Derek Lehmberg

The GE Paradox: Competitive Advantage Through Fungible Non-Firm-Specific Investment

This study addresses two questions: (a) Does General Electric have an exceptional ability to develop non-firm-specific general management talent, and (b) how can GE’s investment into non-firm-specific, nonproprietary managerial capabilities be explained theoretically? The authors’ analysis provides evidence that GE has an extraordinary managerial development capability. Their theory suggests that GE’s managerial development process is valuable, rare, inimitable, and organized to be exploited, and therefore, a source of sustained competitive advantage. This process produces a flow of managers with the potential to be sources of temporary competitive advantage for GE. Outward flow of executive talent is a required byproduct of the process.

Employee Primacy and Corporate Slogans in Japanese and American Firms’ Communication in Times of Crisis

Given the frequency and severity of crises faced by organizations, the question of how managers can best lead their organizations through times of crisis is important. Communication plays a particularly critical role in such situations. We perform a multistage content analysis study using letters to shareholders appearing in publicly traded Japanese and U.S. firms during the economic downturn following Lehman Brothers bankruptcy in 2008. In our initial exploratory study, we identify employee primacy and the existence of corporate slogans as relevant constructs. We then develop hypotheses and test them in a larger sample confirmatory study. We find that firms concurrently exhibiting both employee primacy and corporate slogans in their communication outperformed their peers. To aid in interpreting our results, we also provided three examples of qualitative descriptions of such firms. Our Japanese and U.S. sample increases the generalizability of our results.

Do Japanese electronics firms still follow traditional vertical integration strategies? Evidence from the liquid crystal display industry

In the past, Japanese electronics firms have been known for following vertical integration strategies. Such strategies are consistent with Japanese managerial preferences, traditional relationships, and institutions in Japan. However, changes in the technological and competitive environment have resulted in increasing vertical specialization in the electronics industry outside of Japan. This paper examines whether and to what extent Japanese information technology and consumer electronics firms involved in active matrix Liquid Crystal Display production implemented and maintained integration strategies. While focusing on one industry, this paper aims to shed further light on changing attitudes and practices in Japanese management relating to strategy and internationalization.

The Impact of Power Distance and Uncertainty Avoidance on Real Options Exercise: Potential for Suboptimal Time Delays and Value Destruction

ABSTRACT Real options (RO) valuation has been promoted as a way to evaluate investment opportunities and make investment decisions that takes into account the value of managerial flexibility in the face of uncertainty. Although RO enjoys a substantial body of literature considering its application and suitability in different situations, the impact of national culture on the application of RO has received little attention. Values embedded in national culture affect the behavior of managers. In particular, these values play a role in how managers frame information, communicate, and make decisions, directly and indirectly affecting behavior through cultural layers such as organizational culture. National culture, therefore, can systematically affect the application of RO, potentially leading to suboptimal outcomes. In this article, we hypothesize how 2 particularly relevant dimensions of culture, power distance and uncertainty avoidance, affect RO exercise, and estimate the magnitude suboptimality of these effects using a model we develop for the case of a put option. Our estimates suggest RO may not always be a superior valuation approach to net present value for national cultures with certain characteristics.