Johannes M. Pennings

Foreign entry, cultural barriers and learning

This paper examines the longevity of foreign entries. Hypotheses are developed on the mode (start-ups vs. acquisitions) and ownership structure (wholly owned vs. joint ventures) in relation to cultural distance. The hypotheses are tested within a framework of organizational learning, using data on 225 entries that 13 Dutch firms carried out from 1966 onwards. Results show that the presence of cultural barriers punctuates an organizations learning. Cultural distance is a prominent factor in foreign entry whenever this involves another firm, requiring the firm to engage in ‘double layered acculturation.’ We also identify locational ‘paths of learning.’ The longevity of acquisitions is positively influenced by prior entries of the firm in the same country. Similarly, the longevity of foreign entries, in which the firm has a majority stake, improves whenever the expanding firm engaged in prior entries in the same country and in other countries in the same cultural block.

Human Capital, Social Capital, and Firm Dissolution

This study examined the effect of human and social capital upon firm dissolution with data from a population of Dutch accounting firms for the period 1880–1990. Human capital was captured by firm-l...

Structural conditions of intraorganizational power

1 This research was carried out at the Faculty of Business Administration, University of Alberta, with the support of Canada Council Grants No. 67-0253 and No. 69-0714, and concluded at the Organizational Analysis Research Unit, University of Bradford, England, and the Industrial Administration Research Unit, The University of Aston in Birmingham, England. The strategic-contingencies theory of intraorganizational power proposed by Hickson et al. hypothesizes that the power of subunits results from contingent dependences among them created by unspecified combinations of coping with uncertainty, workflow centrality (immediacy and pervasiveness), and nonsubstitutability. This paper reports on methods devised to test this theory with alternative forms of data on seven organizations, or power systems, of four subunits each. The theory is refined by the exploration of different patterns of variables related to successive levels of power, and the tentative ordering of these variables in terms of their consequences for power.1

ORGANIZATIONAL LEARNING AND DIVERSIFICATION

Employing concepts of lateral and longitudinal learning, we examined the dissolution of 462 expansions of Dutch firms, both acquisitions and new ventures. We interpreted the endurance of an expansi...

The Relevance of the Structural-Contingency Model for Organizational Effectiveness.

Johannes M. Pennings This paper examines the structural-contingency model. Both subjective and objective data were used to explore the degree of association between measures of structure and of environmental uncertainty and related measures of complexity, resourcefulness, competition and instability. The analysis of the data did not support the model; that is, environment has structural correlates, except for the variables of resourcefulness and complexity. The results show furtherthat the goodness of fit between environmental and structural variables fails to explain variance in effectiveness.

Measures of Organizational Structure: A Methodological Note

The application of multiple instruments for measuring structural characteristics of complex organizations in recommended in order to determine their convergent and discriminant validity. This exploratory study makes a comparison between two different sets of measures, designed to assess the degree of centralization and formalization. One set represents the institutional approach, which relies on documents and informants; the other set relies on the survey approach, which is characterized by the use of questionnaires and interview schedules. The simultaneous application of the two sets of instruments to a small sample of manufacturing organizations uggests a certain amount of convergence, but raises serious doubts about the validity of some of the indicators. The differences in scope of the impirical referent of the indicators appear to be a major source for the lack of convergent validity.

Competitive Implications of Interfirm Mobility

This paper examines the competitive consequences of interfirm mobility. Because the loss of key members (defined as top decision makers) to competing firms may amount to a replication of a firms higher-order routines, we investigate the conditions under which interfirm mobility triggers transfer of routines across organizational boundaries. We examine membership lists pertinent to the Dutch accounting industry to study key member exits and firm dissolutions over the period 1880--1986. We exploit information on the type of membership migration (individual versus collective) and the competitive saliency of the destination firm as inferred from the recipient status (incumbent versus start-up) and its geographic location (same versus different province). The dissolution risk is highest when collective interfirm mobility results in a new venture within the same geographic area. The theoretical implications of this study are discussed.

The Urban Quality of Life and Entrepreneurship

This paper examines the influence of quality of life on entrepreneurial activity in 70 urban metropolitan areas. Economic and health/educational quality of life were found to have a positive impact...

Structural Contingency Theory: A Multivariate Test

This paper reconsiders structural contingency theory. It presents a discussion of the methodological underpinnings which surround the research activities of this theory. Two research strategies are reviewed. They entail a multivariate examination of the structure-environment-effectiveness relationship. One of these strategies examines deviations from ideal structural profiles, while the second one involves a canonical correlation analysis between structural and environmental attributes for low and high effectiveness units. The results from field research in a commercial bank are used to illustrate the two analysis strategies. They indicate that effective organizational units show strong structure-environment interrelationships and lead one to conclude that there are indeed effectiveness-induced constraints on the choice of an organizations design or its environment. The methodological and conceptual implications of the findings are then discussed.

Dimensions of Organizational Influence and Their Effectiveness Correlates

December 1976, volume 21 In this study participativeness, centralization, and organizational autonomy were analyzed conceptually and operationally and subsequently related to five indicators of organizational effectiveness. The criteria of effectiveness included total production, decline in production, financial loss due to errors, morale and anxiety. The individual and joint effects of the influence variables on organizational effectiveness were very strong. Participative, decentralized, and autonomous organizations are more effective. The implications of these results are discussed.