Session 117

Issues and Answers for the Diversified Firm

Track F

Date: Tuesday, October 6, 2015

 

Time: 11:00 – 12:15

Common Ground

Room: Plaza Court 1


Facilitator:

  • William Wan, City University of Hong Kong

Title: Capabilities, Configurations, and Leveraging Strategies: An Investigation of the Leveraging Process of Resource Orchestration

Authors

  • David Boss, Ohio University

Abstract: Resource orchestration research has focused primarily on aspects associated with the structuring and bundling of resources to form capabilities. However, questions remain regarding the theoretical and empirical underpinnings of the leveraging process, particularly as it relates to the types of capabilities needed to form capability configurations coordinated and deployed. Further, principles of configuration theory have not been applied to RBV. Herein, we propose to conceptualize and operationalize specific firm-level capabilities, draw upon configuration theory to explain how these capabilities are coordinated into capability configurations in preparation for the deployment of specific leveraging strategies, and examine the relationship between leveraging strategy and firm performance. Using data from the NBA, I find that strategies mediate the relationship between capabilities and performance.

Title: Intra-Industry Diversification Performance Tradeoffs: Profitability - Firm Failure and Customer Loyalty in Hedge Funds

Authors

  • Emanuel Roland Kastl, City University London
  • Charles Baden-Fuller, City University London
  • Hans Frankort, City University London

Abstract: Prior studies on intra-industry diversification suggests non-linear diversification-profitability relationships. These are typically explained by transaction and coordination costs interacting with resource sharing benefits. Past researchers acknowledge that demand side effects have been under-explored, a gap we fill. We use the global hedge-fund industry as our context. Our rich data set covering 216 months, contains more than 3,000 diversified and undiversified firms. We confirm that diversification and profitability have “U” shaped relationships, but firm survival is unambiguously positively-related to diversification suggesting that survival may be the real diversification-benefit. And the results also suggest that customer loyalty is the key driving factor explaining survival benefits.

Title: Resolving the Relatedness Paradox: Realized Merger Types and the Value Effect on Non-Merging Rival Firms

Authors

  • Joseph Clougherty, University of Illinois at Urbana-Champaign
  • Tomaso Duso, German Institute for Economic Research

Abstract: Despite intuitive appeal, empirical evidence supporting the relatedness hypothesis has been scant, as related mergers have generally not out-performed non-related mergers. In considering the impact of merger relatedness on the type of merger realized and non-merging rival firm value, we offer a methodological approach – operationalized via a Heckman procedure that deals with selection-based endogeneity – that sidesteps critiques of this literature. We find that both efficiency-based and collusion-based mergers more likely manifest, and that non-synergistic mergers less likely manifest, when merging firms exhibit higher degrees of relatedness. Furthermore, relatedness leads to decreased rival-firm value under value-destroying merger activity. Thus by simultaneously considering the impact of merger relatedness on merger type and on non-merging rival-firm value, the relatedness hypothesis is empirically supported.

Title: Value Creation: A Study of Firm scope and Related Diversification

Authors

  • Anuja Gupta, University of Pennsylvania

Abstract: This study analyzes the value creation of a leading Fortune 500 company over a significant part of its history in order to gain insights into and build theory about the role of technology strategy and scope in value creation. We characterize the technology strategy as a search process – in which the firm looks for new technology in an exploratory or exploitative mode. Further we introduce a new way to analyze long term performance of firms, based on the stock price history, which we believe has tremendous potential for meaningful application in strategy research. In an inductive mode, we analyze the firm’s search over the years and build an analytical framework to characterize and gain a more nuanced understanding of different strategies within related diversification.

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


Strategic Management Society

Denver