The compatibility of durable goods with contingent generic consumables

Many durable products provide value only when used together with contingent services or consumable components, e.g. light fixtures (bulbs), printers (ink), electronics (batteries). Consumers need only have access to the contingent consumable components to continue to derive service from a durable. In fact, many firms rely primarily upon the revenues generated from the contingent services or consumables as the primary source of profitability, e.g. giving away the razors to make money on the blades. Such firms often invest considerable effort into making sure that consumers of their durables are held captive to their own branded consumables by impeding their access to generically available consumables. They do so by designing their products in such a way that they are not readily compatible with the generic consumables. We consider the implications of competition from third-party manufacturers that can provide generic consumables and the manufacturer’s production decisions of a durable good under such contingencies. This allows us to draw managerial insights about how a firm should decide on his product compatibility and production quantity when the generic contingent consumables enter the market.     

Thinking About Stakeholders of Public Agencies: The Georgia Department of Transportation Stakeholder Audit

Practitioners and scholars have grown increasingly interested in recent decades in how public administrators should and can work with the constituencies they serve. To date, most of this conversation has focused on citizens and broader communities rather than on stakeholders more generally, but these other stakeholders, ranging from oversight policy-making bodies to private sector and nonprofit contractors to governmental partners, are no less important than the general public. The purpose of this paper is to propose a first step that many agencies might take in thinking about their range of stakeholders, a step that we term a “stakeholder audit.” A stakeholder audit entails (1) mapping the universe of an agency’s stakeholders, (2) assessing the agency’s perceived needs for additional information relative to various stakeholder groups, and (3) developing suggestions on how to obtain that information. After first discussing the more general idea of stakeholder analyses, we describe the stakeholder audit technique, and illustrate how it has been applied to a particular agency, the State of Georgia’s Department of Transportation. We conclude by considering how a stakeholder audit could represent a first step for an agency in improving relationships with its stakeholders.

A Business Model Innovation Typology

An effective business model is the core enabler of any company's performance. Business model innovation is not only becoming more and more important due to increasing and globalizing competition, but also an enormous challenge, both theoretically and practically. Although many managers are eager to consider more disruptive changes to their business model, they often do not know how to articulate their existing or desired business model and, even less so, understand the possibilities for innovating it. One of the steps toward developing more theoretical insight and practical guidelines is the identification of types and the development of a typology of business model innovations. Ten retrospective case studies of business model innovations undertaken by two industrial companies provide the empirical basis for this article. We analyzed the characteristics of these innovations as well as their success rates. The findings suggest that there are indeed various business model innovation types, each with its own characteristics and challenges.     

Fast and rigorous: Configurational determinants of strategic decision-making balance

A longstanding debate in the strategic decision-making literature has focused on whether top management teams (TMTs) can effectively balance speed and comprehensiveness when making important decisions. In our research, we build on early insights and pivot from considering whether TMTs can engage indecision-making that balances these tensions to focus instead on when certain types of TMTs are able to achieve such balance. We employ a novel configurational analytical approach and a theoretical framework built from role theory to examine the CEO-TMT interface in a new way. In so doing, we are able to identify specific CEO-TMT constellations that support decision-making that is both fast and rigorous. Using a unique primary dataset and an abductive, configurational approach grounded in fuzzy set qualitative comparative analysis (fsQCA), we identify six specific leader-team configurations that each facilitate decision processes characterized by rigorous intra-team debate, meaningful reconciliation of divergent ideas, and fast decision speed (which we describe as strategic decision-making balance). The range of CEO-TMT configurations that emerge from our analyses contribute new theory and findings for the strategic decision-making and interface literatures more broadly, as well as the specific research streams on executive gender, humility, and TMT structure.     

The wisdom and madness of crowds: How information networks and board cognition help or hinder firm performance across the business cycle

We know little of why a minority of firms pursue counter-cyclical strategies and consequently outperform competitors during recessions. Based on the theory of institutional isomorphism, we hypothesize that these firms avoid the mimetic and normative pressures that promote strategic convergence during uncertainty. We demonstrate these effects at the board-level in a sample of 1,615 U.S. firms. Mimetic processes are evident, with firms' connectedness in board interlock networks attenuating profitability and decreasing firm value during recessions—a reversal of the positive effects during expansions. Normative pressures arise from homogeneity in directors’ educational and professional experience, with greater consequences for long-term performance. Overall, recessionary performance is improved when firms occupy relatively isolated positions in informational networks and appoint directors from a range of backgrounds.     

The role of CEO emotional stability and team heterogeneity in shaping the top management team affective tone and firm performance relationship

In this paper, we aim to bridge the micro-macro divide by addressing continued calls from strategic leadership and affect researchers to examine the black box to consider how CEO characteristics relate to top management team (TMT) affective experiences, and, in turn firm outcomes. We further consider the role of one key contextual factor in this relationship: TMT heterogeneity. We predict that CEO personality, specifically, emotional stability, is positively associated with TMT affective tone. Moreover, we posit that the relationship between TMT affective tone and firm performance depends on TMT task-related heterogeneity, such that positive affective tone benefits firm performance in heterogeneous TMTs, whereas negative affective tone benefits firm performance in homogeneous TMTs. Using a novel methodology that measures key psychological aspects of the CEO and TMT, we examined 50 TMTs from publicly-traded companies to test our predictions. Our findings offer theoretical contributions to the strategic leadership, affect and diversity literatures as well as managerial applications for CEO selection and management and managing diversity in upper echelons.     

CEO proactiveness,innovation, and firm performance

Chief Executive Officers (CEOs) are essential in driving firm innovation. However, despite existing research on CEO personality characteristics and firm innovation and performance, we know relatively little about how personality characteristics reflecting anticipatory action and strong outcome-oriented components, such as proactiveness, shape firm innovation and performance. We explore the relationship between CEO proactiveness and three facets of organizational innovation, as well as its impact on firm performance. We suggest that CEO proactiveness is manifested in different network-building, problem-solving, and feedback-seeking behaviors with different implications for exploratory innovation, exploitative innovation, and organizational ambidexterity, and that its effect on firm performance is partially mediated by organizational ambidexterity. By examining the influence of this important CEO personality characteristic on key firm strategic choices and performance, we extend research on strategic leadership and firm innovation and performance.     

Strategic technology alliance termination: An empirical investigation

There is growing consensus that overall alliance termination rates are high. However, despite this track record of termination and despite unsurpassed growth rates of strategic technology alliances, little is known about the reasons for their termination. Typically strategic alliances have been characterized as inherently instable, i.e. often involving unplanned and premature termination of the alliance by partnering firms indicating alliance failure. The literature on strategic technology alliances, however, proposes that alliance termination does not always indicate failure, but can be intended and can be a sign of strength. We examine these different perceptions by using a sample of 48 strategic technology alliances in different high-technology industries. The findings in the paper confirm that the rates of termination are rather high for strategic technology alliances. Overall, we found that in particular negative prospects about future cooperation, negative perceptions about joint benefits and the lack of a win-win situation had an impact on the decision to terminate a strategic technology alliance. Also, the fact that some companies opt only for short-term (not for long-term and renewed) cooperation seems to introduce a negative factor into the longevity of strategic technology alliances.     

Rivalry and strategic groups: what makes a company a rival?

Strategic group literature has generated a significant amount of research over recent decades. However, the rivalry implications of strategic group have remained unclear. This paper analyses rivalry and strategic groups in the house building industry in a small town from a cognitive approach. We consider rivalry as a subjective and directional phenomenon. Estimating rivalry as the direct identification of competitors we try to explain whether similarity affects rivalry and what factors make a company a “rival”. Results show that perceived rivalry is strongly related to size, past performance, subjective similarity and strategic group structure.

The effect of alliance experience and intellectual capital on the value creation of international strategic alliances

This paper investigates the effects of intellectual capital (IC), alliance experience and their interaction on the value creation of international strategic alliances (ISAs). Based on a sample of ISAs formed by US firms, we find that firms with a higher level of IC receive greater announcement-period wealth gains. In addition, the empirical results suggest experience positively enhances the wealth effect of ISAs. Finally, we find a significant positive interaction effect between experience and IC on the wealth creation of ISAs. The results demonstrate the importance of considering the joint effects of IC and experience in assessing the value creation of ISAs.