Session 110

Models of Corporate Strategies

Track F

Date: Tuesday, October 6, 2015

 

Time: 15:45 – 17:00

Paper

Room: Governor's Square 12


Session Chair:

  • Matthew Selove, University of Southern California

Title: A Model of Product Strategy with Uncertainty about Firm Capabilities

Authors

  • Matthew Selove, University of Southern California
  • Jeanine Miklos-Thal, University of Rochester
  • Michael Raith, University of Rochester

Abstract: We develop a model in which a firm that is uncertain about its own capabilities can launch a sequence of potential products, and each product's success probability depends on the degree of fit between the firm's capabilities and the requirements of the product. A successful new product causes the firm to become more optimistic about the capability that is most important for success in that market; however, success can also cause the firm to become more pessimistic about capabilities used by earlier products. The firm acquires valuable information about its capabilities either from launching a product that has skill overlap with a potential future product, or from launching a product that has skill overlap with a previously launched product, which overlaps with a future product.

Title: Does Mutual Forbearance Really Need Centralization? A Theoretical Note

Authors

  • Alex Eapen, Australian National University
  • Chirag Kasbekar, Australian National University
  • Andre Bonfrer, Australian National University

Abstract: Studies on internal organizational structure and mutual forbearance between multimarket firms emphasize that centralized decision making is indispensable for coordinating strategic actions across divisions. Yet, centralization relocates decision rights from division managers to headquarters, possibly crippling the firm’s local responsiveness. Our key point in this paper is that centralization may not be that critical to achieving mutual forbearance. The argument for centralization assumes division managers will not coordinate among themselves when they face the same rival(s). We show that this is not necessarily true; as the need for coordinated action increases, managers are likely to realize their interdependence, and communicate and coordinate appropriately. Taking also into consideration the ‘influence activities’ centralization begets, we suggest decentralization can outperform centralization as a coordination mechanism for multimarket firms.

Title: Risk and Value Implications of Corporate Diversification

Authors

  • Arkadiy Sakhartov, University of Pennsylvania

Abstract: This study revisits two conceptions about corporate diversification. First, the idea that the risk in corporate diversification can be directly predicted from the type of diversification strategy has been acknowledged since Rumelt (1974). Prior research, however, failed to robustly confirm that idea. Second, researchers sought to confirm a simple relationship between value and risk in corporate diversification. The agreement on whether that relationship should be positive or negative was elusive. To overcome those challenges, the present study develops a simulation model explicating the value and the risk implications of resource relatedness. The results offer several stimulating insights for corporate diversification research and provide a base for improving empirical research.

Title: Within-industry Diversification: Non-scale Free Capabilities, Competition, and Performance

Authors

  • Marco Giarratana, IE Business School
  • Juan Santalo, IE Business School

Abstract: Building on recent developments on the theory of non-scale free resources and competences, this paper analyzed the relationship between within industry diversification and firm performance in a niche. We hypothesize that the negative effect of niche competition on performance will be more accentuated for diversified firms because they shift the use of non-scale free capabilities like managerial attention towards less competitive niche. The losses will be even more pronounced when companies execute also other strategies that are taxing the non-scalable resources. Panel data for the food and drink industry in eight European countries are in line with these predictions.

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 193: Phenomenon-driven Research in Strategic Management
Sun: 09:45 – 11:00
Session 221: Reflecting on the scope of the firm: New avenues for future research
Sun: 11:15 – 12:30
Session 194: The State and Future of Disciplinary Research in Strategic Management
Sun: 16:15 – 17:30
Session 113: Serial Acquisitions: Strategies and Processes
Sun: 17:45 – 00:00
Session 314: Corporate Strategy Business Meeting
Mon: 08:00 – 09:15
Session 111: Portfolio Management: Diversification and Divestitures
Session 176: Different Perspectives Informing Governance Choices: Partner Choice in Alliances vs. Acquisitions
Mon: 11:15 – 12:30
Session 195: Where Are the Boundaries of Strategic Management Research?
Session 210: M&A/JV Implementation
Mon: 16:45 – 18:00
Session 112: Acquisitions - Before the Deal
Session 243: Competitive Dynamics and Market Positioning
Tue: 08:00 – 09:15
Session 115: Horizontal and Vertical Scope: Interactions and Embeddedness
Session 272: Competitive Dimensions of Firm Boundary and Location Decisions
Tue: 11:00 – 12:15
Session 117: Issues and Answers for the Diversified Firm
Session 145: Strategic Leadership and Corporate Strategy
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 116: Acquisitions - After the Deal
Session 267: Healthcare Industry Dynamics, Relationships, and Activities
Tue: 15:45 – 17:00
Session 110: Models of Corporate Strategies
Tue: 17:30 – 18:45
Session 114: The Interplay Between Financial Markets & Advisors and the Acquiring Firm
Session 271: Spinouts


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