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.     

Business model design–performance relationship under external and internal contingencies: Evidence from SMEs in an emerging economy

We examined Business Model (BM) designs – performance relationship and the moderating effects of firm age and external environment on this relationship. Furthermore, we investigated the impact of simultaneously operating dual BM designs (i.e. novelty and efficiency) on firm performance and contingent effect of firm age on this relationship. Based on data from 241 Indian SMEs, our findings highlighted that BM novelty was of greater benefit to younger SMEs compared to mature SMEs, while BM efficiency was of greater benefit to more mature SMEs. The environmental dynamism positively moderated the relationship between BM novelty and performance but it negatively moderated the relationship between BM efficiency and performance. We also found that BM efficiency is more beneficial in a low, rather than a high, munificent environment but we found environmental munificence did not moderate the BM novelty and SME performance relationship. Finally, we found simultaneous deployment of BM novelty and BM efficiency resulted in an enhancement of performance among mature SMEs compared to younger SMEs. Our study not only adds to the limited literature on BMs in SMEs but also helps practicing managers and entrepreneurs to make informed choices about their BMs.     

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.     

Cognitive antecedents of business models: Exploring the link between attention and business model design over time

A firm's ability to conceive performance-enhancing business models (BMs) has become a cornerstone of competitive advantage. There is consensus that external triggers spur such BM change, but the literature has remained silent on the role of internal and cognitive antecedents such as managerial attention. In our inductive case study of four corporate spin-offs, we find that top management teams (TMTs) with a specific set of attention patterns are more likely to develop performance-enhancing BM designs. However, our findings provide evidence that specific attention foci are not sufficient to enhance particular BM designs, as it is also a matter of the intensity of attention. We further find that, over time, TMTs attention patterns shift and cause changes in BM designs. The emergent theoretical framework highlights that attention is an antecedent in explaining BM designs.     

Making more of alliance portfolios: The role of alliance portfolio coordination

Alliance portfolios enable firms to access and integrate multiple resources from different, simultaneous partners. We assess the extent to which alliance portfolio coordination benefits focal firms along three alliance portfolio characteristics: alliance portfolio size, the complementarity of the resources available through the portfolio, and the degree to which relation-specific investments are made across the portfolio. Based on a questionnaire completed by 444 Dutch companies, we found that the three portfolio characteristics play an important role in creating benefits for focal firms through their portfolios. Additionally, our findings suggest that alliance portfolio coordination is an important element in dealing with the challenge of managing portfolios, in that it shapes the effect of the other portfolio characteristics.     

Business models and business model innovation: Between wicked and paradigmatic problems

While research on business models and business model innovation continue to exhibit growth, the field is still, even after more than two decades of research, characterized by a striking lack of cumulative theorizing and an opportunistic borrowing of more or less related ideas from neighbouring fields in the place of cumulative theory. We argue that the lack of cumulativeness stems from lack of construct clarity (i.e., BM and BMI are seldom defined with much precision) and lack of agreement on definitions, which in turn imply that the core constructs are not dimensionalized in a way that eases theory-building and empirical testing. Lack of progress on these matters partly reflect that the BM and BMI constructs are used in multiple explanatory contexts, so that it is not entirely clear what are the problems that BM and BMI research seek to solve. We argue, with Teece (2010), that the BM and BMI constructs are fundamentally about the architecture of the firm's value creation, delivery and capture mechanisms; theoretically the key aspect of BMs is complementarity between activities underlying these mechanisms; BMI means novel changes of such complementary relations; and this understanding not only unifies diverse contributions to the literature but is also productive of new insight.     

Leadership for organizational adaptability: A theoretical synthesis and integrative framework

One of the biggest challenges facing leaders today is the need to position and enable organizations and people for adaptability in the face of increasingly dynamic and demanding environments. Despite this we know surprisingly little about this topic. In this paper we provide a theoretical synthesis and integrative review of research from strategy, organization theory, innovation, networks, and complexity to provide a framework of leadership for organizational adaptability. Our review shows that leadership for organizational adaptability is different from traditional leadership or leading change. It involves enabling the adaptive process by creating space for ideas advanced by entrepreneurial leaders to engage in tension with the operational system and generate innovations that scale into the system to meet the adaptive needs of the organization and its environment. Leadership for organizational adaptability calls for scholars and practitioners to recognize organizational adaptability as an important organizational outcome, and enabling leadership (i.e., enabling the adaptive process through adaptive space) as a critical form of leadership for adaptive organizations.     

The effect of knowledge collaboration on business model reconfiguration

This study examines whether and to what extent the presence and intensity of knowledge collaboration across different partners affects business model reconfiguration (BMR). We build on the business model (BM) literature and operationalize BMR by introducing the presence and intensity of collaboration and firm size effects as main explanatory factors in affecting the propensity of incremental and radical BMR. We analyze a large sample of UK firms during 2002–2014 to capture the effect of knowledge collaboration and firm size on BMR. Positively incremental forms of BMR will be influenced by the presence and intensity of knowledge collaboration, while radical forms of BMR are affected by the intensity of collaboration with customers and the collaboration with suppliers by large firms. Furthermore, firms of different sizes do not equally benefit from knowledge collaboration with suppliers for both incremental and radical BMR, while they do equally benefit from collaboration with other partner types.     

Pluralist perspectives and diverse responses: Exploring multiplexed framing in incumbent responses to digital disruption

Research applying a socio-cognitive lens to disruptive digital innovation often fails to account for intra-firm heterogeneity in how an established incumbent frames and responds to disruptive innovation. To explore the heterogeneous framing processes involved within a firm, we conducted an in-depth case study of the response of a multinational insurance group to a digitally-led disruptive innovation: the rise of internet-based general insurance aggregator platforms between 2002 and 2007. We map different response frames across three separate framing dimensions: the Challenge Type, Response Urgency and Firm Heritage, and explore their interplay in shaping responses to disruption. We introduce the idea of multiplexed framing – comprised of multiple, non-binary frames – and propose that these are holographically distributed – such that conflicting frames can be held by members of the same organizational department or group. This allows managers to leverage the ambiguity generated by multiplexed frames to select the same response strategies for different reasons leading to an equifinal resolution of conflict. We show how such framing enables the organization to trial and adaptively iterate between different strategic responses to disruptive innovation, particularly amid high uncertainty and ambiguity.     

Complexity,simplicity, simplexity

“In the midst of order, there is chaos; but in the midst of chaos, there is order”, John Gribbin wrote in his book Deep Simplicity (p. 76). In this dialectical spirit, we discuss the generative tension between complexity and simplicity in the theory and practice of management and organization. Complexity theory suggests that the relationship between complex environments and complex organizations advanced by the well-known Ashby’s law, may be reconsidered: only simple organization provides enough space for individual agency to match environmental turbulence in the form of complex organizational responses. We suggest that complex organizing may be paradoxically facilitated by a simple infrastructure, and that the theory of organizations may be viewed as resulting from the dialectical interplay between simplicity and complexity.     

Linear solution schemes for Mean-SemiVariance Project portfolio selection problems: An application in the oil and gas industry

We study the Mean-SemiVariance Project (MSVP) portfolio selection problem, where the objective is to obtain the optimal risk-reward portfolio of non-divisible projects when the risk is measured by the semivariance of the portfolio׳s Net-Present Value (NPV) and the reward is measured by the portfolio׳s expected NPV. Similar to the well-known Mean-Variance portfolio selection problem, when integer variables are present (e.g., due to transaction costs, cardinality constraints, or asset illiquidity), the MSVP problem can be solved using Mixed-Integer Quadratic Programming (MIQP) techniques. However, conventional MIQP solvers may be unable to solve large-scale MSVP problem instances in a reasonable amount of time. In this paper, we propose two linear solution schemes to solve the MSVP problem; that is, the proposed schemes avoid the use of MIQP solvers and only require the use of Mixed-Integer Linear Programming (MILP) techniques. In particular, we show that the solution of a class of real-world MSVP problems, in which project returns are positively correlated, can be accurately approximated by solving a single MILP problem. In general, we show that the MSVP problem can be effectively solved by a sequence of MILP problems, which allow us to solve large-scale MSVP problem instances faster than using MIQP solvers. We illustrate our solution schemes by solving a real MSVP problem arising in a Latin American oil and gas company. Also, we solve instances of the MSVP problem that are constructed using data from the PSPLIB library of project scheduling problems.     

Paradigm lost: Reinvigorating the study of organizational culture

In spite of the importance of organizational culture, scholarly advances in our understanding of the construct appear to have stagnated. We review the state of culture research and argue that the ongoing academic debates about what culture is and how to study it have resulted in a lack of unity and precision in defining and measuring culture. This ambiguity has constrained progress in both developing a coherent theory of organizational culture and accreting replicable and valid findings. To make progress we argue that future research should focus on conceptualizing and assessing organizational culture as the norms that characterize a group or organization that if widely shared and strongly held, act as a social control system to shape members’ attitudes and behaviors. We further argue that to accomplish this, researchers need to recognize that norms can be parsed into three distinct dimensions: (1) the content or what is deemed important (e.g., teamwork, accountability, innovation), (2) the consensus or how widely shared norms are held across people, and (3) the intensity of feelings about the importance of the norm (e.g., are people willing to sanction others). From this perspective we suggest how future research might be able to clarify some of the current conflicts and confusion that characterize the current state of the field.     

Boundaries of the business model within business groups

Scholars have sought various ways to find out how financial performance of the firm can be affected by its business model (BM). However, to date academic literature has focused attention on the “firm” as a unit of analysis without clearly defining the boundaries of the reporting entity to which the BMs refer. The aim of this paper is to investigate what are the boundaries of the BM of the affiliated-group companies and how the degree of independence of BMs is measured within the business group. The contribution of the paper is in using the BM concept to expound and criticise the assumptions in economic analysis and accounting standards that groups of companies are economic units that optimise economic income of the group as a whole and that the financial statements of individual subsidiaries, sub-groups and the group as a whole report the value generated by the group.     

Flows with unit path capacities and related packing and covering problems

Since the seminal work of Ford and Fulkerson in the 1950s, network flow theory is one of the most important and most active areas of research in combinatorial optimization. Coming from the classical maximum flow problem, we introduce and study an apparently basic but new flow problem that features a couple of interesting peculiarities. We derive several results on the complexity and approximability of the new problem. On the way we also discover two closely related basic covering and packing problems that are of independent interest. Starting from an LP formulation of the maximum s-t-flow problem in path variables, we introduce unit upper bounds on the amount of flow being sent along each path. The resulting (fractional) flow problem is NP-hard; its integral version is strongly NP-hard already on very simple classes of graphs. For the fractional problem we present an FPTAS that is based on solving the k shortest paths problem iteratively. We show that the integral problem is hard to approximate and give an interesting O(log?m)-approximation algorithm, where m is the number of arcs in the considered graph. For the multicommodity version of the problem there is an $O(\sqrt{m})Since the seminal work of Ford and Fulkerson in the 1950s, network flow theory is one of the most important and most active areas of research in combinatorial optimization. Coming from the classical maximum flow problem, we introduce and study an apparently basic but new flow problem that features a couple of interesting peculiarities. We derive several results on the complexity and approximability of the new problem. On the way we also discover two closely related basic covering and packing problems that are of independent interest. Starting from an LP formulation of the maximum s-t-flow problem in path variables, we introduce unit upper bounds on the amount of flow being sent along each path. The resulting (fractional) flow problem is NP-hard; its integral version is strongly NP-hard already on very simple classes of graphs. For the fractional problem we present an FPTAS that is based on solving the k shortest paths problem iteratively. We show that the integral problem is hard to approximate and give an interesting O(log m)-approximation algorithm, where m is the number of arcs in the considered graph. For the multicommodity version of the problem there is an O(?m)O(\sqrt{m}) -approximation algorithm. We argue that this performance guarantee is best possible, unless P=NP.     

Incorporating balance concerns in resource allocation decisions: A bi-criteria modelling approach

We consider resource allocation problems where inputs are allocated to different entities such as activities, projects or departments. In such problems a common goal is achieving a desired balance in the allocation over different categories of the entities. We propose a bi-criteria framework for trading balance off against efficiency. We define and categorise indicators based on balance distribution and propose formulations and solution algorithms which provide insight into the balance-efficiency tradeoff. We illustrate our models by applying them to the data of a portfolio selection problem faced by a science funding agency and to randomly generated large-sized problem instances to demonstrate computational feasibility.     

A cross-national comparison of public project benefits management practices – the effectiveness of benefits management frameworks in application

Abstract

Benefits are the principal reason why an organization may seek to enact change through programmes and projects. The discipline of identification, definition, planning, tracking and realization of benefits is recognized to be instrumental in achieving organizational strategy. In this study, we describe the results of a cross-national comparison of public sector benefits management (BM) practices in Australia, Canada, the UK and the USA. It explores ‘BM practices in action’, considering to what extent ‘espoused’ or ‘mandated’ frameworks are actually practised and perceived by their users. Employing qualitative analysis, semi-structured interview data were analysed from 46 participants with experience in sponsoring, managing and/or reviewing government projects. The results expose considerable variation in the adoption and standardization of BM frameworks from inter and intragovernmental perspectives. We evidence a strong focus on benefits identification across the data set, specifically at the outset (the business case stage seeking project approval) and observe deterioration in focus as the project or programme progresses through the authorization (or assurance) approval gates towards close-out and operations. The results further emphasize the prominence of political interest, leadership buy-in, a benefits-driven culture and a transparent benefits reporting mechanism in the implementation of ‘effective’ BM frameworks.     

The social responsibility of organizations: Perceptions of organizational morality as a key mechanism explaining the relation between CSR activities and stakeholder support

Prior research on Corporate Social Responsibility (CSR) has documented how specific CSR activities relate to responses of relevant stakeholders, mainly examining employees. However, it is as yet unclear whether these findings generalize to other types of CSR activities or to responses of other stakeholder groups. In fact, results from studies to date also show inconsistent effects in need of further explanation.In this contribution we offer a new perspective on this literature. We extend current insights on organizational CSR activities and stakeholder support, by elaborating on the psychological mechanisms that can explain these relations. We draw together recent developments on organizational anthropomorphism with insights on organizational identification, to argue that the impact of CSR activities on a broad range of stakeholder responses depends on perceptions of organizational morality. We connect prior work on organizational ethics, CSR, and stakeholder support, to social psychological theory and research on impression formation, impression management, and impression updating. This new perspective allows us to broaden the current debate on CSR and stakeholder support.Building on this analysis, we propose a new model that offers a roadmap for future research. We explain the impact of organizational CSR on stakeholder responses, by highlighting perceived organizational morality as a key mediating variable. We then proceed to consider likely moderators of this relation distinguishing between (a) characteristics of the organization, (b) characteristics of (communications about) CSR activities, and (c) characteristics of the perceivers. On the basis of this extended model we develop specific predictions, and review initial evidence supporting these prediction.     

Making things click: Distributive leadership in an online division of an offline organization

The business model that looks likely to dominate the future in the wake of the convergence between Internet and traditional economies is the “bricks and clicks” organization. We conducted an in-depth study of the top executives of a prototypical Fortune 500 company's online division. We tracked and interviewed the president and other top management team (TMT) members over the first 22 months of the launch of the e-business venture. Our findings show that two contextual features, the extraordinary speed and the unsettling complexity/ambiguity of the online business environment, profoundly affected not only leadership requirements but also other key managerial processes, including communication, decision making, and vision. Within this disorienting context, two substantive themes emerged: (1) coping with organizational identity/image tensions with the offline parent organization and (2) becoming a holographic learning organization. We draw upon and extend some of the emerging literature on shared/relational and dispersed leadership to explain how dotcom leaders can adapt to the challenging contextual and substantive features of the e-business environment through the practice of distributive leadership, which we distinguish from prior related articulations of the concept.     

The complexity of influence maximization problem in the deterministic linear threshold model

The influence maximization is an important problem in the field of social network. Informally it is to select few people to be activated in a social network such that their aggregated influence can make as many as possible people active. Kempe et al. gave a $(1-{1 \over e})$ -approximation algorithm for this problem in the linear threshold model and the independent cascade model. In addition, Chen et al. proved that the exact computation of the influence given a seed set is #P-hard in the linear threshold model. Both of the two models are based on randomized propagation, however such information might be obtained by surveys and data mining techniques. This will make great difference on the complexity of the problem. In this note, we study the complexity of the influence maximization problem in deterministic linear threshold model. We show that in the deterministic linear threshold model, there is no n ^1??? -factor polynomial time approximation for the problem unless P=NP. We also show that the exact computation of the influence given a seed set can be solved in polynomial time.     

Constructions of given-depth and optimal multirate rearrangeably nonblocking distributors

Rearrangeable multirate multicast switching networks are customarily called rearrangeable multirate distributors. It has been known for a long time that rearrangeable multirate distributors with cross-point complexity O(nlog?² n) can be constructed, where n is the number of inputs (and outputs) of the switching network. The problem of constructing optimal distributors remains open thus far. This paper gives a general construction of rearrangeable multirate distributors with given depths. One byproduct is a rearrangeable multirate distributor with crosspoint complexity O(nlog?n). We also show that this cross-point complexity is optimal, settling the aforementioned open problem. One of the key ingredients of our new construction is the notion of multirate concentrators. The second ingredient is a multirate version of the Pippenger network. We show how to construct given-depth multirate concentrators and given-depth multirate Pippenger networks with small sizes. When the depth is chosen to optimize the size, we obtain the optimal O(nlog?n) cross-point complexity.