Knowledge that Transforms

This study measures and explains variance in the performance of corporations that purchase and hold blocks of stock in other corporations. Results show that following the purchase of between 5 and 50 percent of a target corporation's common stock, blockholder performance improves on average for 15 months. After 3, 7, 11, and 15-month intervals, performance is positively associated with (1) investments in targets that are suppliers or customers, (2) targets that make cross-investments into the equity securities of the blockholder, and (3) a blockholding value ratio that contrasts the value of the blockholding with the value of the blockholder.

Inkpen and Choudhury's (1995) attempt to plug the gap in strategic thinking posed by the absence of strategy inadvertently raises an existential question about the being of strategy as it is now known. The present paper highlights this implication and calls attention to the importance of the theory advanced by their classification of strategic absence or the absence of strategy.

In this issue Bauerschmidt critiques a recent Strategic Management Journal paper dealing with the absence of strategy. In this paper (Inkpen and Choudhury, 1995), we argued that strategy absence should be viewed as a legitimate phenomenon of interest. Bauerschmidt maintained that we failed to instill a new strategy paradigm and challenged our arguments as a rhetorical ploy. Unfortunately, Bauerschmidt misinterpreted our intended message. Although we challenged the conventional wisdom that every firm must have an articulated strategy, instilling a new paradigm was not our objective. Our main argument was that the concept of absence may help strategy researchers better understand existing paradigms.