Long Range Planning最新文献

This study examines the relationship between rookie independent directors (RIDs) and corporate cash holdings, using a sample of Chinese A-share firms listed on the Shenzhen and Shanghai stock exchanges from 2006 to 2020. We further investigate the moderating effect of economic policy uncertainty on this association. Our results reveal that the presence of rookie independent directors is positively and significantly related to corporate cash holdings, and that economic policy uncertainty amplifies this relationship. Importantly, we also demonstrate that firms with rookie independent directors exhibit improved operating performance when making cash holding decisions in the Chinese context. The study also finds that firms with greater growth opportunities tend to prefer RIDs, who bring new perspectives essential for leveraging these opportunities, leading to enhanced cash holdings. To ensure the robustness of our findings, we employ a variety of advanced econometric techniques, including alternative proxies, tests for reverse causality, two-stage least squares, propensity score matching, and entropy balancing. Based on our results, we recommend that shareholders in China carefully consider the role of RIDs in their governance structure, as they effectively monitor firm management and contribute to the protection of shareholder interests.

The demographic composition of a firm's Board of Directors (BoD) and Top Management Team (TMT) has important consequences for organizational processes and outcomes. However, researchers have focused on the independent effects of diversity in these strategic leadership groups (SLGs), foregoing how it affects their interactions. We adopt a strategic leadership system perspective to account for tasks that a firm's BoD and TMT perform independently, as well as shared tasks performed at their interface. Focusing on the innovation process as a context for strategic decision-making and implementation, we hypothesize inverted u-shaped associations for independent effects of BoD and TMT gender compositions on innovation inputs and TMT gender composition on outcomes. To account for interactions at their interface, we also propose moderating effects between BoD and TMT gender compositions on their relationships with innovation input and outcomes. We find support for our hypotheses within a panel of highly innovative U.S. firms between 2005 and 2018. These findings have important implications for strategic leadership and diversity researchers and may provide guidance on balancing the gender composition of SLGs at firms that pursue innovation.

Short-termism in investment decisions often results in poor firm performance, though excessively long investments can also harm performance by reducing internal flexibility. This study investigated a quadratic, inverted U-shaped relationship between investment horizon and performance. Building on agency theory and resource-constraint arguments, we proposed that organizational slack moderates the relationship between investment horizon and firm performance. For short investment horizons, slack represented unused resources that could have been invested, thus leading to lower performance. For long investment horizons, slack helped cover unanticipated expenses and increased firm performance. We found empirical support for our theory in a large sample of privately held European firms in the utilities and retail trade industries.

The academic, consulting, and practitioner-oriented literatures present many examples of companies that have failed to adapt their strategy in the face of a changing competitive arena, even when their top managers and executives acknowledged the need for change—and had a reasonable idea of what ought to be done. By means of an in-depth study of two polar cases of large companies from the fast-moving consumer goods sector, this study sheds light on the complex intertwined causes that lead some companies into strategic inertia, while others engage in strategic renewal. Our theoretical framing of possible causes of inertia encompasses cognitive schema, power and politics, emotions, and communication. Our findings provide credible evidence that strategic inertia (or renewal) is the outcome of conjunctural causation, so that a similar initial cause may result in different outcomes depending on the processual interaction with other contributing factors at the organizational, group, and individual levels. The conjunction of various causes can lead a company's managers to adhere rigidly to their sources of past success or, alternatively, embrace novel pathways despite short-term uncertainty and anxiety.

It is often assumed that business model innovation drives firm performance, especially when firms operate in highly dynamic environments. However, despite the rise in research on business models, there is little systematic evidence of how various levels of environmental dynamism actually influence the performance effects of two basic types of business model innovation, namely replication (i.e., scaling up and improving an existing business model) and renewal (i.e., introducing a new business model). In this paper, we delineate a conceptual distinction between these two types of business model innovation and investigate how environmental dynamism impacts their performance outcomes. Based on a cross-industry survey that includes both SMEs and larger firms, we show that environmental dynamism weakens the positive effects of business model replication on firm performance. By contrast, in environments where the level of dynamism is intermediate, rather than high or low, environmental dynamism strengthens the performance effects of business model renewal. We discuss how these insights contribute to the business model innovation literature and how they can provide top managers with guidance on when and how to innovate a business model to turn it into a competitive advantage.

The age-related career concerns of Chief Executive Officers (CEOs) have generated considerable research attention over the past 25 years. Despite theory that both very young and very old CEOs may have career concerns that encourage pursuit of short-term profitability at the expense of long-term investment, the vast majority of past studies have examined whether firms with CEOs who are nearing retirement undertake less long-term investment than other firms. Using 31 years of panel data for U.S.-based public firms making branded software products (SIC 7372), we hypothesize and find that the relationship between CEO age and R&D spending is curvilinear with firms managed by either younger or older CEOs spending less on R&D as compared to their middle-aged counterparts (i.e., an inverted U-shaped relationship). These findings are consistent with early career horizon theory and suggest that the career concerns of both young and old CEOs need to be considered by (1) researchers trying to understand the effects of CEOs on strategic decision making and (2) boards of directors attempting to focus CEOs on longer-term investment opportunities.

This study investigated the performance implications of private firms appointing their CEOs to serve as the firms' Communist Party Secretaries in China. Integrating insights from the corporate political strategy literature and institutional theory, this study used a panel dataset of Chinese privately controlled and listed firms covering 2008 through 2019 to investigate CEO/Communist Party Secretary duality as a special political strategy. The effect on firm performance was shown to vary depending on the institutional environment in which a firm operated. CEO/Communist Party Secretary duality enhanced firm performance for firms in less developed regions, where state logic was more influential. But it hampered firm performance in better developed regions, where market logic was more influential. Furthermore, indicators of firms’ inclination to state logic versus market logic were found to influence the effectiveness of CEO/Communist Party Secretary duality on firm performance.

Taking a social networks approach to the performance feedback model from the Behavioral Theory of the Firm (BTOF), we examine how a firm’s position within a strategic alliance network—and the structure surrounding that position—creates distinct pressures that differentially impact decision makers’ problemistic search intensity to social and historical underperformance. We test our predictions on a sample of 32,780 observations of the alliance networks of 4,726 firms and their R&D intensity from 2000–2015 and find results robust to numerous alternative specifications. Results indicate that highly centralized firms search more intensely in response to social underperformance and less intensely in response to historical underperformance. However, structural holes in the network reduce response intensity to social underperformance but increase response intensity to historical underperformance. We posit this is due to how altering one’s network cognitively shapes the perceived threat of status loss. Our study is both managerially and theoretically important, since firms increasingly rely on strategic alliances in the face of major disruptions including globalization, economic crises, and pandemics, and since strategic alliances are instrumental in shaping how firms set and respond to aspirational benchmarks.

We theorize that contingent on whether acquisitions put more emphasis on realizing cost versus revenue synergy, they require different degrees of post-acquisition integration due to their different resource reconfiguration requirements. We use data from 448 US-based acquirers and 1452 domestic acquisitions to find strong support for our theoretical conjecture. On the one hand, we find that for acquisitions that emphasize cost synergy more than revenue synergy, the degree of integration exerts a linear mediating effect on acquirer performance. That is, performance increases as the degree of integration increases. On the other hand, we find that for acquisitions that emphasize revenue synergy more than cost synergy, the degree of integration exerts an inverted U-shaped mediating effect. That is, performance is highest at intermediate degrees of integration. We advance research on post-acquisition integration by first demonstrating the importance of aligning the degree of integration with the synergy rationale in acquisitions (emphasis on cost or revenue synergy) to achieve high acquisition performance. Second, we introduce a novel, replicable approach for empirically operationalizing the degree of post-acquisition integration. We contribute to the resource reconfiguration lens of dynamic capabilities by showing that firms whose managers align the intended source of value creation with their approach to reconfiguration may achieve higher performance outcomes.

Open innovation can support firms looking to deploy strategic agility through product innovations during periods of market and technological change. However, existing research lacks a comprehensive understanding of the microfoundations that underlie strategic agility in the context of open innovation. We address this gap using an in-depth analysis of a firm's open innovation activities in support of new product development (NPD). Our analysis reveals that open innovation can help leverage NPD processes to drive technological innovations in response to changing market conditions. Under such circumstances, open innovation enables firms to deploy strategic agility by continually developing the product portfolio. Our study reveals six mechanisms that enable three mutually complementary practices of agility: knowledge-based agility at the firm-environment interface, behavioural agility in the firm's decision-making process, and organisational agility in the internal NPD process. We theorise the interplay between the mechanisms that constitute each practice and, in doing so, shed light on how they contribute to firm-level strategic agility.