nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒05‒10
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Co-Development of Open Innovation Strategy and Dynamic Capabilities as a Source of Corporate Growth By Alar Kolk; Kristi Püümann
  2. Changes in the Competitive Strategy of Estonian Public Companies in the next Five Years: Challenges for Top Managers, Academics and Consultants By Mait Raava
  3. Content Analysis of Strategic Issue Research 1980-2006 By Egert Valmra; Tomi Laamanen; Heikki Saukola
  4. Rapid International Expansion Strategy of Emerging Market Enterprises: The Interplay between Speed and Competitive Risks on International Performance By Sea-Jin Chang; Jay Hyuk Rhee
  5. Studying Strategy Process in Organizations That Are Structurally Modulating between Exploration and Exploitation: Comparison of Computational Modelling and Case Study Approach By Marko Rillo
  6. China’s International Competitiveness: Reassessing the Evidence By Ari Van Assche; Chang Hong; Veerle Slootmaekers
  7. A Tool for Measuring Institutional Leadership and Its Implementation for the Evaluation of Organizational Leadership Capability By Kurmet Kivipõld; Maaja Vadi
  8. Determinants of the Size and Structure of Corporate Boards: 1935-2000 By Kenneth Lehn; Sukesh Patro; Mengxin Zhao
  9. Changes in the Competitive Strategy of Estonian Public Companies in the next Five Years: Challenges for Top Managers, Academics and Consultants By Mike Franz Wahl
  10. The Role of Organisational Stakeholders in the Formulation of Values Statements By Krista Jaakson

  1. By: Alar Kolk (Institute of Strategy and International Business, Helsinki University of Technology); Kristi Püümann (School of Economics and Business Administration, Tallinn University of Technology)
    Abstract: Companies need to be innovative in terms of their business models and technologies to achieve superior performance. As market conditions require innovation to be open, firms develop dynamic capabilities to generate and realise such open strategies. Even though corporate growth in rapidly changing environment is related to opening up innovation as well as developing dynamic capabilities, there is a necessity for appropriate management of openness of innovation strategies as well as management of the dynamics of capabilities. Therefore this paper suggests that firms need to find a balance point between development of their organisational capabilities and openness of their innovation strategies. Co-development of firms´ dynamic capabilities together with Open Innovation Strategies enables firms to maximise their performance.
    Keywords: open innovation; open business model; innovation strategies; dynamic capabilities; corporate growth
    JEL: L29 O30 O31 O32
    Date: 2008
  2. By: Mait Raava (Department of Management, Estonian Business School)
    Abstract: To create a sustainable competitive advantage, the firm must adapt its strategy in accordance with changes in industry. The purpose of this survey is to reveal how top managers see major changes in strategic management over the next five years. Companies from the Tallinn OMX Market were chosen as a sample of leading companies. Structured interviews were conducted with thirteen top managers. This revealed highly plausible changes in strategic management over the next five years as predicted by top managers of Estonian public companies – these were in the areas of the value chain, corporate structure, planning and control systems, motivation schemes and external opportunities. The major challenges for top managers in the near future are to successfully align the organizational structure with the value chain in accordance with emerging opportunities in foreign markets and define and invest enough in distinctive competencies to achieve sustainable profitable growth. This result is in accordance with the reflections of top mangers that their main priorities in strategic research and development are to facilitate the strategy development process, implement management tools, and research into and share knowledge and experience of doing business in foreign markets. These results suggest specific challenges for academics and consultants for achieving better collaboration in strategic management and development.
    Keywords: competitive advantage, strategic management, future challenges, research and development, collaboration
    JEL: M12 L32
    Date: 2008
  3. By: Egert Valmra (Tallinn University of Technology); Tomi Laamanen (Helsinki University of Technology); Heikki Saukola (Helsinki University of Technology)
    Abstract: Building on the achievements of the previous research on strategic issue management practices, this paper provides a systematization of the main body of strategic issue management research into three main research streams. These include research on individual issue perception, intra-organizational actions in the strategic issue management context, and organizational responses to strategic issues. Our paper also provides a detailed analysis of linkages between perception research and research on organizational responses to strategic issues. Based on this analysis, we find that direct linkages can be drawn between the two research areas due to the commonly accepted categorization of strategic issues as opportunities and threats. As a synthesis of our review, we put forward a conceptual model of the linkages between the research on issue perception and organizational responses.
    Keywords: Strategy process, strategic issue management, cognition, upper echelon
    JEL: L19 L29
    Date: 2008
  4. By: Sea-Jin Chang; Jay Hyuk Rhee
    Abstract: Firms that internationalize relatively late may pursue rapid internationalization by entering multiple markets simultaneously to reach global scale faster and to capture early mover advantages. These trends run counter to the theory of incremental internationalization. With data on Korean firms’ early international expansion experiences, we found evidence that a rapid international expansion strategy enhances firm performance in industries where globalization pressures are high, by firms with less lead-time of their home-country rivals, and in countries where they could be early movers.
    Keywords: incremental internationalization, rapid international expansion strategy, emerging markets, foreign subsidiary survival, foreign direct investment
    Date: 2007–11
  5. By: Marko Rillo (Faculty of Economics and Business Administration, Tallinn University of Technology)
    Abstract: This paper analyses research methods that could be applicable for studying the strategy process in organizations that are shifting in their strategic change process between the modes of exploration and exploitation by the means of structural modulation (Nickerson & Zenger 2002). As the structural modulation phenomenon poses new methodological challenges in terms of handling processual and longitudinal data, then the traditional cross-sectional approach cannot be effectively used. For this purpose, the analysis focuses on two potential, seemingly opposite approaches – quantitative computational modelling and qualitative in-depth case study analysis. It finally concludes with a "to do" list in order to establish the next steps in the research plan.
    Keywords: research methods; strategy process; exploration; exploitation; structural modulation; system dynamics; case study
    JEL: L20 L21 L22 L25 M10
    Date: 2008
  6. By: Ari Van Assche; Chang Hong; Veerle Slootmaekers
    Abstract: In this paper we argue that export data are an inadequate tool to measure a country’s international competitiveness when external trade is dominated by export-processing trade. Export data do not necessarily reflect the value produced in an exporting country, but rather capture the gross value of the products that leave a country’s ports. We demonstrate that, in the case of China, this leads to an upward bias in both the perceived quantitative and qualitative threats to the Western economies.
    Keywords: China, export-processing trade, technological intensity, trade balance
    Date: 2008
  7. By: Kurmet Kivipõld (University of Tartu, Faculty of Economics and Business Administration and Lääne-Viru School of Applied Sciences); Maaja Vadi (University of Tartu, Faculty of Economics and Business Administration)
    Abstract: The concept of Institutional Leadership opens up some essential aspects of organizational leadership capability that could be defined as the collective ability of leadership to detect and cope with changes in the external environment by maintaining the primary goals of the organization. The aim of this paper is to design a tool to measure institutional leadership and evaluate organizational leadership capability. Leadership came under greater focus within the institutional context at the end of the 1990s. On the one hand, this arose from the necessity to transfer leadership capabilities into the strategic assets of institutions, on the other, it is due to other approaches to management (i.e. cascading leadership, intellectual capital, organizational learning, knowledge management and self-organizing systems). The thing that unites all these approaches is their attempt to improve an organization's ability to adapt in a complex environment, and it is proposed that the ability to adapt is based on the knowledge of organizational members and to the extent that this knowledge is embedded in the pattern of organizational structure. Therefore, institutional leadership is an important issue for studying and improving the transformation of knowledge in the structure of an organization. A total of 445 respondents from six Estonian organizations participated by completing a questionnaire about institutional leadership. Next, a quantitative analysis was performed and sets of factors obtained from a partial least squares (PLS) regression and Cronbach alpha test. Finally, the pattern of individual items (statements) within each of the factors was identified and the results which indicate organizational leadership capability were plotted.
    Keywords: leadership, institutional leadership, intellectual capital, knowledge management, organizational learning, organizational structure, self-organizing systems, strategic management
    JEL: M10
    Date: 2008
  8. By: Kenneth Lehn; Sukesh Patro; Mengxin Zhao
    Abstract: We argue that the size and composition of corporate boards are determined by tradeoffs involving the information that directors bring to boards versus the coordination costs and free rider problems associated with their additions to boards. Our hypotheses lead to predictions that firm size and growth opportunities are important determinants of these board characteristics. Using a sample of 82 U.S. firms that survived over the period of 1935 through 2000, we find strong support for the hypotheses. The hypotheses also find support in the relation between changes in board size and firms’ merger and divestiture activity, and changes in the geographical diversification of firms. We find no robust relation between firm performance and either board size or composition after accounting for the determinants of these board characteristics.
    Keywords: Board size, board composition, mergers and acquisitions, firm size, growth opportunities, diversification, geographical diversification, firm performance, and endogeneity
    JEL: G32 G34
    Date: 2007–12
  9. By: Mike Franz Wahl (School of Economics and Business Administration, Tallinn University of Technology)
    Abstract: This article reviews practical and theoretical aspects of ownership research and corporate governance in a historical view. Whom and what is a business for? The answer once seemed clear, but no longer. Jyrki Veranen (1996) argues that the governing of the company should be based on a model that allows the owners to control and support the management. Martin Hilb (2006) argues that ownership has been replaced by investment, and a company’s assets are increasingly found in its people. Ownership history and knowledge of relevant contextual factors help to frame the “right” questions to ask in our research efforts. An historical summary of ownership research is given. The term “corporate governance” has come to mean many things; it involves various problems of asymmetric information and incomplete contracts that generate a need for public policy responses to mitigate market failures and ensuring that companies move towards “good” corporate governance. It seems that all research on corporate governance is actually research on ownership. Ownership research needs delicate and sensitive information. This author is further developing a typology of capital company owners in Estonia, using cluster analysis.
    Keywords: corporate governance, ownership structure, history, classification, Estonia
    JEL: G32 G34
    Date: 2008
  10. By: Krista Jaakson (Institute of Business Administration, University of Tartu)
    Abstract: Although the literature on organisational values is plentiful, little is known about the process of formulating the statements that reflect those values in an organisation. Furthermore, the way that stakeholder groups are treated in the existing literature is dramatically different when it comes to their involvement in the values formulation process. There is no consensus on whether and who to consult when adopting values statements. The aim of the current paper is to offer a model for stakeholder involvement in the process of formulating organisational values statements. First, the categories of values are discussed in order to understand the subject matter. Next, the potential impact of values statements on different stakeholders is mapped and a basis for distinct levels of stakeholder involvement is formed. The model for stakeholder involvement presented in the final chapter rests on the idea that the higher the impact of the values statement on stakeholders the more they deserve to be involved in the process of formulating these values.
    Keywords: organisational values, value statements, stakeholder involvement
    JEL: J53 M14 L14
    Date: 2008

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