Barton M. Sharp

Measuring and Testing Industry Effects in Strategic Management Research: An Update, Assessment, and Demonstration

The authors examine how strategy scholars have measured and tested industry effects. They report findings from three studies. First, they replicate the Dess, Ireland, and Hitt (1990) article on industry controls in strategic management research using a new sample of studies published during 2000 to 2009, finding that there has been a decrease in the proportion of articles that do not control for industry effects at all and at the same time noting a significant increase in the number of single-industry studies. Second, they employ a fine-grained content analysis of articles published in the Strategic Management Journal at three different points during the study period to identify the different ways that industry effects have been considered. Findings depict a myriad of highly diverse industry-level measures that researchers have applied. Third, they test the empirical implications of applying different measures of one particular industry characteristic, industry performance. They demonstrate that empirical findings and the interpretation of theoretical models can differ based on how industry effects are incorporated. Recommendations are offered for guiding future research about how to examine industry effects.

Is there a credibility crisis in strategic management research? Evidence on the reproducibility of study findings:

Recent studies report an inability to replicate previously published research, leading some to suggest that scientific knowledge is facing a credibility crisis. In this essay, we provide evidence on whether strategic management research may itself be vulnerable to these concerns. We conducted a study whereby we attempted to reproduce the empirical findings of 88 articles appearing in the Strategic Management Journal using data reported in the articles themselves. About 70% of the studies did not disclose enough data to permit independent tests of reproducibility of their findings. Of those that could be retested, almost one-third reported hypotheses as statistically significant which were no longer so and far more significant results were found to be non-significant in the reproductions than in the opposite direction. Collectively, incomplete reporting practices, disclosure errors, and possible opportunism limit the reproducibility of most studies. Until disclosure standards and requirements change to include more complete reporting and facilitate tests of reproducibility, the strategic management field appears vulnerable to a credibility crisis.

How Far Do Owners Reach Into the Divestiture Process? Blockholders and the Choice Between Spin-Off and Sell-Off

Recently, outside blockholders, external owners that hold 5% or more of their firms’ outstanding common stockholdings, have been pressuring their firms to engage in divestiture activities. This study considers whether the influence of those owners also extends to how the divestiture is implemented, whether through spin-off or sell-off. Tests of an agency theory model using data from 205 divestitures show that the adoption of spin-offs or sell-offs is associated with the amount of outstanding common stockholdings held by outside blockholders and the size of the unit divested. Spin-offs are used more frequently when outside blockholders own more of the divesting firm’s stockholdings and the divested unit is larger, while sell-offs tend to be selected when outside blockholders own less stock and the divested business is smaller. Consistent with agency theory expectations, spin-offs would allow the blockholders to decide whether to hold or sell their interests in the divested firm, a decision they could make in accordance with their individual portfolio risks. Sell-offs of small units could be used to preserve organizational diversity and produce proceeds that would help the divesting firm’s managers pursue their self-interests. Overall, outside blockholders appear to shape how divestitures are done, even if they cannot directly intervene in their firms’ operations.

Executive influence on invention and commercialization: The moderating role of innovation radicalness

Purpose - The purpose of this paper is to expand the understanding of the “front end” of innovation by examining the influence of top executives, who allocate the resources and cultivate the culture in which inventions are born, on the innovation process. Design/methodology/approach - This paper suggests that the effect of executives on innovation can be better understood by explicitly separating innovation into the component processes of invention and commercialization. This allows us to consider how executive characteristics might have a different effect on technology development outcomes than they do on the subsequent transformation of those technologies into new products. The theory is tested on a sample of firms from the biomedical device industry. Findings - The findings indicate that top management team (TMT) age and tenure have no effect on the type of technologies a firm develops (radical vs incremental) but do significantly affect the efficiency with which new technologies are turned into new products in some contexts. TMT heterogeneity affects both the type of technologies developed in the firm and also their transformation to new products. Interestingly, the effect of executives on commercialization depends on the type of underlying technologies which the firm has developed. Originality/value - This paper contributes to the literatures on TMTs and innovation by offering a more granular explanation of how executives differentially impact the disaggregated stages of the innovation process, and thus also contributes to knowledge of the long-term innovation performance implications of executive leadership.