Michael Dowling

Using R&D cooperative arrangements to leverage managerial experience: A study of technology-intensive new ventures

Abstract During the past decade, increasing attention has been given to the widespread use of research and development (R&D) strategic alliances and cooperative interorganizational relationships. This research has addressed a variety of inter-firm relationships ranging from joint ventures to informal networking. However, most of this literature is based on research involving large established firms. More recently, researchers have recognized that small firms or new ventures are also adopting cooperative R&D strategies with increasing frequency. A variety of reasons for the increasing use of R&D cooperative arrangements in new ventures has been offered, including the need to complement a new ventures existing internal resources, the need to quickly gain the technical capabilities to compete in rapidly changing markets, and the desire to minimize the fixed costs associated with acquiring capital assets. This paper reports the results of a study of new high-technology ventures that examined the relationship between performance, the experience of a ventures management team, and its use of R&D cooperative arrangements. The central proposition of this research was that the effectiveness of R&D cooperative activities is associated with the level of combined expertise possessed by the new ventures management team. Specifically, it was anticipated that new ventures with management teams possessing more experience with the industry and/or with similar technologies would be better able to successfully engage in R&D cooperative activities. The primary data analysis technique was moderated regression. The data was collected from Security and Exchange Commission initial public offering registration statements and other archival documents filed by 210 new ventures in three high-technology manufacturing industries. The results of the regression analysis revealed that sales growth was associated with the use of R&D cooperative arrangements. More important, the results also indicated that this relationship was positive when the new ventures management team was relatively more familiar with the industry, markets, and/or with similar technologies. In other words, our results indicate that the relatively more experienced managers were more proficient at using R&D cooperative activities to strategically position their respective firms vis-a-vis their less experienced counterparts. Evidently, these managers were better able to identify the risks and benefits of engaging in such cooperative activities. Additionally, we provide preliminary evidence that the greater knowledge possessed by the management teams may have allowed the new ventures to reduce the costs associated with R&D market transactions. These findings are important because they suggest that prior managerial experience in similar industries and/or with similar technologies is an important prerequisite for the successful use of R&D cooperative arrangements by new high-technology ventures. Managements knowledge of customer needs, product characteristics, and/or the specific idiosyncracies of the industry and/or technology seems to significantly enhance a new technology-intensive ventures ability to effectively engage in R&D cooperative activities.

Explaining Performance Changes in Newly Privatized Firms

Much debate has been generated about whether privatization tends to enhance firm financial performance. The research presented here seeks to identify the strategic choices that differentiated firms with superior post‐privatization performance from those with inferior post‐privatization performance. Using agency theory as a theoretical foundation, it is hypothesized that superior post‐privatization firm performance will be associated with (1) the government not retaining a significant stock holding, (2) changes in leadership, (3) management stock options being initiated, (4) employee head count being reduced, and (5) the company being restructured financially. The sample draws from 41 privatized firms from six industry classifications and 15 countries. To accommodate comparisons of small subsamples, non‐parametric statistical methods are used. Controlling for size, industry and country (economic/regulatory effects), the hypotheses are generally supported except for the one relating to headcount.

Convergence – Innovation and Change of Market Structures between Television and Online Services

Convergence is an often used but rarely defined concept. Ideas such as the creation of synergies, disappearance of industry boundaries, integration, or overlapping of markets, are all used to describe this phenomenon. Where is convergence occurring and what effects has this phenomenon for the industries involved? We give an overview of the current competition and changes in the television and online services industries where important technological, customer-focused and corporate innovations are moving them “closer together”. We define “convergence” in a strategic management context by distinguishing the dimensions of convergence and analyzing the implications for the industry structure. Does convergence mean the need for closer cooperation between industries or does it imply substitution of products or services? Dealing with altered industry structures through mutual innovation, traditional frameworks have to be reevaluated and will be modified or extended in order to give direction for an adequate strategy.

Convergence and innovation strategy for service provision in emerging Web-TV markets

Abstract The convergence between online or internet services and television has often been represented by the term “Web‐TV”;. But one must make a distinction between the type of service Web‐TV and the company named “WebTV Networks”; who pioneered the business in 1996 and is now a subsidiary of Microsoft. There are also important strategic questions when positioning a new product and service category between the existing markets for online services or TV. Furthermore, we argue that one must distinguish between the direction of innovation and the added value through combining both TV and online content, services, and technology. The strategic positioning along this converging value chain will be an important question for the providers of content, service and transmission, software technology and hardware manufacturers from the online service, personal computer, and TV industries. For players in each industry, it seems possible that they can provide incremental extension of core business by creating converge...

Technological innovation as a gateway to entry: The case of the telecommunications equipment industry

This study first reviews the concept of entry barriers in the economics and strategic management literature and investment in innovation as a particular kind of barrier to entry. An argument is then presented that one can also view, from the perspective of the entrant, innovation as a gateway into a changing industry. Data from the telecommunications equipment industry during the period 1975–1986 support this argument. These findings suggest that the traditional, steadystate assumptions underlying the industrial organization paradigm, and the recently developed strategy typologies based on this paradigm, may be inappropriate in industries experiencing fundamental technological changes. In such cases, strategies designed to take advantage of change may be more fruitful.

‘Low Cost–High Tech’ Innovations for China: Why Setting Up a Separate R&D Unit is Not Always the Best Approach

In this article, we investigate the following question: How can multinational corporations set up their R&D organizations in order to make the best use of their existing technologies and experiences, while at the same time gain a deeper understanding of Asian markets, their requirements, and trends? To answer this question we used a case study approach to examine two distinct organizations which are developing specific innovations for the Chinese market. We refer to these innovations as ‘low cost–high tech’ innovations, which seem specifically appropriate for emerging market contexts like in China. Based on our findings, we refine an existing theoretical framework and propose a set of new organization types for R&D units.

An Empirical Study of Reward and Incentive Systems in German Entrepreneurial Firms

In this paper we present the results of a study analyzing the impact of an entrepreneurial company’s initial organization on the structure of its reward and incentive systems, using data from entrepreneurial firms in Germany. the results suggest that the educational level of employees has the strongest impact on the application of different financial and nonfinancial rewards. Our findings also suggest that entrepreneurial companies in Germany rarely implement sophisticated financial reward systems.

Vertical Coopetition and the Sales Growth of Young and Small Firms

Vertical coopetition describes a situation where a firm has a vertical exchange relationship with a direct competitor. Drawing on resource‐based perspectives and resource dependence theory, we examine specific characteristics of vertical coopetition that affect the sales growth of young and small firms. We propose that the size of the competitor and mutual dependence as well as overdependence among the cooperating rivals affect the growth potential of young and small firms differently. Our research makes a contribution to the literature by disentangling some of the benefits and threats related to vertical coopetition for young and small firms.

Strategies for Change in the Service Sector: The Global Telecommunications Industry

Four key forces—technological change, changes in market demand, deregulation, and globalization—are affecting and changing the structure of the service industries. The forces can be illustrated by using the telecommunications services industry. This article examines and analyzes four major firms: British Telecom in the United Kingdom, DBP TELEKOM in Germany, NTT in Japan, and BellSouth in the United States. These companies are changing their strategies and their structures to deal with current changes in the industry and to prepare for how the industry may evolve over the next ten years. Such changes will have a major impact on the future development of global services industries.

Vertical coopetition in entrepreneurial firms: theory and practice

Purpose – The purpose of this paper is to investigate vertical interfirm relationships with direct competitors – also referred to as vertical “coopetition” – in entrepreneurial firms. Specifically, this study explores the reasons for why entrepreneurial firms engage in vertical coopetition and how they manage this particular type of interfirm relationship. The paper also shed light on the causes for termination of such delicate relational arrangements. Design/methodology/approach – The research design is exploratory. The paper analyze data collected by a survey that was specifically designed for this study. Based on the findings, the paper developed theoretical propositions specifying the conditions under which entrepreneurial firms engage in coopetition, how it is managed, and how it can be sustained. Findings – The findings show that coopetition is a ubiquitous phenomenon for entrepreneurial firms, and mainly arises out of a deliberate strategy. In contrast to large firms, entrepreneurial firms tend to ...