Strategy making as iterated processes of resource allocation

Capitalizing on the Bower-Burgelman process model of strategy making in a large, complex organization, we investigate the multilevel managerial activities that lead firms facing similar new business opportunities to respond with different strategic commitments. Our field-based data provide evidence on (I) the role of ‘corporate contexts’ that reflects top managers' crude strategic intent in shaping strategic initiatives of business-unit managers; (2) the critical influence of early business development results on increasing or decreasing middle managers' enthusiasm to the new businesses and top managers' confidence in these middle managers in a resource allocation; (3) the escalation or deescalation of a firm's strategic commitment to the new businesses as a consequence of iterations of resource allocation. We conclude that it is useful to conceptualize strategy making in a large, complex firm as an iterated process of resource allocation.     

Corporate brand positioning in complex industrial firms: Introducing a dynamic,process approach to positioning

Approaches to positioning predominantly examine the input and outcome effectiveness of certain positioning strategies. However, less is known about the positioning management process and internal dynamics. This study remedies this limitation by identifying corporate brand positioning (CBP) in industrial firms as a strategic development process. Based on comparative case studies within two globally operating industrial multi-business firms, this study opens the proverbial ‘black box’ to reveal how CBP occurs over time and what the driving mechanisms are. Findings suggest understanding CBP as a recurring, multi-level process, making it more than just a corporate-level marketing activity. Positioning episodes are found to pass through seven stages, each creating enablers and barriers for change. CBP should be viewed as a political process that integrates stable corporate and business levels and temporary levels that emerge in micro-events of reflective strategic practice.     

Core competencies and the strategic management of R&D

There is an increasing concern amongst R&D managers and their immediate 'customers' and sponsors within companies to have reliable mechanisms to direct R&D simultaneously toward effective rapid innovation and accumulation of long term technological strength. This is leading R&D managers to seek analytical tools to help them identify technologies which have particular significance for competitive advantage, for multiple SBUs, and for longer term strategic positioning, and to manage them in ways which do not leave them at the mercy of business unit strategies, but situate them closer to the core of corporate strategies. This paper conducts an examination of the parallel literature on the idea of core competencies as a new paradigm in corporate strategy and shows that core competencies can be useful focusing devices for assisting in the creation of this linkage between the technological and non-technological aspects of the corporate strategy agenda. Implications are drawn out for: R&D decisions in the areas of shaping strategic research programmes; funding and organisation regimes for R&D and measuring the effectiveness of R&D.     

SBU strategy and performance: The moderating effects of the corporate-SBU relationship

This study suggests that the link between an SBU strategy and performance is moderated by the SBU's relationship with corporate management. Information processing arguments suggest that this relationship, typically characterized by general measures of centralization, has been inappropriately conceptualized in prior research. An alternative view, one that considers which decisions and activities should be controlled by the individual SBU, is proposed and tested. The results of a study of 496 SBUs indicate that SBU performance is enhanced when: (1) SBUs with an external strategic orientation control environmental monitoring activities and strategic decision analysis, and (2) SBUs with an intraorganizational orientation control those activities relating to operations. Weaker SBU performance is associated with SBU control over those functions and activities not central to the SBU's business strategy. Therefore, it is suggested that the corporate-SBU relationship can either facilitate or inhibit the implementation of the SBU's intended strategy.     

Foreign‐based competition and corporate diversification strategy

Since the mid‐1980s U.S. domestic firms have faced significant increases in foreign‐based (i.e., import) competition as reductions in barriers to international commerce have resulted in markets and industries becoming increasingly global. Despite the growing and widespread importance of foreign‐based competition, the influence that such competition may exert on corporate diversification strategy is a question largely overlooked in the strategic management literature. This paper examines the impact of foreign‐based competition in a firm's core business on both the level and nature of a firm's diversification strategy at the corporate level in a panel dataset of U.S. firms over the period 1985–94. Our findings provide the first evidence that increased foreign‐based competition is indeed a statistically significant factor explaining both the reduced business‐level diversity and the increased strategic focus of U.S. firms that has been widely perceived over the past two decades. Copyright © 2005 John Wiley & Sons, Ltd.     

Success in Global New Product Development: Impact of Strategy and the Behavioral Environment of the Firm

Product innovation and the trend toward globalization are two important dimensions driving business today, and a firm's global new product development (NPD) strategy is a primary determinant of performance. Succeeding in this competitive and complex market arena calls for corporate resources and strategies by which firms can effectively tackle the challenges and opportunities associated with international NPD. Based on the resource‐based view (RBV) and the entrepreneurial strategic posture (ESP) literature, the present study develops and tests a model that emphasizes the resources of the firm as primary determinants of competitive advantage and, thus, of superior performance through the strategic initiatives that these enable. In the study, global NPD programs are assessed in terms of three dimensions: (1) the organizational resources or behavioral environment of the firm relevant for international NPD—specifically, the global innovation culture of the firm and senior management involvement in the global NPD effort; (2) the global NPD strategies (i.e., global presence strategy and global product harmonization strategy) chosen for expanding and exploiting opportunities in international markets; and (3) global NPD program performance in terms of shorter‐ and longer‐term outcome measures. These are modeled in antecedent terms, where the impact of the resources on performance is mediated by the NPD strategy of the firm. Based on data from 432 corporate global new product programs (North America and Europe, business‐to‐business, services and goods), a structural model testing for the hypothesized mediation effects was substantially supported. Specifically, having an organizational posture that, at once, values innovation plus globalization, as well as a senior management that is active in and supports the international NPD effort leads to strategic choices that are focused on making the firm truly global in terms of both market coverage and product offering. Further, the two strategies—global presence and global product harmonization—were found to be significant mediators of the firm's behavioral environment in terms of impact on performance of global NPD programs.     

The Impact of the Corporate Mind‐set on New Product Launch Strategy and Market Performance

In the last decade, there has been an increasing interest in the link between new product launch strategy and market performance. So far, new product launch research has focused on this performance relationship without giving much attention to background factors that can facilitate or inhibit successful launch strategies. However, investigating such antecedents that set the framework in which different strategic launch decisions enable or prevent the market performance of new products is useful for enhancing the current state of knowledge. Drawing on the concept of a firm's orientation, the present study discusses the influence of the corporate mind‐set on new product launch strategy and market performance. It is hypothesized that the capability to successfully launch new products is based on the interplay between a firm's mind‐set (i.e., an analytical, risk‐taking, and aggressive posture) and its strategic launch decisions on setting launch objectives, selecting target markets, and positioning the new product. A research model with mediating effects is proposed, where the corporate mind‐set determines the launch strategy decisions, which in turn impact market performance. The model is tested with data on 113 industrial new products launched in business‐to‐business markets in Germany using a multiple informant approach. The results support the mediated model as the dimensions of the corporate mind‐set have a significant impact on most strategic launch decisions, which in turn significantly contribute to market performance. It is found that while an analytical posture relates to all three strategic launch decisions, risk taking and an aggressive posture have a significant impact on two, respectively one, launch strategy elements. These findings confirm the importance of investigating antecedents for a successful new product launch, as the corporate mind‐set serves as a background resource that sets the framework for successful new product launch decisions. In the final section implications for research and managerial practice as well as limitations of this research are provided.     

Strategic decision making in business relationships: A dyadic agent-based simulation approach

This study employs agent-based simulation to model strategic decision making in business relationships, examining the influence of two important strategy drivers in business relationships (performance and power) on relationship success (relationship survival and performance). The study offers insights into the complex and evolutionary interaction and feedback effects between networking strategy choice, relationship performance and power. Findings show that although certain strategies may be desirable for firms to manage their business relationships, they are not necessarily as successful in all situations. Results indicate that a trade-off exists between relationship context and performance which needs to be considered in strategic networking decisions. Further, the study shows that too many strategy changes cause relationships to become unstable and thus negatively affect performance. The authors refer to this phenomenon as strategy volatility — the rate at which actors change their networking strategies within relationships. This phenomenon arises when too many variables influence firms' decision making and thus cause firms to frequently change their strategy. Although strategy volatility has a relationship safeguarding effect in the short term, this effect diminishes over time.     

Strategic planning in a turbulent environment: evidence from the oil majors

The long‐running debate between the ‘rational design’ and ‘emergent process’ schools of strategy formation has involved caricatures of firms' strategic planning processes, but little empirical evidence of whether and how companies plan. Despite the presumption that environmental turbulence renders conventional strategic planning all but impossible, the evidence from the corporate sector suggests that reports of the demise of strategic planning are greatly exaggerated. The goal of this paper is to fill this empirical gap by describing the characteristics of the strategic planning systems of multinational, multibusiness companies faced with volatile, unpredictable business environments. In‐depth case studies of the planning systems of eight of the world's largest oil companies identified fundamental changes in the nature and role of strategic planning since the end of the 1970s. The findings point to a possible reconciliation of ‘design’ and ‘process’ approaches to strategy formulation. The study pointed to a process of planned emergence in which strategic planning systems provided a mechanism for coordinating decentralized strategy formulation within a structure of demanding performance targets and clear corporate guidelines. The study shows that these planning systems fostered adaptation and responsiveness, but showed limited innovation and analytical sophistication. Copyright © 2003 John Wiley & Sons, Ltd.     

电力多经企业可持续发展的战略思考

逐步推进电力主辅分离的改革是"十一五"深化电力体制改革的重要任务之一。实施改革后,电力多经企业面临新的战略环境。电力多经企业要实现可持续发展,必须深入分析其战略发展条件,应建立现代企业的法人治理结构、真正建立市场化的用人机制、树立积极开拓的市场观念、培育形成企业核心竞争力。电力多经企业可持续发展的战略举措是:实施集团化运作、集约化发展,优先发展主导产业,协同发展和建立企业战略联盟等。     

面向低收入群体的商业模式创新

对企业的BOP战略与面向BOP市场的商业模式创新问题的研究，不仅具有重大且长远的经济意义和社会意义。而且还有重要的理论价值。本本从战略目标的视角将企业的BOP战略划分为市场开发型BOP战略、资源开发型BOP战略和资源一市场开发型BOP战略三种基本类型．且每种BOP战略都对应着相应类型的商业模式创新。同时．三种BOP战略与企业的基本竞争战略之间也存在着对应关系。通过对企业能力的界定。初步构建了企业关键能力与BOP战略之间的匹配模型。进而建立起竞争战略、企业能力与面向BOP市场的商业模式创新三者之间的逻辑关系。     

Improving the Strategy-Innovation Link

In spite of the tremendous impact that new technology has had on every aspect of business operations, we have yet to develop a satisfactory way of incorporating innovation in our strategic thinking processes. However, we are making progress. A further step in our understanding is provided in this article by Gerhard Mensch, the recent winner of the Humboldt prize for his creative work in economics, and Vasudevan Ramanujam. They collaborate in developing a model that links strategy and innovation by relating innovation activities to strategic goals of the firm and the external pressures that are perceived by management.     

External Venturing and Discontinuous Strategic Renewal: An Options Perspective

This study examines the relationship between a firm's venturing activities and its undertaking of strategic renewal. The study was motivated by some important gaps in the corporate entrepreneurship literature on venturing and renewal. The extant literature has not focused on the different types and dimensions of firms' renewal activities. In particular, discontinuous renewal involving shifts in firms' core businesses is not well understood. Moreover, the conditions that drive firms to undertake strategic renewal have not been examined. For example, it is not known how venturing increases or reduces the benefits of undertaking renewal. This study focuses on a discontinuous form of renewal involving major changes in firms' core businesses and examines firms' external venturing activities that complement their internal development. We examine corporate venture capital (CVC) investments, which are direct minority equity investments made by established companies in privately held ventures. Discontinuous renewal is conceptualized as resulting from a set of related, and often sequential, managerial decisions. The first managerial decision is to initiate growth in a business that is relatively newer or smaller for the organization. The second decision is to move away, or even withdraw completely, from the current core business that enabled prior growth and prosperity for the firm and served as its primary revenue earner. Employing a real options perspective, we argue that CVC investments create growth options in new and existing businesses but do not result in firms' withdrawal from existing businesses. Therefore, we expect CVC activity to be negatively associated with the likelihood of a firm undertaking discontinuous renewal. We also propose that the benefits of withdrawing from existing businesses are even lower, and the costs even higher, for firms in dynamic industries and for firms that possess strong internal capabilities. The predictions of the study are tested using longitudinal data on 477 firms from the 1990 Fortune 500 list for the period 1990–2000. We find support for all our predicted hypotheses. These results help address important limitations in the corporate entrepreneurship literature. The study also contributes to the real options and organizational capabilities literatures.     

The Effects of Environmental Turbulence on New Product Development Strategy Planning

Managers need guidance on how to cope with turbulent environments in order to improve corporate performance. Research on environmental turbulence has suggested that firms adopt a less centralized, more organic structure in dynamic, uncertain environments. Little work has been done specifically, however, on how environmental turbulence affects strategy planning for new product development (NPD). In this article, we specify a baseline model with firm innovativeness, market orientation and top management risk taking as antecedents to NPD speed and corporate strategic planning; these in turn are modeled as antecedents to NPD program (not project) performance. Two conceptualizations of the role of environmental turbulence are examined: (1) that market turbulence and technological turbulence are additional direct antecedents to NPD program performance; and (2) that the baseline model is moderated by turbulence (that is, that the strengths of the paths differ depending on levels of turbulence). A cross-sectional survey methodology including four diverse industries [automotive, electronics, publishing, and manufacturing/research and development (R&D) laboratories] was used to test the hypotheses. The latter conceptualization is supported. In particular, the paths from innovativeness to strategic planning and from risk taking to NPD speed are significantly greater in highly turbulent environments. A set of managerial recommendations and implications are provided. First, managers must recognize the possible improvements in new product performance by actively including NPD personnel in corporate strategic planning and also by involving corporate planners in NPD activities. Second, managers also should recognize that turbulent environments heighten the need to make risky investments, and sometimes, risky decisions; risk-taking decisions ought to be encouraged in such environments.     

Strategic Management of Technology

The first step in making sure that R&D spending is productive is to be sure it is going in the same direction as the overall business strategy. Simple enough to say but not always so simple to do. Chris Pappas suggests that the corporate strategy process often focuses on financial factors and market share and neglects technology as a key resource to be planned. With competitive success as well as productivity and profitability becoming more directly tied to technology development, it is time to give technology a more important place in the corporate strategy process. Using the example of an actual firm, Pappas shows that the key to achieving a sustainable competitive advantage lies in formulating the right technology strategy and integrating it into the corporate planning process. His article includes a useful framework for analysis and planning.     

What happened with the grandiose plans? Strategic plans and network realities in B2B interaction

Research concerned with business relationships and organizational levels, respectively, has addressed companies' difficulties in realizing their strategies. Studies of business relationships explain this through actions and reactions among business partners. Organizational studies note gaps between strategic and operational organizational levels in perceptions and goals. This paper combines these perspectives to obtain new insights into why company strategies may not materialize. The purpose of this paper is to describe and discuss how actor bonds on various organizational levels in business relationships affect strategy realization. The paper shows that actors on similar organizational levels representing different companies may actually share more understandings and activities than actors within the same company. The paper contributes to research on dyadic business relationships by highlighting differences in perspectives on various organizational levels, adds insights into research studying organizations by including a business-relationship aspect, and increases understanding of why strategic plans sometimes fail to succeed.     

How Elephants Learn the New Dance When Headquarters Changes the Music: Three Case Studies on Innovation Strategy Change

Does a product innovation strategy change at company headquarters resonate the same way at different strategic business units (SBUs)? What factors play a role in differing implementation of new innovation strategies? A collective case study was conducted at three SBUs of an international conglomerate to investigate why the SBUs implement the same corporate innovation charter in vastly different manners, both in strategic processes and in organizing for new product development (NPD). This study's contribution to the literature is twofold. First, it develops initial insights into how three SBUs implement diverse SBU‐level innovation strategies in response to the same product innovation charter. Second, it extends the findings of previous studies on NPD strategy by presenting how three SBUs reshape their structure and resource allocation, changing various dimensions of their innovation strategy while also fitting the competitive structure in their individual, non‐high‐tech, traditional manufacturing industries as they respond to the corporate mandate. In this study, several factors were observed to influence a firm when formulating a new product innovation strategy. First, past performance and strategic typology constrain the innovation paths available. Poor past performance limits available resources whereas the strategic typology managers use limits their ability to recognize other opportunities. Next, capacity constraints provide a catalyst in moving toward process improvements. Third, management involvement in the day‐to‐day implementation of change is necessary to ensure that the new processes are implemented. Finally, corporate performance metrics are quite influential in how SBUs adapt to change. This study identifies that even with the immense power corporate has over these SBUs, some still dance to their own tune, ignorant of their deviation from the corporate mandate because the metric is not sufficient to detect these deviations. This study suggests the use of multiple types of metrics to minimize the likelihood of nearsighted responses to innovation charter changes.     

How to build a strategic network: A practitioner-oriented process model for the ICT sector

One critical success factor for the future will be the ability to build and develop strategic networks. This ability is especially vital in the dynamic information and communication technology (ICT) sector, where the development of competitive offerings often requires a coalition of platform and service providers. However, the academic literature has yet to propose a systematic managerial tool for the strategic network building process. Our distinctive contribution is the development of a practitioner-oriented process model for building a strategic network, which is linked to the resource-based view and the value creation system approach. Moreover, we suggest that instead of being a sequential stage-wise process, the construction of a strategic network can be divided into parallel, although not necessarily simultaneous, sub-processes based on the required value activities in the entire business concept. The resulting network-building model is used to provide managerial suggestions for the efficient construction of strategic business networks.     

A framework, process and tool for managing technology‐based assets

Technology organisations centre their business on the development of new technology‐based offerings (i.e. products and services). The strategic management of technology‐based assets is therefore crucial for these organisations as an imperative for business success. However, these assets are often intangible and reflect future rather than current value and are therefore difficult to manage when using traditional managerial concepts. This study investigates integrative mechanisms addressing the management of technology‐based assets and offerings in a technology organisation. The approach taken was to study the views and practices regarding the management of technology‐based assets in a number of strategic units of a technology organisation (CSIR, South Africa). The study maintains that the management of technology‐based assets and offerings requires clear strategic management of the process of technological innovation with special emphasis on the management of the intellectual capital (IC) and the intellectual property (IP) of the organisation. The study describes a framework linking the core processes supporting the management of technology‐based assets and offerings with other organisational elements such as leadership, strategy, and culture. Specific key links between the core process of innovation and the strategic management of investment in technology‐based assets using a portfolio approach are discussed.     

Global diversification strategy and corporate profit performance

Based on a sample of 62 multinationals, this paper examines the impact of global diversification strategy on corporate profit performance by integrating the product and the international market dimensions of diversification. The results suggest that the corporate profit performance impact of related and unrelated diversification varies contingent upon the extent of a firm's international market diversification. One important lesson of this work is that both business strategy researchers and managers should review corporate diversification as having distinct yet interactive strategic dimensions—product and international market—and they would do well to recognize both the different and the joint effect of these dimensions on corporate profit performance.