nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒08‒31
twelve papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Resource Co-specialization, Firm Growth, and Organizational Performance: An Empirical Analysis of Organizational Restructuring and IT Implementations By Kim, Sung Min; Mahoney, Joseph T.
  2. A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach By Kim, Jongwook; Mahoney, Joseph T.
  3. Technological Capabilities and Firm Performance: The Case of Small Manufacturing Firms in Japan By Montgomery, David B.; Isobe, Takehiko; Makino, Shige; Lee, Kong Chian
  4. Cross-Boundary Disruptors: Powerful Inter-Industry Entrepreneurial Change Agents By Burgelman, Robert A.; Grove, Andrew S.
  5. Intra-firm Technology Transfer and R&D in Foreign Affiliates: Substitutes or Complements? Evidence from Japanese Multinational Firms By Belderbos, René; Ito, Banri; Wakasugi, Ryuhei
  6. The strategic role of the plant in international networks: a longitudinal study By Vereecke, A.; De Meyer, A.; Van Dierdonck, R.
  7. Entrepreneurship, Spillovers and Productivity Growth in the Small Firm Sector of UK Manufacturing By Hany El Shamy; Paul Temple
  8. Can production subsidies explain China's export performance? Evidence from firm level data By Zhihong Yu; Yundan Gong; Sourafel Girma; Holger Görg
  9. The globalisation in the clothing sector and its implications for work organisation: a view from the Portuguese case By Moniz, António; Paulos, Margarida Ramires
  10. China's integration into global production networks and its implications for export-led growth strategy in other countries in the region By Prema-Chandra Athukorala
  11. Cooperation networks and innovation: A complex system perspective to the analysis and evaluation of a EU regional innovation policy programme By Russo, Margherita; Rossi, Federica
  12. Management Economics in a Large Retail Organization By Siebert, W. Stanley; Zubanov, Nikolay

  1. By: Kim, Sung Min (Loyola U Chicago); Mahoney, Joseph T. (U of Illinois at Urbana-Champaign)
    Abstract: This paper examines the effects of co-specialized information technology (IT) on the growth and performance of IT-investing firms as a driver of competitive advantages. By adopting resource-based and dynamic-capability perspectives on firm-specific IT systems, we first identify the mechanisms of resource co-specialization strategy in the process of IT implementation as organizational restructuring and adaptive customization of IT applications into the context of adopting firms. Then, we examine impacts of the resulting co-specialized IT system on organizational performance. Testable hypotheses are developed to investigate how the co-specialization mechanisms of organizational restructuring and IT customization influence firm growth--in terms of the number of employees, value-added, and revenue. We also examine how co-specialization mechanisms of organizational restructuring and IT customization influence project outcomes -- in terms of project referenceability and license extension measures. These empirical tests control for other contextual factors and the endogeneity of decision variables. Using a unique panel data on 334 firms adopting Advanced Planning and Scheduling (APS)applications, we find strong empirical support for the co-specialization hypothesis that strategic choices of using IT co-specialization mechanisms are positively associated with firm growth and with superior project outcomes in the sample firms.
    Date: 2008
  2. By: Kim, Jongwook (Western Washington U); Mahoney, Joseph T. (U of Illinois at Urbana-Champaign)
    Abstract: This paper maintains that joining property rights theory and Austrian economics informs the dynamic capabilities approach by giving context to key constructs within this approach, particularly the nature of organizational processes and asset positions. By defining resources and capabilities as bundles of property rights, we can develop theory on how firms create, deploy, and renew those resources and capabilities. Developing, deploying and renewing capabilities involve a process of bundling and re-bundling resource combinations. Central to bundling resource combinations is the contracting process, which generates information that can lead to more efficient solutions achieved through bargaining and organizational innovation, which in turn leads to the discovery of new economic opportunities. In a world of positive transaction costs, the notion of the firm as a nexus of (complete) contracts is rightly discarded; rather, the firm is defined as a nexus of incomplete contracts, which allows for entrepreneurial alertness, creativity, and judgment under uncertainty. Thus, we maintain that the contracting process is a discovery process and entrepreneurial in nature, allowing firms to sense and seize new economic opportunities. Property rights theory enables a contractual process-oriented approach for how dynamic capabilities are developed, sustained and rejuvenated and in so doing intertwines firm boundary issues with the capabilities dimension of a strategic theory of the firm.
    Date: 2008
  3. By: Montgomery, David B. (Stanford U); Isobe, Takehiko (Keio U); Makino, Shige (Chinese U of Hong Kong); Lee, Kong Chian
    Abstract: The purpose of this study is to investigate the relationship between technological capabilities and firm performance. We divide technological capabilities into two types – refinement capability, which involves the improvement of the existing asset portfolio, and reconfiguration capability, which involves the restructuring of the asset portfolio through the integration of new assets. The results of an analysis of a sample of 302 small and medium-sized manufacturing firms in Japan suggest that refinement capability relates more positively to operational efficiency than does reconfiguration capability, and that reconfiguration capability relates more positively to strategic performance than does refinement capability. The results also suggest that firms with superior refinement capability tend to possess superior reconfiguration capability. Our findings show that both external and internal factors, such as technological volatility, inter-firm collaboration, and firm age and size, are significantly associated with the level of refinement and reconfiguration capabilities possessed by a firm.
    Date: 2007–12
  4. By: Burgelman, Robert A. (Stanford U); Grove, Andrew S.
    Abstract: Based on comparative case studies of Apple Computer's strategic actions in the music and cellular telephony industries, we develop the concept of "cross-boundary disruptor" as a new type of entrepreneurial actor in inter-industry strategic dynamics. We document how the confluence of forces that drove the convergence of the music and computing industries gave rise to Apple Computer becoming a defining example of a cross-boundary disruptor to the music industry, and examine Apple's chances to do the same in the cellular telephony industry. Using our preliminary conceptual framework, we further examine what kind of company could become a cross-boundary disruptor in the US healthcare industry to help overcome its long-standing stasis. We summarize our case study-based findings into a preliminary substantive theory of the cross-boundary disruption phenomenon, and discuss several implications for further strategic entrepreneurship research and for strategic leadership practice.
    Date: 2007–10
  5. By: Belderbos, René (Katholieke Universiteit Leuven, UNU-MERIT, and University of Maastricht); Ito, Banri (Research Institute of Economy Trade and Industry (RIETI)); Wakasugi, Ryuhei (Kyoto University, Institute of Economic Research)
    Abstract: R&D in foreign affiliates and technology transferred from their parent firms are important potential drivers of productivity in host countries. In this paper we examine the simultaneous impact of local R&D and intra-firm international technology transfer on productivity growth in foreign affiliates. We estimate a dynamic productivity model on a large sample of Japanese manufacturing affiliates worldwide in 1996-1997 and 1999-2000. We find that both affiliate R&D and intra-firm technology transfer contribute to productivity growth, while technology transfer exhibits decreasing marginal returns. The two sources of technology are complements: use of one source of technology increases the marginal impact of the other.
    Keywords: R&D, technology transfer, multinational firms
    JEL: F23 O32 O33
    Date: 2008
  6. By: Vereecke, A.; De Meyer, A.; Van Dierdonck, R. (Vlerick Leuven Gent Management School)
    Abstract: The strategic role of plants is an important decision variable in the design of international plant networks. The framework introduced by Ferdows in the 1990s offers an interesting typology, classifying plants according to their strategic role. Empirical research testing the framework showed its value as a tool for the analysis and assessment of the role of plants in such networks. This paper reports on a follow-up of this empirical study, ten years later. It shows that the typology has predictive value for the future perspectives of the plant. While most of the lead plants have survived, several off-shore and source plants, and some of the server and contributor plants have disappeared from the network. As such, the framework can be useful for plant managers whose objective is to safeguard the future of their plant, as well as for executives in headquarters, who design and redesign plant networks for future competitiveness.
    Keywords: international manufacturing, strategic role, survival
    Date: 2008–07–18
  7. By: Hany El Shamy (University of Surrey); Paul Temple (University of Surrey)
    Abstract: This paper considers the sources of technological change and productivity growth in the small firm sector of UK manufacturing over the period 1973- 2002, focusing on the mechanisms by which spillovers occur between the large firms which perform the bulk of R&D and smaller firms which are the recipients. It is argued that the current volume of domestic R&D generates profitable and high productivity opportunities for smaller firms. However this mechanism ignores the ways in which R&D also contributes to the more general knowledge base available to small firms as codified information which frequently takes the measurable form of industrial standards. A simple model of labour demand among small manufacturing is developed which employs two measures of technological activity intended to capture both these channels. A co-integrating relationship based upon an augmented labour demand equation is established for UK manufacturing, showing the relevance of both channels for the explanation of productivity growth in the small firm sector.
    Keywords: Key Words: Small firms; productivity; technological change; R&D; standards.
    JEL: J23 L25 L26 O32
    Date: 2008–08
  8. By: Zhihong Yu; Yundan Gong; Sourafel Girma; Holger Görg
    Abstract: It is widely accepted that China has been experiencing an export-led growth approach. However, the question whether government can reshape industry structure through production subsidies to enhance export performance has not been answered. This paper analyses the impact of production subsidies on firms’ export performance using a very comprehensive and recent firm level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important
    Keywords: Exporting, subsidies, China, endogenous Tobit
    JEL: F1 O2 P3
    Date: 2008–07
  9. By: Moniz, António; Paulos, Margarida Ramires
    Abstract: The clothing sector in Portugal is still seen, in many aspects as a traditional sector with some average characteristics, such as: low level of qualifications, less flexible labour legislation and stronger unionisation, very low salaries and low capability of investment in innovation and new technology. Is, nevertheless, a very important sector in terms of labour market, with increased weight in the exporting structure. Globalisation and delocalisation are having a strong impact in the organisation of work and in occupational careers in the sector. With the pressure of global competitiveness in what concerns time and prices, very few companies are able to keep a position in the market without changes in organisation of work and workers. And those that can perform good responses to such challenges are achieving a better economical stability. The companies have found different ways to face this reality according to size, capital and position. We could find two main paths: one where companies outsource a part or the entire production to another territory (for example, several manufacturing tasks), close and/or dismissal the workers. Other path, where companies up skilled their capacities investing, for example, in design, workers training, conception and introduction of new or original products. This paper will present some results from the European project WORKS – Work organisation and restructuring in the knowledge society (6th Framework Programme), focusing the Portuguese case studies in several clothing companies in what concern implications of global context for the companies in general and for the workers in particular, in a comparative analysis with some other European countries.
    Keywords: Clothing Industry; Restructuring; Work; Knowledge Society
    JEL: L67 F23 J61 F01 L22 A14
    Date: 2008–07
  10. By: Prema-Chandra Athukorala
    Abstract: TThis paper examines the implications of China's rapid integration into global production networks for export performance of countries in Southeast Asia. In a clear departure from the conventional practice, the trade flow analysis of the paper is based on a careful disaggregation of reported trade data into components and final goods, with a view to delineating supply-side complementarities arising from cross-border production fragmentation. There is clear evidence that network-related trade in components has strengthened Southeast Asia's trade links with China, opening up new opportunities for the expansion of component production/assembly writhing vertically integrated global industries. However, these trade links with China have not lessoned the dependence of growth dynamism of these countries on the global economy; the dynamism of regional cross-border production networks depends inexorably on China's trade in final goods with North America and the European Union.
    Keywords: China, Southeast Asia, production fragmentation, global production networks
    JEL: F14 F23 O53
    Date: 2008
  11. By: Russo, Margherita; Rossi, Federica
    Abstract: Recent developments in innovation theory and policy have led policymakers to assign particular importance to supporting networks of cooperation among heterogeneous economic actors, especially in production systems composed of small and medium enterprises. Such innovative policies call for parallel innovations in policy analysis, monitoring and assessment. Our analysis of a policy experiment aimed at supporting innovation networks in the Italian region of Tuscany intends to address some issues connected with the design, monitoring and evaluation of such interventions. Combining tools from ethnographic research and social networks analysis, we explore the structural elements of the policy programme, its macroscopic impact on the regional innovation system, and the success of individual networks in attaining their specific objectives. This innovative approach allows us to derive some general methodological suggestions for the design and evaluation of similar programmes.
    Keywords: Innovation policy; cooperation networks; evaluation; regional development; SMEs production systems; complex systems
    JEL: R58 O38 D78 O32 O31
    Date: 2008–06–26
  12. By: Siebert, W. Stanley (University of Birmingham, UK); Zubanov, Nikolay (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: We study the impact of and reward to middle management ability using data from 245 stores of a nationwide retailer. The company scores six broad areas of management practice, the most important of which turns out to be "commercial awareness", where able managers raise labour productivity by 17% compared to less able. We show that the managers' incentive scheme is implicitly an insurance one, with managers taking a share in deviations of actual sales from expected. At the same time, abler managers do not receive higher pay all else equal, which implies that middle management ability is not fully tradable.
    Keywords: management, firm behaviour, business economics, productivity, compensation methods
    JEL: D21 J24 M20 J33 M52
    Date: 2008–08

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