Knowledge that Transforms

This study of automotive transaction relationships in the U.S.A. and Japan offers data which indicate that transaction costs do not necessarily increase with an increase in relation-specific investments. We empirically examine the conditions under which transactors can simultaneously achieve the twin benefits of high asset specificity and low transaction costs. This is possible because the different safeguards which can be employed to control opportunism have different set-up costs and result in different transaction costs over different time horizons. We examine in detail the practices of Japanese firms which result in effective interfirm collaboration.

This paper defines initiative as a key manifestation of corporate entrepreneurship, and examines the types of initiative exhibited in a sample of six subsidiaries of multinational corporations. From a detailed analysis of 39 separate initiatives, four distinct types are identified, which we refer to as ‘global,’ ‘local,’ ‘internal’ and ‘global–internal hybrid,’ to correspond to the locus of the market opportunity whence each arose. Two important conclusions are indicated. First, entrepreneurship at the subsidiary level has the potential to enhance local responsiveness, worldwide learning and global integration, a much broader role than previously envisioned. Second, the use of contextual mechanisms to create differentiated subsidiary roles has its limitations because each initiative type is facilitated in different ways.

Issue selling is an important mechanism for creating change initiatives in organizations. This paper presents two studies that examine what middle managers think about as they decide whether or not to sell strategic issues to top management. In Study 1 middle managers identify themes that indicate a favorable or unfavorable context for issue selling. Top management’s willingness to listen and a supportive culture were the most often named contributors to context favorability, while fear of negative consequences, downsizing conditions and uncertainty were thought to signal that a context was unfavorable for issue selling. Study 2 identifies factors that middle managers associate with image risk in the context of issue selling. Violating norms for issue selling, selling in a politically vulnerable way and having a distant relationship with top management were regarded as major contributors to a middle manager’s level of image risk. Both studies enrich our understanding of the social psychological mechanisms that undergird the strategic change process.