A Graphical Tool for Interpreting Regression Coefficients of Trinomial Logit Models

Multinomial logit (also termed multi-logit) models permit the analysis of the statistical relation between a categorical response variable and a set of explicative variables (called covariates or regressors). Although multinomial logit is widely used in both the social and economic sciences, the interpretation of regression coefficients may be tricky, as the effect of covariates on the probability distribution of the response variable is nonconstant and difficult to quantify. The ternary plots illustrated in this article aim at facilitating the interpretation of regression coefficients and permit the effect of covariates (either singularly or jointly considered) on the probability distribution of the dependent variable to be quantified. Ternary plots can be drawn both for ordered and for unordered categorical dependent variables, when the number of possible outcomes equals three (trinomial response variable); these plots allow not only to represent the covariate effects over the whole parameter space of the dependent variable but also to compare the covariate effects of any given individual profile. The method is illustrated and discussed through analysis of a dataset concerning the transition of master’s graduates of the University of Trento (Italy) from university to employment.     

The Evolution of Knowledge and the Dynamics of an Industry Network

The paper moves a step forward in the direction of establishing a connection between the structure and evolution of knowledge bases and the structure and evolution of organizational forms in innovative activities in a science-intensive industry. The paper has an explicit focus on the dynamics of the network of collaborative agreements in R&D in the pharma/biotech industry after the “molecular biology revolution”. Using a comprehensive dataset, built by the authors integrating several sources in the industry, the dynamics of the network over time is extensively analyzed. With regards to network structure, it is found that, while the size of the network increases over time due to net flows of entry, its topological properties remain relatively unchanged. The evolution of the network has occurred without relevant deformations in the core-periphery profile. With regards to age-dependent propensity to collaborate, the paper finds that the extent of inter-generational collaboration is much more significant than intra-generational collaboration. In addition, the propensity of firms of a given generation to enter into collaboration with firms of a different generation increases with the distance between the two, while the total number of intra-generational collaborations decreases over time and, moreover, tends to decrease for most recent generations. In the paper a unitary and coherent explanation of the evidence is developed, coming to reveal the existence of a striking isomorphism between structural properties of the dynamics of knowledge and of the evolution of network structure. This revised version was published online in July 2006 with corrections to the Cover Date.     

Managerial Involvement and Perceptions of Strategy Process

Prior academic research attests to both positive and negative effects of involvement on the process of developing strategy. On the one hand, it has been argued that involvement strengthens shared vision, increases rationality and improves adaptiveness in strategy-making. On the other hand, involvement is said to lead to intense political behaviour, increased cultural inertia and more constraints in the strategy process. The purpose of this study is to investigate the relative importance of these effects. In a survey of over 6,000 managers, we find that their reported levels of involvement are positively associated with perceptions of strategy development processes that are more rational, more focused by a shared vision, and more adaptive. In addition, involvement is negatively associated with statements describing the process as top-down, influenced by politics and slowed by internal culture. Moreover, those who are more involved tend to see business and non-business constraints as less important in determining strategy. We argue that these associations between involvement and desirable features of strategy process are important because perceptions are the basis of managerial behaviour. Thus, managers who are more involved in strategy not only see the process in a more favourable light but also act in ways that make the process more effective. The main implication of these findings is that for most organisations increasing involvement improves the strategy process.     

The Blinders of Dominant Logic

This article argues that the dominant logic embedded in an organisation may keep it on the road ahead, but it also acts as a blinder to peripheral vision. It says that managers need to look at beyond the borders of their industries and geographies to find new opportunities and rethink the logic of the business. It refers to corporate examples where shifts in organisations’ dominant logic allowed traditional assumptions about value creation to be reassessed and resulted in successful forays into the periphery.     

Mining the Periphery for New Products

Revolutionary products often come from upstart players or companies outside the industry, while mainstream operators follow a risk-averse path of concentrating on their current business. This article urges companies to channel resources into looking at the periphery for ideas that could be profit-drivers of the future. It suggests three strategies for finding new products: frame the landscape; develop game-changing hypotheses; and use targeted hunting. It concludes by saying that these approaches will encourage managers to combine broad searching and thinking with focused evaluation and execution.