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Book part

Nathan P. Podsakoff, Wei Shen and Philip M. Podsakoff

Since the publication of Venkatraman and Grant's (1986) article two decades ago, considerably more attention has been directed at establishing the validity of constructs…

Abstract

Since the publication of Venkatraman and Grant's (1986) article two decades ago, considerably more attention has been directed at establishing the validity of constructs in the strategy literature. However, recent developments in measurement theory indicate that strategy researchers need to pay additional attention to whether their constructs should be modeled as having formative or reflective indicators. Therefore, the purpose of this chapter is to highlight the differences between formative and reflective indicator measurement models, and discuss the potential role of formative measurement models in strategy research. First, we systematically review the literature on construct measurement model specification. Second, we assess the extent of measurement model misspecification in the recent strategy literature. Our assessment of 257 constructs in the contemporary strategy literature suggests that many important strategy constructs are more appropriately modeled as having formative indicators than as having reflective indicators. Based on this review, we identify some common errors leading to measurement model misspecification in the strategy domain. Finally, we discuss some implications of our analyses for scholars in the strategic management field.

Details

Research Methodology in Strategy and Management
Type: Book
ISBN: 978-0-76231-339-6

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Book part

Pavlos Dimitratos, Ioannis C. Thanos, Andreas Petrou and Vassilis M. Papadakis

Purpose – This chapter seeks to examine the relationship between three strategic decision-making processes (SDMPs) and international performance of small- and medium-sized…

Abstract

Purpose – This chapter seeks to examine the relationship between three strategic decision-making processes (SDMPs) and international performance of small- and medium-sized enterprises (SMEs).

Methodology/approach – Drawing on a sample of 528 SMEs based in four countries (United States, United Kingdom, Greece and Cyprus), the chapter explores the relationship between formalisation, (hierarchical) decentralisation, lateral communication and international performance. The chapter also investigates the moderating effects of dynamism on the aforementioned relationship.

Findings – Results indicate that formalisation and decentralisation have a positive effect on international performance; whereas lateral communication has no effect. Some evidence exists to support the moderating role of dynamism on the process–international performance link in that decentralisation produces positive effects in stable settings whereas lateral communication produces positive effects in dynamic ones.

Research limitations/implications – This chapter focuses on three SDMP dimensions and one characteristic of the external environment. Future studies are also needed to replicate the findings reported here in other national settings. Also, future studies should consider additional variables.

Practical implications – International performance of the SME can be influenced by how managers are involved in their SDMPs.

Social implications – Given the high role that SMEs have in modern economies for employment and growth, we identify SDMPs that are conducive to their international performance.

Originality/value – This study lies at the intersection of two streams of two complementary streams of research: strategic decision-making and international entrepreneurship. It is one of the first attempts to involve the SDMP stream of research in internationalisation.

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Article

Pedro M. García Villaverde and María José Ruiz Ortega

In this paper, we analyze the influence of the environmental conditions and firm capabilities on the time of entry. We find significant direct and interaction effects…

Abstract

In this paper, we analyze the influence of the environmental conditions and firm capabilities on the time of entry. We find significant direct and interaction effects. Furthermore, we show that firms develop a pioneer behavior not only when they have the suitable capabilities to take advantage of the perceived opportunities in the industry but also when these firms have key capabilities to maintain their first‐mover advantages, given the perception of unfavorable conditions in the industry.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 5 no. 2
Type: Research Article
ISSN: 1536-5433

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Article

Nuruzzaman Arsyad and Peter Hwang

The purpose of this study is to investigate the type of resources that firms draw on to expand internationally within the Association of Southeast Asian Nations (ASEAN…

Abstract

Purpose

The purpose of this study is to investigate the type of resources that firms draw on to expand internationally within the Association of Southeast Asian Nations (ASEAN) context. The authors seek to understand the impact of technological, political and knowledge resources on ASEAN firms’ multinationality, moderated by labor intensity, the type of ownership and the stage of economic development.

Design/methodology/approach

The hypotheses are tested on a sample that comprises 4,056 manufacturing firms in five ASEAN countries: Indonesia, Lao PDR, Philippines, Vietnam and Timor-Leste.

Findings

The authors found that technology resource is not positively associated with multinationality. However, this relationship is moderated by labor intensity and type of firm ownership. Political resources, such as lobbying activities and informal payment to government, are important for ASEAN firms for foreign expansion. However, excessive informal payment may prove to be counterproductive. The authors also found that local firms tend to exploit more political resources than foreign counterparts and firms operating in the lower stage of economic development tend to spend more on lobbying activities, but pay less informal contribution. Finally, for the manager industry experience, they found an inverted U-shaped relationship with respect to multinationality, but for manager education, the association was unexpectedly negative.

Practical implications

From a practical perspective, the findings have three important implications for management of ASEAN multinationals. First, multinationals can systematically exploit and internalize political ties by carefully integrating political activities, through informal contribution and lobbying, into their strategic planning or corporate structure. The findings suggest that political networking will offset weak technological resources, particularly for local firms. Second, managers of multinationals operating in ASEAN should not rely excessively on political actors, as the extra costs associated with the above optimum political resources exceed its marginal benefit. Moreover, excessive reliance on political actors will expose the firm to the threat of opportunism. Even though political resources are important managers need to maintain the utilization of political resources at the optimal level. Third, besides technological and political resources, managers’ knowledge is also crucial for ASEAN firms’ internationalization. The authors provide evidence showing that the positive effect of managerial experience is limited only to a certain level, even though tmanagers’ education has positive linear relationship with multinationality. This implies that at the early stage of international activities, both manager’s experience and education will have positive impact on the firm. However, when international activities are getting more complicated, the manager’s education takes over the manager’s experience. Above its optimum point, the manager’s experience will limit the manager’s capability to create innovative solutions for international expansion, and therefore it is the manager’s education that is able to stimulate revolutionary solution.

Originality/value

In this paper, the authors examine the resource impact on multinationality or the extent to which business activities span across national boundaries to shed light on the antecedents of foreign expansion in ASEAN. They discuss three types of resources (i.e. technological, political and knowledge resources) and seek to understand the impact of these resources on multinationality. Political resources are highlighted in addition to technological and knowledge resources in this paper because ASEAN firms are generally situated in a weak institutional environment in which the political resource is crucial for firms’ entry, operation and exit in international markets (Boddewyn and Brewer, 1994; Hillman and Keim, 1995; Rodriguez et al., 2005).

Details

Journal of Asia Business Studies, vol. 8 no. 2
Type: Research Article
ISSN: 1558-7894

Keywords

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Article

Gloria Parra‐Requena, María José Ruiz‐Ortega and Pedro Manuel García‐Villaverde

This paper seeks to examine how dense and cohesive social networks can lead to pioneering. In this sense, the specific aim of this study is to analyse the mediating role…

Abstract

Purpose

This paper seeks to examine how dense and cohesive social networks can lead to pioneering. In this sense, the specific aim of this study is to analyse the mediating role placed by marketing and technological capabilities to explain the link among the structural social capital and the pioneering.

Design/methodology/approach

Focusing on a sample of 224 companies from the Spanish footwear industry, the authors used partial least squares (PLS) with PLS‐Graph software to analyse data.

Findings

The obtained results show how those firms with a dense and strong social network tend to develop pioneering. In this sense, a positive and significant relationship is found between structural social capital and pioneering. Furthermore, a strong positive relationship is found between structural social capital and marketing and technological capabilities, and of both kinds of capabilities with pioneering. The study also finds that the significant relationship between structural social capital and pioneering disappears under the effect of a firm's capabilities.

Research limitations/implications

This study develops a cross‐sectional and non‐longitudinal approach. In any case, it is clear that the cross‐sectional approach of the study suffices for the proposed aims, having already been put to good use in other studies on entry timing.

Practical implications

It is demonstrated how in mature industries such as the footwear industry, albeit unhampered by strong entry and imitation barriers, marketing and technological capabilities position barriers can be established, which favour a firm's expectations of obtaining FMAs.

Originality/value

This study provides theoretical linkages between concepts of several theoretical approaches, social capital, RBV and the FMAs approach.

Details

Journal of Business & Industrial Marketing, vol. 27 no. 1
Type: Research Article
ISSN: 0885-8624

Keywords

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Book part

Nicholas O’Regan, Abby Ghobadian and S. Jaseem Ahmad

Previous studies have shown that small- and medium-sized manufacturing firms make a substantial contribution to national economies in terms of job and wealth creation …

Abstract

Previous studies have shown that small- and medium-sized manufacturing firms make a substantial contribution to national economies in terms of job and wealth creation (Daly & McCann, 1992; Schreyer, 1996). However, many smaller firms face unprecedented change arising from the increasingly competitive and changing environment in which they operate (Coopers and Lybrand, 1997; D’Aveni, 1994). Much of this competition often emanates from larger firms with greater resource capabilities. Firms of all sizes are increasingly turning to strategy as a means of achieving competitive advantage. Strategy research is mainly directed towards examining why firms differ in performance (Barnett & Burgelman, 1996; Schendel, 1996). Strategy has ‘undergone, in the 1990s, a major shift in focus regarding the sources of sustainable competitive advantage: from industry to firm specific effects’ (Spanos & Lioukas, 2001). This involves more than strategy formulation — it is about making choices based on competing alternatives and implementing the chosen direction using the organisational processes and systems (Shaw, Gupta, & Delery, 2002; Stopford, 2001). Other writers, such as Pettigrew and Fenton (2000), acknowledge that ‘soft’ aspects are an integral part of the evolutionary nature of strategy, and include cultural influences (Chakravarthy & Doz, 1992) and leadership (McNulty & Pettigrew, 1999).

Details

New Technology-Based Firms in the New Millennium
Type: Book
ISBN: 978-0-0805-5448-8

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Article

Nava Subramaniam, Paul Collier, Michelle Phang and Gary Burke

The purpose of this paper is to investigate the relations between perceived business uncertainty (PBU), use of external risk management (RM) consultants, formalisation of…

Abstract

Purpose

The purpose of this paper is to investigate the relations between perceived business uncertainty (PBU), use of external risk management (RM) consultants, formalisation of RM, magnitude of RM methods and perceived organisational outcomes.

Design/methodology/approach

This paper is based on a questionnaire survey of members of the Chartered Institute of Management Accountants in the UK. Using AMOS 17.0, the paper tests the strength of the direct and indirect effects among the variables and explores the fit of the overall path model.

Findings

The results indicate significant and positive associations exist between the extent of PBU and the level of RM formalisation, as well as between the level of RM formalisation and the magnitude of RM methods adopted. The use of external RM consultants is also found to have a significant and positive impact on the magnitude of RM methods adopted. Finally, both the extent of RM formalisation and the magnitude of RM methods adopted are seen to be significantly associated with overall improvement in organisational outcomes.

Research limitations/implications

The study uses perceptual measures of the level of business uncertainty, usage of RM and organisational outcomes. Further, the respondents are members of a management accounting professional body and the views of other managers, such as risk managers, who are also important to the governance process are not incorporated.

Originality/value

This study provides empirical evidence on the impact of RM design and usage on improvements in organisational outcomes. It contributes to the RM literature where empirical research is needed in order to be comparable with the traditional management control system literature.

Details

Journal of Accounting & Organizational Change, vol. 7 no. 2
Type: Research Article
ISSN: 1832-5912

Keywords

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Article

María José Ruiz‐Ortega, Gloria Parra‐Requena, Job Rodrigo‐Alarcón and Pedro M. García‐Villaverde

The purpose of this paper is to study the antecedents of entrepreneurial orientation (EO). Specifically, the authors aim to analyze how firms' capabilities influence the…

Abstract

Purpose

The purpose of this paper is to study the antecedents of entrepreneurial orientation (EO). Specifically, the authors aim to analyze how firms' capabilities influence the relationship between firm environmental dynamism and entrepreneurial orientation. The study seeks to provide a better understanding of antecedents of EO, helping to fill in the gap that exists in the EO literature and explain how certain internal and external factors, independently and jointly, influence EO.

Design/methodology/approach

The empirical study is conducted on a sample of 253 firms from the information and communication technology (ICT) industry. In order to test the proposed model, a hierarchical regression analysis was developed.

Findings

A positive effect of environmental dynamism, technological capabilities and marketing capabilities on EO was detected and it was possible to observe how technology capabilities improve the positive effect of environment dynamism on EO.

Originality/value

The most important contribution of this paper is to demonstrate that the direction of the moderating effect of capabilities on environment dynamism changes depending on the capabilities that are analyzed. While the technology capabilities improve the positive effect of environment dynamism, the marketing capabilities worsen the effect of environment dynamism on EO.

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Article

Vichak Phongpetra and Lalit M. Johri

The paper aims to investigate automobile manufacturers in Thailand and the effects that their business strategies had on their organizational performance.

Abstract

Purpose

The paper aims to investigate automobile manufacturers in Thailand and the effects that their business strategies had on their organizational performance.

Design/methodology/approach

For empirical analysis, the method of confirmatory factor analysis and the structural modeling method were applied in order to refine business strategies, functional strategies, financial, and marketing organizational scales.

Findings

This research reveals that there are three significant business strategies of automobile manufacturers in Thailand which have a positive effect on the organization's financial and marketing performance: cost focus (the first priority), cost leadership (the second priority), and integrated cost an differentiation (the third priority). All the priorities of functional strategies that have a positive effect on the financial and marketing organization performance were subsequently analyzed as follows: manufacturing strategy (most significant), human resource management (the second most significant), marketing strategy (the third most significant), and the financial strategy (the least significant).

Research limitations/implications

Future research should select different random samples to assess the perceptions of front line managers of automobile manufacturers, dealers and automobile part firms.

Practical implications

The management of automobile manufacturers and automobile part firms should implement and improve their business strategies in terms of cost focus, cost leadership, and integrated cost leadership strategies achieve higher financial and marketing performance.

Originality/value

This paper contributes to the existing literature by reexamining the impact of business strategies of automobile manufacturers on organizational performance.

Details

International Journal of Emerging Markets, vol. 6 no. 1
Type: Research Article
ISSN: 1746-8809

Keywords

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Article

Manuel Villasalero

The purpose of this study is to deal with the performance consequences of business units that adopt varying knowledge roles within the internal multi-business network…

Abstract

Purpose

The purpose of this study is to deal with the performance consequences of business units that adopt varying knowledge roles within the internal multi-business network. Multi-business firms are distributed knowledge systems in which business units are extensively involved in internal knowledge transfer processes. Business units play different roles within their respective corporate knowledge networks as knowledge providers, knowledge receivers, both or neither.

Design/methodology/approach

Survey data from a sample of 225 business divisions were analyzed using a multivariate analysis of covariance (ANCOVA).

Findings

Results indicate that divisions which occupy knowledge roles that reveal the possession of unique knowledge (knowledge signaling) or guarantee the accumulation of new knowledge (knowledge learning) outperform those divisions that have access to spilled knowledge (knowledge depreciation) or have no access to any kind of knowledge (knowledge insulation).

Practical implications

Four knowledge roles are distinguished according to the extent to which a business division provides the rest of the corporation with knowledge or receives knowledge from the rest of the corporation, thus exploring the issue of internal knowledge transfer from an integrated perspective that takes the directionality of knowledge flows and the position within the knowledge network into account.

Originality/value

This study contributes to existent research on knowledge transfer and performance outcomes by demonstrating the usefulness of the knowledge role as an integrating concept within this literature. It also extends the four-role framework to the prescriptive domain and tests its normative implications in an intensive internal knowledge transfer setting which has to date gone relatively unnoticed, as is that of multi-business firms.

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