Category Archives: Journal of Management Studies

Penalty Zones in International Sustainability Standards: Where Improved Sustainability Doesn’t Pay

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Abstract

Adopting an international sustainability standard (ISS) helps firms improve their sustainability performance. It also acts as a credible market ‘signal’ that legitimizes firms' latent sustainability practices while improving their market value. But how do these signals function when firms adopt multiple ISSs? We show that the relationships between firms' ISSs adoption and their market value and their sustainability performance appear positive. However, beyond a tipping point of 2 ISSs, firms' market gains decline, even though their sustainability performance continues to improve until a tipping point of 3 ISSs. Differing tipping points create a gap that we refer to as the ‘penalty zone’ – the place where market value declines, even though firms' actual sustainability performance continues to improve. The penalty zone arises because of imprecisions in market signals and serves as a significant barrier to firms wishing to further their sustainability agenda through additional ISS adoption.

Understanding the Link between Post‐Acquisition Resource Reconfiguration and Technology Out‐Licensing

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Abstract

We develop a novel framework to explain how the unique properties of out-licensing enable R&D reconfiguration in the context of technology acquisitions. Out-licensing is an attractive R&D strategy following acquisitions as it expands opportunities for resource reconfiguration to outside the organization by using external partners while at the same time allowing firms to continue to benefit from the technology, both financially and strategically. We also propose that the positive relationship between technology acquisitions and out-licensing is weaker when firms cannot determine the full value potential of their R&D due to uncertainty or when they have high availability of short-term financial slack resources. Using a sample of bio-pharmaceutical firms, the result of a 2SLS fixed-effect regression that accounts for the potential endogeneity of technology acquisitions provides support for our theoretical framework.

Business Groups and Export Performance: The Role of Coordination Failures and Institutional Configurations

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Abstract

We explore the nature of business groups (BGs) and their affiliates in emerging markets through the lens of the coordination failures associated with economic development. We propose that BGs develop distinct economic and political capabilities that provide affiliates with access to the complementary resources required for successful exporting. We further argue that these capabilities are context-specific, based on the market and political institutions of the home country. We propose that the BG advantage in supporting affiliate exporting increases as market institutions strengthen but is reduced (strengthened) as political systems become more democratic (autocratic). We apply Tobit estimation methods to a large sample of firms from emerging and developing countries at different stages of institutional development and find consistent evidence in favour of our hypotheses. We develop a framework to analyse alternative BG internationalization paths in a comparative institutional context.

Multiple‐Principal Demands and CEO Compliance in Emerging Market State‐Owned Enterprises

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Abstract

This study addresses multiple-principal–agent power dynamics in state-owned enterprises (SOEs) in emerging markets. We investigate under what conditions agents (CEOs) accede to demands of government-linked principals. Our qualitative study in Indonesia advances agency theory by disaggregating and categorizing government-linked principals. We also examine three types of principals’ demands (commercial, social, and private) and five types of mechanisms influence agent responses with principals’ private demands (collusion among principals, career-ending threats by principals, plausible deniability through CSR, political ties as enabler, political ties as buffer). Based on our findings and on insights from the public administration literature, we develop a conceptual framework that advances multiple agency theory.

When Business Model Innovation Creates Value for Companies: A Meta‐Analysis on Institutional Contingencies

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Abstract

Using a meta-analysis based on 147 primary studies from 27 countries, we synthesize extant knowledge on the relationship between business model innovation (BMI) and firm performance. Our results show that the positive BMI-firm performance relationship is robust across various conceptualizations of and measures for BMI. Building on prior research suggesting that not all companies benefit equally from engaging in BMI, we set out to study important institutional-level contingencies for the BMI-performance relationship. We build on the institution-based view as theoretical perspective and combine it with insights from the innovation literature to theorize that the magnitude of the positive effect of BMI on firm performance depends on institutional contingencies, specifically national culture and pro-market institutions, because these national institutions affect BMI-driven organizational learning processes. Specifically, we argue and show that the positive relationship between BMI and performance is weaker in countries characterized by high levels of masculinity and individualism, and stronger in countries characterized by high levels of customer orientation, economic freedom, and education. Besides the country-level contingencies, the inclusion of various control variables in our meta-analysis also reveals that, even if located in the same institutional environment, start-up firms benefit more from BMI than mature firms and that there are no observable differences regarding BMI benefits among different industries. Moreover, a nuanced analysis shows that the positive effect on performance is stronger when BMI rely on changes in cognitive schemas compared to BMI that are of more technical nature.

Reducing Symbolic Compliance: The Presence of Multiple Large Shareholders as an Internal Monitoring Mechanism

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Abstract

We propose that in a context where corporate ownership is concentrated, the controlling shareholder of a firm tends to symbolically comply to regulatory requirements that aim to protect minority shareholders; yet the presence of multiple large shareholders can serve as an internal monitoring mechanism that can reduce symbolic compliance. We test this argument through examining firm responses to a regulatory requirement regarding independent accounting director appointments in China. Using data on China's listed non-state-owned enterprises, we find that the presence of multiple large shareholders decreases the likelihood of symbolic compliance, and this negative effect is stronger when noncontrolling large shareholders have low incentives to collude with the controlling shareholder. We also find that a firm engaging in symbolic compliance tends to have a greater level of tunnelling (by the largest shareholder) and earnings management. Our study contributes to the literature on symbolic management in an institutional setting where ownership is concentrated.

The Art of Phenomena Construction: A Framework for Coming Up with Research Phenomena beyond ‘the Usual Suspects’

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Abstract

Despite the centrality of research phenomena, the process of their definition is often neglected and reduced to a simple choosing of pre-established subjects of interest. However, good research not only includes empirical work aimed at more or less ‘given as fact’ phenomena. It also involves phenomena construction: that is, the process of generating and establishing phenomena to investigate and theorize. We contend that phenomena construction is not separate from, but integral to, both the empirical and theorizing phases in research. As few phenomena are truly ‘given’ or straightforward to observe, good research calls for careful and creative construction of the phenomenon under investigation. We propose and elaborate a framework that enables researchers to generate and establish research phenomena beyond those currently available in their specific area of interest and, based on this, to produce more imaginative and impactful research.

Investors’ Reactions to Alliance‐Engendered Acquisition Ambiguity: Evidence from U.S. Technology Deals

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Abstract

We study how, when target firms are engaged in strategic alliances, the ambiguity surrounding an acquisition's anticipated synergies influences investors’ reactions to announcements of acquisitions. Drawing on behavioural finance research and the resource redeployment literature, we predict that investors’ limited access to the information encoded in the target firms’ alliances and the uncertainty around the re-deployability of their embedded resources generate a negative relationship between the number of target alliances and investors’ reactions. We also hypothesize that this negative effect is exacerbated when the alliances involve foreign alliance partners but is attenuated when acquirers are experienced in acquiring targets with alliances. Analysis of a large sample of US technology acquisitions supports all our hypotheses. We contribute to management research by offering a viable explanation of investors’ reactions to the announcement of major corporate events, such as acquisitions, whose structural characteristics deny investors material information about these events’ potential to create value.

Corporate Social Performance, Legitimacy, and the Choice of Foreign Partners by State‐Controlled Entities in the Global Extractive Industries

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Abstract

We study the outcome of the decision of a state-controlled entity (SCE) to form an international joint venture (IJV) with a foreign partner in the SCE's country. Focusing on the perspective of the host SCE, we propose that in its search for a partner, the SCE will evaluate the sociopolitical legitimacy effect of a candidate partner's corporate social performance (CSP). Thereby, the SCE will consider CSP an important selection criterion because of its legitimacy effect on the selection decision, the SCE, the IJV, and the host state in the eyes of salient local and international stakeholders. Moreover, the legitimacy effect of a candidate partner's CSP will further influence the decision outcome through its interaction with the level of corruption in the candidate partner's home country, the extant sociopolitical legitimacy of the host state, and the number of neighbouring countries of the host country participating in international multi-stakeholder initiatives. We find support for our hypotheses using a novel sample of extractive industries IJVs between SCEs from 48 countries and 203 foreign partners from 22 countries for the period 2000–15.

The Dent in the Floor: Ecological Knowing in the Skilful Performance of Work

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Abstract

This paper draws on a phenomenological perspective to explore how people develop and enact skill in work at through ecological knowing – a sensuous form of knowing in one's being embedded in and across place and time. In doing so, we abductively interweave the work of Finnish architect Juhani Pallasmaa and British anthropologist Tim Ingold with an empirical study of two industrial museums and two contemporary illustrations of choral conducting and motion capture performance. Our contribution is threefold: first, we expand theories of knowledge and corporeality by theorizing ecological knowing as encompassing emplaced wisdom and embodied skill – thus elevating embedded and embodied human agency in contrast to studies that focus on the body, skill, and knowledge as objects. Secondly, we present an alternative way of understanding how expertise develops and is enacted in work activities. Finally, we offer methodological resources, currently underutilized in management studies, for studying this sensorial form of knowing in a way that is consistent with its underlying phenomenological commitments.