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To explore the importance of the board of director nomination process (that is, who nominates a given director for a position on the firm’s board) for the voting outcomes, disciplining of management, and overall monitoring quality of the board of directors.

We exploit a recent regulation passed by the US Securities and Exchange Commission (SEC) requiring disclosure of the board nomination process. In particular, we focus on firms’ use of executive search firms versus allowing internal members (often simply the CEO) to nominate new directors to serve on the board of directors.

We show that companies that use search firms to find board members pay their CEOs significantly higher salaries and significantly higher total compensations. Further, companies with search firm-identified independent directors are significantly less likely to fire their CEOs following negative performance. In addition, companies with search firm-identified independent directors are significantly more likely to engage in mergers and acquisitions (M&A) and see abnormally low returns from this M&A activity. We instrument the endogenous choice of using an executive search through the varying geographic distance of companies to executive search firms. Using this instrumental variable framework, we show search firm-identified independent directors’ negative impact on firm performance, consistent with firm behavior and governance consequences we document.

Given the recent law passage, we are the first to directly analyze the nomination process, and show a surprisingly large predictive effect of seemingly arm’s-length nominations. This has clear implications for thinking carefully through how independence is defined in the director nomination process.

Employing the notion of balanced growth postulated by competence-based literature, the present study submits that a firm’s growth strategy can be understood as its ability to manage the interplay of building and leveraging existing competence within the business context. The synergistic effects resulting from the creation of a self-reinforcing cycle of competence building and leveraging initiatives then drive the achievement of superior performance. To examine the validity and usefulness of this conception, we conduct a systematic investigation on the strategy-performance link of contract electronics manufacturers based in Taiwan, who have emerged as the competitive global supply base in electronics and computer industries. Empirical results based on a panel of business-level operating data show that while building product-related competence is essential to the contract manufacturer’s achievement of higher profitability, leveraging competence between subcontracting services and own-brand business will significantly enhance both profitability and sale growth. The implications of formulating a sustainable growth strategy for contract manufacturers in the context of horizontally configured industries, and suggestions for future research endeavors on competence-based management are discussed.

This paper presents a model of resources refinement for systematically and comprehensively deriving competence-based competitive advantages. Competence-based competitive advantages support market-based strategies. They reinforce the overall market-based advantages of low costs, product differentiation and minimal cost differentiation at the business unit level and of carrying out tasks jointly in a performance compound at the corporate level. Competence-based competitive advantages also support resource-based strategies by reinforcing the advantages of product innovation skills at the business unit level and transfer of core competences in a performance compound at the corporate level.

This paper develops a framework for understanding history as a source of competitive advantage. Prior research suggests that some firms enjoy preferential access to resources as a result of their past. Historians, by contrast, understand past events as more than an objective account of reality. History also has an interpretive function. History is a social and rhetorical construction that can be shaped and manipulated to motivate, persuade, and frame action, both within and outside an organization. Viewed as a malleable construct, the capacity to manage history can, itself, be a rare and inimitable resource.

The literature on organizational change has long acknowledged the need to balance stability and economic efficiency with the need to be flexible and to change. Authors, certainly in the dynamic capabilities tradition but also in other perspectives, have stressed the importance of more open and loosely coupled systems to promote adaption. However, many organizations do not operate on such premises but rather rely on creating efficient business units through tight coupling, building strict social and administrative control, and jointly relying on common systems. In this study, we conduct 46 interviews with employees from three different retail organizations to investigate how units in such tightly coupled systems change within the framework of the set standards. Through contrasting the characteristics of high and low functioning units, we identify three mechanisms that seem to enable the units to successfully and repeatedly realign and establish new configurations. We conclude that the orchestrator of all three realignment mechanisms is the middle manager, and we discuss the middle manager's role and the different activities that enable a successful realignment.

A reason why industry incumbents seldom survive technology transitions is their strong reliance on an efficient, but inflexible organizational system. We studied three digital transformation initiatives that created fast progress in a struggling newspaper group by working against the industry logic and established thinking in the area. This chapter argues that management succeeded in introducing a new strategic practice through these transformation initiatives. We focus on three factors contributing to the success: complexity management, short time development of a long-term vision, and the introduction of impossible goals.

The purpose of this chapter is to examine what small business strategic management and long-term planning involves as practised by successful growth-oriented small businesses. The aim is to provide insight into the strategic learning, control and development processes, including indicative detail of the underpinning day-to-day practices and actions that make up those processes. Key focus is the overall strategic control activity of more progressive owner managers and their use of an idiosyncratic mentally held ‘strategic planning and thinking framework’ that guides and informs strategic decision-making, strategic adjustment to existing markets, products and processes activities and long-term strategic direction.

The research approach is underpinned and informed by personal construct theory which gives emphasis to the highly complex nature of the task of small business strategic control and highlights the need for a creative and innovative research methodology to facilitate close and detailed investigation of the phenomenon. To this end, a multidisciplinary case study research methodology was developed by the authors to underpin examination of strategic development and planning within micro-, small- and medium-sized businesses.

The chapter enhances understanding of small business strategic management practice in growth-achieving micro and small enterprises. The findings of this research, whilst demonstrating the key role of entrepreneurial learning in small firm strategic control of the uncertain external environment, also provides a multidimensional lens through which to dissect and better understand the small firm strategy development process – drawing upon and integrating grains of truth from the differing schools of management thought embedded in the literature.

The findings of this study also facilitate the addressing of the ‘black box’ of hazy insight within the literature which fails to reveal micro-level fine detail understanding of the managerial and organisational actions and activities that make up strategy process. The authors commence provision of such black box insight within this chapter – this as lead-through to the follow-on chapter which affords specific attention to enhancing understanding of the micro-level fine detail minutia of managerial, organisational and work activities that make up strategy process within small businesses.

The research is of a comparative dimension focussing on small business development within the developed economy context of the UK, the emerging economy contexts of Malaysia and Ghana and the transitional economy contexts of Russia. Thus, time and resource limitations bound the studies.

This chapter is based on a four-year literature review process that focused on conceptual business management research. A new platform for advancing business management in competence-related ways is compiled using 66 references that contain a population of 84 competence-related business management concepts published in English between the years 1990 and 2002. For the purposes of this study, the home bases of focal firms are limited to the OECD countries. Ex ante, various research traditions were regrouped into eight schools of thought on business management based on resources, competences, knowledge, organizations, processes, business dynamism, evolution, and Porter's frameworks. The eligible concepts were identified via an analysis of 50 journals and books of 18 publishers. The findings reveal that 99 authors have assigned primary or secondary roles to a firm's competences within their 84 concepts across the eight schools of thought. The two schools with primary emphasis on a firm's competences, the dynamism-based school (18 concepts) and the competence-based school (16 concepts), have produced 34 (41%) concepts. The six other schools have generated 50 (60%) concepts: 14 knowledge-based, ten resource-based, ten evolutionary, seven Porterian, seven organization-based, and two process-based concepts. The platform developed in this chapter may help researchers to focus on the most promising areas and ways to produce highly applicable concepts for managing a firm's dynamic business. Some suggestions to this end are put forth: (i) increase future collaboration between scholars, business managers, and business consultants, (ii) advance competence-based concepts primarily along the international business dimension, and (iii) conduct future competence-related literature reviews. The rigorous conduct of future reviews involves the replicable ways of searching, browsing, including or excluding, retrieving, inferring, coding, and presenting the conceptual data.

In this conceptual paper we investigate how corporate venturing influences an organization's competences. The impact of various types of corporate ventures on the portfolio of strategic options of a firm's competence modes (Sanchez, 2004a; Sanchez & Heene, 2002) will be assessed by distinguishing two fundamentally different dimensions of corporate venturing: technology and product (Block & MacMillan, 1993). We argue that the level of product and factor market dynamism mediates the effect of corporate venturing on a firm's competence modes. Corporate ventures that significantly increase the level of product or factor market dynamics will increase the flexibility in all five competence modes. These ventures have a direct effect on the lower-order competence modes and an indirect, lagged effect on higher-order competence modes through feedback loops. The developed framework and the propositions contribute to managing the ability of a firm to change its coordination, resource, and operating flexibility in order to sustain value creation.

This paper proposes a semi-Beerian frame of reference for designing a business organization as a system with four subsystems and eight modes of thinking and interacting in both offering and resource markets. A systemic organizational competence includes an ability to connect a business unit with its markets. It possesses absorption, attenuation, and amplifier capacities. It guides and re-specifies all technology, embedded knowledge, capabilities, and other resources that together enable a business unit to act in the predefined, emerging, or innovative ways needed for goal attainment. Ex ante, various research traditions were regrouped into eight schools of thought on business management based on Porter's frameworks, resources, competences, knowledge, organizations, processes, business dynamism, and evolution. The findings reveal that various core, distinct, organizational, higher, and lower competences and capabilities play both primary and secondary roles, across the eight schools of thought, within a population of 84 competence-related business-management concepts published between years 1990 and 2002. Most authors do not deal with competitiveness boundary setting and modeling. A new frame of reference points to some viable avenues of producing highly applicable competence-based concepts as four semi-Beerian subsystems (boundaries, models, designs, and actions). Managing a business unit successfully involves eight kinds of explicit and tacit knowledge, situational information, reflections, decisions, models, designs, and interactions. It is proposed that a high degree of systemic advancement is one of the necessary attributes of any competence-based concept that will be proven to be highly applicable in managing a real dynamic business. Thus, competence-based scholars are encouraged to adopt the suggested assumptions, redesign their concepts as one or several semi-Beerian subsystems, and thus advance their school of thought markedly in the future.