Session Details: Session 1075

Strategic Decision Making

Track E

Date: Tuesday, October 14, 2008

 

Time: 14:30 – 15:45

Common Ground

Room: Salon 25


Facilitator:
Donde Plowman, University of Tennessee

Title: Capabilities for the Dynamic Implementation of Business Development Projects

Authors

  • Ronald Klingebiel, Frankfurt School of Finance and Management

Abstract: In this paper, I relate organisational capabilities to flexibility value. Based on an analysis of data from 61 business development projects, I explore the capabilities for realising performance enhancements expected from preserving project design flexibility. I find that the explicit assessment and design of flexibility, as proposed in real options theory, is important for reaping value. However, such grounded flexibility decision-making is insufficient to explain performance differentials between projects that use flexible plans. Instead, the extent to which i) managers gather and process information during the lifetime of flexibility, ii) managers are able to make timely use of flexibility despite socio-psychological currents, and iii) a higher-level organisational context both encourages and controls flexibility usage, are all positively associated with the achievement of enhanced project outcomes.

Title: Distinctiveness and Flexibility of Resources: A Study of the Motion Picture Industry

Authors

  • Paolo Boccardelli, LUISS Guido Carli University
  • Christian Lechner, Free University of Bozen-Bolzano
  • Mats Magnusson, Chalmers University of Technology

Abstract: The resource-based research has in the last two decades become a dominant view, but it has been subject to critique because of its lack of dynamics, its tautology character, and its lack of strong empirical evidences. As a matter of fact, despite the relevant work performed by strategy scholars, there is still a need to understand the specific characteristics of strategic resources. The aim of this paper is to investigate the role of resources’ distinctiveness and flexibility with a major focus on human capital. With a research in the motion picture industry, empirical observations on the type of resources deployed by independent as well as major companies, and their impact on artistic and economic performance have been collected and analysed.

Title: How Small and Large Firms’ Strategic Flexibility Affects Competitive Strategy

Authors

  • Niels Van der Weerdt, Erasmus University-Rotterdam
  • Ernst Verwaal, KU Leuven
  • Henk Volberda, Erasmus University Rotterdam

Abstract: Building on arguments from dynamic capabilities as well as organization design literatures, this paper builds a unifying framework which conceives strategic flexibility as formed by different underlying dimensions which have opposing relationships with firm size. Large size positively effects the capacity to recognize environmental change but simultaneously reduces organizational responsiveness, and vice versa. We argue that different size related compositions of strategic flexibility achieve strategic fit in different competitive environments. Strategic flexibility of large firms is superior in a complex, but predictable environment, whereas small firms outperform in simple, but unpredictable environments. The model is tested and support is found using archival and survey data from 1465 firms and 2150 respondents. The results contribute to a more nuanced understanding of how size impacts strategic flexibility.

Title: Judgment-Theoretical Assessments of Value and Inimitability Within the Realm of the Resource Based View

Authors

  • Franz Kellermanns, University of North Carolina at Charlotte
  • Jorge Walter, George Washington University
  • Benedict Kemmerer, BSH Bosch
  • VK Narayanan, Drexel University

Abstract: According to the RBV and the mainstream strategic management literature, resource-related decisions are critical to the firm. Implicit in all these decisions--and explicit in applied resource-decision frameworks--is one crucial diagnostic step: judging which resources are valuable, rare, non-substitutable, and inimitable. Our study employs judgment analysis to show which antecedents affect decision makers’ value and inimitability judgments. We specifically investigate whether these assessments are compensatory (i.e., individual judgment cues are interchangeable) or non-compensatory in nature (i.e., all cues are considered and have to reach a specific threshold). Our findings indicate that conjunctive decision models best reflect decision-makers' value and inimitability judgments and that they rely only on select cues to reach their assessments. Implications and future research opportunities are discussed.

Title: The Political Landscape in Resource Allocation Decisions

Authors

  • Massimo Garbuio, University of Sydney
  • Dan Lovallo, University of Sydney

Abstract: This study examines three sources of politics – manipulation of information, formation of alliances/lobbying and the importance of avoiding contradicting more senior figures in the organization - in resource allocation decisions and their impact on corporate performance. Results of an empirical study of 430 executives show that both a greater number of decision-making layers and the presence of conflict increase the use of politics. Politics has a direct and indirect negative impact on financial performance. The indirect negative impact is mediated by a firm’s decision-making and implementation speed. In addition, the use of politics is greater when divisions are evaluated using tight financial control rather than balanced control. Finally, manipulation of information is greater in a top-down rather than in a bottom-up resource allocation process.

Title: The Problem Solving Perspective: A Strategic Approach to Understanding Firm Organization and Performance

Authors

  • Michael Leiblein, Ohio State University
  • Jeffrey Macher, Georgetown University

Abstract: Any theoretical perspective that examines firm organization and performance should examine two important dimensions: first, how accurate does the proposed “unit of analysis” reflect actual firm decision making? And second, does discriminating alignment in organization exist? This paper addresses these two questions via a conceptual model of discriminating alignment between problems and firm organization and performance. This problem solving perspective suggests a discriminating alignment between problems, which vary according to their structure and complexity, and organizational modes, which vary according to their abilities to support knowledge development and transfer. Problems represent an ideal unit of analysis to examine firm organization, especially in comparison to the other perspectives utilized in strategy research. Several theoretical implications and empirical examples are made.

All Sessions in Track E...

Sun: 10:00 – 11:30
Session 1501: Exploration Strategies: Current Research and Future Content and Methodological Challenges
Sun: 13:00 – 14:30
Session 1601: Organizational Capabilities and Competitive Advantage: Where Do We Go From Here?
Sun: 15:00 – 16:30
Session 1701: Using Research Centers to Foster ABC Collaboration
Mon: 11:15 – 12:30
Session 1067: The Upside of Financial Investments
Session 1072: Lessons from Industry Cases
Mon: 15:30 – 16:45
Session 1073: Learning and Competitive Dynamics
Session 1074: Configurations and Performance
Session 1076: The Knowledge-Based View in New Arenas
Mon: 17:00 – 18:15
Session 1060: Value Creation and Appropriation: Perspectives From the Resource-Based View, Property Rights and Incomplete Contracting
Session 1062: Mastering Alliance Capability
Session 1069: Leveraging and Repositioning Resources
Tue: 11:15 – 12:30
Session 1059: Networks and Social Capital
Session 1070: Performance and the Competitive Arena
Tue: 14:30 – 15:45
Session 1063: Topics on Competitive Dynamics
Session 1066: Managing and Environmental Stewardship
Session 1075: Strategic Decision Making
Wed: 10:00 – 11:15
Session 1065: Managing Stakeholder Networks and External Communication
Session 1071: Technology, Innovation and Competitive Advantage
Wed: 11:30 – 12:45
Session 1064: Exploring Dynamic Capabilities
Session 1068: Signals and Firm Reputation


Strategic Management Society

Cologne Conference