Session 77

Transformation, Renewal and Corporate Strategy

Track F

Date: Monday, October 8, 2012

 

Time: 16:30 – 17:45

Paper

Room: Club B


Session Chair:

  • Hicheon Kim, Korea University

Title: An Examination Of The Performance Of Firms Undertaking Discontinuous Strategic Renewal

Authors

  • Anu Wadhwa, Imperial College London
  • Sandip Basu, City University of New York

Abstract: We examine whether undertaking discontinuous strategic renewal affects a firm’s subsequent performance. Discontinuous strategic renewal involves major shifts by firms away from existing core businesses into new ones. Although there are significant risks involved in discontinuous renewal, it could have long-term benefits such as an improved post-renewal competitive position. We propose competing hypotheses regarding whether undertaking discontinuous renewal affects firms’ post-renewal performance as compared to firms that do not undertake such renewal. Drawing from diverse literatures, we also predict that both the structural conditions of the new industry that a firm shifts to as well as the firm’s own capabilities enhance its post-renewal performance. We test our predictions using longitudinal data on 461 Fortune 500 firms for the period 1990-2000.

Title: Firm Performance and the Rate of Change in Capabilities

Authors

  • David Bryce, Brigham Young University

Abstract: This paper connects firm performance to the rate and direction of the evolving capabilities portfolio of the firm. Theory development in the resource-based view, capabilities, and dynamic capabilities has supplied important foundations for understanding the development of capabilities and firm growth. We suggest that too rapid or too slow evolution of capabilities results in performance declines, while intermediate rates of capability evolution provide both new knowledge absorption and exploitation opportunities. We identify longitudinal patterns of expansion based on a knowledge and capabilities logic and show the implications that these patterns have for firm performance.

Title: How Do Firms Transform Their Business Portfolios? An Explorative Analysis of Transformation Processes of Multi-business Firms

Authors

  • Sebastian Schönhaar, Freiberg University of Mining and Technology
  • Michael Nippa, Free University of Bozen-Bolzano
  • Ulrich Pidun, Boston Consulting Group

Abstract: Research on business portfolio restructuring has largely focused on antecedents and outcomes of single events such as acquisitions and divestitures, and on performance implications of diversification or refocusing strategies. Yet, longitudinal studies that investigate the transformation of a portfolio over time and its underlying strategic decision processes are rare. Using a longitudinal and explorative study design we improve the understanding of such transformation processes by developing a transformation metric that allows us to measure and describe the magnitude and time period of a transformation and derive different transformation patterns and characteristics. We apply this metric to a preliminary sample of the 50 largest European firms and further illustrate our approach with an in-depth analysis of Vivendi's portfolio transformation from a construction to a media conglomerate.

Title: Technological Progress via Outward-Bound Experiences: M&As as Responses to a Sustained Lack of Productivity Growth

Authors

  • Lorenzo Ciari, European Bank of Reconstruction and Development
  • Joseph Clougherty, University of Illinois at Urbana-Champaign
  • Tomaso Duso, German Institute for Economic Research
  • Jo Seldeslachts, University of Amsterdam

Abstract: We find that firms based in industries experiencing sustained low productivity growth tend to respond by acquiring targets based in other industries; i.e., they engage in outward M&As. This outward M&A activity, in turn, increases the productivity of the acquiring industry in subsequent years. Moreover, horizontal M&A activity and inward M&A activity do not generate an equivalent increase in home industry productivity. Thus, it appears that outward M&As (i.e., diversification) represent unique learning events that allow for the revitalization of an industry. Interestingly, cross-industry mergers indicate unidirectional learning, as the productivity of the acquiring industry is enhanced, but the productivity of the target industry is not affected.

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 123: Capabilities and Corporate Strategy
Sun: 09:30 – 10:45
Session 124: Corporate Strategy and the Role of the Manager
Sun: 11:15 – 12:30
Session 125: Publishing Strategic Management Research
Mon: 08:00 – 09:15
Session 256: Resource Sources and Corporate Strategy: Location, Funding and Advisors
Mon: 09:30 – 10:45
Session 79: Diversification Strategy and Firm Performance
Mon: 13:30 – 14:45
Session 88: Managing Firm Boundaries: Growth, Divestitures and Networks
Mon: 16:30 – 17:45
Session 77: Transformation, Renewal and Corporate Strategy
Tue: 08:00 – 09:15
Session 80: Acquisition Experience, Intensity and Performance
Tue: 11:00 – 12:15
Session 257: Acquisition Performance
Tue: 14:15 – 15:30
Session 86: Corporate Strategy: Expanding Understanding and Knowledge
Tue: 15:45 – 17:00
Session 253: New Insights into Relatedness and Performance


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