Corporate social irresponsibility and stakeholders' support: evidence from a case study

Stakeholders' decisions regarding whether to continue to support a firm after it has been perceived as culpable for socially irresponsible behaviour is "coin of the realm" in selecting which firms (or which parts of a firm) will be able to survive a corporate social irresponsibility (CSI) scandal. Our empirical setting is an embedded polar case of audience support, the Parmalat case, following a severe CSI scandal. The scandal represented a "trigger event" that ignited an active reevaluation of the firm on behalf of its stakeholders. We show that, while the firm's cognitive legitimacy was not harmed by the CSI scandal, two dimensions of legitimacy played a key role in stakeholder evaluations: moral and pragmatic legitimacy. The capacity to manage the interplay between these two dimensions emerged as a key factor underlying stakeholders' support. Finally, we argue that if pragmatic legitimacy is feeble it is unlikely that the firm is able to maintain stakeholders' support. Our study suggests that possessing a sound source of competitive advantage in one (or more) of the businesses in which the firm operates is decisive to maintain the support of independent stakeholders following CSI scandal

From “Strategic Fit” to Synergy Evaluation in M&A Deals

The aim of this paper is to grasp the processes underlying the genesis and assessment of synergies in M&A deals. We proceed to an in-depth scrutiny of the foundations of synergies using Porter’s model of the value chain. A discernment of the nature of synergies and the mode of their emergence is helpful to clarify to what extent and under which boundary conditions it is appropriate to apply the DCF or the real option techniques for evaluating each type of synergy. Combining both financial tools, the methodology suggested for evaluating the synergies is able to: evaluate projects of M&As, orient the selection of target firms and the definition of the premium of acquisition, and drive the integration processes

Legitimacy Maintenance After a Corporate Social Irresponsibility Scandal: Lessons From The Parmalat Case

From the organizations’ perspective, maintaining legitimacy in such contexts has been considered relatively unproblematic (Patriotta, 2011; Scherer et al., 2013) as it entails following adaptive strategies and conforming substantially (or even merely symbolically) to the dominant institutional logics (Suchman, 1995; Elsbach, 1994; Scherer et al., 2013). 3 Nonetheless, whilst the implementation of a adaptive strategy to maintain the corporation with its main audiences is a necessary phase, it cannot be considered sufficient to assure the maintenance of audience support. Audiences evaluate competitive advantage and other sources of reassurance that supporting the company is worthwhile from a rational perspective. This restoration process may be complemented by the corporations’ power over resource dependent audiences. Independent audience decisions are based on the competitive advantage of firm in each business. When their are untouched, the adaptive strategy leads to audience support and successful business rehabilitation processes with all audiences, even with those that were initially harmed. However, if competitive advantage is feeble independent audiences will not sustain the weak business (or corporation) even if adaptive strategies have been implemented. The presence of an unharmed competitive strategy is crucial to the selection of which parts of an organization (or the organization as a whole) can be reintegrated with all the main audiences of the company after a CSI scandal, including the “harmed” audience. The richness of the empirical setting allows us to highlight that a significant difference between firm characteristics that plays a crucial role in determining the reactions of the main constituent audiences and, consequently, the possibility for maintain the legitimacy. The post-crisis turnaround processes to succeed is the possession of sound source(s) of competitive advantage in one (or more) of the business(es) in which the firms operates

AUDIENCE SUPPORT DECISIONS IN IN THE AFTERMATH OF A SOCIAL SCANDAL: THE ROLES OF LEGITIMACY AND REPUTATION

Constituent audience evaluations and decisions regarding whether to continue to support a corporation after it has been perceived as culpable for socially irresponsible behaviour following corporate social irresponsibility (CSI) scandals are coin of the realm in selecting which firms (or which parts of a firm) will be able to survive a CSI-scandal. Research has largely taken for granted that CSI leads to the loss of corporate legitimacy and, consequently, of constituent audience support. Though legitimacy may be reconstructed, empirics suggest this is a necessary but insufficient condition for the maintenance of audience support. Adopting the evaluators\u2019 perspective, this study focuses on the different social evaluations audiences may express following corporate scandals. In the post-scandal phase, both legitimacy and reputation seem to emerge as significant aspects of audience evaluation. Due to the cognitive and social specificities connected to the dynamics of legitimacy and reputation creation, maintenance and restoration, this paper proposes that there is a specific sequence and interplay between the two forms of social evaluation following social scandals

The relationship between institutions and value creation in software development models

Purpose: The purpose of this paper is to analyse the possibility for firms to consider institutional settings to systematically direct dispersed individual efforts of discovery and invention towards objects (products or processes) of their interest in order to enhance their value creation capacity. Design/methodology/approach: The authors conduct a comparative analysis of the different institutional settings within which software products are invented and produced – closed producer-centred model, open user-centred model, and hybrid interactive producer-user model. Findings: The authors draw indications regarding the possibility to design institutional settings for value creation and the potential pitfalls tied to these strategic tools. Originality/value: A theoretical framework is elaborated in order to understand the different ways in which institutional contexts influence and direct value creation processes. The model analysed shows the firms’ deliberate attempt to stimulate a dynamic process of social interaction and communication which may foster higher levels of creativity and innovation. In order to guarantee the necessary accessibility and to sufficiently motivate external programmers towards the perception of a new code, the firm has to surrender the traditional source through which it appropriates value: barriers to the accessibility of the code developed through IPRs. The adoption of an institutional setting which facilitates dynamic value creation processes suggests, therefore, the need to turn to dynamic mechanisms for value appropriation in parallel

Disruptive power of digital startups

The image of the new digital entrepreneur has turned into an iconic image that concerns their status, celebrity, identification, and imitation. New digital entrepreneurs, who have recently started their hi-tech business in a profitable manner, are seen in the collective imagery not only as smart and successful individuals, but as real superstars, the great witnesses of our time, and the exceptional candidates for guest starring a range of video and radio shows, who are liable of wide admiration and ample emulation. Just think of Facebook’s Mark Zuckenberg or Tesla’s Elon Musk. This chapter is aimed to supplement the debate in management and entrepreneurship on the role and impact of digital startups in the development of entrepreneurial driven economies and local and global ecosystems. First, drawing on neo-Austrian economics angle and disruption theories, we acknowledge that digital startups are the ones that, by widely disrupting the received environment, are liable to provide the energetic lymph for spurring innovation and growth in the economic system as a whole, in local and global ecosystems, as well as in favoring the raise of a new generation of digital entrepreneurs. In this vein, we articulate the arguments in favor of digital startups at three key analytical levels: (a) the economic system; (b) the ecosystem level; and (c) the entrepreneurial level. Finally, by critically looking at the other side of the coin, we also underscore the shortcomings of the digital startups movement corresponding to the three levels above

Coopetitive Dynamics in Distribution Channel Relationships: An Analysis of the Italian Context in the Twentieth Century

Through the analysis of the evolution of channel relationships in Italy during the twentieth century, this paper illustrates retrospectively the main factors and determinants underlying the emergence of coopetitive relationships in vertical distribution interactions and, furthermore, allows to identify different forms of coopetitive relationships in distribution channels. This empirical setting also allows to shed light on the way power instances are connected to the emergence of distinct types of interfirm relationships. Finally, it clarifies that in order to define a relationship as coopetitive, it is not sufficient for firms to collaborate for the creation of value and compete for the appropriation of value, rather firms must be engaged in multiple level relationships in which they both collaborate and compete for the creation of value

TIME AND STRATEGY: TOWARDS A MULTITEMPORAL VIEW OF THE FIRM

This paper takes into consideration the main views underlying the theory of the resource based firm within strategy studies, underscoring their fundamental monotemporal nature and proposing a way to elaborate a multi-temporal view of the firm. By analyzing the link between the time concepts used as bases for the formulation of studies within the strategy field and the types of actor behavior implicitly (or explicitly) entailed by such time concepts, the paper shows the inadequacy of any one of the two monotemporal views of the resource-based firm to encompass all of the main actor behaviors on which the firm\u2019s survival and success increasingly rests. The paper draws on the Austrian process view in economic studies to formulate a methodological framework which consents the elaboration of a multi-temporal view of the resource based firm, in which different time concepts are bridged and in which all main actor behaviors crucial for prolonged firm success are encompassed. Finally, the paper shows how the multi-temporal view of the firm consents with the re-interpretation and maintenance of both the static and the dynamic concepts elaborated within the strategy literature and, eventually, also expands the causal relationships between strategic management and a number of other areas of inquiry in the management field, such as time-space relationships, the relationship between strategy and entrepreneurship, and the relationship between the former and the evolutionary perspective