Incumbent Responses to an Entrant with a New Business Model: Resource Co-Deployment and Resource Re-Deployment Strategies

The constructs of re-deployment and co-deployment have been central to discussions of scope economies in diversified firms. We argue however that these constructs are also significant in the context of single business firms. Increasingly, changes in technology and demand preferences have provided opportunities for entrants to attack incumbents with a different business model, one that may neutralize the incumbent’s advantage for at least some set of customers (e.g. Netflix versus Blockbuster). In such a context incumbents often respond by modifying their business model. We note that several of the business model-altering responses of the incumbent can be characterized in terms of co-deployment and re-deployment benefits and costs, where co-deployment benefits/cost apply to the scope economies/diseconomies in running multiple business-models within the same firm and re-deployment benefits/costs apply to the implications of moving assets from one business model to another. We then examine the set of strategic choices faced by the incumbent in competing with an entrant with a different business model. We identify five set of factors that are likely to influence the decision to choose between these alternatives – uncertainty spawned by the new business model, market segment targeted by the new model, the within-business-across-business-model co-deployment and re-deployment benefits and costs, the across-business co-deployment and re-deployment benefits and costs, and the incumbent’s prior performance history. Although some of these choices have seen some work, most remain relatively underexplored in the strategy literature. We highlight the potential for research in this area with a set of propositions that identify key conditions that should hold true for a particular strategic choice to be picked by an incumbent

A Framework for Understanding Firms’ Foreign Exit Behavior

Although research on foreign market entry and expansion behavior has attracted significant interest in the literature, there is a general lack of research (either conceptual or empirical) on the exit behavior of international companies. To address this issue, the authors develop a conceptual framework to understand firms’ foreign exit behavior. The objective is to lay the conceptual foundation for subsequent empirical research in this area. A series of research propositions have been advanced that can guide hypothesis generation for future research

Activity Overinvestment: The Case of R&D

The literature on corporate diversification has often argued for and established the case that companies often overdiversify in a product market sense – i.e. enter into unrelated product markets where they may not fully cover their cost of capital. Yet, even without engaging in unrelated diversification, managers need to make resource allocation decisions to a variety of activities that a company conducts to consummate its business. In this article we focus on Research and Development (R&D) activity and we discuss the effects that the uncertainty, boundary ambiguity, feedback latency, R&D lumpiness and legitimacy that characterize technological contexts can have in making overinvestment in R&D likely. Specifically, in this article we a) draw attention to the construct of activity overinvestment, and specifically R&D overinvestment, b) use the received literature to argue that there exists a prima facie case for examining this construct and its antecedents in order to evaluate the extent and implications of R&D overinvestment, and c) make the more general case that the resource allocation literature needs to study the issue of activity overinvestment systematically

Job dissatisfaction and the older worker:Baseline findings from the Health and Employment After Fifty study

Objectives: Demographic changes are requiring people to work longer. Labour force participation might be promoted by tackling sources of job dissatisfaction. We aimed to describe the epidemiology of job dissatisfaction in older British workers, to explore which perceptions of work contribute most importantly, and to assess possible impacts on health.Methods: Participants aged 50–64?years were recruited from 24 English general practices. At baseline, those currently in work (N=5437) reported on their demographic and employment circumstances, overall job satisfaction, perceptions of their work that might contribute to dissatisfaction, and their general health, mood and well-being. Associations of job dissatisfaction with risk factors and potential health outcomes were assessed cross-sectionally by logistic regression, and the potential contributions of different negative perceptions to overall dissatisfaction were summarised by population attributable fractions (PAFs).Results: Job dissatisfaction was more common among men, below age 60?years, those living in London and the South East, in the more educated and in those working for larger employers. The main contributors to job dissatisfaction among employees were feeling unappreciated and/or lacking a sense of achievement (PAF 55–56%), while in the self-employed, job insecurity was the leading contributor (PAF 79%). Job dissatisfaction was associated with all of the adverse health outcomes examined (ORs of 3–5), as were most of the negative perceptions of work that contributed to overall dissatisfaction.Conclusions: Employment policies aimed at improving job satisfaction in older workers may benefit from focussing particularly on relationships in the workplace, fairness, job security and instilling a sense of achievement.<br/

Reversing the Extraverted Leadership Advantage: The Role of Employee Proactivity

Extraversion predicts leadership emergence and effectiveness, but do groups perform more effectively under extraverted leadership? Drawing on dominance complementarity theory, we propose that although extraverted leadership enhances group performance when employees are passive, this effect reverses when employees are proactive, because extraverted leaders are less receptive to proactivity. In Study 1, pizza stores with leaders rated high (low) in extraversion achieved higher profits when employees were passive (proactive). Study 2 constructively replicates these findings in the laboratory: passive (proactive) groups achieved higher performance when leaders acted high (low) in extraversion. We discuss theoretical and practical implications for leadership and proactivity