'Dominance by birthright'? reconfiguration of firm boundaries to acquire new resources and capabilities

We examine pre-entry resources and capabilities (R&Cs) of de alio and de novo entrants in an emerging industry. Then, we investigate how entrants modify their firm boundaries, after entering a new industry, to acquire the R&Cs deemed critical to be competitive and survive in the industry. Our analysis uses the global biofuel industry as a case study. We use multiple sets of data, including primary data collected from semi-structured interviews with industry stakeholders and experts across major biofuel-producing countries as well as quantitative data from industry reports. Firms typically deploy two successive strategies in order to survive and grow. First, they extend vertical boundaries to capitalise on their own pre-entry R&Cs. Then they move quickly to acquire new R&Cs, which are classified as critical in the value chain of the industry. A new taxonomy of pre-entry R&Cs is proposed i) to distinguish critical and non-critical forms of R&Cs, and ii) to reflect the ease of acquisition of any requisite R&Cs, which are context specific. These strategic moves lead to the bi-directional vertical integration observed in the biofuel industry. Managers need to be able to assess the opportunities for entry and subsequent strategies to be competitive by assessing their R&Cs in terms of criticality and ease of acquisition in their entry decision making. A new taxonomy of R&Cs of the firm is proposed which has theoretical significance and practical implications for new entrants

Entrepreneurial adaptation: Insights from existing literature and possibilities for new research.

Recent research shows that new ventures have great difficulties in defining a viable business model from the outset and that minor or major adaptations to this initial business model are needed as the venture evolves. Entrepreneurial adaptation or the entrepreneur's willingness and ability to make appropriate adjustments to the business concept become critical. If adaptation is so important for entrepreneurial companies, we need to ask ourselves a number of questions. (1) What causes this need for adaptation? (2a) What is the precise effect of adaptation on a start-up's performance or survival and (2b) is this effect similar for all start-ups? Also, (3) what do we know about the process of adaptation? And (4) what are factors enabling this adaptation process? Finally, we also need to determine (5) how the concept of adaptation in entrepreneurial companies is related to existing concepts of change and adaptation. The purpose of this paper is to give an overview of different literature streams that are specifically relevant to entrepreneurial adaptation and the questions listed above, and to point out gaps in the existing literature requiring further investigation. We look at whether and how the existing literature can provide insight into each of those five questions. In a final section, we point out directions for further research.Innovation; Research; Model; Companies; Performance; Startups; Processes; Factors;

Evolution in inter-firm governance along the transport biofuel value chain in maritime Silk Road countries

We investigate how value chain governance can evolve in the transport biofuel sector beyond logistics and operations optimization, drawing on cases of eighteen manufacturers in four Belt and Road countries. We find that key motivations for vertical integration include control of strategic factors such as security of supply and gaining access to the retail market, subject to inter-institutional and intra-organizational barriers. We contribute to a theory of governance mode selection by suggesting plural governance mode offers a key strategic choice under institutional constraints. In BRI countries, plural mode could be less disruptive when integrating value chains.ESRC-Cambridge Commonwealth Trust-Dorothy Hodgkin Postgraduate Awar

When Difference Hurts: Technology Space Activity and Failure

This paper investigates failure of startups due to their accumulation of intellectual property rights (IPR) in the context of the wireless telecommunication industry, here framed as their technology space - a space that we constructed through shared technology. Obtaining intellectual property rights forms an important signal for startup viability but only to a limited degree, compelling us to posit a U shape relationship between failure rate and IPR flow. The location of startups in the technology space, and the associated signals that come with that location presents powerful information regarding their failure rates. Disclosing intellectual properties erodes the benefits of secrecy and innovative lead time as deference (as proxied by patent citations) by peer to new firms increases their hazard of failure due potential competition and harmful spillover effects - particularly if the sector manifests a weak appropriability regime. Technology concentration of the deference is also found to be harmful; however the interaction of the two is positive. This leads us to infer that startups with specific and focused technology acknowledged many other firms or those with general but deferred to by few others have better possibility of stemming the rot

Diversification, Coordination Costs and Organizational Rigidity: Evidence from Microdata

This paper examines the impact of coordination costs and organizational rigidity on the returns to diversification. The central thesis is that coordination costs offset economies of scope, while organizational rigidity increases coordination costs, further constraining economies of scope. The empirical tests of this proposition identify the effects of coordination and organizational rigidity costs on business-unit and firm productivity, using novel data from the Economic Census on taxicab and limousine firms. The key results show that coordination and organizational rigidity costs are economically and statistically significant, while organizational rigidity itself accounts for a 16% decrease in paid ride-miles per taxicab in incumbent diversifiers, controlling for the other costs and benefits of diversification and incumbency. The findings suggest that coordination costs, in general, and organizational rigidity costs, in particular, limit the scope of the fir

We Act Therefore We Are: A Theory of Action Driven Strategy

This dissertation examines the effects of competitive actions on strategic choice. Despite acknowledging that competitive behavior might be an important determinant of organizational strategy, researchers in strategic management have yet to explore how competitive actions that firms adopt to acquire competitive advantage can also encourage future strategic decisions. Competitive actions can be sources of strategic choice because they expose the firm to its competitive environment. This exposure to the competitive environment generates salient experience and knowledge that narrow managerial selection of strategic alternatives, therefore influencing strategic choice.This dissertation develops a conceptual framework that links competitive dynamics to strategic choice literature and provides an empirical model grounded on observable and quantitative variables. Specifically, it tests how characteristics of competitive actions such as scope, and the use of action repertoires can directly influence strategic choices such as the adoption of diversification strategies, the divestment of assets, and the implementation of corporate social responsibility policies.Results confirm the theoretical prediction that competitive actions are drivers of strategic choice. I found support that characteristics of actions like breadth and the diversity of repertoires that firms adopt to compete are motivators of strategic choice. Such findings indicate that previously neglected connections between competitive behavior and strategy are relevant and indicative that firms' might access knowledge and experience previously obtained in the marketplace to decide which strategies to take.Business Administratio

Diversification, Coordination Costs, and Organizational Rigidity: Evidence From Microdata

This paper examines the impact of coordination costs and organizational rigidity on the returns to diversification. The central thesis is that coordination costs offset economies of scope, while organizational rigidity increases coordination costs, further constraining economies of scope. The empirical tests of this proposition identify the effects of coordination and organizational rigidity costs on business unit and firm productivity, using novel data from the Economic Census on taxicab and limousine firms. The key results show that coordination and organizational rigidity costs are economically and statistically significant, while organizational rigidity itself accounts for a 16 percent decrease in paid ride-miles per taxicab in incumbent diversifiers, controlling for the other costs and benefits of diversification and incumbency. The findings suggest that coordination costs, in general, and organizational rigidity costs, in particular, limit the scope of the firm

Incumbent Responses to an Entrant with a New Business Model: Resource Co-Deployment and Resource Re-Deployment Strategies

The constructs of re-deployment and co-deployment have been central to discussions of scope economies in diversified firms. We argue however that these constructs are also significant in the context of single business firms. Increasingly, changes in technology and demand preferences have provided opportunities for entrants to attack incumbents with a different business model, one that may neutralize the incumbent’s advantage for at least some set of customers (e.g. Netflix versus Blockbuster). In such a context incumbents often respond by modifying their business model. We note that several of the business model-altering responses of the incumbent can be characterized in terms of co-deployment and re-deployment benefits and costs, where co-deployment benefits/cost apply to the scope economies/diseconomies in running multiple business-models within the same firm and re-deployment benefits/costs apply to the implications of moving assets from one business model to another. We then examine the set of strategic choices faced by the incumbent in competing with an entrant with a different business model. We identify five set of factors that are likely to influence the decision to choose between these alternatives – uncertainty spawned by the new business model, market segment targeted by the new model, the within-business-across-business-model co-deployment and re-deployment benefits and costs, the across-business co-deployment and re-deployment benefits and costs, and the incumbent’s prior performance history. Although some of these choices have seen some work, most remain relatively underexplored in the strategy literature. We highlight the potential for research in this area with a set of propositions that identify key conditions that should hold true for a particular strategic choice to be picked by an incumbent

The Appropriation of Value from Knowledge: Three Essays on Technological Discontinuities, Market Entry, and Patent Strategy

Knowledge accumulation and protection are critical considerations of the firm. How does the capability to appropriate value from knowledge affect firm strategies in the industries? To answer this question, I develop a new theory and evidence to argue that appropriate value from knowledge is a central consideration in firms’ capabilities and decisions to deal with technological changes and intellectual property issues. In particular, I examine the relatedness of products and markets, the strategic uses of patents, and how firms can successfully adapt to concerns regarding technological changes and intellectual property leakage. Throughout my three dissertation chapters, I find evidence that the capability to appropriate value from knowledge can affect how firms behave in consistent and essential ways. These findings provide important implications for knowledge-based views of the firm and strategy-based recommendations in terms of the management of knowledge assets

Process framework for innovation through tradition and its antecedents in rural heritage B&B

Design/methodology/approach: Nine heritage Bed and Breakfast (B&Bs) displaying successful Innovation through tradition (ITT) in Songyang county in China were selected as the research site. Multiple cases of B&B were interviewed, and some observations were conducted. This study adopted the process-oriented reflexive critical incident technique to collect qualitative data and analysed it thematically. Purpose: ITT is an increasingly important area of research particularly in the creative and cultural industries. The purpose of this study is to develop a process framework of ITT for rural heritage B&B sector and investigate the antecedents and challenges of ITT implementation. Findings: Based on the findings, a five-phase innovation framework is proposed to demonstrate how ITT could be achieved in practice. These phases are idea generation, idea evaluation, initial implementation, continuing implementation, and sustaining improvement. Three key antecedents (experience corridors, networks, and institutional pressures) of ITT implementation were also identified. Practical implications: This study has showed that rural heritage B&Bs can differentiate themselves from competition by the means of ITT. It proposes a process framework for this kind of innovation bringing to light the required steps, the antecedents, and key activities which the practitioners should pay great attention. It highlights the needs for continuing and sustaining innovations in long-term. Originality: This study proposes a novel five-phase process framework of ITT to encompass the innovation activities in heritage setting. For practitioners, this study recommends enhancing the sensing capability of local entrepreneurs through personal travel experience and establishing business networks as the key antecedents of a successful ITT under rural heritage setting