Jaideep Anand

Agency and Institutions: National Divergences in Diversification Behavior

A fundamental theme in comparative crosscountry research is the convergence of organizational forms in diverse national settings. In this paper we examine a special instance of this theme: the pattern of diversification across industries. A common argument is that technical and market forces compel firms to adopt ?coherent? strategies of diversification. This thesis implies that there should be a convergence in the patterns of interindustry diversification in all market-based economies. An institutional approach offers an alternative view. From this perspective, when diversification across industries is seen as subject to nation-specific governance and resource constraints, countries should vary widely in their interindustry diversification patterns.To test these alternative views, we analyze the diversification patterns of large corporations from five countries: France, Germany, Japan, the United Kingdom, and the United States. Our results do not support the hypothesis of a common pattern of diversification across countries, and thus reject the technological thesis. By comparing two case studies in which entrepreneurs attempted to diversify by acquisition in France and the United States, we examine how institutions and agents interact to permit different diversification patterns to arise in diverse national environments.The statistical results and case studies imply that, given the fixity of certain institutions, even if countries are subject to globalization, convergence in diversification patterns is not necessary. The results cast doubt upon the merits of stylizing the debate as a choice between technical and institutional theories of organizational choice. Rather, the study points to the importance of two theoretical statements. The first is to inquire under what conditions there is likely to be consensus on a given ?means-end? rationality for a specific managerial decision (e.g., diversification). The second is to understand the structural opportunities available to entrepreneurs for diversifying through acquisitions. Iterating between these cognitive and structural considerations shifts the focus from the false debate between technological and institutional arguments to the study of entrepreneurship situated in historically given national environments.

Competing globally: How Japanese MNCs have matched goals and strategies in India and China

Abstract Japanese MNCs have established strong investment positions in the US, Europe and Asia. China has been a major recipient of Japanese foreign direct investment (FDI), while investment in India has grown much more slowly. We argue that the differences extend much beyond the levels of investment—Japanese involvement in India and China is qualitatively different. Japanese FDI in China was motivated by access to location-specific productive resources, and it involved a high degree of technology, management skills and organizational knowledge transfer. The Japanese subsidiaries in China were integrated with the network of international subsidiaries as a part of the MNCs global strategy. Japanese FDI in India, however, was motivated by the desire to access local markets. It involved less transfer of technology and management skills, and Japanese subsidiaries in India operated independently as part of a multi-domestic strategy. We conclude that foreign entrants to the region should be aware and able to respond to the unique advantages of each host country and to the different strategies and capabilities of the subsidiaries of Japanese MNCs.

Transferring Collective Knowledge: Teaching and Learning in the Chinese Auto Industry:

This article studies teaching and learning strategies that firms use to transfer collective knowledge between organizations. The benefits of group teaching and group learning in transferring collective knowledge from a source community to a recipient community are discussed first, followed by an examination of international R&D capability transfer in the Chinese auto industry, based on interviews at multiple ventures in China and the US. Several results emerge from the study. Group teaching is more effective than individual teaching in helping recipients understand multiple dimensions of a source’s collective knowledge and in creating bridge networks, and group learning is more effective than individual learning for helping trainees integrate their learning and then re-embed it with their local context. Among four teaching–learning configurations, group teaching–group learning is the most effective transfer strategy for transferring collective knowledge. Individual teaching–individual learning transfers collective knowledge poorly, but can lay a foundation for more complex teaching–learning combinations. The sequence of group teaching– individual learning followed by individual teaching–group learning is less costly than group–group education but takes longer and is less effective for transferring collective knowledge.

Managing a Portfolio of Real Options

This study analyses the determinants of the value of a portfolio of real options and explores implications for strategic management. It focuses the analysis on four elements: the number of real options in the portfolio, constraints on the number of options that can be exercised, the volatility of underlying assets, and the correlation between underlying assets. These elements are articulated around a trade-off between growth options and switching options and are applied to different strategic situations of technological, market, and macroeconomic uncertainty.

Driving Performance via Exploration in Changing Environments: Evidence from Formula One Racing

Until recently, scholars have customarily lumped multiple dimensions of environmental change into single constructs, and usually ascertained that the more the context changes, the more value firms derive from higher levels of exploration. In sync with more recent studies focusing on specific dimensions of change, in this paper we borrow theoretical elements from systems theory to examine the possibility that the reward to developing innovative product components may itself be eroded by implicit and yet burgeoning costs to fit the new component technology into existing architectures, thereby dampening system performance. Specifically, we theoretically assess how varying magnitudes of industry regulatory changes affect the optimum level of firm exploration, and propose-counterintuitively vis-i-vis past literature-that the more radical i.e., competence destroying, as opposed to incremental i.e., competence enhancing, these changes are, the more the optimum intensity of firm exploration recedes. Based on quantitative as well as qualitative empirical analyses from the Formula One racing industry, we precisely trace the observed performance outcomes back to the underlying logic of our theory, stressing that impaired capabilities to integrate the new component in the architecture redesign and time-based cognitive limitations both operate to inhibit the otherwise positive relationship between firm exploration and performance. In the end, we offer new insights to theory and practice.

An Examination of Dynamic Capabilities: Is Evolutionary Theory Underdetermined?

Firms frequently need to update their capabilities in changing environments but face significant barriers to accomplish this goal due to the stickiness of their routines, local search constraints, bounded rationality, uncertain imitability, and causal ambiguity. Under high levels of uncertainty, dynamic capabilities are often externally oriented, involving acquisitions and alliances. However, nonunique but competitive predictions about the behavior of these capabilities arise from the evolutionary theory. We test these competitive hypotheses analyzing portfolios of acquisitions and alliances made by pharmaceutical firms in search of portfolios of biotech capabilities. The analysis of portfolios enables us to better identify “common practices” in the pharmaceutical industry than using a transactional‐level focus. We develop implications for the evolutionary theory and for managerial practice.

Resource Characteristics and Redeployment Strategies: Toward a Theoretical Synthesis

Abstract Firms pursue a number of redeployment strategies in order to achieve growth and create value for their stakeholders. While the majority of previous research focuses on how firms create synergic value by sharing resources across multiple business units, we lack a systematic analysis of the determinants of different redeployment strategies. In this paper, we develop a theoretical framework that allows us to systematically investigate how intrinsic resource characteristics affect resource redeployment strategies. Our framework identifies four critical characteristics of resources, that is, fungibility, scale-free nature, decomposability, and tradability. We develop a number of predictions that provide guidance for researchers to identify the optimal resource redeployment strategy appropriate for resources with a certain set of characteristics.