Incorporating international strategic alliances into overall firm strategy: A typology of six managerial objectives

This research differentiates between international strategic alliance (ISA) structures, functions, and objectives, focusing on the latter and the link to overall firm strategy. Six objectives are put forward–learning, leaning, leveraging, linking, leaping, and locking out–with a discussion of the strategic implications of each. From a theoretical perspective, it is suggested that more emphasis should be placed on ISA objectives as a means of supporting overall firm strategies, as opposed to focusing on ISA structures or functions. From an applied perspective, managers are encouraged to consider the long-term strategic implications inherent in specific alliance arrangements. © 1995 John Wiley & Sons, Inc.     

Exploration and exploitation fit and performance in international strategic alliances

Exploration and exploitation constitute two separate, potentially conflicting strategic choices for firms engaged in international strategic alliances. Our empirical study challenges the ambidexterity argument and demonstrates that exploration and exploitation are separate (though not necessarily antithetical) strategies with different antecedents and performance consequences.Our results show that while competency similarity is conducive to upstream innovative performance, prior experience with the partner is potentially damaging for this type of performance and trust and cultural distance do not play significant roles. When the motive is efficiency and downstream market performance, prior experience with the partner instead is beneficial, as are high levels of trust and low levels of cultural distance. These findings have key implications for literature on strategic fit and alliance performance.     

Management ownership and firm performance

This article explores the relationship between management ownership and firm performance. Using the panel data of Chinese listed firms from 2000 to 2004 and the average model, we attempt to avoid some of the deficiencies in research design and performance indicator selection in prior studies. Results show that the proportion of shares held by top management is significantly and positively related to firm performance. Empirical tests of sub-samples in each year confirm the above conclusion.     

Beating the recession blues: Exploring the link between family ownership,strategic marketing behavior and firm performance during recessions

This study explores whether family firms exhibit unique marketing behavior and whether their unique behavior in turn helps them outperform non-family firms during periods of economic contraction. Findings based on a sample of 275 large publicly listed U.S. firms reveal that family firms outperform non-family firms during recessions. This superior performance is partially driven by family firms' proactive marketing behavior and their relatively strong emphasis on corporate social responsibility (CSR). During recessions, while non-family firms tend to decrease their advertising intensities and rates of new product introduction (NPI), family firms are likely to maintain relatively high levels of advertising intensity and rates of NPI. Unlike non-family firms, family firms are also likely to maintain high levels of corporate social performance (CSP) during recessions. These results underscore the benefits of proactive marketing behavior and a continued emphasis on CSR during economic downturns. The authors also add to the scant family-firm literature, demonstrating the family firm to be an effective organizational form.     

Board independence, firm performance and ownership concentration: Evidence from Chile

What determines the composition of companies' boards in the context of high ownership concentration? Are independent directors important as an internal governance mechanism in companies with high ownership concentration? Do markets favor companies whose controlling shareholders use voting rights to elect professional directors?Using a four-year, 160-company panel data, and controlling for endogeneity, this paper addresses these three related questions, finding that an increase in the proportion of outside directors affects company value. The paper also finds that companies that present more exacerbated agency conflicts tend to incorporate professional directors to the boards, in an effort to improve corporate governance and ameliorate the agency problem.     

Employee ownership and firm performance: A variance decomposition analysis of European firms

Employee ownership is of increasing interest to researchers, policymakers, and firms. Findings on the influence of employee ownership on performance, however, remain mixed, possibly due to differences in institutional/cultural factors, period-effects, between-industry differences, and firm-specific heterogeneity. To further shed light on performance gains from employee ownership attributable to the relative effects of country, year, industry, and firm, we draw on a sample of 12,648 firm-years from 1797 European firms from 2006 to 2014. We find that while the relative variance explained by employee ownership is not statistically significant, its joint effects with country, year, industry, or firm explain 2.25%, 0.12%, 0.51%, and 4.16% of variance in ROA, respectively. Similar effects are observed for workforce productivity as an outcome. These findings suggest that contextual factors, especially in line with previous research, firm-related factors are important for the effective utilization of employee ownership. This study has implications for strategic human capital theory and practitioners.     

Managerial ownership,diversification, and firm performance: Evidence from an emerging market

Numerous existing studies have explored the impact of corporate diversification on firm performance, whereas considerably less research has investigated the inter-relationships among managerial ownership, diversification, and firm performance. This paper develops several hypotheses based on the agency theory self-interest perspective and tests the relationships among managerial ownership, corporate diversification, and firm performance using a sample of 98 emerging market firms listed on the Taiwan Stock Exchange. The results show a U-shaped relationship between managerial ownership and corporate diversification, similar to that found in prior studies. However, the inflection point is 33.17%, which is lower than that found in previous studies. Moreover, in contrast to prior results, corporate diversification is found to be positively associated with short-term firm performance and bears no relationship with mid-term firm performance, while firms engaged in unrelated diversification outperform those engaged in related diversification. This paper concludes with theoretical implications and suggestions for future research.     

State ownership,political ideology,and firm performance around the world

It is often taken as a stylized fact that state ownership harms the financial performance of firms. Yet we show that this relationship varies greatly across national contexts. We argue that the political ideology of the government, both independently and in conjunction with political institutions (state capacity and political constraint), affects this relationship. We test our hypotheses using meta-analytical techniques on an international sample spanning 53 years and 131 countries. Our research sheds further light on the state ownership – firm performance relationship by highlighting the role of the political ideology of the government, and its interactions with political institutions.     

Knowledge assets and firm international performance

This paper investigates how intangible knowledge assets impact upon firm international performance through the analysis of a sample of 290 European listed companies. We draw upon the knowledge-based view of the firm, and argue that more knowledge assets have a positive impact on foreign sales intensity, but only a up to a point. The inverse quadratic relationship found suggests that it is necessary to balance knowledge assets with complementary assets in order to achieve a higher degree of international performance. Furthermore we also suggest that externally-generated knowledge assets may have a positive impact upon international performance, but that the impact will be mediated by the possession of internally generated knowledge assets.     

Determining international strategic alliance performance: A multidimensional approach

This paper considers the relationship between subjective, multidimensional measures of international strategic alliance (ISA) performance and predictors of success both before the alliance is formed (pre-alliance formation factors) and during the operation of the alliance (post-alliance formation factors). The empirical study, based on a web-survey, investigates a sample of Danish partner firms engaged in 48 equity joint ventures and 70 non-equity joint ventures with partners from around the world. A multi-dimensional operationalization of alliance performance measurement is utilized in order to capture both process and outcome aspects of alliance performance. The results show a significant relationship between alliance performance and host country risk as well as partner reputation preceding alliance formation. During the operation of the alliance, relationships between collaborative know-how, trust, protectiveness, complementarity, cultural distance and alliance performance were found.     

Dynamic learning and strategic alliances: A commentary essay

Strategic alliances and the learning benefits they foster in partner firms inspire a rich literature in the organizational sciences. Part of this literature asks whether or not alliances drive dynamic learning opportunities and thus help partner firms create or enhance dynamic competitive capabilities. Chen, Lee, and Lay (2010) show that alliances do foster the development of dynamic competitive capabilities and do this through dynamic learning mechanisms. This commentary essay critiques the merits of the authors' potential contributions to extant theory and managerial practice and offers new questions for further research.     

Drivers of dynamic learning and dynamic competitive capabilities in international strategic alliances

Research on dynamic competitive capabilities (DCCs) is critical for businesses to operate effectively in a rapidly changing environment. The driving forces of the dynamic learning mechanism (DLM) play a decisive role in the evolution of DCCs that the resource-based view (RBV) has failed to clearly identify. By engaging in an empirical study with a sample of 363 strategic alliances in Taiwanese companies, this paper shows that learning intent and embedded learning positively influence the drivers of DLM, such as manager integration power, external linkages, codification of experience, and ambiguity, to both strongly and positively affect DCC development in high-level management of international strategic alliances.     

R&D spending,strategic position and firm performance

Based on R&D investment data from Chinese listed manufacturing firms, this paper examines the effect of R&D spending on firms’ future performance conditional on their strategic positions. We find that firms pursing a product differentiation strategy have more R&D spending than those with a cost leadership strategy. In addition, we document a positive effect of R&D spending on firms’ future performance if they adopt a product differentiation strategy. Meanwhile, for the firms that adopt a cost leadership strategy, the relationship between R&D spending and firm performance resembles an inversed U-shape. Furthermore, we find this inversed U-shape relationship only exists for non-state-owned firms. Overall, this paper provides guidance and useful suggestions on the efficient allocation of R&D resources for Chinese manufacturing firms.     

Team and organizational resources, strategic orientations, and firm performance in a transitional economy

Firms in transitional economies are learning to develop strategies to exploit new market opportunities though bounded by their lack of market experience and resources as well as institutional and cultural heritage. This paper examines the managerial orientations of top managers in the transitional economy of China by focusing on a firm's team and organizational resources. Specifically, the following antecedents motivate a firm to put more emphases on strategic orientations: the firm has an effective top management team, strong managerial competences, and when the firm has ample endowment of slack resources, social network, and support from the institutional environment. Empirical results support that team orientation, managerial competence, social network, and local institutional support are instrumental in developing market-focused strategic orientations. In addition, strategic orientations with heavy emphases on overall low costs and product innovation relate to higher firm performance.     

企业组织资本、战略前瞻性与企业绩效:基于中国企业的实证研究

Organizational capital is an institutional arrangement in a firm’s production and management activities, which helps integrate all resources in the firm and affect the firm’s strategic choice and performance. This paper classifies organizational capital into three subtypes, namely power orientated capital, norm orientated capital and knowledge orientated capital. Moreover, strategic proactiveness is also brought into this influencing process. Results show that strategic proactiveness fully mediates the effect of power orientated capital on firm performance, but partially mediates that of norm orientated capital. It is also found that neither power nor norm orientated capital affects innovative performance, whereas knowledge orientated capital affects directly both financial performance and innovative performance. The significance of this research is to provide a meaningful supplement to the theory of decision-making-process for the top management team. Suggestions on how to cultivate organizational capital are provided for Chinese enterprises. __________ Translated and revised from Guanli shijie 管理世界 (Management World), 2007, (5): 83–93     

Ultimate ownership,risk-taking and firm value: evidence from China

This article investigates the relationship among ultimate ownership, risk-taking and firm value using firm-level data from Chinese companies. The results indicate that dominant ultimate controlling shareholders exacerbate the agency problem. The larger the divergence between ultimate shareholder’s control rights and cash flow rights, the stronger motivation is to reduce corporate risk-taking (CRT) to safeguard private benefits. Furthermore, the presence of a dominant ultimate controlling shareholder is harmful to firm value, and the divergence between its control right and cash flow right has a significantly negative effect on firm value. Corporate risk-taking plays a significant mediating effect between ultimate controlling shareholder and firm value. Based on these results based on theory and practice, we propose a number of practical implications for managers.     

Linking the formal strategic planning process,planning flexibility,and innovativeness to firm performance

This study explores the link between financial performance and the formal strategic planning process, planning flexibility, and innovativeness of 448 firms in a multi-industry sample. The results suggest that firms' formal strategic planning processes and planning flexibility are positively associated, and each is positively related to innovativeness. In addition, innovativeness fully mediates the relationships between firm performance and the formal strategic planning process and planning flexibility.     

Sponsorship relationships as strategic alliances: A life cycle model approach

In recent years, academics and practitioners have recognized that sponsorship relationships operate as strategic alliances. Additionally, they have emphasized the lack of analytical approaches which allow an understanding of the developmental process of such alliances. In an attempt to fill this gap, we examine how key sponsorship characteristics change over different stages of the life cycle (formation, operation, and outcome) to determine the success or failure of the relationship. Specifically, we propose a life cycle model that articulates general paths in sponsorship relationship developmental stages and the behavior pattern of sponsorship characteristics. Throughout this framework, we illustrate our reasoning with examples drawn from the UBS/Team Alinghi sponsorship relationship.     

Managerial ownership and performance: A commentary essay

Florackis, Kostakis, and Ozkan [Florackis, C., Kostakis, A., and Ozkan, A., 2008. Managerial ownership and performance, Journal of Business Research, forthcoming] empirically examine the exact nature of the relationship between managerial ownership and corporate performance in the framework of semi-parametric regression. This commentary explores the authors' contribution to the corporate governance literature in the light of recent advances in semi-parametric regression. The commentary also considers how Florackis et al.'s findings align with important, emerging work in the corporate governance literature.