Modeling growth strategy in a biotechnology startup firm

The top managers of a biotechnology startup firm agreed to participate in a system dynamics modeling project to help them think about the firm's growth strategy. The article describes how the model was created and used to stimulate debate and discussion about growth management. The paper highlights several novel features about the process used for capturing management team knowledge. A heavy emphasis was placed on mapping the operating structure of the factory and distribution channels. Qualitative modeling methods (structural diagrams, descriptive variable names, and friendly algebra) were used to capture the management team's descriptions of the business. Simulation scenarios were crafted to stimulate debate about strategic issues such as capacity allocation, capacity expansion, customer recruitment, customer retention, and market growth, and to engage the management team in using the computer to design strategic scenarios. The article concludes with comments on the impact of the project.

Institutions, unionization and voice: the relative impact of context and actors on firm level practice

Trade unions provide a voice in the way firms are run, an input into reward systems and increased security of employment. But these vary with national context. Using transnational survey evidence, this article explores the relative impact of setting, and of unions and collective bargaining, on these issues. It is found that, irrespective of context, organizations are significantly more likely to make use of compulsory redundancies in the absence of unions and collective bargaining. However, in other areas, the impact of unions appeared less pronounced than that of the wider context. The article explores the reasons behind this, and the broader policy implications thereof.

The economic theory of the firm as a foundation for international business theory

The economic theory of the firm is central to the theory of the multinational enterprise. Recent literature on multinationals, however, makes only limited reference to the economic theory of the firm. Multinationals play an important role in coordinating the international division of labour through internal markets. The paper reviews the economic principles that underlie this view. Optimal internalisation equates marginal benefits and costs. The benefits of internalisation stem mainly from the difficulties of licensing proprietary knowledge, reflecting the view that MNEs possess an ‘ownership’ or ‘firm-specific’ advantage. The costs of internalisation, it is argued, reflect managerial capability, and in particular the capability to manage a large firm. The paper argues that management capability is a complement to ownership advantage. Ownership advantage determines the potential of the firm, and management capability governs the fulfilment of this potential through overcoming barriers to growth. The analysis is applied to a variety of issues, including out-sourcing, geographical dispersion of production, and regional specialisation in marketing.

Intra-tumor heterogeneity: lessons from microbial evolution and clinical implications

Multiple subclonal populations of tumor cells can coexist within the same tumor. This intra-tumor heterogeneity will have clinical implications and it is therefore important to identify factors that drive or suppress such heterogeneous tumor progression. Evolutionary biology can provide important insights into this process. In particular, experimental evolution studies of microbial populations, which exist as clonal populations that can diversify into multiple subclones, have revealed important evolutionary processes driving heterogeneity within a population. There are transferrable lessons that can be learnt from these studies that will help us to understand the process of intra-tumor heterogeneity in the clinical setting. In this review, we summarize drivers of microbial diversity that have been identified, such as mutation rate and environmental influences, and discuss how knowledge gained from microbial experimental evolution studies may guide us to identify and understand important selective factors that promote intra-tumor heterogeneity. Furthermore, we discuss how these factors could be used to direct and optimize research efforts to improve patient care, focusing on therapeutic resistance. Finally, we emphasize the need for longitudinal studies to address the impact of these potential tumor heterogeneity-promoting factors on drug resistance, metastatic potential and clinical outcome.

Supply management capabilities, routine bundles and their impact on firm performance

Despite the generally positive contribution of supply management capabilities to firm performance their respective routines require more depth of assessment. Using the resource-based view we examine four routines bundles comprising ostensive and performative aspects of supply management capability – supply management integration, coordinated sourcing, collaboration management and performance assessment. Using structural equation modelling we measure supply management capability empirically as a second-order latent variable and estimate its effect on a series of financial and operational performance measures. The routines-based approach allows us to demonstrate a different, more fine-grained approach for assessing consistent bundles of homogeneous patterns of activity across firms. The results suggest supply management capability is formed of internally consistent routine bundles, which are significantly related to financial performance, mediated by operational performance. Our results confirm an indirect effect of firm performance for ‘core’ routines forming the architecture of a supply management capability. Supply management capability primarily improves the operational performance of the business, which is subsequently translated into improved financial performance. The study is significant for practice as it offers a different view about the face-valid rationale of supply management directly influencing firm financial performance. We confound this assumption, prompting caution when placing too much importance on directly assessing supply management capability using financial performance of the business.

Diffusion of digital innovation in construction: a case study of a UK engineering firm

The UK government is mandating the use of building information modelling (BIM) in large public projects by 2016. As a result, engineering firms are faced with challenges related to embedding new technologies and associated working practices for the digital delivery of major infrastructure projects. Diffusion of innovations theory is used to investigate how digital innovations diffuse across complex firms. A contextualist approach is employed through an in-depth case study of a large, international engineering project-based firm. The analysis of the empirical data, which was collected over a four-year period of close interaction with the firm, reveals parallel paths of diffusion occurring across the firm, where both the innovation and the firm context were continually changing. The diffusion process is traced over three phases: centralization of technology management, standardization of digital working practices, and globalization of digital resources. The findings describe the diffusion of a digital innovation as multiple and partial within a complex social system during times of change and organizational uncertainty, thereby contributing to diffusion of innovations studies in construction by showing a range of activities and dynamics of a non-linear diffusion process.

Age and firm growth: evidence from three European countries

This article provides new insights into the dependence of firm growth on age along the entire distribution of growth rates, and conditional on survival. Using data from the European firms in a global economy survey, and adopting a quantile regression approach, we uncover evidence for a sample of French, Italian and Spanish manufacturing firms with more than ten employees in the period from 2001 to 2008. We find that: (1) young firms grow faster than old firms, especially in the highest growth quantiles; (2) young firms face the same probability of declining as their older counterparts; (3) results are robust to the inclusion of other firms’ characteristics such as labor productivity, capital intensity and the financial structure; (4) high growth is associated with younger chief executive officers and other attributes that capture the attitude of the firm toward growth and change. The effect of age on firm growth is rather similar across countries.

How does investing in cheap labour countries affect performance at home? Firm-level evidence from France and Italy

Transferring low tech manufacturing jobs to cheap labour countries is often seen by part of the general public and policy makers as a step into the de-industrialization of the European economies. However, recent contributions have shown that the effects on home economies are rarely negative. Our paper contributes to this literature by examining how outward investments to developing and less developed countries (LDCs) affect home activities of French and Italian firms that turn multinational in the period analysed. The effects of these investments are also compared to the effects of investments to developed economies (DCs). The analysis is carried out by using propensity score matching. We find no evidence of a negative effect of outward investments to LDCs. In Italy they have a positive long term effect on value added and employment. For France we find a positive effect on the size of domestic output and employment.

The future of stakeholder management theory: a temporal perspective

We propose adding a temporal dimension to stakeholder management theory, and assess the implications thereof for firm-level competitive advantage. We argue that a firm’s competitive advantage fundamentally depends on its capacity for stakeholder management related, transformational adaptation over time. Our new temporal stakeholder management approach builds upon insights from both the resource-based view (RBV) in strategic management and institutional theory. Stakeholder agendas and their relative salience to the firm evolve over time, a phenomenon well understood in the literature, and requiring what we call level 1 adaptation. However, the dominant direction of stakeholder pressures can also change, namely, from supporting resource heterogeneity at the firm level to fostering industry homogeneity, and vice versa. When dominant stakeholder pressures shift from supporting heterogeneity towards stimulating homogeneity in industry, the firm must engage in level 2 or transformational adaptation. Stakeholders typically provide valuable resources to the firm in an early stage. Without these resources, which foster heterogeneity (in line with RBV thinking), the firm would not exist. At a later stage, stakeholders also contribute to inter-firm homogeneity via isomorphism pressures (in line with institutional theory thinking). Adding a temporal dimension to stakeholder management theory has far reaching implications for this theory’s practical relevance to senior level management in business.

The transaction cost economics theory of the family firm: family-based human asset specificity and the bifurcation bias

We develop a transaction cost economics theory of the family firm, building upon the concepts of family-based asset specificity, bounded rationality, and bounded reliability. We argue that the prosperity and survival of family firms depend on the absence of a dysfunctional bifurcation bias. The bifurcation bias is an expression of bounded reliability, reflected in the de facto asymmetric treatment of family vs. nonfamily assets (especially human assets). We propose that absence of bifurcation bias is critical to fostering reliability in family business functioning. Our study ends the unproductive divide between the agency and stewardship perspectives of the family firm, which offer conflicting accounts of this firm type's functioning. We show that the predictions of the agency and stewardship perspectives can be usefully reconciled when focusing on how family firms address the bifurcation bias or fail to do so.

Internationalisation, innovation and productivity: how do firms differ in Italy?

This paper addresses the issue of intra-industry heterogeneity and internationalisation. We show that, after controlling for sector, location, firm age and size, Italian manufacturing companies exhibit different economic and innovative performance according to their involvement in foreign activities. In particular, exporters show intermediate innovative performance between non-internationalised firms and those carrying out foreign production. Multinationals with a lower commitment to foreign markets, i.e. with non-manufacturing activities abroad only, exhibit a higher productivity than exporters but they do not appear to innovate more than the latter. Heterogeneity in productivity is robust to controlling for innovation inputs and outputs, suggesting that the difference in economic performance cannot be entirely attributed to different innovative activities, and that the involvement in international operations can be a distinct channel of knowledge accumulation.

The compositional and configurational heterogeneity of matrix habitats shape woodland carabid communities in wooded-agricultural landscapes

Landscape heterogeneity (the composition and configuration of matrix habitats) plays a major role in shaping species communities in wooded-agricultural landscapes. However, few studies consider the influence of different types of semi-natural and linear habitats in the matrix, despite their known ecological value for biodiversity. Objective To investigate the importance of the composition and configuration of matrix habitats for woodland carabid communities and identify whether specific landscape features can help to maintain long-term populations in wooded-agricultural environments. Methods Carabids were sampled from woodlands in 36 tetrads of 4 km2 across southern Britain. Landscape heterogeneity including an innovative representation of linear habitats was quantified for each tetrad. Carabid community response was analysed using ordination methods combined with variation partitioning and additional response trait analyses. Results Woodland carabid community response was trait-specific and better explained by simultaneously considering the composition and configuration of matrix habitats. Semi-natural and linear features provided significant refuge habitat and functional connectivity. Mature hedgerows were essential for slow-dispersing carabids in fragmented landscapes. Species commonly associated with heathland were correlated with inland water and woodland patches despite widespread heathland conversion to agricultural land, suggesting that species may persist for some decades when elements representative of the original habitat are retained following landscape modification. Conclusions Semi-natural and linear habitats have high biodiversity value. Landowners should identify features that can provide additional resources or functional connectivity for species relative to other habitat types in the landscape matrix. Agri-environment options should consider landscape heterogeneity to identify the most efficacious changes for biodiversity.

The brand likeability scale: an exploratory study of likeability in firm-level brands

We develop a new measurement scale to assess consumers’ brand likeability in firm-level brands. We present brand likeability as a multidimensional construct. In the context of service experience purchases, we find that increased likeability in brands results in: (1) greater amount of positive association; (2) increased interaction interest; (3) more personified quality; and (4) increased brand contentment. The four-dimensional multiple-item scale demonstrates good psychometric properties, showing strong evidence of reliability as well as convergent, discriminant and nomological validity. Our findings reveal that brand likeability is positively associated with satisfaction and positive word of mouth. The scale extends existing branding research, providing brand managers with a metric so that likeability can be managed strategically. It addresses the need for firms to act more likeably in an interaction-dominated economy. Focusing on likeability acts as a differentiator and encourages likeable brand personality traits. We present theoretical implications and future research directions on the holistic brand likeability concept.