Abstract In this study, we have examined high and low levels of organizational adaptation to environmental change by analyzing strategy, structure, and performance relationships. Our results indicate that organizations with particular levels of adaptation tend to have specific strategy‐structure arrangements which yield certain performance results. Organizations with an optimum strategy‐structure match tend to have higher performances. Implications for future research in organizational adaptation are discussed.
Abstract We show that successful foreign market entry is related to the extent of foreign presence in an industry at the time of entry. Survival of 31 Canadian‐based businesses that entered 24 U.S. medical sector markets between 1968 and 1989 tended to be somewhat longer in product markets in which foreign‐based businesses held a moderate market share when the Canadian businesses entered than in low and high foreign share product markets. The result controls several other industry and business‐level factors, including industry concentration, entry year, corporate size, related diversification, entry mode, and service sector status.
Abstract An empirical study based upon a sample of 645 small businesses assesses the relationship that life cycle stage and level of competition exhibit with the problems perceived to constrain small business strategic planning. Problems have been identified as either internal (cash flow) or external (competition); they have further been classified as either situational or core problems. Among the most prevalent problems reported by decision makers are customer contact, market knowledge, marketing planning, location, and adequacy of capital. A total of 16 problem areas were identified. Traditional wisdom offers the scenario where problems faced will vary as the organization progresses through the life cycle. Much of this research refutes conventional wisdom in that level of competition was determined to have more of an impact on problem perception.
Abstract This paper argues that national differences in levels of trust impact perceptions of transactions costs and thereby influence the desirability of internalization and the choice of foreign market entry mode. The paper tests this framework on industry level data from the United States Commerce Department's Benchmark Survey of operations of U.S. ‐based manufacturing multinational corporations in 1977 and 1982, and shows that cultural differences in trust do influence perceptions of transaction costs and the preference for direct foreign investment across countries.
Abstract A firm's decision to manufacture abroad depends on location, governance, and strategic factors. Governance factors are firm‐specific. In spite of this, most empirical studies of foreign direct investment (FDI) have been conducted at the industry level (making it impossible to look at firm‐specific determinants), and only a handful have considered governance, location, and strategic factors simultaneously. This paper is the first large sample study of the determinants of foreign direct investment at the product and firm‐level. It examines the impact of location and governance factors, and of four types of strategic interactions, on a Japanese firm's propensity to manufacture in the U.S. The results support the view that foreign direct investment is explained by location, governance, and strategic variables. Economies of scale and trade barriers encourage Japanese FDI in the U.S. The larger a Japanese firm's R & D expenditures, the greater the probability it will manufacture in the U.S., but this is not the case for advertising expenditures. Some strategic factors are also important: Japanese firms with medium domestic market shares have the highest propensity to invest in the U.S. There is evidence of follow‐the‐leader behavior between firms of rival enterprise groups, but none of ‘exchange‐of‐threat’ between American and Japanese firms. Japanese investors are also attracted by concentrated and high‐growth U.S. industries.
Abstract This paper develops a model of global strategy that includes the constructs of industry globalization potential, the use of global strategy, the role of organization and management and the performance consequences of using global strategy. Propositions are developed as to why American and Japanese MNCs might differ in their perceptions of industry globalization potential, in their desired global strategy response, in their organizationally‐derived ability to implement global strategy and in their resulting performance. The model and arguments are examined in extensive interviews with senior executives at 36 worldwide businesses belonging to some of the largest American and Japanese MNCs. Data are analyzed using a partial least squares causal model. The results show that the Japanese firms have more globalized stategies than do the Americans, and that this factor affects their performance favorably.
Abstract The incidence of bankruptcy has risen dramatically among firms of all types and sizes in the past decade. Little is known, however, about the effects of alternative governance structures on the propensity of an organization to file Chapter 11 bankruptcy. Relying on logistic regression for periods 5 years and 3 years prior to the bankruptcy, as well as the contemporaneous period, we examine the relationships among independent/interdependent board composition and the structure of CEO/board chairperson positions and the filing of bankruptcy. While controlling for a series of financial indicators and firm size, the results illustrate robust explanatory power for the governance variables for both lagged periods.
The resource view of the firm has made substantial progress in identifying what attributes of a firm may provide a source of competitive advantage; however, the literature has far less to say about the emergence of these distinctive capabilities. We develop a simple framework based on the role of positive feedback effects of market activity, organizational factors that cause a firm to focus on a particular capability trajectory, and lastly the role of managerial choice with respect to anticipated feedback effects, which we term feedforward effects. We apply this framework to the emergence of competitive positions in the mutual fund-processing business from its inception to 1984.
Strategy implementation scholars have traditionally focused their attention on behavioral and social phenomenc in a firm that enable it to both choose and implement its strategies. Unfortunately, some of this work has assumed that it is possible to study strategy implementation independent of the content of a firm's strategies, and independent of the particular competitive context within which a firm operates. Recent developments in the resource-based view of the firm reaffirm the importance of studying the strategic consequences of behavioral and social phenomena within a firm, but suggest that separating this work from the content of strategy, or from the competitive context of a firm, is inappropriate. The papers in this special issue focus on important behavioral and social phenomena in a firm (e.g., organizational behavior), but do so in an explicit competitive context (e.g., competitive organizational behavior).
Abstract In this paper, CEOs are considered as ‘cognizers’ charged with integrating views in the top management team; a role which should require high cognitive complexity especially in diversified multinational corporations. A methodology for studying top managers' cognitive complexity is described and then applied to a sample of 26 CEOs. The CEOs' cognitive maps of the structure and of the dynamics of their industry are analyzed in terms of their degree of complexity, in relation to the breadth of the business portfolio of the firm, its geographic scope and the links the firm has with foreign parents. The results of this exploratory test generally confirm the principle of requisite cognitive complexity, and reveal a new set of more precise hypotheses linking particular dimensions of the scope of the firm with particular dimensions of CEOs' cognitive complexity.