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Strategic Management Journal Vol. 44 No. 8 2023

Ownership competence: The enabling and constraining role of institutions

Nicolai J. Foss1; Peter G. Klein2,3; Lasse B. Lien3; Thomas Zellweger4; Todd Zenger5

1 Department of Strategy and Innovation Copenhagen Business School Frederiksberg Denmark · 2 Baylor University, Entrepreneurship, Hankamer School of Business Waco Texas USA · 3 Department of Strategy and Management NHH Norwegian School of Economics Bergen Norway · 4 Swiss Research Institute of Small Business and Entrepreneurship University of St. Gallen St. Gallen Switzerland · 5 Department of Management, David Eccles School of Business University of Utah Salt Lake City Utah USA

open access

Abstract

Research Summary Monteiro and Miranda (2022) argue that owners differ in their ability to select and work within a particular institutional environment, suggesting “institutional competence” as a dimension of ownership competence distinct from what we call governance, matching, and timing competence. We agree that institutions matter and welcome the chance to describe their role in detail. However, rather than treating institutional competence as a separate channel by which owners create value from their assets, we think institutional features can be modeled as “shift parameters” that moderate the effect of ownership competencies on outcomes. In developing this argument, we reflect more broadly on the interplay between ownership competence and institutional uncertainty, noting that society at large benefits from individual‐level ownership competence, ownership by some owners may cause harm to other owners, and property‐rights enforcement and ownership competence are complements in generating private and societal benefits. Managerial Summary In “Ownership Competence” (Foss et al., 2021) we argued that business owners vary in their ability to create value out of the assets they own, distinguishing between governance, matching, and timing competence. Monteiro and Miranda (2022) argue that we should add “institutional competence” as a fourth kind of competence, describing the ability of owners to choose countries, regions, or environments where they can best exercise their ownership skills. We agree that these external conditions are important but argue that they work by modifying the impact of governance, matching, and timing competence rather than acting as an independent channel. In our response, we also comment on broader issues related to social and institutional aspects of ownership.

DOI
10.1002/smj.3494
Volume
44
Issue
8
Pages
1955-1964
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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