| Corporate Strategy and Litigation |
| | Figueiredo, John M. de | MIT Sloan School of Management | jdefig@mit.edu | 617-258-7253 |
| | This paper integrates the firm's nonmarket strategy with its competitive strategy. It examines how firms in telecommunications industry increase profitability by litigating Federal Communications Commission regulations. It shows that companies exploit informational avantage to select disputes to challenge in court. Moreover, it demonstrates tha firms that win in court, frequently take advantage of the political makeup of the bench. |
| | Keywords: Litigation; Regulation |
| Task Environment Complexity: An Empirical Reassessment |
| | Cannon, Alan R. | Clemson U. | acannon@clemson.edu | (864)-656-7418 |
| | St. John, Caron H. | Clemson U. | scaron@clemson.edu | (864)-656-3760 |
| | Researchers attempting to measure environmental complexity - one of three key dimensions of organizational task environments proposed by Dess and Beard (1984) - remain challenged by the lack of a conceptually compelling and empirically sound scheme for operationalizing this important construct. Our synthesis of complexity's supporting literatures leads us to conclude that complexity is a multidimensional construct that has been operationalized overly narrowly in recent years. A factor analysis on a variety of complexity measures supports this conclusion. The multidimensional aspect of this construct raises the likelihood that studies based on single measures have failed to capture conceptually relevant and statistically meaningful aspects of complexity. |
| | Keywords: Environmental Complexity; Measurement Validity; Factor Analysis |
| Idea Generation in Strategic Renewal |
| | Wooldridge, Bill | U. of Massachusetts, Amherst | wooldridge@mgmt.umass.edu | 413 545 5697 |
| | Floyd, Steven W. | U. of Connecticut | steven@sba.uconn.edu | 860 486 3389 |
| | This paper proposes a theory of idea generation in the strategic renewal process. It begins with a description of the overall strategic renewal process identifying three central elements; ideas, initiatives, and capabilities. Attention is then focused on how new divergent strategic ideas emerge in a context where most of the thinking and activity is directed toward the implementation of established strategies. The emphasis is not on creativity per se, but on how new ideas emerge within a social context. The paper draws from theories of organizational knowledge and social networks to identify key constructs and develop a set of research propositions. In particular, subjective knowledge, information asymmetries, weak social ties, and cognitive motivation are highlighted as important elements of the process. The paper ends with a discussion of relevant research issues and suggested directions. |
| | Keywords: Renewal |
| Science and Technology Platforms: Breaking Path Dependencies to Respond to Hypercompetition in Manufacturing Industries |
| | Lane, Peter J. | Arizona State U. | peter.lane@asu.edu | (602)-657-0927 |
| | Makri, Marianna | Arizona State U. | marianna.makri@asu.edu | (602) 965-8813 |
| | An increasing number of industries today are experiencing increased rivalry and discontinuous change-hypercompetition. Product market positions are being eroded much more quickly and traditional long-term sources of competitive advantage are no longer feasible. Instead, firms are advised to pursue a series of short-term competitive advantages through a constant stream of new products and services based technology platforms or "core technical competencies." We suggest that technology platforms are vulnerable to the same types of hypercompetitive pressures as product market positions and therefore must be renewed more frequently than before. However, scientometrics research suggests that technological knowledge progresses in short, linear chains. Hence, technology platforms built solely on technical resources and capabilities have a limited capacity to adapt hypercompetitively. We propose that one solution lies in firms making more use of science in developing their technology platforms. Scientometrics suggests that scientific knowledge develops in a non-linear branching spirals. Science platforms therefore have a greater potential for developing technology platforms that break out of the strong path dependencies inherent in technology thus facilitating the dynamic strategic maneuvering required by hypercompetition. We test our hypotheses by looking at the use of science in US patents across 32 manufacturing industries from 1985-1997, a period that prior research suggests coincides with the rise of hypercompetition among US manufacturers. We find strong evidence of an increase in the use of science in technology development in 31 of those industries and evidence that the use of science is a response to hypercompetitive shifts in the industries. |
| | Keywords: hypercompetition; technology; science |
| Towards A Nationally-Bounded Theory of Corporate Governance |
| | Lubatkin, Michael H. | U. of Connecticut | mike@sbaserv.sba.uconn.edu | (860) 486-3482 |
| | Lane, Peter J. | Arizona State U. | peter.lane@asu.edu | (602)-657-0927 |
| | Collin, Sven-Olof Yrjö | Lund U. | sven-olof.collin@fek.lu.se | +46 46 222 94 87 |
| | Very, Phillippe | EDHEC | very.ph@edu.edhes.asso.fr | 33-4-9318-9966 |
| | Agency theory has come to dominate corporate governance research and practice. There is increasing evidence, however, that its assumptions may be culturally biased, and that there may be multiple strains of agency theory shaping corporate governance outside the US. An integrative model of corporate governance is needed to reconcile those models and to explain the nature and origin of national differences in corporate governance. We propose a nationally-bounded model of corporate governance that synthesizes agency theory, the behavioral theory of the firm, institutional economics, and socialization theory. We begin by looking at opportunism as a variable and not a given as assumed by agency theory. The prior conditioning of management and shareholders influences both the propensity to act opportunistically and what actions are likely to be perceived as opportunistic. This prior conditioning is suggested to be a function of national background institutions provide individuals with their primary socialization. Those background institutions also shape the national formal institutions define and constrain the governance mechanisms that can be used to inhibit opportunistic attitudes from becoming opportunistic behaviors. We briefly show that when applied to the US, this model is fully congruent with the predictions of traditional US agency theory. The cross-cultural applicability of model is demonstrated through two brief historiographies which show our model to provide more accurate depictions of the critical corporate governance relationships in Sweden and France than possible through traditional US agency theory. |
| | Keywords: corporate governance; institutional economics; international |
| Does Industry Matter Differently in Different Places? A Comparison of Industry, Corporate Parent, and Business Segment Effects in Four OECD Countries |
| | Furman, Jeffrey L. | Sloan School of Management MIT | jfurman@mit.edu | 617-258-7269 |
| | Abstract: Since Schmalensee (1985), a stream of research has explored the locus of firm rent generation by
decomposing accounting profits into effects attributable to time, industry, corporate parent, and individual business
segment. This paper extends prior findings, particularly those of Rumelt (1990) and McGahan and Porter (1997, 1998)
by (1) expanding the scope of analysis to include data on firms from Australia, Canada, and the United Kingdom, as
well as the United States and (2) addressing the importance of understanding geographic influences on firm profits.
The empirical analysis corroborates previous findings for the United States, namely that business-specific effects
predominate in explaining variance in profits, although industry and corporate parent effects are significant and
substantial. Cross-national comparisons demonstrate that this general pattern is evident in other countries as well,
although results do vary across country. Results of estimates in the manufacturing sector provide further evidence of
cross-country differences and suggest that explanations for locus of profit differences across country operate at levels
less aggregate than the national level. In motivating the analysis the paper describes methodological and analytical
considerations that arise from the introduction of geographic considerations into the examination of the locus of profits. |
| | Keywords: locus of profits; variance decomposition; industry effects |