Articles

Alliance Formation and Firm Value

G. PACHECO DE ALMEIDA, L. CABRAL

Management Science

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

Mots clés : firm alliances, matching, competitive advantage


We consider the formation of alliances that potentially create complementarities, that is, when the value function is super-modular in firm resources. We show that, in a frictionless world where information is perfect and managers optimize, firm alliances disproportionately increase the value of high-resource-level firms, resulting in higher variance and higher skewness of the distribution of firm value; moreover, higher-value alliances are subject to regression to the mean at a faster rate. These effects are magnified if the degree of complementarities is endogenously determined by each firm’s investment. We also consider alliances where matching and/or information about firm resources are imperfect, and show that complementarities are a necessary but not sufficient condition for alliances to cause an increase in firm value; and that complementarities are neither a necessary nor a sufficient condition for alliances to be correlated with higher firm value

Bouncing Back: Building Resilience Through Social and Environmental Practices in the Context of the 2008 Global Financial Crisis

M. DESJARDINE, P. BANSAL, Y. YANG

Journal of Management

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Départements : Stratégie et Politique d’Entreprise

Mots clés : organizational resilience; social and environmental practices; strategic and tactical practices; global financial crisis; survival analysis

http://journals.sagepub.com/doi/abs/10.1177/0149206317708854


Even though organizational researchers have acknowledged the role of social and environmental business practices in contributing to organizational resilience, this work remains scarce, possibly because of the difficulties in measuring organizational resilience. In this paper, we aim to partly remedy this issue by measuring two ways in which organizational resilience manifests through organizational outcomes in a generalized environmental disturbance—namely, severity of loss, which captures the stability dimension of resilience, and time to recovery, which captures the flexibility dimension. By isolating these two variables, we can then theorize the types of social and environmental practices that contribute to resilience. Specifically, we argue that strategic social and environmental practices contribute more to organizational resilience than do tactical social and environmental practices. We test our theory by analyzing the responses of 963 U.S.-based firms to the global financial crisis and find evidence that support our hypotheses

Do stakeholder orientation and environmental pro-activity impact firm profitability?

F. BRULHART, S. GHERRA, B. QUELIN

Journal of Business Ethics

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

Mots clés : Environmental proactivity, Firm profitability, Resource-based theory, Stakeholder orientation, Stakeholder theory

https://link.springer.com/content/pdf/10.1007%2Fs10551-017-3732-y.pdf


The impact of socially responsible corporate behavior on economic performance is a major preoccupation of managers today. This article explores the links between narrowly defined constructs: stakeholder orientation, environmental proactivity and profitability, from the perspectives of stakeholder theory and resource-based theory. We collected data on the food and beverage, and household and personal products industries. Using structural equation modeling, this paper makes two contributions. We found a negative link between companies simply having a higher stakeholder orientation and profitability. Importantly, however, environmental proactivity not only had a positive impact on profitability, but also appeared to mediate the relationship between stakeholder orientation and profitability. In other words, if a company is more environmentally proactive, it will be more attentive to a broad array of stakeholders, and this will in turn contribute positively to profitability

Family Firms in the Ownership Network: Clustering, Bridging, and Embeddedness

D. MANI, R. DURAND

Entrepreneurship: Theory and Practice

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

Mots clés : family firms, community, embeddedness, network

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3164896


In this paper, we investigate family firms’ position in the intercorporate ownership network. Rooting our predictions in the Behavioral Agency Model and a Network analytical framework, we predict and find that family involvement decreases the likelihood of business group affiliation and of cross-group ties leading to a lower embeddedness within the overall network. We predict and find the opposite effect for community involvement. We use the complete longitudinal dataset of publicly listed firms’ corporate ownership ties in India (2001, 2005, and 2009). Theoretical and substantive contributions are to research on family businesses and to research on interorganizational networks

NGOs and the Creation of Value in Supply Chains

O. CHATAIN, E. PLAKSENKOVA

Strategic Management Journal

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

Mots clés : NGO, Non-Governmental Organizations, Nonprofit, Firm-NGO collaboration, Value creation


Research abstractFirms and NGOs often collaborate to establish new supply chains. With a formal model, we analyze how NGOs can alleviate market failures and improve supplier economic inclusion while strategically interacting with firms. We account for the specific goals of the NGO and the need to induce collaboration between firms and their suppliers. The analysis reveals a "valley of disappointment", when NGO efforts benefit all actors but only marginally the firm. We also show that more powerful firms might prefer to internalize NGO functions, while firms with lower bargaining power and higher investment requirements are better off collaborating with NGOs. Finally, we study NGOs-firms matching patterns and find that firms with higher bargaining power match with NGOs holding stronger capabilities.Managerial abstractThis paper analyzes interactions between firms and NGOs aiming to improve the economic inclusion of suppliers or to promote the adoption of specific (e.g., sustainable) practices. For firm executives, this study shows the constraints and benefits associated with working with NGOs, the conditions under which integration of NGO functions is preferable, as well as the types of NGOs that offer better prospects for a successful collaboration. For NGO executives, it highlights the need to provide enough economic incentives to firms and suppliers alike to ensure their collaboration and the tradeoffs associated with this constraint, in particular if NGO capabilities are limited. Overall, the study provides a comprehensive understanding of how NGO activities can influence value creation in a vertical value chain.

Product Categories as Judgment Devices: The Moral Awakening of the Investment Industry

R. DURAND, D-L. ARJALIES

Organization Science

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

Mots clés : France – Investment Industry – Morals – Normative Attributes – Positive Attributes – Product Categories – Purpose – Socially Responsible Investment (SRI)


Product categories are more than classification devices that organize markets; as they reflect market actors' purposes, they are also judgment devices. Taking stock of the literature on product categories and drawing on the distinction between the faculties of knowing and judging, we elaborate a framework that accounts for how and why market actors include or exclude normative attributes in a product category definition. Based on a field study of the development of Socially Responsible Investment (SRI) funds in France, we describe the phases and conditions of a judgment framework for category definition, for both nascent and established categories. We discuss implications for research on product categories and the workings of markets more broadly

Shine on me: Industry coherence and policy support for emerging industries

P. GEORGALLIS, G. DOWELL, R. DURAND

Administrative Science Quarterly

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

Mots clés : markets, institutional change, institutionalization, social movements, categories

http://journals.sagepub.com/doi/pdf/10.1177/0001839218771550


It has long been recognized that government support can catalyze the emergence and growth of new industries. But under what conditions does an emergent category of organizations come to receive state support in the first place? In this paper, we theorize how government support for a nascent industry is jointly determined by the industry's internal features and external forces. We test our arguments by analyzing feed-in-tariff policies for the emergent solar photovoltaics (PV) industry in 28 European countries over more than two decades. We find that feed-in-tariffs were more likely in countries with greater numbers of solar PV producers and in countries where the industry was more coherent, containing fewer producers coming from industries with a contrasting identity. Further, we find that the concentration of the incumbent energy sector enhances the effect of the number of producers on policy support when the industry is coherent, but not when it is incoherent. Our results shed new light on the relationship between public policy and industry category emergence, and extend our understanding of how new industries can attain valuable state support while operating in seemingly hostile environments

The private scope in public-private collaborations: an institutional and capability-based perspective

B. QUELIN, S. CABRAL, S. LAZZARINI, I. KIVLENIECE

Organization Science

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

Mots clés : public‐private partnerships, institutional environment, private scope, capability, governance mechanisms


There has been a growing interest in the organization of business activities at the public interface, as illustrated by the emergent phenomenon of public‐private partnerships (PPPs). In this study, we analyze the determinants of private scope in partnering with public actors—i.e., the extent to which private actors are involved in multiple, consecutive value‐creating activities in thepartnership. Based on a unique dataset of public‐private agreements worldwide over two decades, we find that institutional and capability‐based determinants jointly affect the extent of private scope in public‐private collaborations. Our results highlight the contingent role of the quality of institutional environment. Institutions not only facilitate greater private scopedirectly but also moderate the effect of public and private capabilities on private scope. We find that prior public experience in PPPs enhances private scope in settings with high‐quality institutions, while having an opposing effect in low‐quality environments. Moreover, public governance capabilities accumulated via units designed to deal with PPPs appear to substitute for the lack of high‐quality institutions, suggesting that even under weak institutional settings, countries can foster high private scope with the creation of pockets of specialized public capabilities. In contrast, private capabilities in PPPs, expressed as firm engagement in recurring government co‐funded projects,appear to have a complementary effect: they help to increase private scope in PPPs, but only when domestic institutions are of high quality. By highlighting the determinants of private actor involvement in public sector activities, our study offers important implications for the theory and practice of hybrid (cross‐sector) organizational forms

Under a Magnifying Glass: On the Use of Experiments in Strategy Research

G. DI STEFANO, C. GUTIERREZ

Strategic Organization

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Départements : Stratégie et Politique d’Entreprise

Mots clés : causal inference, experiments, decision making, behavioral strategy, apophenia, microfoundations

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3246861


The rate at which experimental studies are published in the field of strategy has steadily increased over the past few years. Still, experimental papers account for only a small fraction of strategy papers. This may not come as a surprise given the skepticism surrounding the experimental method, which is often seen as uninterested in establishing external validity, and too “micro” for a field in which the level of analysis is primarily organizational and inter-organizational. Is this skepticism founded? To what extent can experiments be a useful tool for strategy research? To answer this question, we start by examining experimental strategy papers published between 1980 and 2016. Results from the analysis alleviate doubts about the suitability of experimental methods for the study of questions of strategic interest to firms. We next discuss the main advantagesassociated with the use of experiments and why they make strategy an exciting field in which to be an experimentalist today

Willing and Able: A General Model of Organizational Responses to Normative Pressures

R. DURAND, O. HAWN, I. IOANNOU

Academy of Management Review

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

Mots clés : institutional theory, normative pressures, symbolic, substantive, conformity, compliance, issue salience

https://journals.aom.org/doi/abs/10.5465/amr.2016.0107?journalCode=amr


We develop a conceptual understanding of when and how organizations respond to normative pressures. More precisely, we examine two main factors underlying the willingness and ability of organizations to respond to an issue: (1) issue salience, and (2) the cost-benefit analysis of resource mobilization. We suggest that decision-makers’ interpretation of issue salience in conjunction with their perception of the costs and benefits of taking action to address the issue generates five potential responses: symbolic compliance and symbolic conformity, substantive compliance and substantive conformity, and inaction. We extend the baseline model by examining a number of boundary conditions. By focusing on the willingness and ability of organizations to respond to normative pressures, and by adopting the issue as the unit of analysis, our model helps explain intra- as well as inter-organizational response heterogeneity to institutional complexity. We contribute to the institutional research tradition and offer useful implications for managerial practice, from strategic management to policy making


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