Industry consolidation as a strategy: an acquisition program perspective

PurposeThe purpose of this paper is to enlighten the intriguing process of industry asset consolidation. It is critical for firms to manage their business acquisitions strategically for survival in this industry life cycle process, which develops through multiple company mergers. The companies extensively acquiring industry assets have utilized acquisition programs consisting of both pre-acquisition strategizing and post-acquisition integration; however, the existing literature on acquisition programs focuses on post-acquisition integration activities. This study aims to bridge this gap.Design/methodology/approachThis study focuses on pre-acquisition strategizing of acquisition programs and proposes a model in which an acquiring company could manage its acquisitions for industry asset consolidation over the industry evolution.FindingsEmpirically, in the multi-case study of telecommunications infrastructure companies, the authors collect an extensive set of archival records accumulated over the whole industry life-cycle, spanning more than 30 years, and they apply a qualitative data analysis to reveal strategic actions within the companies.Research limitations/implicationsThe discoveries elaborate on activities comprising the acquisition process model: social legitimacy, strategic alignment, resource fulfillment, consolidation pursuit and merging.Practical implicationsThe counterintuitive findings are that the companies strived to ensure legitimacy early in the telecommunication infrastructure markets before they reached strategic alignment with their owners.Originality/valueThe results extend the understanding of industry asset consolidation as an organization-level phenomenon and show how contextual factors connected to industry life-cycle phases, such as regulatory regimes and financial cycles and industry evolution, influence the attributions of an acquisition program

The effect of a competitive strategy and green supply chain management on the financial and environmental performance of logistics service providers

Despite the critical role of logistics service providers (LSPs) in improving the environmental sustainability of supply chains, there is still uncertainty about how LSPs can turn environmental management into competitive advantage. Based on a Finnish national logistics survey and financial reporting data from 266 LSPs, this article examines their competitive strategies and green supply chain management (GSCM), and tests their respective relationships with environmental and financial performance. Financial data are used to measure financial performance in a novel way. The findings indicate that leading LSPs with operational excellence and strong brands are more advanced in terms of GSCM than LSPs that do not excel in any competitive priority. GSCM practices are positively related to environmental performance, but not to financial performance. However, managers should not be discouraged by the apparent absence of short‐term financial benefits of GSCM practices, which in any case could enhance future differentiation opportunities. </p

The mitigating role of regulation on the concentric patterns of broadband diffusion. The case of Finland

This article analyzes the role of Finnish regulation in achieving the broadband penetration goals defined by the National Regulatory Authority. It is well known that in the absence of regulatory mitigation the population density has a positive effect on broadband diffusion. Hence, we measure the effect of the population density on the determinants of broadband diffusion throughout the postal codes of Finland via Geographically Weighted Regression. We suggest that the main determinants of broadband diffusion and the population density follow a spatial pattern that is either concentric with a weak/medium/strong strength or non-concentric convex/concave. Based on 10 patterns, we argue that the Finnish spectrum policy encouraged Mobile Network Operators to satisfy ambitious Universal Service Obligations without the need for a Universal Service Fund. Spectrum auctions facilitated infrastructure-based competition via equitable spectrum allocation and coverage obligation delivery via low-fee licenses. However, state subsidies for fiber deployment did not attract investment from nationwide operators due to mobile preference. These subsidies encouraged demand-driven investment, leading to the emergence of fiber consumer cooperatives. To explain this emergence, we show that when population density decreases, the level of mobile service quality decreases and community commitment increases. Hence, we recommend regulators implementing market-driven strategies for 5G to stimulate local investment. For example, by allocating the 3.5 GHz and higher bands partly through local light licensing.Comment: Accepted manuscrip

Leveraging supply chain networks for sustainability beyond corporate boundaries: Explorative structural network analysis

The ability of companies to achieve systemic sustainability goals is influenced by the structure of the larger supply chain network in which they reside. However, managing sustainability throughout multi-tiered global supply chain networks and complying with new supply chain law initiatives has proven to be a great challenge for many firms. This article investigates node- (firm) and network-level network structural characteristics and their implications for sustainability. The empirical study first explores structural patterns in a network of 5458 companies and then focuses on a sub-set of 604 companies associated with the automotive industry. The following four sustainability archetypes were identified: impassive networks, environmentally focused networks, socially focused networks, and orchestrated networks. The article further specifies strategy options for lead firms, suppliers, and regulators in enhancing sustainability in each archetype. The most sustainable firms are typically the most central, not necessarily the ones closest to the customers. Regulators should target central firms for a ripple effect.</p

Performance outcomes of environmental collaboration: evidence from Finnish logistics service providers

Purpose Firms that need to address growing concerns about the environmental impact of theiractivities could benefit from collaborating internally and externally. This paper develops andempirically tests a theoretical model of the effects of internal and external environmentalcollaboration with customers on the firm performance of logistics service providers.Design/methodology/approach Hierarchical multiple regression and generalised linear modellingare utilised to analyse 311 logistics service providers offering road transport services in Finland.The dataset was collected from a Finnish nationwide logistics survey in 2012 and financial reportsbaseddata.Findings External environmental collaboration with customers seems to be the most effective wayto improve operational and financial performance, while internal environmental collaboration doesnot yield similar benefits.Research limitations/implications Research limitations include the concentrated geographic originof the respondents and the exclusion of potential indirect effects of environmental collaboration onoperational and financial performance through environmental performance.Practical implications Managers planning to implement environmental initiatives should extendtheir focus from internal operations to external partners in the supply chain.Originality/value This research is one of the first attempts to focus on performance outcomes withregard to the environmental activities of logistics service providers. The research providesquantified insights using both self-reported and financial reports-based data.Keywords Environmental collaboration, Operational performance, Financial performance,Logistics service provider, FinlandPaper type Research paper</p

Unravelling Mickey Mouse: The Effect of Supply Chain Position and Organisational Slack on the Uneven Balance of Sustainability Dimensions

This paper contributes to a less-studied area on how a firm’s position in the supply chain influences triple-bottom-line considerations in strategic decision making. We also contribute to previous research on a nuanced understanding of unabsorbed organisational slack as an antecedent to the triple-bottom-line dimensions of sustainability. The research data comprises survey data and financial reporting data from 508 manufacturing and trading firms operating in Finland, divided among four supply chain tiers. The economic dimension dominates the decision making on all tiers, followed by social and environmental considerations, resembling the shape of Mickey Mouse. Unabsorbed organisational slack is negatively related to the importance of economic considerations and positively related to environmental considerations. The results help firms in evaluating their position in terms of sustainability and in their redesigning efforts accordingly. The findings will also be useful in terms of promoting sustainability practices among supply chain members and policymakers in their practical efforts towards sustainable development. </p

Revisiting the relationship between environmental and financial performance: The moderating role of ambidexterity in logistics

Research has shown the need for business organizations to be ambidextrous, which means they should possess the ability to simultaneously exploit existing competencies and explore novel opportunities for improved organizational performance. Past evidence suggests that corporate environmental and financial performance may benefit from well-organized logistics operations. Meanwhile, the causality between the performances has been continuously debated, and the role of ambidexterity in the relationship is largely unexplored. We argue that ambidexterity in logistics operations enhances the link between environmental and financial performance. Using longitudinal data from Finnish manufacturing and trading firms, we applied regression analysis to test a theory-driven moderation model. Our findings indicate that ambidexterity in logistics operations affects the strength of the virtuous cycle between environmental and financial performance. Notably, the stronger the explorative orientation in logistics in a firm, the more enhanced the link between their environmental and financial performances. Overall, firms may find it challenging for their available resources to be employed for environmental and financial sustainability unless they are ambidextrous. Financial resources and environmental investments are necessary conditions but not sufficient for performance improvements in themselves; they need to be coupled with a desire to seek new, innovative solutions rather than just exploit existing practices. Combining exploitative and explorative orientations in logistics helps businesses meet divergent stakeholder expectations and translate their resources into performance. To this end, logistics operations should be organized to support organizational performance through an active search for new solutions as well as investments to develop both existing and new logistics practices.</p

Logistiikkaselvitys 2014

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