Corporate strategy revisited: A view from complexity theory

Despite its long tradition and well known contributions, corporate strategy research is yet far from being mature. This paper proposes an innovative framework that approaches the field from the theoretical perspective provided by complexity theory. We propose to see the corporate level of the organization as the driver, pacer and framer of the overall firm's evolution process. Drive is provided by the cognitive representation of the corporate fitness landscape that is implicit in the firm's corporate plan. Pacing is a consequence of the kind of strategic initiatives ("search strategy") developed by the company. Framing is achieved through the architectural design that the corporate level implements for the firm.corporate strategy; complexity theory; self-organizing;

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

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

Dilemas multinacionales: tres estructuras regionales para América Latina

Cada vez son más las multinacionales que han adoptado las organizaciones regionales para operar en América Latina. La aparente homogeneidad cultural, el deseo de simplificar las líneas de reporte y la aversión al riesgo catalizaron dicho fenómeno, permitiendo que las MNC cosecharan los beneficios de la integración asociados con la regionalización de los procesos de negocios. Pero a la hora de crear la arquitectura organizacional de las organizaciones regionales, las MNC se basaron en diversos criterios. Dicha variación resulta de decisiones estratégicas fundamentales y llevan a importantes diferencias en los mecanismos de coordinación que vinculan a la oficina global con la regional. Nokia, por ejemplo, creó una organización regional que está fuertemente entrelazada con su casa matriz global. En cambio, The Walt Disney Company elaboró un enfoque estratégico y organizacional para América Latina que se separa radicalmente del modelo organizacional global. Finalmente, encontramos casos, como el de Volkswagen Latin America, que representa una zona intermedia entre los modelos organizacionales anteriores. La investigación de los autores (tres de ellos del IAE de Buenos Aires, y el cuarto del AESE de Lisboa) descubrió que estas diferencias expresan la percepción que tiene la casa matriz acerca del aporte de la región al portafolio de capacidades de la MNC, la importancia de la oficina regional en su capacidad de adaptarse al entorno local y el logro de niveles exitosos de innovación y desempeño.Fil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Kleinhempel, Ralph Matthias. Universidad Austral. Instituto de Altos Estudios; ArgentinaFil: Caldart, Adrian. Universidad Austral. Instituto de Altos Estudios; ArgentinaFil: Fragueiro, Fernando. Universidad Austral. Instituto de Altos Estudios; Argentin