Organizational Hubris in Entrepreneurial ICT Settings

The objective of this paper is to determine symptoms of organizational hubris in entrepreneurial ICT settings and to examine whether the environmental conditions of the ICT sector particularly trigger these symptoms. For this purpose, a theoretical framework is developed to transfer existing findings related to organizational hubris in large and established organizations to entrepreneurial ICT settings. The empirical analysis is based on an in-depth case study of an ICT Start-Up where five distinct symptoms of organizational hubris are determined. Moreover, the promising dynamic environment, the complex knowledge base required to exploit business ideas as well as crucial technological choices prior to market entry are identified as triggers of the ICT sector for the occurrence of organizational hubris. In addition to existing findings in literature, functional effects of organizational hubris such as general triggers to launch a business and sufficient self-confidence to attract key partners are determined

Startups’ roads to failure

The role of a relatively small cadre of high-tech startup firms in driving innovation and economic growth has been well known and amply celebrated in recent history. At the same time, it is well recognized that, while the overall contribution of startups is crucial, the high-risk and high-reward strategy followed by these startups leads to significant failure rates and a low ratio of successful startups. So, it is curious to notice that literature tends to focus on successful startups and on quantitative studies looking for determinants of success while neglecting the numerous lessons that can be drawn by examining the stories of startups that failed. This paper aims to fill this gap and to contribute to the literature by providing a repeatable and scalable methodology that can be applied to databases of unstructured post-mortem documents deriving startup failure patterns. A further and related contribution is the analysis carried out with this methodology to a large database of 214 startup post-mortem reports. Descriptive statistics show how the lack of a structured Business Development strategy emerges as a key determinant of startup failure in the majority of cases

Mergers, acquisitions and technological regimes: the European experience over the period 2002-2005

Comparisons by countries and by sectors of mergers and acquisitions have usually been performed in separate fields of research. A first group of studies, focusing on international comparisons, has explored the role of corporate governance systems, investor protection laws and other countries’ regulatory institutions as the main determinants of takeovers around the world. A second group of contributions has attributed a central role to variations in industry composition, documenting that, in each country, mergers occur in waves and within each wave clustering by industry is observed. This paper aims to integrate both perspectives and to make comparisons by countries and by sectors, thus exploring the role of various driving forces on takeover activities. It also intends to consider the specific influence that technological regimes and their innovation patterns may exert in reallocating assets and moving capital among sectors. This will be done by examining the European experience of the last few years (2002-2005). We found that even in countries where transfer of control is a frequent phenomenon, mergers are less frequent in those sectors where innovation is a cumulative process and where takeovers may be a threat to the continuity of accumulation of innovative capabilities.Mergers and Acquisitions, Corporate Governance, Technological Regimes

Cognitive dissonance, mental frames and the financial value of agricultural co-operatives

The co-operative as an economic and social institution has long been recognized for its contribution to economic development as well as its positive effect on local communities. However, over the last decade or so substantial structural changes in the agricultural sector have undermined some of the most prominent North American co-operatives. In some cases, co-ops asked for bankruptcy protection, others ceased operations while some were transformed to for-profit firms. The present study offers three essays that explore the challenges that co-operatives are facing in terms of their relationship with their members in local markets, the decision-making process of their leaders and the co-ops' role in the modern economy. These first two essays are linked by the fact that they both develop models that are about cognitions. Examining cognition offers some new insights to understanding the process behind the decline of agricultural co-ops. In the first essay the model examines consumers' cognitions, while the model in the second essay examines management's cognitions. The essays differ on the agent's ability to change the perceptions that result from those cognitions. Essay One assumes that consumers' perceptions are partially flexible and thus can change over time with some cost; on the other hand, essay Two assumes that beliefs are inflexible due to the high cost of changing them. Essay One examines the relationship between a co-operative and its membership in a local market using an economic psychological approach. More specifically, the essay presents a modified rational-choice model to investigate how cognitive dissonance can influence members' loyalty. The effect of cognitive dissonance is analyzed in a case where a local co-operative operates alongside with an investor-owned firm (IOF) in a market. The model illustrates how cognitive dissonance can give rise to switching costs for those consumers who wish to switch to the IOF. Analytical results demonstrate the effect of these switching costs on equilibrium market shares and discuss how a drop in the dissonance cost because of managerial decisions by the co-op can result in dramatic drops in its market share. Essay Two illustrates how management's mental frame can be incorporated into an economic model and develops a theoretical underpinning for the link between a strong mental frame and the financial difficulties that a firm might experience. The case of the Saskatchewan Wheat Pool with its Project Horizon plan is proposed as an example of a situation where the established mental frame gave rise to a belief regarding future member support that had a significant influence on the decision-making process of the co-op's CEO. The analysis includes a game theoretic model of a duopoly between a co-operative and an IOF, where mental framing is explicitly incorporated into the primitives of the model. Analytical results illustrate how the CEO's belief regarding member commitment can influence decision-making and therefore affect the market share and profits of the firm. Essay Three uses non-parametric econometric techniques to examine the stock price effect of a co-op's acquisition by a publicly-traded IOF. The potential for this study emerged as a result of the takeover of Dairyworld, a dairy co-op, by Saputo, a publicly-traded private corporation. The study uses the prediction-error approach to estimate Saputo's returns after the acquisition as a deviation from its expected returns. A non-parametric bootstrap technique simulates Saputo's stock returns and examines its behavior around the acquisition date. The empirical results are consistent with a number of hypotheses, including the pro-competitive role that co-operatives are believed to have in the economy. The essay also includes a comprehensive discussion regarding the greater financial value that co-ops have for IOFs

Managerial and Entrepreneurial Decision Making

Since the conceptualization of bounded rationality, management scholars started investigating how people—managers and entrepreneurs—really make decisions within (and for) organizations. The aim of this eBook is to deeply investigate trends that have flourished within this pivotal research area in conceptual and/or empirical terms, trying to provide new insights on how managers and entrepreneurs make decisions within and for organizations. In this vein, readers that approach this eBook will be taken by hand and accompanied to the discovery of how the mind of decision makers is at the basis of organizational developments or failures. In this regard, published contributions in this eBook underline how executives and entrepreneurs must be ecologically rational, thus be aware of the negative and positive effects that biases can have depending on the context and use them at their advantage. Managerial and entrepreneurial decision-making are phenomena that cannot be detached from the environment in which executives and entrepreneurs are embedded, claiming to establish new approaches to research that looks at decision-making as an individual/group/organization-environment dialectical and multi-level phenomenon

Organizational value creation and destruction in corporate venturing : in search of international competitive advantage

This dissertation focuses on one of the central themes in strategic management research: the creation and sustainability of competitive advantage. This theme is explored in the context of high-technology corporate ventures. In this context, the environment is unpredictable and competitive. The international dimension adds additional complexity. High innovativeness, organizational uncertainty and inter-organizational activity portray the organizations studied empirically in this research. The research question of the dissertation is: how do internal corporate ventures achieve and sustain international competitive advantage in a high-technology environment? The method used in this dissertation is theory-building multiple-case study. Four cases of Finnish internal corporate ventures are analyzed over a period of four years: from 1998 to 2001. The main data consists of 22 semi-structured interviews with key informants and insider observations in the venture organizations throughout the investigation period. In addition, public documents (press releases, announcements, annual reports, web pages, industry reports) and internal documentation (business plans, business support documentation, internal announcements, minutes of meetings) are analyzed to support and complement the main data. The theoretical starting point for the analysis is the relational view of competitive advantage, which describes how inter-organizational processes may lead to economic rents. As a result of the cross-case theory-building analysis, the explicit mechanisms how economic value is both gained and destroyed are presented. The developed model is a system, where the two categories, value creation and destruction are further divided into organizational and inter-organizational mechanisms. The data analysis also suggests that value creation and destruction are interrelated and interdependent in complex ways. The found value destruction mechanisms in corporate venturing include management failures, opportunism, politics, bureaucracy and collective blindness on the organizational level and on the inter-organizational level, power asymmetries, cultural complexity, conflicting interests and collective blindness. Examples of explicit value creation mechanisms are also given in the study, the findings support earlier research on competitive advantage of organizations. In internal corporate venturing, the relationship between the parent organization and the venture is identified to be as of crucial importance. The concept of parent-venture dependence is introduced to describe the level of reliance between the organizations. Based on the findings, it is proposed that growth may not be the best measure of performance for venture organizations, because high growth rate can be artificially created for example through parent-venture relationship. This kind of growth may also lead to value destruction. The main contribution of this study is to the debate on the competitiveness of organizations. The relations between value destruction mechanisms, growth and the creation of competitive advantage have not been widely addressed in previous research. The findings of this dissertation are applicable in a wider context, even though the data analysis is based on a case-study on internal corporate ventures.reviewe

Critical management studies in South Africa

This book shows how Critical Management Studies (CMS) scholarship is starting to develop a character of its own in South Africa. It attests to CMS slowly gaining momentum and acquiring an identity of its own amongst South African scholars. However, management studies in South Africa is dominated by capitalist ideology and positivist methodology. Although Interpretive scholarship has gained some momentum, it still falls within the parameters of ‘mainstream’, capitalist thinking. Scholarship outside the domain of capitalist thinking, such as critical scholarship, remains sorely underexplored. Being entrenched in the positivist tradition is arguably a major Achilles’ Heel for the progression of management as a field of inquiry. CMS presents a vehicle for alternative epistemologies to be heard in the management discourse. With its focus on power imbalances, struggles for emancipation from oppression, and distrust of capitalism, CMS provides the peripheral point of view with a voice. CMS presents a space where scholars can engage with South African realities surrounding political, cultural, social, and historic contexts and issues in management. This book is promoting CMS to the scholarly community, to show that there are exciting possibilities being offered by a different approach to management scholarship. This book also forms part of a larger project of growing CMS in South Africa, and is a collection of original works by academics actively working in CMS, following various methodological approaches which can be categorised into two broad methodological categories, namely, conceptual work and empirical work following an Interpretive approach