Browsing Working Papers (SMG) by Title
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Gry Knudsen, Line; Bernhard Nielsen, Bo (København, 2008)[More information][Less information]
Abstract: Inter-organizational collaboration is an organizational form that is used by an increasing number of firms to meet a wide range of organizational aims (Hagedoorn 1996; 2002; Narula, 2004; Casson and Mol, 2006). Inter-organizational alliances are a preferred way of sourcing a variety of resources (Eisenhardt and Shonhoven, 1996; Gulati, 1999; Van de Ven and Walker, 1998), and a prominent view of the strategic alliance literature suggests that inter-firm collaboration has a special strength in serving as a mechanism by which a firm can leverage its skills, acquire new competencies, and learn (e.g. Kogut, 1989; Hamel, Doz, and Prahalad, 1989; Huber, 1991; Larsson, Bengtsson, Henriksson, and Sparks, 1998; Lyles, 1988; Powell and Brantley, 1992; Inkpen and Tsang, 2008). As firms collaborate at an increasing rate (Khanna et al, 1998) it becomes still more important to understand how these firms can be instrumental in organizing and governing the various collaborative knowledge processes that take place in alliances. URI: http://hdl.handle.net/10398/7416 Files in this item: 1
smg wp 2008-17.pdf (312.7Kb) -
A Research AgendaFoss, Nicolai J.; Argyres, Nicholas; Felin, Teppo; Zenger, Todd (Frederiksberg, 2012)[More information][Less information]
Abstract: For decades, the literatures on firm capabilities and organizational economics have been at odds with each other, specifically relative to explaining organizational boundaries and heterogeneity. We briefly trace the history of the relationship between the capabilities literature and organizational economics and point to the dominance of a “capabilities first” logic in this relationship. We argue that capabilities considerations are inherently intertwined with questions about organizational boundaries and internal organization, and use this point to respond to the prevalent “capabilities first” logic. We offer an integrative research agenda that focuses, first, on the governance of capabilities and, second, on the capability of governance. URI: http://hdl.handle.net/10398/8426 Files in this item: 1
Foss_SMGWP2012_1.pdf (780.0Kb) -
Foss, Nicolai J.; Klein, Peter G. (København, 2007)[More information][Less information]
Abstract: This chapter reviews and discusses rational-choice approaches to organizational governance. These approaches are found primarily in organizational economics (virtually no rational-choice organizational sociology exists), particularly in transaction cost economics, principal-agent theory, and the incomplete-contracts or property-rights approach. We distill the main unifying characteristics of these streams, survey each stream, and offer some critical commentary and suggestions for moving forward. URI: http://hdl.handle.net/10398/7438 Files in this item: 1
smg_wp_11.pdf (832.2Kb) -
Foss, Nicilai J.; Klein, Peter G.; Linder, Stefan (Frederiksberg, 2013)[More information][Less information]
Abstract: Austrian economics focuses on markets, but has much to say about organizations. In particular, Austrian insights on the structure of production, the heterogeneity and subjectivity of resources, the nature of uncertainty, the role of monetary calculation, and the function of the entrepreneur provide solid foundations for a distinctly Austrian theory of organizations. We review these insights, discuss recent literature on Austrian economics and the theory of the firm, and suggest new directions for developing and extending an Austrian approach to organizations. URI: http://hdl.handle.net/10398/8692 Files in this item: 1
Foss_Klein_Linder_SMGWP2013.pdf (544.3Kb) -
An Entrepreneurial Theory of Economic OrganizationKlein, Peter G.; Foss, Nicolai J.; Foss, Kirsten (København, 2006)[More information][Less information]
Abstract: Recent work links entrepreneurship to the economic theory of firm using the Knightian concept of entrepreneurship as judgment. When judgment is complementary to other as-sets, and these assets or their services are traded in well-functioning markets, it makes sense for entrepreneurs to hire labor and own assets. The entrepreneur’s role, then, is to arrange or organize the human and capital assets under his control. We extend this Knightian concept of the firm by developing a theory of delegation under Knightian uncertainty. What we call original judgment belongs exclusively to owners, but owners may delegate a wide range of decision rights to subordinates, who exercise derived judgment. We call these employees "proxy-entrepreneurs," and ask how the firm’s or-ganizational structure — its formal and informal systems of rewards and punishments, rules for settling disputes and renegotiating agreements, means of evaluating perform-ance, and so on — can be designed to encourage forms of proxy-entrepreneurship that increase firm value while discouraging actions that destroy value. Building on key ideas from the entrepreneurship literature, Austrian economics, and the economic theory of the firm we develop a framework for analyzing the tradeoff between productive and de-structive proxy-entrepreneurship. We link this analysis to the employment relation and ownership structure, providing new insights into these and related issues in the eco-nomic theory of the firm. Keywords: Judgment, entrepreneur, delegation, employment relation, ownership. JEL Codes: B53, D23, L2 URI: http://hdl.handle.net/10398/7452 Files in this item: 1
smg 2006-48.pdf (368.6Kb) -
An Industry PerspectiveAndersen, Torben Juul (København, 2005)[More information][Less information]
Abstract: Multinational enterprise in control of dispersed overseas resources and capabilities has been linked to strategic flexibility that allows the firm to take advantage of opportunities and manage exposures imposed by changing environmental conditions. This paper analyzes the implied performance and risk management effects in a comprehensive sample of public firms and finds supportive evidence for the proposition that multinationality can enhance performance across industries. However, the ability to exploit upside potential and avoid downside risk is industry specific. The positive effects of multinationality are found particularly pronounced among firms operating in knowledge intensive service industries while firms in capital-intensive primary industries display the inverse relationships. Keywords: Strategic flexibility, Real options, Risk management URI: http://hdl.handle.net/10398/7473 Files in this item: 1
cbs forskningsindberetning smg 30.pdf (479.6Kb) -
Kumar, Vikas; Pedersen, Torben; Zattoni, Alessandro (København, 2008)[More information][Less information]
Abstract: Manuscript Type: Empirical Research Question/Issue: Institutional and transaction costs theories highlight the idea that group affiliated firms outperform unaffiliated firms in emerging economies. The persistence of superior performance for group affiliated firms is, however, questioned by the fast and recent development of markets and institutions in these countries. In this article, we explore this link between firm performance and the evolution of institutional environment. Research Findings/Insights: The setting of the empirical investigation is India in the postreform era (post 1990). We test for effects of business group affiliation on firm performance over a 17 year time period from 1990 to 2006. Our findings show that (i) the performance benefits of group affiliation erode with the evolution of the institutional environment; (ii) older affiliated firms are better able to cope with institutional transition than younger affiliated firms; (iii) service-sector affiliated firms are better able to cope with institutional transition than manufacturing-sector affiliated firms. Theoretical/Academic Implications: Our findings both support the institution- and transaction costs-based theory of business groups, and extends it by incorporating a dynamic and longitudinal component. They also demonstrate – in line with recent works - that the benefits of group membership differ for different types of member firms. Practitioner/Policy Implications: The article has implications for both managers and policy makers. Managers of business groups should timely adapt their strategy to the evolution of the institutional environment. Policy makers should, instead, devote attention to the consequences of their policies because they may undermine the efficiency of large national companies. URI: http://hdl.handle.net/10398/7430 Files in this item: 1
smg wp 2008-25.pdf (191.1Kb) -
Hashai, Niron; Asmussen, Christian G.; Benito, Gabriel R. G.; Petersen, Bent (København, 2007)[More information][Less information]
Abstract: This paper expands entry mode literature by referring to multiple modes exerted in different value chain activities within and across host markets, rather than to a single entry mode at the host market level. Scale of operations and knowledge intensity are argued to affect firms’ entry mode diversity across value chain activities and host markets. Analyzing a sample of Israeli based firms we show that larger firms exhibit a higher degree of entry mode diversity both across value chain activities and across host markets. Higher levels of knowledge intensity are also associated with more diversity in firms’ entry modes across both dimensions. URI: http://hdl.handle.net/10398/7445 Files in this item: 1
smg wp 2007-003.pdf (676.1Kb) -
The Sensing of Frontline Employees Against Executive ExpectationsHallin, Carina Antonia; Andersen, Torben J.; Tveterås, Sigbjørn (Frederiksberg, 2012)[More information][Less information]
Abstract: The literature suggests that important strategic initiatives can derive from employees within the organization as they respond to needs and opportunities observed in daily operations. This seems to indicate that employees have a good sense of the firm’s operational capabilities observed through direct interactions with colleagues, customers and partners. Executives make their own judgments about the corporate capabilities from discussions with various managers, other executives and industry specialists. But, the information gathered by executives may be qualitatively different from the conditions sensed by the employees. So, we arranged a contest between operational capabilities assessed by employees and executives and the relationship to subsequent firm performance. Based on more than 400 individual data points collected from two medium-sized organizations over a period of eighteen months, advanced distributed lag time-series analyses show that the sensing of front-line employees (surprisingly) is a better medium-term predictor of organizational performance than executive judgments. These results have implications for the way organizations set up their management information and communication structure. URI: http://hdl.handle.net/10398/8471 Files in this item: 1
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The Role of Mentalizing for Reward Design and Managenemt in Principal-Agent RelationsFoss, Nicolai J.; Stea, Diego (Frederiksberg, 2013)[More information][Less information]
Abstract: Agency theory is one of the most important foundational theories in management research, but it rests on tenuous cognitive assumptions. We combine classical agency theory with a realistic theory of the intrinsically imperfect human potential for interpersonal sensemaking. This allows us to systematically show how the principal’s ability to mentalize with the agent influences value creation in principal-agent relations, and to link this to organizational sensemaking instruments. URI: http://hdl.handle.net/10398/8624 Files in this item: 1
Foss_Stea_SMGWP2013_1.pdf (1.149Mb) -
Ledelsesmæssige udfordringerArlbjørn, Jan Stentoft; Wæhrens, Brian Vejrum; Johansen, John; Pedersen, Torben (Frederiksberg, 2009)[More information][Less information]
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Foss, Nicolai J. (København, 2008)[More information][Less information]
Abstract: For tre til fire årtier siden var der i fin overensstemmelse med tidsånden megen tale om økonomisk teoris krise. En række alternative, »heterodoxe«, »non-mainstream« retninger blev etableret eller taget frem af gemmerne og støvet af som alternativer til den formodet monolitiske, neoklassiske hovedstrøm. URI: http://hdl.handle.net/10398/7453 Files in this item: 1
smg wp 2008-22.pdf (157.8Kb) -
Andersen, Torben Juul; Oliviero, Roggi (Frederiksberg, 2012)[More information][Less information]
Abstract: Corporate failures, periodic recessions, regional debt crises and volatile financial markets have intensified the focus on risk management as the means to deal with turbulent conditions. The ability to respond effectively to abrupt environmental impacts is considered an important source of competitive advantage. Yet, surprisingly little research has analyzed whether the presumed advantages of effective risk management are associated with superior outcomes. Here we present a comprehensive study of risk management effectiveness and the relationship to corporate performance based on more than 33,500 observations in 3,400 firms over the turbulent 20-year period 1991-2010. Determining effective risk management as the ability to reduce earnings and cash flow volatility, we find that both have significant positive relationships to lagged performance measures after controlling for industry effects, company size and financial leverage. URI: http://hdl.handle.net/10398/8697 Files in this item: 1
Torben Andersen Roggi.pdf (135.5Kb) -
Foss, Nicolai J.; Lyngsie, Jacob; Zahra, Shaker A. (Frederiksberg, 2013)[More information][Less information]
Abstract: Research highlights the role of external knowledge sources in the recognition of strategic opportunities, but is less forthcoming with respect to the role of such sources during the process of exploiting or realizing opportunities. We build on the knowledge-based view to propose that realizing opportunities often involves significant interactions with external knowledge sources. Organizational design can facilitate a firm’s interactions with these sources, while achieving coordination among organizational members engaged in opportunity exploitation. Our analysis of a double-respondent survey involving 536 Danish firms shows that the use of external knowledge sources is positively associated with opportunity exploitation, but the strength of this association is significantly influenced by organizational designs that enable the firm to access external knowledge during the process of exploiting opportunities. URI: http://hdl.handle.net/10398/8680 Files in this item: 1
SMGWP2013_6.pdf (545.6Kb) -
The case of the Resource-based viewFoss, Nicolai J. (København, 2005)[More information][Less information]
Abstract: Does the RBV represent a case of scientific progress? And has it emerged as the dominant approach to the analysis of competitive advantage for this reason? Conventional criteria for scientific progress, notably those of the growth of knowledge literature, are not particularly helpful for understanding this. Instead, it is argued that in order to understand why the RBV is an instance of scientific progress, we should begin from the notion that reduction is at the heart of progress in science, and that many scientists implicitly or explicitly hold this view. The RBV is a case of scientific progress because it identified theoretical mechanisms at levels lower than those that were usually investigated in strategy research prior to the RBV. Unfortunately, the micro-emphasis of the RBV gave way during the 1990s to more aggregative modes of theorizing (i.e., the capabilities approach). Thus, the RBV represents an "unfinished revolution" as there is still considerable potential to dig deeper in the deep structure of competitive advantage. Keywords: Resource-based view, mechanisms, reductionism, competitive advantage, transaction costs, property rights. JEL Code: L2, M1 URI: http://hdl.handle.net/10398/7481 Files in this item: 1
cbs forskningsindberetning smg 31.pdf (531.8Kb) -
Implications for New Organizational FormsFoss, Kirsten; Foss, Nicolai J. (København, 2005)[More information][Less information]
Abstract: Two of Herbert Simon’s best-known papers are "The Architecture of Complexity" and "The Structure of Ill-Structured Problems." We discuss the neglected links between these two papers, highlighting the role of decomposition in the context of problems on which constraints have been imposed as a general approach to problem solving. We apply these Simonian ideas to organizational issues, specifically new organizational forms. Specifically, Simonian ideas allow us to develop a morphology of new organizational forms and to point to some design problems that characterize these forms. Keywords: Herbert Simon, problem-solving, new organizational forms. JEL Code: D23, D83 URI: http://hdl.handle.net/10398/7431 Files in this item: 1
cbs forskningsindberetning smg 28.pdf (508.4Kb) -
Felin, Teppo; Foss, Nicolai J. (København, 2008)[More information][Less information]
Abstract: Organizational scholars have recently argued that economic theories and assumptions have adversely shaped management practice and human behavior, leading not only to the incorporation of trust-eroding market-mechanisms into organizations but also unnecessarily creating self-interested behavior. A number of highly influential papers have argued that the self-fulfilling nature of (even false) theories provides the underlying mechanism through which economics has adversely shaped not just social science but also management practice and individual behavior. We question these arguments, and argue that there are important boundary conditions to theories falsely fulfilling themselves, boundary conditions that have hitherto been unexplored in organizational research, and boundary conditions which question the underlying premises used by organizational scholars and social scientists to attack economics. We specifically build on highly relevant findings from social psychology, philosophy and organizational economics to show how (1) objective reality and (2) human nature provide two important boundary conditions for theories (falsely or otherwise) fulfilling themselves. We also defend organizational economics, specifically the use of high-powered incentives in organizations, and argue that self-interest (rightly understood) facilitates in creating beneficial individual and collective and societal outcomes. URI: http://hdl.handle.net/10398/7466 Files in this item: 1
smg wp 2008-19.pdf (394.8Kb) -
Insights from the Autrian School PerspectiveIshikawa, Ibuki (København, 2006)[More information][Less information]
Abstract: The purpose of this paper is to identify the source of competitive advantage in the resource based view of strategic management literature. In particular, it is argued that the source of competitive advantage is rooted in entrepreneur judgment. In this argument, this paper consists largely of three parts: firstly, a brief survey of the theoretical framework of the RBV of strategic management, particularly to identify critically the resource conception in the sense of what RBV scholars understand; secondly, to argue the significance of exploiting the Austrian perspective, especially focusing on Lachmann (1947,1956), Mises (1946) and Knight (1921) to improve the RBV framework; thirdly, to apply the Austrian perspective to the RBV and demonstrate that the source of competitive advantage is derived from entrepreneurial judgment per se, not the resource per se, and to discuss some possible future research avenues for further development. It becomes clear through this paper that a strategy is mainly seen as the quest for the entrepreneurial judgmental rent. The major insight of this paper is that taking the entrepreneur insight from the Austrian school of thought is the fruitful way to understand the source of competitive advantage. Jel Code: B25, D21, D81, M13 URI: http://hdl.handle.net/10398/7460 Files in this item: 1
cbs forskningsindberetning smg 45.pdf (3.691Mb) -
Foss, Nicolai J. (København, 2007)[More information][Less information]
Abstract: While (managerial) beliefs are central to many aspects of strategic organization, interactive beliefs are almost entirely neglected, save for some game theory treatments. In an increasingly connected and networked economy, firms confront coordination problems that arise because of network effects. The capability to manage beliefs will increasingly be a strategic one, a key source of wealth creation, and a key research area for strategic organization scholars. KEYWORDS: Interactive beliefs, coordination, network economy, common knowledge. JEL CODE: D84, M30 URI: http://hdl.handle.net/10398/7439 Files in this item: 1
smg_2007-006.pdf (167.7Kb) -
Klein, Peter G.; Barney, Jay B.; Foss, Nicolai J. (Frederiksberg, 2012)[More information][Less information]
Abstract: Strategic entrepreneurship is a newly recognized field that draws, not surprisingly, from the fields of strategic management and entrepreneurship. The field emerged officially with the 2001 special issue of the Strategic Management Journal on “strategic entrepreneurship”; the first dedicated periodical, the Strategic Entrepreneurship Journal, appeared in 2007. Strategic entrepreneurship is built around two core ideas. (1) Strategy formulation and execution involves attributes that are fundamentally entrepreneurial, such as alertness, creativity, and judgment, and entrepreneurs try to create and capture value through resource acquisition and competitive posi-tioning. (2) Opportunity-seeking and advantage-seeking—the former the central subject of the entrepreneurship field, the latter the central subject of the strategic management field—are pro-cesses that should be considered jointly. This entry explains the specific links between strategy and entrepreneurship, reviews the emergence and development of the strategic entrepreneurship field, and discusses key implications and applications. URI: http://hdl.handle.net/10398/8514 Files in this item: 1
Klein_Barney_Foss_SMGWP2012_3.pdf (457.4Kb)