Supplier Rationalization: A Sourcing Decision Model

We draw on extant literature on strategic sourcing and supply base rationalization to anchor our argument that measuring supplier performance diversity is germane to executing an effective supply base rationalization strategy. We explicate how a novel approach to data envelopment analysis (DEA) efficiency assessment can be utilized to measure this performance diversity. More specifically, our methods are anchored in cross efficiency analysis in DEA that allows for evaluating the efficiency of a supplier with respect to the optimal weights (strengths) of its peers. This methodology is applied to an actual supplier dataset of a large multinational telecommunications company in categorizing their supply base into groups for effective supplier rationalization. We conclude that measuring and analyzing the performance diversity within the framework of DEA provides a mechanism for firms to better balance a rationalized and diversified supply base with unique skills.     

企业风险管理与经营效率:来自中国保险业的经验证据

本文从风险管理的视角对企业效率评估的数据包络分析技术进行了改进,探讨了风险管理与经营效率的内在关联,并以中国保险业为例,对1999年以来企业真实的经营效率水平进行了评估。结果表明:企业内部的风险管理能力对其经营效率水平的提升具有明显的影响,而且这种影响力正在逐渐加强。不考虑企业内部的风险管理水平将直接导致其经营效率的测算结果出现低估,2002年以后这种低估的程度越发明显,这可归因于同期保险企业开始逐渐重视提高自身的风险管理能力。以上结论也为企业如何在管控风险的同时提升经营效率水平提供了有价值的指导。     

Why do Emerging Market Firms Engage in Voluntary Environmental Management Practices? A Strategic Choice Perspective

In this paper, we investigate firms’ decisions to engage in voluntary environmental management (VEM) practices within an emerging market context. Drawing on the strategic choice and the resource‐based view perspectives, we report results from a survey of VEM practices – a specific form of self‐governance – drawing on a sample of 519 Turkish firms from various industries to identify important strategic antecedents of firms’ decisions to engage in such practices. We find that as firms become more customer focused, more inclined to pursue a differentiation strategy and subject to a higher level of strategy‐oriented stakeholder focus, they tend to implement higher levels of VEM practices, with important implications for research, policy and practice for both emerging and developed markets.     

Statistical precision of DEA and Malmquist indices: A bootstrap application to Norwegian grain producers

Previous applications of data envelopment analysis (DEA) and its subsequent Malmquist indices to efficiency and productivity measurements have been criticised for not providing statistical inferences regarding the significance of observed results. In this paper, DEA and a Malmquist index are combined with a bootstrap method in order to provide succinct statistical inferences that determine the performance of grain producers in Eastern Norway. The data cover the period between 1987 and 1997. Results reveal: (i) a significant degree of inefficiency (approximately 11%) and an average productivity progress of 38% over the period considered; (ii) the formidable productivity progress observed is primarily explained by technical efficiency changes that enabled producers to catch up with front runners; and (iii) environmental factors, such as weather conditions, impact both efficiency and productivity. Finally, the analysis reveals that using bootstrapping to make statistical inferences suggests that researchers should be careful in making performance comparisons based on conventional DEA methods, as any discovered differences may not be significant.     

Governance Structures,Multidimensional Efficiency and Firm Profitability

Using a panel data set of 361 German corporations for the period 1991–1996 we test the hypothesis that firms with more efficient governance structures have higher profitability. To determine efficiency we compare firms with respect to ownership concentration, the identity of owners, capital structure, investment and firm growth by a multi-input/multi-output Data Envelopment Analysis (DEA). This non-parametric linear programming technique considers both multiple in- and out- puts. Based on the concept of pareto efficiency, it computes an efficiency score where the associated weights of the inputs and outputs are determined endogenously. The DEA efficiency scores are then used as explanatory variables in panel data regressions of profitability. Our main finding is that the efficiency scores indeed contribute significantly to explaining profitability differences between firms, even after controlling for industry effects and unobserved systematic firm effects.     

The hazards of strategic planning for global markets

Global strategic marketing planning has emerged as a key process in managing today's worldwide marketplace. This survey of 90 large American global corporations reveals that most are bottom-up planners. US firms appear to have distinct cost and numbers orientations. Industry and competitive analyses are used in many companies, although managers appear to lack suitable frameworks for SWOT analyses. Economic climate changes tend to be most disruptive to global planning efforts. When faced with non-achievement of goals, most firms reformulate both objectives and strategies.     

A generalisation of the Farrell cost efficiency measure applicable to non-fully competitive settings

This paper enhances cost efficiency measurement methods to account for situations where the input prices can depend on negotiation or tend to qualitatively differentiate the resources available at each decision making unit. In these circumstances, there are some shortcomings in the cost efficiency measure described in the data envelopment analysis (DEA) literature. This paper proposes new models and measures for cost efficiency evaluation that overcome the limitations of the existing DEA models. The applicability of the measures developed is illustrated in the context of the analysis of bank branch performance.     

EXPLORING THE STRATEGY-TECHNOLOGY CONNECTION IN SMALL MANUFACTURING FIRMS

Small manufacturing firms make a significant contribution to the economy. Yet, partly because of the greater availability of data on larger firms, strategic management and manufacturing strategy research have tended to neglect small business. Using a survey of small manufacturers, we examine the applicability of Porter's typology of generic strategies to this context and investigate the links between generic strategies and one important dimension of manufacturing strategy-technology management. The analysis of generic strategies shows consistency with previous work on larger firms and tends to support the use of the typology in this setting. Moreover, the internal and external influences on the technology adoption decision process vary significantly with generic strategies, implying that the role played by individuals and networks constitutes a dominant factor. Surprisingly, no distinction was found between firm groupings with respect to decision criteria, which suggests that the decision process of small firms remains rather inexplicit, informal, and, to a large extent, intuitive. We also found that technologically more sophisticated firms tend to hold stronger competitive positions and that technological strength appears to be related to both cost advantage and differentiation.     

Measuring Corporate Social Performance: An Efficiency Perspective

Aggregation of corporate social performance (CSP) metrics poses a major challenge to researchers and practitioners. This study provides a critical evaluation of current aggregation approaches and proposes a new methodology based on data envelopment analysis (DEA) to compute a CSP index. DEA is independent of subjective weight specifications and provides an efficiency index to benchmark the CSP of firms. Using CSP data from 2190 firms in three major industries from the Kinder, Lydenberg, and Domini, Inc. database in 2007, our study presents the first application of the DEA model for CSP and ordinal data and opens up a new path for future empirical CSP research.     

Internationalization paths of Indian pharmaceutical firms — A strategic group analysis

This paper is an attempt to throw light on the internationalization paths of emerging economy firms through a strategic group analysis of internationalizing firms in the Indian pharmaceutical industry. Strategic group analysis of a proprietary data set of strategic variables from forty firms revealed significant variation in their internationalization strategies. The distinct strategies exhibited different value creation potential, but led to similar levels of performance in terms of return on assets, thus indicating equifinality of different paths to multinationality. Inductively drawing from in-depth analysis of firms from each of the strategic groups, the paper proposes a conceptual model of internationalization for emerging economy firms through a combination of exploitation and exploration strategies along the dimensions of products and markets. Firms that are able to supplement the conventional exploitation strategies with exploration through new products and new markets, by taking advantage of increasingly liberalized economies, could emerge as Third-world multinationals with capabilities that could potentially challenge even MNCs from the developed world.     

The forms and use of intuition in top management teams

Nascent research suggests that benefits of intuition use accrue not only to individuals but also to teams. These benefits may be especially important for top management teams (TMTs), who formulate strategic decisions for their firms. However, work on intuition use in strategic decision making (SDM) remains focused on the intuitions of chief executive officers (CEOs). Furthermore, the emerging literature on team intuition is very fragmented, leaving an unclear picture of how teams may develop and use intuition in their decision-making activities. To address these problems, we integrate team intuition and TMT research to propose four forms of TMT intuition, which differ based on the locus and integration of intuition. We describe the forms of TMT intuition, clarify the mechanisms that shape them, and discuss their relevance for TMTs' decision-making activities. Overall, we advocate for strategy research that focuses on the notion of “team” in team intuition.     

The Importance of Compensating Strategic Network Board Members for Network Performance: A Contingency Approach

Firms in government‐supported strategic networks tend to rely on professional network board members for support and assistance. As such, two significant issues arise: should board members be compensated and under which circumstances is compensation more – or less – effective for network performance. Based on yearly panel data from 53 government‐supported strategic networks of small‐ and medium‐sized enterprises over a five‐year period, this study examines the effects of compensating network board members. Advocating for a contingency approach, we combine the agency and stewardship literatures to posit that the effects of compensation are moderated by contingency factors that stimulate either an agency or stewardship relationship between the network board and the networking firms. Our findings indicate that significant funding, network firms represented on the network board, and top‐down network formation stimulate board members to become agents rather than stewards. This therefore explains the higher effect of board member compensation under such conditions.     

Using Malmquist Indexes to measure changes in the productivity and efficiency of US accounting firms before and after the Sarbanes–Oxley Act

There have been many criticisms of the Sarbanes–Oxley (SOX) Act passed in July of 2002 to correct business accountability and performance practices. The act has a major emphasis on accounting and its practices. This paper attempts a response to these criticisms by investigating changes in productive efficiency for 62 of the largest US public accounting firms between the periods (2000–2001) and (2003–2004)—the periods before and after enactment of SOX in July of 2002. DEA is used to calculate Malmquist indexes of productivity and efficiency changes. This index is used because it can distinguish between changes in technical efficiency, which limit the possibilities, and changes in the performance efficiencies for each firm. Contrary to many of the criticisms, results indicate that accounting firms have exhibited significant post SOX growth in productive efficiency which is better than pre-SOX performances.     

考虑多维合作策略的非径向超预期管理效率评价

现有非预期产出问题集中于环境DEA效率评价,普遍以弱可处置性与负导向为前提,无法适应管理效率评价中超预期产出的"策略可处置"、"多维效率扩展"与"评价导向交融"特征。相对现有进展,针对环境DEA弱可处置性的局限,归纳了超预期管理效率的多维合作策略与对应策略作用下的效率溢出效应;针对超预期管理效率策略化评价的非径向测度基础,界定多维合作策略贡献,形成了"投入"合作与"产出"分配意义上的效率评价方案;针对传统DEA方法模糊评价结果不可比难点,引入合作博弈思想构建CSG-DEA模型,统筹了隐藏效率的评价信息再提取与策略联盟收益分配权重折算需求。案例应用结果表明,所构建的方法与策略有效、可行,能够为评价导向特殊、考虑多维合作策略的超预期管理效率评价问题提供决策参考。     

Exploring Strategy Implementation Consistency Over Time: The Moderating Effects of Industry Velocity and Firm Performance

In this paper we empirically investigate the temporal development of a firm’s strategy implementation consistency (SIC), i.e. the alignment between firms’ resource allocation decisions (RAD) and their articulated corporate concept (Noda and Bower, 1996; Burgelman and Grove, 1996; Love et al., 2002; Mintzberg, 1978). Doing so, we test whether (1) SIC is more likely to increase or decline over time, (2) whether firms competing in (low) high-velocity environments in fact show different temporal patterns in SIC, and (3) whether overperforming firms succeed in conserving their level of SIC. For our analysis we draw on 6238 RAD of 20 publicly listed firms with European origin over a period of 4–6 years. Applying maximum likelihood ordered logit estimation, our results indicate that the likelihood of an alignment of RAD and a firm’s corporate concept decreases over time. In line with scholars’ perception of high-velocity environments, we find that the firms in our sample competing under such conditions show no clear trend in SIC. These firms tend to “zig-zag” over time – swaying off and pulling back to their strategic course independent of the timing of the announcement of a corporate concept. We also find that overperforming firms are unsuccessful in preserving their SIC at the same level over time. Based on the empirical findings the paper discusses implications for theory and derives suggestions for corporate level managers on how to balance SIC and strategic flexibility.     

Toward a capabilities perspective of the small firm

This paper attempts to explain the competitive advantages of the small firm in the capabilities perspective. It begins by identifying the kinds of strategic assets possessed by small firms. It argues that entrepreneurship and a simple capital structure are the sources of dynamism for small firms. The relationship between the small firm's resources and its capabilities are then critically examined. In particular, the analysis focuses on the influences of strategic assets on the organizational flexibility – a significant source of competitive advantage enjoyed by small firms. The competitive attributes of small firms are further discussed in terms of firm's internal and external capabilities. Finally, the relationship between the small firm's capabilities and the choice of technology strategies is examined.     

Implications of CAD/CAM for management

For many firms, investment in computer-aided design is an important first step towards integrated systems of design and manufacture (Computer-Aided Design/Computer-Aided Manufacture—CAD/CAM). A recent study of CAD in the British engineering industry has indicated that few firms have yet fully recognised its strategic significance. Successful selection and implementation of CAD/CAM requires changes in investment appraisal procedures and demands higher levels of technical skills at senior levels than are normally found in British engineering firms.     

MEASUREMENT OF MULTIPLE SITES IN SERVICE FIRMS WITH DATA ENVELOPMENT ANALYSIS

Data envelopment analysis (dea) has become an increasingly popular method to measure performance for service firms with multiple sites. DEA is superior to many traditional methods for firms that have multiple goals. The promise of DEA is that the complex, multi-objective problem of performance measurement can be reduced to a single number. Unfortunately, the practice of DEA often belies the promise. Misconceptions concerning the purpose and implementation of DEA can cause DEA applications to be less than successful. Here, the technique is explained, and a guide to the implementation of DEA is proposed, utilizing DEA studies of retail bank branches.     

Following the Herd or Not?: Patterns of Renewal in the Netherlands and the UK

How do large firms conduct their strategic renewal journeys in an increasingly turbulent environment? Are there generic industry patterns, or are these renewal journeys country- or firm-specific? To answer these questions, we examine the relative incidence of external versus internal and explorative versus exploitative renewal actions, and their speed, in leading Dutch and UK financial service companies using longitudinal data. The context, content and process dimensions of strategic renewal are distinguished, and research questions about these attributes are formulated and investigated using new metrics. Findings show that while exploration/exploitation ratios are fairly similar for firms across the entire industry, systematic differences are evident between the external/internal renewal ratios of Dutch and UK firms, and that speed of renewal is largely determined at the firm level. Thus we find that industry-, country- and firm-specific factors all influence journeys of strategic renewal in distinctive and complementary ways.     

State ownership and listed firm performance: a universally negative governance relationship?

Our analysis of more than 1,000 Chinese listed firms, 2003–2005, reveals a positive association between state ownership (SO) and firm performance. Arguably, if SO “causes” performance, it must be through the channel of agency cost. Therefore, our paper checks the robustness of this positive SO/performance finding by analyzing the role of agency cost as a mediator. It emerges that SO in the Chinese context may represent a strategic asset rather than an agency burden. However, it is not clear whether this is an outcome driven by efficiency or power.