Articles

Achieving High Growth in Policy-Dependent Industries: Differences between Startups and Corporate-Backed Ventures

R. DURAND, G. PANAYIOTIS (PANIKOS)

Long Range Planning

A paraître

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

http://ssrn.com/abstract=2794262


This research examines which firms achieve high growth in policy-dependent industries. Using the European solar photovoltaic industry as our empirical setting, we investigate the impact of policy support on the growth of independent startups and corporate-backed ventures operating across countries with diverse policy conditions. We find that producers' growth is positively linked to policy generosity, and negatively linked to policy discontinuity. Moreover, corporate-backed ventures are less affected by policy generosity compared to entrepreneurial startups, and less impacted by policy discontinuity as well. Our results underline the importance of country- and firm-level differences in analyzing firms' response to regulatory policies, and point to the need for a better understanding of the unintended consequences of policies designed to support new industries.

Alleviating Managerial Dilemmas In Human-Capital-Intensive Firms Through Incentives: Evidence From M&A Legal Advisors

O. CHATAIN, P. MEYER-DOYLE

Strategic Management Journal

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

Mots clés : Human-Capital-Intensive Firms, Human Capital, Managerial Dilemmas, Incentives, Capabilities, Micro-foundations, Mergers and Acquisitions, Law firms

http://ssrn.com/abstract=2693097


We examine how human-capital-intensive firms deploy their human assets and how firm-specific human capital interacts with incentives to influence this deployment. Our empirical context is the UK M&A legal market, where micro-data enable us to observe the allocation of lawyers to M&A mandates under different incentive regimes. We find that law firms actively equalize the workload among their lawyers to seek efficiency gains while ‘stretching’ lawyers with high firm-specific capital to a greater extent. However, lawyers with high firm-specific capital also appear to influence the staffing process in their favor, leading to unbalanced allocations and less sharing of projects and clients. Paradoxically, law firms may adopt a seniority-based rent-sharing system that weakens individual incentives to mitigate the impact of incentive conflicts on resource deployment

Better Safe than Sorry: Subsidiary Performance Feedback and Internal Governance in Multiunit Firms

T. OBLOJ, m SENGUL

Journal of Management

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


This paper explores the link between subsidiary performance feedback and internal governance mechanisms in multiunit firms. A central premise of performance feedback models is that performance below aspirations is associated with increased risk tolerance and thereby with a higher likelihood of taking excessive risks in resource allocation decisions. Building on this observation, we contend that the headquarters of multiunit firms take this association into account in the design of internal (i.e., headquarters-subsidiary) governance mechanisms. Accordingly, a subsidiary’s performance-aspiration gap (below aspirations) is positively associated with the headquarters’ oversight of its resource allocation decisions and negatively associated with the provision of incentive schemes that promote risk taking. Regression results, using data on subsidiaries in France between 1998 and 2004, support our hypotheses and show that subsidiaries performing below historical and social aspirations are less likely to be given discretion in investment decisions and incentivized by cash bonuses. In the supplementary analyses we also provide suggestive evidence that subsidiary performance problems in multiunit firms trigger structural adaptation in the internal governance mechanisms in pursuit of regaining fit

Estimating Value Creation from Revealed Preferences: Application to Value-Based Strategies

O. CHATAIN, D. MINDRUTA

Strategic Management Journal

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


We develop and apply a new set of empirical tools consistent with the tenets of value-based business strategies, leveraging the principle that “no good deal comes undone” and the methods of revealed preferences to empirically estimate drivers of value creation. We demonstrate how to use these tools in an analysis of value creation in buyer–supplier relationships in the UK corporate legal market. We show how the method can uncover evidence of subtle mechanisms that traditional methods cannot easily distinguish from each other. Furthermore, we show how these estimates can be used as parameters of biform games for out-of-sample analyses of strategic decisions. With readily available data on relationships between firms, this approach can be applied to many other contexts of interest to strategy researchers

How Do Firm Political Connections Impact Foreign Acquisitions? The Effects of Decision Makers’ Political and Firm Embeddedness

P. DUSSAUGE, R. ANAND, J ALBINO PIMENTEL

Global Strategy Journal

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


Organization Design, Proximity, and Productivity Responses to Upward Social Comparison

T. OBLOJ, T. ZENGER

Organization Science

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

Mots clés : Incentives, Social Comparison Costs, Envy, Productivity, Organization Design

https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxwdWJsaXNoZWRwYXBlcnMxMjM0fGd4OjVmOGU0MTIwNWZkNzQ2Zjc


We investigate the mechanisms that shape social comparison in organizations and generate socialcomparison costs. In particular, we focus on heterogeneity in the strength and type of incentivesand argue that, from an efficient design perspective, such variance in rewards is a double edgedsword. While the sorting and incentive effects that result may increase productivity, the socialcomparison processes that arise may dampen it. We posit that the mechanisms underlying thesebehavioral costs are shaped not only by the magnitude of reward variance, but by the formal andinformal design elements shaping the distance of advantaged peers. In other words, the moreproximate socially, structurally or geographically are those to whom one socially compares, thelarger the behavioral response. Empirically, we use an unanticipated event during which outlets ofa bank, previously operating under essentially homogenous incentives, were assigned totournament groups with differing ex ante probabilities of winning a prize—an event that increasesvariance in awards and hence generates an impetus for social comparison. We find that units withmore socially, geographically, and structurally proximate peers assigned to ‘advantaged’tournament groups decreased their productivity. We discuss implications of these results fororganizational design and boundaries

Public-Private Collaboration, Hybridity and Social Value: Towards New Theoretical Perspectives

B. QUELIN, I. KIVLENIECE, S. LAZZARINI

Journal of Management Studies

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


The Price of Admission: Organizational Deference as Strategic Behavior

J. JOURDAN, R. DURAND, P. THORNTON

American Journal of Sociology

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

Mots clés : deference, symbolic boundaries, strategic management, organizations

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2845785


Why would market organizations engage in symbolic and material acts conveying appreciation and respect to other organizations that confirm their inferior position in an established hierarchy? Deference, we argue, is the price outsider organizations pay to pass categorical and symbolic boundaries, and gain acceptance in contexts where insiders regard them as impure. Because not all organizations can or are willing to pay the price, deference varies according to positional, dispositional, and interactional characteristics. We examine and find support for the view of organizational deference as strategic behavior using empirical evidence on market finance organizations investing in film production in France over two decades. Our analysis expands research on non-conflictual interactions and symbolic boundaries in market setting

Too any Cooks Spoil the Broth? Geographic Concentration, Social Norms, and Knowledge Transfer

G. DI STEFANO, A. A. KING, G VERONA

Advances in Strategic Management

A paraître, vol. 36

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

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2767610


A long tradition in social science research emphasizes the potential for knowledge to flow among firms co-located in dense areas. Scholars have suggested numerous modes for these flows, including the voluntary transfer of private knowledge from one firm to another. Why would the holder of valuable private knowledge willingly transfer it to a potential and closely proximate competitor? In this paper, we argue that geographic concentration has an effect on the expected compliance with norms governing the use of transferred knowledge. The increased expected compliance favors trust and initiates a process of reciprocal exchange. To test our theory, we use a scenario-based field experiment in gourmet cuisine, an industry in which property rights do not effectively protect knowledge and geographic concentration is common. Our results confirm our conjecture by showing that the expectation that a potential co-located firm will abide by norms mediates the relationship between geographic concentration and the willingness to transfer private knowledge

Behavioral Strategy and the Strategic Decision Architecture of the Firm

O. SIBONY, D. LOVALLO, T. C. POWELL

California Management Review

2017, vol. 59, n°3, pp.5-21

Départements : Stratégie et Politique d’Entreprise

Mots clés : behavioral strategy, psychology, cognitive bias, strategic decision process


This special issue explores the impacts of behavioral strategy on managementpractice. Behavioral strategy can best contribute to management practice by shifting its focus from individual decision biases to the design of behaviorally informed decision processes at the level of the firm. This introduction identifies three types of organizational decision processes, shows how they interact with individual and group biases, and proposes a model showing how managers can design and deploy these processes to shape the strategy of the firm. It then introduces the articles in this special issue and discusses their contributions to the future of behavioral strategy