Simulation modelling and strategic change : creating the sustainable enterprise

Peer reviewedPublisher PD

Ethical judgment and radical business changes: the role of entrepreneurial perspicacity

This study examines the implications of practical reason for entrepreneurial activities. Our study is based on Thomas Aquinas’ interpretation of such virtue, with a particular focus on the partition of practical reason in potential parts such as synesis, or common sense, and gnome, or perspicacity. Since entrepreneurial acts and actions deal with extremely uncertain situations, we argue that only this perspicacity, as the ability of correctly judging in exceptional cases, has the power to find wisdom under such blurred conditions. Perspicacity frees entrepreneurs from their cognitive schemata rendering them able to be truly entrepreneurial. Based on this vision and thanks to a semantic analysis of the meaning of the Greek word gnome, we construct an interpretative model for entrepreneurial judgment composed of three dimensions, specifically, knowledge-cognitive, external-affective and personal-reflective. The model highlights how a ‘successful’ entrepreneurial judgment is also such from a holistic point of view

Going, Going, Gone. Innovation and Exit in Manufacturing Firms

This paper examines the effect of innovation on the risk of exit of a firm, distinguishing between different modes of exits. Innovation represents a resource and a capability that helps a firm to build competitive advantage and remain in the market. At the same time, the resources and capabilities of innovative firms make them an attractive target for the acquisition process of other firms, thereby increasing the likelihood of the exiting the market. We explore these effects empirically by linking data on innovation and exits for a large sample of manufacturing firms in the Netherlands. The results show that the effect of innovation on a firm's risk of exit differs according to the mode of exit and, in addition, it is shaped by the nature of the innovation. While a firm can lower its risk of failure by innovating in either products or processes, the introduction of a new product in the absence of innovation in the production process increases the risk of exit as a result of merger and acquisition.Mergers and acquisitions;Innovation;Competing risks model;Firm exit

Innovation decision of Tunisian service firms: an empirical analysis

Innovation is widely recognised as a key driver of economic growth and competitiveness. But, some works focus especially on analyzing the determinants and the effects of innovation while distinguishing between its various types (product innovation, process innovation, radical innovation and incremental innovation). The analysis of the determinants is certainly important, but few research efforts testing the way in which firms make the decision to innovate. Based on a sample of 108 Tunisian service firms, the purpose of the paper is to explain the way in which firms make the decision to innovate: simultaneous (one-stage model) or sequential (two-stage model). We find that the two-stage model has a statistically-significant advantage in predicting the innovation. In practice, the sequential model illustrates well the innovation making-decision procedures.Innovation, Decision making, Service sector.

SME Performance, Innovation and Networking Evidence on Complementarities for a Local Economic System

The paper addresses the relevancy of networking activities and R&D as main drivers of productivity performance and ouput innovation, for small and medium enterprises (SME) playing in a local economic system. Given the intangible nature of many techno organisational innovation and networking strategies, original recent survey data for manufacturing and services are exploited. The aim is to provide new evidence on the complementarity relationships concerning different networking activities and R&D in a local SME oriented system in Northern Italy. We first introduce a methodological framework to empirically test complementarity among R&D and networking, in a discrete setting. Secondly, we consequently present empirical evidence on productivity drivers and on complementarity between R&D and networking strategies, with respect to firm productivity and process/product output innovation. R&D is a main driver of innovation and productivity, even without networking. This may signify, in association with the evidence on complementarity, that firm expenditures on R&D are a primary driver for performance. The complementarity with networking is a consequential step. Networking by itself cannot thus play a role in stimulating productivity and innovation. It can be a complementary factor in situations where cooperation and networking are needed to achieve economies of scale and/or to merge and integrate diverse skills, technologies and competencies. This is compatible with a framework where networking is the public good part of an impure public good wherein R&D plays the part of the private-led driving force towards structural break from the business as usual scenario. Managers and policy makers should be aware that in order to exploit asset complementarity, possibly transformed into competitive advantages, both R&D and networking are to be sustained and favoured. our evidence suggests that R&D may be a single main driver of performance. Since R&D expenditures are associated with firm size, a policy sustain is to be directed towards firm enlargement. After a certain threshold firms have the force to increase expenditures. The size effect is nevertheless non monotonous. Then, but not least important, for the majority of firms still remaining under a critical size threshold, policy incentives should be directed to R&D in connection with networking, through which a virtuous circle may arise. It is worth noting that it is not networking as such the main engine. Networking elements are crucially linked to innovation dynamics; it is nevertheless innovation that explains and drives networking, and not the often claimed mere existence of local spillovers or of a civic associative culture in the territory. Such public good factors exist but are likely to evolve with and be sustained by firm innovative dynamics.Firm Competitiveness, Innovation, R&D, Networking, Complementarity, Local Economic System

Innovative coordination of agribusiness chains and networks

To facilitate scientifically grounded innovative forms of strategic network coordination, this paper integrates two major bodies of literature on competitive advantage. The two bodies of literature are the industry-oriented outside-in approach, and the competence-oriented inside-out approach, here homogenized along the dimensions of degrees of firm embeddedness, respectively, the broadness of shared resource bases. The elements detailed are interfirm relationships, resource bases, network governance instruments, coordination mechanisms, the impact of events on network structures, and the active mobilisation of actors and resource. Thereby, the paper is able to detail 5 generic types of business networks. Next, it relates 21 network governance instruments to type of partnerships (binding vs loosening), forms of interaction (cooperative vs opportunistic). The realized reduction of network complexity enhances conceptual transparency and increases the instrumental usage of this research for effective network coordination by businesses. An integrated case illustrates the usefulness of the various concepts and the coherency of the different elements