Search results

1 – 2 of 2
To view the access options for this content please click here
Article
Publication date: 23 July 2020

Michael Wade, Didier C-L Bonnet and Jialu Shan

This paper provides evidence based quantification of both “actual” disruption of industries as well as a measure of disruption “hype”. The data cover a seven-year period…

Abstract

Purpose

This paper provides evidence based quantification of both “actual” disruption of industries as well as a measure of disruption “hype”. The data cover a seven-year period from 2012 to 2018 across 12 industries. The authors’ complemented the research with a survey of 2000 business executives. Whereas there has been some measures of disruption in the past, no research to the authors’ knowledge has been conducted that measure both actual disruption and disruption hype.

Design/methodology/approach

The current fascination with disruption hides an awkward truth, we assume it is happening, but do we really know for sure? Disruption is rarely defined and almost never measured. Equally, the influence of the hype around disruption is hard to gauge. The authors do not know to what extent hype is driving management action. This is worrisome as the disruption “noise level” can lead to unhealthy collective thinking and bad business decision-making. Some rigour is required. To craft winning strategies, executives should take a more evidence-based approach for managing disruption.

Findings

The authors’ failed to find evidence of any correlation between the hype around an industry disruption and actual disruption within that industry. So the important conclusion for executives is “do not believe the hype”. We found some surprising differences by industry between actual disruption and the hype by industry.

Research limitations/implications

Disruption is one of the most talked about subject in the field of strategy, yet there is little quantification. With this research, the authors’ aim is to advance the fact-based understanding of disruption. Disruption hype is never measured but has a strong influence on executives. The authors have quantified hype using online, search, social media and survey sources. Much more is needed to be able to measure hype more accurately.

Practical implications

The authors’ recommend a set of practical guidelines for executives to support fact-based strategy formulation: analysis of actual disruption, scenario planning and strategic responses.

Social implications

The “noise” around industry disruption is so high that it is assumed to happen. Much of what is written is quasi-fake news. The authors need to rebalance the debate with fact-based analysis.

Originality/value

To authors’ knowledge, there has never been any fact-based analysis of both actual and hype disruption levels.

Details

Journal of Strategy and Management, vol. 13 no. 4
Type: Research Article
ISSN: 1755-425X

Keywords

To view the access options for this content please click here
Article
Publication date: 18 April 2016

Paul Strebel, Margaret Cording and Jialu Shan

Getting rid of the contradictions between financial and sustainability reports is not straightforward, owing to their disparate financial-, environmental- and…

Abstract

Purpose

Getting rid of the contradictions between financial and sustainability reports is not straightforward, owing to their disparate financial-, environmental- and people-related data. The purpose of this paper is to show how a big step toward integrating the reports can be made by focusing on extracted value and subtracting it from reported profits. Value extraction is defined as value captured from stakeholders by distorting the competitive market process.

Design/methodology/approach

Value extracted is identified by looking at three ways in which it is done: manipulating markets to enhance profits, exploiting market distortions to socialize costs and privatizing benefits. These categories are related to one consolidated bottom-line using the data from JPMorgan’s 2012 reports. Application to the Western oil majors shows how one bottom-line can be used to assess the risks posed by value extraction to the economic sustainability of a firm.

Findings

Conservatively estimated, JPMorgan’s value extracted in 2012 was 25 per cent of reported profits. From 2007-2009, the average annual value extracted by Exxon and Chevron was 17 and 16 per cent of reported profits, respectively, whereas for BP and Eni, it was 23 and 30 per cent, respectively. Higher value extraction by BP preceded the Deepwater Horizon explosion and, in Eni’s case, the political disruption of its activities.

Research limitations/implications

It is difficult to get precise numbers on the value extracted because sustainability costing and related data are often neither available nor standardized.

Social implications

Reported profits minus value extracted, defined as competitive profits, provide a proxy for one bottom line that integrates the financial and sustainability reports.

Details

Journal of Business Strategy, vol. 37 no. 2
Type: Research Article
ISSN: 0275-6668

Keywords

1 – 2 of 2