Corporate strategy in turbulent environments: Key roles of the corporate level

This paper analyzes the evolution during the period 1986-2002 of the corporate strategy of Lujan, a highly successful car components manufacturer headquartered in Spain, as a way to explore how the corporate level influences the successful evolution of a company exposed to a "turbulent" environment over a long period. We find that the corporate level plays three key roles. First, it drives a firm's evolution by developing a cognitive representation of the firm's competitive landscape. Second, it paces the company's evolution by alternately shifting the balance of organizational initiatives between static efficiency-based "local search" strategies, chosen in times of stability or economic slowdown, and dynamic efficiency-based "long jump" strategies, adopted during periods of major environmental turbulence. Long-jump corporate strategies, carried out through limited downside strategic initiatives such as real options and strategic alliances ("off-line long-jumps"), are particularly frequent in these circumstances. The third role consists of developing an organizational architecture that frames the self-organized coordination of the different business divisions. The Lujan story clearly illustrates the important role of corporate strategy in a firm that must undergo radical transitions as a result of major environmental changes.corporate strategy; turbulent environments; complexity theory; car components;

A formal evaluation of the performance of different corporate styles in stable and turbulent environments

The notion of "parenting styles", introduced by Goold, Campbell and Alexander, has been widely acknowledged by the Corporate Strategy literature as a good broad description of the different ways in which corporate managers choose to manage and organize multibusiness firms. The purpose of this paper is to present a formal test of the relationship between parenting style and performance. For this test, we developed a set of agent-based simulations using the Performance Landscapes framework, which captures and describes the evolution of firms led by different parenting styles in business environments with different levels of complexity and dynamism. We found that the relative performance of each style is contingent upon the characteristics of the environment in which the firm operates. In less complex business environments, the Strategic Planning style outperforms the Strategic Control and Financial Control styles. In highly complex and highly dynamic environments, by contrast, the Strategic Control style performs best. Our results also demonstrate the importance of planning and flexibility at the corporate level and so contribute to the wider debate on Strategic Planning vs. Emergent Strategies.Corporate strategy; Parenting styles; Agent-based models;

Unraveling the “black box” of cross-business-unit collaboration : paper presented at the 2014 Academy of Management Conference

Extensive research identified the economic, organizational and social factors that configure the process of cross-business unit (“cross-BU”) collaboration leading to the creation of crossBU synergies. Yet, the inner workings of the “black box” determined by the multiple cause and effect relationships between these factors remains to be determined. Building from current theory, we studied the process of cross-BU collaboration through a simulation model. We found that the initial conditions and patterns of evolution of the different configurations of factors lead to significant differences in the performance of cross-BU collaboration initiatives. Our findings extend previous research, characterizing cross-BU synergy creation as a multidimensional and complex phenomenon, by identifying the drivers of such complexity and its effects on performance. We also shed light on the impact of business relatedness on performance and on the roles of the corporate level in multi-business firms. We finally discuss how managers should manage cross-BU initiatives under different organizational arrangements

Analysing industry profitability: a "complexity as cause" perspective

We investigate how the competitive complexity of an industrial sector affects its profitability. For that purpose, we developed a set of simulations representing industries as complex systems where different firms co-evolve linked by multiple competitive dimensions. We show that increases in the complexity of an industry, resulting from increases in the number of players and in the number of competitive dimensions linking them, damages industry performance. We also found that the negative impact on performance resulting from a higher number of competitive dimensions decreases as the number of players in the industry increases and that the decrease in industry performance associated to big increases in the number of players is mediated by the number of competitive dimensions linking them. (C) 2009 Elsevier Ltd. All. rights reserved