An empirical examination of the science–technology relationship in the biotechnology industry

Understanding how a firm's scientific capability influences its technology development has important implications on the firm's research and development (R&D) strategies. However, the current literature reveals a puzzling outcome in its empirical investigations on the science–technology relationship. While many studies show the positive influence of a firm's scientific capability on its technological performance, a few others indicate that if a firm focuses its attention more on cutting edge science, its overall technological performance will suffer. We suggest that these findings can be reconciled by conceptualizing and measuring the scientific capability of the firm differently. This paper attempts to demonstrate how different notions of scientific capability are associated with different performance outcomes. Furthermore, a firm's scientific capability facilitates the integration of new knowledge to produce valuable technologies when a firm broadens its search for new knowledge. The paper highlights the nuances of conceptualizing and measuring the firm's scientific capability in two different ways: number of scientific publications and non-patent references. The findings also shed light on the mechanism through which science accelerates technological progress inside a firm.     

Survival of the foreign subsidiaries of TMNCs: The influence of business group affiliation

We investigate the survival rates of the foreign subsidiaries of multinational firms from India to test if affiliation to a business group affects a subsidiary's survival chances. Business group affiliation is an important organizational attribute of firms in emerging economies. Business groups are complex organizations with heterogeneous resources that evolve along with changes in the institutional environment of a firm's home country. We examine how business group affiliation and the development stage of the host country jointly influence the survival chances of foreign subsidiaries. Our results show that business group affiliation does not have an independent influence on a subsidiary's survival rates, but it does have a contingent effect, where the contingency emerges from the development stage of the host country. Our findings thus have implications for the theory of TMNCs, and business group strategy in emerging economies.     

Coopetition Strategy – When is it Successful? Empirical Evidence on Innovation and Market Performance

Coopetition (collaboration between competing firms) has been viewed as a potentially beneficial but also a risky relationship for a firm. Earlier literature provides inconclusive evidence in terms of the effects of a firm's coopetition strategy on innovation and market performance, suggesting both positive and negative implications. Some of this variation could be attributed to the fact that coopetition is successful only in certain types of business environment. In order to take the research further, this study examines the effect of a coopetition strategy on the firm's innovation and market performance, focusing on the moderating effects of market uncertainty, network externalities and competitive intensity. The results from a cross‐industry survey of 209 Finnish firms provide novel evidence on the conditions under which coopetition is successful and when it is not.     

Rethinking the Corporate Financial–Social Performance Relationship: Examining the Complex,Multistakeholder Notion of Corporate Social Performance

The corporate financial performance (CFP)–corporate social performance (CSP) relationship has been investigated many times over the past few decades, yet the notion of CSP has generally been understood to be a single, monolithic aspect of corporate strategy. This article examines the common CFP–CSP understanding in three distinct ways: (1) by extending the evaluation of CSP as a complex, multistakeholder notion; (2) by analyzing CSP's relationship with the firm's financial performance at a given point in time as a lead (independent) variable in the relationship and as a lag (dependent) variable in the relationship; and (3) for both positive and negative stakeholder relationships. The results indicate that the employee emerges as the stakeholder group most strongly linked to CFP, followed by the consumer stakeholder. The natural environment and the community stakeholder group are minimally associated with CFP. General support is found for a CFP–CSP relationship at a given point in time, with some support found for CSP as a lead (independent) variable. When used as a measure of financial performance, return on assets is more often correlated with CSP than is return on equity. These results and their implications are discussed.     

The Influence of Service Orientation on B2B e‐Service Capabilities: An Empirical Investigation

E‐Services, or the company's portfolio of service offerings available to its customers through the Internet, are an emerging area of interest to operations management. Yet little is known about the operations and capabilities needed for provision of business‐to‐business (B2B) e‐services. This paper aims to make a contribution toward closing this gap. First, we develop a new construct of B2B e‐service capability, a term that captures a generic set of five interrelated and complementary dimensions: (1) e‐service recovery, (2) e‐customization, (3) ease of navigation, (4) service portfolio comprehensiveness, and (5) information richness. These combined operational abilities are associated with B2B service delivery, including its portal design, technology architecture, and mix of product and service offerings. They are posited to be necessary for delivering effective B2B e‐services. We also argue that, both service orientation (SO) and customer receptivity to technology, influence B2B e‐service capability. We empirically test a path model using structural equation modeling on a sample of 181 businesses that have deployed B2B e‐services. We find that the influence of SO on performance is not direct but rather mediated by the e‐service capability, a finding that holds for both goods producers and service providers. We suggest that a firm's SO may mitigate industrial customers' resistance toward conducting business online.     

How do shareholders influence international firms’ environmental strategies? The differential impact of strategic and financial investors

Debates about the drivers of corporate environmental strategy as well as the influence of shareholders on environmental investments have grown exponentially in the last decade. This paper provides a novel perspective on the influence of investors on a firm's environmental strategy by theorizing how the shareholders' orientation may provide different resources for firms to outperform environmental institutional pressures, and further analyzing how foreign market exposure moderates this relationship. Our results, produced from a longitudinal sample of 2237 observations between 2007 and 2017 from 276 US firms in 11 industries, show that having a higher percentage of strategic shareholders positively drives firms' environmental proactivity. Meanwhile, having a higher percentage of financial shareholders is positively related to firms' environmental proactivity only at high levels of foreign market exposure, but is negatively related at low levels. Our results contribute to the ownership and environmental strategy literature by delimitating the different influences of strategic and financial investors on firms' environmental strategy and making a bridge between institutional and resource-based perspectives.     

The Effects of “Going Private” Using Private Equity: The Newly Private Corporation and the Dimensions of Corporate Performance

The trend toward private ownership of corporations prompts a reexamination of the dimensions of corporate performance under a governance system that includes powerful owners and a reduced public presence. Using insights from corporate social responsibility and stakeholder theories and informed by agency theory, we develop a model regarding the performance implications of public corporations going private through the use of private equity. We put forth that in general going private tends to result in greater emphasis on corporate financial performance and in lesser emphasis on corporate social performance (CSP). Yet several variables, including the firm's capitalization, its post‐going‐private exit strategy, and its managerial discretion, are proposed to moderate the negative relationship between going private and CSP.     

The Moderating Influence of Competitive Intensity on the Relationship between CEOs' Regulatory Foci and SME Internationalization

The international business literature has mainly focused on the impact of top managers' psychological attributes on firms' strategic decisions. However, the potential moderating influence of industry conditions such as competition, has not been well explored. Deriving insights from the regulatory focus and upper echelons theories, this paper extends the international business and regulatory focus literature by investigating how the impact influence of CEOs' regulatory foci on firms' degree of internationalization depends on the intensity of competitive market conditions. Using primary data gathered from 289 small and medium-sized enterprises (SMEs) in Ghana, the findings of the study revealed when competition is intense in the domestic market, the potency of a CEO's promotion focus as a driver of internationalization is amplified. In addition, the research shows that intense domestic market competition weakens the negative influence of a CEO's prevention focus on a firm's degree of internationalization. These findings have important research and managerial implications for international business.     

When to Mass Customize: The Impact of Environmental Uncertainty*

Previous research on mass customization (MC) has focused on what it is and how it is implemented. In this study we examine when MC is an appropriate strategy for firms to follow by scrutinizing the effects of three environmental uncertainty variables (demand uncertainty, competitive intensity, and supply chain complexity) on the MC–performance relationship. Specifically, we distinguish the direct effect of environmental uncertainty on MC ability and the moderation effect of environmental uncertainty on MC ability's impact on customer satisfaction. We examine six competing hypotheses using data collected from 266 manufacturing plants. Our results show that competitive intensity has a direct positive impact on MC ability. However, demand uncertainty moderates the relationship between MC ability and customer satisfaction, and the direct and positive relationship between MC ability and customer satisfaction holds only when customer demand is highly uncertain. Supply chain complexity neither has a direct relationship with MC, nor moderates the MC–performance relationship. Implications of these research findings are discussed and future research directions are identified.     

The value of a firm’s engagement in ESG practices: Are we looking at the right side?

Firms allocate many resources to environmental, social, and governance (ESG) issues and to growth options as if they were independent sources of value. Challenging this view, this paper explores the interplay of a firm's engagement in ESG practices and growth options in determining its total value. We draw upon real options reasoning to explain how ESG practices can carry two opposite (trust-enhancing and risk-reducing) forces, driving an inverted U-form relationship between ESG performance and growth options value. Moreover, we argue that ESG performance and growth options are likely to build substitutive insurance mechanisms which might exert a negative moderating effect of growth options on the relationship between ESG performance and a firm's total value. Empirical analyses of ESG scores and growth options values on a panel of U.S. firms from 2009 to 2018 provide substantial support for our hypotheses. Our results show that the inverted U-form relationship between ESG performance and growth options value becomes stronger for the environmental and social pillars. Our evidence on the moderating effect of growth option values also provides valuable insights for interpreting prior conflicting empirical evidence on the association between ESG performance and a firm's total value.     

Putting the “psychic” Back in Psychic Distance: Awareness,Perceptions, and Understanding as Dimensions of Psychic Distance

Unlike the IB literature whose emphasis within the term ‘psychic distance’ has been more on “distance” and less on “psychic,” our starting point is all “psychic” and no “distance,” assuming distance is defined as the difference between two countries. We propose that psychic distance be centered on the firm's managers and explain how their cognitive limitations, perceptions, heuristics, and experiences interact with a foreign environment to influence their decision making. We replace the conventional definition of distance with the cognitive dimensions of managerial awareness, perceptions, and understanding. Awareness captures the manager's consciousness of foreign context elements relevant to the firm's decision, perception is the manager's interpretation of the extent of these relevant environmental elements, and a manager's understanding captures the relationships among these context elements and the firm's decision. We argue that a multidimensional psychic distance construct is necessary as many of distance's problems are due to the illusion it promises of capturing a manager's perception of a complex foreign environment in a single number. Our approach eliminates distance's problems of symmetry and linearity. It also eliminates the constraint that distance is only associated with negative outcomes. After explaining the theoretical value of awareness, perception, and understanding by developing propositions predicting context traps, we present our operationalization of psychic distance.     

Fit in strategic information technology management research: an empirical comparison of perspectives

The impacts of information technology on business performance has been a focus of research in recent years. In this regard, contingency models based on the notion of “fit” between the organization's management of IT, its environment, strategy, and structure seem to show promise. Six perspectives are examined as they pertain to the relationships between the firm's environmental uncertainty, its strategic orientation, its structure, its strategic management of IT, and its performance, namely moderation, mediation and matching as bivariate approaches to fit, and covariation, profile deviation and gestalts as systems approaches. These relationships are analyzed by means of an empirical study of 110 small enterprises. Results obtained from applying and comparing the six perspectives illustrate their significant differences and confirm the need for conceptual and methodological rigor when applying contingency theory in strategic information technology management research.     

Operational Slack and Venture Survival

Slack can act as a double‐edged sword. While it can buffer against environmental threats to help ensure business continuity, slack can also be costly and reduce profitability. In this study we focus on operational slack, the form related to the firm's production processes. We investigate the role of operational slack on firm survival during its venture stage when its survival is significantly challenged by environmental threats. Specifically, we explore how change in three types of environmental uncertainty, namely dynamism, complexity, and lack of munificence, affect the relationship between operational slack and venture survival. Results suggest that with an increase in environmental uncertainty, operational slack lowers the likelihood of venture failure.     

Multichannels Strategy Implementation: The Role of Channel Alignment Capabilities*

A firm's distribution channels represent a key portfolio of resources that can be leveraged for competitive advantage. One approach to this portfolio that has become increasingly important in recent years is multichannel distribution (MCD). While this strategy has important benefits in terms of market coverage and firm performance, the use of multiple channels seriously affects downstream channel roles such as service delivery, as the financial rewards to channel members and the services they offer are separated. A channel member who offers poor or no service can free‐ride on the services offered to the same customer from a different channel. We draw on agency theory to explain these negative consequences. Additionally, the resource‐based view of the firm along with capabilities theory provides two key means of alleviating these consequences: channel tracking capabilities and reward alignment capabilities. The study, conducted in an industry facing serious MCD issues (the outdoor sporting goods industry), used key informant data matched to secondary data. Our results show that managers can reap the performance rewards of MCD strategies while minimizing its negative consequences. In particular, monitoring practices such as frequent site visits and phone contact with customers develop the firm's channel tracking capabilities, allowing managers to better monitor downstream activities. This becomes particularly important as the complexity from having multiple channels increases. Likewise, reward alignment capabilities such as retail price maintenance agreements and cooperative advertising enable the manager to minimize conflict among channel participants by ensuring sufficient profitability for all channel members.     

How Governance Misalignment and Outsourcing Capability Impact Performance

Notwithstanding the popularity of outsourcing as a business strategy, the performance benefits realized through outsourcing efforts are observed to be mixed in practice. This leads to important unresolved questions regarding why some firms are able to derive substantial value from their outsourcing initiatives while other firms are left disappointed. This study joins an emerging literature integrating transaction cost economics and capabilities‐based perspectives to develop a deeper understanding of the drivers of outsourcing performance. I develop a theoretical model that examines the independent and joint influence of governance misalignment (i.e., deviation from transaction cost's predicted mode of governance) and a firm's outsourcing capability on the performance of outsourced processes. I test the theoretical model using a dataset of 172 outsourced and 156 in‐house processes. The finding that governance misalignment corresponds to inferior process performance supports transaction cost's discriminating alignment hypothesis. Interestingly, I also find that a retained technical expertise (TE) and outsourcing knowledge management routines (OKMR; both contributors to a firm's outsourcing capability) positively influence outsourcing performance both directly and via their relationship with governance misalignment. While a retained technical expertise and outsourcing knowledge management routines each positively influence outsourcing performance, they do so in distinctive ways. These findings have important managerial implications and make a significant theoretical contribution. Specifically, this study demonstrates that the notion of a governance misalignment is firm‐specific, conditional on the governance capabilities of the organization. This insight underscores the value of integrating transaction cost logic with capabilities‐based perspectives.     

Learning from international business affiliates: developing resource-based learning capacity through networks and knowledge acquisition

Resource-based learning capacity (RBLC) is an organization's specific resources – both human and tangible – that can be organized to enhance learning processes. This study develops and tests a model that examines the relationship between the learning efforts of focal firms from their international business affiliates (IBAs) – organizations located outside the focal firm's domestic market with whom the focal firm has a relationship – and the focal firms' RBLC. This learning process refers to the transfer of knowledge from the IBA to the focal firm. Results indicate that while learning effectiveness positively influences the RBLC of the focal firm, learning efficiency has a negative impact on RBLC. The IBA's home country network centrality and the tie strength between the focal organization and the IBA are found to influence learning effectiveness positively. Tie strength also enhances learning efficiency. Finally, the findings indicate that the IBA's home country network centrality enhances the strength of the ties between the focal organization and its IBA.     

The Impact of Stakeholder Management on Corporate International Diversification

This article explores the relationship between stakeholder management and international diversification. We differentiate between strengths and concerns in stakeholder management to demonstrate the differential effects of the two aspects of stakeholder management. Previous research on stakeholder theory often focuses on the importance of stakeholder relations, trying to build a business case of relational capital that results from strong stakeholder management. Such a relational approach, however, overlooks the process of managing stakeholders, a process that allows firms with strengths in stakeholder management to develop an important capability of managing tensions. In this study, we argue that this capability, an inherent part of stakeholder management, can be critical when firms face increased complexity during the process of international diversification. We therefore propose that strengths in stakeholder management are positively related to international diversification, while concerns in stakeholder management are negatively related to international diversification. Using panel data for 169 US multinational firms over a 10‐year period, we find support that strengths in stakeholder management facilitate international diversification. We discuss the contributions of our findings to stakeholder theory and international business research.     

Organizational emotional capability,product and process innovation,and firm performance: An empirical analysis

The concept of emotional capability is one of the competencies that a firm has which is vital for the daily life of the organization. However, the effect of emotional capability, involving the dynamics of encouragement, displaying freedom, playfulness, experiencing, reconciliation, and identification constructs on the firm innovativeness (i.e., product and process) is interestingly missing in the technology and innovation management (TIM) literature. In this study, by investigating 163 Turkish firms, the dynamics of encouragement and experiencing were found to have a positive association with both firm product and process innovativeness; and the dynamics of displaying freedom have a positive relationship with firm process innovativeness. We also demonstrate that the impact of emotional capability constructs on firm innovativeness is contingent upon environmental uncertainty. Specifically, we find that the influence of the dynamics of encouragement on firm product innovation increases with increased rate of environmental uncertainty. Interestingly, the relationship between the dynamics of experiencing and product innovation across low, medium, and high levels of environmental uncertainty is an ∩-shaped. And, the relationship between the dynamics of displaying freedom and product innovation across low, medium, and high levels of environmental uncertainty is a U-shaped. In addition, we show that a firm's emotional capability influences its financial and market performance via firm innovativeness. We discuss the theoretical and managerial implications of the study's findings.     

Linking Entrepreneurial Orientation to Environmental Collaboration: A Stakeholder Theory and Evidence from Multinational Companies in an Emerging Market

Revisiting stakeholder theory as a potential theory of the firm giving rise to expectations about organizing, we analyze when and under what circumstances entrepreneurially oriented firms increase their environmental collaboration with suppliers. Specifically, we investigate the association between entrepreneurial orientation and environmental collaboration with suppliers by accounting for the degree of employees’ work engagement and market environment complexity as stakeholder-oriented moderators of this relationship. We test our hypotheses using multi-level analyses on 249 managers nested in 66 multinational companies (MNCs) in Turkey. We find that entrepreneurial orientation positively impacts environmental collaboration with suppliers. A high level of work engagement (as an organizing principle favouring a stakeholder focus) and a low level of market environment complexity (as an organizing principle favouring the customer as an instrumental stakeholder) moderate this linkage. We enrich the debate on entrepreneurial orientation, strategy, and environmental sustainability by providing logic rooted in stakeholder theory of the conditions under which MNCs’ entrepreneurial orientation in emerging markets prioritizes and privileges environmental collaboration with suppliers.