221-240 of 269 Results

Article

Social Entrepreneurship  

Sophie Bacq and Jill R. Kickul

Social entrepreneurship is an ever-growing and ever-changing field. Known as the process of identifying, evaluating, and exploiting opportunities aiming at social value creation by means of commercial, market-based activities and of the use of a wide range of resources, social entrepreneurship combines market elements with a societal purpose. An overview of the evolution of social entrepreneurship as a field of research from its origins in the 1980s to date, and analysis of the themes presented at The Annual Social Entrepreneurship Conference over more than a decade, show how the core components of social entrepreneurship remained as the field evolved—social value creation, business model, and social entrepreneurial intentions, with the addition of nuances and complexities over time. These trends demonstrate the importance—and unique opportunities—for social entrepreneurship researchers to pursue further research on scaling, impact measurement, and systems change. Social entrepreneurship bears the promise and potential to revisit, and potentially challenge, the theoretical assumptions made in traditional entrepreneurship and management scholarship, embracing a multiplicity of salient stakeholders, other levels of analysis, or the relevance of community.

Article

Social Movements and Their Impact on Business and Management  

Sarah A. Soule

Do the activities of social movements (e.g., public protest, shareholder activism, boycotts, and sabotage) impact businesses, and if so, how do they impact businesses? When confronted by activist demands, how do firms respond, and does this response vary depending on who the activists are and what their relationship is to the firm? Answering these questions is critical for businesses and activists alike, as we move into an era of heightened activism directed at firms. A growing area of research that is situated at the intersection of economic and political sociology, social movement studies, history, and organizational theory, tackles these questions, in an increasingly methodologically sophisticated and nuanced manner. As a result, a number of important articles and books have been published, and several high-profile, interdisciplinary conferences have been held. This body of research shows that social movements have both direct and indirect effects on businesses, and that these effects are amplified by media attention to activism. For example, we know that activism impacts the financial performance of firms, as well as their reputation. And, we know that the activities of social movements have consequences on firm policies and practices. In turn, businesses have developed a varied repertoire of ways to respond to activist demands. While some businesses ignore activists, others decide to retaliate against activists. Increasingly, businesses concede to the demands of activists in material ways by changing policies and practices that are criticized, while others devise symbolic ways to respond to activist demands, thereby preserving their reputation without necessarily changing their activities.

Article

Social Network Analysis in Organizations  

Jessica R. Methot, Nazifa Zaman, and Hanbo Shim

A social network is a set of actors—that is, any discrete entity in a network, such as a person, team, organization, place, or collective social unit—and the ties connecting them—that is, some type of relationship, exchange, or interaction between actors that serves as a conduit through which resources such as information, trust, goodwill, advice, and support flow. Social network analysis (SNA) is the use of graph-theoretic and matrix algebraic techniques to study the social structure, interactions, and strategic positions of actors in social networks. As a methodological tool, SNA allows scholars to visualize and analyze webs of ties to pinpoint the composition, content, and structure of organizational networks, as well as to identify their origins and dynamics, and then link these features to actors’ attitudes and behaviors. Social network analysis is a valuable and unique lens for management research; there has been a marked shift toward the use of social network analysis to understand a host of organizational phenomena. To this end, organizational network analysis (ONA) is centered on how employees, groups, and organizations are connected and how these connections provide a quantifiable return on human capital investments. Although criticisms have traditionally been leveled against social network analysis, the foundations of network science have a rich history, and ONA has evolved into a well-established paradigm and a modern-day trend in management research and practice.

Article

Social Networks and Employee Creativity  

Gamze Koseoglu and Christina E. Shalley

In the field of management, employee creativity, which is defined as the production of novel and useful ideas concerning products, processes, and services, has been found to be necessary for organizational success and survival. An employee’s relationships with others in the organization affect creativity because employees work in the presence of, and with, their coworkers. A social network approach has been taken to understand how employee relationships can affect creativity. Social networks examine the interaction of individuals with those around them, such as asking them for help or advice. Four components of social networks that have a role in employee creativity have received attention: the nature of the employee’s relationships with coworkers, the structure of the employee’s social network, the position of the employee in the organizational network, and the employee’s network heterogeneity. Regarding the nature of relationships, while some researchers have found that weaker ties are more beneficial for employee creativity, other researchers have found that stronger ties are more advantageous. In order to resolve this conflict, researchers examined the role of strong versus weak ties at different stages of the creativity process and found that, while weak ties might be more useful during idea generation, strong ties come into play during idea elaboration. There are also conflicting findings on the role of the structure of social network. Specifically, a group of researchers found support for a positive relationship between sparse networks and employee creativity, and another group found a positive relationship between dense networks and creativity. Some researchers aimed to resolve this debate, and their findings mirrored the findings on tie strength. They found that density affects different stages of the creative process in unique ways, and while sparse networks are more beneficial during idea generation, dense networks become more important during idea implementation. Compared to the previous two components, the role of network position and network heterogeneity has received less attention from researchers. Researchers found that both central and peripheral positions have certain benefits and costs for creativity. For example, on the one hand, employees located at the periphery of an organization can collect nonredundant information from outside of the organization that has not been shared by others in the organization and has a positive influence on creativity. On the other hand, employees at a central location gain benefits from fast and easy access to information based on many contracts and receiving recognition from many others, thereby improving creativity. Finally, researchers consistently found that different types of network heterogeneity, such as the diversity of one’s contacts in terms of functional background, organizational function, or nationality, positively affects employee creativity. There are many opportunities for future research on the relationship between social networks and creativity, such as examining the role of motivational and cognitive processes as mediational mechanisms, focusing on the role of alter characteristics, studying social networks in a team setting, and taking a temporal approach to understand how changes in social networks over time affect employee creativity.

Article

Social Norms in Organizations  

Jennifer E. Dannals and Dale T. Miller

Social norms are a powerful force in organizations. While different literatures across fields have developed differing definitions and categories, social norms are commonly defined as and divided into descriptive norms, i.e., the most commonly enacted behavior, and prescriptive norms, i.e., the behavior most commonly viewed as acceptable or appropriate. Different literatures have also led to differing focuses of investigation for social norms research. Economic theorists have tended to examine social norm emergence by studying how social norms evolve to reduce negative or create positive externalities in situations. Organizational theorists and sociologists have instead focused on the social pressures which maintain social norms in groups over time, and eventually can lead group members to internalize the social norm. In contrast, social psychologists have tended to focus on how to use social norms in interventions aimed at reducing negative behaviors. Integrating these divergent streams of research proves important for future research.

Article

Socioemotional Aspects of Entrepreneurship for the Classroom  

Alexander Bolinger and Mark Bolinger

There is currently great enthusiasm for entrepreneurship education and the economic benefits that entrepreneurial activity can generate for individuals, organizations, and communities. Beyond economic outcomes, however, there is a variety of social and emotional costs and benefits of engaging in entrepreneurship that may not be evident to students nor emphasized in entrepreneurship courses. The socioemotional costs of entrepreneurship are consequential: on the one hand, entrepreneurs who pour their time and energy into new ventures can incur costs (e.g., ruptured personal and professional relationships, decreased life satisfaction and well-being, or strong negative reactions such as grief) that can often be as or more personally disruptive and enduring than economic costs. On the other hand, the social and emotional benefits of an entrepreneurial lifestyle are often cited as intrinsically satisfying and as primary motivations for initiating and sustaining entrepreneurial activity. The socioemotional aspects of entrepreneurship are often poorly understood by students, but highlighting these hidden dimensions of entrepreneurial activity can inform their understanding and actions as prospective entrepreneurs. For instance, entrepreneurial passion, the experience of positive emotions as a function of engaging in activities that fulfill one’s entrepreneurial identity, and social capital, whereby entrepreneurs build meaningful relationships with co-owners, customers, suppliers, and other stakeholders, are two specific socioemotional benefits of entrepreneurship. There are also several potential socioemotional costs of entrepreneurial activity. For instance, entrepreneurship can involve negative emotional responses such as grief and lost identity from failure. Even when an entrepreneur does not fail, the stress of entrepreneurial activity can lead to sleep deprivation and disruptions to both personal and professional connections. Then, entrepreneurs can identify so closely and feel so invested that they experience counterproductive forms of obsessive passion that consume their identities and impair their well-being.

Article

Sources of Knowledge in Firms  

Hugo Pinto and Manuel Fernández-Esquinas

This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Business and Management. Please check back later for the full article. In order to obtain competitive advantages, firms have to make use of knowledge as the main element of their capacities for innovation and management. Innovation is a complex and collective process, resulting from different contexts, socioeconomic aspects, and specificities of firms that create nuanced management and policy implications. Sources of knowledge are varied, as each firm interacts with multiple types of actors to pursue its mission: partners and strategic allies, suppliers, customers, competitors, specialized organizations such as knowledge intensive business services, universities, technology centers, public research organizations, innovation intermediaries, and public administration bodies. Different kinds of knowledge are relevant for the firms, both tacit and codified knowledge. Knowledge needs to be translated into capacity to act. Knowledge generation and absorption can be understood as two sides of the same coin. It is necessary to take into account factors that shape both facets and the relationship between the production, transfer, and valorization of knowledge. Influential factors concerning knowledge characteristics are related to tacitness and to the existing knowledge base. Contextual factors, such as the economic sector, technological intensity, the local buzz, and the insertion in global value chains are essential as environmental enablers for generating and absorbing knowledge. Finally, the internal characteristics of the firm are of crucial relevance, namely the existing innovation culture, leadership, and also the size or internal R&D capacities. These factors reinforce the dynamic capacities of the firm and the decision to engage in open innovation strategies or to give more importance to strategies that protect and codify knowledge, such as industrial property rights.

Article

Stakeholder Engagement in Management Studies: Current and Future Debates  

Sybille Sachs and Johanna Kujala

Stakeholder engagement refers to the aims, practices, and impacts of stakeholder relations in businesses and other organizations. According to a general framework, stakeholder engagement has four dimensions: examining stakeholder relations, communicating with stakeholders, learning with (and from) stakeholders, and integrative stakeholder engagement. Stakeholder engagement is increasingly used in areas like strategic management, corporate social responsibility (CSR), and sustainability management, while stakeholder-engagement research in marketing, finance, and human resources (HR) is still less common. Two main camps in the stakeholder-engagement literature exist: the strategic and the normative. To foster an inclusive understanding of stakeholder engagement, future research in both camps is needed. While the strategic camp necessitates a relational view, including both the firm and the stakeholder perspectives, the normative camp requires novel philosophical underpinnings, such as humanism and ecocentrism. Furthermore, there is constant debate about the argument that stakeholder engagement is, and should be, most importantly, practical. Stakeholder-engagement research should focus on solving real-life problems with practical consequences intended to make people’s lives better.

Article

Stereotypes at Work  

Katina Sawyer and Judith A. Clair

Stereotypes are a central concern in society and in the workplace. Stereotypes are cognitions that drive what individuals know, believe, and expect from others as a result of their social identities. Stereotypes predict how individuals view and treat one another at work, often resulting in inaccurate generalizations about individuals based on their group membership. As such, it’s important to break down and combat the use of stereotypes in decision-making at work. If stereotypes can be overcome in the workplace, fairness and equity in organizations becomes more likely.

Article

Strategic Decision-Making in Business  

Bill Wooldridge and Birton Cowden

Scholarly interest in how managers make strategic decisions dates from the inception of the strategic management field and continues in the present. Although such decision-making was originally conceived as a completely rational, top-management process, contemporary thinking recognizes that strategies from across multiple organizational levels change within social and political contexts. Within this broad domain, multiple research streams address a wide variety of topics and issues. Prominent among these are, (1) the extent to which strategic decisions are formed through comprehensive analysis versus piecemeal decision-making, (2) how characteristics of top managers and the composition of top management teams affect strategic decision-making, (3) the role of politics, conflict, and consensus in strategy making, (4) how cognitive biases and heuristics influence the process, (5) when and how intuitive judgments can form the basis for effective decision-making, and (6) how managers at various organizational levels participate in the process. Research across these streams is both descriptive and normative, with a focus on contextual contingencies and relationships to firm performance. Taken as a whole this literature has significantly enhanced understanding of how strategies form within organizations. Contemporary work continues to provide new insights and demonstrates the continued value of this productive area of study.

Article

Strategic Empowerment in Human Resource Management  

M. Taner Albayrak and Alper Ertürk

Empowerment is considered one of the best managerial approaches to foster employees’ effectiveness, creativity, commitment, performance, and other positive work-related attitudes and behaviors while providing an essential tool for leadership development and succession planning. Empowerment involves delegation of authority, sharing of information and resources, and allowing employees to participate in decision-making processes. Empowerment practices result in positive outcomes through psychological empowerment, which comprises meaning, impact, self-determination, and competence. However, empowerment should be exercised with care, and before doing so, leaders should understand their employees’ competences, willingness, and characteristics, as well as the organizational culture and industrial dynamics. With the increasing use of information and communication technologies, inevitable influence of globalization, and continuously changing dynamics of interconnectedness among industries, the business environment has become more volatile, uncertain, complex, and ambiguous (VUCA). In order to survive in this environment, companies try to increase diversity in their workforce to make the best use of a broad variety of skills, experiences, and opinions, thus boosting creativity and innovativeness, which makes leadership more difficult than ever. With empowerment, the concept of delegation of power is important. Therefore, comparing the concept of personal empowerment with managerial empowerment helps in understanding that these concepts are different, although interconnected. Delegation of authority ensures that the manager transfers decision-making authority to subordinates under certain conditions. In delegation, authority is retained by the manager, who has the ultimate responsibility. On the other hand, in empowerment, authority is fully transferred to the person who is already doing the job, with all the rights and responsibilities to take the initiative as necessary. Empowerment is also closely related but different from the concept of motivation. In motivation, decision-making authority and control stays with the manager. Empowerment, on the other hand, gives employees the opportunity to participate in management, solve problems, and participate in decision-making processes. In this context, the concepts of delegation of authority, motivation, participation in management, and job enrichment are the domain dimensions of personal empowerment, and thus they are interrelated, yet different. It is important to create a common vision and to have common values in order to establish the empowerment process. Subordinates and supervisors need to trust each other, and empowerment needs to be seen as a philosophy, not a technique. It is necessary to create business conditions that enable the development of knowledge and skills in personnel empowerment. These conditions affect the perceptions and attitudes of the staff, such as, support, loyalty, identification, and trust. Empowering employees promotes organizational commitment, increases engagement, and reduces turnover intentions of key personnel. Because empowerment involves encouraging participation of subordinates in the decision-making process, it also helps to enhance the effectiveness of the decisions and reduce decision-making time. In the VUCA world, limited decision making could be a critical obstacle to establish and maintain sustainability in highly competitive business environments.

Article

Strategic Flexibility and Competitive Advantage  

Kathryn Rudie Harrigan

Concerns regarding strategic flexibility arose from companies’ need to survive excess capacity and flagging sales in the face of previously unforeseen competitive conditions. Strategic flexibility became an organizational mandate for coping with changing competitive conditions and managers learned to plan for inevitable restructurings. They learned to reposition assets and capabilities to suit their firms’ new strategic aspirations by overcoming barriers to change. Core rigidities flared up in the form of legacy costs, regulatory constraints, political animosity, and social resistance to adjusting firms’ strategic postures; managers learned that their firms’ past strategic choices could later become barriers to adapting corporate strategy. Managerial insights concerning how to modify firms’ resources changed the way in which they were subsequently regarded. Enterprises saw assets lose their relative productivity and value as mastery of specific knowledge become less germane to success. Managers recognized that their firms’ capabilities were mismatched to market or value-chain relationships. They struggled to adapt by overcoming barriers to change. Flexibility problems were inevitable. Even if competitive conditions were not impacted by exogenous change forces, sustaining advantage in a steady-state competitive arena became difficult; sustaining advantage in dynamic arenas became nearly impossible. Confronted with the difficulties of changing strategic postures, market orientations, and overall cost competitiveness, managers embraced the need to combat organizational rigidity in all aspects of their firms’ operations. Strategic flexibility affected enterprise assets, capabilities, and potential relationships with other parties within firms’ value-creating ecosystems; the need for strategic flexibility influenced investment choices made to escape organizational rigidity, capability traps and other forms of previously unrecognized resource inflexibility. Where entry barriers once protected a firm’s strategic posture, flexibility issues arose when the need for endogenous changes occurred. The temporary protection afforded by imitation barriers slowed an organization’s responsiveness to changing its strategy imperatives—making the firm rigid when adaptiveness was needed instead. A firm’s own inertia to change sometimes created mobility barriers that had to be overcome when hypercompetitive conditions arose in their traditional market arenas and forced firms to change how they competed. Where exogenous changes drove competitive conditions to become more volatile, attainment of strategic flexibility mandated the need to downsize the scope of a firm’s activities, shut down facilities, prune product lines, reduce headcount, and eliminate redundancies—as typically occurred during an organizational turnaround—while simultaneously increasing the scope of external activities performed by an enterprise’s value-adding network of suppliers, distributors, value-added resellers, complementors, and alliance partners, among others. Such structural value-chain changes typically exacerbated pressures on the firm’s internal organization to search more broadly for value-adding innovations to renew products and processes to keep up with the accelerated pace of industry change. Exploratory processes of self-renewal forced confrontations with mobility or exit barriers that were long tolerated by firms in order to avoid coping with the painful process of their ultimate elimination. The sometimes surprising efforts by firms to avoid inflexibility included changes in the nature of firms’ asset investments, value-chain relationships, and human-resource practices. Strategic flexibility concerns often trumped the traditional strengths accorded to resource-based strategies.

Article

Strategic Groups in Business  

Briance Mascarenhas and Megan Mascarenhas

A strategic group is defined as a set of firms within an industry pursuing a similar strategy. The strategic group concept emerged with much promise over 40 years ago. Research on strategic groups over time in a broad variety of settings has sought to clarify their theoretical and empirical properties. These research findings are gradually being translated into practical managerial guidance, so that the strategic group concept can be understood, operationalized, and used productively by managers. Two main approaches exist for identifying strategic groups—a ground-up approach, using disaggregated data, and a top-down, using cognition. Once identified, managerial insights can be derived from clarifying a strategic group’s profile. Firm membership in a group helps to uncover immediate and more distant types of competitors. Group profitability differences reveal the more rewarding and less attractive areas within an industry, as well as identify the lower-return groups from where firm exits are likely to occur. Group dynamics reflect competitive and cooperative behavior within and between groups. Several promising areas for future research on strategic groups to improve understanding and practice of strategy.

Article

The Strategic Management of Technology and Innovation  

Mark Dodgson

The strategic management of technology and innovation is an important contributor to organizational performance and competitiveness. It creates value, assists differentiation, enhances productivity, and guides creativity and initiative. In the face of uncertainty in operating environments, caused especially by rapid technological change, the strategic management of innovation configures capabilities and resources within organizations. These include the capability to search for innovations, select the most advantageous, and appropriate or capture their returns. It involves investing in sources of innovation, such as research and development (R&D) and collaboration with external partners, and using methods for effectively assessing their contributions. Unstable and turbulent operating conditions can disrupt established organizational policies and practices and make planning difficult. As a result, strategies for technology and innovation are necessarily emergent rather than prescriptive, exploratory rather than determinable. Any advantages technology and innovation create are likely to be transitory. The pressing need for greater environmental sustainability, increased focus on the social consequences of innovation, and the impact of new digital and data-rich technologies, add to the challenges of the strategic management of technology and innovation. To address these challenges, attention to physical and intellectual capital needs to be supplemented by greater concern for human, social, and natural capital, and to organizational culture and behavior. This requires the foundation of the strategic management of technology and innovation in the discipline of economics to be complemented by others, such as psychology, organizational behavior, and ethics.

Article

Strategic Planning in the Public Sector  

John Bryson and Lauren Hamilton Edwards

Strategic planning has become a fairly routine and common practice at all levels of government in the United States and elsewhere. It can be part of the broader practice of strategic management that links planning with implementation. Strategic planning can be applied to organizations, collaborations, functions (e.g., transportation or health), and to places ranging from local to national to transnational. Research results are somewhat mixed, but they generally show a positive relationship between strategic planning and improved organizational performance. Much has been learned about public-sector strategic planning over the past several decades but there is much that is not known. There are a variety of approaches to strategic planning. Some are comprehensive process-oriented approaches (i.e., public-sector variants of the Harvard Policy Model, logical incrementalism, stakeholder management, and strategic management systems). Others are more narrowly focused process approaches that are in effect strategies (i.e., strategic negotiations, strategic issues management, and strategic planning as a framework for innovation). Finally, there are content-oriented approaches (i.e., portfolio analyses and competitive forces analysis). The research on public-sector strategic planning has pursued a number of themes. The first concerns what strategic planning “is” theoretically and practically. The approaches mentioned above may be thought of as generic—their ostensive aspect—but they must be applied contingently and sensitively in practice—their performative aspect. Scholars vary in whether they conceptualize strategic planning in a generic or performative way. A second theme concerns attempts to understand whether and how strategic planning “works.” Not surprisingly, how strategic planning is conceptualized and operationalized affects the answers. A third theme focuses on outcomes of strategic planning. The outcomes studied typically have been performance-related, such as efficiency and effectiveness, but some studies focus on intermediate outcomes, such as participation and learning, and a small number focus on a broader range of public values, such as transparency or equity. A final theme looks at what contributes to strategic planning success. Factors related to success include effective leadership, organizational capacity and resources, and participation, among others. A substantial research agenda remains. Public-sector strategic planning is not a single thing, but many things, and can be conceptualized in a variety of ways. Useful findings have come from each of these different conceptualizations through use of a variety of methodologies. This more open approach to research should continue. Given the increasing ubiquity of strategic planning across the globe, the additional insights this research approach can yield into exactly what works best, in which situations, and why, is likely to be helpful for advancing public purposes.

Article

Structural Equation Modelling  

Wayne Crawford and Esther Lamarre Jean

Structural equation modelling (SEM) is a family of models where multivariate techniques are used to examine simultaneously complex relationships among variables. The goal of SEM is to evaluate the extent to which proposed relationships reflect the actual pattern of relationships present in the data. SEM users employ specialized software to develop a model, which then generates a model-implied covariance matrix. The model-implied covariance matrix is based on the user-defined theoretical model and represents the user’s beliefs about relationships among the variables. Guided by the user’s predefined constraints, SEM software employs a combination of factor analysis and regression to generate a set of parameters (often through maximum likelihood [ML] estimation) to create the model-implied covariance matrix, which represents the relationships between variables included in the model. Structural equation modelling capitalizes on the benefits of both factor analysis and path analytic techniques to address complex research questions. Structural equation modelling consists of six basic steps: model specification; identification; estimation; evaluation of model fit; model modification; and reporting of results. Conducting SEM analyses requires certain data considerations as data-related problems are often the reason for software failures. These considerations include sample size, data screening for multivariate normality, examining outliers and multicollinearity, and assessing missing data. Furthermore, three notable issues SEM users might encounter include common method variance, subjectivity and transparency, and alternative model testing. First, analyzing common method variance includes recognition of three types of variance: common variance (variance shared with the factor); specific variance (reliable variance not explained by common factors); and error variance (unreliable and inexplicable variation in the variable). Second, SEM still lacks clear guidelines for the modelling process which threatens replicability. Decisions are often subjective and based on the researcher’s preferences and knowledge of what is most appropriate for achieving the best overall model. Finally, reporting alternatives to the hypothesized model is another issue that SEM users should consider when analyzing structural equation models. When testing a hypothesized model, SEM users should consider alternative (nested) models derived from constraining or eliminating one or more paths in the hypothesized model. Alternative models offer several benefits; however, they should be driven and supported by existing theory. It is important for the researcher to clearly report and provide findings on the alternative model(s) tested. Common model-specific issues are often experienced by users of SEM. Heywood cases, nonidentification, and nonpositive definite matrices are among the most common issues. Heywood cases arise when negative variances or squared multiple correlations greater than 1.0 are found in the results. The researcher could resolve this by considering a small plausible value that could be used to constrain the residual. Non-positive definite matrices result from linear dependencies and/or correlations greater than 1.0. To address this, researchers can attempt to ensure all indicator variables are independent, inspect output manually for negative residual variances, evaluate if sample size is appropriate, or re-specify the proposed model. When used properly, structural equation modelling is a powerful tool that allows for the simultaneous testing of complex models.

Article

Subsidiary Governance and Strategy in the Multinational Enterprise  

Niall O'Riordan, Paul Ryan, and Ulf Andersson

Corporate governance is concerned with how firm performance may be affected by how the organization is governed. Corporate governance is a multifaceted concept that ranges in scholarly interest from the composition of boards to ownership and relational issues of power dependency, control, and decision-making within an organization. International business (IB) researchers have employed multiple theoretical lenses across institutional, resource dependency, and agency theories to examine corporate governance in the multinational enterprise (MNE). As the organizational form of the MNE shifted from hierarchical to heterarchical, and responsibility for sourcing market and innovation knowledge was increasingly devolved to competent subsidiaries, governance arrangements in the MNE came under increased scrutiny. Much IB research into corporate governance examined the balance of power within the MNE and how decision making is influenced by both headquarters (HQ) and its subsidiaries. A parent-subsidiary governance dilemma became apparent around the degree of freedom and control that HQ should leverage over its foreign subsidiaries to maximize the survival and performance of these economically, culturally, and politically dispersed units. Agency theory and resource dependence theory were to the fore in examining the parent-subsidiary dilemma around how control over decision-making scope and processes shaped subsidiary governance around the strategies and operations with the MNE governance architecture. In essence, subsidiary governance and strategy can be seen to represent two sides of the same coin. Subsidiary governance and strategy become complex issues the minute we step outside the hierarchical domain and allow for subsidiaries to have a greater contributory role in the MNE. As a subsidiary is mandated to pursue certain activities in the environment where it has been located, it also is granted some autonomy to strategize around its assigned activities and responsibilities. Opportunities may surface through the embeddedness of its activities in the local environment and the resources this can provide to the subsidiary and MNE. Acting on these opportunities by taking initiatives can result in increased influence and an elevated role in terms of mandate gain and enlarged responsibilities. The issue of subsidiary governance first emerges in relation to how the subsidiary strategy is aligned or not aligned with HQ strategy. Subsidiary managers can decide to solely perform their assigned mandate, or they can choose to generate a resource endowment that may help them become indispensable for HQ, but crucially to guarantee their own survival. The mechanisms available to subsidiaries to achieve this strategic aim are evidenced via initiative taking, seeking autonomy, increasing their role, appropriating power and influence, and embedding themselves in the local and internal environments. In this chapter we approach corporate governance from the perspective of the subsidiary (subsidiary governance) and examine the relationship between subsidiary governance and what we determine to be the prime elements of subsidiary strategy. We respectively define subsidiary governance as the gamut and interplay of control and operations around which management strategize and subsidiary strategy as a process of continuous, deliberate upgrading of knowledge and capabilities to thrive and survive. IB literature on MNE subsidiary governance and strategy to date is incomplete insofar as there are disparate steams of research that warrant integration into a grand theory of subsidiary governance and strategy.

Article

Survey Design  

Don H. Kluemper

The use of surveys is prevalent in academic research in general, and particularly in business and management. As an example, self-report surveys alone are the most common data source in the social sciences. Survey design, however, involves a wide range of methodological decisions, each with its own strengths, limitations, and trade-offs. There are a broad set of issues associated with survey design, ranging from a breadth of strategic concerns to nuanced approaches associated with methodological and design alternatives. Further, decision points associated with survey design involve a series of trade-offs, as the strengths of a particular approach might come with inherent weaknesses. Surveys are couched within a broader scientific research process. First and foremost, the problem being studied should have sufficient impact, should be driven by a strong theoretical rationale, should employ rigorous research methods and design appropriate to test the theory, and should use appropriate analyses and employ best practices such that there is confidence in the scientific rigor of any given study and thus confidence in the results. Best practice requires balancing a range of methodological concerns and trade-offs that relate to the development of robust survey designs, including making causal inferences; internal, external, and ecological validity; common method variance; choice of data sources; multilevel issues; measure selection, modification, and development; appropriate use of control variables; conducting power analysis; and methods of administration. There are salient concerns regarding the administration of surveys, including increasing response rates as well as minimizing responses that are careless and/or reflect social desirability. Finally, decision points arise after surveys are administered, including missing data, organization of research materials, questionable research practices, and statistical considerations. A comprehensive understanding of this array of interrelated survey design issues associated with theory, study design, implementation, and analysis enhances scientific rigor.

Article

Sustainability in Business: Integrated Management of Value Creation and Disvalue Mitigation  

Markus Beckmann and Stefan Schaltegger

Sustainable development is about meeting the needs of current and future generations while operating in the safe ecological space of planetary boundaries. Against this background, companies can contribute to sustainability in both positive and negative ways. In a world of scarce resources, the positive contribution of businesses is to create value for diverse stakeholders (i.e., goods in the actual sense of good services and things with value) without social shortfalls or ecological overshooting with regard to planetary boundaries. Yet, when value-creation processes cause negative social or ecological externalities, companies create disvalue for current or future stakeholders, thus undermining sustainable development. Sustainability in business therefore aims at the integrative management of value creation and disvalue mitigation. Various institutions, such as sustainability laws as well as quasi-regulatory and voluntary sustainability standards, aim at providing an enabling environment in this regard yet are often insufficient. Corporate sustainability therefore calls for proactive management. Neither value nor disvalue fall from heaven but are rather co-created or caused through the interaction with stakeholders. Transforming from unsustainability to sustainability thus requires transforming the underlying relational arrangements. Here, market and non-market stakeholder relations need to be distinguished. In markets, companies transact with customers, employees, suppliers, and financiers who typically have voluntary exchange relationships with the firm. As a result, stakeholders can use the exit option when the relationship causes them harm. Companies therefore need to know and respect their value-creation partners, their potential contributions, and above all their needs. Sustainability can influence these market relationships in two ways. First, as sustainability addresses environmental, social, and ethical issues that are otherwise often overlooked, sustainability can relate to specific goals and motivations that stakeholders pursue when they care about these matters. Second, sustainability can be linked to transaction-specific particularities. This can be the case when sustainability features lead to information asymmetries, higher transaction costs, or resource dependencies. Non-market relationships, however, can differ in that stakeholders are involuntarily affected by the firm. In many cases, such as environmental pollution, stakeholders like local communities experience disvalue but cannot simply walk away. From a sustainability perspective, giving voice to non-market stakeholders through dialogue and participation is therefore crucial to identify early-on potential issues where companies cause disvalue. Such a proactive dialogue does not necessarily present a constraint that limits value creation in the market. Giving a voice to non-market stakeholders can also help create innovations and mobilize valuable resources such as knowledge, legitimacy, and partnership. The key idea is to find solutions that create value not only for market stakeholders but also for a larger circle, including non-market stakeholders as well. Such stakeholder business cases for sustainability aim at the synergistic integration of value creation and disvalue mitigation.

Article

The Swiss Watch Industry  

Pierre-Yves Donzé

The Swiss watch industry has enjoyed uncontested domination of the global market for more than two decades. Despite high costs and high wages, Switzerland is the home of most of the largest companies in this industry. Scholars in business history, economics, management studies, and other social sciences focused on four major issues to explain such success. The first is product innovation, which has been viewed as one of the key determinants of competitiveness in the watch industry. Considerable attention has been focused on the development of electronic watches during the 1970s, as well as the emergence of new players in Japan and Hong Kong. Yet the rebirth of mechanical watches during the early 1990s as luxury accessories also can be characterized as a product innovation (in this case, linked to marketing strategy rather than pure technological innovation). Second, brand management has been a key instrument in changing the identity of Swiss watches, repositioning them as a luxury business. Various strategies have been adopted since the early 1990s to add value to brands by using culture as a marketing resource. Third, the evolution of the industry’s structure emphasizes a deep transformation during the 1980s, characterized by a shift from classical industrial districts to multinational enterprises. Concentration in Switzerland, as well as the relocation abroad of some production units through foreign direct investment (FDI) and independent suppliers, have enabled Swiss watch companies to control manufacturing costs and regain competitiveness against Japanese firms.Fourth, studying the institutional framework of the Swiss watch industry helps to explain why this activity was not fully relocated abroad, unlike most sectors in low-tech industries. The cartel that was in force from the 1920s to the early 1960s, and then the Swiss Made law of 1971, are two major institutions that shaped the watch industry.