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Article

Andy El-Zayaty and Russell Coff

Many discussions of the creation and appropriation of value stop at the firm level. Imperfections in the market allow for a firm to gain competitive advantage, thereby appropriating rents from the market. What has often been overlooked is the continued process of appropriation within firms by parties ranging from shareholders to managers to employees. Porter’s “five forces” model and the resource-based view of the firm laid out the determinants of value creation at the firm level, but it was left to others to explore the onward distribution of that value. Many strategic management and strategic human capital scholars have explored the manner in which employees and managers use their bargaining power vis-à-vis the firm to appropriate value—sometimes in a manner that may not align with the interests of shareholders. In addition, cooperative game theorists provided unique insights into the way in which parties divide firm surplus among each other. Ultimately, the creation of value is merely the beginning of a complex, multiparty process of bargaining and competition for the rights to claim rents.

Article

Michael Dowling

Ray Noorda, the former CEO of Novell Inc., first coined the term “coopetition” in 1992 to describe a common phenomenon in the computer industry: cooperation between competitors. This phenomenon is inconsistent with classical economic and business theory going as far back as Adam Smith, who viewed the production system as based on a separation between suppliers and buyers. Micro-economists have traditionally viewed the firm as buying raw materials and components from suppliers, producing finished goods, and selling those goods in competition with other firms to a different set of firms or consumers. However, starting in the 1990s, research on forms of cooperative relationships between competitors became very common. The most common types are (a) competing firms engaging in horizontal alliances along the same level of the value chain and (b) vertical cooperation along different levels of the value chain between suppliers and firms in the focal industry or between customers and firms. In the last 25 years, there has been a great increase in research on coopetition. In a systematic literature review conducted in 2014, one researcher found over 130 academic articles in more than 80 academic publications published since 1996. The majority of the research to date has been qualitative, with many cases studied conducted. A number of special issues in academic journals have been devoted to the topic in general or to special topics concerning coopetition. The Strategic Management Journal organized a special issue in 2018 on the interplay of competition and cooperation, and a number of workshops have been held on coopetition strategy and innovation.

Article

Lukas Neumann and Oliver Gassmann

Frugal innovation as a concept was initially sparked by a groundbreaking article published in The Economist in 2010. In it, the conception and application of a handheld electrocardiogram (ECG), the Mac 400, specifically designed to serve the rural population in India, was introduced. Every aspect of this product and its ecosystem was designed to serve the customer at less than 25% of the original cost. Since this publication, a lively discussion around this concept has developed in academia as well as in the industry. As a term, “frugal innovation” refers to solutions (products or services), methods, or designs that focus on serving new customers in resource-constrained contexts at the bottom of the pyramid (BoP) and/or emerging and developing markets. This understanding has broadened somewhat as such innovations gain increasing attention and relevance throughout all customer segments across the globe. What remains consistent is that frugal innovation is based on a new type of value architecture that is specifically developed to serve customers’ needs in the respective context by utilizing as few resources as possible. This approach leads to many cases where frugal innovations are novel and disruptive to their market environment. Research shows that for firms, especially traditional “Western” ones, these innovations require significant changes in firms’ activities along the entire value chain.

Article

Work motivation is defined as a set of energetic forces, internal or external to individuals, that help to initiate work-related behavior and determine its form, direction, intensity, and duration. It is one of the most studied and discussed topics in industrial and organizational psychology and extensively documented in meta-analyses and literature reviews. The content approaches to motivation show that (a) both mastery- and performance-approach goals are related positively to performance (achievement goal theory); (b) a promotion focus is positively associated with positive worker outcomes, while a prevention focus has less beneficial outcomes and relates negatively or not at all to such outcomes (regulatory focus theory); and (c) intrinsic motivation and basic need satisfaction are positively related to positive worker outcomes (self-determination theory). Context motivational theories indicate that (a) extrinsic incentives are associated with poorer well-being and creativity yet better employee performance (reinforcement theory) and (b) job characteristics explain up to 87% of the variance in worker outcomes (work design theories). Finally, the process approaches to motivation reveal that (a) expectancy theory is more useful in explaining choice behavior rather than energy investment or persistence; (b) setting specific difficult goals increases performance, even more so when feedback is also given, and that goal commitment is particularly important for goal achievement (goal setting theory); (c) goals allow people to more effectively process information, but the role of self-efficacy is less clear (self-regulation theories); and (d) perceived behavioral control is essential for intentions to behave (theory of planned behavior). Most of this research on work motivation has employed rather traditional research methods, such as cross-sectional self-reported studies that disconnect with work motivation theory focusing on dynamic processes over time. Therefore, to properly test motivational theory and advance the field of work motivation, future research should use longitudinal (experimental) field studies, person-centered approaches, and experience sampling method studies to allow for the evaluation of motivational and behavioral variability as a function of time, work events, and individual and situational factors. In terms of content, future research should go beyond the study of separate work motivation theories and integrate them to better understand the content, process, and context of work motivation. Such an integrated theory should include the work context in a more structured and explicit way, also taking into account that contextual variables may operate in isolation or interactively to affect motivation and that workers also influence the work context. As such, time and individual perspectives thereof should also be better incorporated in such integrated work motivation theories. Finally, there are a few “do’s” and “don’ts” for practitioners to enable them to practice evidence-based human resource management. First, following self-determination theory, one should bear in mind that not all motivation is good: Some types, especially those reflecting autonomous motivation (i.e., related to intrinsic motivation or experienced meaningfulness), generally lead to better outcomes than other, more controlled types (e.g., based on rewards or guilt induction). Second, goal setting theory is a useful perspective when developing performance management systems.

Article

The Resource-Based View of the firm (RBV) is a set of related theories sharing the assumptions of resource heterogeneity and resource immobility across firms. In this view, a firm is a bundle of resources, capabilities, or routines which create value and cannot be easily imitated or appropriated by competitors due to isolating mechanisms. Grounded in the economic traditions of the “Chicago School” of economic efficiency, the “Austrian School” of economics, and organizational economics, the RBV comprises theories that explain the existence of (sustained) competitive advantage and of economic rents. Empirical research from this perspective addresses both firm performance and firm behavior at the level of business strategy (e.g., within-industry competition) and corporate strategy (e.g., acquisitions). Initially developed through a series of papers by several authors in the 1980s–1990s, major extensions and refinements of the RBV include the knowledge-based view of the firm (KBV), dynamic capabilities, and the relational view, which recognizes capabilities can be developed and shared through alliances between firms.

Article

Edoardo Della Torre, Alessia Gritti, and Adrian Wilkinson

Employee voice (EV) refers to all the ways and means through which employees have a say in the decisions that affect their work and the overall running of their organization. It involves different domains and topics and occurs through a variety of channels (direct and indirect, formal and informal, individual and collective). The main distinction is between direct voice channels, through which employees have the opportunity to express their ideas and opinions directly to managers without the mediation of representatives, and indirect voice channels, through which EV is expressed by representatives, usually elected from the wider group of employees. Since the last decades of the 20th century, EV has become a central topic in human resource management (HRM), industrial relations, (IR) and organizational behavior (OB) literature, providing researchers and practitioners with an extensive and ever-increasing amount of knowledge. However, each discipline has created its own conceptualization of the meanings of and purposes for EV, leading EV to become a contested terrain, characterized by research silos and competing literatures. While the OB perspective concentrates on the informal and prosocial nature of individual EV, the IR approach is mainly focused on formal structures for collective EV and the contrasting interests of management and workers, and the HRM approach tends to emphasize the role of direct EV as a component of the wider HRM systems that may generate higher organizational outcomes. Integrative approaches that can bring together different disciplinary perspectives are therefore required for a more comprehensive understanding of how EV takes shape in organizations and affects individual and organizational outcomes. Greater attention should also be paid to the multidimensionality of EV, investigating further how it relates to employee silence and to other phenomena, such as ethical employee voice and whistle-blowing. Finally, little is known about the emerging forms of EV related to workplace digitalization and working remotely.

Article

Vinícius Chagas Brasil and J.P. Eggers

In competitive strategy, firms manage two primary (non-financial) portfolios—the product portfolio and the innovation portfolio. Portfolio management involves resource allocation to balance the important tradeoff of risk reduction and upside maximization, with important decisions around the evaluation, prioritization and selection of products and innovation projects. These two portfolios are interdependent in ways that create reinforcing dynamics—the innovation portfolio is the array of potential future products, while the product portfolio both informs innovation strategy and provides inputs to future innovation efforts. Additionally, portfolio management processes operate at two levels, which is reflected in the literature's structure. The first is a micro lens which focuses on management frameworks to boost portfolio performance and success through project-level selection tools. This research has its roots in financial portfolio management, relates closely to research on new product development and marketing product management, and explores the effects of portfolio management decisions on other organizational functions (e.g., operations). The second lens is a macro lens on portfolio management research, which considers the portfolio as a whole and integrates key organizational and competitive concepts such as entry timing, portfolio management resource allocation regimes (e.g., real options reasoning), organizational experience, and the culling of products and projects. This literature aims to set portfolio management as higher level organizational decision-making capability that embodies the growth strategy of the organization. The organizational ability to manage both the product and innovation portfolios connects portfolio management to key strategic organizational capabilities, including ambidexterity and dynamic capabilities, and operationalizes strategic flexibility. We therefore view portfolio management as a source of competitive advantage that supports organizational renewal.