Custom-built

Mass customization has rapidly moved from an abstract theory to a practical source of competitive advantage. Fabrizio Salvador has been studying the companies that have bolstered their business by tapping into the idiosyncratic needs of customers. Tom Brown reports on his latest thinking.     

A Five-Year Review, Update, and Assessment of Ethics and Governance in Strategic Management Journal

Although business ethics has a long history as a core theme within the realm of strategic management it has not received considerable attention in top strategy journals until recently. In this paper, we assess the state of business ethics research published over a 5-year period (2006–2010) in Strategic Management Journal to ascertain whether there has been an increase in business ethics research published in the top strategy outlet. The results of our content analysis reveal that ethics research in SMJ is indeed on the rise yet this research stream is still underrepresented with only 5.8 % of all articles published over the five-year period having an ethics theme. Moreover, the link between Corporate Social Performance and Financial Performance was identified as the top theme during the review period.     

Creating a Testable, Estimable Model to Inform Our Response to the Test-Score Gap Crisis

The test-score gap between black and white students should be seen as a crisis. We propose a testable model based on readily available data that will allow us to estimate the impact and interrelationships of a multitude of factors that may be partially responsible for the problem. The estimation of this model will require the joint efforts of experts in many areas of education as well as of experts in multilevel structural equation modeling.     

Pecking order and debt capacity considerations for high-growth companies seeking financing

This paper examines incremental financing decisions within high-growth businesses. A large longitudinal dataset, free of survivorship bias, to cover financing events of high-growth businesses for up to 8 years is analyzed. The empirical evidence shows that profitable businesses prefer to finance investments with retained earnings, even if they have unused debt capacity. External equity is particularly important for unprofitable businesses with high debt levels, limited cash flows, high risk of failure or significant investments in intangible assets. These findings are consistent with the extended pecking order theory controlling for constraints imposed by debt capacity. It suggests that new equity issues are particularly important to allow high-growth businesses to grow beyond their debt capacity.     

How social and human capital influence opportunity recognition and resource mobilization in India's handloom industry

Small-scale firms in rural areas play an extremely important role in the development of any country, and especially in developing countries. To understand entrepreneurs who operate in a low-technology industry, we rely on the network perspective on entrepreneurship. In this paper, we investigate how the social and human capital of entrepreneurs (in this case master weavers in the handloom industry) influence their ability to recognize opportunities and mobilize resources. In addition to examining the direct effects, we also explore the possibilities of social capital mediating between human capital, on the one hand, and opportunity recognition and resource mobilization on the other. This paper adds to existing literature in two ways: firstly, we expand the social capital paradigm by including different cultural settings and links to existing studies regarding small enterprises. Secondly, we provide additional evidence to the ongoing debate as to what constitutes a ‘good network’.     

The Impact of Outsourcing Strategies on Information Systems Capabilities in the Hotel Industry

This work analyses the strategy of outsourcing information systems and information technology (IS/IT), considering the different activities comprising the IS/IT area. The literature on IS contains numerous works that analyse outsourcing, very few of which examine the relationship with the different types of capabilities in the IS/IT area and their strategic value. Most works centre on the motives for, and advantages of, the strategy of outsourcing the IS/IT area, while scant attention has been paid to the study of the long-term consequences of outsourcing. This work develops a theoretical model which is applied to the hotel sector and which shows that hotels following a more intensive outsourcing strategy develop fewer managerial capabilities related to knowledge in the management of IS/IT resources. This negative relationship extends to other types of capabilities typical of the area and to certain organisational capabilities. A negative relationship is also observed between the level of outsourcing and the strategic value given to the IS/IT area, which may lead to a lower potential for the development of competitive advantage.     

HR in the small business enterprise: Assessing the impact of PEO utilization

Within small businesses, organizational leaders are themselves often responsible for the HR function, an area where they typically have limited training and experience. Not surprisingly, small business leaders have raised concerns about the quality of HR programs in their firms and the fact that HR consumes scarce managerial time. While professional employer organizations (PEOs) emerged in response to such concerns, much controversy exists as to whether and how small businesses benefit from PEO utilization. Using a survey of more than 740 small businesses, we examine the relationship between PEO utilization and two key small business outcomes: managerial time required by HR activities and satisfaction with HR outcomes. Our results indicate that firms not using a PEO reported significantly lower levels of satisfaction with HR outcomes than firms that used a PEO for a limited set of transactional services and firms that used a PEO for both transactional and strategic HR services. Among firms using a PEO, satisfaction with HR outcomes was significantly higher among firms that obtained a broader set of transactional and strategic HR services. Firms that used a PEO also reported that HR consumed significantly less managerial time relative to leaders in firms that made no use of a PEO. However, there was no significant difference in the time demanded by HR between firms that used a limited set of transactional services and those that used a broader range of transactional and strategic services. Implications for the role of PEOs and their use within small businesses are discussed. © 2005 Wiley Periodicals, Inc.