16 research outputs found
Resource-based theory and mergers & acquisitions success
Mergers & acquisitions (M&A) are most popular external growth strategies. While the number of M&A has been increasing during the past decades, on average, only the shareholders of target firms gain value during the acquisitions process, while acquirers do not receive abnormal positive returns. This paper analyses the impact of strategically valuable resources on the success of M&A decisions. We test complementary resource-based hypotheses regarding the value of M&A for the shareholders of both transaction partners. Our sample consists of transactions in the pharmaceutical and biotechnological industry. The results of our study show that the shareholders of both transaction partners will gain above average positive returns only when the acquirer and the target own and combine strategically valuable resources and capabilities. --
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Strategic or Status quo-Preserving Business Exit: (How) Do CEO Turnover and Succession Matter?
Business exit has implications for a firm’s corporate strategy. Two types of exit events are distinguished: those that involve strategic change and those that are status quo-preserving. This study investigates the impact of CEO turnover and succession on strategic versus status quo-preserving business exits. Based on a sample of CEO turnover and succession events and subsequent business exits of German corporations from different industries, our results suggest that neither voluntary nor involuntary CEO turnover is relevant to business exit. In contrast, outsider succession significantly affects the likelihood of strategic business exit, while a corporation’s performance does not moderate this relationship
competitive advantage by shaping institutions
Institutions matter greatly in the development of competitive advantage.
Different institutional strategies to manipulate and shape institutions are
discussed in the literature. This paper aims at extending the existing
conceptual model of membership strategy. Despite being referenced frequently,
the concept of membership strategy is not well developed. This is surprising
because what is referred to as membership strategy has become very popular in
various industries. We propose and develop a theoretical model that explains a
firm’s opportunity to protect itself against dominant institutional pressures
and, additionally, to create competitive advantage by implementing a consumer
centric membership strategy. Practical examples are discussed to clarify
theoretical interrelationships. The main illustrative case focuses on Blizzard
Entertainment, an American developer and publisher of video games
comparing the VRIO-framework to the recognition heuristic
Decision-making heuristics are widely used in different economic and non-
economic contexts to yield a good solution with an acceptable problem-solving
effort. This paper presents the main features of an experimental research
project to analyze the effectiveness and efficiency of selected heuristic
techniques, which can be used to facilitate and improve the strategic
decision-making process. The resource-based view and modern, psychologically
inspired decision-making theory provides the theoretical basis for the study
examining the predictive power of the VRIO-framework
Strategy tools are widely used in the practice of strategic management to
yield a good solution with an acceptable problem-solving effort. This paper
presents results of an experimental research project that assesses the
practical effectiveness of a theory-based decision-making tool, the VRIO-
Framework, in predicting the stock-market performance of different companies.
The VRIO’s predictive power is compared to the predictions derived from
Analyst Ratings that are a widespread and commonly used tool in the decision-
making context of this study. Our results suggest that the VRIO-Framework is a
particularly effective forecasting tool whereas the power of Analyst Ratings
is disputable. The results also provide support for the practical usefulness
of resource-based theory
Resource-based theory and mergers & acquisitions success
Mergers & acquisitions (M&A;) are most popular external growth strategies.
While the number of M&A; has been increasing during the past decades, on
average, only the shareholders of target firms gain value during the
acquisitions process, while acquirers do not receive abnormal positive
returns. This paper analyses the impact of strategically valuable resources on
the success of M&A; decisions. We test complementary resource-based
hypotheses regarding the value of M&A; for the shareholders of both
transaction partners. Our sample consists of transactions in the
pharmaceutical and biotechnological industry. The results of our study show
that the shareholders of both transaction partners will gain above average
positive returns only when the acquirer and the target own and combine
strategically valuable resources and capabilities
(how) do CEO turnover and succession matter?
Business exit has implications for a firm’s corporate strategy. Two types of
exit events are distinguished: those that involve strategic change and those
that are status quo-preserving. This study investigates the impact of CEO
turnover and succession on strategic versus status quo-preserving business
exits. Based on a sample of CEO turnover and succession events and subsequent
business exits of German corporations from different industries, our results
suggest that neither voluntary nor involuntary CEO turnover is relevant to
business exit. In contrast, outsider succession significantly affects the
likelihood of strategic business exit, while a corporation’s performance does
not moderate this relationship
The impact of governance on management research
The rigor versus relevance debate of management research is ongoing. We
contribute to this discussion by contrasting alternative assumptions about
generating management knowledge and linking knowledge generation to academic
governance. Specifically, we show that knowledge-by-representation dominates
the field and is reinforced by the governance structures and processes guiding
our academic management journals, peer review, and business school practices.
We propose governance changes in academic publishing to encourage innovative
research that may also generate knowledge-by-exemplification with strong ties
to management practice
Choosing the right network strategy to manage exploration processes
We develop a social capital model that explains how networks of
interorganizational relationships can be structured to manage exploration
processes directed at gaining competitive advantage in different environmental
contexts. We argue that a networkstructure of low density and high strength of
relationships is beneficial if the main goal of the network is to actively
configure the environment, e.g. under conditions of high environmental
complexity. In contrast, a network structure of high density and low strength
of relationships is advantageous if the adaptation to changing environmental
conditions is the main concern of the embedded organizations, e. g., in
contexts characterized by high environmental variability
Using Updated Information from the Frontline
Effective strategy-making in turbulent industries needs current insights that can inform ongoing decisions around adaptive strategic moves. Frontline employees involved in the daily business transactions are the first to see the subtle changes not otherwise observed by top managers. Top management with dominant logics anchored in previous business contexts usually receive updated information from performance reports for prior periods. All the while, we discern a human inclination linked to the position of power where managers subconsciously discard updated information from frontline employees. We present an experiment to investigate these effects and discuss the implications for strategic response capabilities among firms