Business Group Affiliation and Firm Search Behavior in India: Responsiveness and Focus of Attention

Abstract

This paper investigates the effects of organizational form on problemistic search. We contrast how Indian firms affiliated with business groups and unaffiliated firms evaluate performance and react by adjusting their internal technology search and external market search. We propose that, compared with unaffiliated firms, business group–affiliated (BG-affiliated) firms are more externally oriented in setting aspiration levels and more likely to respond to low performance in the market domain. We find support for an external orientation of BG-affiliated firms and find that group affiliation determines the responsiveness to performance feedback in different search domains. The findings suggest a need to add considerations of organizational form and governance to the theory of organizational search.

The impact of corporate governance practices on R&D efforts: a look at shareholders' rights, cross-listing, and control pyramid

“…Our article also provides evidence that the influence of governance practices on R&D decisions goes beyond the firm level to encompass all the bodies belonging to the same business group. This result supports some recent efforts carried out on the role of business groups on R&D and innovation activities and performances (Chang et al, 2006;Belenzon and Berkovitz, 2010;Vissa et al, 2010).…”

Contradictory yet Coherent? Inconsistency in Performance Feedback and R&D Investment Change

“…Several contributions to the literature (Greve 2003a(Greve & 2010Haleblian & Rajagopalan, 2005;Lant, Milliken, & Batra, 1992;Lant & Shapira, 2008;Milliken & Lant, 1991) have shown adaptation following performance feedback occurs in many organizational aspects, such as goal setting, expectation formation, evaluating alternative courses of action, as well as actual and impactful changes to Inconsistency in Performance Feedback and R&D Investment Change 5 organizational structures, procedures and strategies. A few studies have already investigated how performance feedback affects R&D yielding an empirical baseline we build on and advance (Chen, 2008;Chen & Miller, 2007;Greve, 2003b;Salge, 2011;Vissa, Greve, & Chen, 2010). We discuss these studies in detail in our theory section and demonstrate that in sum they amount to a partial insight into R&D investment decision-making.…”

Corporate governance and national institutions: A review and emerging research agenda

“…Research from North America (e.g. Morck et al, 1988, Smith & Amoako-Adu, 1999, India (Vissa, Greve & Chen, 2010) and South-East Asia (e.g., Filatotchev et al, 2005; provides evidence of the negative effect of a controlling family on corporate performance. Here family interests may dominate over the interests of non-family shareholders, since the concentration of personal and family wealth in family-controlled firms normally creates a preference for wealth distribution towards dominant owners over other dimensions of firm performance, such as maximization of dividend payments to outside shareholders (Carney & Gedajlovic, 2002).…”