Exploring how complex solution-based capabilities (CSC) are developed and integrated in engineering companies

Abstract

This paper explores how engineering companies develop and integrate solution-based capabilities for complex ‘one-off’ or small-batch production. Although there is extant literature on developing a stand-alone service, product and process capabilities, an integrated solution-based capability for effective execution of complex ‘design-build’ projects is currently underdeveloped. For such firms to be successful in delivering complex solutions, there is the need for organisational structured routines and processes which we conceptualise as complex solution-based capabilities (CSC). The study was based on a multiple case study using in-depth semi-structured interviews with managers and engineers. Primary data collected were complemented by documentary evidence, for triangulation and validity. The data were analysed using thematic analysis to develop a framework of CSC. The findings show that the case study companies have developed and integrated CSC through organisational routines and processes of make-to-concept approach, value creation and strategic coordination. Implications and future research are discussed.     

Reference model for implementing ERP systems: an analytical innovation networks perspective

The process for implementing ERP systems is related with the identification of a large range of variables (organisational goals, business rules, business processes, actors, resources and specifics and unique concepts to support these variables). The main agents related to the implementation are the solution supplier, the customer company and the consulting service. If the implementation process is addressed as an organisational innovation, the question is: How to coordinate the ERP implementation resources from an innovation agents network? In order to answer this question, a reference model is proposed for the formation and management of an innovation agent’s network for ERP implementation. The research method is based on a multi-case study for identifying the requirements and to elaborate the reference model applying a modelling method the Enterprise Knowledge Development (EKD). As results, the reference model in an analytical perspective of innovation networks and their drivers, enables to identify, understand and support the process of implementing ERP systems under the EKD models they are: goals; business rules; business processes; actors and resources; concepts; technical components and requirements.     

Visualizing and managing value creation through integrated reporting practices: a dynamic resource-based perspective

The article builds on the current debate on how accounting tools can assist top management teams to manage their resources, while communicating a variety of data and information about value creation to their stakeholders. Within this debate, the study focuses on a recent tool for corporate reporting, the Integrated Reporting (〈IR〉), and investigates its utility to support the development of a holistic model for managing strategic resources to create value. To operationalize the 〈IR〉 according to this perspective, the article combines 〈IR〉 with the Dynamic Resource-Based View (DRBV) of the firm on the basis of their common idea that strategic resources are interconnected and have to be managed with the collaboration of all stakeholders in order to inform governance actions and create value with a holistic perspective. For the two case studies analyzed, the information provided by the two organizations’ 〈IR〉 is specifically organized and re-framed using “resource mapping”, which is a DRBV-based visual and analytical technique representing the causal relationships between resources and governance actions. In this way, we not only aim to re-organize and visualize existing information into a new form, but we also expect to describe and communicate the dominant logic in the business and the leverage points where the value creation process lies, supporting the usefulness of Integrated Reporting as a management and governance tool.

     

The tone of business model disclosure: an impression management analysis of the integrated reports

The rising emphasis on the business model (BM) as a reportable element reflects the view that it constitutes one of the key starting points for investors’ analysis. In spite of this, recent academic and professional studies describe current reporting on BMs as uninformative: too optimistic, generic and incomplete. The International Integrated Reporting Council (IIRC) claims that these limitations may be overcome by means of an “Integrated Report”, an innovative report which is expected to offer a complete and balanced representation of how organizations create value by mean of their BMs. The paper investigates the informativeness of BM disclosure questioning whether companies adopt impression management (IM) strategies by manipulating the tone of the BM disclosures provided in their reports. We perform a manual content analysis of all the reports identified in the IIRC website and a multivariate statistical analysis to assess if a positive tone of BM disclosure is significantly associated with weak corporate governance, bad performance and low verifiability of the disclosure itself. Our findings support the idea that managers use BM disclosure as an IM strategy. This evidence has relevant implications for both accounting scholars and practitioners, since it questions the role of integrated reporting in improving corporate reporting on BMs.     

An actor-network perspective on business models: How ‘Being Responsible’ led to incremental but pervasive change

Business models have been studied as organizational value logics, which manifest in the states of cognition, artefacts, and activities. There is no conceptual perspective integrating all three of these states yet. In response, this paper develops a conceptual scaffold of an actor-network perspective: Value logics become programs of action as they are embodied in human actors’ cognition and inscribed into artefacts, forming actor networks that enact business model activity systems. An in depth case study of The Company (anonymized) and of its corporate responsibility initiative ‘Being Responsible’ illustrates the empirical application of this perspective. An analysis of 104 interviews with 72 individuals shows how The Company's business model was enacted by a network of human and nonhuman actors. The Being-Responsible artefact engaged in translation through which it enrolled business model actors to enact a responsibility logic in addition to their commercial logic. This changed the business model incrementally, but pervasively. The paper contributes (1) an integration of existing theory on business model logics manifesting cognition, artefacts, and activities in an actor-network perspective, (2) an extension of research on artefacts, exploring their agency when not explicitly related to the business model; and (3) the development of substantive theory that explains incremental, pervasive business model change through distributed processes of translation. The translation perspective also holds promise for explaining the dynamics of business model creation, maintenance, and radical business model change.     

Does business model affect accounting choices? An empirical analysis of European listed companies

Financial accounting research increasingly includes business model (BM) constructs, but the ability of financial reporting to capture BM characteristics has not been verified. This study empirically explores the links between BMs and accounting choices by clustering a sample of 103 European listed companies according to an innovative, nonlinear algorithm (self-organizing map) that uses pertinent industrial, strategic, governance, and financial variables to uncover different dimensions of a BM. The authors investigate accounting choices (accounting measurement, accounting treatment, and disclosure level) by companies that belong to the different identified BMs. The analysis of the relations between different company BMs and their accounting choices indicates no significant connections, which offers empirical confirmation of the criticisms regarding the inability of financial reporting to represent (or even consider) a company’s BM. The results suggest further attempt to capture BM in financial reporting, which requires regulators to establish accounting standards that acknowledge the value creation processes of an entity and incentivize managers to represent those processes.     

Crafting business models for conflicting goals: Lessons from creative service firms

The business model construct has become attractive to both managers and academics. It reflects how the most important organization's strategic and tactical choices regarding the allocation of resources interact in order to create and capture value. Yet with the growing entrepreneurial complexity, managers often end up pursuing conflicting and even paradoxical strategic goals, thus rendering the business modelling processes more complex, too. Well-known examples are profit versus social value, stakeholder versus company interests, exploration versus exploitation and environmental sustainability versus economic returns. The academic business model literature so far has provided limited insights on how to implement business models beyond a single goal and focused mainly on the initial strategic choice of a business model, ignoring that such salient tensions are often persistent and resurface within the business practice. In this study we leverage paradox theory to investigate how managers of creative firms make tactical choices to accommodate (not solve) salient tensions within their business models, focusing on the domains like services provided, choice of clients, networking and resourcing practices, revenue models and new venture creation. Based on qualitative case study research, we found four integrating and three differentiating decision-making tactics that managers deploy to create both economic and creative value through their business models. Adding to the business model theory, we show how business models are crafted in managerial practices by making tactical decisions to solve conflicts and paradoxes. The results equally enrich the paradox literature by providing for tactical-level approaches toward working through the paradox.     

Organisation structure,management style and company performance

This paper examines the relationship between organisation structure and management style and their influence on organisational effectiveness measured in both ‘human’ and financial terms. Account has also been taken of related contextual factors such as differences in task, size and environment of a company. Using information collected from a sample of fifty small and medium size printing and building firms the authors have elaborated a conceptual model involving the independent attributes; integration, control, task orientation and people orientation. The validity of this model has been operationally tested and examined against the background of evidence reported by other research workers on the contextual determinants of organisational structure and management style. Substantially different patterns of association between ‘organisation’ and ‘style’ and company performance are found for the two industries and an important outcome of the research has been to produce further evidence in favour of the contingency theory of organisation. The paper concludes with some implications for management practice and organisational design.     

Integrated reporting: an exploratory study of French companies

The increasing complexity of the business world has led to growing demands for companies to provide information about their financial performance, their corporate governance and their contribution to developing sustainability. In addition, there are increasing needs for investors to obtain more information about the value creation process since financial reporting systems account imperfectly for most of intangible assets generated by companies. In this context, this article aims to determine if integrated reporting does effectively achieve the objective of reducing the information asymmetry. To answer this research question, a qualitative content analysis was conducted of the IR disclosed by the French companies in the period of 2013–16. The study reveals that information asymmetry is not reduced since companies mention only some capitals as inputs to their value creation process while almost entirely excluding natural capital. Moreover, companies disclose only positive information mainly about their financial capital, without mentioning any destruction of capital, especially not the natural one. Finally, from our findings, signals disclosed by these companies can be classified in three categories: intent signals composed of information about social and relational capital; camouflage signals composed of information about the reduction of the pollution without mentioning the pollution itself and need signals composed of information about dividends encouraging investors to maintain their financial support.

     

Transnational Diaspora and Civil Society Actors Driving MNE Internationalisation: The Case of Grameenphone in Bangladesh

Multinational enterprises (MNEs) are viewed as proactive global economic actors that enter new and emerging markets with intentional strategies, building on their inherent resources and firm-specific advantages. However, an international joint venture involves numerous actors in the market entry process. While emerging markets tend to feature complex institutional contexts and idiographic entry challenges, our study with a focus on emerging market presents two under-examined types of stakeholders as distinct social actors' that affect internationalisation process: the transnational diaspora and civil society actors. It provides evidence of the reactive internationalisation of an MNE, showing how the transnational diaspora drove the MNE's internationalisation and how a civil society actor, in conjunction with a diaspora member, facilitated the creation of an international joint venture (IJV) in Bangladesh. This case study analyses and describes the stages of development, documenting how Norwegian Telenor, American Gonophone, Japanese Marubeni and Bangladeshi Grameen Bank created an IJV named Grameenphone in Bangladesh, and how diaspora and civil society actors made up the prime movers and organisational capability base for this process, which would not have happened without their market-driving and enabling influence. The findings illustrate the central role of transnational diaspora entrepreneurship and the related innovation, motivation, contextual intelligence, networking and funding that supported this emerging-market IJV development. The study contributes to research on international joint ventures, transnational diaspora entrepreneurship and civil society actors and the internationalisation of MNEs.     

数字货币时代的商业模式讨论--基于双案例的比较研究

本文运用对比案例分析法,选取Steemit论坛和知乎论坛作为分析对象,探究了使用数字货币与否对同一行业组织的商业模式及其创新有什么影响。本文以商业模式画布为蓝本,通过对比数字货币背景下商业模式在价值主张、价值创造、价值传递、价值网络和价值实现五个方面的差异,探究数字货币时代下商业模式的创新影响,以及商业模式不同价值元素间新的构成秩序。本研究分析了选取案例商业模式中的不同对应元素,并给出了以下三个针对数字货币和商业模式的新命题:第一,数字货币在价值创造过程中联结利益主体;第二,数字货币起到了模糊价值网络边界的作用,从而促进构成新的治理模式;第三,使用数字货币可以在价值实现过程中完成利润重新分配。最后,文章认为数字货币情景下商业模式中不同价值元素的交互关系,呈现出以客户关系为核心的共同价值创造和共同价值实现的新秩序。     

Reference model for implementing an MRP system in a highly diverse component and seasonal lean production environment

Companies are currently choosing to integrate logics and systems to achieve better solutions. These combinations also include companies striving to join the logic of material requirement planning (MRP) system with the systems of lean production. The purpose of this article was to design an MRP as part of the implementation of an enterprise resource planning (ERP) in a company that produces agricultural implements, which has used the lean production system since 1998. This proposal is based on the innovation theory, theory networks, lean production systems, ERP systems and the hybrid production systems, which use both components and MRP systems, as concepts of lean production systems. The analytical approach of innovation networks enables verification of the links and relationships among the companies and departments of the same corporation. The analysis begins with the MRP implementation project carried out in a Brazilian metallurgical company and follows through the operationalisation of the MRP project, until its production stabilisation. The main point is that the MRP system should help the company's operations with regard to its effective agility to respond in time to demand fluctuations, facilitating the creation process and controlling the branch offices in other countries that use components produced in the matrix, hence ensuring more accurate estimates of stockpiles. Consequently, it presents the enterprise knowledge development organisational modelling methodology in order to represent further models (goals, actors and resources, business rules, business process and concepts) that should be included in this MRP implementation process for the new configuration of the production system.     

Acquired middle managers’ strategy roles and value creation in cross-border acquisitions

Middle managers (MMs) are important organisational players. In intra-organisational settings, their enactment of strategy roles has been linked to value creation. In this paper, we study this question in the context of acquisitions. An acquisition removes the acquired MMs' upward links towards top management and introduces new players (i.e., acquiring MMs) who influence their work. This paper explores whether acquired MMs are able to enact their strategy roles in the post-acquisition era, and if so, how this contributes to acquired-unit value creation. Adopting an actor-based, mixed-methods research design studying cross-border acquisitions, our findings contribute to the debate on managerial roles and acquisition value creation. We found that value-creating transactions are represented by acquired MMs' enactment of the strategy roles of implementing and championing, while value-declining transactions are represented by acquired MMs' enactment of the synthesising role. Notwithstanding, the relationship between acquired-firm value creation and acquired MMs' strategy role enactment is contingent upon acquired and acquiring MMs' relationships. Going forward, we call for more research on managers’ effects on acquisition value creation.     

Stakeholder Theory: The State of the Art

Abstract

For the last 30 years a growing number of scholars and practitioners have been experimenting with concepts and models that facilitate our understanding of the complexities of today’s business challenges. Among these, “stakeholder theory” or “stakeholder thinking” has emerged as a new narrative to understand and remedy three interconnected business problems—the problem of understanding how value is created and traded, the problem of connecting ethics and capitalism, and the problem of helping managers think about management such that the first two problems are addressed. In this article, we review the major uses and adaptations of stakeholder theory across a broad array of disciplines such as business ethics, corporate strategy, finance, accounting, management, and marketing. We also evaluate and suggest future directions in which research on stakeholder theory can continue to provide useful insights into the practice of sustainable and ethical value creation.     

When outsourcing is not an option: International relocation of investment bank research — Or isn't it?

Outsourcing is high on the agenda of firms seeking to cut costs. Based on an enhanced value-chain concept we develop a model that determines the conditions under which outsourcing and offshoring are not expedient. The model allows for an integrated analysis of horizontal and vertical links to actors within and outside the firm. Equity and country research in investment banks and their outsourcing potential are used as case studies. We draw mainly on qualitative evidence from interviews with investment bank analysts, as well as data on locations of research units of foreign investment banks in India. The option of outsourcing certain stages of business processes and offshoring parts of the value chain within firms to low-wage locations depends crucially on how processes are ‘embedded’ in relation to other departments within and to corresponding actors outside the firm. Our analysis shows that there is little, if any, scope for outsourcing but some potential for low-level research activities to be offshored to low-cost regions.     

Lust an der Macht – Frauen in Organisationen

Storyline and analysis of the film “The Devil Wears Prada” provide vivid scenes to derive reflections on organisational culture in globalised companies and women in chief positions. Women come into conflict with leading the company successfully, the dependence on efficient – female – staff and the image as a woman. The article illustrates, how influences of the company’s products fashion und fashion market have a normative effect, especially on female staff members. Theories of organisational culture, careers of women and findings of gender research are shown in connection with complex strategies of women in their determination to succeed, to self-realization and the pressure to adapt oneself. This involves reflected perspectives to leave clichés of gender and to reinforce organisational and personal potentials.     

Supply Chain Sourcing Under Asymmetric Information

We study a supply chain with two suppliers competing over a contract to supply components to a manufacturer. One of the suppliers is a big company for whom the manufacturer's business constitutes a small part of his business. The other supplier is a small company for whom the manufacturer's business constitutes a large portion of his business. We analyze the problem from the perspective of the big supplier and address the following questions: What is the optimal contracting strategy that the big supplier should follow? How does the information about the small supplier's production cost affect the profits and contracting decision? How does the existence of the small supplier affect profits? By studying various information scenarios regarding the small supplier's and the manufacturer's production cost, we show, for example, that the big supplier benefits when the small supplier keeps its production cost private. We quantify the value of information for the big supplier and the manufacturer. We also quantify the cost (value) of the alternative‐sourcing option for the big supplier (the manufacturer). We determine when an alternative‐sourcing option has more impact on profits than information. We conclude with extensions and numerical examples to shed light on how system parameters affect this supply chain.     

Supply chain agility as an acclimatisation process to environmental uncertainty and organisational vulnerabilities: insights from British SMEs

Abstract

Even though supply chain agility (SCA) has been considered an essential concept in supply chain management (SCM) research, the way it is experienced and manifested, especially by small and medium-sized enterprises (SMEs), has received much less attention. Our purpose is to focus on SME organisational vulnerabilities in the context of increased environmental uncertainty, and explore how SCA is developed and applied by SMEs amid their vulnerabilities. By relying on insights from comparative case studies of three British SMEs, we examine SME SCA as an acclimatisation process and delve into SMEs’ experiences of facing environmental uncertainty while developing and applying SCA. Our findings highlight that organisational attitudes underlie how SMEs perceive environmental uncertainty, tackle organisational vulnerabilities and develop SCA as an acclimatisation process. Our findings also reveal that resource constraints, supply chain relationships, interorganisational power dynamics, and access to information play important roles in developing SCA.     

Positive Deviance on the Ethical Continuum: Green Mountain Coffee as a Case Study in Conscientious Capitalism

Increasingly, stories are emerging about businesses that engage in ethical behaviors above and beyond mere compliance with regulations. These positive deviations along the ethical continuum provide an opportunity to explore how some companies’ business philosophy leads them to pursue an array of outcomes beyond the bottom line. This paper presents a case study of Green Mountain Coffee Roasters, the leading ethical company in the United States as rated by Forbes magazine, exploring the company culture and operating philosophy from a perspective of conscientious capitalism. The three underlying assumptions of conscientious capitalism are: (1) interconnectedness between individuals, businesses, and global society; (2) wealth as a holistically understood state rather than solely a financial status; and (3) relevant time spanning multiple generations. Implications are offered for commerce, business practitioners, and educators.     

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.