Performance Metric Portfolios: A Framework and Empirical Analysis

The widespread adoption of supply chain management principles suggests that managers recognize the importance of evaluating operational decisions holistically. However, it is often difficult to link specific operational practices to strategic level outcomes and in turn to corporate financial results. This presents problems for both managers and academic researchers attempting to justify the often high cost of operational improvement initiatives in terms of objective accounting metrics. This study provides evidence that it is possible to demonstrate linkages between carefully chosen portfolios of tactical, strategic, and financial metrics. Survey data from 118 manufacturers are used to evaluate hypotheses linking multilevel metrics of performance across three well‐established strategic foci. We present portfolios of metrics drawn from the literature and from the Supply Chain Counciľs supply‐chain operations reference model and related design and customer chain models. Our analysis suggests that metric portfolios in which tactical metrics are designed to match strategic‐level metrics, based on alignment with a specific strategic focus, provide clearer mechanisms for understanding performance linkages.     

Constructing managerial manoeuvring space in contradictory contexts

This paper discusses manoeuvring space and demonstrates how autonomy, power and discretion need to be understood as constructed and integrated behaviours where managers manoeuvre between dilemmas in their own management practices. Twenty-seven Norwegian police managers were shadowed and interviewed. We found that constructions of manoeuvring space presupposed that managers balanced dilemmas. We identified three different strategies through which managers constructed manoeuvring space by navigating between dilemmas and actively constructing demands and constraints. These strategies were (1) decoupling, (2) sensegiving and (3) strategic positioning. Our findings add to the managerial discretion literature, arguing that constructions of manoeuvring space are central to managers’ development and to how they create opportunities and possibilities to make choices that balance conflicting dilemmas in contradictory contexts.     

Strategic Development of Business Models: Implications of the Web 2.0 for Creating Value on the Internet

There is virtually a consensus that, to remain competitive, firms must continuously develop and adapt their business models. However, relatively little is known about how managers can go about achieving this transformation, and how, and to what extent, different types of business models should be adapted. To illustrate the differential effect of environmental changes on different business model types, this article draws from the ‘4C’ Internet business model typology to elaborate on how a recent wave of changes on the Internet – the emergent Web 2.0 phenomenon – is affecting each of its four business model types. We argue that Web 2.0 trends and characteristics are changing the rules of the ‘create and capture value’ game, and thus significantly disrupt the effectiveness of established Internet business models. Since systematic empirical knowledge about Web 2.0 factors is very limited, a comprehensive Web 2.0 framework is developed, which is illustrated with two cases and verified through in-depth interviews with Internet business managers. Strategic recommendations on how to what extent different Web 2.0 aspects affect each business model type are developed. Executives can use the ideas and frameworks presented in the article to benchmark their firm's efforts towards embracing the changes associated with the Web 2.0 into their business model.     

Interactive profit-planning systems and market turbulence: A dynamic capabilities perspective

This article describes, theorizes and empirically investigates the concept of interactive profit-planning systems (PPS) through the lens of the dynamic capabilities logic. With this conceptualization: interactive PPS capabilities comprise budgeting, forecasting and results-reporting routines, in which top and middle managers interact to create knowledge for sensing, seizing, and business model reconfiguring (to manage strategic business change). Survey data from 331 Australian firms is analyzed employing partial least squares structural equation modeling. The data provides support for two hypotheses: (1) greater market turbulence strengthens the positive effect of interactive PPS capabilities on business unit performance; and (2) greater market turbulence strengthens the positive effect of flexibility values (of organizational culture) on interactive PPS capabilities. Our findings show that interactive PPS capabilities function according to the salient tenets of the dynamic capabilities logic, and clarify the beneficial roles of formal cybernetic control systems and the intertwined involvement of top and middle managers in using dynamic capabilities.     

Embracing the Paradox of Interorganizational Value Co‐creation–Value Capture: A Literature Review towards Paradox Resolution

This study reviews literature on paradoxical tensions between value co‐creation and capture in interorganizational relationships (IORs). The purpose of this review is to make a re‐evaluation of the literature by engaging a paradox theory lens, thereby identifying factors that render tensions salient and factors that lead to virtuous or vicious cycles. This review of 143 articles reveals factors that make tensions salient: these relate to plurality (e.g. coopetition), scarcity (e.g. lack of experience with IORs), change (e.g. changes in collaboration scope) or combinations thereof (e.g. IORs in weak appropriability regimes). Results also uncover factors that resolve paradoxical tensions of value co‐creation and capture, thus spurring virtuous cycles (e.g. carefully mixing trust and contracts), as well as factors that promote vicious cycles, owing to the emphasis on either value co‐creation or capture (e.g. myopia of learning). This review further reveals a new category of factors that may stimulate either virtuous or vicious cycles, depending on the extent to which they are enforced. This finding expands the value co‐creation–capture paradox resolution and brings to light new dynamics in the paradox framework of dynamic equilibrium. This study thus contributes by: (1) reassessing the existing literature and applying paradox theory to the well‐known hazard of value co‐creation and capture; (2) highlighting factors that amplify paradoxical tensions related to this hazard; and (3) outlining factors that help solve the paradox by embracing its contradictory poles and factors that hinder paradox resolution by emphasizing either value co‐creation or appropriation.     

Business models and organization design

Despite a voluminous literature, business model research continues to be plagued with problems. Those problems hinder theory development and make it difficult for managers to use research findings in their decision-making. In our article, we seek to make three contributions. First, we clarify the theoretical foundations of the business model concept and relate them to the five elements of a business model: customers, value propositions, product/service offerings, value creation mechanisms, and value appropriation mechanisms. A clear definition of a business model enables theory to develop systematically and provides coherent guidance to managers. Second, we suggest that value configuration is a contingency variable that should be included in future theorizing and model building. Each of the elements of a business model is affected by a firm's value configuration depending on whether the firm is a value chain, value shop, or value network. Third, we link business models to organization design. We show how organization design is affected by value configuration and how new collaborative organizational forms enable open and agile business models. We derive the implications of our analysis for future research and management practice.     

Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal

In this qualitative study, we explore how incumbent firms in traditional industries build dynamic capabilities for digital transformation. Digital transformation has been defined as the use of new digital technologies, such as mobile, artificial intelligence, cloud, blockchain, and the Internet of things (IoT) technologies, to enable major business improvements to augment customer experience, streamline operations, or create new business models. In making sense of digital transformation, we discovered that leaders in various industry circles use the term inconsistently to describe various strategizing and organizing activities; in addition, the term has gained limited scholarly attention as a context for study of strategic change. Drawing on senior executives' experiences with leading digitalization projects at incumbent firms, we propose a process model comprising of nine microfoundations to reveal the generic contingency factors that trigger, enable, and hinder the building of dynamic capabilities for digital transformation. Our findings reveal that digital transformation is an ongoing process of using new digital technologies in everyday organizational life, which recognizes agility as the core mechanism for the strategic renewal of an organization's (1) business model, (2) collaborative approach, and eventually the (3) culture.     

On the emergence and management of paradoxical tensions: The case of architectural firms

Paradoxical tensions are pervasive and unavoidable in the everyday practice of creativity-based contexts, such as architectural firms. Whilst the existing literature has extensively explored both coping strategies and multiple ways of approaching paradoxical tensions, we still have a limited understanding of how individuals engage with paradoxical tensions and how organizations support their members' efforts to sustain such tensions. Accordingly, my purpose here is to explore paradoxical tensions in the context of architectural firms and explain how firms and their members make sense of these tensions. I use a multiple case study to investigate empirically the salient paradoxical tensions central to architectural firms and to develop an understanding of what makes them salient. I explain how triggers evoke latent tensions and make them salient and also outline salient paradoxical tensions prevalent within this context. In exploring how architectural firms and their members make sense of these tensions, I outline and explain the importance of a paradoxical mindset, a paradoxical practice, and supporting organizational arrangements. I conclude by discussing the interplay among mindsets, practices, and arrangements as an organizing platform—a conceptual framework that future studies could explore further.     

The management of managers: A review and conceptual framework

The management of managers is an important contemporary concern, but the literature on the issue is not well integrated. This paper reviews key sources on the topic across organizational economics, human resource development and strategic human resource management. It presents a novel interdisciplinary framework for analysing how firms manage senior managers and for guiding future research, arguing that firms adopt different styles to attract–defend, develop–renew and motivate–harvest their senior managerial resource, depending on their contexts and choices that are made in the firm over time. The notion that some styles draw on early identification of élites while others treat management identification as more of an emergent problem is central to the typology. Within each of the styles identified, effectiveness in the management of managers hinges on recognizing and handling certain strategic tensions and problems.     

“It's not how it looks!” Exploring managerial perspectives on employee wellbeing

The literature on employee wellbeing (EW) has largely focussed on employees' subjective experiences and has generally assumed that managers’ interpretations of EW are consistent and non-problematic. Tensions inherent in managing complex expectations, and diverse results, have not been adequately investigated, and ways in which EW practices are viewed by senior managers have not been sufficiently examined. This paper attempts to fill this gap by exploring the perceptions of senior managers with human resources (HR) responsibilities affecting EW. There is a specific focus on the tensions experienced by these senior managers and the related tactics they adopted to successfully manage them. We gathered data from focus groups made up of 20 senior managers from companies operating in the Milan County in Italy. An analysis of this data identified four predominant dimensions of EW, as well as the tensions felt by the managers and the various tactics they used to overcome them. Finally, we classified the interpretative tactics into four broad resolution strategies (i.e. flexible, integrative, separated and reciprocal thinking) that senior managers adopted to cognitively address their experience of tensions.     

Framing the multifaceted nature of design thinking in addressing different innovation purposes

Scholars and practitioners acknowledge the role of design, and specifically design thinking, as a driver of innovation and change. Design thinking is gaining attention in the business community beyond the traditional product innovation realm and is increasingly promoted as an engine for the creation of novel user experiences, new businesses, strategic transformation, organizational and cultural change. Is it reasonable to assume that the same set of practices fits such a broad range of applications equally well? This study addresses how design thinking applications are differently framed when addressing diverse innovation purposes. Specifically, we compare two purposes: innovation of solutions, encompassing traditional product and service development projects, and innovation of direction, encompassing strategic and organizational renewal projects. Based on data collected from 146 design thinking projects conducted by European consulting firms we investigate the relationships between the design thinking practices adopted and the value generated by the projects. We then analyze how these relationships vary depending on the purpose of the innovation project, namely whether focused on innovating solutions or direction. The results show that different purposes indeed call for different practices. In projects aimed at innovating solutions, market value is positively related to capturing current user needs and envisioning future society. Conversely, in projects aimed at innovating direction, market value is positively related to challenging current assumptions.     

The role of cognitive load in effective strategic issue management

Firms have different ways of addressing issues emerging from outside their regular calendar-driven strategy processes. These practices tend to be unstructured, organization specific, and highly dependent on the characteristics of the strategic issues themselves. Building on three dimensions of cognitive load—intrinsic, germane, and extraneous cognitive load—we extend existing research on strategic issue management by showing how different team-level choices in strategic issue processing and organizational congestion interact in their effects on a firm's strategic issue management performance. Based on an in-depth analysis of all 92 strategic issue decisions in a large multinational firm during a three-year period, we find that organizational disturbances influence strategic issue initiation by top management, which in turn influences the quality of strategic issue management practices and subsequent performance outcomes. We conclude by providing recommendations for managers on how they can decrease the sensitivity of their companies' strategic issue systems to external disturbances.     

Dynamic stability: Unfolding dynamics of vicious cycles in a design firm

Paradoxes generate tensions and contradictions in organizations. In this paper, we contribute to the paradox literature by developing a complex systems approach to how organizational members experience tensions generated by the strategic intent paradox. Specifically, we focus on the unfolding dynamics of vicious cycles experienced by organizations dealing with paradox. Drawing on a case study of a design firm, we demonstrate how a vicious cycle forms through feedback loops and develops dynamic stability over time. On the basis of our findings, we develop a micro-level understanding of vicious cycles, which incorporates defence mechanisms at staff and senior management levels. Our main contribution is a theoretical model of unfolding dynamics of vicious cycles. Our model shows the importance of (1) feedback loops that underpin a vicious cycle and (2) importance of circular causality, reinforcing cycles, and micro-mechanisms in theorizing vicious cycles.     

Strategic Design Responsiveness: An Empirical Analysis of US Retail Store Networks

This study uses a service operations management (SOM) strategy lens to investigate chain store retailers' strategic design responsiveness (SDR)—a term that captures the degree to which retailers dynamically coordinate investments in human and structural capital with the complexity of their service and product offerings. Labor force and physical capital are respectively used as proxies for investments in human capital and structural capital, whereas gross margins are proxies for product/service offering complexity. Consequently, SDR broadly reflects three salient complementary choices of SOM design strategy. We test the effects of “brick and mortar” chain store retailers' SDR on current and future firm performance using publically available panel data collected from Compustat and the University of Michigan American Customer Satisfaction Index databases for the period 1996–2011. We find that retailers that fail to keep pace with investments in both structural and human capital exhibit short‐term financial benefits, but have worse ongoing operational performance. These findings corroborate the importance of managers strategically maintaining the complementarity of design‐related choices for improving and maintaining business performance.     

Paradoxes and Dual Processes: A Review and Synthesis

Paradox and dual‐process theories are used by management and organization researchers in studying a variety of phenomena across a wide range of management sub‐fields. Cognition is a focal point of both of these theories. However, despite their growing importance and shared areas of inquiry, these two theories have developed largely in isolation from each other. To address this lack of integration, the authors conducted a review and synthesis of relevant aspects of the paradox and dual‐process literatures. Focusing bidirectionally on how paradox theory informs dual‐process theory and how dual‐process theory informs paradox theory, they highlight the ‘nestedness’ of intuition and analysis in paradox (a paradox within paradoxical thinking). On the basis of the review and synthesis, they identify four themes (epistemological and ontological assumptions in the relationship between intuition and analysis; psychological and psychometric issues in the relationships between intuition and analysis; managers’ experiences of tensions between intuition and analysis; managers’ approaches to tensions between intuition and analysis) and introduce an integrative framework that assimilates these two perspectives and sets out an agenda for future research and implications for management.     

Paradox versus dilemma mindset: A theory of how women leaders navigate the tensions between agency and communion

A wealth of literature documents that women leaders can face simultaneous and yet conflictual demands for both agency and communion, due to the incongruence of their leader role and gender role demands. However, we still know little about why some women cope with the tensions between agency and communion better than others and what implications are involved. Using a paradox perspective, we develop a theoretical model to explain how women leaders experience and respond to agency-communion tensions, which impacts their intrapersonal and interpersonal outcomes. Specifically, we propose that in response to experiencing tensions fueled by the dual demands for agency and communion, women leaders can adopt a paradox mindset that simultaneously embraces agency and communion, or a dilemma mindset that dichotomizes agency and communion. The paradox mindset helps women leaders build psychological resilience, identity coexistence, and leadership effectiveness, whereas those who adopt a dilemma mindset experience depleted resilience, identity separation, and lowered leadership effectiveness. Further, our model highlights individual, interpersonal, and organizational conditions that shape women's experience and stimulate a paradox mindset versus a dilemma mindset. We conclude by discussing theoretical and practical implications of our model.     

A data envelopment analysis approach for ranking journals

We create a data envelopment analysis (DEA) model to rank business journals, using data from the Thomson Reuters Journal Citation Reports^® (JCR). As opposed to previous models that ranked journals in only one field and mostly relied on survey data, this model is used to rank 358 business journals from five different JCR categories according to such citation-based factors as the number of articles, the number of citations, impact factor, five-year impact factor, immediacy index, eigenfactor score, and article influence score. We compute relative efficiencies of the journals and thereby create plausible journal rankings that largely, but not completely, corroborate three widely used business publication journal ranking lists. In addition, we show how the different characteristics of the JCR data impact the DEA ranking model. Finally, we identify journals that are not on the business publication lists but consistently perform very well relative to those benchmark journals, and should possibly be included in the business publication ranking lists. We also identify journals whose inclusion in widely used business publication rankings cannot be justified by our methodology.     

Der Personalverantwortliche als strategischer Partner

Since Ulrich (Human resource champions: the next agenda for adding value and delivering results, Boston, Harvard Business School Press, 1997) shaped the strategic role of HR managers, his concept of an HR business partner has been controversially discussed by researchers and practitioners. Explanations about when and how HR managers act as strategic business partners have found limited attention in the literature. Based on the theory of reasoned action developed by Ajzen und Fishbein (Understanding attitudes and predicting social behavior, Englewood Cliffs, Prentice-Hall, 1980; J Pers Soc Psychol 27(1):41?C57, 1973), we hypothesize a positive relation between personal attitudes as well as subjective norm and the behaviour of HR managers to act as a strategic business partner. Results of the German Cranet survey in 2009 show that expected positive consequences influence the personal attitude, whereas the acceptance of the human resources as well as the existence of an HR strategy within the organisation is positively related with subjective norm. Hence, both attitude and subjective norm positively influence the behaviour of HR managers to act as a strategic business partner.     

Performance Appraisal,Performance Management,and Firm-Level Performance: A Review,a Proposed Model,and New Directions for Future Research

Abstract

There has been a long history in management and industrial/organizational psychology of studying methods to improve performance at work. These efforts have traditionally been concerned with individual-level performance (with some attention paid to team performance as well); even when research began to more broadly consider the topic of performance management instead of just performance appraisal. However, the often unstated assumption was that, if an organization could effectively improve the performance of individual employees, this would accrue to improvements in firm-level performance as well. A review of the literature suggested that this link had never really been established in a direct way. Instead, we found considerable support for relating “bundles” of human resource (HR) practices to firm-level performance, and several models for how these practices could create the transformation from individual-level to firm-level performance. We drew upon several of these models, from somewhat diverse literatures, to propose a model whereby bundles of HR practices, when aligned with the strategic goals of the organization, can be used to create a climate for performance that could transform generic knowledges, skills, and abilities (KSAs) into specific KSAs needed to improve firm-level performance.     

Project Success: A Multidimensional Strategic Concept

This article presents projects as powerful strategic weapons, initiated to create economic value and competitive advantage. It suggests that project managers are the new strategic leaders, who must take on total responsibility for project business results. Defining and assessing project success is therefore a strategic management concept, which should help align project efforts with the short- and long-term goals of the organization. While this concept seems simple and intuitive, there is very little agreement in previous studies as to what really constitutes project success. Traditionally, projects were perceived as successful when they met time, budget, and performance goals. However, many would agree that there is more to project success than meeting time and budget. The object of this study was to develop a multidimensional framework for assessing project success, showing how different dimensions mean different things to different stakeholders at different times and for different projects. Given the complexity of this question, a combination of qualitative and quantitative methods and two data sets were used. The analysis identified four major distinct success dimensions: (1) project efficiency, (2) impact on the customer, (3) direct business and organizational success, and (4) preparing for the future. The importance of the dimensions varies according to time and the level of technological uncertainty involved in the project. The article demonstrates how these dimensions should be addressed during the project’s definition, planning, and execution phases, and provides a set of guidelines for project managers and senior managers, as well as suggestions for further research.