The corporate development and strategy function (CDSF) at firms’ headquarters is critical for their strategy activities, yet we know little about its design and structure. We argue that environmental uncertainty, strategic task demands, and structural complexity affect the need for strategy resources at the corporate level and, thus, the size of the CDSF. Drawing upon a survey of strategy heads from 105 large, listed European firms as well as archival data, we find that a firm’s market fragmentation, related diversification strategy, acquisition activity, overall size, and organizational centralization are positively associated with the number of CDSF employees. We also find, however, that the function’s size does not affect a firm’s financial performance.
We build on intraorganizational power literature to study the influence of the chief strategy officer (CSO) within organizations. We argue that the CSO's individual characteristics - structural power, expert power, and prestige power - as well as institutional forces of the firm's environment - cultural power distance and industry power level - affect the extent of the CSO's actual power over a broad range of strategic decisions. Further, we hypothesize that the CSO's actual power is positively associated with firm performance. An analysis of survey and archival data of 104 European firms reveals that the host country's cultural power distance and the industry's power level, however, not the CSO's individual characteristics, determine the CSO's actual power within the firm. Moreover, we find that firms benefit from powerful CSOs.
This study examines the interorganizational strategy process as documented by two case ecologies within the emerging domain of electric mobility. We argue that interorganizational strategy-making oscillates between meta- and firm-level and unfolds within constructed strategic arenas through an ongoing negotiation between dispersed actors. We report findings about strategic activity that seems to compensate for the absence of hierarchical structures and authorities as present in collaborative arrangements. Our study also points towards the salient roles of individuals in building common strategies by linking actors that are spread across ecologies, as well as giving "voice and face" to interorganizational endeavors.
Prior studies argue that behaviorally complex managers may contribute to an organizational unit's ambidexterity. While some suggest that such managers reconcile exploration and exploitation directly, others propose that they foster both activities indirectly by framing an ambidextrous behavioral context. We hypothesize that these direct and indirect processes are not independent alternatives, but are interrelated. Based on two samples, we find that SMEs' managers affect unit-level ambidexterity directly and indirectly, while those of larger corporations' business units only have an indirect effect. Our study extends and reconciles the literature on managerial and contextual ambidexterity, as well as that on individual-level and unit-level ambidexterity. The insight that the effectiveness of different paths to ambidexterity may depend on the type of organization under study, is further discussed.
This article aims to promote a dynamic perspective on the issue of strategy tool implementation and rejection. While research on strategy tools mainly used surveys for a long time, practice and process perspectives of strategy enriched the discussions about the actual use and value of strategy tools. However, the process of implementation and subsequent rejection of a successful strategy tool cannot be explained by existing research. On the basis of a revelatory case study, we present the process of strategy tool implementation by means of a systems model. We provide an initial dynamic hypothesis that explains the underlying dynamics of the boom and bust phenomenon.
The novels and political ideas of Ayn Rand (1905-1982) have recently experienced a renaissance, also thanks to the Tea Party movement. While Rand is widely read across the United States, she is practically unknown in Europe, where she was born. The letters she received from European readers often lamented the fact that she did not receive any attention in their respective home countries. It is commonly thought that this difference in popularity is due to ideological reasons, the less individualistic culture of many European countries, for instance. This paper, however, will argue that other factors have also contributed to the lack of success of Rand's American bestsellers in Europe. To this end, the paper first provides a brief European publication history of Rand's oeuvre. It will then analyze the reasons practical and personal, as well as political and economic for the lack of success of Rand's novels in the European book markets.
The comparison of mental models of dynamical systems can help understanding they way individuals understand dynamic situations and how their understanding changes. Current approaches like the Distance Ratio and the Closeness Ratio have been criticized for not taking into account feedback loops and delays; an improved comparison method has been proposed, specifying an Element Distance Ratio, Loop Distance Ratios and a Model Distance Ratio. We are advancing in the automation of the computations in order to take this burden away from analysts. This paper describes the essential computations. It briefly presents the comparison method for the different ratios. Then it introduces the conceptual architecture of the software tool, its main data structures and algorithms. The tool shall be put to use in mental model research.
This paper deals with the representation of the structure of mental models of dynamical systems (MMDS). Systems are dynamical if their present output depends on past input. Available research about mental models has most often accounted only for aspects which have the capability to form a static mental model-i.e., simple variables, common links, and their polarity. The properties which translate such models into dynamical mental models are feedback loops and delays. Not many mental model studies have accounted for them up to now. The contribution of this paper is twofold: First, we elaborate the structural content of a MMDS-the conceptual structure. And second, we use this conceptual structure to enrich the seminal definition of a MMDS. Based on a current overview of research about MMDS, we lay out paths for further research.
Research on ambidexterity suggests that managers should place equal emphasis on exploitation and exploration activities. Based on system dynamics modeling, we were able to support the general ambidexterity hypothesis that a decision-making focus favoring either exploitation or exploration at the expense of the other yields negative outcomes. However, our findings challenge the assumption that an equal emphasis on the two activities is most beneficial. Instead, we find that managers' operational decisions biased towards exploitation lead to higher long-term profits than an identical preference for exploitation and exploration. Such a bias generates higher profits in the short run, leads to higher disposable funds for future investments, and increases available resources for both exploitation and exploration in the long run.
Upper echelons theory describes that executives are influenced by their
personalities and perceptions in strategic decision-making. One
subordinate notion of upper echelons theory is that objectively observable characteristics of executives can be used as a valid approximation of executives' personalities and thereby serve as a predictor for strategic decision-making. However, this notion has been questioned, and there has been demand for more direct measures of strategic decision makers' personalities and the psychological processes underlying strategic decision-making. This paper aims at contributing to the explanation of these psychological processes by defining dimensions to profile top executives' personalities and developing a theory that explains the relationship between this personality profile, anger and decision-making processes of top executives. Our central argument is that top executives' personality is linked to the decision-making process, and that anger mediates this relationship. This contributes to current research by (1) suggesting a comprehensive range of profiling dimensions, (2) investigating the influence of this personality on the emotion anger during the strategic decision-making process, and (3) analyzing if and how this personality directly influences strategic decision-making processes.
