Does corporate strategy matter?

A revisionist view that corporate strategy does not matter has gained considerable influence in recent years. This view largely stems from empirical results of early variance decomposition studies that found negligible corporate effects associated with profitability differences between businesses. Our analysis of the variance decomposition literature shows this view to be incorrect. Not only do the studies as a group show that factors at the corporate level of organizations contribute to profitability differences, but also evidence suggests that factors specifically associated with corporate strategy contribute to corporate effects. Corporate strategy in fact does matter. Copyright Ó 2001 John Wiley & Sons, Ltd

Field Evidence on Individual Behavior & Performance in Rank-Order Tournaments

Economic analysis of rank-order tournaments has shown that intensified competition leads to declining performance. Empirical research demonstrates that individuals in tournament-type contests perform less well on average in the presence of larger number of competitors in total and superstars. Particularly in field settings, studies often lack direct evidence about the underlying mechanisms, such as the amount of effort, that might account for these results. Here we exploit a novel dataset on algorithmic programming contests that contains data on individual effort, risk taking, and cognitive errors that may underlie tournament performance outcomes. We find that competitors on average react negatively to an increase in the total number of competitors, and react more negatively to an increase in the number of superstars than non-superstars. We also find that the most negative reactions come from a particular subgroup of competitors: those that are highly skilled, but whose abilities put them near to the top of the ability distribution. For these competitors, we find no evidence that the decline in performance outcomes stems from reduced effort or increased risk taking. Instead, errors in logic lead to a decline in performance, which suggests a cognitive explanation for the negative response to increased competition. We also find that a small group of competitors, who are at the very top of the ability distribution (non-superstars), react positively to increased competition from superstars. For them, we find some evidence of increased effort and no increase in errors of logic, consistent with both economic and psychological explanations

Vertical integration and firm boundaries : the evidence

Since Ronald H. Coase's (1937) seminal paper, a rich set of theories has been developed that deal with firm boundaries in vertical or input–output structures. In the last twenty-five years, empirical evidence that can shed light on those theories also has been accumulating. We review the findings of empirical studies that have addressed two main interrelated questions: First, what types of transactions are best brought within the firm and, second, what are the consequences of vertical integration decisions for economic outcomes such as prices, quantities, investment, and profits. Throughout, we highlight areas of potential cross-fertilization and promising areas for future work

Building Dynamic Service Analytics Capabilities for the Digital Marketplace

Service firms are now interacting with customers through a multitude of channels or touchpoints. This progression into the digital realm is leading to an explosion of data, and warranting advanced analytic methods to manage service systems. Known as big data analytics, these methods harness insights to deliver, serve, and enhance the customer experience in the digital marketplace. Although global economies are becoming service-oriented, little attention is paid to the role of analytics in service systems. As such, drawing on a systematic literature review and thematic analysis of 30 in-depth interviews, this study aims to understand the nature of service analytics to identify its capability dimensions. Integrating the diverse areas of research on service systems, big data and dynamic capability theories, we propose a dynamic service analytics capabilities (DSAC) framework consisting of management, technology, talent, data governance, model development, and service innovation capability. We also propose a future research agenda to advance DSAC research for the emerging service systems in the digital marketplace

CEO succession and the CEO’s commitment to the status quo

Chief executive officer (CEO) commitment to the status quo (CSQ) is expected to play an important role in any firm’s strategic adaptation. CSQ is used often as an explanation for strategic change occurring after CEO succession: new CEOs are expected to reveal a lower CSQ than established CEOs. Although widely accepted in the literature, this relationship remains imputed but unobserved. We address this research gap and analyze whether new CEOs reveal lower CSQ than established CEOs. By analyzing the letters to the shareholders of German HDAX firms, we find empirical support for our hypothesis of a lower CSQ of newly appointed CEOs compared to established CEOs. However, our detailed analyses provide a differentiated picture. We find support for a lower CSQ of successors after a forced CEO turnover compared to successors after a voluntary turnover, which indicates an influence of the mandate for change on the CEO’s CSQ. However, against the widespread assumption, we do not find support for a lower CSQ of outside successors compared to inside successors, which calls for deeper analyses of the insiderness of new CEOs. Further, our supplementary analyses propose a revised tenure effect: the widely assumed relationship of an increase in CSQ when CEO tenure increases might be driven mainly by the event of CEO succession and may not universally and continuously increase over time, pointing to a “window of opportunity” to initiate strategic change shortly after the succession event. By analyzing the relationship between CEO succession and CEO CSQ, our results contribute to the CSQ literature and provide fruitful impulses for the CEO succession literature