Communication and attention dynamics: An attention‐based view of strategic change

Research Summary : The attention‐based view (ABV) has highlighted the role of organizational attention in strategic decision making and adaptation. The tendency to view communication channels as “pipes and prisms” for information processing has, however, limited its ability to address strategic change. We propose a broader role for communication as a process by which actors can attend to and engage with organizational and environmental issues and initiatives and argue that such a view can significantly advance understanding of strategic change. On this basis, we offer suggestions for future research on communication practices, vocabularies, rhetorical tactics, and talk and text in shaping organizational attention in strategic change. We also maintain that this enhanced view of the ABV can help advance research on dynamic capabilities, strategy processes, strategy‐as‐practice, and behavioral strategy. Managerial Summary : To further enhance our capabilities to manage strategic change and renewal processes in organizations, we need a better understanding of how to manage organizational attention. In this article, we highlight the importance of understanding the role of communication and discuss the use of different communication practices, vocabularies, rhetorical tactics, and talk and text as possible levers that can be used to dynamically shape organizational attention. We call for further research to advance the understanding of how these levers can be used to influence the ways in which different sets of strategic issues, initiatives, and action alternatives are handled. We believe that such an enhanced view of organizational attention can enable the development of new, improved strategy practices to manage strategic change and renewal processes.     

Strategic groups as subsets of strategic scope groups in the Belgian brewing industry

This research report proposes a distinction between strategic scope groups and strategic groups whereby strategic groups are delineated within strategic scope groups. A strategic scope group (SSG) includes firms within an industry that define their business using a four-dimensional ‘strategic space’ consisting of buyer types, product types, geographical reach and level of vertical integration, in a similar way. Within each SSG there may be several strategic groups (SGs). An SG includes firms within an SSG that deploy their resources in a similar way and that compete in the same way. While all firms within an SSG may compete against each other, firms within the same SG compete against each other in a similar way. Within the brewing industry in Belgium five SSGs could be identified. These SSGs differ statistically significantly on a risk-adjusted return on assets measure. SGs themselves did not differ on this performance measure. One may therefore conclude that mobility barriers between SSGs are higher than they are between SGs. © 1997 by John Wiley & Sons, Ltd.     

Post‐formation dynamics in strategic alliances

This paper investigates the occurrence and determinants of post‐formation governance changes in strategic alliances, including alterations in alliances' contracts, boards or oversight committees, and monitoring mechanisms. We examine alliances in the biotechnology industry and find that firms' unique alliance experience trajectories affect the likelihood of such ex post adjustments in these partnerships. Transactional features such as the alliance's scope, its division of labor, and the relevance of the collaboration to the parent firm also bear upon alliances' dynamics. We discuss the implications of these findings and how they complement prior research focusing on alliance design or termination at opposite ends of the alliance life cycle. Copyright © 2002 John Wiley & Sons, Ltd.     

Environmental dynamism and strategic decision‐making rationality: an examination at the decision level

Several approaches have been used to explore environmental dynamism as a contingent predictor of the relationship between rational‐comprehensive strategic decision‐making and firm‐level performance. At the decision level of analysis, however, small sample sizes, low statistical power, and statistical dependence have plagued the research. Through the use of a simulated decision‐making environment and multilevel analysis, this study examined 400 decisions from 54 executive teams. Consistent with much of the existing firm‐level research, the results indicated that environmental dynamism may moderate the relationship between rational‐comprehensive decision making and decision quality. Surprisingly, the form of the relationship differed from much of the firm‐level research. Copyright © 2003 John Wiley & Sons, Ltd.     

Discourse revisited: Dimensions and employment of first‐order strategy discourse during institutional adoption

Despite decades of research on strategy, we still know little about what the concept of strategy means to actual strategists and how they use it in practice. Working at the intersections of institutional and practice theories, we use exploratory interviews with strategy directors and a longitudinal case study to uncover four dimensions of first‐order strategy discourse: functional, contextual, identity, and metaphorical. We also reveal three phases in the interrelation between first‐order strategy discourse and institutional work: shaping, settling, and selling and a differential emphasis (selective focusing) on dimensions of the first‐order strategy discourse during the institutional adoption process. We contribute to a deeper understanding of the concept of strategy in practice, the process of institutional adoption, and of the role of discourse in this process. Copyright © 2013 John Wiley & Sons, Ltd.     

Strategic frameworks for understanding employer participation in school‐to‐work programs

The knowledge and skills inherent in human capital are increasingly recognized as the essence of competitive advantage. Extending the emerging literature on capability building, this paper explores the strategic decision of participating in school‐to‐work programs from the transaction cost and resource‐based view of the firm. Using data from a national sample, we find that both strategic perspectives help to explain decisions to participate in school‐to‐work activities. Our findings indicate that school‐to‐work programs and activities may be understood as interorganizational strategies from a transaction cost view and evidence of a firm's motivation to develop human capital to build competitive advantage from a resource‐based view. Implications for school‐to‐work public policy development in the United States and future research are identified. Copyright © 2005 John Wiley & Sons, Ltd.     

Strategy tools‐in‐use: A framework for understanding “technologies of rationality” in practice

In response to critiques of strategy tools as unhelpful or potentially dangerous for organizations, we suggest casting a sociological eye on how tools are actually mobilized by strategy makers. In conceptualizing strategy tools as tools‐in‐use, we offer a framework for examining the ways that the affordances of strategy tools and the agency of strategy makers interact to shape how and when tools are selected and applied. Further, rather than evaluating the correct or incorrect use of tools, we highlight the variety of outcomes that result, not just for organizations but also for the tools and the individuals who use them. We illustrate this framework with a vignette and propose an agenda and methodological approaches for further scholarship on the use of strategy tools. Copyright © 2014 John Wiley & Sons, Ltd.     

The Limits on Pay as a Strategic Tool: Obstacles to Alignment in Non‐Union Environments

Strategic human resource management literature emphasizes the potential of pay to secure strategically desirable employee outcomes for the employer. Strategic pay, in contrast with pluralist models of pay determination, assumes an absence of collective bargaining constraints. This article analyses the process of determination of non‐unionized managerial, professional and technical pay in seven leading consumer goods firms that claim to use pay as a strategic tool. It demonstrates that implemented pay practice is often remote from what is aspired to strategically. Despite the absence of collective bargaining constraints, there remain unavoidable obstacles to the ability of management to implement pay systems aligned to strategic goals. These constraints impose fundamental limitations on the use of pay as a strategic tool.     

Platform competition: Strategic trade‐offs in platform markets

Because the literature on platform competition emphasizes the role of network effects, it prescribes rapidly expanding a network of platform users and complementary applications to capture entire markets. We challenge the unconditional logic of a winner‐take‐all (WTA) approach by empirically analyzing the dominant strategies used to build and position platform systems in the U.S. video game industry. We show that when platform firms pursue two popular WTA strategies concurrently and with equal intensity (growing the number and variety of applications while also securing a larger fraction of those applications with exclusivity agreements), it diminishes the benefits of each strategy to the point that it lowers platform performance. We also show that a differentiation strategy based on distinctive positioning improves a platform's performance only when a platform system is highly distinctive relative to its rivals. Our results suggest that platform competition is shaped by important strategic trade‐offs and that the WTA approach will not be universally successful. Copyright © 2013 John Wiley & Sons, Ltd.     

Conceptualizing executive hubris: the role of (hyper‐)core self‐evaluations in strategic decision‐making

Researchers have long been interested in how an executive's self‐concept affects his or her behaviors, but have lacked a theoretically grounded, validated construct for conducting systematic inquires. The concept of ‘core self‐evaluation’ (CSE), which has been recently validated in the psychology literature, concisely encompasses and consolidates the common, overlapping portions of four previously unconnected personality dimensions: self‐esteem, self‐efficacy, locus of control, and emotional stability. CSE has great potential to provide substantial leverage for research on executive self‐concept. We review and reconcile prior research on related constructs in executive settings (including narcissism, hubris, and overconfidence) and argue that CSE should be adopted as a robust, well‐validated umbrella construct for research on executive self‐concept. Indeed, a very high level of CSE, or hyper‐CSE, aligns closely with what is often colloquially called ‘hubris.’ We anticipate that hyper‐CSE executives—who possess supreme levels of self‐confidence, self‐potency, and conviction that they will prevail—will manifest this trait in their job behaviors. We develop a set of integrated propositions that describe the implications of CSE for strategic decision processes, strategic choices, and organizational performance. Finally, we propose additional avenues for research. Copyright © 2005 John Wiley & Sons, Ltd.     

Strategic human capital management in the context of cross‐industry and within‐industry mobility frictions

Research Summary: We develop and test a theory examining how frictions that restrict mobility across industries and frictions constraining mobility within an industry can co‐occur to effectively isolate individual human capital, ultimately changing the firm's make‐versus‐buy decision for human capital. Empirically, we demonstrate that when cross‐industry frictions in the form of limited skill transferability and within‐industry frictions in the form of noncompete enforceability are both present, employees exhibit longer tenures, firms hire workers with less initial experience, firms change the amount and nature of training provided, and wages marginally increase. These findings suggest that sufficiently strong and complementary mobility frictions shift the emphasis of firms’ human capital management practices toward internal development of human capital relative to acquisition on the external market. Managerial Summary : In the face of frictions to employee mobility both within and across industries, which we capture empirically using measures of noncompete enforceability and limited skill transferability across industries, firms tend to hire less experienced workers, such workers exhibit longer tenures, and firms invest more in their training, particularly in the development of new skills. Our findings imply that for firms operating under such complementary frictions, better hiring and internal development capabilities are particularly important for performance, while those firms without such capabilities may benefit from considering ways to circumvent the mobility frictions, including moving out of the focal state or lobbying for different noncompete laws.     

Incumbent strategic behavior in financial markets and the exit of entrepreneurial start‐ups

This paper empirically investigates the forces that shape the post‐entry exit probability of entrepreneurial start‐ups, with an emphasis on the impact of incumbents' strategic behavior in financial markets. We find that entrepreneurial start‐ups in highly competitive industries are more likely to exit and that leverage compounds this exit risk. However, the latter result only holds when potential adverse selection and moral hazard problems in financial markets are large at start‐up. Under these circumstances, competitors can negatively influence creditors' perceptions on entrepreneurial quality or behavior through aggressive strategic actions to impede future financing and induce the start‐up's exit. Copyright © 2004 John Wiley & Sons, Ltd.     

Changes in the intellectual structure of strategic management research: a bibliometric study of the Strategic Management Journal, 1980–2000

The aim of this paper is to identify the works that have had the greatest impact on strategic management research and to analyze the changes that have taken place in the intellectual structure of this discipline. The methodology is based on the bibliometric techniques of citation and co‐citation analysis which are applied to all the articles published in the Strategic Management Journal from its first issue in 1980 through 2000. Copyright © 2004 John Wiley & Sons, Ltd.     

The effectiveness of contractual and trust‐based governance in strategic alliances under behavioral and environmental uncertainty

Research summary: We examine the interplay of behavioral and environmental uncertainty in shaping the effectiveness of two key governance mechanisms used by strategic alliances: contractual and trust‐based governance. We develop and test hypotheses, using a meta‐analytic dataset encompassing over 15,000 strategic alliances across 82 independent samples. We find that contractual governance works best under low to moderate levels of behavioral uncertainty and moderate to high levels of environmental uncertainty, while it is detrimental to alliance performance when both types of uncertainty are low or high. Trust‐based governance is most effective at high levels of behavioral uncertainty and low levels of environmental uncertainty. It suffers a large loss of usefulness at high behavioral uncertainty as environmental uncertainty increases. Managerial summary: Strategic alliances allow firms to gain greater efficiency and create value. Yet, many such alliances fail because they are not able to deal with the twin challenges posed by behavioral and environmental uncertainty. Findings from our meta‐analysis imply that under conditions of high behavioral uncertainty and low‐to‐moderate levels of environmental uncertainty, the use of trust‐based governance alongside contractual governance might enhance the latter's effectiveness. The combined effectiveness of contractual and trust‐based governance under high levels of both behavioral and environmental uncertainty is not obvious. When both behavioral and environmental uncertainty are high, contractual governance hurts alliance performance while trust‐based governance does not function at its best either. Under these conditions, it might be better for firms to turn to hierarchy or vertical integration. Copyright © 2015 John Wiley & Sons, Ltd.     

Misused and missed use — Grounded Theory and Objective Hermeneutics as methods for research in industrial marketing

Since qualitative research methods have always found strong representation within sociology it is warranted to look at the sociological discussion in order to challenge and enrich qualitative research in industrial marketing. With this mission in mind, we discuss two sociological concepts that constitute influential schools within the German-speaking sociology of language community: Grounded Theory and Objective Hermeneutics. The analysis of their suitability for research in industrial marketing along several dimensions shows that while both methods target the reconstruction of meaning, they pursue different paths. Grounded Theory strives to discover higher-ranked social patterns, while Objective Hermeneutics is concerned with universal motives underlying a specific interaction.     

Strategic rationale for responding to extra‐jurisdictional regulation: Evidence from firm adoption of renewable power in the US

It is well documented that firms respond to regulations in their home jurisdictions. We present hypotheses that firms also respond to regulations in jurisdictions where they do not operate. We examine renewable‐power provision in the U.S. electric utility sector between 2001 and 2006, and find that firms adopt more renewable‐power generation when their peers (i.e., firms in the same regulatory jurisdiction) face greater renewable‐power standards in other jurisdictions. The underlying mechanism is that forward‐looking firms assess when extrajurisdictional regulations foreshadow regulatory changes where they operate. Our analyses support this mechanism versus plausible alternatives. We demonstrate firms acting strategically to respond to extrajurisdictional regulations and show that the central conduit motivating this response is the extrajurisdictional footprint of firms operating in the same jurisdiction as a focal firm. Copyright © 2013 John Wiley & Sons, Ltd.     

Ambidexterity and performance in multiunit contexts: Cross‐level moderating effects of structural and resource attributes

Research suggests that unit‐level ambidexterity positively impacts subsequent unit performance but theory and testing on this impact remain impoverished. We develop a cross‐level model suggesting that structural and resource attributes of the organizational context significantly shape the relationship between unit ambidexterity and performance. Using multisource and lagged data from 285 organizational units located within 88 autonomous branches, results from hierarchical linear modeling show that this relationship is boosted when the organization is decentralized, more resource munificent, or less resource interdependent. We also find that structural differentiation of the organization does not condition the unit ambidexterity‐performance relationship. Through this cross‐level theory and testing, we develop a richer explanation of the effectiveness of ambidextrous units operating in multiunit contexts. Copyright © 2012 John Wiley & Sons, Ltd.     

CEO compensation in relation to worker compensation across countries: The configurational impact of country‐level institutions

Executive compensation and its relation to that of rank and file employees are vital areas of strategy research. This study contributes to our understanding of cross‐national differences in executive compensation by exploring how key formal and informal country‐level institutions of social power structures combine to shape CEO and worker compensation across countries as well as the resulting pay dispersion. Analyzing data spanning 54 countries using the configurational approach fuzzy set Qualitative Comparative Analysis (fsQCA), the study also explores the causal asymmetry underlying compensation outcomes by investigating institutional configurations linked to high CEO compensation, high worker pay, and high pay dispersion and those configurations linked to the absence of these outcomes. The article concludes by discussing the study's implications for theory and research on executive compensation. Copyright © 2015 John Wiley & Sons, Ltd.     

Differences in managerial discretion across countries: how nation‐level institutions affect the degree to which ceos matter

The concept of managerial discretion provides a theoretical fulcrum for resolving the debate about whether chief executive officers (CEOs) have much influence over company outcomes. In this paper, we operationalize and further develop the construct of managerial discretion at the national level. In an empirical examination of 15 countries, we find that certain informal and formal national institutions—individualism, tolerance of uncertainty, cultural looseness, dispersed firm ownership, a common‐law legal origin, and employer flexibility—are associated with the degree of managerial discretion available to CEOs of public firms in a country. In turn, we show that country‐level managerial discretion is associated with how much impact CEOs have on the performance of their firms. We also find that discretion mediates the relationship between national institutions and CEO effects on firm performance. Finally, we discuss two inductively derived institutional themes: autonomy orientation and risk orientation. Copyright © 2011 John Wiley & Sons, Ltd.