Pages : 342 - 365
This article investigates the relationship between ownership structure and corporate diversification strategy. It focuses on the potential conflict of interest between shareholders and managers regarding diversification, and tests the resolution of such conflict by shareholder monitoring and then by the alignment of managers’ behaviour with that of shareholders. The study is original in that it is conducted on a population of large French companies, makes a clear distinction between insider and outsider ownership, and compares related diversification strategies to conglomerate strategies. The research shows that the effect of monitoring by outside blockholders is clear, leading to related diversification at the expense of unrelated diversification strategies. However, an increase in managerial ownership, far from leading to alignment, leads to managerial behaviour that goes against the interests of shareholders and more precisely to unrelated diversification strategies.
Quantitative Methods - Strategy & Business Policy
Pages : 366 - 381
Several meta-analyses highlight the benefits of market orientation for organizational performance. However, results diverge regarding its impact on new product performance. This fact calls for investigation of new moderators for this causal relationship. We hypothesize a moderation effect of competency diversity in new product development teams. We indeed observe this moderation and its specific effects on each dimension of market orientation (customer orientation, competitors and technology).
Pages : 382 - 390Download PDF (EN)
Xavier Lecocq, Benoît Demil, Juan Ventura.
Pages : 214-225
The topic of business models has been flourishing in managerial literature and more recently in the academic sphere. Since 1995, its use has emerged in a multitude of arenas (Gazhiani & Ventresca, 2005). Of course, such construct may be criticized as a new fashion in the management field that could disappear in several years. In this special issue, however, the authors have tried to explore and test the potential power and interest of what seems to be more than a new concept in strategic management.
The stance taken by the authors in this issue is noteworthy for two reasons. First, as far as theory is concerned, the authors postulate that talking about business models differs from drawing on traditional concepts from corporate or competitive strategy. This first point has been partially explored and supported empirically by Zott & Amit (2008). They show that the construct of the business model is imperfectly covered by the concepts of strategy. More specifically, the choice of a business model cannot be reduced to the choice of a product/market strategy. The second significant decision made by the authors is to trust practitioners. Indeed, the use of the business model is largely attributable to the practical sphere. This explains the profusion of grey literature produced by consultants, managers and journalists until the end of the 90s, which made the concept fuzzy but at the same time underlines its potential usefulness for day-to-day business. If we concur with Clegg & Starbuck (2009) in accepting recursive relations with practitioners to build knowledge, the practical use of the concept may be a good starting point. Indeed, as a design science, management can aim to put forward artefacts and engage in conversation with practitioners and users.
In this introduction, we trace the emergence and development of the business model as a theme in strategic management. To this end, we use Lakatos’s view of scientific progress, and especially his concept of ‘research program’ as recently drawn upon by Edouard and Gratacap (2010) for the concept of ‘ecosystem’. In this article, the ‘research program’ is used in a broad sense because we apply it to a social science, namely management. However, although the business model is not (yet) a theory per se but rather (depending on the approach adopted) a concept or a tool which helps to describe an economic activity, or potentially a ‘framework’ (Teece, 2007), we demonstrate that it presents the features of a research program. This program is progressive in the sense used by Lakatos. Finally, we try to look ahead and envisage some avenues for the business model as a research program.
Strategy & Business Policy - Theory Development
Loïc Plé, Xavier Lecocq, Jacques Angot.
Pages : 226 -265
Over the last few years, firms have involved their customers increasingly in different goods- and services-related processes (design, production, delivery, etc.). A corollary of this trend towards increasing integration of the customer has been new organizational choices aimed at generating higher margins, either by increasing revenues or by reducing costs. In other words, thinking about the ways in which the customer can and should be mobilized has mirrored fundamental changes in business models (BMs). However, the academic literature on the BM concept has remained relatively scarce so far (Demil & Lecocq, 2008). In particular, it seems that no study has thus far tackled the issue of customer participation in the BM.
Customer participation has been the focus of much research in the field of services marketing and management. This literature considers the customer as an active player, going beyond traditional perspectives of the customer as a mere buyer Still, the customer’s impact on the firm’s ability to generate revenues, and thus on the firm’s BM, remains unknown.
This paper aims to provide a theoretical framework for the way in which firms can and should integrate their customers into their BM. Combining BM and customer participation literatures, we develop a theoretical framework for what we label the “Customer-Integrated Business Model” (CIBM), a generic BM based on customer participation. Our model relies on the RCOV (Resources and Competences, Organization, Value Proposition) of Demil & Lecocq, 2010. In a CIBM, the customer is considered as a resource. This has significant consequences, both on the two other components (Value Proposition and Organization) and on the interrelations between the three parts of the model. We exemplify this theoretical framework with two case studies based on secondary data. We conclude by addressing the potential limitations of CIBM.
Strategy & Business Policy - Theory Development
Bertrand Moingeon, Laurence Lehmann-Ortega.
Pages : 266 - 297
The purpose of this article is to show through a case study the inherent difficulties in creating and implementing a new business model in an existing firm. This research is based on a study of Valtis, a French security transportation firm whose CEO helped to introduce onto the market an innovative system based not on securing goods but on removing temptation: money is no longer carried in armored vehicles but is placed in secure containers, transported by unarmed men traveling in unmarked cars. The article shows that as well as demonstrating technological innovation, this is in fact a radically new business model. It also highlights the double loop learning needed to create it and also the difficulties encountered when two business models (the old and the new one) coexist during and after the strategic experimentation phase. More generally, the article aims to show how the notion of business model opens up the question of strategic regeneration.
Cesar Camisón Zornoza, Ana Villar-Lopez.
Pages : 298 - 317
The present study provides a conceptualization of the business model construct from which a multi-dimensional evaluation tool is developed that provides the basis for drawing up a taxonomy and analysing its comparative efficacy. The empirical data was obtained from a sampling of 159 Spanish business organisations. The cluster analysis revealed the existence of four business models that were designated as “multidivisional”, “integrated”, “hybrid” and “network”. The results also indicate that the adoption of a certain business model is not enough to attain superior performance, highlighting the need to consider other contingent factors.
Strategy & Business Policy
Valérie Chanal, Marie-Laurence Caron-Fasan.
Pages : 318-341
Recent literature on open innovation suggests that firms can improve their performance by “opening” their business models, in other words, they can reduce their R&D costs by incorporating external knowledge. This implies that firms will be able to capture value through knowledge produced outside the organization. This, however, presents a number of difficulties notably where the knowledge produced is the result of collective creativity carried out by communities of peers. Here, tension can arise when some of the business actors involved take, or attempt to obtain, financial benefit from part of the value created by the online communities. The purpose of this article is to address the following research question: what are the main strategic difficulties encountered by firms whose business models rely on public web communities to create value? Our study used a collaborative research approach, and our empirical data is based on the longitudinal strategic analysis of a web start-up, CrowdSpirit, a collaborative web-based platform which enables communities to imagine and design innovative products. Our research highlights three main points that need to be addressed in further research on open business models. First, we highlight the fact that the ‘openness’ of the business model to online communities leads to the development of a multi-level incentive model adapted to the different profiles of the various contributors. Second, we suggest that crowdsourcing platforms act as intermediaries in multi-sided markets and, as such, are at the core of a knowledge-sharing and IP transfer process between multiple actors. Finally, we suggest that the business model design and development can be considered as an ongoing learning process.
Qualitative Methods - Strategy & Business Policy
Achim Schmitt, Gilbert Probst, Michael L. Tushman.
Pages : 128-150
We constantly hear of the increasing complexity of our fast-paced, globalized world, and those who did not survive the succession of crises of the last decade could certainly attest to the difficulties of strategy-making in such circumstances. Of course, our reflex when confronted with fear of the future is often to run for cover, particularly if management can get away with downsizing while blaming the crisis. But of course, this only fulfils the short-term objectives of strategy. If an organization favors short-term exploitation when crisis strikes, what will become of it in the longer term? By the same token, allocating resources to long-term exploration might incur the risk of precipitating the fall. It is with this ambidexterity dilemma in mind that I approached a group of colleagues who have for some time been at the forefront of research in the field. First, of course, is Michael Tushman of Harvard Business School. Michael, besides being a leading international scholar, is also one of the editors of M@n@gement. Michael is very supportive of the journal, and I thank him for that as well as for accepting the offer to join in this attempt to reflect on the dilemma of “ambidexterity in times of crisis”. Michael has been working for a long time with my dear colleague Gilbert Probst, of the University of Geneva. Working together with Michael and other colleagues, Gilbert has inspired many young scholars to research the complexity and paradoxes of ambidexterity. Finally, Achim Schmitt, an up-and-coming academic, was the final element required for a successful team. Their joint efforts produced a very thoughtful insight into the way in which ambidexterity can pass a stress test in preparation for major future crises. They offer their views on improving the theory of organizational ambidexterity in the context of economic crises, and their case study of Samsung Electronics captures the essence of ambidexterity in practice. I feel that in broader terms their text also sets the agenda for future research on ambidexterity. I hope that the readers of M@n@gement will enjoy this Unplugged essay as much as I did.
Strategy & Business Policy - Theory Development - Organizational Behavior
Pages : 151-171
This paper aims at understanding organizational boundaries in their different dimensions : internal and external, horizontal and vertical, static and dynamic. It first gives a definition of the phenomenon : a boundary is a potential or actual mechanism that rarefies or regulates flows between two heterogeneous spaces, and makes these flows visible. It then formulates three propositions :
1. There are no such things as « natural boundaries ». Organizational boundaries are the result of decisions about capability units that are always debated.
2. Once established, boundaries tend to be stable and to become entrenched.
3. Even when they are entrenched, boundaries remain debatable. When controversies intensity, strategies aiming at changing the boundaries develop, and strategies aiming at maintaining them develop in response. A case study allows a discussion of these propositions. The selected case is the Air Traffic Management industry in Europe. The authors have been working on it for more than ten years. The main points this article makes are the following: The concept of capability unit is related to the idea that there are no such things as « natural » boundaries. When managers define a boundary, be it internal or external, they think of a capability, and this is done in a context of causal ambiguity. Boundaries are the object of a decision and are always debatable and debated. They induce a rarefaction of the financial, informational, and other flows, and this rarefaction can vary in intensity over time. Once defined, boundaries tend to sediment and become entrenched. In such a process, the asynchrony of decisions made in different areas, such as technology, human resources, and organization of sub-activities, plays a key role. As the environment evolves, controversies concerning the perimeter of the capability units may intensify and some actors may develop strategies aimed at changing the boundaries. These strategies will pertain to the boundaries of a few capability units, or to a large set of boundaries. In the latter case, the strategy, which can be characterized as “architectural”, would be developed by an actor with a particular status. This actor would belong to several organizational fields and would therefore not be constrained by the same symbolic boundaries as actors who belong to one field alone. Such a strategy entails a willingness to impose synchrony to other actors in the industry. The dynamics of displacing the boundaries relies on two processes, competition and cooperation, combined in a coopetitive approach.
Qualitative Methods - Strategy & Business Policy - Organization Theory
Pages : 172-204
This article aims to shed light on the ways in which working students marry their work and school activities. On the basis of questionnaire responses garnered from 303 working French students, it shows that coping strategies implemented to deal with the stress which arises from the work-school conflict are generally effective, with the exceptions of self-accusation and cognitive repression. Furthermore, a negative relationship between work-school conflict, stress and turnover intention emerges. This study goes beyond mere one-dimensional illustrations which portray students as being under pressure or taking action to foster their own professional development, and instead suggests a combined response to role conflict which involves both confronting the conflict and managing emotions.
Quantitative Methods - Organizational Behavior
Pages : 205-213Download PDF (EN)
Pages : 70-98
The aim of this article is to show that firms opt for temporal agglomeration
(entering the market at the same time as their competitors) when uncertainty
concerning the success of their products is particularly significant. An analysis
of the major Hollywood studios from 2000 to 2006 shows that these firms limit
uncertainty by adopting similar behaviours. Results show that a combination
of factors lead to the agglomeration of film release dates. Budgets and styles
are used as reference points by players in the industry; Oscar and day-off
effects are strong. Rules and standards relating to the process of selection
limit firms’ behaviour. More than a deliberate strategy, temporal agglomeration
seems to emerge from complex interactions, increasing competition and thus
decreasing the movies’ market performance.
Quantitative Methods - Strategy & Business Policy
Pages : 99-127
Inference plays a central role in management research as researchers are frequently led to draw conclusions or make generalizations from their observations or results. In many cases, they are able to do this rigorously through inferential statistics, which is the process of inference whereby the statistician tests the generalization of information collected in a sample to the entire population the sample is from. Statistical tests are thus at the heart of inferential statistics and, consequently, the process of inference. However, since they were first developed, statistical significance tests have been the object of sharp and repeated criticism regarding both their nature and their role (Nickerson, 2000). Such criticism has been longstanding in virtually all disciplines, with the notable exception of management that is just beginning to address the issue (Mbengue, 2007, Schwab & Starbuck, 2009). The main purpose of this paper is to provide researchers in management with clear information about the controversy surrounding statistical significance tests, to detail the content and issues and, most importantly, to offer recommendations for improving the testing of hypotheses and beyond, in other words, the process of statistical inference in management research.
Pages : 1-37
The objective of this article is to evaluate the impact of the initial context of companies on their propensity to cooperate and on the characteristics of partner companies that they consider to be significant. More specifically, the authors attempt to measure the influence of different dimensions of distance (cultural, administrative, geographic, economic and technological) on the choice of the country of partners in international R&D cooperation. Based on the contribution of the literature on international business and the framework proposed by Ghemawat (2001), this article develops several hypotheses concerning the effects of distance, analysed by five different dimensions. These hypotheses are tested on a sample of 1502 international agreements concluded by European companies in the biotechnology industry. The findings of the empirical study show that distance influences the choice of the country of partners, but that the impact varies according to the dimension analysed and the context of the agreement. In particular, they reveal that administrative, geographic, economic and technological distance plays an essential role, whereas cultural distance does not have a significant influence on the choice of the country of partners, at least in the biotechnology industry and when projects are subsidised.
Quantitative Methods - International Management
Pages : 38-69
Clusters are characterised by partnership practices that lead to a high level of competitiveness. However some of them encounter coordination difficulties due to conflicts over the appropriation of collective gains. This is more specifically the case of bioclusters because of their sectoral particularities and because of the different public policies that apply. Stemming from an analysis of conflicts at stake in a biocluster, this article aims at bringing to light how firms and institutions strategies emerge and co-evolve as their actions are characterised by divergent interests. According to an evolutionary perspective, we propose an exploratory simulation leading to an analysis of the mutual adaptation dynamics developed by the agents involved. The results show on the one hand that firms adjust their bargaining strategies according to uncertainty and to their perception of the gains which might be generated at the collective level. On the other hand, the model shows that local authorities can play a regulatory part in the game. This exploratory research provides insight into management public modalities so as to generate cooperation and innovation within bioclusters.
Quantitative Methods - Strategy & Business Policy