MNE dynamic capabilities in (un)related diversification

While we know that dynamic capabilities (DCs) are important for multinational enterprises (MNEs), little is known about the multiple DCs they may exercise and how they configure the DCs to support their related or unrelated diversification activities. Our qualitative empirical case study findings illuminate how an MNE does so. We confirm that DCs rest on the ostensive microfoundations that encompass the three principal DC processes of sensing opportunities, seizing opportunities and transforming resources. Furthermore, we explicate their performative microfoundations. We reveal that for all the DCs, performative microfoundations of sensing include information gathering and strategic analysis. The performative microfoundations of seizing include a capacity to experiment, then formulating a course of actions. Finally, the microfoundations of transforming include resource structuring, then capability renewal (for unrelated diversification) or capability improvement (for related diversification), and capability implementation. While the process flow of ostensive microfoundations is uniform across DCs, the transforming process flow of performative microfoundations differs for related and unrelated diversification activities. Alongside evidencing the different exploitative/explorative learning and involvement of lower/top-level management associated with the DCs supporting related/unrelated diversification activities respectively, we foreground DCs' configurational nature and extend the IB DC literature on MNE diversification and DCs' microfoundations.     

Can a Previous Alliance Between an Acquirer and a Target Affect Acquisition Performance?

Throughout the 1990s, organizations have been combining resources through acquisitions and alliances in record numbers. An acquirer’s previous alliance with a target may give an acquirer target-specific information and experience that may be an advantage-producing resource in selection, valuation and integration of the target. This study investigates whether a previous alliance between an acquirer and a target affects post-acquisition performance and finds that a previous alliance between an acquirer and a target correlates positively with acquisition performance. Acquirers’ previous R&D, technology transfer, manufacturing and marketing alliances with targets benefit acquisition performance more than their previous licensing alliances with targets. Furthermore, target-specific learning effects are strongest and most beneficial to acquisition performance in acquirers’ previous technology transfer and manufacturing alliances with targets.     

Product diversification through licensing: Empirical evidence from Chinese firms

Anecdotal evidence suggests that manufacturing firms are able to engage in product diversification through external technology acquisitions, such as technology licensing. However, there is little empirical evidence regarding this proposition to link inward technology licensing and firms’ product diversification or to suggest when and under what conditions the effect of diversification through this channel may be mitigated or augmented. The current study aims to address this research gap through an empirical investigation of a sample of 141 Chinese manufacturing licensee firms. The results indicate that inward technology licensing is positively related to a firm’s diversification and that this relationship is further moderated by a licensee firm’s R&D expenditure and technological distance relative to the licensor firm.     

Experiential learning,M&A performance,and post-acquisition integration strategy: A meta-analysis

While research on mergers and acquisitions (M&A) capabilities is accelerating, our understanding of their antecedents and performance implications still remains rather fragmented. Previous research has outlined the importance of learning for building M&A capabilities, but no work has attempted to summarize previous empirical findings regarding different learning mechanisms and their impacts on M&A performance. Mainly drawing upon organizational learning theory and the dynamic capabilities perspective, this study consolidates research on the relationship between different learning mechanisms, post-acquisition integration strategies, and M&A performance. Using meta-analytical techniques, our study shows that the capability-building mechanism relying on deliberate investments in learning tends to be more effective than the capability mechanism based on mere experience accumulation. In addition, our findings indicate that a higher degree of integration is associated with enhanced M&A performance among firms with more developed experiential learning, highlighting the need to explore mediating effects of integration strategy choices on the experiential learning-performance relationship.     

Strategizing in an Unpredictable Climate: Exploring Corporate Strategies to Cope with Regulatory Uncertainty

Government regulation of business activities is increasing rapidly, exposing firms to considerable uncertainty and requiring managers to decide on appropriate strategic postures. To help managers make informed decisions, this study compiles a comprehensive overview of strategies to cope with regulatory uncertainty and illustrates their interdependencies and how they can be combined into overall coping postures, as well as offering management guidelines on deciding which to adopt. A literature review identifies a considerable variety of coping strategies, and we apply unique data from a worldwide cross-industry survey to categorize each into one of three types - offensive, defensive or passive. We find that firms aiming to cope with the uncertainty associated with post-Kyoto regulation typically adopt one of four strategic postures, each characterized by a specific combination of these types: ‘daredevils’ rely solely on offensive strategies; ‘coordinators’ combine them with defensive ones, ‘hedgers’ pursue strategies from all three categories while ‘gamblers’ choose not to specifically cope with uncertainty at all. We exemplify the strategies characteristic of each posture, and illustrate their interdependencies by means of case studies in the European airline industry. We identify two main factors managers should consider particularly when deciding on their firm’s strategic posture: the level of regulatory uncertainty they perceive and the firm’s exposure to future regulations, and find that the higher the level of uncertainty, the broader the range of strategies applied, and the more future regulation seems likely to affect a firm, the more actively it seeks to cope with the associated uncertainty.     

Strategic Shared Leadership and Organizational Dynamic Capabilities

We propose that the purposeful sharing of strategic decisions and the process of making and taking those between the dominant coalition of an organization (Strategic Shared Leadership or SSL thereafter), initiated and supported by a focal strategic leader or small team, engenders Organizational Dynamic Capabilities (ODCs) though the transfer of individually-residing DCs within the SSL team, the transformation -co-creation of novel ones and their embeddedness-institutionalization within the organization. It also enhances organizational cognition which mediates the relationship by enriching co-created ODCs and their capacity to deliver reliably change through sensing, seizing and reconfiguring. Accordingly, SSL serves as a co-creator and key predictor of the emergence of ODCs. This helps address the challenges of DCs to marry stability with change, be predictable and to be capable of predicting.     

The benefits of embedding experiential learning in the education of planners

Abstract

In a future of complexity, uncertainty and fragmented governance we envision planning graduates who will be better prepared for the real world of planning as a result of an experiential learning (EL) approach in undergraduate tertiary education. In this paper, we present the findings of an Australian research project in which planning educators developed and tested a range of experiential planning principles based on sound pedagogical theory. Embedding EL principles and activities within the planning curriculum provides a structured programme of engagement between theory and practice over the four years of an undergraduate Australian planning programme, including opportunities for work-integrated learning. Students gain experience in negotiated decision-making involving a wide range of interactions with planning practitioners. Students become more adaptable—cognizant of mechanisms influencing change, and recognize the value of lifelong learning founded on critical reflection. We propose that a more systematic approach to integrating experiential learning in tertiary planning education culminating in ‘work integrated learning’ would provide a vehicle for further partnerships with responsive local practitioners and communities. Finally, this paper also argues that applying experiential learning does not compromise the quality of planning education based on greater academic rigour.     

Acquiring technological competencies through inter-organizational collaboration: An organizational learning perspective

Firms are becoming increasingly sophisticated in their technology strategies and are procuring know-how through a variety of collaborative methods including licensing agreements, joint ventures, minority investments, and equity acquisitions. This paper examines the relationship between an organization's learning capability and inter-organizational collaboration in acquiring technological competencies. Organizational learning is posited to be a mediating mechanism through which technological competencies are developed via varying levels of organizational interaction. A general model is developed which suggests an “efficient fit” relationship between an organization's ability to learn, characteristics of the technology, and mode of inter-organizational collaboration. The concept of a “learning gap” is introduced, and managerial implications are suggested. Finally, propositions are developed to facilitate future empirical research.     

In learning mode? The role of mindsets in derailing and enabling experiential leadership development

In comparison to the vast literature on leadership theories, concepts, and behaviors, relatively less is known about why leaders often learn little from their leadership experiences, as well as how to support them in doing so. We propose that leaders learn more from their challenging leadership experiences when they are in learning mode, defined as intentionally framing and pursuing each element of the experiential learning process with more of a growth than a fixed mindset. We describe how the extent to which leaders are in learning mode stems from salient mindset cues and guides whether they work through the experiential learning process with a predominantly self-improvement or self-enhancement motive. We theorize about several other likely mediators and moderators of when being in learning mode will manifest in experiential leadership development. Practical implications at the micro, meso, and macro levels, as well as within management education are outlined.     

Organizational responsiveness of Russian and American growth-oriented small and medium enterprises (SMEs)

The paper discusses problem-based learning (PBL) as a mediating factor in generating a variety of learning networks in workplace contexts. It is argued that informal learning in experiential circumstances can be systematized to encourage deep learning at the individual and collective level. Given the distinct problem-solving opportunities in PBL, learners can increase their capacity to acquire new knowledge through self-inquiry, reflection and dialogue. The repositioning of learning attitudes also leads to an enlargement of communities of practice wherein double and triple-loop learning cycles intersect to create rigorous learning. An integrated model is proposed to explain the dynamics of PBL operating within the constraints of workplace contexts.     

The impact of government policy on technology transfer: an aircraft industry case study

This case study explores the interaction between domestic and foreign governmental policy on technology transfer with the goal of exploring the long-term impacts of technology transfer. Specifically, the impact of successive licensing of fighter aircraft manufacturing and design to Japan in the development of Japan’s aircraft industry is reviewed. Results indicate Japan has built a domestic aircraft industry through sequential learning with foreign technology transfers from the United States, and design and production on domestic fighter aircraft. This process was facilitated by governmental policies in both Japan and the United States.     

Learning and Open Source Software License Choice

Licensing is the defining characteristic of open source software (OSS) and often has tremendous impact on the success of OSS projects. However, OSS licenses are very different from those for proprietary software, and our understanding of the choice of OSS licenses is very limited. In this study, we explore this important decision from a learning perspective. We build collaboration networks and trace paths through which potential learning and knowledge flow across projects using a dataset derived from SourceForge. We identify that both experiential learning and vicarious learning have significant influence on OSS license choice. We provide reasons why experiential learning and vicarious learning affect decision‐making regarding OSS license choice, and explore important contingencies under which the two modes of learning are more effective. We find that leadership roles on prior projects and similarities between projects significantly moderate these two modes of learning, respectively. More importantly, we argue and empirically illustrate that experiential learning is more effective than vicarious learning in influencing OSS license choice. Our research sheds new light on our understanding of license choice for OSS projects and provides practical guidelines for future OSS development.     

Beyond appearances – Do dynamic capabilities of innovative firms actually differ?

Dynamic capabilities are the higher-order capabilities needed for changing operational-level capabilities and learning in new domains, and thus they are critical for innovation activities. The aim of this study is to explore heterogeneity of dynamic capabilities in a comparative setting. We chose four innovative case firms representing a single industry, namely magazine publishing. The similarity of the cases provided a solid foundation for comparing their dynamic capabilities. Based on the results it seems that the practices comprising sensing capabilities are likely to be similar across firms within a single industry, while practices comprising seizing and reconfiguring types of capabilities may differ more between companies. Thus dynamic capabilities have both idiosyncratic and common features across an industry. These findings are relevant to practicing managers in that they illustrate that competing companies within the same industry tend to develop similar types of practices to match the changing requirement of the operating environment. Hence, managers should not be falsely comforted by the current situation within their firms, but proactively develop their unique capabilities to gain advantage over their competitors.     

Copyright Issues for the Distance Learning Professor

The Internet has made the accessibility of knowledge both instantaneous and global. The professor who teaches online must be aware of the legal issues created by digital technology. The scope of the Fair Use Doctrine in the U.S. Copyright Law is under debate by educators and copyright owners. Educators advocate amending the scope of works available for distance learning, under the Fair Use principle, to include the same range of exclusions allowed in face to face classrooms such as: audiovisual works, movies and videos. While copyright owners advocate licensing of materials, educators feel that licensing procedures and costs need to be geared to the needs and ability to pay of the educational institution, otherwise their distance learning students will not have access to the same materials as those who sit in the classroom. This revised version was published online in July 2006 with corrections to the Cover Date.     

Opt‐Out Options in New Product Co‐development Partnerships

We study three contractual arrangements—co‐development, licensing, and co‐development with opt‐out options—for the joint development of new products between a small and financially constrained innovator firm and a large technology company, as in the case of a biotech innovator and a major pharma company. We formulate our arguments in the context of a two‐stage model, characterized by technical risk and stochastically changing cost and revenue projections. The model captures the main disadvantages of traditional co‐development and licensing arrangements: in co‐development the small firm runs a risk of running out of capital as future costs rise, while licensing for milestone and royalty (M&R) payments, which eliminates the latter risk, introduces inefficiency, as profitable projects might be abandoned. Counter to intuition we show that the biotech's payoff in a licensing contract is not monotonically increasing in the M&R terms. We also show that an option clause in a co‐development contract that gives the small firm the right but not the obligation to opt out of co‐development and into a pre‐agreed licensing arrangement avoids the problems associated with fully committed co‐development or licensing: the probability that the small firm will run out of capital is greatly reduced or completely eliminated and profitable projects are never abandoned.     

A new framework of firm-level innovation capability: A propensity–ability perspective

One of the critical topics in contemporary innovation management literature concerns what constitutes innovation capability (IC) at the firm level. There have been many attempts to conceptualize and operationalize this capability. Still, they either fail to discriminate the elements that characterize IC or to present consistent, comparable elements across distinct models or frameworks. This paper reports the results of a systematic approach to formulate a firm-level IC framework. To do so, the authors conducted an extensive systematic literature review, screened 19,589 papers, and analyzed in detail 186 documents that directly address empirical or theoretical elements of IC. The researchers cross-analyzed these papers for direct and indirect references to ICs (and related concepts, such as innovation orientation, innovation competence, and innovativeness) and generated thematic categories. We drew on a hybrid approach moving between inductive and deductive coding and theme development. We adopted an ex-ante theoretical perspective of the propensity/ability axis built upon the willingness–ability approach and the dynamic capability lens. The proposed synthetizing framework is coherent with Teece’s (2014) ordinary and dynamic capabilities. It comprises two sets of elements: on one hand, structural and contextual antecedents that characterize an organization's propensity toward innovation and, on the other hand, actions and resource-related capacities that act as causal mechanisms that, articulated within functions—sensing, seizing, and transforming—constitute the ability to generate innovation.     

Technological and Output Complementarities, and Inter-Firm Cooperation in Information Technology Ventures

Firms whose profiles of technologicalcompetence are complementary to one another are morelikely to enter into technology-based cooperativeagreements, and a broad level of technologicalcomplementarity is necessary for these agreements toextend as far as a mutual coordination of learningprocesses (combined research ventures). Using data onagreements between the world's largest firms in thearea of information technology (IT) and the patternsof technological specialization of these firms in theIT fields as revealed by their corporate patenting inthe US, we show that the technologicalco-specialization of firms helps to explain allianceformation, over and above the effects of anyco-specialization in IT products. While firms whosetechnological efforts are less complementary are lesslikely to cooperate for technology purposes, if theydo cooperate it is to exploit the differences in theirfields of expertise, and hence they are likely to usequasi-market organizational forms such as licensing,while the purpose of the alliance is restricted to anexchange of knowledge without any joint coordinationof learning (research). Instead, equity jointventures are likeliest when at a broad level ofaggregation the profiles of technologicalspecialization of partners are complementary, but ata more detailed level of disaggregation there is agreater distance between them, such that thecoordination of learning efforts is feasible, butrequires a stronger organizational commitment.     

产品异质性、成本差异与不完全议价能力企业技术许可

建立了包含产品异质性、研发溢出、企业吸收能力、创新规模、创新后企业间成本差异以及创新企业的讨价还价能力等现有文献中多数可量化参数的多阶段博弈模型,力图统一关于创新企业技术许可而出现的多样性结论.研究结论表明:1)当创新后企业间成本差异足够大时,创新企业存在垄断的可能性,但这种可能性可能被产品间足够大的异质程度所打破;2)创新企业讨价还价能力的作用不仅在于"数量"(许可得益大小)上的获得,更在于"质量"(许可方式)上的选择.3)R&D溢出、吸收能力以及创新规模通过对创新后企业间的成本差异起作用,间接地对企业的技术许可行为产生影响;4)创新企业的讨价还价能力并非在所有由成本差异和产品替代程度所构成的区域内都对技术许可方式的选择产生影响.在创新后企业间成本差异较小时,不管创新企业的讨价还价能力和企业间产品替代程度如何,产量提成许可总是最优;而在成本差异和产品替代程度都较大时,固定费许可最优.但在某些特定的区域内,最优的技术许可方式随着创新企业讨价还价能力的增强从产量提成许可转向固定费许可.     

Creative Search and Strategic Sense-making: Missing Dimensions in the Concept of Dynamic Capabilities

In this paper we discuss the role of managerial agency in creating and shaping dynamic capabilities. We argue that dynamic capability is a phenomenon that enables a deviation to take place from the knowledge that otherwise would have arisen cumulatively from experiential learning. In addition we argue that to create major changes in patterns of knowledge accumulation managers need to be purposefully and creatively engaged. Such agency is identifiable in two cognitive processes we call creative search and strategic sense-making. We show how these processes differ in respect to their temporal orientation and relationship to uncertainty and by adopting a process perspective we demonstrate how creative search, strategic sense-making and experiential learning are complementary. This notion of complementarity implies that these processes, notwithstanding their contrasting characteristics, coexist together and serve to offer an explanation for how knowledge progresses at a firm level. Variance is introduced into the framework proposed through the identification of factors that influence the coexistence of creative search and strategic sense-making. The argument developed is illustrated through the use of an emergent technology context.     

Becoming the best: by beating or ignoring the best? Toward an expanded view of the role of managerial selection in complex and turbulent environments

This paper explores how the rules that guide search affect organizational adaptation in complex and turbulent environments. Our consideration of such rules extends beyond search scope—i.e., exploitation of current technologies vs. exploration of new technologies—to include focus on competition. We consider two types of competitive focus—i.e., external, where the choice of focal technology to be improved is influenced by information about other organizations and internal, where it is not influenced by others. We refer to this expanded set of rules as managerial selection and vary it to explore how it affects organizational adaptation. Employing an agent based simulation model, built on the framework of NKC fitness landscapes, we consider multiple types of interdependencies within and between technologies and across competitors. We show that in the presence of these multiple interdependencies, the ability of organizations to adapt is conditioned as much or more by the focus of search than by its scope. In particular, we observe that in simple and stable environments, organizational adaptation is enhanced by an external focus but in complex and turbulent environments, such external focus is counterproductive.