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Few high-growth firms (HGFs) are able to maintain high-growth over time. The purpose of this paper is to find out why only a small number of firms become persistent HGFs…
Few high-growth firms (HGFs) are able to maintain high-growth over time. The purpose of this paper is to find out why only a small number of firms become persistent HGFs, explicitly focusing on the role of the founding entrepreneur in this process.
Initially, 28 semi-structured interviews were performed with high-growth entrepreneurs to discover why so few founders could become persistent high-growth entrepreneurs. In a second phase, four case studies were conducted to uncover the factors that facilitate a swift evolution from the “managerial” role to the “strategic” role.
High-growth entrepreneurs, who quickly make a transition from a managerial role into a strategic role are more likely to keep their firm on its high-growth trajectory. This transition is made possible by: the early development of strategic skills; the presence of a high quality human capital base; and an organizational structure with characteristics from Mintzberg’s “machine bureaucracy.”
The results are vital for entrepreneurs of “one-shot” HGFs with the ambition to make their firm a “persistent” HGF. If high-growth rates are to be sustained, the three factors that emerged from the authors’ analysis should foster the delegation of managerial tasks, resulting in an easier transition toward a “strategic role.”
Insights are valuable as both founders and governmental institutions can benefit from knowing which factors contribute to a successful phase transition from “manager” to “strategist.”
The paper “Linking learning, customer value, and resource investment decisions: Developing dynamic capabilities” by Graham Hubbard, Angelina Zubac, and Lester Johnson suggests that strategic capabilities are developed when market learning processes are directly integrated into a firm's investment processes. Explicitly linking market learning processes and resource investment decisions is essential in building and maintaining competitive advantage. Based on a broad theoretical exploration, this paper presents six derived hypotheses about learning and dynamic capabilities development:H1Successful firms have higher levels of dynamic capabilities than less successful firms.H2Dynamic capabilities are more important and better developed in successful firms in dynamic markets than in mature markets.H3Successful firms learn more about customer value than do less successful firms.H4Managerial perceptions of how customer value can be created are more aligned in successful firms than less successful firms.H5Resource investment decision making is more aligned with market learning processes in successful firms than less successful firms.H6Firms in dynamic markets are more oriented to customer learning than those in mature markets.The paper argues that previous work on analyzing capabilities of organizations has not been directly linked to how firms actually learn, specifically about customers and about ways of creating customer value. Yet it is the process of learning about customers that is critical for creating value for customers and for targeting investments in resources that support the activities and processes necessary to create and deliver that value. The integration of learning about customers into resource investment decision processes is thus argued to be critical to the creation of firm value and to the development of dynamic capability in an organization.
This volume begins with a literature review of the different approaches to the management of competences in interorganizational relations. In Frédéric Prevot's paper, “The management of competences in the context of interorganizational relations,” the existing literature is structured in a two-dimensional model based on the nature of the relationship (cooperation or competition) and the actions taken on the competences (leveraging or building). Four objectives for the management of competences in the context of interorganizational relationships are thus derived: (1) sharing of competences, (2) protection of competences, (3) creation of competences, and (4) acquisition of competences. Each competence objective then requires specific management approaches to achieve.
The vulnerability of capabilities – their susceptibility to depreciation of their strategic value – results from an unbalance between exploitation and exploration within a…
The vulnerability of capabilities – their susceptibility to depreciation of their strategic value – results from an unbalance between exploitation and exploration within a capability as well as between different levels of capabilities. This vulnerability is examined under the lens of bounded awareness in which the issues of timing, success, and beliefs affect the bias in the deployment of capabilities. Different levels of capabilities are prone to become vulnerable because of internal and external forces. Interfirm knowledge transfer is suggested as a way to reduce the vulnerability of capabilities.
Innovation competence has become an essential requirement for technology-based organizations to survive in the new economy. Commitment to long-term objectives and learning…
Innovation competence has become an essential requirement for technology-based organizations to survive in the new economy. Commitment to long-term objectives and learning are considered as indispensable for building innovation competence. Communication networks play a crucial role in both these aspects. In this context management faces the question of how the characteristics as well as the contents of communication present in the network will influence the innovation competence. In this paper a literature study is done to present an understanding of the relationships between communication networks and innovation competence. The paper proposes that the characteristics of communication (frequency, diversity, and centrality) along with the content of communication (shared vision, shared task knowledge, and shared social knowledge) significantly affect the elements necessary to build technological innovation.
This paper explains how a variety of business units within a listed corporation have tried to define their strategic capabilities, as part of a process of developing independent business strategies within the corporation's corporate strategy. This paper describes the processes by which strategic capabilities were identified in each unit, the differences and similarities between the capabilities identified at the business unit level, and their consistency (or otherwise) with an overall corporate strategic positioning.
This paper is based on the author's consulting experience with both the parent corporation and its individual business units over a period of 15 years, and most recently on an intensive relationship with one division of the corporation and its 13 business units began three years ago. An objective of these relationships has been clarifying each business unit's strategy and any basis for sustainable competitive advantage of its strategic capabilities. What emerged from this process is a set of definitions of business unit strategic capabilities which are both similar to, but in some cases different from, the corporate parent's perceptions of the strategic capabilities of its business units.
This paper describes the process by which a first representation of “strategic capabilities” emerged in each business unit. For each unit, the agreed descriptions of strategic capabilities helped guide strategic decision making and implementation and assisted each unit in clarifying its strategic positioning in its markets. However, considerable differences remain in the articulation of each unit's capabilities and in what capabilities are considered to exist in the business units.
This paper is designed to give practitioners and academics a case study through which to consider practicalities involved in articulating and operationalizing strategic capabilities in general and in defining corporate strategies in particular.