Appropriating the value from innovation: inimitability and the effectiveness of isolating mechanisms

Preventing the imitation of products and their underlying characteristics is a key source of competitive advantage. Isolating mechanisms, such as patents, brand name and speed to market, render an organisation's inventions imperfectly imitable by competitors, helping sustain the above‐normal returns achieved from a new product innovation. A theoretical framework is developed whereby the characteristics of isolating mechanisms, namely causal ambiguity, asset stock effects and enforceability of property rights, are shown to be important determinants of appropriation effectiveness. A multiple method research design, consisting of a survey of 238 large Australian organisations, and a further six case study organisations, is adopted. The results indicate that isolating mechanisms in the form of technological capabilities, market‐based assets and knowledge protection positively moderate an organisation's returns from their innovation activities, while being first‐to‐market is found to negatively moderate the business returns achieved. Implications for managers in increasing the effectiveness of their appropriation regime, and future directions for research are proposed.     

Spatial Heterogeneity of Willingness to Pay for Forest Management

The paper investigates the spatial heterogeneity of public’s preferences for the implementation of a new country-wide forest management and protection program in Poland. Spatial econometric methods and high resolution geographical information system data related to forest characteristics are used to explain the variation in individual-specific willingness to pay (WTP) values, derived from a discrete choice experiment study. We find that respondents’ WTP is higher the closer they live to their nearest forest, and the scarcer forests are in the area where they live. Interestingly, the higher the ecological value of forests in respondents’ area, the more people prefer extending areas of national forest protection. We also investigate spatial patterns in individual-specific WTP scores and in latent class membership probabilities, finding that preferences are indeed spatially clustered. We argue that this clustering should be taken into account in forest management and policy-making.     

Advantage by design: Competing with opportunity-based organizations

Organization design is becoming more and more a cornerstone of competitive advantage in today's increasingly complex companies. Our research on firms that have achieved significant advantage suggests that many did so by creating powerful synergies among their capabilities, among market opportunities, and between the two. But the way they recognized and realized these synergies was through their multidimensional organizational designs. Such designs not only reify and empower the dimensions within or across which synergies can occur (function, product, market segment, customer, etc.), they also define and manage the collaborative interfaces needed to discover, exploit, and renew those synergies.     

Financial service preferences and patronage motives of older consumers

The 2000 US Census reported that nearly one in eight Americans is 65 years of age or older. This suggests that financial institutions in the USA and in other developed countries have an excellent market opportunity if they stay abreast of the preferences of the elderly population. Responding to these changes involves an understanding of demographic trends and an understanding of the growing diversity within the older population. Using a national random survey of 1,727 adults this paper explores a segmentation approach based on factors directly related to the older consumers' needs and lifestyles, which in turn are influenced by changing life conditions. The cluster analysis suggests four gerontographic segments that best describe the financial service preferences and motives of the mature consumer market. These segments are explained and managerial implications are highlighted.     

Aggregate and regional disaggregate fluctuations

This paper models fluctuations in regional disaggregates as a nonstationary, dynamically evolving distribution. Doing so enables study of the dynamics of aggregate fluctuations jointly with those of the rich cross-section of regional disaggregates. For the US, the leading state—regardless of which it happens to be—contains strong predictive power for aggregate fluctuations. This effect is difficult to understand if only aggregate disturbances affect aggregate business cycles through aggregate propagation mechanisms. Instead, a better picture might be one of a “wave” of regional dynamics, rippling across the national economy.     

Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments

Data from a discrete choice experiment on improvements of rural landscape attributes are used to investigate the implications of discontinuous preferences on willingness to pay estimates. Using a multinomial error component logit model, we explore differences in scale and unexplained variance between respondents with discontinuous and continuous preferences and condition taste intensities on whether or not each attribute was considered by the respondent during the evaluation of alternatives. Results suggest that significant improvements in model performance can be achieved when discontinuous preferences are accommodated in the econometric specification, and that the magnitude and robustness of the willingness to pay estimates are sensitive to discontinuous preferences.     

Environmental,social and governance (ESG) activity and firm performance: a review and consolidation

Interest in why firms conduct environmental, social and governance (ESG) activity is longstanding and increasing. Our understanding, however, remains fragmented with alternative accounts that seek to explain the relationship between ESG performance (ESGP) and corporate financial performance (CFP). This paper reviews alternative accounts for the relationship and finds that the weight of empirical evidence shows a positive, statistically significant but economically modest ESGP–CFP link, consistent with theoretical expectations. This economically modest relationship suggests ESG activity is unlikely to be primarily motivated by narrow measures of CFP. Further scholarship viewing ESG as part of overall firm activity would be constructive.     

Family ownership and acquisition behavior in publicly‐traded companies

Much of the literature on corporate acquisitions has focused on managerial incentives for making acquisitions but has underemphasized the role played by the social context of major shareholders. This study of Fortune 1000 firms argues that the priorities and risk preferences of family owners can have important implications not only for the volume but also for the diversifying nature of their acquisitions. Agency and family business perspectives are used to derive expectations concerning the acquisitions behavior of family owners. Consistent with both perspectives, and owners' desire to reduce business risk, we find that family ownership is inversely related to the number and dollar volume of acquisitions. However, whereas agency theorists differ about how ownership concentration influences whether acquisitions are diversified, the family firm literature is more definitive. The latter suggests that given family owners' desire to retain control of their firms for offspring, their wealth must remain concentrated. Hence they can most easily reduce the risk of their wealth portfolio by diversifying the business—that is, through diversifying acquisitions. Consistent with this logic, we found the propensity to make diversifying acquisitions to increase with the level of family ownership. Copyright © 2009 John Wiley & Sons, Ltd.     

Digging Deep to Compete: Vertical Integration,Product Market Competition and Prices

This article establishes a causal effect of product market competition on vertical integration. I exploit a hitherto unexplored natural experiment in the U.S. coal mining industry and a unique mine‐level organizational data set. Following an exogenous increase in product market competition, the incidence of vertical integration fell by 33% within the treatment group relative to the counterfactual. I find novel evidence that transition to the lower degree of vertical integration is driven by competition's reducing market prices by 32% which decreased the incentive to conduct vertical mergers. I discuss several possible interpretations of these changes.     

Configurations of strategy and structure: Towards a synthesis

There already exists a substantial body of work dealing with the relationships between strategy and structure. But most of the studies oversimplify things by focusing mainly on diversification and divisionalization. Recent literature has derived more complex and integrated views of strategy and structure, much of it isolating common types, ‘gestalts’, or configurations. This paper suggests a new approach for examining the relationships between strategy and structure and proposes some functional linkages between several complex strategic and structural configurations.