International strategy and performance—Clustering strategic types of SMEs

This paper identifies different strategic types of internationalised SMEs, in so doing providing managers and entrepreneurs with a much better understanding of the main strategic options and their relationship with the international performance of firms. We provide a theoretical analysis of strategic orientations and strategic behaviour in international SMEs, followed by an empirical investigation based on a sample of Italian SMEs. The SMEs are grouped into strategic types using cluster analysis, and the link between strategic type and international performance is subsequently analysed using logistic regression. The empirical data suggest that there are four broad strategic types, namely an entrepreneurial/growth-oriented group of firms, a customer-oriented group, a product/inward-oriented cluster, and a further group of firms that lacks strategic orientation. The characteristics of the strategic clusters are discussed, and the regression results show that a clear and proactive strategic orientation and its consistency with business strategy leads to improved international performance. This confirms the positive and highly significant role of strategic types.     

Europe 2020 — A promising strategy?

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Europe 2020 — A promising strategy?     

Does rivals' innovation matter? A competitive dynamics perspective on firms' product strategy

We build on the awareness-motivation-capability (AMC) framework of competitive dynamics research to examine how a signal of a rival's innovation, in the form of research and development (R&D) intensity, may influence a focal firm's product actions. We argue that a rival's R&D intensity increases a focal firm's awareness of a competitive threat and thus its motivation to react by increasing its product actions. However, this competitive impact is conditional on the focal firm's size and performance relative to the rival, as well as the strategic homogeneity of the two. We use the AMC framework to analyze such moderating effects.     

How do strategic groups handle cognitive complexity to sustain competitive advantage? A commentary essay

Cheng and Chang [Cheng SL, Chang HC. Performance Implications of Cognitive Complexity: An Empirical Study of Cognitive Strategic Groups in Semiconductor Industry. Journal Business Research 2009‐this issue] empirically investigate how a strategic group's cognitive complexity affects firm performance in the context of Taiwan's semiconductor industry. This commentary essay explores the authors' contribution to the multidisciplinary strategic group literature. The commentary also considers how Cheng and Chang's results can be integrated with important work in the competitive dynamic studies.     

To agree or not to agree? A meta-analytical review of strategic consensus and organizational performance

The premise underlying most of the research on strategic consensus is that a higher degree of consensus has a positive impact on organizational performance. Empirical studies, however, have produced inconsistent results for the strength and direction of this relationship, as well as for the role of potential moderators. With this meta-analysis, we provide empirical support for a positive effect of strategic consensus on organizational performance, and offer evidence for the existence of several moderators of the aforementioned relationship, which we then discuss as fruitful avenues for future research. This study enhances our understanding of this important strategy process construct and benefits managerial practice by discussing means for improving the realization and implementation of strategies.     

Personal and Historical Nostalgia—A Comparison of Common Emotions

ABSTRACT

This research uses an experimental research design to examine differences in the emotional responses of 806 respondents experiencing specifically personal or historical nostalgic reactions to advertising appeals. Changes in intensity of five emotions common to both reactions are examined. Upbeat/elation, loss/regret, and warm/tender emotions are significantly heightened under the personal compared with the historical nostalgic response. Negative/irritation and serenity/calm emotions are not significantly different. These results highlight the need to examine nostalgia as two separate reactions and provide insights useful to practitioners regarding emotional reactions to each form. It also suggests the need for future research into personal and historical nostalgia's comparable influences on other responses.     

Does network board capital matter? A study of innovative performance in strategic SME networks

This article examines the effects of network board capital (i.e., human capital and relational capital) on total, radical and incremental network innovative performance. Results from a five-year longitudinal study of network boards in 53 strategic networks suggest that a network board's diversity, education level, and interlocking directorates with other such networks affect network innovative performance. The degree of board diversity and interlocking directorates primarily influence incremental innovation, whereas education level influences radical innovation. The study finds that a network board's diversity of expertise and education level are important for improving all components of innovative performance (total, radical and incremental) in smaller networks. Managerial implications of these findings are discussed.     

Stay positive or go negative? Memory imperfections and messaging strategy

This paper studies the optimal mix of message content in elections while explicitly accounting for voters' memory imperfections. We build an analytical model of a political contest between two candidates facing an election with an electorate consisting of supporters, opponents, and undecided voters. The candidates take decisions on advertising sequence and content (positive vs. negative). Our model explicitly considers the role of memory processes, in particular decay (the idea that memories fade with time) and rehearsal (the idea that accessing a memory eases its recall,) that crucially affect how effective ads are in influencing choice. The model yields several interesting insights: (a) when both candidates have low initial support, they invest only in positive messages; (b) when both candidates are endowed with high initial support, their messaging strategies take a “pulsing” shape involving negative advertising accompanied by positive advertising; (c) when one candidate has low initial support while the other has high initial support, the former adopts a “pulsing” strategy while the latter adopts only positive advertising. Furthermore, we show that a candidate with low initial support facing a candidate with high initial support responds with a messaging strategy bunched with negative content towards the end of the election cycle. Our model's predictions are shown to find empirical support in a dataset assembled from 2016 U.S. Senate races.     

Founder centrality effects on the Mexican family firm’s top management group: firm culture,strategic vision and goals,and firm performance

Using social networks, we examined the founder’s influence on key strategic behaviors in Mexican family business. First, we drew on a sample of 42 Mexican family businesses and 201 managers to show how founder centrality affects the top management group (TMG) members’ cohesiveness. TMG members’ cohesiveness was examined in terms of the firm’s culture, its strategic vision, and strategic goals. Second, we examined how founder centrality and top management member group cohesiveness are related to performance in terms of financial, social and family-oriented objectives. Significant relationships were found between a founder’s centrality and the TMGs strategic behavior. Further, significant results connect different aspects of the founder’s centrality and the TMGs strategic behavior to financial, social and family-oriented objectives.     

Diehard or delicate? Violence and young firm performance in a developing country

Business Economics - The genesis and survival of new businesses is an important determinant of entrepreneurial dynamism. With the recent surge in security challenges, the issue of young...     

Joining the pack or going solo? A dynamic theory of new firm positioning

The question of new firm positioning in the marketplace and entrant's subsequent long-term performance lies at the heart of strategic entrepreneurship. We suggest a dynamic theory of new firm positioning that hinges on an important feature of the competitive environment: industry-level product diversity. The key argument is that industry-level product diversity drives imitation or differentiation at entry, which in turn shapes the exit likelihood of new entrants. So, in our theory, the extent of the new entrant's product portfolio overlap with all the industry's incumbents takes center stage. Support for our logic is obtained from the analysis of the life histories of 640 British motorcycle producers during the period 1899–1993.     

Outsourcing agrochemical services: economic or strategic logic?

Although the different perspectives of outsourcing—strategic versus economic—are taken into account in this research, our main objective is not to analyze the main reasons underlying this logic or to explain the decision behind outsourcing different activities. Instead, we aim to carry out a thorough analysis of the relationship between the characteristics of different service activities in terms of complexity, from a development point of view and the amount of knowledge firms’ gain from it and the theoretical approach underlying the outsourcing process. In this article, we test this proposal by analyzing the decisions to outsource services in R&D activities in the agrochemical industry.     

How do interorganizational and interpersonal networks affect a firm's strategic adaptive capability in a transition economy?

This paper examines the effects of a firm's interorganizational network characteristics and a CEO's interpersonal network ties on a firm's strategic adaptive capability in a transition economy. Using a unique survey dataset of 250 Chinese firms, the paper focuses on the compositional diversity of a firm's interorganizational network and the structural holes in a CEO's interpersonal network. The results show that an interorganizational network that is diverse in composition and an interpersonal network that is rich in structural holes have significantly positive effects on a firm's strategic adaptive capability in China's transition economy. However, a negative interaction effect occurs between interorganizational network diversity and interpersonal network structural holes. The results suggest that managers simultaneously consider both the individual and joint effects of interorganizational and interpersonal network characteristics when developing firm strategies.     

Country of origin: A competitive advantage?

Country of origin has been identified in the literature as an important cue that might be used by global marketers to influence consumers' valuation of the brand. Its effect on consumer perceptions, affect and behavioral intentions has been widely documented, based on consumer surveys and laboratory experiments. Despite this empirical evidence, we argue that country of origin is only one extrinsic cue among many extrinsic and intrinsic cues available to the consumer in a real purchase situation. Furthermore, in real life, consumers are likely to engage in some level of information search, which would further dilute the country of origin effect in the marketplace. Based on these arguments, we conclude that country of origin might not necessarily lead to a competitive (dis)advantage in terms of a price premium or discount. For a sample of products, we show that the objective product quality varies significantly by country of origin, and that these differences are consistent with extant research on country of origin effects on consumers' perceptions. After controlling for quality differences across brands, we demonstrate that marketers from different countries charge prices that are justified by differences in product quality. Price premiums or discounts are therefore explained by differences in product quality rather than the image effect produced by the country of origin cue.     

Mitigate,tolerate or relocate? Offshoring challenges,strategic imperatives and resource constraints

This paper examines key firm-level factors influencing initial strategic responses to offshoring implementation challenges. Comparative case findings indicate that firms are likely to try to mitigate challenges if they perceive to have control over their cause; if strategic objectives are diverse; and if firms have abundant resources available. By comparison, firms tolerate challenges if cost is a strategic imperative, or if resource endowments are limited. Firms relocate operations temporarily or permanently in particular if challenges are externally caused, whereby temporary relocation requires investments into flexible global infrastructures. Findings reveal critical contingencies of capability development and learning in offshoring and beyond.     

Small and medium size firm’s marketing competitive advantage and environmental initiatives in the Middle East

The paper explores Small and Medium Size Enterprises (SMEs) in Saudi Arabia within the context of environmental sustainability. The objective of the study is to examine whether SME’s sustainable marketing competitive advantage through environmental initiatives can positively associate to a firm’s environmental (green) best practices and stakeholder influences; similarly, it also identifies if best practices mediate environmental costs and competitive advantage. A sample of 181 responses are obtained and are analysed using factor analysis, multiple regression and their interaction effects. The findings show that the association between firms that have competitive advantage due to environmental initiatives were found to be significant for best practices and indirect stakeholder influences. Furthermore, the results identified that by using environmental best practices, SMEs can lower their environmental costs to gain marketing competitive advantage. These findings highlight the function of environmentalism and how it can influence practitioners.     

Strategy shift: Integrating strategy and the firm’s capability to innovate

Innovation is a key source of organizational growth and profitability. Many organizations at the front end of innovation struggle to engender an innovation approach that is effective and lasting. This article presents a framework that defines the interdependency of innovation and strategy, and then outlines the role of top management to continuously renew the positioning of the firm. Based on a synthesis of prior research—including the Dynamic Capabilities View, Innovation Orientation, and Disruptive Innovation Theory—and our own experience working with organizations, we present an operational strategy shift framework, which allows practitioners to increase, refine, and transform their firm’s capability to innovate (CTI) toward achieving their strategic objectives. This framework provides guidance that leaders can use to integrate innovation into their strategic process.     

Ferrous and non-ferrous metals — A problem of supply or a challenge?

The following article represents an excerpt from a report made by the author on September 30, 1976 to the German-Brazilian Chamber of Commerce in Rio de Janeiro, sponsored by the Fried. Krupp Company. It offers an outlook on the future supply and demand situation for ferrous and non-ferrous metals and identifies a number of factors which might, in the long run, lead to supply problems for the Federal Republic of Germany. Against this background it illustrates the Federal Government’s policy for safeguarding the supply with metals vitally needed by the German economy.     

A franchise: a resource-rich small service firm?

Internationally, the small firm community has been the focus of attention from academics and policy makers for several decades. On the other hand, franchising of services is a relative newcomer, particularly in the United Kingdom, and has not received the attention that this form of business organisation warrants. This article investigates the extent to which franchising represents the intelligent leverage of resources by ‘small firm’ owner-operator franchisees, focusing on one major ‘benchmark’ franchisor in the UK – McDonald's Restaurants Ltd. The article enables the exploration of the profile of individuals attracted to franchising and the associated resources, costs, tensions and contradictions, and moves discussion towards conclusions based on a resource scarcity/efficiency thesis from the dual perspectives of the franchisee and franchisor.