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1 – 10 of over 86000Xuanwei Cao and Ali Quazi
This paper aims to illustrate how institutional factors, such as Guanxi (connectedness) mechanism in a transition economy, could impact managerial cognition and their temporal…
Abstract
Purpose
This paper aims to illustrate how institutional factors, such as Guanxi (connectedness) mechanism in a transition economy, could impact managerial cognition and their temporal orientation at individual level as well as induced change on corporate environmental strategy (CES). More specifically, this paper explores the micro foundation of corporate strategy change in an attempt to examine how corporate strategic choice and actions evolve with managerial cognition of “Guanxi” with various temporal orientations.
Design/methodology/approach
The paper reviews the extant literature focusing on Guanxi and CES with special attention to the temporal orientation in strategy formulation. A conceptual framework is proposed to analyze the underlying mechanism of Guanxi in mediating and shaping CES. A multi-case study with four companies operating in two industry sectors were investigated considering their relative long foothold as well as their different postures and dynamic change of corporate environment strategy in the past decades.
Findings
The findings support recent critiques on the likely shift in strategic choice of firms from the traditional Guanxi-based to a rule-based format. The interactions between entrepreneurial cognition and strategic activities toward environmental issues were still influenced by deep relational embeddedness. The findings proved that managerial Guanxi cognition impacts managers’ temporal orientation and their strategic choice on CES. Foreign-invested enterprises in the process of localization face the potential risk of emerging backdrop of their CES, i.e. from more active strategy to more reactive strategic posture, whereas local private-owned enterprises show a transformation from reactor to follower and even pioneer in the wave of those entrepreneurs’ changing cognition on the role of Guanxi in their businesses.
Research limitations/implications
One main limitation of the study is the lacking of quantitative measurement of corporate environment performance. Although the paper used multiple cases to explore the dynamics of Guanxi on impacting CES, only with further development of effective scale measurement to test corporate environment performance can increase the explaining power of the proposed theoretical model in this study. It is important to note that with data of longitudinal measurement of corporate environment performance, it would be more convincing to show the outcome of the temporal lens of Guanxi on CES. However, the lacking availability of qualified disclosed data on indicating corporate environment performance constrains another limitation for the study. Considering the complexity of corporate environment strategy, the focus cases in the paper might still lack powerful and convincing illustration to prove the impact of Guanxi on CES despite the enriched contextual data and description. It is necessary to conduct deeper analysis to exclude the impact of other possible factors on CES to highlight the direct impact of Guanxi on CES.
Practical implications
The results of the in-depth analysis and interpretation of the exploration of the cases suggest that Guanxi still seems to dominate managerial thinking process as the norm is deeply rooted in their mind sets. However, Guanxi is no longer considered as a mere reactive cultural norm rather a positive mechanism through which Chinese firms can achieve their sustainable environmental strategic goals as well as economies prosperity in the rapidly competitive business landscape in modern China.
Originality/value
Previous research on CES largely neglected the context factors. This paper presents a conceptual model to deepen our understanding of the contextual factor of Guanxi with a temporal perspective and its consequent influence on CES. This helps policy makers as well as strategic management researchers and academics to reconsider the mechanism of adaptation and selection in shaping CES in the event of large scale institutional change.
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There has been increasing interest in Australia regarding corporate boards, their role and the contribution they make to organisations' performance and success. There is however…
Abstract
Purpose
There has been increasing interest in Australia regarding corporate boards, their role and the contribution they make to organisations' performance and success. There is however, a gap in our knowledge about what board members do. To better understand boards, we need to know more about the behaviour of those who sit on boards. Many chairmen and all non‐executive directors serve on corporate boards in a part‐time capacity, however, such part‐time service does not negate a role in strategy. The purpose of this paper is to ask how, if at all, do part‐time board members influence strategy in Australian public companies?
Design/methodology/approach
This paper first examines the literature on choice, change and control as key aspects of firms' strategic conduct. Second, attention turns to generating empirical data to examine how part‐time board members engage with these processes. Attention is given to the actions of part‐time board members vis‐à‐vis executive directors, both inside and outside the boardroom. Data from interviews with 20 board members are interpreted using the 1999 framework of McNulty and Pettigrew which conceptualises part‐time board members' involvement in strategy as: ”taking strategic decisions”, ”shaping strategic decisions” and ”shaping the content, context and conduct of strategy”.
Findings
Each of the three levels of part‐time board member involvement in strategy described by McNulty and Pettigrew engage part‐time board members in processes of choice, change and control in differing ways. Part‐time board members are able to shape both the ideas that form the content of corporations' strategies and the methodologies and processes by which those ideas evolve. In so doing, part‐time board members are capable of exerting control over management and influencing processes of strategic choice and change. Boards of directors have a role in strategy formulation, strategic decision‐making and strategic control.
Practical implications
The board's role is in the driver's seat not as a rubber stamp. A process whereby board members can engage and exert a controlling influence over strategic direction and outcomes of the corporation is of benefit not only to Australian corporations but has global corporate benefit. The paper describes and analyses the contribution to strategy made by board members in five Australian companies
Originality/value
This paper describes and analyzes the contribution to strategy made by board members in five Australian companies.
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David A. Waldman and Mansour Javidan
The primary purpose of this chapter is to examine some old truths about leadership at the CEO level, and to summarize a new perspective based on charismatic leadership theory that…
Abstract
The primary purpose of this chapter is to examine some old truths about leadership at the CEO level, and to summarize a new perspective based on charismatic leadership theory that could help cast light on this important area of strategic management. In so doing, we attempt to move charismatic leadership theory in some new directions by bridging micro-and macro-level conceptualizations. The upper echelons perspective from the strategic management literature is first summarized. We then identify problems in conceptualization and measurement that have served to limit the usefulness of this theoretical approach with regard to understanding the leadership role and effects of CEOs. We present two alternative new models that incorporate the constructs of strategic change, CEO charisma, and perceived environmental uncertainty. Data are also presented, suggesting mixed support for the models. Suggestions are made with regard to future quantitative and qualitative research.
This study examined factors influencing the growth of new firms in metal‐based manufacturing and business services in Finland over the three first years of their operation. The…
Abstract
This study examined factors influencing the growth of new firms in metal‐based manufacturing and business services in Finland over the three first years of their operation. The factors affecting the growth of a new firm were found in the start‐up phase, in the characteristics of the entrepreneur and of the firm, and in the firm’s environment. Growth was especially explained by the know‐how and changes in the strategic behaviour of the entrepreneur and by the firm’s environment. New firmshad equal chances for growth irrespective of their locality. Instead, growth was affected by changes in a firm’s competitive situation, and, especially in the more developed service centres, growth was dependent on a firm’s expanding its market area in the first three years of operation. The results also clearly indicated that in a small specialist firm personal relationships formed an important part of the entrepreneur’s management capabilities.
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Fadi Alkaraan, Mohamamd Albahloul and Khaled Hussainey
Companies documents such as annual reports incorporate narratives of repetitive rhetorical strategies as effective mechanisms adopted by companies' boardrooms to promote strategic…
Abstract
Purpose
Companies documents such as annual reports incorporate narratives of repetitive rhetorical strategies as effective mechanisms adopted by companies' boardrooms to promote strategic change and strategic choices. These mechanisms can be viewed as persuasive appeals to facilitate boardrooms’ discourses. Despite the contribution of previous research through narrative analysis domains, conceptualization of narrative practices remains a relatively neglected area in the extant accounting literature.
Design/methodology/approach
The analytical framework is rooted in Aristotle's three pillars of rhetorical proofs: ethos (credibility/trustworthiness), pathos (emotion/identification through cultural domains) and logos (reason/rationale) in investigating narrative extracts regarding persuasive appeals adopted by Carillion's board through annual reports that facilitate discourse regarding Carillion’s strategic choices. Further, the authors emphasis on repetitive rhetorical slogan strategies embedded in the annual reports regarding Carillion's acquisitions strategy. We viewed acquisitions narratives as rhetorical communication artefacts and analyzed the repetitive rhetoric slogans in these corporate documents.
Findings
Findings of this study show how persuasive strategies and repetitive slogans trigger the discourses of Carillion's annual reports by drawing on perspectives from upper echelon theory, impression management and communication patterns. Findings reveal that Carillion’ board strategically use repetitive rhetoric slogans to shape optimistic corporate future performance which might be different from the feasible reality. Finally, the authors argue that corporate executives are striving to construct an alternative reality stem from their initial unrealistic aspiration to lead their sector of less controlled market share. Findings of this study have theoretical and managerial implications.
Research limitations/implications
The key limitation of this study lies with the case study as the research methodology. Subjectivity remains inherent in interpreting the findings of this study. Future studies may adopt or adapt the authors’ analytical framework to examine other domains underpinning corporate reporting practices.
Practical implications
The findings of this study have practical implications for boardrooms and policymakers. Findings of this study have theoretical and managerial implications. The level of optimism has its impact on the mood of financial decision-makers, and when there is a high level of optimism, managers may consider making more investment decisions and therefore making many acquisitions. Managerial overconfidence has been widely documented in the literature. Overconfident managers systematically overestimate the probability of good outcomes (and correspondingly underestimate the probability of bad outcomes) resulting from their actions.
Social implications
Managerial overconfidence refers to overestimation of managers' own abilities and outcomes relating to actions which are under their control. Executives believed that they have ultimate control over outcomes, which leads them to underestimate the probability of failure generally. According to self-attribution bias, many people tend to excessively credit their own skills for good results and overly credit external factors for bad outcomes.
Originality/value
The study explores the repetitive rhetorical slogan strategies embedded in the annual reports regarding Carillion's acquisitions strategy. Further, the study reveals how Carillion's board engaged through the early report with discourse and repetitive slogans to maintain their legitimacy. Findings reveal that Carillion’s board strategically uses repetitive rhetoric slogans to shape optimistic corporate future performance, which might be different from the feasible reality. Finally, the authors argue that corporate executives are striving to construct an alternative reality stem from their initial unrealistic aspiration to lead their sector of less controlled market share.
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The change in the environment of nonprofit organizations (NPOs) has accentuated the need for managers to understand the relationship between strategy, HRM and organizational…
Abstract
Purpose
The change in the environment of nonprofit organizations (NPOs) has accentuated the need for managers to understand the relationship between strategy, HRM and organizational effectiveness. The purpose of this paper is to examine contingencies that underlie strategy, HRM and the dimensions of fit and flexibility in the actual HRM practices implemented by two study organizations that have deployed HRM in strategic change.
Design/methodology/approach
The research used two case studies of NPOs who reported that they adopted HR practices as an integral component of their adaptive strategy to achieve a fit. Thus, the research adopted purposive sampling to determine the cases that are appropriate to examine the research questions.
Findings
The findings provide evidence of horizontal and vertical fit and flexibility‐focused HRM practices designed to provide strategic alternatives. The research raises questions about how well NPOs’ managers understand contingency drivers of strategy, HRM practices and the direction of HRM in NPOs. A number of factors contributed to promote fit, flexibility and HR practices. First, the emphasis on HRM as a critical priority in strategy by senior management. Second, factor that may have contributed to fit and flexibility dimension is the use of professional managers in the NPOs. The case organizations involved either internal or external consultants with HRM expertise in strategic planning process. Finally, organisational structure that facilitated communication channels within both organizations. Both organizations emphasized internal communications as a way of engaging employees.
Research limitations/implications
The findings set the groundwork for major research which could extend findings from previous empirical research, that strategy of NPOs is aligned with the level of HR practices in some functions such as training and not aligned in others practices such as recruitment.
Practice implications
For nonprofit managers, this research reinforced the importance of senior management commitment and HR expertise to develop and implement HR practices that are aligned with current strategy and the need to develop employees’ skills to facilitate flexibility to adapt to change in the environment. It is imperative for the HR practices of NPOs not only to achieve horizontal and vertical fit, but also to build in flexibility the organization requires to develop, deploy and sustain employee skills and behaviour needed to cope with the competitive environment and to help with the achievement of organisational goals.
Originality/value
The important point of this research is that it extends our understanding of fit and flexibility in NPOs. It provides an example of how two NPOs adopted and emphasized SHRM as a critical component of their strategy.
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Hannu Littunen and Markku Virtanen
The purpose of this study is to analyse which factors differentiate growing firms from the non‐growth businesses. It seeks to analyse the start‐up factors as well as the changes…
Abstract
Purpose
The purpose of this study is to analyse which factors differentiate growing firms from the non‐growth businesses. It seeks to analyse the start‐up factors as well as the changes in the activities and the characteristics during the seven‐year period from the start‐up stage.
Design/methodology/approach
The study is a part of a longitudinal research project that has followed the development of 200 SMEs in Finnish metal‐based manufacturing and business services since their start‐up in 1990. The paper uses a contingency approach and concentrates on 86 respondents who have survived after seven years' activity. The paper develops a model for testing the factors that differentiate growing ventures from the non‐growth companies.
Findings
Static characteristics of the entrepreneur and the firm other than group management style do not explain the growth of the firm. The factors that differentiate growing businesses from non‐growth companies include mainly dynamic variables such as increases in production capacity and external network relations, and changes in adopting a specialised product policy. In most cases extrovert attitude and proactive strategies, particularly with respect to markets, were necessary to achieve growth over an extended period.
Research limitations/implications
The study is restricted to two branches of industry and the period covered included a severe recession in the economy. Thus more branches and development during a less turbulent time period could be included. The most important implication of the study is that analysing growth should concentrate on the dynamics of firm development rather than on static characteristics of the entrepreneur or the firm.
Practical implications
The practitioners, e.g. venture capitalists, could use the results when selecting their portfolio companies, since the findings suggest the variables which should be used in differentiating growing businesses from non‐growth companies.
Originality/value
The paper uses a contingency approach together with longitudinal data in the analysis. The results show that the differentiating factors of growing companies are dynamic variables, including especially motivation and strategy factors. Thus longitudinal data are a necessary condition for robust analysis of growth.
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Ihssan Samara and Ibrahim Yousef
This study aims to investigate the joint effect of foreign directors (FDs) and firm performance on the corporate strategic change.
Abstract
Purpose
This study aims to investigate the joint effect of foreign directors (FDs) and firm performance on the corporate strategic change.
Design/methodology/approach
A theoretical framework linking foreign directors, firm performance and strategic change is proposed and tested. This study uses a sample of longitudinal data from 958 US listed firms over the period 2010–2018. The basic model of study first tests whether there is a direct relationship between FDs and level of strategic change. It then incorporates firm performance as a moderating variable, testing its effect on the relationship between foreign director and strategic change.
Findings
Consistent with the study’s expectations, the empirical findings indicate that FDs rich in appropriate experience are associated with superior strategic change, measured both in terms of variation in firm strategy over time and deviation from industry norms. The findings confirm that FDs are a salient driver of strategic change. The strength of the effect, however, depends on the firm performance.
Research limitations/implications
This paper has implications for effective global leadership development based on international appointments. First, directors can benefit from being assigned to work in foreign countries so that they are exposed to a wide range of experiences and can learn to overcome culture shock. Second, posting directors to foreign countries can improve their international knowledge and enhance various competencies related to creativity, leadership and problem-solving. By demonstrating that the board’s characteristics can play a role in corporate strategy development, the current study thus has implications for both study and practice with regard to board composition. The number of seats on any given board is finite, and each individual director is thus expected to not only monitor top management but also to apply their knowledge and relevant experience in service to the company’s ambitions. Except in cases where high firm performance leads to strategic persistence, the results suggest that greater levels of FDs correlate positively with strategic change.
Practical implications
The practical implications of this paper pertain to director recruitment and selection. First, the findings echo support for the inclusion of members with greater levels of international experience on boards and top management teams. It seems that, despite the importance of this characteristic, directors at US companies often lack substantial experience abroad (Carpenter and Westphal, 2001). A possible reason for this could be that internationally experienced employees otherwise lack the social capital necessary for promotion to directorships because of time spent stationed away from the firm’s headquarters. It is thus essential for companies to create networking opportunities for directors assigned to foreign offices.
Originality/value
Although previous research has provided some insight into how chief executive officer international experience can manifest in strategic change, this understanding remains far from complete for the members of board of directors. Furthermore, the topic of firm performance as a potential moderating influence remains underexplored. The aim of this study, therefore, is to assess the impact of FDs among directors on corporate strategic change while taking into account the possible confounding role of firm performance in this relationship.
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Shuaijiao Bai, Henrique Duarte and Dong Guo
The purpose of this paper is to convey how the transition to market-based orientations by state-owned enterprises (SOEs), particularly the military sector, represents a…
Abstract
Purpose
The purpose of this paper is to convey how the transition to market-based orientations by state-owned enterprises (SOEs), particularly the military sector, represents a coevolutionary process between business and regulatory institutions that has an impact on both the military and civilian markets.
Design/methodology/approach
The authors conducted a longitudinal case study of a military SOE, the Aosheng Group, between 1951 and 2012 to understand the dynamics between institutions and organizations. A comparative analysis between the main stages of evolution was completed, and conclusions about the main patterns of organizational and institutional change were reached.
Findings
The study reports evidence on the coevolutionary nature of change in big SOEs in China, demonstrating how institutional changes are bigger drivers in promoting reorientations than are market pressures. Within the framework of punctuated equilibrium theory, the determining role that managers may play in leading and implementing organizational reorientations is emphasized.
Research limitations/implications
A triangulated methodology was employed to analyse a long period; however, its application to just a single case might be questioned in terms of generalizing any of the findings.
Originality/value
The longitudinal perspective applied in this case study contributes to critical questioning as to how Chinese agencies define forms of control and the goals for SOEs under their jurisdiction and the importance of allowing managerial discretion to the assigned managers.
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Xi Zhong, Weihong Chen and Ge Ren
Many studies have examined the antecedents of firms' strategic change on a micro and meso level, but few studies have explored it from the macrolevel (e.g. economic policy…
Abstract
Purpose
Many studies have examined the antecedents of firms' strategic change on a micro and meso level, but few studies have explored it from the macrolevel (e.g. economic policy uncertainty) perspective. This research draws attention to the impact of economic policy uncertainty on firms' strategic change.
Design/methodology/approach
This research empirically tests hypotheses based on a sample of listed firms in China during the period between 2010 and 2017.
Findings
Based on real options theory, the authors theorize and find that economic policy uncertainty will negatively affect firms' strategic change through the mediating effect of CEO turnover. Moreover, organizational inertia will strengthen the negative impact of economic policy uncertainty on CEO turnover and will weaken the positive impact of CEO turnover on firms' strategic change.
Originality/value
First, this research contributes to the strategic change literature by demonstrating the important impact of economic policy uncertainty on firms' strategic change. Second, this research expands the literature on the economic consequences of economic policy uncertainty. Third, this research clarifies the path and boundary conditions of economic policy uncertainty affecting strategic change by introducing the mediating effects of CEO turnover and the moderating effects of organizational inertia.
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