment of the country itself? Evidence from the ‘China-Australia’ trading relationship

In doing business with China, poor supply chain performance is reported as being caused by either poor relationships between firms in China or the business environment in which firms in China have to operate. This research paper explores the relative importance of these two factors for food supply chains from Australia to China. Results are based on surveys of 84 importers, wholesalers and retailers in China and 22 Australian exporters and wholesalers. They show that the country itself had a greater influence than firm to firm relationships. Firms exporting food to China should therefore keep supply chains as short as possible to minimize the uncertainties associated with the business environment.     

The internationalisation of family firms: case histories of two Chinese overseas family firms

Internationalisation is an important part of the business history of both non-family and family firms. The discourse regarding both is based on the mainstream microeconomic theories of the firm. This article, through examining the case histories of two successful Chinese overseas family firms, shows that explanations of internationalisation need often to venture beyond the confines of existing theories, especially where contextual factors are influential in shaping decision-making. The experiences of these firms point to the role of the state as a major contextual factor. The case history approach is the most relevant in this and other instances where context matters.     

Discretionary power of project managers in knowledge‐intensive firms and gender issues

The scarcity of women among highly qualified professionals in business‐to‐business information and communication technologies (ICT) in Europe and in North America has been noted as recently as the late 1990s (Panteli, Stack, Atkinson, & Ramsay, 1999). The organization and management of work in such firms is typically project‐based. This has many consequences, including: long working hours with fierce resistance to any reduction, unpaid overtime, high management expectations of employee flexibility to meet unanticipated client demands, and the need for employees to negotiate flexible work arrangements on a case‐by‐case basis with a project manager who often has much discretion on whether to accommodate such requests. We found that women are particularly disadvantaged in such a system, which could partly explain their under‐representation in such jobs. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

The Choice between Bank Debt and Trace Credit in Business Start-ups

This paper investigates the choice between bank debt and trade credit in business start-ups. While trade credit is more expensive than bank debt, suppliers tend to follow a more lenient liquidation policy when client firms encounter financial distress. As a result, suppliers are more willing to renegotiate the outstanding debt or grant additional debt whereas banks are more likely to liquidate borrowers upon default. Given the risky nature of business start-ups, we argue that the entrepreneur’s choice of debt instruments reflects these differences in liquidation policy between lenders and is thus determined by the venture’s failure risk, the entrepreneur’s private control benefits that are lost upon liquidation and the liquidation value of firm assets. Using unique data on 325 first-time business start-ups, we find that firms in industries with high historical start-up failure rates and entrepreneurs who tend to highly value private benefits of control use less bank debt. These effects are especially prevalent in start-ups where assets have a high liquidation value and thus banks are more likely to liquidate the venture following default. An erratum to this article can be found at     

Early international entrepreneurship in China: Extent and determinants

We use data on 3,948 Chinese firms obtained from the World Bank’s Investment Climate Private Enterprise Survey to investigate early international entrepreneurship (international new ventures) in China. The extent of early international entrepreneurship in China is significant: 62% of the exporting firms start export operations within 3 years. Foreign shareholders within the firm and an entrepreneur with previous exporting experience are noted to significantly increase the probability that a firm internationalizes early. We find marked differences in the behaviour of indigenous and foreign-invested firms, and between direct and indirect exporters. For example, for an indigenous firm the more foreign experience its entrepreneur has, the less likely it is to start exporting early. As far as indirect exporting is concerned, business networks are significant determinants of the extent of such exporting, but delays the internationalization process of indigenous firms. The more firms in China export, the more time their managers need to spend on government regulations, although perhaps counter-intuitively, this was not found to discourage exporting. Overall, the findings suggest that exporting by indigenous Chinese firms is often due to challenging or adverse domestic conditions.     

Beyond risk mitigation: Enhancing corporate innovation with scenario planning

The impact of exogenous shocks on business strategy, and possible responses to those threats, have received growing attention when considering the challenges of conducting business in an increasingly complex business environment. Scenario/contingency planning is a tool used by firms to translate their organizational learning capabilities into preconceived operational responses designed to react to, and then recover from, an exogenous shock. The use of scenario planning that includes exogenous shock scenarios has become a best practice in many industries. This article explores the additional potential usefulness of scenario planning as a tool for promoting innovation and corporate entrepreneurship.     

Humility in Business: A Contextual Approach

The virtue of humility is often considered to be at odds with common business practice. In recent years, however, scholars within business ethics and leadership have shown an increasing interest in humility. Despite such attention, the argument for the relevance of humility in business could be expanded. Unlike extant research that focuses on humility as a character-building virtue or instrumentally useful leadership trait, this article argues that humility reflects the interdependent nature of business. Through such an approach, the article gives an extrinsic motivation of the relevance of humility in business, and, from a theoretical point of view, links the intra-personal and intra-organizational perspective on humility to an inter-organizational one. The article contextualizes the virtue of humility by relating it to the economic, cognitive, and moral aspects of business practice and managerial work. It claims that the assumption of self-sufficiency in business is a grave misrepresentation of what business is—a practice characterized by interdependency. Potential links between virtue ethics, leadership, and contextually oriented theories of business, such as stakeholder theory, network theories, and resource dependence theory, are also identified.     

Client loyalty and defection in the corporate legal industry

As the legal service industry matures and becomes saturated, more traditional forms of marketing may need to be replaced by the adoption of newer relationship concepts. This article reports on a research investigation among corporate clients of UK law firms. The findings reveal that satisfaction with the service is the key factor that influences corporate clients to stay loyal to a particular law firm. The quality of legal advice, trust and honesty were also found to be important factors that drive client loyalty. Conversely, poor quality, as an outcome of the client – legal firm interaction, is perceived to be a significant contributor of client defection. Overall, the findings emphasise the need for legal firms to focus on client retention for survival and profitability.     

Automotive foreign direct investment in the United States: Economic and market consequences of globalization

This article examines the substantial growth of foreign direct investment into the United States by international (i.e., non-domestic) automotive firms over the past quarter century. Global macro-environmental factors influencing this investment are examined, as are the resulting impacts on numerous stakeholders including global automotive firms, consumers, and regional and state economies. The findings illustrate effective adaptive strategies that both automotive firms and economic development stakeholders follow in an increasingly global environment, resulting in significant economic, market, and quality-of-life benefits. The stakeholder perspective affords a more comprehensive view of globalization, forwarding a position counter to the protectionist viewpoint often espoused in business and popular culture.