1,041 research outputs found
The Performance of Private Equity Funds: Does Diversification Matter?
This paper is the first systematic analysis of the impact of diversification on the performance of private equity funds. A unique data set allows the exact evaluation of diversification across the dimensions financing stages, industries, and countries. Very different levels of diversification can be observed across sample funds. While some funds are highly specialized others are highly diversified. The empirical results show that the rate of return of private equity funds declines with diversification across financing stages, but increases with diversification across industries. Accordingly, the fraction of portfolio companies which have a negative return or return nothing at all, increase with diversification across financing stages. Diversification across countries has no systematic effect on the performance of private equity funds
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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
Universal Rights and Wrongs
This paper argues for the important role of customers as a source of competitive advantage and firm growth, an issue which has been largely neglected in the resource-based view of the firm. It conceptualizes Penrose’s (1959) notion of an ‘inside track’ and illustrates how in-depth knowledge about established customers combines with joint problem-solving activities and the rapid assimilation of new and previously unexploited skills and resources. It is suggested that the inside track represents a distinct and perhaps underestimated way of generating rents and securing long-term growth. This also implies that the sources of sustainable competitive advantage in important respects can be sought in idiosyncratic interfirm relationships rather than within the firm itself
Effects of family control on the degree and type of diversification: empirical evidence for business groups
This article analyzes the impact of ownership structure on corporate diversification,with reference to large listed family business groups. By considering agency theoryand socioemotional wealth, the study examines the relationship between family own-ership, concentration of ownership, and degree and type of diversification. The studyconsiders 99 Spanish listed business groups (50 family-controlled- and 49 nonfamily-controlled groups) and considers diversification of business group as the focus ofanalysis. The results show how family business groups present a lower preference forunrelated diversification than related diversification. There is also a nonlinear rela-tionship between the concentration of ownership in family groups and the degree ofdiversification, showing different behaviors in family groups according to sharesowned by the family's leading shareholders. This article contributes to the literatureby providing a more precise identification of the corporate strategy adopted by busi-ness groups and establishing new evidence about the impact of family control ondiversification strategies and the differences regarding nonfamily business groups
Human Resources and the Resource Based View of the Firm
The resource-based view (RBV) of the firm has influenced the field of strategic human resource management (SHRM) in a number of ways. This paper explores the impact of the RBV on the theoretical and empirical development of SHRM. It explores how the fields of strategy and SHRM are beginning to converge around a number of issues, and proposes a number of implications of this convergence
Re-inventing artisanal knowledge and practice: a critical review of innovation in a craft-based industry
This paper presents a critical review of the ways in which the specialised knowledge and working practices of craft-based industries have been transformed in the context of broader processes of industrialisation and global competition. The opening section makes the case for artisanal knowledge as a ‘Cinderella’ subject that remains important yet largely uncharted territory for innovation researchers. It is followed by a critical review of existing empirical and theoretical studies that have examined the reproduction and reinvention of artisanal knowledge. The review concludes that valuable insights remain obscured due to the way in which this literature is distributed across discrete disciplines with little evidence of cross-fertilisation or integration. Several common themes emerge, which provide the basis for an outline theoretical framework. The central arguments are illustrated with reference to a case-based analysis of the technological and social innovations that have taken place in English farmhouse cheesemaking over an extended period, from the pre-industrial era to the beginning of the present century. The concluding section considers how more nuanced understandings of artisanal knowledge and practice might enhance innovation theory and contribute to the continued flourishing of craft-based industries
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Change escalation processes and complex adaptive systems: from incremental reconfigurations to discontinuous restructuring
This study examines when “incremental” change is likely to trigger “discontinuous” change, using the lens of complex adaptive systems theory. Going beyond the simulations and case studies through which complex adaptive systems have been approached so far, we study the relationship between incremental organizational reconfigurations and discontinuous organizational restructurings using a large-scale database of U.S. Fortune 50 industrial corporations. We develop two types of escalation process in organizations: accumulation and perturbation. Under ordinary conditions, it is perturbation rather than the accumulation that is more likely to trigger subsequent discontinuous change. Consistent with complex adaptive systems theory, organizations are more sensitive to both accumulation and perturbation in conditions of heightened disequilibrium. Contrary to expectations, highly interconnected organizations are not more liable to discontinuous change. We conclude with implications for further research, especially the need to attend to the potential role of managerial design and coping when transferring complex adaptive systems theory from natural systems to organizational systems
What lies between market and hierarchy? Insights from internalization theory and global value chain theory
In this paper, we suggest that internalization theory might be extended by incorporating complementary insights from GVC theory. More specifically, we argue that internalization theory can explain why lead firms might wish to externalize selected activities, but that it is largely silent on the mechanisms by which those lead firms might exercise control over the resultant externalized relationships with their GVC partners. We advance an explanation linking the choice of control mechanism to two factors: power asymmetries between the lead firms and their GVC partners, and the degree of codifiability of the information to be exchanged in the relationship
A holistic model of human capital for value creation and superior firm performance : the Strategic factor market model
Abstract:Understanding the link between human capital, competitive advantage and firm performance is a major focus of research in strategic human capital studies in strategic management and Strategic Human Resource Management (SHRM). Indeed, much progress has been made in understanding this link. However, strategy scholars have emphasized firm-specific human capital as the most strategic form of human capital, and mobility constraints as the route to human capital-based competitive advantage and superior performance. SHRM, on the other hand, have been primarily focused on human resource policies, practices and systems, and more recently on the ability, motivation, and opportunity framework. Consequently, there has been an implicit assumption that there is already an understanding of how human capital actually creates value in firms. This article presents a succinct review of extant studies and a model that explores value creation from human capital. The model, based primarily on the theory of strategic factor market, holds promise in furthering extant understanding of the link between human capital, competitive advantage and firm performance. The model takes a more holistic approach to the role of human capital in value creation in firms
Sticky knowledge: A possible model for investigating implementation in healthcare contexts
<p>Abstract</p> <p>Background</p> <p>In health care, a well recognized gap exists between what we know should be done based on accumulated evidence and what we actually do in practice. A body of empirical literature shows organizations, like individuals, are difficult to change. In the business literature, knowledge management and transfer has become an established area of theory and practice, whilst in healthcare it is only starting to establish a firm footing. Knowledge has become a business resource, and knowledge management theorists and practitioners have examined how knowledge moves in organisations, how it is shared, and how the return on knowledge capital can be maximised to create competitive advantage. New models are being considered, and we wanted to explore the applicability of one of these conceptual models to the implementation of evidence-based practice in healthcare systems.</p> <p>Methods</p> <p>The application of a conceptual model called sticky knowledge, based on an integration of communication theory and knowledge transfer milestones, into a scenario of attempting knowledge transfer in primary care.</p> <p>Results</p> <p>We describe Szulanski's model, the empirical work he conducted, and illustrate its potential applicability with a hypothetical healthcare example based on improving palliative care services. We follow a doctor through two different posts and analyse aspects of knowledge transfer in different primary care settings. The factors included in the sticky knowledge model include: causal ambiguity, unproven knowledge, motivation of source, credibility of source, recipient motivation, recipient absorptive capacity, recipient retentive capacity, barren organisational context, and arduous relationship between source and recipient. We found that we could apply all these factors to the difficulty of implementing new knowledge into practice in primary care settings.</p> <p>Discussion</p> <p>Szulanski argues that knowledge factors play a greater role in the success or failure of a knowledge transfer than has been suspected, and we consider that this conjecture requires further empirical work in healthcare settings.</p
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