Because current management theories evolved in the context of brick-and-mortar firms, this paper examines three key questions raised by the advent of e-business: (1) Will the strategy types found among e-business firms resemble Porter’s (1980) generic strategies? (2) Will we find performance differences among e-business firms pursuing different types of strategies? (3) Will we find differences in the strategy-performance relationships of pure online firms (pure plays) and firms with both online and offline operations (clicks-and-bricks)? We conclude that integrated strategies that combine elements of cost leadership and differentiation will outperform cost leadership or differentiation strategies. We also argue that, regardless of business strategy type, clicks-and-bricks firms that closely integrate their on-and offline operations will enjoy performance advantages over their pure play counterparts.
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AbstractPurpose -Drawing upon the resource dependence theory, the purpose of this paper is to examine how the board capital diversity influences the explorative innovation of firms, attempting to resolve the inconsistent empirical findings of the effect of outside directors on firm's R&D strategy. Design/methodology/approach -Using a sample of Korean manufacturing firms which consider R&D capability to be one of their core competencies, the study uses negative binomial model to test the influence of board capital diversity on explorative innovation. Findings -Results support the value of moderate level of board diversity hypothesis by demonstrating that board capital diversity shows an inverted U-shaped relationship with explorative innovation. The results also suggest that CEO ownership positively moderates the relationship between board capital diversity and firms' innovative performance. Originality/value -Mainstream research has focussed on the directors' monitoring role based on agency theory, overlooking the more positive resource provision role. Taking on the concepts of board capital and exploration, the study introduces the notion that outside directors should be selected with a view as vehicles for bringing in valuable expertise and social linkages for the firm's explorative innovation.
<span>This study questions the conventional wisdom that strategic change and a rapid pace of change are necessary for firm survival in a changing environment. Recognizing the potential costs of strategic change, we argue that conventional wisdom might be oversimplified. Drawing on the U.S. trucking industry and its deregulation, this paper concludes that mere change in strategy is insufficient to guarantee organizational survival and success, and hasty change may exert a negative impact on firm performance. Conclusions drawn from this study should be given appropriate caveats since we focus on conditions idiosyncratic to strategic change prompted by industry deregulation.</span>
Although traditional strategic management theory evolved in the context ofbrick and mortar firms operating in a physical space, we propose that Porter's(1980) generic strategy framework is still applicable, albeit in need of somemodification, to competition in the digital age. This study tests that assertionin a sample of Korean online shopping malls. In particular, it explores the followingresearch question: Do Porter's (1980) generic strategies explain performancedifferences across business-to-consumer (B2C) firms?Our results suggest that Porter's generic strategies are applicable to e-businessand that they indeed explain performance differences across firms.Contrary to conventional wisdom, but consistent with the logic of business inthe digital realm, the cost leadership strategy exhibited the lowest performance.Firms pursuing a hybrid cost leadership/differentiation strategy exhibited thehighest performance. Interestingly, when a sub-sample of all firms pursuing thehybrid strategy was analyzed for performance differences by firm type (pureplays vs. clicks-and-bricks), pure plays exhibited superior performance. Ourfindings suggest that cost leadership and differentiation can be combined at thesame time, and must be combined to be successful in e-business.
This study investigates whether and how the corporate social responsibility (CSR) profile of a company transfers to another company when an executive leaves a firm. We integrate upper echelon and institutional theories, and develop a novel measure of CSR profiles to explore this issue with a longitudinal data set of executive migrations over a 14-year period. We find that migrated executives assimilate elements of their old firms’ CSR profiles into their new firms (i.e., narrowing the distance between the two firms’ CSR profiles), and this is true for both CSR and corporate social irresponsibility (CSiR). This relationship is stronger when the migrating executive comes from a bigger firm with better social and financial performance than that of the new firm. We also find that the potential for improvement in CSR profiles in migration holds true for CSiR, but not CSR. Our findings have import for upper echelon theory and the managerial discretion afforded to executives regarding CSR decisions.
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