Podcast
Questions and Answers
Why did Brinckmann et al. (2010) choose to apply a meta-analysis method in their study?
Why did Brinckmann et al. (2010) choose to apply a meta-analysis method in their study?
They aimed to aggregate findings from various studies to understand the overall business planning-performance relationship in small firms.
What are the three moderating factors that influence the business planning-performance relationship according to Brinckmann et al. (2010)?
What are the three moderating factors that influence the business planning-performance relationship according to Brinckmann et al. (2010)?
The three moderating factors are environmental dynamism, firm size, and the entrepreneurs' prior experience.
What term completes the conclusion by Brinckmann et al. (2010) regarding business planning, stating, 'Overall, business planning is a […] activity despite the required resources and small firms’ resource constraints'?
What term completes the conclusion by Brinckmann et al. (2010) regarding business planning, stating, 'Overall, business planning is a […] activity despite the required resources and small firms’ resource constraints'?
A. value creating
What does the name 'Uber Technologies, Inc.' imply about the company's operational scope?
What does the name 'Uber Technologies, Inc.' imply about the company's operational scope?
How does Uber’s international presence reflect its growth strategy?
How does Uber’s international presence reflect its growth strategy?
What partnerships does Uber have to enhance its service offerings?
What partnerships does Uber have to enhance its service offerings?
In what ways might the competitive landscape influence Uber's strategic decisions?
In what ways might the competitive landscape influence Uber's strategic decisions?
What implications does Uber’s business model have for small businesses in similar sectors?
What implications does Uber’s business model have for small businesses in similar sectors?
What is the neo-classical view of organizations as described by Margolis and Walsh?
What is the neo-classical view of organizations as described by Margolis and Walsh?
Briefly describe the two alternatives proposed for developing normative stakeholder theory.
Briefly describe the two alternatives proposed for developing normative stakeholder theory.
What are the two opposite relationship types firms may have with their stakeholders according to Jones et al. (2018)?
What are the two opposite relationship types firms may have with their stakeholders according to Jones et al. (2018)?
List the three different types of reciprocity distinguished by Bosse et al. (2009).
List the three different types of reciprocity distinguished by Bosse et al. (2009).
Why are close relations with stakeholders considered rare and inimitable according to Jones et al. (2018)?
Why are close relations with stakeholders considered rare and inimitable according to Jones et al. (2018)?
What is the main performance characteristic associated with Microsoft's diversification strategy compared to its competitors?
What is the main performance characteristic associated with Microsoft's diversification strategy compared to its competitors?
What are legitimate reasons for engaging in unrelated diversification despite general market disfavor?
What are legitimate reasons for engaging in unrelated diversification despite general market disfavor?
How does a stakeholder approach contribute to sustainable competitive advantage according to Jones et al. (2018)?
How does a stakeholder approach contribute to sustainable competitive advantage according to Jones et al. (2018)?
How does Uber's internationalization strategy support or contradict the Process Theory of Internationalization?
How does Uber's internationalization strategy support or contradict the Process Theory of Internationalization?
What alternative theory explains the internationalization behavior of high-tech firms like Logitech and Skype in the 21st century?
What alternative theory explains the internationalization behavior of high-tech firms like Logitech and Skype in the 21st century?
Which factor acts as a moderator of firm survival when entering foreign markets: resource dependency, resource fungibility, or resource specificity?
Which factor acts as a moderator of firm survival when entering foreign markets: resource dependency, resource fungibility, or resource specificity?
Give an example of an Intellectual Property Right that innovators use to capture business potential.
Give an example of an Intellectual Property Right that innovators use to capture business potential.
List three factors that influence decision makers' preference for Intellectual Property Rights over other appropriation measures according to James et al. (2013).
List three factors that influence decision makers' preference for Intellectual Property Rights over other appropriation measures according to James et al. (2013).
What do proponents of the shareholder model believe about resource allocation for social initiatives?
What do proponents of the shareholder model believe about resource allocation for social initiatives?
What is one criticism that economists hold against stakeholder proponents?
What is one criticism that economists hold against stakeholder proponents?
How do firms capture the business potential of innovations according to the fourth plenary lecture?
How do firms capture the business potential of innovations according to the fourth plenary lecture?
Which diversification mode is generally considered the most profitable for firms, and why?
Which diversification mode is generally considered the most profitable for firms, and why?
In the Service Opportunity Matrix by Sawhney et al. (2004), how would the introduction of 'Alexa for Residential' be categorized?
In the Service Opportunity Matrix by Sawhney et al. (2004), how would the introduction of 'Alexa for Residential' be categorized?
What strategies would you implement to mitigate capability risks in the design stage of 'Alexa for Residential'?
What strategies would you implement to mitigate capability risks in the design stage of 'Alexa for Residential'?
According to Brax and Visintin, what type of model does the meta-model of servitization propose?
According to Brax and Visintin, what type of model does the meta-model of servitization propose?
What are the potential benefits of Amazon's 'Alexa for Residential' service for homeowners?
What are the potential benefits of Amazon's 'Alexa for Residential' service for homeowners?
Why might organic growth be less profitable compared to acquisitions for some firms?
Why might organic growth be less profitable compared to acquisitions for some firms?
How does the concept of 'exploitation' differ from 'exploration' in the context of growth strategies?
How does the concept of 'exploitation' differ from 'exploration' in the context of growth strategies?
What role do solution providers play in the 'Alexa for Residential' service?
What role do solution providers play in the 'Alexa for Residential' service?
What is the primary difference between causation and effectuation in entrepreneurship?
What is the primary difference between causation and effectuation in entrepreneurship?
What is the S-curve hypothesis in relation to international diversification?
What is the S-curve hypothesis in relation to international diversification?
How do capabilities affect a firm's survival and growth during early internationalization?
How do capabilities affect a firm's survival and growth during early internationalization?
What is the significance of understanding foreign establishment mode choice in international business?
What is the significance of understanding foreign establishment mode choice in international business?
What distinguishes organic growth from non-organic growth in firms?
What distinguishes organic growth from non-organic growth in firms?
In what ways can firms capture value from their innovations?
In what ways can firms capture value from their innovations?
What role does stakeholder theory play in achieving sustainable competitive advantage?
What role does stakeholder theory play in achieving sustainable competitive advantage?
How can cultural differences impact cross-border mergers and acquisitions?
How can cultural differences impact cross-border mergers and acquisitions?
What advantage do failures in prior start-up attempts provide for entrepreneurs?
What advantage do failures in prior start-up attempts provide for entrepreneurs?
What impact does the age of a firm have on its capability development?
What impact does the age of a firm have on its capability development?
How do intangible assets influence the performance of an internationalization strategy?
How do intangible assets influence the performance of an internationalization strategy?
What is the relationship between multinationality and firm performance according to the research aim?
What is the relationship between multinationality and firm performance according to the research aim?
Why is the development of intangible assets seen as resource-intensive?
Why is the development of intangible assets seen as resource-intensive?
What does the S-curve hypothesis suggest about international diversification?
What does the S-curve hypothesis suggest about international diversification?
What structural challenges might firms encounter that hinder their ability to learn and adapt?
What structural challenges might firms encounter that hinder their ability to learn and adapt?
How can hiring managers with international experience affect a firm's success?
How can hiring managers with international experience affect a firm's success?
What is meant by 'common ground' in the context of technology acquisitions?
What is meant by 'common ground' in the context of technology acquisitions?
How does technological interdependence influence post-merger integration decisions?
How does technological interdependence influence post-merger integration decisions?
What are two limitations mentioned regarding the study of technological interdependence in acquisitions?
What are two limitations mentioned regarding the study of technological interdependence in acquisitions?
Identify the two types of technology emphasized in the study: Component vs. Standalone technology.
Identify the two types of technology emphasized in the study: Component vs. Standalone technology.
In addressing value appropriation, what is meant by the distribution of benefits from innovation?
In addressing value appropriation, what is meant by the distribution of benefits from innovation?
What implications does the presence of ‘common ground’ have for post-acquisition strategies?
What implications does the presence of ‘common ground’ have for post-acquisition strategies?
Why is the area of absorptive capacity relevant in the study of technology acquisitions?
Why is the area of absorptive capacity relevant in the study of technology acquisitions?
How does the age and size of a target firm potentially influence acquisition success?
How does the age and size of a target firm potentially influence acquisition success?
What is the primary difference between radical and incremental innovation?
What is the primary difference between radical and incremental innovation?
How does a firm's degree of radical innovation orientation affect its use of formal appropriation measures?
How does a firm's degree of radical innovation orientation affect its use of formal appropriation measures?
What is a 'property-preempting investment' as mentioned in the context of Merck's collaboration with Washington University?
What is a 'property-preempting investment' as mentioned in the context of Merck's collaboration with Washington University?
What role does persistence play in value capturing according to the content?
What role does persistence play in value capturing according to the content?
How do informal and formal appropriation measures relate to search breadth in innovative firms?
How do informal and formal appropriation measures relate to search breadth in innovative firms?
What economic concern do pharmaceutical companies face regarding gene ownership?
What economic concern do pharmaceutical companies face regarding gene ownership?
What is the significance of stakeholder management in contrast to shareholder-oriented growth?
What is the significance of stakeholder management in contrast to shareholder-oriented growth?
How can firms strengthen their appropriability regimes, according to Pisano and Teece?
How can firms strengthen their appropriability regimes, according to Pisano and Teece?
What are the primary costs associated with research and development (R&D) for innovators?
What are the primary costs associated with research and development (R&D) for innovators?
What disadvantages do first movers face in the market?
What disadvantages do first movers face in the market?
How can imitation impact the profitability of innovation?
How can imitation impact the profitability of innovation?
Define 'appropriability regimes' in the context of innovation.
Define 'appropriability regimes' in the context of innovation.
What role do patents play in capturing value from innovations?
What role do patents play in capturing value from innovations?
What are some strategies firms can employ to protect their innovations from competitors?
What are some strategies firms can employ to protect their innovations from competitors?
How does the concept of lead-time advantage benefit innovators?
How does the concept of lead-time advantage benefit innovators?
What is the significance of 'humble openness' in the context of collaborative innovation?
What is the significance of 'humble openness' in the context of collaborative innovation?
What characterizes unrelated diversification, and how do conglomerates utilize this approach?
What characterizes unrelated diversification, and how do conglomerates utilize this approach?
Describe the link between intangible assets and the type of diversification a firm may pursue.
Describe the link between intangible assets and the type of diversification a firm may pursue.
How do market power advantages contribute to the rationale behind diversification?
How do market power advantages contribute to the rationale behind diversification?
What is the significance of capital flexibility in diversified firms?
What is the significance of capital flexibility in diversified firms?
What is the expected behavior of managers regarding resource allocation in unrelated diversification?
What is the expected behavior of managers regarding resource allocation in unrelated diversification?
What role does resource dependency play in the firm’s market entry strategy?
What role does resource dependency play in the firm’s market entry strategy?
Explain the concept of 'predatory pricing' in the context of diversification.
Explain the concept of 'predatory pricing' in the context of diversification.
How do head-office efficiencies enhance a diversified firm's capital allocation?
How do head-office efficiencies enhance a diversified firm's capital allocation?
Study Notes
Business Planning & Growth Strategies
- Meta-analysis is used to examine the relationship between business planning and performance.
- Moderating factors that influence the relationship between business planning and performance include entrepreneurial experience, industry characteristics, and firm size.
- Business planning is a value-creating activity, despite potential resource limitations in small firms.
- Uber's internationalization strategy is consistent with the Process Theory of Internationalization.
- Born Globals are firms that internationalize early and rapidly, driven by high technological innovation.
- Resource specificity plays a role in determining the viability of a firm in foreign markets.
- Intellectual Property Rights are used by innovators to capture value from their innovations.
- Factors influencing the choice between Intellectual Property Rights and other appropriation measures include
- Nature of innovation,
- Industry structure, and
- Firm resources and capabilities.
- Stakeholder proponents are criticized for misappropriation and misallocation of resources.
- Neoclassical view considers organizations as a nexus of contracts.
- Developing a normative stakeholder theory involves considering:
- Instrumental stakeholder theory, focusing on maximizing firm value through stakeholder relationships.
- Normative stakeholder theory, emphasizing ethical obligations to stakeholders.
- Stakeholder approach can lead to sustainable competitive advantage through relational view on competition.
- Relational view recognizes two types of relationships:
- Arm's-length relationship characterized by transactional interactions.
- Close relationship grounded in mutual trust and cooperation.
- Reciprocity is an outcome of the stakeholder approach, encompassing three types:
- Direct reciprocity between the firm and a specific stakeholder.
- Indirect reciprocity involving benefits received through another stakeholder.
- Generalized reciprocity based on a sense of social obligation or fairness.
- Close relations with stakeholders are rare and inimitable due to:
- Specificity and complexity of trust built over time.
- Mutual commitment and interdependence.
- Microsoft's diversification strategy is considered effective, positioning it favorably within the mega-tech sector.
- Unrelated diversification can be justified by:
- Synergy, leveraging resources across different industries.
- Risk reduction, diversifying investments across various markets.
- Growth opportunities, expanding into new markets.
- Growth through acquisitions, among different diversification modes, tends to be the most profitable.
- Alexa for Residential is an example of service innovation and exploitation of existing capabilities according to Sawhney et al.
- Capability risks associated with service innovation can be mitigated through:
- Thorough market research to understand customer needs and preferences.
- Prototyping and testing to validate service concepts and functionalities.
- Partnering with experts to leverage relevant expertise and resources.
- Meta-model of servitization by Brax and Visintin is a continuous model emphasizing the gradual evolution of a firm towards a service-oriented business model.
International Diversification and Firm Performance
- International expansion involves costs and benefits over time
- Research aims to understand the relationship between multinationality and firm performance
- Research includes a theoretical framework that integrates asset-based internalization advantages with internationalization costs/benefits
- Research investigates how internationalization motives, such as intangible assets, affect performance implications
- Research uses longitudinal data from 1,489 Japanese firms to test the theoretical model
Theoretical Framework
- Hypothesis 1: Firm performance is influenced by the level of internationalization
- Internationalization costs increase with the level of internationalization
- Internationalization benefits increase with the level of internationalization, but at a diminishing rate over time
- Performance is expected to follow an S-shaped curve
Intangible Assets Moderating Influence
- Hypothesis 2: Intangible assets (IA) positively moderate the exploitation benefits of internationalization
- IA examples: technological know-how, patents, management skills, brands, goodwill
- IA value does not depreciate when used in different international markets
- Firms with more IA generate higher returns from their FDI
Acquisitions and Technological Interdependence
- Sample: 49 information technology hardware acquirers (1988-1998), 207 acquisitions
- Focus on acquisitions of small, established firms in the information technology hardware sector
- Structural Integration: acquisition disappeared from CORPTECH, validated by press releases and primary data
- Technological Interdependence: measured by pre-acquisition patenting activity by both target and acquirer in the same technology classes
- Other measured factors: Target size and age, Target quality, Product market relatedness, Acquirer size, Acquirer acquisition experience, Acquirer R&D intensity
Value Appropriation from Innovation
- Value Appropriation: distribution of benefits from innovation
- Innovation challenges:
- R&D costs primarily borne by the innovator, profits shared with fast followers
- Pioneering disadvantages: first movers are often solutions searching for a market, fast followers benefit from iterative learning
- Imitation at favorable prices
- Lack of complementary assets
Appropriability Regimes
- Complete appropriability: no one else can use or copy the innovation
- Allows innovators to retain a large share of the value creation
- Grants innovators significant bargaining power in the value chain
Bargaining Power in the Supply Chain
- Asset types:
- Proprietary assets: specific to the innovation, difficult to imitate
- Co-specialized assets: complementary assets needed to leverage the innovation
- Dedicated assets: assets specific to a particular transaction, difficult to redeploy
- Value capture depends on the composition and strength of these assets
Formal and Informal Appropriation Mechanisms
- Formal mechanisms: patents, copyrights, trademarks, trade secrets
- Informal mechanisms: lead-time advantages, complexity, bundling of products and services, human resources, reputational assets, switching costs
- Openness and innovativeness influence the use of formal and informal appropriation measures
Incremental vs. Radical Innovation
- Incremental innovation: minor improvements for markets
- Radical innovation: creation of advanced, distant knowledge
Strengthening Appropriability Regimes
- Merck's strategy to preempt gene privatization through public domain data release
- Persistence is crucial for value capturing
Stakeholder vs. Shareholder-Oriented Growth
- Stakeholder management: building relationships with various stakeholders
- Shareholder management: maximizing shareholder value
- Different approaches to resource allocation and organizational goals
Unrelated Diversification
- Diversification into businesses with no strategic fit, value chain relationships, or unifying theme
- Focus on profit-generating ventures regardless of industry or alignment
- Often referred to as conglomerates
Resources and Diversification
- Intangible assets are associated with related diversification
- Ability to raise equity capital does not influence diversification type
- Higher-performing firms support the model better
Diversification-Performance Linkage
- Diversification-performance relationship can be curvilinear
- Linear models rest on assumptions of market power advantages and internal market efficiencies
- Complex, nonlinear relationships are more realistic and better capture empirical evidence
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Description
This quiz explores key concepts in business planning and growth strategies, including the relationship between planning and performance, the impact of moderating factors like firm size, and the internationalization strategies of firms like Uber. Delve into the role of Intellectual Property Rights and the characteristics of Born Globals as you test your knowledge on these critical business topics.
