Institutional ownership,capital structure,and firm performance

In most studies of ownership and firm performance, researchers have assumed different forms of ownership do not interact in their effect on firm strategy or performance. Focusing on the role of institutional owners, this study poses two related questions: (1) What are the relationships between outside institutional shareholdings, on the one hand, and a firm's capital structure and performance, on the other? and; (2) Does the size of stockholdings by corporate executives, family owners, and insider-institutions modify those relationships? The data, collected from 40 pairs of manufacturing firms selected from as many industries over a 3-year period, shows that the size of outside institutional stockholdings has a significant effect on the firm's capital structure. We have also found that family and inside institutional owners' shareholdings moderate the relationship between outside institutional shareholdings and capital structure. Likewise, corporate executives' shareholdings supplement the relationship between outside institutional shareholdings and firms' performance. These findings suggest that internal and external coalitions interact with each other to influence the firm's conduct.     

Strategy-making and environment: The third link

Whereas much is known about the relationships between strategy and structure, and between environment and structure, too little is known about a third link—the relationship between strategy-making and environment. An empirical study was conducted upon two distinct samples of firms. We hypothesized that increases in environmental dynamism, hostility and heterogeneity should be related to specific changes in the amount of analysis and innovation which characterizes strategy-making activity. Most of these relationships tended to be much stronger in successful than in unsuccessful samples of firms.     

A systematic comparative analysis and synthesis of two business-level strategic typologies

Two important business-level strategic typologies were systematically evaluated, analyzed and compared in this study: Porter'S Overall Cost Leadership, Differentiation, Focus, and ‘Stuck in the Middle’ generic competitive strategies, and Miles and Snow'S Defender, Prospector, Analyzer, and Reactor types of organizational adaptation. On the basis of strategic theory, and following a pilot study, 31 strategic variables were evaluated by judges on a seven-point maximum-minimum scale, for each strategy, within its typology. Analysis of variances and concordance among judges regarding the ranking of the strategies on each variable were examined, and a strategic profile was built for each strategy. Proximities between strategies of the two typologies were analyzed using monotonic multidimensional scaling. The analysis indicated similarities and differences between the two typologies. A synthesis of the two typologies is suggested along two dimensions: internal consistency of the strategy, and level of proactiveness.     

Strategy fit and performance consequences of international marketing standardization

This study addresses a long‐standing debate in the literature regarding the appropriateness and performance consequences of marketing strategy standardization vs. adaptation. Much of the relevant literature represents the headquarters' viewpoint and broadly assesses antecedents of standardization or adaptation across widely varying markets. Using strategic fit as the theoretical platform for analysis, the study investigates international marketing strategy for a specific product or line within subsidiaries of U.S., Japanese, and German multinational corporations (MNCs) operating in the U.K. The results indicate that degree of strategy standardization is significantly related to similarity between markets with respect to regulatory environments, technological intensity and velocity, customs and traditions, customer characteristics, a product's stage in its life cycle, and competitive intensity. On the critical question of performance consequences, the findings suggest that superior performance results from strategy standardization only to the extent that there is fit or coalignment between the MNC's environmental context and its international marketing strategy choice. Copyright © 2006 John Wiley & Sons, Ltd.     

First-mover strategy,resource capacity alignment,and new product performance: a framework for mediation and moderation effects

Based on the competence-based perspective and contingency perspective, this study attempts to examine the relationships among first-mover strategy, a firm's core capacity, resource allocation, and new product performance. Our findings indicate that (1) firms achieve a better new product performance when adopting first-mover strategy and having an excellent core capacity, and (2) firms achieve a better new product performance if their core capacity (technical and managerial) fits the resource allocation they implement. Managerial implications and future research directions are discussed.     

Relating strategy and structure to flexible automation: A test of fit and performance implications

This study analyzed various strategy and structure choices to determine their fit relationship with flexible automation (FA). ¹Using the moderator hypothesis, we proposed that the more strategy and structure choices complemented FA's competences, the higher would be the performance impact of FA. Data from 87 FA users indicate that quality and flexibility strategies, described as complementary to FA's strengths, interact positively with FA. Low cost strategy, described as conflicting with FA, interacts negatively. Organic structure, viewed as complementary to FA, has only main effects whereas a mechanistic structure interacts negatively. At the manufacturing level, skill diversity and team approaches, considered as complementary to FA, interact positively. While a subgroup analysis of high-low performers lends additional support to these relationships, analysis of industry subgroups indicates that some relationships are industry specific. We discuss the implications of these findings for research and practice.     

Modeling the dynamics of strategic fit: a normative approach to strategic change

This study develops and tests a dynamic perspective on strategic fit. Drawing from contingency and resource‐based arguments in the strategy and organizational theory literatures, we propose a distinctive analytical approach to identify environmental and organizational contingencies that should predict changes in a firm's strategy and the performance implications of such changes. We test our model using extensive longitudinal data from over 4000 U.S. savings and loan institutions during a period when many S&Ls considered changing strategic direction. The findings support our model of dynamic strategic fit. Specifically, we find that (1) the timing, direction, and magnitude of strategic changes can be logically predicted based on differences in specific environmental forces and organizational resources, and (2) organizations that deviated from our model's prediction of dynamic strategic fit (i.e., changed more or changed less than our model prescribed) experienced negative performance consequences. We conclude by discussing the implications of our approach and findings for future research on strategic fit and strategic change. Copyright © 2000 John Wiley & Sons, Ltd.     

Choice situation,strategy, and performance: A reexamination

This study further examines strategy and performance relationships between and within situations of varying strategic choice and environmental determinism. Contrary to Lawless and Finch's (1989) previous test of Hrebiniak and Joyce's (1985) dynamic, interactive view of organizational adaptation, the results are more in line with the theory. Some discrepancies are found, however, suggesting useful issues and hypotheses for future research.     

Entrepreneurial strategy making and firm performance: tests of contingency and configurational models

This field study explores the nature of entrepreneurial strategy making (ESM) and its relationship with strategy, environment and performance. In the first phase, we assess the independence of entrepreneurially oriented strategy-making processes through factor analysis. The second phase, using moderated hierarchical regression anlaysis, investigates the relative predictive power of two approaches for exploring the ESM–performance relationship: contingency and configuration. Findings from a sample of 32 firms competing in a wide variety of industries indicate that configurational approaches that align ESM, strategy, and environment have greater predictive power than contingency approaches. However, not all high performing configurations are consistent with normative theory. Thus, alternate theories linking entrepreneurial strategy making to competitive advantage should be developed and tested. © 1997 John Wiley & Sons, Ltd.     

Different recipes for success in business relationships

Companies need to manage business relationships successfully in order to stay competitive. Drawing on configurational logic, this study shows that companies can improve their relationship performance through leveraging the structure of their business relationships. However, relationship structures must align with the company's business strategy. To date, research has focused on individual characteristics of business relationships, but little is known about relational configurations, namely the interplay between different business relationship characteristics on the one hand, and the firm's underlying business strategy on the other. We apply Hoffmann's (2007) strategy typology, namely shaping, adapting, and stabilization strategy types, to operationalize different business strategies. Drawing on a sample of 658 business service companies and employing fuzzy set qualitative comparative analysis (fsQCA), this study confirms the existence of different recipes for success, that is, multiple equifinal configurations leading to relationship performance. For each of the three business strategies, different combinations of relationship characteristics are successful, each encompassing a distinct configuration of core and periphery conditions. While firms following an adapting strategy should stress behavioral commitment above all other relationship characteristics, the two remaining business strategies instead rely predominantly on different factors such as trust and communication. This study contributes to business marketing theory and practice by highlighting different ways to develop business relationships successfully.     

When does incentive compensation motivate managerial behaviors? An experimental investigation of the fit between incentive compensation,executive core self-evaluation,and firm performance

We develop and test an integrative model that examines the fit between compensation schemes, executives' characteristics, and situational factors. We propose that a fit among all three factors is crucial to motivate desirable managerial behaviors. Using a specially designed management simulation, our study demonstrates that the effectiveness of incentive compensation to motivate managerial behaviors depends on executives' core self-evaluation and firm performance. Our results show that, relative to fixed salary compensation, executives with higher core self-evaluation respond to incentive compensation with greater perseverance, competitive strategy focus, ethical behavior, and strategic risk taking during organizational decline. However, these interaction effects are not present during organizational growth. Our theory and empirical evidence provide significant insights into the complex relationships among compensation schemes, executives' characteristics, firm performance, and managerial behaviors. Copyright © 2012 John Wiley & Sons, Ltd.     

Performance implications of the buyer-supplier market orientation fit

Extant research examining the link between market orientation and performance offers few insights into how the interplay between a firm's market orientation (MO) and its key supplier's MO influences the firm's performance. Using archival and survey dyadic data from 876 firms (438 firm-supplier dyads), we explore the impact of MO fit (i.e., fit between the focal firm's MO and its supplier's MO) on the focal firm's performance (ROA). The findings indicate a direct and positive relationship between MO fit and ROA. This highlights the need for firms to focus both on their own MO and their key supplier's MO as sources of competitive advantage in today's business environment. The strength of the relationship between MO fit and ROA increases when the exchanged business volume increases between the focal firm and its supplier and when the respective relationship progresses in age. Furthermore, firms with MO fit perform best, followed by firms with higher supplier MO misfit (firm's MO is lower than its key supplier's MO), while firms with lower supplier MO misfit (firm's MO is higher than its key supplier's MO) are the laggards.     

Value creation and firm sales performance: The mediating roles of strategic account management and relationship perception

Research on relationship management has extolled the virtue of sellers creating value for their customers. Indeed, loyal relationships, defined as repeated business exchanges, tend to flourish when firms create and deliver value to their customers. While few argue this premise, questions remain regarding the precise delineation of a firm's value creation competence and the mechanism by which it influences the firm's performance. In the current study, the authors define the value creation competence concept and find empirical evidence for its positive effects on firm sales performance (e.g., new customer leads, close rates, retention, revenue, etc.). Interestingly, the results suggest this effect is mediated by strategic account management and the perception of the relationship held between buyer and seller. Both of these findings have implications in establishing that a firm's value creation competence translates into improved sales performance, mediated by strategic account management and relationship perceptions.     

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.     

Value creation,competition, and performance in buyer‐supplier relationships

The value‐based approach to strategy argues that a firm's ability to capture value depends on the extent of its added value. In this paper, I empirically test the link between added value and value capture using a longitudinal dataset of United Kingdom law firm performance, capabilities, and client relationships. In this setting, competitors relevant for defining a firm's added value are those that share a client with the firm. Further, within a client relationship, value creation, and hence added value, can be decomposed in two parts: product‐line capability and client‐specific scope economies. I find that added value, measured at the level of each buyer‐supplier relationship, is a driver of relationship stability and supplier profitability. This suggests that suppliers with similar capabilities might enjoy different economic returns depending on the composition of their set of relevant competitors. These findings shed light on the conditions under which firms can appropriate returns from their capabilities. They indicate that concepts from cooperative games can be fruitfully applied to empirical studies of firm performance and to the elaboration of insights from the resource‐based view of the firm. Copyright © 2010 John Wiley & Sons, Ltd.     

New Product Strategy, Structure, Process, and Performance in the Telecommunications Industry

A continuous flow of new products is the lifeblood for firms that hope to remain competitive in high-technology industries such as telecommunications. Faced with rapidly shrinking product life cycles, these firms must aggressively pursue the quest for more effective new product development (NPD). Ongoing success in such industries is dependent on choosing the right mix of new product strategy, organizational structure, and NPD processes. Rather than considering the interrelationships among these success factors, however, most previous studies of NPD have examined these issues individually. This shortcoming is compounded by the fact that past studies of NPD have typically cut across industry lines. Gloria Barczak addresses these problems by proposing that a firm's choice of new product strategy, structure, and process are interrelated, as are the effects of those choices on NPD performance. Because these choices and their effects also may be dependent on the unique characteristics of the industry in which a firm competes, her study focuses exclusively on firms in a specific, high-technology industry, telecommunications. The study finds that no single NPD strategy, in and of itself, stands out as being better than any other for the telecommunications industry. Instead, it appears that a company's focus should be on ensuring the best possible fit between its chosen NPD strategy and its corporate goals and capabilities. In keeping with the current focus on cross-functional teams, the study results indicate that project teams and R&D teams are the most effective means for organizing NPD efforts in the telecommunications industry. Perhaps not surprisingly, R&D teams are more important for first-to-market firms than they are for fast followers and late entrants. An R&D team provides the technical skills necessary for playing the role of pioneer. Regardless of the firm's NPD strategy and structure, the presence of a product champion is an important element in the success of new product efforts. In an era of rapid, technological advances, idea generation and screening efforts are essential to the success of telecommunications firms. To ensure that they do not fall into the trap of introducing technology for technology's sake, pioneering and fast-follower firms in particular must recognize the importance of staying in touch with their markets. Such market-oriented activities as customer prototype testing and concept definition and testing can help these firms ensure that their technological developments are in line with customer needs and requirements.     

Assessing generic strategies: An empirical investigation of two competing typologies in discrete manufacturing industries

In spite of the extensive empirical evidence supporting Porter's (1980) typology of generic strategies, many researchers have criticized it for its conceptual limitations. To address these criticisms, Mintzberg (1988) proposed an alternative typology of generic strategies. Our findings, based on a survey of executives in manufacturing firms, provide support for Mintzberg's typology and fail to support Porter's typology. Given the findings, we call for further empirical validation of competing typologies to revitalize research on generic strategies.     

The implications of strategy and social context for the relationship between top management team heterogeneity and firm performance

This research reexamines the link between top management team (TMT) heterogeneity and firm performance. Specifically, I theorize that the effects of education, work experience, and tenure on performance will depend upon the top management team's strategic and social context. In a test of such theorizing, I find that (1) the positive relationships between TMT educational, functional, and tenure heterogeneity and performance are contingent on complexity, as indicated by a firm's international strategy and, (2) such relationships are clearly stronger in short‐tenured top management teams. The theory and results presented here provide impetus for future studies, as well as suggest to upper echelon researchers that they think more critically about the conditions under which demographic characteristics are most likely to influence organizational outcomes like performance. Copyright © 2002 John Wiley & Sons, Ltd.