What You See Is not What You Get: Product Architecture and Corporate Strategy

Weaving insights from the study of technology, operations, and organizational theory, we examine factors that underlie decisions about product product architecture. The general principles that determine the composition and interdependency between the components that make a product have largely been relegated to the engineering literature. However, our preliminary results from a Wharton-SMU study of product architecture in the imagining industry suggest several overlooked factors that play an important role in determining product architecture and consequently – firm performance. We suggest that product architecture decisions are far from being the exclusive domain of engineers. Using a sample of firms and products from the imaging sector, we distinguish between the engineering product architecture and perceived product architecture and note that they can be decoupled. Second, we seek to determine how firm choices regarding the design architecture can be mapped explained using variables such as firm prestige and customer sophistication

Top Management Pay: Impact of Overt and Covert Power

This paper examines variations in executive pay as a function of CEO power. We assume that CEOs optimize their pay conditional upon their ability to shape decisions that favour their interests. Power is inferred from overt manifestations such as share holdings, but also from covert sources such as a CEOs\u27 social capital. Two components of compensation are considered: base pay and bonus. While financial performance, firm size, and other factors are held constant, the results show overt power as measured by CEO, and CEO-family equity holdings, to have a curvilinear relationship with executive compensation. Proxies of covert power include tenure, being (one of) the founder(s), and firm diversification. These variables magnify or moderate the effect of equity holdings on compensation. The power effects are most pronounced for the size of CEO bonus

Innovation and Strategic Renewal in Mature Markets: A Study of the Tennis Racket Industry

This paper presents a study of successive new product introductions in the mature tennis racket industry. The inquiry examines novel design\u27s important role in strategic renewal, under the assumption that innovation includes not only the development, production, and launch of new products, but also communication between firms and market. We explore this industry\u27s transformation through the strategic actions of innovative firms and subsequent competitive contagion. A tennis racket innovation triggers competitors\u27 imitative reactions and sways the market toward a new de facto standard when the new product launch includes marketing such as product endorsement by high-profile professional players and advertising. Our results indicate that innovators should actively manage various industry participants as an integral part of their strategic renewal efforts, especially when facing rivalry with “me-too” peers. We suggest the interface between firms and consumers as a next focus for research on strategic renewal

Internal Capabilities, External Networks, and Performance: A Study on Technology-Based Ventures

This study examined the influence of internal capabilities and external networks on firm performance by using data from 137 Korean technological start-up companies. Internal capabilities were operationalized by entrepreneurial orientation, technological capabilities, and financial resources invested during the development period. External networks were captured by partnership- and sponsorship-based linkages. Partnership-based linkages were measured by strategic alliances with other enterprises and venture capitalists, collaboration with universities or research institutes, and participation in venture associations. Sponsorship-based linkages consisted of financial and nonfinancial support from commercial banks and the Korean government. Sales growth indicated the start-up\u27s performance. Regression results showed that the three indicators of internal capabilities are important predictors of a start-up\u27s performance. Among external networks, only the linkages to venture capital companies predicted the start-up\u27s performance. Several interaction terms between internal capabilities and partnership-based linkages have a statistically significant influence on performance. Sponsorship-based linkages do not have individual effects on performance but linkage with financial institutions has a multiplicative effect with technological capabilities and financial resources invested on a start-up\u27s performance. Implications and directions for future research were discussed

Competitive Implications of Interfirm Mobility

This paper examines the competitive consequences of interfirm mobility. Because the loss of key members (defined as top decision makers) to competing firms may amount to a replication of a firm’s higher-order routines, we investigate the conditions under which interfirm mobility triggers transfer of routines across organizational boundaries. We examine membership lists pertinent to the Dutch accounting industry to study key member exits and firm dissolutions over the period 1880–1986. We exploit information on the type of membership migration (individual versus collective) and the competitive saliency of the destination firm as inferred from the recipient status (incumbent versus start-up) and its geographic location (same versus different province). The dissolution risk is highest when collective interfirm mobility results in a new venture within the same geographic area. The theoretical implications of this study are discussed

Spatial and Temporal Heterogeneity in Founding Patterns

A growing body of literature suggests that populations of organizations are not homogeneous, but instead comprise distinct subentities. Firms are highly dependent on their immediate institutional and competitive environments. The present paper further explores this issue by focusing on the spatial and temporal sources of industry heterogeneity. Our goal is threefold. First, we explore founding rates as a function of spatial density, arguing that density-dependent processes occur along a geographic gradient ranging from proximate, to neighboring, to more distant contexts. Second, we show how multiple, local evolutionary clocks shape such entrepreneurial activity. Third, we provide evidence on how diffusion processes are directly affected by social contagion, with new organizational forms spreading through movements of individuals. Results from data on the Dutch accounting industry corroborate these patterns of heterogeneity

Autosomal dominant optic neuropathy and sensorineual hearing loss associated with a novel mutation of WFS1

PURPOSE: To describe the phenotype of a novel Wolframin (WFS1) mutation in a family with autosomal dominant optic neuropathy and deafness. The study is designed as a retrospective observational case series. METHODS: Seven members of a Dutch family underwent ophthalmological, otological, and genetical examinations in one institution. Fasting serum glucose was assessed in the affected family members. RESULTS: All affected individuals showed loss of neuroretinal rim of the optic nerve at fundoscopy with enlarged blind spots at perimetry. They showed a red-green color vision defect at color vision tests and deviations at visually evoked response tests. The audiograms of the affected individuals showed hearing loss and were relatively flat. The unaffected individuals showed no visual deviations or hearing impairment. The affected family members had no glucose intolerance. Leber hereditary optic neuropathy (LHON) mitochondrial mutations and mutations in the Optic atrophy-1 gene (OPA1) were excluded. In the affected individuals, a novel missense mutation c.2508G>C (p.Lys836Asn) in exon 8 of WFS1 was identified. CONCLUSIONS: This study describes the phenotype of a family with autosomal dominant optic neuropathy and hearing impairment associated with a novel missense mutation in WFS1

Developing a new national MDMA policy:Results of a multi-decision multi-criterion decision analysis

BACKGROUND: Ecstasy (3,4-methylenedioxymethamphetamine (MDMA)) has a relatively low harm and low dependence liability but is scheduled on List I of the Dutch Opium Act (‘hard drugs’). Concerns surrounding increasing MDMA-related criminality coupled with the possibly inappropriate scheduling of MDMA initiated a debate to revise the current Dutch ecstasy policy. METHODS: An interdisciplinary group of 18 experts on health, social harms and drug criminality and law enforcement reformulated the science-based Dutch MDMA policy using multi-decision multi-criterion decision analysis (MD-MCDA). The experts collectively formulated policy instruments and rated their effects on 25 outcome criteria, including health, criminality, law enforcement and financial issues, thematically grouped in six clusters. RESULTS: The experts scored the effect of 22 policy instruments, each with between two and seven different mutually exclusive options, on 25 outcome criteria. The optimal policy model was defined by the set of 22 policy instrument options which gave the highest overall score on the 25 outcome criteria. Implementation of the optimal policy model, including regulated MDMA sales, decreases health harms, MDMA-related organised crime and environmental damage, as well as increases state revenues and quality of MDMA products and user information. This model was slightly modified to increase its political feasibility. Sensitivity analyses showed that the outcomes of the current MD-MCDA are robust and independent of variability in weight values. CONCLUSION: The present results provide a feasible and realistic set of policy instrument options to revise the legislation towards a rational MDMA policy that is likely to reduce both adverse (public) health risks and MDMA-related criminal burden