Michael B. Heeley

Pioneers and Followers: Competitive Tactics, Environment, and Firm Growth

Market pioneering, as a form of corporate entrepreneurship, occurs when a firm is first to offer a new product on the market. The connection between market pioneering and firm performance has received little scholarly attention, and it focused primarily on (1) pioneering as an environment specific phenomenon and (2) firms performance, as affected by the fit between a firms pioneer/follower status and its competitive tactics. These phenomena are explored, emphasizing how they are manifested in different industry environments and what pioneers and followers do differently to promote their performance. A theory that describes how specific competitive tactics relate to firm sales growth rate among market pioneers and market followers is developed in two distinct environmental settings: hostile and benign. To test two proposed hypotheses, data is collected from senior managers of 103 independent, non-diversified manufacturing firms in 75 industries. The main analytical techniques used to assess the data are: cluster analysis, ANOVA, and correlational analysis. The findings suggest that market pioneers grow at the same rate as market followers. In hostile environments, pioneering may enable firms to break out of the dominant price-based mode of competition and grow despite charging high prices. Pioneers in hostile environments are better served than followers from a wide geographical distribution of their products. It is recommended that followers in hostile environments reduce their cost structures in order to maintain low price strategies. The results also suggest that, in benign environments, offering products with warranties superior to those of competitors may have positive effects on sales growth, more so among pioneers than followers. Using a large number of distribution channels benefits pioneers more than followers. The studys contribution to the pioneering literature and literature on coping with hostility is assessed. Common and effective bases for competition under various levels of environment hostility are theorized and empirically identified.(CBS)

Absorptive Capacity in the Software Industry: Identifying Dimensions That Affect Knowledge and Knowledge Creation Activities

The ability of the firm to effectively use external knowledge (its absorptive capacity) is important to firm competitiveness and innovativeness. However, the wide array of approaches to studying absorptive capacity has obscured our understanding of what drives the effective use of external knowledge. The authors show that absorptive capacity is composed of mutliple dimensions: (a) the firm’s relationship to its external environment; (b) the structure, routines, and knowledge base of the main value creation group(s); and (c) individuals’ absorptive abilities. Their data illustrate that each of these dimensions contributes to increased knowledge or knowledge creation activities.

Effects of Firm R&D Investment and Environment on Acquisition Likelihood*

R&D investments contribute to the development of firm technology resources, and the possession of such resources often increases a firms attractiveness as a potential acquisition target. However, the value ascribed to a firms technology resources by would-be acquirers may be moderated by its industrys environmental characteristics. Using data from 2886 firms, we find that investments in R&D predict acquisition likelihood and that R&D investments are most strongly associated with acquisition of firms under conditions of high environmental munificence and dynamism. Theoretical and managerial implications are discussed.

Strategic decision making in an intuitive vs. technocratic mode: structural and environmental considerations

Abstract This study describes how the relationship between decision making style and firm performance is impacted by environmental technological sophistication and organization structure. Data collected from 96 manufacturing firms operating in 68 industries suggest that different combinations of style and structure predict firm financial performance in high-tech and low-tech environments. For example, in high-tech environments, sales growth rates were found to be higher when the technocracy dimension of decision making style and the organicity dimension of organization structure are negatively related. In low-tech environments, on the other hand, sales growth rates were found to be higher when these dimensions are positively related. Different results were observed when firm financial performance was operationalized in terms of return on sales (ROS).

THE PRIVATE RETURNS TO TECHNOLOGICAL CAPABILITY.

We investigate the validity of using patent citation counts as a measure of firm technological capability. We test the hypothesis that information reflected in citations by patents belonging to the...