Articles

Asset Divestment as a Response to Media Attacks in Stigmatized Industries

R. DURAND, J.-P. VERGNE

Strategic Management Journal

août 2015, vol. 36, n°8, pp.1205-1223

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Stigma, Impression management, Divestment, Media, Categories, Reputation, Defense industry

http://ssrn.com/abstract=2415019


In stigmatized industries characterized by social contestation, hostile audiences, and distancing between industry insiders and outsiders, firms facing media attacks follow different strategies from firms in uncontested industries. Because firms avoid publicizing their tainted-sector membership, when threatened, they can respond by divesting assets from that industry. Our analyses of the arms industry demonstrate that media attacks on the focal firm and its peers both increase the likelihood of divestment for the focal firm. Specifically, attacks on the focal firm are the most consequential, followed by attacks on peers in the same industry subcategory, and by attacks on peers in different subcategories. These findings shed new light on divestment as a response to media attacks in stigmatized industries and lead us to rethink impression management theory

Business Partners: Complementary Assets, Financing, and Invention Commercialization

T. ASTEBRO, C. SERRANO

Journal of Economics and Management Strategy

été 2015, vol. 24, n°2, pp.228-252

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

http://ssrn.com/abstract=2602992


This paper assesses the relative importance of the complementary assets and financial capital that business partners may add to the original inventor-entrepreneur. Projects run by partnerships were five times as likely to reach commercialization as those without business partners, and they had mean revenues approximately 10 times as great as projects run by solo entrepreneurs. These gross differences may be due both to partners impacting business success that is, who the particular partners were, and to selection of the type of project or of whom to select as a partner. After controlling for selection effects and observed/unobserved heterogeneity, the smallest estimate of partners' complementary assets approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean. Our findings suggest that a critical policy option to increase commercialization rates and revenues for early-stage businesses is to support the market for finding skilled partners

Défis au Bas de la Pyramide

B. GARRETTE, A. KOZAN, T. ROULET

Management International

printemps 2015, vol. 19, n°3, pp.65-82

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Bas de la Pyramide, Entreprises multinationales, Ethique des affaires, ONGs, Développement économique, Base of the Pyramid, MNEs, Business ethics, NGOs, Economic development


Le « Bas de la Pyramide » (BdP), est-il le nouvel Eldorado pour les entreprises, ou seulement un miroir aux alouettes? L’examen des activités « BdP » existantes montre que les entreprises ont beaucoup de mal à gagner de l’argent en offrant aux populations les plus pauvres de la planète des produits et des services qui sont censés contribuer à la résolution de problèmes sociaux ou environnementaux. Cet article suggère cependant que les entreprises doivent persévérer dans leurs efforts. Nous proposons des solutions pour surmonter les obstacles économiques, sociaux et politiques des projets « BdP » et discutons le rôle de ces initiatives en matière d’innovation et de croissance

Detecting heterogeneous risk attitudes with mixed gambles

L. SANTOS-PINTO, A. BRUHIN, J. MATA, T. ASTEBRO

Theory and Decision

décembre 2015, vol. 79, n°4, pp.573-600

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Individual risk taking behavior, Latent heterogeneity, Finite mixture models, Reference-dependence, Loss aversion

http://ssrn.com/abstract=2125956


We propose a task for eliciting attitudes towards risk that is close to real world risky decisions which typically involve gains and losses. The task consists of accepting or rejecting gambles that provide a gain with probability p and a loss with probability 1 - p. We employ finite mixture models to uncover heterogeneity in risk preferences and find that (i) behavior is heterogeneous, with slightly less than one half of the subjects behaving as expected utility maximizers, (ii) for the others, reference-dependent models perform better than those where subjects derive utility from final outcomes, (iii) models with sign dependent decision weights perform better than those without, and (iv) there is no evidence for loss aversion. The procedure is sufficiently simple so that it can be easily used in field or lab experiments where risk elicitation is not the main experiment

Disentangling the Performance Effects of Efficiency and Bargaining Power in Horizontal Growth Strategies: An Empirical Investigation in the Global Retail Industry

V. MOATTI, C. REN, J. ANAND, P. DUSSAUGE

Strategic Management Journal

mai 2015, vol. 36, n°5, pp.745-757

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Mergers and acquisitions (M&A), Organic growth, Bargaining power, Operating efficiency, Retail


Mergers and acquisitions (M&A) and organic growth are two common strategies to achieve horizontal growth. In this study, we disentangle two distinct sources of firm performance corresponding to different theoretical perspectives on firm size: firms' bargaining power with respect to suppliers and customers, and operating efficiency arising from scale economies. We conceptually argue and empirically show that relatively, M&A enhance bargaining power in the short term while organic growth enhances operating efficiency over the long term. In order to disaggregate these effects, we use accounting rather than financial or managerial data and test our predictions in the global retail industry over a 20-year period. We examine implications of these results for sustainability of size-based competitive advantages

Evidence Doesn't Argue for Itself: The Value of Disinterested Dialogue in Strategic Decision-Making

M. GARBUIO, D. LOVALLO, O. SIBONY

Long Range Planning

décembre 2015, vol. 48, n°6, pp.361-380

Départements : Stratégie et Politique d’Entreprise

Mots clés : Analysis, Behavioral strategy, Disinterested dialogue, Evidence-based management, Strategic decision making


Previous studies of strategic decision-making have demonstrated a relationship between the strategic decision-making process and its effectiveness, namely whether the decision delivers the expected results. In this article, we demonstrate that there are two key dimensions of strategic decision-making: 1) the analysis performed, and particularly financial aspects of a decision; and 2) strategic conversations about the decision at hand, or the “disinterested dialogue” about the decision, as we refer to it. Whereas, it is well-accepted that a robust analysis is important for effective decisions, we argue that disinterested dialogue is also a necessary construct in explaining the effectiveness of strategic decisions. To test this hypothesis, we undertook a study of 634 strategic decisions made by executives across multiple industries and regions. The results confirmed that both a robust analysis and disinterested dialogue have a significant positive relationship with decision-making effectiveness. However, disinterested dialogue has a significantly greater impact on the effectiveness of strategic decisions than robustness of analysis. We discuss the impact of our results for theory and practice.

Giants at the Gate: Investment Returns and Diseconomies of Scale in Private Equity

F. LOPEZ DE SILANES, L. PHALIPPOU, Oliver GOTTSCHALG

Journal of Financial and Quantitative Analysis

juin 2015, vol. 50, n°3, pp.377-411

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Private equity, Diseconomies of scale

http://dx.doi.org/10.2139/ssrn.1363883


We document the wide dispersion of private equity investment returns and examine performance determinants using a newly constructed database of 7,500 investments worldwide. One in ten investments does not return any money, whereas one in four has an IRR above 50%. Quick flips are associated with some of the highest returns. Performance does not appear scalable: Investments held by private equity firms in periods with a high number of simultaneous investments underperform substantially. Results are consistent with the theoretical literature on organizational diseconomies linked to firm structure. Private equity firms’ actions do not appear to be mechanical or easily scalable

Moving Beyond the Rhetoric of Responsible Management Education

E. CORNUEL, U. HOMMEL

Journal of Management Development

2015, vol. 34, n°1, pp.2-15

Départements : Stratégie et Politique d’Entreprise

Mots clés : Ethics, Sustainability, Responsibility, Social responsibility, Management education, Business schools, Responsible management education


Purpose – Business schools appear to be slow adopters of responsible management education (RME), though the rhetoric of RME is visible throughout the sector. The purpose of this paper and the accompanying ones in this Special Issue is to address this apparent gap between substance and image by analysing the barriers to RME adoption and potential ways of overcoming them. The contributions offer insights from a range of different perspectives that will help encourage an informed debate on how to make RME more of a reality in management education. Design/methodology/approach – This paper analyses the problem within the dominant institutional logic of the business school sector, which is shaped by entrepreneurialism, operational for-profit orientation and externally validated reputation creation. It sets the stage for the other contributions to this Special Issue, which use alternative approaches to analyse the limited progress of RME adoption. Findings – This paper identifies five potential barriers to RME adoption: students, as “customers”, do not sufficiently value the “R” in RME; the switch from full-time to part-time and online provision precludes the use of pedagogical methods particularly suited for RME; the fragmentation of intellectual production in business schools makes it difficult to implement an institution-wide RME-based learning model; the standardization of educational provision combined with a focus on ranking-related performance indicators moves business schools away from addressing RME-specific learning needs; and entrepreneurialism and business school rankings link RME directly and indirectly to financial impact, which is difficult to determine. In the authors’ view the way forward requires a review of the intellectual underpinning of modern management in combination with the adjustment of organizational routines and more explicit forms of faculty development. Originality/value – The existing literature focuses on the differentiating features of RME and how they can help to overcome deficiencies in management education as practiced today. This paper and others in this Special Issue adopt the reverse perspective and analyse the reasons for institutional inertia as a starting point for identifying ways of encouraging more widespread adoption

Peer conformity, attention, and heterogeneous implementation of practices in MNEs

R. DURAND, A. JACQUEMINET

Journal of International Business Studies

octobre-novembre 2015, vol. 46, n°8, pp.917-937

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Multinational corporations (MNCs) and enterprises (MNEs), Institutional theory, Corporate social responsibility, Practice implementation, Attention, Simultaneous equation modeling

http://ssrn.com/abstract=2638422


How do subsidiaries respond to normative demands from both their headquarters and local external constituents? We propose that subsidiaries pay varying levels of attention to either demands depending on their peers’ norm-conforming behavior, resulting in heterogeneous practice implementation. We study the implementation of 25 practices, associated with three corporate social responsibility (CSR) issues in 101 worldwide subsidiaries of a multinational enterprise (MNE). Consistent with the idea that attention is limited and therefore selective, we find that external peers' conformity to the CSR norm directs subsidiaries’ attention toward the CSR-related demands of external constituents at the expense of the demands from the headquarters. However, internal peers’ conformity increases attention to both external and headquarters’ demands related to CSR. As higher attention levels result in higher practice implementation, internal and external peers' conformity drives the heterogeneity of practice implementation in the MNE. Our results suggest the need to rethink the influence of peers’ conformity on subsidiaries’ implementation of practices, as it not only triggers mimicry based on legitimacy but also and simultaneously a more strategic response based on internal and external competitive threats and attention allocation.

Peer Conformity, Attention, and Heterogeneous Implementation of Practices in MNEs

R. DURAND, A. JACQUEMINET

Journal of International Business Studies

2015, vol. 46, n°8, pp.917-937

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)



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