Age,order of entry,strategic orientation,and organizational performance

This paper proposes an empirical test of several hypotheses linking age, order of entry, and strategic orientations to a firm's performance. Three strategies are defined: cost-leadership strategy, innovative differentiation, and marketing differentiation. The aim is to show that the impact on performance of both age and each of the three strategic orientations may differ according to a firm's order of entry into an industry.Following Lieberman and Montgomery's (1998) evaluation of their major contribution on first mover advantage, we emphasize three points. First, we develop and test hypotheses related to early and late followers' strategic orientations, broadening the scope of traditional studies on pioneers. Second, the model combines the dimensions of a firm's age, order of entry, and strategic orientations, as well as industry conditions (stage of the industry, environmental unpredictability, and technology diffusion), to establish a contingent model of performance analysis. Finally, the empirical study deals chiefly with organizational performance and not market share, which is considered a typical advantage accruing to pioneers.In addition, the scope of the study (582 French manufacturing firms) provides the means to fill a void in empirical studies because it is a broad cross-sectional test on non-U.S. data. The firms are mainly private, small to medium-sized, and single or dominant business firms. Therefore, our assumptions must be understood as particularly applicable to this type of firm.The results reveal important lessons for practitioners. First, we did not find a first-mover advantage in terms of organizational performance. In addition, pioneers' organizational performance is enhanced by the cost leader strategy—contrary to our assumption emphasizing innovative differentiation for these firms. Second, early followers' performance benefits from innovative differentiation and marketing differentiation. Finally, late entrants developing a cost leader strategy have a significantly higher performance. All groups considered, late followers are the firms most sensitive to environmental uncertainty and age effects.Our study clarifies the impact of a firm's age and strategic orientations on its performance depending on the firm's order of entry. The implications of these results are particularly relevant for practitioners and entrepreneurs. First, a cost leadership strategy seems to be a guarantee for a pioneer to increase its organizational performance. New ventures should therefore take into consideration the fact that newness and innovative differentiation might not be the best strategic orientations for high performance in the long run. Second, as a second mover, however, developing a superior product and being able to market it efficiently appear to be the enhancing factors of firm performance. Third, for both pioneers and early followers, age does not significantly reduce their performance. However, the longer a firm waits before entering, the greater is the negative effect of age on its performance. This is due to the difficulty of resisting competitive erosion, because pioneers and early followers drive the changes in the industry. The identification of these effects should help managers and stakeholders to make more effective entry decisions to sustain a firm's advantage, leading to better performance and higher probability of survival.     

生产率与出口企业市场进入次序的双向影响--来自中国工业企业的证据

本文以出口企业的市场进入次序为落脚点,利用2000－2006年中国海关数据库和中国工业企业数据库的海量匹配数据,对出口企业的市场进入次序与企业生产率的增速之间的关系进行实证分析。研究结果表明,高生产率企业更倾向于充当开拓者,而低生产率企业倾向于充当跟随者,这种自选择作用在制成品出口中得以彰显,但在初级产品和农产品出口中并不显著;短期内跟随者的生产率增速高于开拓者,但在长期开拓者的先发优势愈发显著,其生产率增速明显优于跟随者。     

Pioneers and followers: Competitive tactics,environment, and firm growth

Market pioneering—where a firm is first to offer a distinctively new product to the market—is a commonly recognized form of corporate entrepreneurship. As with other forms of corporate entrepreneurship, the linkage between market pioneering and firm performance has received limited empirical attention, much of which has yielded inconsistent results. Nonetheless, two conclusions regarding when and how pioneering relates to firm performance are revealed in the literature. First, theory and past research suggest that pioneering is an environment-specific phenomenon. That is, certain types of environments may be most likely to encourage or reward the actions of pioneers, while these same actions may meet with limited success in other environments. Second, theory and past research suggest that firm performance is affected by the fit between a firm's pioneer/follower status and its competitive tactics. In other words, market entry order moderates the effectiveness of a firm's competitive tactics such that certain tactics will be most effective when employed by market pioneers, while other tactics will be most effective when employed by market followers.Considered jointly, the preceding observations suggest that insights might be gained regarding the effective management of market pioneering and market following by seeking to understand (a) how these phenomena are manifested in different industry environments and (b) what pioneers and followers do differently in these environments to promote their performance. The research described in this paper addresses these issues. In particular, this paper develops theory that describes how particular competitive tactics are thought to relate to firm sales growth rate among market pioneers and market followers in two distinct environmental settings. Hypotheses are developed based on the following research propositions:P1: In hostile environments, pioneers and followers will differentially benefit in achieving high sales growth rates from their reliance on relatively high prices, relatively broad product lines, relatively broad served (geographical) markets, relatively advanced process technologies, and relatively advantageous purchasing arrangements.P2: In benign environments, pioneers and followers will differentially benefit in achieving high sales growth rates from their reliance on relatively high quality products, relatively strong product warranties, relatively high advertising and promotion expenditures, relatively strong control over distribution channels employed, and relatively large numbers of distribution channels employed.To test the hypothesized relationships, data were collected from the senior managers of 103 independent, nondiversified manufacturing firms operating in 75 industries. Cluster analysis, ANOVA, and correlational analysis were employed as the principal analytical techniques.The results suggest that market pioneers grow neither more nor less rapidly than market followers. However, in hostile environments, pioneering may enable firms to break out of the dominant price-based mode of competition and grow in spite of charging high prices. This ability of pioneers to excel in hostile environments seems to be further facilitated by limiting product line breath to a small number of product offerings that provide a “tight fit” with market needs. Pioneers in hostile environments also appear to be relatively better served than followers from gaining a wide geographical distribution for their products. Followers in hostile environments, on the other hand, should seek to reduce their cost structures in order to effectively sustain low price strategies. The employment of advanced process technologies and the pursuit of “purchasing advantages” were actions which proved to be more advantageous for followers than for pioneers in hostile environments.The managerial implications of this research applicable to benign environment firms are quite different. Other things being equal, relatively high prices may not be as detrimental to growth among followers in benign environments as they are among followers in more hostile environments. Benign environment followers may, in fact, be better off when they charge relatively high prices and compete on non-price bases. The results also suggest that, in benign environments, offering products with warranties superior to those of competitors may have a significantly more positive effect on sales growth among pioneers than followers. Moreover, employing a large number of distribution channels appears to benefit pioneers more than followers. However, among the sampled firms, benign environment pioneers that realized the greatest growth did not have extensive control over distribution channel members. Therefore, benign environment pioneers may grow more quickly if they target their distribution-related resources toward expanding their channels rather than toward controlling some smaller number these channels.This study contributes to the pioneering literature by having corroborated several findings of the PIMS-based studies regarding tactical differences between pioneers and followers, and by having further documented the relevance of market entry order (or pioneer/follower status) as a moderator of the performance associated with particular competitive tactics. Moreover, by having examined the tactics-performance relationships of pioneers and followers in two distinct environmental settings, this study adds specificity and empirical support to the emerging theoretical paradigm that depicts pioneering as an environment-specific phenomenon. Finally, this study contributes to the literature on coping with hostility by having theorized about and empirically identified common and effective bases for competition under varying levels of environmental hostility.     

Knowledge seeking in going abroad

Based on knowledge theories, this study examines the impact of client‐following and market‐seeking entry strategies on foreign market entry by firms. The article also explores the subsequent development of knowledge in firms. Using data from 116 firms, we test three hypotheses using logistic regression. Our hypotheses are supported in the data. Our analysis shows that significant differences exist between client‐following firms and market‐seeking firms. Client followers are both supported and trapped by their international network, whereas market seekers, though not supported, are much freer to pursue higher‐order learning. Due to differences in their network ties, these two types of firms learn at different speeds and learn different things. We also found that firms with proactive knowledge‐seeking strategies learn more. Thus, learning strategies have consequences for exploration and exploitation of international markets, what is learned and how much is learned, and proactive internationalization strategies for firms. © 2009 Wiley Periodicals, Inc.     

An Empirical Analysis of Follower Entry Timing Decisions

Followers frequently incur market share penalties due to delayed entry. How might they then respond to a pioneer? This paper attempts to answer this question. Followers are assumed to be able to respond by choosing a time interval of entry relative to the pioneer, and by focusing on consumer relative preferences for their brand. These choices potentially involve different trade-offs. For example, achieving higher relative preferences may result in an entry delay that would increase the leadtime. We argue that the follower's response will depend on the magnitude of the pioneering effect. Our analysis of the ASSESSOR database indicates that followers respond primarily by reducing leadtimes. We further find that later followers achieve higher consumer relative preferences than earlier followers do. While these findings merit generalizability as they concern multiple brands and categories, many of which still exist, their implications should be qualified with caution since the data do not go beyond 1984.

     

Relationships among fashion consumer groups,locus of control,boredom proneness,boredom coping and intrinsic enjoyment

Fashion change agents and fashion followers differ in their need for mental stimulation. Within a context of fashion diffusion theory, this study examined the effects of locus of control and fashion consumer group on three attributes linked to mental stimulation – boredom proneness, intrinsic enjoyment, and boredom coping. For this US sample of young women, an internal locus of control orientation was associated with a higher level of fashion innovativeness and opinion leadership. Fashion change agents, with either an internal or external locus of control orientation, and fashion followers with an external locus of control orientation, were similar in their heightened ability to entertain themselves (internal stimulation). Fashion followers with an external locus of control orientation were less able to entertain themselves than the other three groups.     

Is there a negative relationship between the order-of-brand entry and market share?

The order-of-entry effect has been continually examined over the last quarter century, leading to the generalization that a negative relationship exists between the order-of-brand entry and market share. As the number of followers that become market share leaders and the conceptual arguments against this assumption grow, the nonexistence of this negative relationship has yet to be empirically demonstrated. This research challenges the generalization by examining market conditions in which a brand’s entry position has exerted a positive effect on its market share potential, compared with an earlier entry position. Using order-of-entry models consistent with extant literature, an empirical analysis of consumer scanner data across 375 followers reveals two situations that challenge the prediction of a negative relationship between the order-of-brand entry and market share.     

First-mover and incumbency advantages in mobile telecommunications

The present study analyzes data of 191 mobile network operators from 49 countries in order to identify the extent of first-mover and incumbency advantages. A large number of new market entry opportunities and involvement of many previous state-owned monopolists have characterized the mobile telecommunication services industry over the last 20 years. The results of this study show that both, first-movers and incumbents in the mobile telecommunication services industry are more successful regarding market share and operational financial results than later entrants. A pioneer position and incumbency are only loosely connected, with success originating both from first-mover and incumbency advantages. Moreover, the timing effect is stronger and more sustainable for market share compared to operating margin, indicating that followers successfully compensate part of their market share disadvantages with strategies like SIM-only tariffs, outsourcing and alternative distribution approaches. In addition, the typical rank-based measurement of timing position reveals somewhat stronger associations than a variable that is using the time elapsed between commercial launches of pioneers and followers.     

A New Scale to Measure Executive Servant Leadership: Development,Analysis, and Implications for Research

This article introduces a new scale to measure executive servant leadership, situating the need for this scale within the context of ethical leadership and its impacts on followers, organizations and the greater society. The literature on servant leadership is reviewed and servant leadership is compared to other concepts that share dimensions of ethical leadership (e.g., transformational, authentic, and spiritual leadership). Next, the Executive Servant Leadership Scale (ESLS) is introduced, and its contributions and limitations discussed. We conclude with an agenda for future research, describing ways the measure can be used to test hypotheses about organizational moral climate, ethical organizational culture, corporate responsibility, and institutional theory.     

Entry mode choice of Chinese enterprises: The impacts of country risk, cultural distance and their interactions

Recent years have witnessed a phenomenal growth in the number of Chinese enterprises “going global.” Drawing on three leading theoretical perspectives including the transaction cost theory, organizational capability theory and eclectic theory, this paper develops hypotheses to test how country risk and cultural distance are associated with entry mode choices of enterprises from China. Based on a sample of 167 Chinese companies, an empirical investigation has been conducted employing logistic regression and hierarchical regression analyses. Our results show that country risk and cultural distance have significant impact on entry mode choice. With the increase of country risk or cultural distance, businesses prefer non-ownership-based entry modes such as trade and licensing. However, entry mode choice is also noticeably influenced by the interaction between country risk and cultural distance, which is a new finding of international entry mode research. Furthermore, private enterprises are more likely to adopt high-involvement entry mode than the state-owned enterprises, and service enterprises are less likely to use high-involvement entry mode, which suggests that different approaches are used to deal with country risk and cultural distance by various types of enterprises.     

Consumer learning, switching costs, and heterogeneity: A structural examination

This paper develops and estimates a model of forward-looking consumer learning with switching costs using household level scanner data from a frequently purchased product category. This is novel because current models of consumer purchase behavior assume that only one of these types of dynamics is present, not both at the same time. My model estimates support the presence of both learning and switching costs in this product category. The estimates show that before consuming new products, consumers are unsure of their tastes for them, and subsequently learn their tastes by purchase and consumption of new products. Switching costs are large, comprising roughly 30 percent of the cost of a medium sized package of the product. Additionally, the model incorporates very rich individual level unobserved heterogeneity in price sensitivities, tastes, and switching costs, and the amount by which consumers learn. To show that my model produces different implications than a model with learning or switching costs only, I estimate two more specifications, one without each type of dynamics, and simulate counterfactuals that are of interest to managers and policymakers. I find that intertemporal elasticities are underestimated when either type of dynamics is left out, by as much as 90%. Informative advertising is also affected by the presence of switching costs, although the direction of the bias is not signed. Leaving out dynamics also has a large impact on long-term elasticities, which are used by antitrust policymakers to evaluate the impact of mergers. When learning is ignored, cross elasticities are underestimated by as much as 45%. When switching costs are ignored, both own and cross elasticities are underestimated.     

Impacts of Competition on Food Production,Processing and Marketing

The concepts of perfect competition and competitiveness are commonly used by economists and business professionals to describe market behavior. To a large degree the use of these concepts are subjective and lack objective measures. Firms in a perfectly competitive industry are expected to operate where average revenues equal average costs at minimum cost, which implies that aggregate production elasticities are one. Agriculture and food processing were compared using Census data in order to measure whether or not this was true. Aggregate state data tended to confirm that production elasticities for these industries did tend to approach one, although some divergence existed. Impacts of competition indicated that value added returns were as low as 13 to 22 cents for meat and dairy processing, compared to 40 to 49 cents as an industry standard. Elasticity estimates indicated meat and dairy products were each relatively homogeneous products requiring national level marketing. Grains and fruits and vegetables, however, had marketing advantages because elasticities were divergent from one, indicating product differentiation in terms of end products and quality.     

Firm exits as a determinant of new entry: Is there evidence of local creative destruction?

This study posits that a local process of creative destruction provides an impetus to regional industrial renewal. We argue that exits of older firms release resources that stimulate local entry. New entrants add value to these resources by redeploying them in more productive uses. We test our hypotheses with a unique longitudinal database encompassing the entry and exit of Canadian manufacturing enterprises. We find that exits of old firms increase entry and that on average new entrants are more productive. Persistent high local rates of exit, however, deter entry.     

The Interactive Effect of Authentic Leadership and Leader Competency on Followers’ Job Performance: The Mediating Role of Work Engagement

The effect of authentic leadership and leader competency on employee job performance has received growing attention in the past decades; however, few studies have simultaneously integrated these two leadership perspectives. We have thus developed a mediated moderation model to test the interactive effect of authentic leadership and competency on followers’ job performance through work engagement. Based on a sample of 248 subordinate–supervisor pairs, hierarchical regression analyses reveal that (1) authentic leadership positively relates to followers’ task performance and organizational citizenship behavior (OCB); (2) leader competency moderates the relationship between authentic leadership and OCB; (3) and followers’ work engagement mediates the main effect of authentic leadership and the interactive effect of authentic leadership and competency on followers’ task performance and OCB. All the three results are consistent with our hypotheses.     

Factors influencing the foreign entry mode of Asian and Latin-American banks

The majority of past studies on the foreign market mode of entry have focused on manufacturing industries. Although some studies have explored the entry mode decisions of the banking industry, most of them have adopted the case study method, and systematic studies have been relatively few. This study intends to fill this gap through an investigation of 7041 Asian and Latin-American bank branches covering the period from 1999 to 2005. The analytical results demonstrate that both Asian and Latin-American banks are market seekers. However, Latin-American banks are not customer followers. In addition, the larger the scale of the bank or the greater the net interest margin the more likely it is that high-control entry modes will be adopted. In contrast, in countries in Asia with a greater cultural distance, banks tend to establish low-control entry modes to avoid uncertainty. However, this does not apply in the case of Latin America.     

For the Good or the Bad? Interactive Effects of Transformational Leadership with Moral and Authoritarian Leadership Behaviors

Although the ethical aspects of transformational leadership have attracted considerable attention, very little is known about followers’ reactions to the moral and immoral conduct of transformational leaders. Against this background, this study examined whether and how transformational leadership interacts with moral and authoritarian leadership behaviors in predicting followers’ in-role and extra-role efforts. Building on attribution theory, we hypothesized that the positive and negative effects of these leadership behaviors would be particularly pronounced for highly transformational leaders given that this leadership style elicits strong attention and sense-making efforts among followers. We tested our model in a sample of 228 individuals comprising 114 leader–follower dyads from a wide range of organizations and industries. In line with our hypotheses, results revealed that for highly transformational leaders, moral leadership behaviors related positively to employees’ in-role and extra-role efforts whereas authoritarian leadership behaviors related negatively to employees’ in-role and extra-role efforts. In contrast, moral and authoritarian leadership behaviors did not significantly affect followers’ reactions to leaders low in transformational leadership. Taken together, these findings suggest that transformational leadership, contrary to its largely positive perception in the literature, can be a rather mixed blessing. Implications for theory, future research, and managerial practice are discussed.     

Factors enhancing the choice of higher resource commitment entry modes in international new ventures

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success of international new ventures (INVs). It is generally accepted that these firms choose relatively low-resource commitment entry modes to operate in foreign markets. Nevertheless, some researchers have suggested that higher resource commitment entry modes in foreign markets also seem to be competitive strategies for INVs. In this study, from a marketing/international entrepreneurship interface perspective and focusing on organizational issues, we center our attention on international market orientation as a neglected yet important factor in INVs’ choice of higher resource commitment entry modes in foreign markets. We suggest that an entrepreneurial orientation and the timing of international entry are important correlates to an international market orientation. We also suggest that the international learning effort of INVs through their international market orientation has a direct, positive impact on the resources these companies commit to their foreign markets through the use of higher resource commitment entry modes. Accordingly, the model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher resource commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of resource commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher resource commitment entry modes.     

Innovation and imitation effects in the mobile telecommunication service market

This study investigates adoption patterns of the first mover and the followers in the Information and Communication Technology industry. The continuous behavior of adopters over time is difficult to analyze and most previous studies were cross-sectional rather than longitudinal. In order to overcome these limitations, a mathematical diffusion model with verified official time-series data is used to analytically investigate the impact of both innovation and imitation effects on the mobile phone adoption in South Korea. The results showed that the imitation effect of the first mover was larger than those of the followers in the mature mobile telecommunication services market in South Korea. The innovation effect of the follower was larger than that of the first mover, and the innovation effect was larger than the imitation effect in the market.     

Export Premium,Self‐selection and Learning‐by‐Exporting: Evidence from Chinese Matched Firms

This study empirically focuses on examining the hypotheses of export premium (exporters are more productive than non‐exporters), selection‐into‐exporting (more productive firms are ones that tend to become exporters) and learning‐by‐exporting (new export market entrants have higher productivity growth than non‐exporters in the post‐entry period). The propensity score matching method is used to adjust for observable differences of firm characteristics between exporters and non‐exporters, allowing an adequate ‘like‐for‐like’ comparison. We also use the difference‐in‐difference matching estimator to capture the magnitude of different productivity growth between matched new export market entrants and non‐exporters in the post‐entry period up to two years. Drawing on 2,340 Chinese firms in the period 2000–02, we find evidence for export premium and self‐selection, and once the firm has entered the export market there is additional productivity growth from the learning effect, in particular in the second year after entry.     

To elevate or to duplicate? Experiential learning,host-country institutions,and MNE post-entry commitment increase

A multinational enterprise’s (MNE) decision to commit more resources to a host country operation is a key aspect of internationalization. MNEs can change their foreign operation mode in several ways in order to increase host-country commitment after initial entry, but existing theory on mode changes provides little guidance on what drives MNEs to increase commitment in a certain way over another. In this paper, we differentiate between mode duplication, whereby an MNE replicates an existing operation mode in a host country, and mode elevation, whereby an MNE establishes a new, different mode of operation either in lieu of or in addition to an existing one. We subsequently leverage learning theory to argue that both deeper international experience and broader international experience increase the likelihood of implementing a mode elevation rather than a mode duplication due to the higher complexity of the former. We further argue that these relationships are not uniform across different levels of host-country institutional quality. We test our hypotheses in a primary dataset of 80 Austrian MNEs implementing 527 mode changes while internationalizing into 21 countries in Central and Eastern Europe over 24 years, and find support for our theory. Overall, this study contributes to the international business literature on mode changes by offering theory and evidence regarding the drivers of whether an MNE increases foreign commitment by establishing a new operation mode or by duplicating an existing one in a host country.