Backing outsiders: selection strategies for discontinuous innovation

A key challenge in managing innovation is to explicitly identify ways to improve an organization's performance with regard to discontinuous innovation. However, discontinuous innovation does not fit the existing ‘frame of reference’ and hence requires a reframing of the traditional ways of innovating within the organization. More specifically, previous research shows that practices that work well in the context of incremental innovation do not work in the context of discontinuous innovation. Thus, the aim of this paper is to explore innovation practices that enable organizations to select innovation projects, which are ‘outside the box’ of its prior experience, i.e. are discontinuous in nature. Building on the experience of more than 150 firms across 12 countries, we have identified nine innovation practices for the selection of discontinuous innovation; these can be grouped into three clusters: enable, engage and experience. In sum, we identify that an organization needs to acknowledge that its choice to engage in discontinuous innovation will have consequences for the innovation practices chosen to select which discontinuous projects to carry forward.     

Exports versus FDI in German Manufacturing: Firm Performance and Participation in International Markets

Recent theoretical work has been able to explain how even within narrowly defined industries, firms can exhibit heterogeneous degrees of participation in international commerce. Differences in productivity between firms are the principal explanation offered by theory to explain heterogeneity with respect to international commerce. In particular, theory predicts that the least productive firms will produce for the domestic market only, while better performers engage in export activities, and the top firms establish foreign subsidiaries. This paper presents an empirical test of the relationship between productivity and patterns of international trade and production. Using German firm‐level data from 1996 to 2002, we test the predicted rank ordering of productivity according to firms’ trade pattern by examining the distribution functions of the three subsets of firms for stochastic dominance. Our results are generally consistent with the predictions from theory, and document significant productivity differences according to trade patterns.     

Information search behaviour and its determinants: the case of ethical attributes of organic food

Daily decisions on food purchase are known to be undertaken using limited information search. However, when confronted with ‘ethical’ products, consumers often become more involved, and this results in a more extensive search for information. This research focuses on the information search behaviour of European consumers with regard to ethical attributes like animal welfare or environmental aspects of organic food by means of an Information Display Matrix. Row‐wise information search by product characteristics (attributes) was widely preferred over information search by product alternatives (column‐wise). Therefore, information (e.g. in the Internet) should increasingly be provided by attributes. The majority of consumers use simplifying and selective search strategies when looking for information on organic food with additional ethical attributes. Consumers tend to start information search in the top, left hand corner and move towards the bottom, right hand corner. Thus, principal attributes should be placed in the upper left corner and be followed by the next most important and so on when presenting information on an array of different products. Our results show that information search patterns of consumers depend on socio‐demographic characteristics like gender and age and, to a lesser extent, also on attitudes regarding environmental or social aspects of food production. Thus, marketers, particularly those using the Internet, should revise their systems of information provision and focus increasingly on consumers' needs.     

Dependency of organic farms on direct payments in selected EU member states: Today and tomorrow

This paper examines the development of the role of government support in the financial situation of organic farms in selected Western and Eastern European countries, contrasting dependency on direct payments with that of conventional farms and assessing the impact of foreseeable changes in the political and economic environment. The results show that direct payments play an important role in the financial viability of organic farms in both Western and Eastern European countries. The level of specific support for organic farming is put into perspective, as other support payments and market returns contribute larger shares to total farm revenue in all the countries analysed. Modelling analyses show that support payments will continue to play an important role in the profitability of organic farms in Western Europe after implementation of the 2003 reform of Common Agricultural Policy in the EU. For organic farmers in Eastern European countries, the importance of support payments increases strongly with EU accession, as first pillar payments are introduced and environmental payments are expanded significantly.     

A contextual theory of organizational learning from failures and successes: A study of acquisition completion in the global newspaper industry, 1981–2008

This study develops and tests theory about the context‐specificity and outcome‐dependence of experiential learning in acquisition processes. First, we investigate whether learning from experience gained in different acquisition contexts is limited to influencing subsequent outcomes of same‐context transactions. Second, we analyze whether learning patterns in response to prior successes and failures differ across acquisition contexts, depending on two properties of these contexts—the degree of structural variance and the level of stimulation of deliberate learning. Learning is assessed with respect to an underexplored organizational goal variable in acquisitions: completion of a publicly announced transaction. An analysis of 4,973 acquisition attempts in the newspaper industry in 1981–2008 largely supports our theory. Copyright © 2012 John Wiley & Sons, Ltd.     

Target pricing: Demand-side versus supply-side approaches

The practice of target pricing has been a key factor in the success of Japanese manufacturers. In the more commonly known demand-side approach, the target price for the supplier equals the manufacturer's market price less a percent margin for the manufacturer but no cost-improvement expenses are shared. In the supply-side approach, cost-improvement expenses are shared and the target price equals the supplier's cost plus a percent margin for the supplier. Using a general oligopoly and Cournot duopoly models, we characterize the equilibrium and optimal policy for each approach under various conditions. We find that sharing cost-reduction expenses allows the manufacturer using the supply-side approach to attain competitive advantage in the form of increased market share and higher profit, particularly in industrial conditions where margins are thin and price sensitivities are high.     

Die NAFTA-Verhandlungen — Wohin steuert die US-Handelspolitik?

Since entering into force, NAFTA has contributed to major changes with regard to trade flows, supply chains and foreign investment among Canada, the US and Mexico. But nearly 30 years after the original negotiations, the need for modernisation is evident. A possible US exit from the agreement could lead to major turbulence in trade and investment relations within NAFTA. This article starts by looking at data showing the huge amount of trade and investment interdependencies. Next, it examines the objections being raised against NAFTA in the US and the reasons for this criticism, followed by an analysis of the goals the US is pursuing, set against the background of its reformulated, much more protectionist trade policy strategy. Finally, scenarios for an outcome are discussed.     

The future of mobility and its impact on the automobile insurance industry

Among the trends impacting most industries are new mobility concepts, digitalization, urbanization, rising environmental awareness, and demographic change. The automobile insurance industry, in particular, is strongly affected by new mobility concepts, including autonomous, shared, and electric vehicles, which are expected to increasingly impact the risk exposure and insurance demand in the future. Identifying and assessing the resulting risk and opportunity landscape from these trends thus becomes a major strategic challenge for insurers. The aim of this paper is to analyze the trends that impact the field of mobility and thus automobile insurers. Based on this, we derive a set of strategic response measures for insurers to enable them to be prepared for the future of mobility.