Knowledge that Transforms

A sample of tenured business policy scholars, with significant track records in publishing, rated key management journals with respect to their appropriateness as outlets for scholarly research in the business policy field. The results of the survey are reported.

The paper describes a test of the Galbraith and Nathanson (1978) model of stages of development. In particular, Galbraith and Nathanson hypothesized that in highly diverse firms: (1) performance criteria are more objective, (2) bonus is a larger proportion of total compensation, and (3) bonus allocation decisions are based more on an objective ‘formula’ of performance evaluation than on the discretion of the firm President or Chief Executive Officer. The study compared the three variables across three diversification groups (high, medium, low), based on Rumelt's (1974) classification (single product, vertically integrated, dominant, related, unrelated, and conglomerate). The study used written surveys of corporate managers in Fortune 1000 manufacturing firms.

Among the important elements of a company's strategic plan is its decision about the degree of financial leverage it elects to imbed in its capital structure. A simple operational framework that can assist in framing that decision, which concentrates on the likelihood of being unable to meet fixed financial charges, is presented. The model is tested empirically, and support for its potential usefulness in the financial planning process is found.

Research suggests that firms which emphasize unrelated diversification through mergers and acquisitions are often located in unfavorable market positions, in terms of the attractiveness of their industries and their competitive positions within these industries. However, these previous research efforts have not established whether such positions will also be linked to firms using non‐conglomerate acquisition strategies. This study utilizes three acquisition strategies—conglomerate, technology‐related, and marketing‐related—to hypothesize differences in the market position of acquisitive firms. Results show that, while acquisitive growth is generally associated with a decline in market position, one particular acquisition strategy, the marketing‐related strategy, is associated with a distinctly superior position. Firms utilizing this strategy were found to be in more profitable industries and to have higher market shares in these industries.

This paper investigates whether publicly held firms which change to private ownership through management buyouts (ex‐public firms) possess characteristics prior to the change which differentiate them from firms which remain publicly owned. The financial characteristics of ex‐public firms for the year immediately prior to going private were analyzed. A multivariate framework was developed to determine which attributes best distinguished firms going private via management buyouts from similar firms not going private. A discriminant function was developed using seven ratios: (1) concentration of ownership, (2) cash flow to net worth, (3) cash flow to total assets, (4) price/earnings ratio, (5) price/book value ratio, (6) book value of depreciable assets in relation to original costs, and (7) dividend yield. The model demonstrated a classification accuracy of 77.8 percent for the original sample and 81.4 percent in a hold‐out sample validation. These findings imply that financial characteristics alone provide a means by which firms going private via management buyouts can be separated from others. Therefore one can argue that, regardless of the stated motive for going private, financial characteristics either are explicit decision variables or directly reflect non‐financial reasons for management buyouts.

This paper is concerned with identifying influences on the competitive performance of companies involved in the U.K. brewing industry. It seeks to identify key strategic characteristics, relate these to company performance and move towards an explanation of the influences that emerge as influencing competitive standing. It argues that diversification strategies must be studied as an aspect of industry structure, and shows that more focused, limited diversification and regional brewing strategies may be preferable in the context of the U.K. brewing industry. The research findings conflict with those of many previous studies which research the diversification strategies of primarily large firms (both in the U.S. and the U.K.) drawn from across‐industry samples (e.g. the Fortune 500 firms) and which identify superior performance for related diversification strategies. The study therefore provides support for the hypothesis that there is an optimum level of diversification within an industry which balances economies of scope and diseconomies of organizational scale. In the context of the U.K. brewing industry the traditional single or dominant business brewers seem to have found the strategy which matches firms effectively with the important characteristics of industry structure.

Business plans that were funded by venture capitalists were compared to unfunded plans. Comparisons on the basis of plan structure, plan organization, and financial projections indicate that plans which deviate too far from the norm of the variables studied tend to go unfunded. Implications for plan preparation are discussed.

While comprehensive, ongoing competitive intelligence systems generate valuable input for broad strategic decisions, they often fail to provide the specific actionable information needed by managers operating in a project‐oriented environment. This paper proposes a project‐based framework for competitive analysis. The framework was developed from field reseach involving 16 projects. A comparison of project‐based and comprehensive competitive analysis systems is made to illustrate their differences. A case example from field research is utilized to illustrate concepts central to this approach and its practical utility. A set of guidelines regarding pitfalls to avoid in project‐based competitive analysis is presented.

In a study of the impact of human resource planning an organization performance, statistical tests did not indicate significant differences between the performance of firms using formal human resource planning and firms that do not. There was an indication of a positive change in performance after the initiation of human resource planning, relative to non‐users of such systems.