Implanting competitive strategy: A contingency approach

Competitive business strategies are often formulated with little regard given to the articulation format. This paper examines the strategy formulation process from a systems perspective and argues that articulation of a competitive strategy, such that sustained competitive advantage is created, requires consistency along the entire business chain. Internal consistency within the business chain is built through inter‐linkages. The inter‐linkages are made through four inter‐connective elements: human resources, technological resources, information resources and financial resources. It is argued in this paper that the human factor is of major importance since it integrates the other inter‐connective elements and therefore represents a key factor in the process of articulation and implementation. In view of the critical role of the human element in articulation of business strategy for competitive advantage, the paper develops a human‐factor related contingency framework. The developed contingency framework examines Porter's (1980, 1985) generic strategies with respect to congruent requisites necessary for building competitive advantage.     

Development time and new product sales: A contingency analysis of product innovativeness and price

Opposing theories and conflicting empirical results with regard to the effect of development time on new product sales suggest the need for a contingency analysis into factors affecting this relationship. This study uses a unique combination of accounting and perceptual data from 129 product development projects to test the combined contingency effect of product innovativeness and new product price on the relationship between development time and new product sales. The results show that for radically new products with short development times, price has no effect on new product sales. When the development time is long, price has a negative effect on the sales of radical new products. The findings additionally show that price has no effect on sales for incremental new products with short development times and a negative effect for incremental new products with long development times. Together, these findings shed new light on the relationship between development time and new product sales.     

Emotional loyalty and share of wallet: A contingency approach

The purpose of this study is to investigate whether three demographic (age, income, and education) and two situational (relationship duration and product type) customer characteristics moderate the relationship between emotional loyalty and share of wallet. In so doing, this study explicitly examines the extent to which results diverge when using share of wallet versus conative loyalty (i.e., behavioral intentions) as the dependent measure. Data from a sample of US store shoppers (n=604) indicate that education, relationship duration, and product type moderate the effect of emotional loyalty on share of wallet but not on conative loyalty. Implications for retailers are discussed with suggestions for future research.     

Organizational design: A contingency approach: A model for organic management design

For those firms that operate in a stable environment—an unchanging technology and a certain market—a mechanistic management system is efficient. A great many corporations, however, must have a flexible organizational structure, which can adapt to constant changes in technology and fluctuations in the market. These firms are often characterized by their organic approach to management design. In this article, the authors develop a model for organizational design based on the variables of internal needs and external conditions and illustrate their model with nationally known firms as examples. The model's quadrants are: high uncertainty/low integration; high uncertainty/high integration; high certainty/low integration; and high certainty/high integration.     

Bank presence in firm equity: A diversification based approach

This study analyses the possible reasons for banks deciding to invest in firm equity, based on the fundamentals of the strategic diversification literature. Those fundamentals suggest that it may be in response to the negative evolution of other aspects of banking business, namely, credit business, fixed interest business and services, as well as the bank's level of efficiency. The results confirm the hypotheses that the decision to hold equity in other firms is related to the evolution of the bank's other businesses. However, the results for savings banks differed from those for banks.     

Efficiency of multinational banks: Impacts of geographic and product loci

This paper explores geographic diversification strategies’ impact on multinational banks’ operational performance within the context of research on globalization and regionalization. We employ a sample of the 49 largest banks from 16 European countries from 2011 to 2018 and proxy operational performance by technical efficiency. We find the impact of geographic diversification on operational performance depends on the locus of geographic diversification—home-regional vs. inter-regional—and the interplay between geographic diversification and banks’ functional focus. More specifically, home-regional diversification together with a concentration on non-interest income-generating activities, including fee and commission and trading income, worsens performance, and diversification across regions alongside a focus on non-interest income-generating activities improves performance. Distinct product characteristics’ ability to facilitate different regional dispersions has important managerial implications for enhancing the success of geographic diversification strategies, a central but unresolved issue in global banking.     

The effect of product diversification strategies on the relationship between international diversification and firm performance

Previous studies have provided mixed evidence on the interaction effect of product and international diversification on firm performance. This study extends this stream of research by investigating the differential impacts of product diversification strategies on the relationship between international diversification and firm performance. We find that while related product diversification positively influences the performance of multinational firms, unrelated product diversification negatively moderates the international diversification–performance relationship. The evidence is robust for different models of international diversification and firm performance, and holds for firms in both the service and manufacturing industries. Our findings highlight the importance of distinguishing different product diversification strategies, and provide a potential explanation for prior mixed evidence.     

Geographic diversification,product diversification,and firm cash flow volatility: the moderating effect of firm dynamic capability

Literature is largely inconclusive on the effects of geographic diversification and production diversification on firm performance. This impedes the understanding of diversifications and hinders the decision-making process in global practice. Further, performance indicators in the literature are mainly constrained to the returns aspect of the firm. Risk side factors such as the volatility of cash flow are largely neglected. This paper explores the inconclusive pattern of diversifications from the perspectives proposed by resource-based theories and dynamic capability theories. It examines how firm capability dichotomizes the relationships between diversifications and firm cash flow volatility. Results confirm that capability the roles of both geographic and product diversifications. A high capability is a necessary condition by which diversification strategies by themselves, or their joint effort, can benefit the firm.     

Small business growth through geographic expansion: A comparative case study

Although the small business sector as a whole is achieving phenomenal growth, an important concern in the field has been identifying the problems, challenges, and success characteristics associated with the prudent growth of individual firms. A strategy utilized by many small firms to achieve their growth objectives is one of geographic expansion. This approach involves expanding a firm’s business from its original location to one or more additional geographic sites, and is particularly well suited for firms that cannot expand in their present location but believe that their products or services may be appealing to consumers in other markets.Surprisingly, despite the prevalence of geographic expansion as a means of small firm growth, this is a neglected area of small business research. Although researchers have examined the common challenges associated with small firm growth, a small business that expands from one location to several locations is subject to a number of potentially unique challenges. For example, during the course of opening a new geographic site, a small business manager will be confronted with the task of managing an existing business and a start-up at the same time. The challenge created by this undertaking, along with the other challenges associated with geographic expansion, have not been specifically identified. An improved understanding of these challenges may help small firm managers maximize their changes of leading successful expansion efforts.As a result of the lack of research in this area, this study used a comparative case study methodology to develop a theoretical model of the antecedents of effective small business geographic expansion. The model was developed in two steps. First, a preliminary model of the antecedents of effective small business geographic expansion was developed from the existing small business growth literature. Second, using analytic induction, the preliminary model was compared with the experiences of five small businesses that have engaged in a growth strategy of geographic expansion for the purpose of developing a more thorough and more valid theoretical model. A unique attribute of the sample is that not all of the businesses have been successful in their expansion efforts. Two of the five small businesses included in the study have had failed expansions, providing us the rare opportunity to contrast failed expansion efforts against successful ones.The model that emerged from this approach supports the notion that geographic expansion involves a unique set of managerial challenges. The consistent evidence across the five case studies indicated that effective small business geographic expansion involves the following six major areas of concern: planning for growth, managing growth, reasons for growth, expansion site characteristics, a set of moderator variables, and expansion performance.Among the implications of the study is that the unique nature of the geographic expansion process adds a layer of complexity to firm growth that exacerbates the need for planning. Along with the normal challenges involved with adding structure to accommodate growth, a firm that engages in geographic expansion must do this in an unfamiliar location, where the market potential and legitimacy of the firm’s business concept is untested. The consistent evidence that emerged from the cases is that planning helps attenuate these challenges. In addition, the recruitment and selection of qualified personnel to staff expansion sites is a critical activity, along with networking in the expansion site locations to establish organizational legitimacy. Three variables were found to moderate the relationship between managing growth and expansion performance. Learning and flexibility were found to have a positive influence on the managing growth expansion performance relationship, whereas environmental turbulence was found to have the opposite impact. Finally, a complex set of relationships emerged from the study pertaining to expansion site characteristics. For instance, the evidence generated across the cases suggested that planning helps a firm develop a set of heuristics for expansion site selection, which helps a firm avoid placing a site in an undesirable location.     

Processes of firm growth and diversification: theory and evidence

Investigating the role of diversification in the firm growth process, we build on Penrose’s (The theory of the growth of the firm. Oxford University Press, Oxford, 1959) Theory of the Growth of the Firm to formulate hypotheses about growth of employment, assets and sales in the years before, during and after a new product introduction. We exploit a new database from the German machine tool industry that boasts a detailed and meaningful definition of diversification. Our exploratory analyses indicate that diversification, in terms of product introductions, is preceded by employment growth. Moreover, we find support that diversification is positively associated with subsequent asset growth, but negatively associated with subsequent employment growth.     

Effects of export product diversification on quality upgrading: an empirical study

This paper empirically examines the effects of export product diversification on overall export quality in a panel data set of 115 countries from 1970 to 2010. It uses the data sets of the overall export quality and three export diversification measures of the International Monetary Fund: the extensive margin (variation in the number of new products exported), the intensive margin (variation in export values among existing exports), and the overall (Theil) index. It finds that export quality has only been increasing with a higher variation in export values among existing exports in low- and lower-middle-income countries. It also observes that export quality has been increasing with both a higher variation in export values among existing exports and new products exported in upper-middle- and high-income countries. The results are robust to the changing measures of controls in the benchmark model, the inclusion of many other controls; i.e. various measures of globalization, country size, factor endowments, macroeconomic stance, etc., and the exclusion of outliers.     

Supporter networks and network growth: a contingency model of organizational emergence

Despite the belief that networks are essential to entrepreneurial success, very few studies consider the role of networks in the founding of new organizations. In response, we test the direct and interactive effects of the characteristics of nascent entrepreneurs’ supporter networks and network growth on organizational emergence. We find that (1) the governance and content of the supporter network, along with network growth, are important in predicting organizational emergence, and (2) the structure and content of the supporter network may inform the need for network growth. We conclude by discussing the implications of our findings for academics and practitioners.     

Innovation and survival of exporters: A contingency perspective

We challenge the traditional view that innovations always help exporters prosper in competitive international market, by developing and testing the premise that the relationship between innovation and export performance is contingent on some important firm-specific idiosyncrasies. With a large dataset of Chinese firms, the empirical results demonstrate that innovation could be detrimental to exporter survival. Such negative effect is more pronounced for firms that have weak profitability and high outstanding receivables, and also for those without foreign ownership. Nonetheless, we also observe a positive relationship between innovation and survival in highly profitable exporters. By identifying the negative rather than conventionally assumed positive effect of innovation, and the conditions under which innovation facilitates or impedes exporter survival, this paper contributes to the literature on the relationship between innovation and export in the context of emerging markets. Our findings have important implications for how managers develop innovation strategy to compete in the export market.     

Reduce product counterfeiting: An integrated approach

There is substantial interconnection between the reduction of product counterfeiting and quality management. This article seeks to demonstrate how integrating anti-counterfeiting initiatives into quality management strategies can reduce risk in the supply chain. We explore issues pertaining to product counterfeiting, the practical application and constraints of anti-counterfeiting initiatives within the supply chain, and the intersection of anti-counterfeiting initiatives with quality management programs. Gaps in current management strategies to address these issues are identified, and a potential remedy to address these deficiencies is proposed. Practical suggestions regarding the application of quality principles to offset counterfeiting should reduce risk in the supply chain.     

On voluntarism and the role of governments in CSR: towards a contingency approach

In the corporate social responsibility (CSR) literature, the principle of voluntarism is predominant and implies that responsible business activities are discretionary and reach beyond the rule of law. This principle fails to explain that governments have a great interest in CSR and exercise influence on firms’ CSR activities. Therefore, we argue in favour of a contingency approach on voluntarism in CSR. To this end, we analyse the academic literature to demonstrate how governments are part of the CSR debate. We selected 703 papers where the impact of governments is mentioned from five journals in our field (BEER, BEQ, BSE, BAS, JBE) in the period 1982–2011. We studied the titles and abstracts of these papers and provide an overview of: (i) the geographical orientation of the reviewed studies; (ii) the variety of government levels involved; and (iii) the various subjects where governments appear to be involved. In addition, an in‐depth reading of a subsample of 39 articles offers more details on the role of governments in the CSR literature. Hence, we offer a structured overview on the discussion of CSR and governments while stimulating a contingent understanding of the voluntarism concept in CSR.     

Toward a contingency view of new product creativity: Assessing the interactive effects of consumers

Although creativity is widely recognized as a critical element for firms to develop new products, knowledge about how consumers evaluate product creativity remains far from definitive. The authors analyze how the relevance of novelty and appropriateness—two main elements of creativity—varies according to the characteristics of the consumer. A sample of 283 consumers indicates a negative interaction effect between novelty and appropriateness, suggesting that creativity depends on either, according to contingencies. Novelty is more relevant when consumers are highly involved or have little knowledge of the product. Appropriateness is more relevant when consumers are minimally involved or have significant knowledge. Theoretical and managerial implications are provided.     

The impact of geographic diversification on export performance of small and medium-sized enterprises (SMEs)

Two alternative diversification strategies—the geographic diversification of export sales and key market concentration—are extensively discussed in management, strategy, entrepreneurship, and economics literature. However, no conclusive evidence currently exists as to how either of these strategies affects the performance of international sales. This paper contributes to a better understanding of geographic diversification as a key dimension of the internationalization process for small and medium-sized enterprises (SMEs). In it, we analyze a comprehensive database of Polish exporters over a 3-year period to better understand the geographic diversification patterns of exporters. Based on this analysis, six propositions emerged from the export patterns examined and two viable strategies for exporting SMEs are identified: (1) concentrating on a single market and (2) a balanced approach aimed at targeting a small number of key markets, combined with a strategy of penetrating other markets. Implications for practice and future research are also discussed herein.