Alex Miller

Antecedents and Outcomes of Decision Speed in Different Environmental Contexts

This study refined and extended some findings of previous research on decision-making speed. Decision speed was associated with simultaneous consideration of many alternatives, regardless of context. In contrast, the relationship between board experience and decision speed was context-specific. Similarly, decision speed was associated with higher performance only in high-velocity environments.

DIVERSIFICATION AND TOP MANAGEMENT TEAM COMPLEMENTARITY: IS PERFORMANCE IMPROVED BY MERGING SIMILAR OR DISSIMILAR TEAMS?

This study examines the impact of complementary top management teams (defined as differences in functional backgrounds between the acquiring and acquired firm managers) on post-acquisition performance. Based on a sample of 147 acquisitions completed during 1986-88, we find that complementary backgrounds have a positive impact on postacquisition performance in both related and unrelated acquisitions. Another major finding is that complementarity is negatively related to top management team turnover among acquired managers, suggesting that differences in functional backgrounds are more easily integrated into the new organization. Finally, top management team turnover among acquired managers is negatively related to postacquisition performance. These findings highlight the importance of examining complementarity in terms of differences, and reinforce the notion that differences have the potential to create unique value for the organization.

Exploring Determinants of Success in Corporate Ventures

Examines the characteristics of young corporate ventures (CV) that can aid in predicting the financial performance of these ventures. Data used in the analysis were obtained from the PIMS database. Eighty-four ventures that had an average age of eight years were analyzed. The results show that it is important for these ventures to be in high-growth industries. The third of the ventures examined that had the highest growth had a return on investment (ROI) that was three times that of those ventures in the slow growth industries. Further, the analysis shows that involvement of the parent company through shared facilities, customers, or marketing strategy does not impact the success of the CVs. With respect to the variables that a CV has some control over, those that have the greatest impact included market share, position in a growth-share matrix, timing of market entry, scope of market definition, product characteristics, and vertical integration. Given these results, managers of both the parent company and the CV can impact the financial success of the new venture. (SRD)

Using information-processing theory to understand planning/performance relationships in the context of strategy

This study reveals the importance of viewing planning processes within the context of strategic orientation. Information-processing theory is used to examine the differences in planning processes given variable strategy content in the banking industry. Findings suggest that banks implementing different strategies require their planning systems to focus on different kinds and amounts of information. Moreover, the relationship between planning and bank performance is clarified when information requirements of a specific strategy are considered. It appears the strategy moderates the relationship between planning and performance. Copyright

Entry order, market share, and competitive advantage: A study of their relationships in new corporate ventures

Abstract This research explored the extent to which entry order (the decision to enter a market early as a “pioneer,” or to wait and follow) determines not only market share, but other competitive factors such as position and promotion that late entrants might hope to employ to overcome a pioneers advantages. The study analyzed data on 119 nonservice new corporate ventures (consumer and industrial) from the Profit Impact of Marketing Strategy (PIMS) research data base, STR4. Based on a review of the strategic management and marketing literatures, three hypotheses on the effects of entry order were generated and subsequently tested. The first hypothesis states that pioneers achieve higher market shares than followers. Since, a priori, the market share for the pioneer has to be larger than the market share split among later entrants, the issue is the rate at which the early entrants market share will decrease as additional businesses enter, what we term the “degree of lateness effect.” Later entrants have the choice of being an early follower, that is entering the industry soon after the pioneers, or waiting until the industry matures (late entrants). A high degree of lateness effect would indicate that early followers would gain higher market shares than late entrants. An analysis of the data indicated that pioneers have significantly higher market shares than followers and that little degree of lateness effect existed between early and late entrants. The second hypothesis states that pioneers will achieve differentiation advantages (in such areas as product and service quality, promotion, and technological positioning) greater than followers. There is considerable theoretical and empirical evidence that pioneers are able to generate competitive advantages through name recognition, image leadership, the establishment of technical standards which make switching to other products difficult, and superior consumer information advantages due to market lead times. An analysis of the data indicated that pioneers have significant competitive advantages in product/service quality and technology over followers. The one area where pioneers did not have a competitive advantage over followers was in advertising and promotion. The third hypothesis states that followers will achieve cost advantages greater than pioneers. While learning curve theory suggests that pioneers will enjoy cost/price advantages, contrasting arguments can be made that followers can enjoy lower costs by “coattailing” on the pioneers efforts to educate consumers, develop a dominant design, and create an infrastructure to span the gap from raw material suppliers to finished good deliveries. We suggest that because pioneers are likely to have attained differentiation advantages, followers will have only one alternative left: compete on the basis of price and become the lowest-cost producer. An analysis of the data indicates that while followers do appear to have lower prices than pioneers, followers do not have significantly lower cost structures. This result implies a lower level of profitability for a follower strategy. Overall, the results of this study advance the notion that new corporate ventures should enter as pioneers, rather than as followers. Pioneers had higher market shares and stronger competitive positions (higher quality, more differentiated products, and better service) than followers. Followers appear to have few successful competitive options available outside of promotion for gaining market share.

Segmenting the informal venture capital market: Economic, hedonistic, and altruistic investors

Abstract Analysis of data from 214 investors in new or growing ventures yielded three investor types based on the perceived values or benefits they derived from their investments. Reflecting differences in these values, the three were labeled economic, hedonistic, and altruistic. Tests indicated the type were different on several dimensions. Implications for theory-building and application in terms of market segmentation are discussed.

THE BENEFITS OF STRATEGIC HOMOGENEITY AND STRATEGIC HETEROGENEITY: THEORETICAL AND EMPIRICAL EVIDENCE RESOLVING PAST DIFFERENCES

Past research on the relationship between strategic variety and industry profitability has argued for either high homogeneity or high heterogeneity. In this paper, we review the literature on strategic variety and use it to develop hypotheses suggesting that the relationship between strategic variety and average industry profits is curvilinear. Based on our analysis of 61 industries, we find empirical support for our hypotheses, suggesting that very high levels of heterogeneity or homogeneity are more likely associated with industry profitability, while the industries in our sample displaying moderate levels of strategic variety are most likely to suffer from widespread financial losses.

Technological intensity as a predictor vs. a moderator of the competitive responses to new entrants

Anecdotal and conceptual literature suggests that technology is strongly linked to the competitive nature of the marketplace (Fraker, 1984; Porter, 1988). But empirical work has yet to document the precise nature of such a link. There is reason to believe a market’s technological intensity (e.g., levels of RD rather, the market’s technological intensity influences what other variables are predictors of rivalry. In other words, rivalry in high tech and low tech markets will be best described using models containing different variables. The distinction being made holds significant implications for researchers. If technological intensity moderates the factors that predict rivalry rather than simply predicting rivalry directly, it suggests a fundamentally different sort of modeling effort. It suggests that it is inadequate to merely search for main effects, and that

ARE COMPLEMENTARY MANAGEMENT TEAMS SIMILAR OR DIFFERENT? THE IMPACT OF MANAGERS' FUNCTIONAL BACKGROUNDS ON POST-ACQUISITION CORPORATE PERFORMANCE.

This paper examines the impact of functional background difference between the top management teams of the acquiring firm and acquired firm on pos-acquisition corporate performance. While differences in functional backgrounds had a positive impact on performance in related acquisitions, there was no such relationship in unrelated acquisitions.