Complex technological capabilities in emerging economy firms: The role of organizational relationships

Formal organizational relationships are important sources for capability building in emerging economy firms eager to move up the value chain. We examine how access to valuable knowledge available to firms via organizational relationships creates learning opportunities necessary for the development of complex technological capabilities. Using a sample of 852 observations of emerging economy firms from the Indian software industry between 1992 and 2000, we find that developing strong domestic intra-organizational relationships, through affiliation with a moderately diversified business group or operating in a related industry, promote more complex technological capabilities. In the case of foreign inter-organizational relationships, we find that greater foreign client contact enhances the complexity of firm technological capabilities. However, accessing knowledge from domestic inter-organizational relationships appears to hinder the development of firm complex technological capabilities. An interesting result from our research was that having greater access to knowledge from foreign intra-organizational relationships, embedded within foreign subsidiaries, did not lead to the development of complex firm technological capabilities. The results of our study highlight that for emerging economy firms wanting to improve their complex technological capabilities, there may be diminishing benefits to learning from and acquiring knowledge available within specific types of formal organizational relationships.     

Building the Complementary Board. The Work of the Plc Chairman

This article addresses the critical issue of board effectiveness, and in particular the conditions under which chairmen as well as other non-executives can make an effective and positive contribution to the strategic direction and control of companies. It is informed by qualitative interview-based research with chairmen, chief executives and non-executive directors in major UK companies which focused on the now typically separate role and work of the company chairman. The article argues that in the governance debate too much attention has been given to issues of board structure and composition to the neglect of issues related to the knowledge and motives of individual non-executives, and how their energies are combined in processes of board accountability. Drawing upon directors’ experiences, the article examines the bases that underpin and the positive potential of what are termed ‘complementary’ board relationships, through which a chairman can contribute directly to the performance of the chief executive, as well as create the conditions for other non-executives to contribute to the performance of the executive team. The article also explores the negative dynamics of what are termed ‘complimentary’ relationships between executives and non-executive directors and how these sometimes inadvertently come to weaken board accountability and create the conditions for an external crisis of confidence.     

Invoking Cleopatra to examine the shifting ground of leadership

This essay argues that the understanding of leadership is not independent of the power relations within a given cultural context. These shape how ‘leadership’ comes to be ‘known’ — defined and identified. Drawing from cultural studies, it examines the interacting dynamics of power, difference and context in shaping our knowledge of leadership. So whereas we currently identify leadership in Cleopatra, this is due to shifts in the contemporary ground of knowledge that constitutes ‘leadership’. Specifically, the essay focuses on manifestations of gendered power that elicited changes in her appraisals. The analysis examines historical writing (Plutarch), literature (Shakespeare), art (Egyptian Revival) and film (Hollywood) to illustrate gendered paradoxes — criteria that had traditionally defined ‘leaders’ from ‘followers’, but which have become ambiguous. These include queen–lover (embodiment), public–domestic (sphere of work and influence), sage–child (intellect), white–black (racialized identity) and Rome–Egypt (international leadership). In closing, the essay reflects on the implications for leadership studies.     

Development of absorptive capacity over time and across boundaries: The case of R&D consortia

Absorptive capacity (AC) has been identified as the ability of firms to acquire, assimilate, and apply external knowledge, and thus as a pre-condition for learning from knowledge environment. However, extant literature has focused on AC as (1) a static and (2) a firm-centred concept. In particular, there is little conceptual framing and empirical evidence of how AC develops over time and across boundaries. Taking R&D consortia as the unit of analysis and based on insights from three in-depth case studies of collaborative R&D, our contribution is a framework for AC development over time and across inter-organizational, intra-organizational, and practice boundaries at different stages of collaboration in R&D consortia. Using this framework, we identify a set of mechanisms which enable the development of AC and we discuss the preconditions for these mechanisms. For R&D managers, our research implies that in order to enhance effectiveness of knowledge transfer and learning in R&D consortia they need to develop a strategy that (1) supports learning and AC development throughout the whole cycle of the collaboration, not only by focusing on intra-firm capabilities, but in particular by providing flexible interfaces for overcoming a variety of interaction and learning boundaries between heterogeneous R&D partners, and (2) enables the integration of created and acquired knowledge within the organization once the collaboration is over.     

知识链视角下开放式创新主体的联盟策略研究

创新联盟是开放式创新的实践基础,选择适宜的合作伙伴缔结创新联盟是组织面对的重要决策问题。本文以组织间知识转移为线索,考虑一个由知识源、知识转化中介与信息服务机构组成的知识链,以知识产权交易为合作机制设计序贯博弈模型,分析了不同的联盟策略对组织的知识创造与创新收益的影响。研究表明:缔结创新联盟能够产生双赢效应,即同时提高联盟内部成员与非联盟成员的知识创造及创新收益;知识链在集中决策时的整体创新收益与知识创造均高于分散决策;由知识源与信息服务机构组建创新联盟是分散决策下知识链的最优联盟策略。研究结论有助于揭示开放式创新的知识转移对组织联盟策略的作用机理。     

Netchising: The Next Global Wave?

Companies have long taken ‘going global’ to mean having a physical presence at locations everywhere. It has meant executives in transit and bricks-and-mortar facilities on the ground. Based on extensive field interviews with executives at 35 different MNCs, our research shows that an increasing number of companies are succeeding overseas without massive foreign investment by adopting the global business model we call netchising. This new business model relies on the Internet for procurement, sales, and maintaining customer relationships, and non-equity partnership arrangements to provide direct customer interfaces and local adaptation and delivery of products and services. Netchising offers potentially huge benefits over traditional exporting or foreign direct investment approaches to globalization.     

Establishing best practice university research funding strategies using mixed-mode modelling

This paper develops a model representing the university research funding problem under a performance based research funding (PBRF) scheme during the ‘lead-up period’ using a mixed-mode modelling approach (involving soft and hard models) and suggests a solution heuristic. The resultant model facilitates the development of ‘best practice’ strategies to assist in raising the level of research quality and participation, thus placing the university (or academic unit) in the best possible position for facing the final hurdle, the formal research assessment process. This assessment process constitutes the ‘positioning problem’, for which models already exist to assist individual universities to adopt the most favourable strategy. However, the ultimate position of the university depends on the results from the lead-up period. The suggested model facilitates ‘research enhancement’ strategy formulation, evaluation and revision and actively involves the researchers themselves. Benchmarking, an Expert Panel (operating on panel consensus) and subjective strategy impact evaluation are the key tools used. The suggested methodology relies on the knowledge, wisdom and experience of the researchers themselves and will hopefully facilitate the achievement of an academic unit's research goals over the lead-up period preparing them for the ‘positioning problem’. The paper also offers some suggestions as to how to establish and obtain maximum usefulness from the expert panel. Lastly, the suggested solution to the suggested model is user friendly, requiring no more than the use of a spreadsheet.     

Interdependence and accounting information exchanges in inter-firm relationships

These days, the locus of business operations is difficult to define and is subject to continuous modifications. On the one hand, firms form clusters of quasi-integrated partners; on the other, they outsource internal activities to external entities. Such inter-firm relationships have been studied in both the strategic and organizational fields, because they possess specific characteristics that challenge the extant theoretical frameworks and conclusions. Management accounting scholars have recently recognized the importance of these agreements and have started to study inter-organizational accounting information sharing, which supports inter-firm collaboration. Yet, the conditions that foster the exchange of this information between external partners, i.e., open book accounting, are still underexplored. Through some exploratory evidence, and a case study in the fashion industry, we focus on analysing one under-investigated factor, i.e., interdependence, suggesting that, ceteris paribus, this variable may explain several functions played by the accounting information in inter-organizational settings.     

Knowledge recontextualization by returnee entrepreneurs: The dynamic learning perspective

Effective knowledge recontextualization is key to successful knowledge transfer in cross-cultural context. This paper explores how returnee entrepreneurs in Vietnam learn to recontextualize their overseas knowledge while establishing new ventures back in their home country. Our dynamic learning process model suggests that (1) in the pre-founding phase, an interactive vicarious learning and intuitive learning mechanism enables returnees to make sense of overseas knowledge; (2) during the founding phase, blended learning mechanism – the balancing act between market response versus market imposing - helps returnees manage the paradoxical cross cultural tension, importantly (3) in the growth phase, the cycling between unlearning and relearning helps them discard, select and recreate new knowledge in the pursuit of sustainable entrepreneurial growth. The study advances the literature on knowledge recontextualization by clarifying key underpinning learning mechanisms essential for ensuring “effectiveness” outcomes. It also contributes to the work on returnee entrepreneurship and entrepreneurial learning by demonstrating how international entrepreneurs learn overtime to thrive in a conflicting cultural context.     

The individualized corporation: An interview with Sumantra Ghoshal

Sumantra Ghoshal discusses the main features of his and Christopher Bartlett's new book, The Individualized Corporation, leading on to some of his current thinking on management issues in multinational corporations.Much of the book is devoted to describing the new corporate model, and to suggesting how such a company can be built and managed. Ghoshal points out that the major challenge to an individualized corporation is to manage people. A successful firm has a ‘smell of the place’ which motivates and invigorates its people. It also is capable of joint learning and a transformation process that progressively involves rationalization, revitalization and continuous self-renewal: the last of these is called in the book ‘cooking sweet and sour’.Reflecting Ghoshal's evolving thinking, the book moves well beyond managerial specifics to the realm of corporate philosophy. Management doctrine is changing from the old model of strategy, structure and systems to one built on purpose, process and people - a doctrine which embodies a new moral contact with employees.Looking at the future, Ghoshal insists we need an institutional theory of the firm, which recognizes their role as social institutions and also the role of management in distinguishing the visible hand of companies from the invisible hand of markets. This, and an inquiry into the management of the process of change - at a managerial, micro-level of analysis - is his new personal intellectual challenge.     

Managing Internal R&D Networks in Global Firms: What Sort of Knowledge is Involved?

How should a global firm manage its network of R&D centres in an effective manner? Some have developed an Integrated Network model in which the R&D centres around the world are tightly integrated into a coherent whole. Others have adopted a Loosely-Coupled Network model in which individual “centres of excellence” are given considerable autonomy. In this paper we argue that the way individual R&D units are structured, and the way the entire network is managed, should be based not on administrative heritage, environmental turbulence or management style, but on the basis of the underlying characteristics of the firm’s knowledge assets. In particular we focus on the observability and mobility of the firm’s knowledge assets, the impact these factors have on the way individual R&D centres are structured, and how they relate to one another in the international network. The argument is supported using examples and data from Swedish firms including ABB, Alfa Laval and Ericsson.     

The role of deliberate and experiential learning in developing capabilities: Insights from technology licensing

We discuss the interdependencies between deliberate and experiential learning in developing a dynamic technology licensing capability, which was termed ‘desorptive capacity’ in earlier conceptual work. We use new three-year lagged data from two surveys of 79 firms to examine the role of dedicated licensing employees and prior licensing experience in developing firms’ sensing, seizing, and transforming capacities in technology out-licensing. The findings emphasize capabilities’ multidimensionality and critical trade-offs due to interdependencies between deliberate and experiential learning in developing capabilities. Besides interdependencies with experiential learning, deliberate learning strengthens sensing and seizing capacity, but it negatively affects transforming capacity based on inertia.     

Strategizing in an Unpredictable Climate: Exploring Corporate Strategies to Cope with Regulatory Uncertainty

Government regulation of business activities is increasing rapidly, exposing firms to considerable uncertainty and requiring managers to decide on appropriate strategic postures. To help managers make informed decisions, this study compiles a comprehensive overview of strategies to cope with regulatory uncertainty and illustrates their interdependencies and how they can be combined into overall coping postures, as well as offering management guidelines on deciding which to adopt. A literature review identifies a considerable variety of coping strategies, and we apply unique data from a worldwide cross-industry survey to categorize each into one of three types - offensive, defensive or passive. We find that firms aiming to cope with the uncertainty associated with post-Kyoto regulation typically adopt one of four strategic postures, each characterized by a specific combination of these types: ‘daredevils’ rely solely on offensive strategies; ‘coordinators’ combine them with defensive ones, ‘hedgers’ pursue strategies from all three categories while ‘gamblers’ choose not to specifically cope with uncertainty at all. We exemplify the strategies characteristic of each posture, and illustrate their interdependencies by means of case studies in the European airline industry. We identify two main factors managers should consider particularly when deciding on their firm’s strategic posture: the level of regulatory uncertainty they perceive and the firm’s exposure to future regulations, and find that the higher the level of uncertainty, the broader the range of strategies applied, and the more future regulation seems likely to affect a firm, the more actively it seeks to cope with the associated uncertainty.     

Globalisation, International Configurations and Strategic Implications: The Case of Retailing

In contrast to the old debate between national and more globally orientated strategies, recent typologies, as outlined by Calori and others in a recent issue of this journal, have begun to uncover subtler international strategies applicable to less patently global industries. This article investigates whether such typologies can be adapted to a service sector such as retailing and analyses performance differences across the whole set of these new categorisations, segregating some of the main sectors. Focusing on clothing where scale economies were lower, we present a case study demonstrating how this approach can still yield strategic insights and recommendations at an early stage in internationalisation, even for players located in more peripheral locations such as Norway. We confirm ‘continental leadership’ strategies (under consideration) can be associated with slightly better profitability for retailers more generally; but we warn that this is riskier for clothing retailers, for whom market share emerges as a less critical driver. The most profitable retail strategy configuration is the bold ‘global shaper’ strategy. However, taking into account the case company’s resource position within the clothing sector, our approach recommends consideration of the ‘quasi-global’ strategic configuration, associated with an improvement of just under 2% return on investment. This perspective also aids ‘strategic benchmarking’ (illustrated against high performers H&M and Zara), setting an agenda for operational improvements.     

复杂产品系统创新过程中跨组织知识管理的障碍因素

复杂产品系统是由一个创新网络来进行开发和制造的,跨组织的知识管理可以促进该创新过程中知识和信息的流动、扩散和应用。在前人相关研究基础上,通过问卷调查,对复杂产品系统创新过程中知识管理的障碍因素进行了探讨,并指出不同行业的复杂产品系统,在创新过程中知识管理面临的阻碍因素可能有所不同。     

The Management of Innovation in Project-Based Firms

How relevant are traditional innovation ideas for project-based firms? This paper asks if project-based firms provide a context supportive of innovation or indeed if they view it as useful. Based on research in firms from a variety of sectors, including telecommunications, information systems, computers, financial services and engineering, procurement and construction, the paper reveals that the very project control systems around which the firms operate serve to stifle innovation. Project-based firms—regardless of sector—prioritise efficient management of projects, tolerating the use of slack resources only when absolutely necessary. Finally innovation is not seen as universally useful, but primarily as costly and dangerous. It concludes that the space at which ‘innovation’ and ‘projects’ comes together is still dominated by ideas on how to correctly manage projects, rather than how to effectively manage innovation. Innovation of ideas on managing innovation projects may be merited.     

The War of the Woods: Facilitators and Impediments of Organizational Learning Processes

This study examines unfolding organizational learning processes at MacMillan Bloedel, a company which, after years of resisting stakeholder pressures for change, disengaged from the field’s dominant paradigm and developed a new solution. We elaborate the Crossan, Lane and White multi–level framework of organizational learning processes, finding support for the four feedforward learning processes they identified (intuiting, interpreting, integrating and institutionalizing), and adding two action–based learning processes: ‘attending’ and ‘experimenting’. We introduce the concept of a ‘legitimacy trap’ to describe an organization’s over–reliance on institutionalized knowledge when external challenges arise. The trapped organization rejects external challenges of its legitimacy when it perceives the sources of those challenges to be illegitimate. Feedforward learning is blocked as the organization escalates its commitment to its institutionalized interpretations and actions. Taking a grounded theory approach, we discuss how individuals attend to new stimuli and engage in intuiting about them, how groups interpret, experiment with and integrate new solutions, and how the firm validates and institutionalizes the successful solution. Facilitators and impediments of each of these learning processes are identified. Our additions to the model recognize the importance of context in organizational learning processes, and suggest how power may impact organizational learning.     

Tacit Knowledge and Environmental Management

This article demonstrates tacit knowledge’s relevance in environmental management and explores how organisations can manage this knowledge. Through case studies it reveals how taking the tacit knowledge of employees into account can be particularly useful in three key areas of environmental management: the identification of pollution sources, the management of emergency situations and the development of preventive solutions. In order to take tacit environmental knowledge into account, firms must challenge the predominance of formal knowledge in the management of environmental problems and promote a climate of learning that encourages the recognition and sharing of employees’ experiences. The paper also presents a framework for the analysis of the creation, transfer and retention of tacit knowledge that is not limited to environmental knowledge management.     

Transforming the Vodafone/Ericsson Relationship

In the context of global business, there is limited evidence or guidance as to how firms transform their existing physical in-country relationships into an IT-enabled global relationship. When one of the world’s largest mobile operators, Vodafone of the UK, joined with the world’s largest supplier of cellular network infrastructure, Ericsson of Sweden, the aim was to transform their relationship into a global and virtual one, enacted through an inter-organisational information system (IIS). This article explains how this transformation proceeded.The transformation was treated from the start as an improvisation. There was no fixed destination or project plan, only a shared acceptance that the benefits accruing to the two companies would be asymmetric. The resulting IIS, which both companies now call the eRelationship, allows for information sharing, communication, virtual teams, competence development, network support services, and product forecasting, ordering and tracking. We consider and analyse some key features of this case, namely the role of improvisation, the impact of horizontal organisational relationships, and the evaluation of the transformation and the IIS.     

Managing Culture at British Airways: Hype, Hope and Reality

Nearly twenty years after the publication of the (in)famous In Search of Excellence, the notion of ‘cultural change’ within organisations continues to excite attention. This is readily understandable, since cultural interventions offer practitioners the hope of a universal panacea to organisational ills and academics an explanatory framework that enjoys the virtues of being both partially true and gloriously simple. Such a combination is apparent in the way that many attempts to shape organisational culture are presented to the public: as simple stories with happy endings.¹ This article attempts to rescue a fairy-tale. The story of British Airways is one of the most widely used inspirational accounts of changing culture. Throughout the 1980s and 1990s it was used to demonstrate the necessary compatibility of pleasure and profits² in celebratory accounts where culture change is presented as the only explanation for the transformation that occurred. This corrective makes no attempt to deny the very substantial changes that took place in BA. Rather, it sets these in context noting the organisation’s environment at the time of the transformation, the structural changes that took place and observes the impact that such changes had over the long term. ^{[3], [4] and [5]}Today, nearly twenty years after the publication of the (in)famous In Search of Excellence, the notion of ‘cultural change’ within organisations continues to excite attention. This continuing attraction is readily understood, since cultural interventions offer practitioners the hope of a universal panacea to organisational ills and academics an explanatory framework that enjoys the virtues of being both partially true and gloriously simple. Such a combination is apparent in the way that many attempts to shape organisational culture are presented to the public: as simple stories with happy endings.To a certain extent, of course, any form of narration encourages a story, an ending, and, as a result, a simplification—and stories may be used to shed light on attitudes and understandings not otherwise easily available to the researcher. But there is a very significant difference between listening to the accounts that individuals tell in order to make sense of their lives and allowing the study of the workplace to become ‘fictionalised’. The former involves engaging with the ‘subjects’ of the research, attempting to understand their world view and allowing them a voice in the process they are participating in. The latter can mean a selective reading of the data with examples chosen because they illustrate pre-set conclusions.In management particularly the capacity of writers to turn case studies into celebratory fictions is worrying. As Marchington argues, too many texts focus on “fairy tales and magic wands”.⁶ Such an emphasis encourages the belief that what is important in the workplace is not context, structure, power, economics or industrial relations but whatever new initiative management have chosen to introduce (the “magic wands”). The form that this magic takes varies from intervention to intervention but the impact claimed for each is curiously similar, with unproductive workplaces turned around and reluctant employees transformed into enthusiasts. Any changes that take place are seen to be a direct result of the magic and most are exaggerated. As a result, research into management becomes research into a series of fads and fashions with Total Quality Management or Business Process Re-engineering or empowerment or culture vying for attention. Every intervention is presented as new, so academic understanding of the workplace starts afresh each time a guru develops a new magic wand. Lessons cannot be carried forward since BPR is not employee involvement and company culture is not TQM. Elements of the workplace that might have provided a crucial element of continuity are ignored or dismissed as unimportant since only change is magical. As a result, by relying on these accounts, we understand less and less about why organisations function in the way that they do and practitioners are encouraged to believe that each initiative starts with a blank sheet, entirely unconstrained by what has gone before.Accordingly, in this article we attempt to rescue a fairy-tale. The story of British Airways is one of the most widely used inspirational accounts of changing culture. Throughout the 80s and 90s it was used to demonstrate the necessary compatibility of pleasure and profits. In such celebratory accounts, culture change is presented as the only explanation for the transformation that occurred. This corrective makes no attempt to deny the very substantial changes that took place in BA. Rather, it sets these in context noting the organisation’s environment at the time of the transformation, the structural changes that took place and observing the impact that such changes had over the long term.⁷