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Library of Congress Cataloging-in-Publication Data
Names: Duhaime, Irene M., editor. | Hitt, Michael A., editor. | Lyles, Marjorie A., editor.
Title: Strategic management : state of the field and its future / editors, Irene M. Duhaime, Michael A. Hitt, Marjorie A. Lyles.
Description: New York, NY : Oxford University Press, [2021] | Includes bibliographical references and index. |
Identifiers: LCCN 2021008277 (print) | LCCN 2021008278 (ebook) | ISBN 9780190090890 (paperback) | ISBN 9780190090883 (hardback) | ISBN 9780190090913 (epub) | ISBN 9780190090920
LC record available at https://lccn.loc.gov/2021008277
LC ebook record available at https://lccn.loc.gov/2021008278
DOI: 10.1093/oso/9780190090883.001.0001
1 3 5 7 9 8 6 4 2
Paperback printed by LSC Communications, United States of America
Hardback printed by Bridgeport National Bindery, Inc., United States of America
To Walter for your constant love and support. To my wonderful family, lifelong friends, and outstanding colleagues in the field of strategic management. To my doctoral faculty and fellow graduate students at the University of Pittsburgh, especially John H. Grant, for providing a learning environment both challenging and nurturing for the start of an academic career.
I.M.D.
To my professors and mentors during my graduate education at the Leeds School of Business, University of Colorado (PhD), and the Rawls College of Business, Texas Tech University (MBA), who prepared me for my career as an academic researcher and teacher. I was honored to receive a Distinguished Alumni Award from both institutions in recent years.
M.A.H.
To my fellow co-editors and chapter authors for their lifelong dedication to encouraging innovative and thoughtful work that has allowed the field of strategic management and SMS to flourish. Also to my professors and fellow doctoral students at the University of Pittsburgh for their love and patience with me— especially Ian Mitroff. I congratulate them for encouraging a young single mom to get a PhD in Business when other schools suggested she would be a great secretary. To my faculty at Carnegie-Mellon University who provided a basis for my research on organizational learning.
M.A.L.
Irene M. Duhaime, Michael A. Hitt, and Marjorie A. Lyles
PART 1: EVOLUTION OF STRATEGIC MANAGEMENT RESEARCH
Robert E. Hoskisson and Jeffrey S. Harrison, Leads
1.0.
Robert E. Hoskisson and Jeffrey S.
Henrich
Melissa E. Graebner
PART 2: CORPORATE STRATEGY
2.0.
2.1.
2.2.
R. Duane Ireland and Michael C. Withers
Emilie R.
PART 3: STRATEGIC ENTREPRENEURSHIP AND TECHNOLOGY
Kathleen M. Eisenhardt, Lead
3.0. Strategy in Nascent Markets and Entrepreneurial Firms 169
Kathleen M. Eisenhardt
3.1. Industry Emergence: A Markets and Enterprise Perspective 187
Rajshree Agarwal and Seojin Kim
3.2. Technology Entrepreneurship, Technology Strategy, and Uncertainty 205
Nathan R. Furr
PART 4: COMPETITIVE AND COOPERATIVE STRATEGY
John Child, Rodolphe Durand, and Dovev Lavie, Leads
5.1. MNCs and Cross-Border Strategic Management 301 D. Eleanor Westney
5.2. Emerging Economies: The Impact of Context on Global Strategic Management 319
Peter J. Williamson and José F.P. Santos
PART 6: STRATEGIC LEADERSHIP
Donald C. Hambrick and Adam J. Wowak, Leads
6.0. Strategic Leadership 337
Donald C. Hambrick and Adam J. Wowak
6.1. Top Management Teams 355
Margarethe F. Wiersema and Joshua S. Hernsberger
6.2. CEO Succession 369
Yan (Anthea) Zhang
PART 7: GOVERNANCE AND BOARDS OF DIRECTORS
Ruth V. Aguilera, Lead
7.0. Corporate Governance 389
Ruth V. Aguilera
7.1. Boards of Directors and Strategic Management in Public Firms and New Ventures 411
James D. Westphal and Sam Garg
7.2. Ownership and Governance 427
Brian Connelly
PART 8: KNOWLEDGE AND INNOVATION
Henk W. Volberda, Tatjana Schneidmuller, and Taghi Zadeh, Leads
8.0. Knowledge and Innovation: From Path Dependency toward Managerial Agency 445
Henk W. Volberda, Tatjana Schneidmuller, and Taghi Zadeh
8.1. Organizational Learning 467
Mary Crossan, Dusya Vera, and Seemantini Pathak
8.2. Management of Innovation and Knowledge Sharing
Michael Howard
PART 9: STRATEGY PROCESSES AND PRACTICES
Robert A. Burgelman, Steven W. Floyd, Tomi Laamanen, Saku Mantere, Eero Vaara, and Richard Whittington, Leads
9.0. Strategy Processes and Practices 503
Robert A. Burgelman, Steven W. Floyd, Tomi Laamanen, Saku Mantere, Eero Vaara, and Richard Whittington
9.1. Strategic Decision-Making and Organizational Actors 525 Rhonda K. Reger and Michael D. Pfarrer
9.2. Strategic Change and Renewal
Quy N. Huy and Daniel Z. Mack
PART 10: MICROFOUNDATIONS AND BEHAVIORAL STRATEGY
Nicolai J. Foss, Lead
10.0. Microfoundations in Strategy: Content, Current Status, and Future Prospects 559
Nicolai J. Foss
10.1. Strategic Human Capital: Fit for the Future 579
Russell Coff and Marketa Rickley
10.2. Extending the Microfoundations of Capability Development and Utilization: The Role of Agentic Technology and Identity-Based Community 595
David G. Sirmon
PART 11: CRITICAL FACTORS AFFECTING STRATEGY IN THE FUTURE
Phanish Puranam, Lead
11.0. Critical Factors Affecting Strategy in the Future
Phanish Puranam
11.1. Artificial Intelligence in Strategizing: Prospects and Challenges 625
Georg von Krogh, Shiko M. Ben-Menahem, and Yash Raj Shrestha
11.2. Sustainability Strategy 647
Michael L. Barnett, Irene Henriques, and Bryan W. Husted
11.3. What Would the Field of Strategic Management Look Like If It Took the Stakeholder Perspective Seriously?
Jay B. Barney and Alison Mackey
11.4. Business Model Innovation Strategy
Raphael Amit and Christoph Zott
List of Contributors
Agarwal, Rajshree University of Maryland, USA
Aguilera, Ruth V. Northeastern University, USA
Amit, Raphael University of Pennsylvania, USA
Barnett, Michael L. Rutgers University, USA
Barney, Jay B. University of Utah, USA
Ben-Menahem, Shiko M. ETH Zurich, Switzerland
Burgelman, Robert A. Stanford University, USA
Chang, Sea-Jin National University of Singapore, Singapore
Child, John University of Birmingham, UK
Coff, Russell University of Wisconsin, USA
Connelly, Brian Auburn University, USA
Crossan, Mary University of Western Ontario, Canada
Cuervo-Cazurra, Alvaro Northeastern University, USA
Duhaime, Irene M. Georgia State University, USA
Durand, Rodolphe HEC Paris, France
Eisenhardt, Kathleen M. Stanford University, USA
Feldman, Emilie R. University of Pennsylvania, USA
Floyd, Steven W. University of Massachusetts, USA
Foss, Nicolai J. Copenhagen Business School, Denmark
Furr, Nathan R. INSEAD, France
Garg, Sam The Hong Kong University of Science and Technology, Hong Kong
Graebner, Melissa E. University of Illinois, USA
Greve, Henrich R. INSEAD, Singapore
Hambrick, Donald C. Pennsylvania State University, USA
Harrison, Jeffrey S. University of Richmond, USA
Helfat, Constance E. Dartmouth College, USA
Henriques, Irene York University, Canada
List of Contributors
Hernsberger, Joshua S. University of California, Irvine, USA
Hitt, Michael A. Texas A&M University, USA
Hoskisson, Robert E. Rice University, USA
Howard, Michael Texas A&M University, USA
Husted, Bryan W. Technologico de Monterrey, Mexico
Huy, Quy N. INSEAD, Singapore
Ireland, R. Duane Texas A&M University, USA
Kim, Seojin University of Maryland, USA
Laamanen, Tomi University of St. Gallen, Switzerland
Lavie, Dovev Bocconi University, Italy
Lyles, Marjorie A. Florida International University, USA
Mack, Daniel Z. Singapore Management University, Singapore
Mackey, Alison Clarkson University, USA
Mantere, Saku McGill University, Canada
Pathak, Seemantini University of Missouri–St. Louis, USA
Pfarrer, Michael D. University of Georgia, USA
Puranam, Phanish INSEAD, Singapore
Reger, Rhonda K. University of North Texas, USA
Rickley, Marketa University of North Carolina–Greensboro, USA
Santos, José F.P. INSEAD, France
Schneidmuller, Tatjana LUISS Business School, Italy
Shaver, J. Myles University of Minnesota, USA
Shrestha, Yash Raj ETH Zurich, Switzerland
Sirmon, David G. University of Washington, USA
Tallman, Stephen University of Richmond, USA
Vaara, Eero University of Oxford, UK
Vera, Dusya University of Houston, USA
Volberda, Henk W. University of Amsterdam, The Netherlands
von Krogh, Georg ETH Zurich, Switzerland
Westney, D. Eleanor Massachusetts Institute of Technology, USA, and York University, Canada
Westphal, James D. University of Michigan, USA
Whittington, Richard University of Oxford, UK
Wiersema, Margarethe F. University of California, Irvine, USA
Williamson, Peter J. University of Cambridge, UK
Withers, Michael C. Texas A&M University, USA
Wowak, Adam J. University of Notre Dame, USA
Zadeh, Taghi University of Amsterdam, The Netherlands
Zhang, Yan (Anthea) Rice University, USA
Zott, Christoph IESE Business School, Spain
Editor Bios
Irene M. Duhaime is Professor Emeritus of the Robinson College of Business at Georgia State University, where she held the Robinson Distinguished Leadership Professorship and served as Senior Associate Dean. She received her PhD from the University of Pittsburgh. Her research has been published in the leading journals of the field. She has held leadership positions in professional associations, including the Strategic Management Society’s Board of Directors, and led its 25th Anniversary Conference, first SMS Doctoral Workshop, and Entrepreneurship and Strategy Interest Group. She has served the Academy of Management as Chair of the Career Achievement Awards Committee and the Business Policy and Strategy Division, and as panelist and faculty resource on consortia and other developmental activities for doctoral students and junior faculty. She is deeply committed to the Ph.D. Project as a doctoral student mentor and frequent presenter at their annual conference. She was elected as a member of the SMS Fellows in 2010 and served as the elected Dean of the SMS Fellows group for 2017 and 2018. She received the Trailblazer Award from the Management Doctoral Student Association of the Ph.D. Project in 2015, and the Distinguished Service Award of the Academy of Management in 2014 and Strategic Management Society in 2017.
Michael A. Hitt is a University Distinguished Professor Emeritus at Texas A&M University. He received his PhD from the University of Colorado. His work has been published in many of the top scholarly journals, and the Times Higher Education listed him among the top scholars in economics, finance, and management. An article in the Academy of Management Perspectives lists him as one of the top two management scholars in terms of the combined impact of his work both inside (i.e., citations in scholarly journals) and outside of academia. He is a former editor of the Academy of Management Journal, a former co-editor of the Strategic Entrepreneurship Journal, and the current editor-in-chief of the Oxford Research Encyclopedia of Business and Management. He is a Fellow in the Academy of Management, the Strategic Management Society, and the Academy of International Business. He is a former President of both the Academy of Management and the Strategic Management Society. He has received honorary doctorates from the Universidad Carlos III de Madrid and Jönköping University. He has received the Irwin Outstanding Educator Award from the BPS Division and the Distinguished Service Award and the Distinguished Educator Award from the Academy of Management. He has been listed as a Highly Cited Researcher in the Web of Science (top 2 percent in citations) each year since 2014.
Marjorie A. Lyles is International Business Distinguished Research Fellow at the Florida International College of Business. She graduated from Carnegie-Mellon University and received her PhD from the University of Pittsburgh. She is Past President of the Strategic Management Society. She’s an Emeritus Professor of Global Strategic Management at Indiana University Kelley School of Business and Adjunct Professor IU Lilly Family School of Philanthropy. She was given the John W. Ryan Award for exceptional contributions to IU’s international programs. She received an Honorary Doctorate from Copenhagen Business School. She is a Fellow of both SMS and the Academy of International Business. Her teaching and research focused on emerging economies since the mid-1980s. She did projects, teaching, and work in China since 1985 when she was a consultant with the U.S. Department of Commerce in the Dalian programs. Her research includes mixed methods, which required her to seek research grants and includes two from National Science Foundation. Her work has helped the development of organizational learning and the knowledge-based perspectives. Her research has appeared in top journals such as SMJ, ASQ, JIBS, AMR, AMJ, OSci, and JMS. Lyles has also worked with governmental, nonprofit, and corporate entities. She has consulted with the USIS, World Bank, and UNDP.
INTRODUCTION
Irene M. Duhaime, Michael A. Hitt, and Marjorie A. Lyles
In 1977, a conference titled “Business Policy and Planning Research: The State-ofthe-Art” was held at and hosted by the University of Pittsburgh, followed in 1979 by the publication of Schendel and Hofer’s edited book, Strategic Management: A New View of Business Policy and Planning. That conference and the publication of the associated Schendel-Hofer book are widely viewed as landmark events that were turning points from what was referred to as “Business Policy and Planning,” largely viewed in academia as a teaching field and area of management practice (Whittington, 2019), to the research-based discipline of Strategic Management we know today.
The Schendel-Hofer book, published by Little, Brown and Company, captured the field of Strategic Management as it existed in 1979, spanning the major areas envisioned as the scope of “Strategic Management.” With primary contributions and commentaries enriched by the discussions and debates of the nearly 100 academics, business executives and consultants attending the conference, the book addressed what were then seen as the major issues encompassed by strategic management, and how research on those issues could develop the field as a scholarly discipline as well as enhance teaching in the field. It laid out a fairly comprehensive and well-organized representation of what was then known in the field and the major debates on the issues in the field. It concluded with an extensive set of research questions on each of those areas, providing a rich research agenda for then-current and future researchers in the fledgling field of Strategic Management.
Following the conference and book publication, a number of developments led to a flourishing field. The founding in 1980–1981 of the Strategic Management Journal (SMJ) and the Strategic Management Society (SMS), both through the efforts of Dan Schendel, provided strategic management researchers opportunities for presentation, discussion, and broad dissemination of their research. These in turn led to the rapid growth in numbers of doctoral programs in strategic management, faculty positions devoted to the discipline, and theoretical and empirical research to advance the field. The Schendel-Hofer book had significant impact on the development of the field of Strategic Management because it was widely used in doctoral seminars, influencing the research agendas of generations of strategic management scholars. The high impact of that edited book was attributable in large part to (1) the breadth of the book’s coverage of the field as it was known at that time, and (2) the reputations, visibility, and quality of the editors and of the scholars who authored the sections and subsections of the book.
Over the last four decades, strategic management research has advanced significantly in a number of important areas, resulting in a field that is richer and more developed but is also more fine-grained in its focus. At the same time, the growing breadth of the field and the increasingly specialized nature of research can result in fragmentation, thus slowing the progress of critically important research contributions by limiting intradisciplinary research conversations and the identification of exciting and promising research directions.
After many years of development, there is a need to reassess the field of Strategic Management: to examine the current state of the field and to consider its future. As such, the need also arises to define the content and boundaries of the field. There are limited alternatives for obtaining a comprehensive overview of the field as it exists today and to identify promising directions for the field’s further development. This volume assesses progress of the field, the content and boundaries of the field after more than 40 years of research, and the areas with the most promise for fruitful research to advance our knowledge in the future. Our purpose is to help scholars in the field, new and more established, by integrating the significant knowledge that has been created and by providing a base for research in the Strategic Management field over the coming decades.
In this book we address the major streams of research and major research approaches that have helped to develop the field to its current state. But perhaps the book’s highest potential value is the extensive and insightful discussion of promising future opportunities and research agendas. Many chapter authors have devoted nearly half of their space to the discussion of promising pathways for future research, and have identified numerous research questions that, when addressed, will add significant value to research knowledge and to the strategic management of firms. We believe that the discussion of historical roots and the analysis of the field’s development to its current state will be important resources for doctoral students and for young scholars whose careers began in recent decades without benefit of an up-to-date resource like this book, and that the extensive discussion of future research opportunities will benefit all. Another extremely helpful aspect of the book is that the chapters have extensive reference lists that can help the readers find the major past writings on the topics. In its examination of the future of strategic management, the book offers the perspectives of scholars who are widely regarded as leaders in the field. We hope that readers will be assisted in theory building and in identification and pursuit of new areas of exploration.
The book has 11 Parts, along with this introductory chapter by the editors. Each of the book’s Parts covers a major topic area and is led by one or more prominent scholars whose research is specialized in the area on which the Part focuses. Those scholars have provided lead chapters on the primary research focus for their Parts of the book. In those lead chapters, the authors present an overview of that research (Part), including major theoretical perspectives present in the work to date, and commentary on the future of research in that area, identifying new directions as well as exciting interdisciplinary opportunities. Each Part also includes chapters on more
focused topics, representing some of the major streams of research related to the primary foci in that Part. The chapters are authored by a mix of well-established scholars and scholars who are rising stars whose work is already well known and respected in their area.
The model for this book has been designed to consider the current breadth and depth of the field, both significantly greater than when the Schendel-Hofer book was published in 1979. In 1979, the research agenda being outlined and research questions suggested had the objective of defining Strategic Management as a research discipline and establishing its structure as a field. By contrast, this book examines theoretical perspectives and research methods for a field of far greater breadth and depth, with the challenge of assessing what possible avenues are likely most promising for research efforts in the coming decades. We believe that the works contributed by leading scholars can provide a blueprint for the future, offering significant value for readers seeking to make meaningful and valuable contributions to strategic management research and to have important and positive impacts on the field. By provoking creative thinking about productive future research agendas, these chapters are thus likely to have a major impact on the scholarly field of Strategic Management.
Overview of the Book
Evolution of strategic management research: theory and methods
In Part 1, the book begins with an examination of the major theoretical streams and research methods used in strategic management research. In their lead chapter, Hoskisson and Harrison emphasize the importance of conversation in strategic management—especially across disciplines, because the field draws on multiple disciplines. They argue that such interaction has advanced research in the field by moving from the broader “swings of the pendulum” between an internal firm focus and a focus on the external environment of the firm observed a few decades ago (Hoskisson et al., 1999) to narrower swings of the pendulum by applying external perspectives to internal questions, and vice versa. They argue that research integrating multiple theoretical perspectives (i.e., at the middle of the pendulum) is most promising for strategic problem solving and to advance knowledge in the field. Their overview is followed by two chapters presenting the evolution of major theoretical perspectives and future theoretical foci in strategic management research and two chapters addressing a variety of important research methods (quantitative and qualitative) that have been used in strategy research and/or are promising for future research development.
In his chapter on organizational perspectives, Greve discusses institutional theory, network theory, learning theory, and resource dependence theory in relation to
individuals, groups, and societal influences on organizations. He argues there is significant value in theories that recognize how organizational processes and human judgment affect organizational decisions. In her chapter on the economic perspectives, Helfat presents economic foci in two categories: (1) “homegrown” theories (such as the resource-based view of the firm [RBV] and ordinary and dynamic capabilities) that rely on economic logic but have been developed largely within strategic management and (2) theories (such as economies of scope, expanded to intertemporal economies of scope, and transaction cost economics) that originated in the economics field but have been developed in new directions within strategic management research. She identifies interesting directions for future research, in particular questions involving interactions between theories and new perspectives on the relationship of the firm to its external environment.
The chapter by Shaver focuses on quantitative research methods and proposes practices to advance the rigor and impact of future such research. He emphasizes the importance of rigorous, evidence-based research to aid decision-makers, and of endogeneity and causal identification. Yet he recognizes the tension between designing research for causal identification and research that examines meaningful strategy questions, and recommends pathways for researchers’ pursuit of these oftenconflicting research objectives. Graebner’s chapter reviews a variety of qualitative research methods used in strategic management research and those with promise for future research. She emphasizes the high value of qualitative research methods for exploring and understanding novel phenomena, particularly through the richness and nuance of qualitative data. She reviews qualitative research approaches that are well established in the strategy literature, approaches that are growing in use, and approaches that are used rarely but hold promise. Her discussion of promising future uses of qualitative research methods includes the study of strategy during crisis and examination of strategic decision-making in the era of machine learning and artificial intelligence.
Corporate strategy
Part 2 focuses on the strategic choices firms make about the breadth and scope of their businesses, resource allocation across those businesses, and management across those businesses. In his lead chapter, Chang identifies major dimensions of corporate strategy, including diversification, mergers and acquisitions, vertical integration, divestitures and spin-offs, and internal control systems to share resources across business boundaries. He highlights research focused on the potential positive effects of synergy and work exploring the internal coordination costs of sharing, adapting, and transferring resources (Helfat and Eisenhardt, 2004) to creating that synergy. Chang ends his chapter with discussion of the need for research in diverse cultural and institutional environments, such as emerging markets and family ownership; the business group structure; and the growing influence of tech giants and platform owners.
The chapter by Ireland and Withers explains the importance and different attributes of acquisitive growth as a key element of firms’ corporate strategies. The authors explore research on factors influencing firm growth, including managerial capabilities, corporate governance, and firms’ environments, as well as research on outcomes of acquisitive growth and issues in managing such growth. Ireland and Withers offer suggestions for promising future research on resource orchestration to drive corporate growth and on the role of acquisitive growth during crisis as a means to drive economic recovery. In her chapter, Feldman reviews research on the contractionary strategies firms engage in as they restructure their corporate portfolios through divestitures, identifying four main categories of such research: drivers of divestiture decision-making, actors that undertake and influence those decisions, interdependencies between divestitures and other modes of corporate strategy, and the implications of divestiture for divested units. She calls for needed research on these contractionary actions, pointing to promising areas such as modularity in organizational design, how divesting firms reconfigure organizational resources and processes after divestiture, and the role of interorganizational knowledge and learning spillovers within the context of divestitures. Feldman notes that divestitures are increasingly used in practice as value-adding strategic tools rather than merely as solutions to corporate problems, and she urges scholars to view them as part of holistic corporate strategies over time rather than as discrete events (Feldman, 2020).
Strategic entrepreneurship and technology
In her lead chapter for Part 3, Eisenhardt describes strategic entrepreneurship as emphasizing “how technologies, industries, and firms emerge, and why some firms (but also technologies and industries) succeed while others do not.” Her chapter focuses on strategy in nascent markets, which she characterizes as ambiguous, uncertain, and fast-paced—all of which can pose significant challenges. Eisenhardt argues that in such an environment, a focus on strategy formation is critical; thus she takes an organizational view that emphasizes “thinking” and “doing.” She notes that current research has advanced from an emphasis on founding teams to one on managerial cognition and from organizational processes to learning processes. Among the many questions to be addressed in the future, she identifies promising avenues for research in “shaping strategies” that attempt to restructure industry architectures and in exploration of different types of nascent markets, such as ecosystems, platforms, and markets with strong institutional forces, such as energy and defense as well as the medical profession and universities.
In their chapter, Agarwal and Kim explore research on industry emergence, emphasizing insights from research on industry evolution as well as from research on founding and top management teams. They explain the developmental stages of nascent industries and research on transition among those stages, combining insights drawn from those research streams with those from work on founding individuals
and teams to identify challenging and valuable puzzles they recommend as opportunities for future research contributions. Those puzzles include a shift in focus from human and relational capital to human enterprise, the role of product champions and intrepreneurs in the evolution of firms and industries, the effect of institutional constraints on human enterprise and the markets for talent, and how industries emerge in developing-country contexts. Furr addresses technology entrepreneurship, calling for increased focus on technology strategy as the use of technology to create and capture value. His chapter argues that the most powerful firms today are those with technology positions rather than our more common focus on firms’ industry and resource positions. Furr examines contributions to our understanding of technology entrepreneurship from the literatures on technology management, industry evolution, entrepreneurship, and strategy in dynamic environments. He calls for attention to the innovation and commercialization process, using a more behavioral lens and analyzing how entrepreneurs learn and adapt in a new market. He ends his chapter with discussions of the need for a technology strategy view and a theory of uncertainty in relation to technology entrepreneurship.
Competitive and cooperative strategy
Part 4 addresses competitive and cooperative strategy, long recognized as core topics of importance in strategic management research. In their lead chapter, Child, Durand, and Lavie define competitive and cooperative strategies, as well as coopetitive strategy, in which firms simultaneously compete and cooperate with each other. The authors identify four new contexts for research on competitive and cooperative strategies: the rise of emerging economies, increasing protectionism and political intervention stemming from the dominance of politics over economics, technological disruption, and increasing social demands on business. Child et al. explore the implications of these new contexts for the study and understanding of competitive and cooperative strategy.
Durand addresses competitive advantage in his chapter, reviewing research that examines links between competitive advantage and firm performance. He identifies three factors that explain firms’ ability to earn and maintain a competitive advantage: barriers to the mobility of their productive factors, resource heterogeneity, and differences in managerial analytical capabilities. He argues that understanding of the important relationship between competitive advantage and firm performance can be enhanced by future research that better defines both industry and performance and utilizes new research methods from his many suggestions. Lavie’s chapter addresses the roles of alliances and networks in cooperative and coopetitive strategy. He explores existing work and suggests future research opportunities regarding key dimensions of alliances and networks, including motivation for alliance formation, mechanisms for alliance partner relations, value creation and capture in alliances, managing alliance portfolios, partnering experience and learning in alliances, and
multiparty alliances and ecosystems, as well as structural embeddedness in networks. Among the many questions to be addressed in the future are the microfoundations of alliance relationships, failure of relational mechanisms, and the trade-off between routinization and flexibility in alliance management.
Global strategy
Global strategy is a topic, like strategic entrepreneurship, that has such importance that the Strategic Management Society dedicated a journal to it. Tallman and CuervoCazurra (founding and current coeditors, respectively, of the Global Strategy Journal) provide an overview of global strategy, organized around firms’ decisions regarding expansion (whether to internationalize, country selection, and entry mode selection), management of foreign activities (how to structure, coordinate, and control operations for efficiency), and capitalizing on the advantage(s) sought (building scale, learning, and arbitrage across activities and operations). The authors suggest that fruitful future research will address changes in the context of international firms, including the context of countries (globalization, emerging markets, and government activism), industries (digitalization, big data, and global value chains), and companies (global expertise, remote collaboration, and the gig economy). Tallman and Cuervo-Cazurra end their chapter with a call to address grand global changes in the environment as the ultimate measure of success of the field.
Westney’s chapter explains key aspects of multinational corporations (MNCs), companies whose operations are distributed across countries, and demonstrates their importance in global strategy and cross-border management. Westney describes the strategic challenge for MNCs as “where to do what and how.” She explains the considerations of global integration and local responsiveness (GI/LR) through the GI/LR framework and explores MNC capabilities for innovation and cross-border learning. She suggests four areas as important for future research: the changing balance of global integration and local responsiveness, management of regional strategies, cross-border learning in the face of increasing resistance to globalization, and MNC’s responses to global challenges such as climate change. Williamson and Santos address the opportunities and challenges presented by emerging economies, for the leading domestic firms in those economies and multinationals evolving from those economies, as well as for the strategies of multinationals from developed economies. Williamson and Santos characterize emerging economies as those for which novel interactions between market and nonmarket forces are widespread across the economy, while the economy is undergoing continued transformation. This results in a dynamic business environment as well as an opportunity-rich yet also challenging research environment. Williamson and Santos identified many interesting avenues for research, concluding their chapter with discussion of opportunities with suggestions for topics, specific questions, and research methods that hold promise for future research value.
Strategic leadership
Strategic leadership is a core construct in the field of Strategic Management. In their lead chapter, Hambrick and Wowak focus on three key topics in strategic leadership: executive attributes (including executive personality and experiences as well as CEO tenure), managerial discretion (to meaningfully influence firm strategy and thus performance), and executive compensation (including implications of pay dispersion among members of the top management team [TMT]). The authors suggest future research that pairs or reconciles managerial discretion and managerial attributions (the extent to which observers such as stakeholders believe managers matter). Additional suggestions for fruitful future research include examination of the relationships between CEOs and their top management teams.
Wiersema and Hernsberger’s chapter examines the roles of top management teams and their influence in strategic decision-making in firms. They discuss TMT composition—demographic attributes, relative homogeneity or heterogeneity, and TMT structure—and research examining relationships between these factors and firm outcomes. Limitations of past research and research challenges for scholars are identified and some solutions are proposed. Promising avenues for future research are also suggested, including work drawing on sociocognitive theories as well as exploration of influence within the TMT and of the relationship between the CEO and the TMT. In her chapter, Zhang focuses on the other critical player in strategic leadership of firms, the CEO, specifically on a topic of significant impact for firms and for the CEOs themselves; CEO succession. She explains the different types of CEO candidates and decision-making by boards of directors about CEO succession. Zhang notes recent developments in this stream of research, including more fine-grained categorization of the CEO succession event and its related processes, the issue of limited information for board decisions, the roles of board evaluation and social approval in CEO succession, and limited representation of female and ethnic-minority CEOs. Among the many questions to be addressed in the future, she suggests that attention be given to the postsuccession transition process, incentives for CEOs to leave office, and the postsuccession careers of departed CEOs.
Governance and Boards of Directors
Governance and Boards in organizations, the topic of Part 7, bears some relationship to the topics of strategic leadership in Part 6. In her lead chapter, Aguilera describes corporate governance as “choices on who makes decisions in organizations (who governs), how those decision-makers are monitored and rewarded, and how the created value is appropriated and distributed among the different interest groups” (i.e., stakeholders such as shareholders, employees, customers, and society more broadly). She reviews corporate governance research, with particular attention to areas that
have received the most attention in recent years, such as shareholder engagement and international corporate governance (including business groups and comparative corporate governance), as well as internal and external corporate governance mechanisms. Additionally, she identifies three themes for future research: the purpose of the firm in light of the ongoing debate on shareholder versus stakeholder maximization; increasing demands for corporate social responsibility accountability through the UN Global Sustainability Goals and the Environmental, Social, and Governance (ESG) ratings; and the corporate governance of artificial intelligence (AI) in organizations.
Westphal and Garg’s chapter examines the role of Boards of Directors, with attention to corporate Boards as well as the Boards of new ventures. The authors report that their comparison of recent work on Boards in those different contexts showed a “common emphasis on behavioral processes in the boardroom, in dyadic CEOboard interactions . . . and in relations between directors and external constituents.” They recommend that future research link these behavioral processes to issues facing corporations and new ventures, including Board diversity, the role of technology and innovation in strategic decision-making and investor communication, and differences across cultures and institutions. In his chapter, Connelly reviews the roles of different types of owners (including institutional investors, inside owners, blockholders, and state ownership) in the governance of the firm, describing ways in which those different types of owners affect firm-level outcomes. He identifies and discusses the status of five unresolved debates among governance scholars: the competitive influence of common shareholding, the costs and benefits of excess control, the consequences of share repurchases, the threat of short sellers, and the valuecreating prospects of shareholder-nominated directors. Each of these debates offer rich opportunities for future work contributing to these research conversations.
Knowledge and innovation
Knowledge and innovation is an area of growing importance in the Strategic Management field. Volberda, Schneidmuller, and Zadeh’s lead chapter for this Part suggests that trends in knowledge and innovation research demonstrate that innovation has been moving from an earlier path-dependent (and thus incremental and passive) view toward a more active managerial agency of innovation view. Their citation analysis of Cohen and Levinthal’s (1990) paper on absorptive capacity, a key concept in knowledge and innovation, finds subsequent work to be clustered around five concepts: international knowledge transfer, organizational capabilities and learning, networks and ties, regional clusters, and open innovation. Volberda et al. observe that research on knowledge and innovation has been changing from a more macro view to one that integrates microfoundations and from a focus only on managerial cognition to include the role of managerial attention. The authors note that more research is needed in four areas critical to the advancement of knowledge and innovation: diverse audiences (as a source of legitimacy but also as a source of knowledge
