Age,Experience and Corporate Synergy: When Are They Sources of Business Unit Advantage?

When do older businesses have a competitive advantage over new startups? When do the corporate subsidiaries have advantages over independent firms? This paper tackles these questions by comparing the performance of businesses classified according to age and affiliation in the game of competitive survival. The research is based on an analysis of 377,000 United States business units between 1978 and 1984. Our results suggest that age confers substantial advantages in competitive environments where intangible assets, accumulated through experience, are critical to success. These include industries with high-labour intensity, high skill levels and heavy reliance on push marketing. For other industries, e.g., where competitive advantage can be built through superior service or media hype, age advantage is generally much more limited. Affiliation with a corporate group, meanwhile, allows young businesses to overcome some of their handicap by ‘borrowing’ experience through their parent. Once a business is well established, however, affiliation is immaterial.     

Business model in IPO prospectuses: insights from Italian Innovation Companies

How do companies to be listed deal with the voluntary disclosure of their business model? Is it true that firms with greater intellectual capital resources and technological innovation endowments are less prone to full disclosure? This paper aims to examine the choices of voluntary disclosure of the business model made by three Italian manufacturing companies in initial public offering prospectuses. The objective is to explore whether any differences exist and may be related to the type of innovation underlying the firms’ business model. A series of interviews with the top management allows to deeply understand the business model of each company. A content analysis allows to measure the level of disclosure and identify the strategic concepts of the business model and their relevance. The study provides evidence that companies with a business model based on technology-push and design-driven innovation have a lower propensity to the full disclosure of their intangible resources, particularly of those based on knowledge as some could be also invisible. The paper contributes to the ongoing debate on the role of business and financial reporting.     

International Experience in International Business Research: A Conceptualization and Exploration of Key Themes

International experience, the experience that firms accrue from operating internationally, is a key concept in explaining firm internationalization. This paper reviews the conceptualization of international experience in the international business literature. It highlights how prior research has identified three dimensions of the international experience construct (length, scope and diversity), thereby demonstrating that international experience should be treated as a multidimensional construct. In addition, intensity is presented as a fourth and novel dimension of international experience. The importance of this multidimensional conceptualization is highlighted in an explanation of why the international diversification and international experience constructs are not synonymous. In light of the importance of international experience in explaining firm internationalization, the authors explore how the source of the firm's international experience will determine the limits to its application in foreign markets. In particular, the authors distinguish between location‐bound international experience and non‐location‐bound international experience as sources of firm‐specific advantages (FSAs). The FSAs that the firm develops from its experience with equity and non‐equity entry modes are presented as examples of specific FSAs developed within the firm's bundle of FSAs concerning internationalization. The paper concludes with some implications of the conceptualization of international experience for several issues of international business research as well as providing managerial implications.     

Income Shifting in Italian Business Groups and some Governance Implications

This paper explores the relationship among group control, financial reporting strategies and governance implications in the pursuit of domestic tax planning. A very large number of papers deals with international tax planning in multidivisional enterprises, but very few are devoted to exploring significant incentives for national business groups to engage in tax planning strategies. In this paper we propose a one-period model relating to the tax incentives of income shifting in Italian business groups. We show that, given the total amount of expected earnings before taxes and the dividends received by the firms belonging to a business group, an optimal solution to the problem of minimizing the group tax burden exists. The optimal solution involves a gain in value for the group as a whole; nevertheless, since in business groups ownership is often differentiated among shareholders (often because of the separation between ownership and control), income shifting may determine wealth transfers, often in favor of the controlling shareholder. We therefore analyze the management and governance implications of such income shifting, for both shareholders and stakeholders (i.e. managers). This revised version was published online in July 2006 with corrections to the Cover Date.     

Sustainability by Example: MBAs Experience the Value of an Environmental Business Plan

The World Resources Institute's Environmental Enterprise Corps (EEC) offers MBA students consulting opportunities with environmental entrepreneurs in Latin America. The program works toward environmental sustainability from several directions. Not only do the student teams help these entrepreneurs move closer to attracting investment, but students gain experience addressing real business issues and see the successes of businesses based on improving the environment. Investors gain confidence in these enterprises and potential entrepreneurs gain encouragement to include environmental considerations into core business strategy. The students finish the projects with personal experience in sound businesses that focus on both environmental and financial returns.The University of Michigan Business School participated in an EEC ecotourism project in Peru. The students researched key customer markets and ways to reach them. As the entrepreneur implements recommendations, the students have the satisfaction of knowing how their research benefited not only a company, but also an ecosystem and local community.     

When reputation management is people management: Implications for employee voice

This article explores the relationship between internal reputation management, HRM, and employee voice. Drawing on qualitative data from 25 medium-size and large Norwegian organizations, we find that organizations pursue a desired reputation through a single, official corporate voice by discouraging prohibitive employee voice through technocratic control and coercive HRM practices. The emphasis on technocratic control and coercive HRM occurs despite the widely held belief in reputation and branding literatures that employees should be committed corporate ambassadors who enthusiastically promote their organization's desired reputation and deeply believe in the images they convey to internal and external stakeholders. The findings contribute to studies on reputation management by linking internal reputation management, HRM, and employee voice, pointing out “people management” aspects of reputation management and highlighting important organizational and employee-based consequences.     

Earning While Learning: When and How Student Employment is Beneficial

Although studies of student employment (‘earning while learning’) mostly find positive wage effects, they do not adequately consider the relation of the employment to the field of study. We investigate how different types of student employment during tertiary education affect short‐ and long‐term labour market returns. Beyond examining differences between non‐working and part‐time working students, we distinguish between student employment related and unrelated to the field of study. Our results show significant positive labour market returns of ‘earning while learning’ only for student employment related to the field of study. These returns consist of a lower unemployment risk, shorter job‐search duration, higher wage effects, and greater job responsibility.     

Business Groups as Hierarchical Clique Structures: A Conceptual and Methodological Discussion as it applies to the Mexican Experience

The hierarchically nested set of business groups that result from 110 Mexican firms sharing corporate directors (i.e. interlocking directors) is analysed using social network tools. It is argued that these groupings are one of the many dimensions that should be employed to understand the complex nature of ‘business groups’ broadly understood. The hypothesis that business groups are responses ‘to market failures that arise in the particular institutional contexts of emerging economies’ (Khanna and Rivkin, Strategic Management Journal, 22 (2001), p. 46) is tested using the groups constructed from data on interlocking directorates. The results show that as firms belong to more of the same sets of groups, their financial performance tends to be more similar, thus supporting the idea that ‘groups can make up for under‐developed institutions, thereby reducing transaction costs’ (Khanna and Yafeh, Journal of Economic Literature, 45 (2007), pp. 340–341).     

When small is not enough: How to save entrepreneurs from themselves

This article goes beyond the traditional celebration of Entrepreneurship to focus on why Entrepreneurship is not enough. First, entrepreneurial companies that have overcome the start-up difficulties, must become “professionalized” in order to consolidate their gains and face a period of stable growth. This, as is well-known, is not easy. But there is another, even harder problem: in becoming “professional”, most companies lose the entrepreneurial spirit that made them successful in the first place. In an ever-changing world, with more and more international competition in the face of Europe's unification in 1992, a company that loses its entrepreneurial sparkle is just waiting for dismissal. This article analyzes the main causes of that “hardening of the arteries” and their proven remedies.     

A New Kind of Case Study: Using Business Bestsellers in the Business Policy Course

The undergraduate Business Policy (Strategic Management) course is often taught by using the case method of instruction. Cases are generally regarded as especially good vehicles for giving students an understanding of the general management view of an organization. The authors believe that it is useful for students to learn much about the strategy of at least one corporation in-depth. They use a business bestseller about a particular company or industry each semester for this purpose. All undergraduate students prepare the same written assignments on this company or industry using the business bestseller as a starting point. Experience in using the business bestseller as the basis of a written assignment in the business policy course has been very positive. Students both enjoy and profit from an assignment that focuses in-depth on a major firm or industry that they can comprehend and the evolution of which they can follow. Alumni often indicate that they continue to track the company or industry after graduation. The authors believe that such written assignments help prepare students of business strategy for the real world. This revised version was published online in July 2006 with corrections to the Cover Date.     

When Gray is Good: Gray Markets and Market‐Creating Investments

Gray markets arise when an intermediary buys a product in a lower‐priced, often emerging market and resells it to compete with the product's original manufacturer in a higher priced, more developed market. Evidence suggests that gray markets make the original manufacturer worse off globally by eroding profit margins in developed markets. Thus, it is interesting that many firms do not implement control systems to curb gray market activity. Our analysis suggests that one possible explanation lies at the intersection of two economic phenomena: firms investing to build emerging market demand, and investments conferring positive externalities (spillovers) on a rival's demand. We find that gray markets amplify the incentives to invest in emerging markets, because investments increase both emerging market consumption and the gray market's cost base. Moreover, when market‐creating investments confer positive spillovers, each firm builds its own market more efficiently. Thus, firms can be better off with gray markets when investments confer spillovers, provided the spillover effect is sufficiently large. These results provide a perspective on why firms might not implement control systems to prevent gray market distribution in sectors where investment spillovers are common (e.g., the technology sector) and, more broadly, why gray markets persist in the economy.     

Solving the crisis: When agency is the preferred leadership for implementing change

Glass-cliff research shows that female leaders are preferentially selected in a crisis to signal change and not for their leadership qualifications. In parallel, the management literature urges for agentic “masculine” leadership to turn around organizations in crisis. We hypothesized that, regardless of their gender, agentic leaders should be preferred to communal leaders if leadership qualifications and actual change potential motivate leader selection. Three experimental studies demonstrated that agentic (vs. communal) candidates were perceived to match poorly-performing (vs. strongly-performing) companies. This effect was accounted for by perceptions of agentic candidates' higher suitability, higher task-orientation (versus person-orientation), and higher change potential. We discuss that women face ambiguity as to why they become leaders in crisis contexts: because they are perceived as signaling change, stereotypically linked to their gender, or for their perceived agentic qualities as leaders. In contrast, men become crisis leaders due to their perceived agentic change potential.     

The Dynamics of Research Alliances: Examining the Effect of Alliance Experience and Partner Characteristics on the Speed of Alliance Entry in the Biotech Industry

Few studies have moved beyond the dyadic level of an ongoing alliance and examined factors contributing to the success of entering a series of alliances. In this paper we expect biotechnology firms over time to learn from their alliance experience and to develop general alliance capabilities. Specifically, we expect the speed with which they enter into new research alliances, e.g. their alliance formation rate, to be affected by capabilities built up in prior alliances as well as by characteristics of their partners. We use longitudinal event history data for the complete population of US biotechnology firms for 1973–1999 to test four hypotheses about factors affecting the rate of new alliance formation. Our analysis suggests that the speed of entering research alliances is affected by prior experience of the focal firm, but not by partner characteristics. Our findings provide evidence that biotech firms learn how to learn more effectively from multiple research alliances; however, this effect is generalized and not tied to specific characteristics of the alliance partner.     

基于价值流分析的提高通信网络业务可用性的方法

本文提出了通信网络业务可用性的概念.运用价值流分析法,对通信网络的运行维护流程进行了分解,分析了跨企业流程中存在的浪费现象,提出了改善措施并得到验证.     

When the Outcome is Employability: Leading Indicators for the Governance of Labour Market Services

The aim of this paper is to explore the relationship between output, leading outcome, and lagging outcome indicators in the governance of labour market services. To support the definition of human capital development policies, the adoption of an intermediate outcome indicator of employability is proposed. By crossing data from a survey on workers’ perception of their own employability with administrative data on individual employment conditions, this work tests the effectiveness of such indicator. Results suggest a positive relationship between subjective career success and outcome, confirming the importance of employability as a predictor of long-term labour market performance.     

Routines in International Business: A semi-systematic review of the concept

Routines are a crucial element in different streams of International Business (IB) research. This semi-systematic review examines articles published in top-ranked IB journals to analyze how the concept routines is used, in order to provide orientations for future research in the field. A systematic search process in three databases, followed by inductive text analysis and a cluster analysis, identifies three distinct research streams on routines in International Business: Global strategy, international organizational learning, and internationalization processes. A comprehensive analysis of the use of the concept in IB is presented by documenting qualities, types, dimensions, antecedents, and consequences of routines in the extant research. We integrate the fragmented and often implicit aspects ascribed to routines in IB research, so that future research can draw upon a defragmented, synthesized, and clarified concept. Opportunities for future contributions are highlighted in five broad areas: hierarchy and order in the MNE; agents, context, and time; distributing routines; distributed routines; and the non-routine.