How much does country matter in emerging economies?: Evidence from Latin America

The purpose of this paper is to examine the magnitude of country, industry and firm-specific effects for firms competing in emerging economies and also explore differences between high and low performers. The authors use ANOVA methodologies on samples from firms competing in Latin America between 1990-2006. It was found that the firm-specific effect is the most important one, and relatively equivalent in magnitude to the firm-specific effects found in developed countries. Country and industry effects are less important than the firm-specific effect. Contrary to previous studies that indicate that the country effect is relatively more important in emerging economies, the authors found that it is even less important than the industry effect, a result that has important implications for strategic management and international business theory. The source behind the strong firm-specific effects might stem from their resources and capabilities to manage and take advantage of the institutional and macroeconomic environments. Further analysis indicates that the firm-specific effect is relatively more important for firms showing high performance than for those firms showing low performance. Through these findings the authors feel that further research is needed so as to arm future managers with a more clear and comprehensive strategy when doing business in a Latin American country. The paper's findings are specific for large public corporations in Latin America. The paper allows managers to think about sources of competitive advantages in emerging economies. The paper shows that, despite weak institutional contexts and highly volatile macroeconomic environments, managers in the region should be able to obtain substantial differences in economic performances within the region. Activities needed for such differentiation might differ from those carried out in developed countries, with more emphasis on managing institutional voids and periods of economic and political cycles but the result should be the same.Fil: Diaz Hermelo, Francisco. Universidad Austral. Instituto de Altos Estudios; ArgentinaFil: Vassolo, Roberto Santiago. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Austral. Instituto de Altos Estudios; Argentin

Alliance activity as a dynamic capability in the face of a discontinuous technological change

Using a dynamic capabilities lens, this study examines how technological and complementary capabilities affect firms’ abilities to enter emerging technologies. The empirical evidence from a sample of pharmaceutical firms entering the new biotech fields indicates that both technological and complementary capabilities potentially affect firms’ entry into emerging technologies and entry mode. However, the results also show that capabilities in the traditional technology and the emerging technology have different effects. Firms with capabilities in the emerging technology are more likely to enter new technological fields and more likely to use internal development in doing so. Complementary capabilities also increase the rate of entry into emerging technological fields. However, capabilities in traditional technology are found to be unrelated to the propensity to enter new fields, and to the choice of entry mode. These results are consistent with insights from the literature on dynamic capabilities and evolutionary theory. We examine the implications of these results for literatures on strategic alliances and technological competition.Fil: Anand, Jaideep. Ohio University; Estados UnidosFil: Oriani, Raffaele. Luiss Guido Carli University; ItaliaFil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentin

The forgotten competitive arena: Strategy in natural resource industries

Despite their importance in the global economy, the complex competitive dynamics of natural resource industries and their implications for business performance remain largely understudied in strategic management. This article identifies major traits that are highly relevant in natural resource industries, including the standardized nature of their products, their emphasis on process-based innovations, the presence of dual physical and financial derivative markets, and the importance of nonmarket forces that affect the creation and appropriation of rents from natural resources. We propose a general framework that guides our observations, and we discuss research opportunities for the study of firm strategy in natural resource industries.Fil: Casarin, Ariel. Universidad Adolfo Ibañez; ChileFil: Lazzarini, Sergio G.. Institute of Education and Research; BrasilFil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Pontificia Universidad Católica de Chile; Chile. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentin

Managing in Latin America: Common issues and a research agenda

Latin America is a paradoxical region. It has unique conditions that make it one of the most attractive contexts worldwide for doing business, but it also faces serious challenges that severely underscore these opportunities. We apply a simple framework of analysis to describe the Latin American business environment and detect research opportunities. For that, we focus on four aspects of the region: (1) the institutional context, (2) the macroeconomic environment, (3) the consumer profile, and (4) the natural resource endowments. We summarize firms' strategic choices that result from this context and analyze their consequences for new business creation, incumbents' survival and growth, and sources of competitive advantages. We conclude by outlining a management research agenda.Fil: Vassolo, Roberto Santiago. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Austral; ArgentinaFil: De Castro, Julio O.. IE University; EspañaFil: Gomez Mejia, Luis R.. Texas A&M University; Estados Unido

Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle

We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms’ performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008–2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms’ performance, but this positive effect weakens during recessions.Fil: Reyes, Tomas. Pontificia Universidad Católica de Chile; ChileFil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Pontificia Universidad Católica de Chile; Chile. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Kausel, Edgar E.. Pontificia Universidad Católica de Chile; ChileFil: Peña Torres, Diamela. Pontificia Universidad Católica de Chile; ChileFil: Zhang, Stephen. University of Adelaide; Australi

Hospital Investment Decisions in Healthcare 4.0 Technologies: Scoping Review and Framework for Exploring Challenges, Trends, and Research Directions

BACKGROUND: Alternative approaches to analyzing and evaluating health care investments in state-of-the-art technologies are being increasingly discussed in the literature, especially with the advent of Healthcare 4.0 (H4.0) technologies or eHealth. Such investments generally involve computer hardware and software that deal with the storage, retrieval, sharing, and use of health care information, data, and knowledge for communication and decision-making. Besides, the use of these technologies significantly increases when addressed in bundles. However, a structured and holistic approach to analyzing investments in H4.0 technologies is not available in the literature. OBJECTIVE: This study aims to analyze previous research related to the evaluation of H4.0 technologies in hospitals and characterize the most common investment approaches used. We propose a framework that organizes the research associated with hospitals’ H4.0 technology investment decisions and suggest five main research directions on the topic. METHODS: To achieve our goal, we followed the standard procedure for scoping reviews. We performed a search in the Crossref, PubMed, Scopus, and Web of Science databases with the keywords investment, health, industry 4.0, investment, health technology assessment, healthcare 4.0, and smart in the title, abstract, and keywords of research papers. We retrieved 5701 publications from all the databases. After removing papers published before 2011 as well as duplicates and performing further screening, we were left with 244 articles, from which 33 were selected after in-depth analysis to compose the final publication portfolio. RESULTS: Our findings show the multidisciplinary nature of the research related to evaluating hospital investments in H4.0 technologies. We found that the most common investment approaches focused on cost analysis, single technology, and single decision-maker involvement, which dominate bundle analysis, H4.0 technology value considerations, and multiple decision-maker involvement. CONCLUSIONS: Some of our findings were unexpected, given the interrelated nature of H4.0 technologies and their multidimensional impact. Owing to the absence of a more holistic approach to H4.0 technology investment decisions, we identified five promising research directions for the topic: development of economic valuation methodologies tailored for H4.0 technologies; accounting for technology interrelations in the form of bundles; accounting for uncertainties in the process of evaluating such technologies; integration of administrative, medical, and patient perspectives into the evaluation process; and balancing and handling complexity in the decision-making process

The impact of Industry 4.0 on the relationship between TPM and maintenance performance

Purpose In this paper, the authors examine the impact of Industry 4.0 (I4.0) technologies on the relationship between total productive maintenance (TPM) practices and maintenance performance. Design/methodology/approach Data collection was carried out through a multinational survey with 318 respondents from different manufacturing companies located in 15 countries. Multivariate data techniques were applied to analyze the collected data. Diffusion of innovations theory (DIT) was the adopted theoretical lens for our research. Findings The authors’ findings indicate that I4.0 technologies that aim to process information to support decision-making and action-taking directly affect maintenance performance. Technologies oriented to sensing and communicating data among machines, people, and products seem to moderate the relationship between TPM practices and maintenance performance. However, the extent of such moderation varies according to the practices involved, sometimes leading to negative effects. Originality/value With the advances of I4.0, there is an expectation that several maintenance practices and performance may be affected. Our study provides empirical evidence of these relationships, unveiling the role of I4.0 for maintenance performance improvement

The effect of uncertainty correlation and resource fungibility on the valuation of a portfolio of external exploration activities

The real options theory and the diversification approach to strategic investments represent two important ways of thinking about how firms cope with uncertainty. Yet, these two lines of reasoning have developed independently of each other and the literature has missed interesting opportunities for cross-fertilization between them. This dissertation incorporates the diversification view into the real options approach in order to assess the value of a portfolio of related strategic investments. The study is built upon the observation that firms often simultaneously invest in multiple options, and develops a model of the interaction among such multiple investments within a single firm. In particular, this dissertation seeks to understand how the presence of uncertainty correlation between these investments and fungible resources between the investing firm and its investments affect the value of a portfolio of strategic options. By introducing these two effects the study shows the conditions under which the value of the portfolio can be lower or higher than the value that results from the linear combination of each individual option. The portfolio of real options approach is tested on a sample of 549 equity agreements, acquisitions, divestitures, and buyouts between pharmaceutical companies and biotechnology labs from 1989 to 1999. A binary logit model was specified for analyzing the entry mode decisions; a negative binomial regression model was specified for analyzing size decisions; and a hazard rate model was specified for analyzing termination decisions. The results strongly support the advantage of using a portfolio of real options model over the single option models previously proposed in the literature and provide support for the two different effects that mediate uncertainty—uncertainty correlation and resource fungibility. Consequently, this study extends the conceptual base of real option analysis within strategic management by carefully specifying and empirically testing a more complete option model. In doing so, it improves upon previous real options valuation models and enhances the possibilities for understanding how firms diversify in highly uncertain environment

Sources of performance heterogeneity in emerging economies

PURPOSE: The purpose of this paper is to explore location effects on firm performance in emerging economies simultaneously accounting for permanent and transitory country, industry, country-industry and firm-specific effects. DESIGN/METHODOLOGY/APPROACH: The authors utilize a novel methodological approach: an autoregressive, cross-classified, mixed-effect linear regression model that allows them to simultaneously estimate a permanent (long-run) component, a transitory (short-run) component and the speed of decay of the transitory (autoregressive) component. FINDINGS: The authors find that the firm-specific effect is most important in explaining permanent and transitory differences. The country–industry interaction is the second most important effect, confirming that industries are not completely global and are still subject to country conditions. Broader views of the country–business context and industry conditions taken independently would be incomplete unless the country–industry interactions are considered. In other words, country matters because industry matters and vice versa. Country effects are also significant, but only transitory emphasizing the dynamic nature of emerging economies and the shortcomings that may result from considering the country business context static. Finally, the authors find that the chances of achieving sustainability of abnormal returns in emerging economies are dynamic and have significantly increased recently. ORIGINALITY/VALUE: To the authors' knowledge, this is the first to simultaneously estimate country, industry, country–industry and firm effects on the permanent and transitory components of abnormal returns in a sample of emerging economies. The study generates important evidence regarding the sources of sustainable differentiation for firms competing in emerging economies. Finally, the authors find that chances of achieving sustainability of abnormal returns in emerging economies are dynamic and have significantly increased recently.Fil: Diaz Hermelo, Francisco. Universidad Austral. Instituto de Altos Estudios; ArgentinaFil: Hetiennot, Hernan. Universidad Austral. Instituto de Altos Estudios; ArgentinaFil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentin

Induced variation in administrative systems: Experimenting with contexts for innovation

Purpose: The purpose of this paper is to revise Burgelman’s idea (1991, 1994) that induced strategic processes is necessarily variation-reducing. In doing so, the authors explore whether major change in a firm’s administrative system can be managed in an evolutionary fashion via induced variation-increasing mechanisms. In particular, the authors focus on a multi-business multinational firm in which different administrative systems were experimented simultaneously as a way to determine which of these systems provided the most conducive context for innovation and capability development. Design/methodology/approach: The authors adopted an inductive perspective and developed a single case research project aimed at documenting the process of experimentation and subsequent selection and adoption of a new administrative system by a large multi-business multinational firm. Findings: The paper’s main contribution is the concept of “induced variation”, understood as intra-organizational variation-increasing mechanisms deliberately created at the top level of the organization to trigger an intra-organizational evolutionary process of management innovation. This finding extends and modifies Burgelman’s discussion of induced and autonomous strategic behavior by showing that induced processes need not necessarily be variation-reducing, but may actually be variation-increasing. Additionally, the authors explain how an evolutionary process aimed at learning about the relative merits of alternative administrative systems through in vivo “reflection in action” (Schön, 1983) unfolds in a complex global organization. Research limitations/implications: While the work provides several insights on the development of an evolutionary process leading to management innovation, its inductive nature limits its external validity and requires the development of further work for such purpose. Practical implications: The authors explore the roles of regional organizations in creating new corporate capabilities for the MNC. Social implications: – The authors show how management capabilities developed in the Latin American context were rolled out to other locations. Originality/value: The authors' findings confirm that major drastic reorganization initiatives can actually be approached using an evolutionary approach.Fil: Caldart, Adrian. Associação de Estudos Superiores de Empresa. Escola de Direcção e Negócios; PortugalFil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Silvestri, Luciana Carla. Harvard University; Estados Unidos. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentin