Ravi Madhavan

Divestiture and Firm Performance: A Meta-Analysis

While numerous empirical studies have examined the relationship between corporate divestiture and subsequent firm performance, inconsistent findings persist, suggesting the need for a quantitative synthesis and an examination of potential moderating effects. The authors conduct a meta-analysis of the divestiture-performance relationship, encompassing 650 effect sizes from 94 studies. Results indicate that across studies, corporate divestiture does positively impact subsequent performance. The analysis also suggests statistically significant moderating effects of type of performance measure, transaction format, transaction intent, and firm’s resource level. While providing a quantitative synthesis of current empirical findings, the authors call for further research to surface additional moderators to refine the knowledge concerning the link between corporate divestiture and subsequent performance.

Real Options: Taking Stock and Looking Ahead

We discuss recent developments in real options theory and its applications to strategic management research, examine the potential difficulties in implementing real options in theory and practice, and propose several areas for future research. Our review shows that real options theory has provided substantial insights into investment and exit decisions as well as into the choice of investment modes. In addition, extant research studies have contributed significantly to our understanding of whether and how organizations can benefit from real options. Future research that addresses difficulties in applications will further advance both real options theory and practice in strategic management. We call for future generations of research to enhance the impact of real options as an emerging dominant conceptual lens in strategic management.

Diversity in Alliance Portfolios and Performance Outcomes A Meta-Analysis

Given the increasing interest in alliance portfolios, alliance portfolio diversity (APD) has been the focus of many recent studies. Yet, the performance consequences of APD—or of diversity in general—are neither theoretically clear nor empirically consistent. With meta-analytic analyses, we assess extant research on the APD–performance link. Across studies, APD has a positive impact on performance, although the level of analysis and how performance is measured influence the relationship. Going beyond conventional quantitative synthesis, however, we also systematically uncover patterns in how theoretical orientation and the operationalization of diversity moderate the APD–performance relationship. Our study serves as an invitation for future APD studies to employ more sophisticated theoretical and operationalization approaches as they expand our knowledge of diversity in alliance portfolios.

Bringing the firm back in: Networking as antecedent to network structure

In the network strategy view, relative competitive advantage stems not merely from opportunity structures embedded in networks but also from the distribution of ability and motivation among firms. Thus, there is a need to “bring the firm back in” to the network strategy narrative. We demonstrate that a mixed-methods design, blending large-sample data with micro-data on specific firms and their networks, can increase our understanding of the interplay of network structure and actor mechanisms, thus bridging the chasm between theory and practice in network strategy. We believe this is a critical step toward the “strategic design of networks.”

Evidence Based Management

In their managerial roles, clinicians face the challenge of how to access, assess and deploy the most relevant and current management knowledge. This challenge is exacerbated by the fact that the management discipline is a relative latecomer to the evidence-based paradigm. Although the research-based model of business education can be traced back to the 1950’s, the management discipline is still characterized by a multiplicity of theoretical perspectives, the lack of consensus on a hierarchy of evidence, and the lack of point-of-use tools that translate scientific results into protocols. As a result, popular claims based on anecdotal evidence often compete with rigorous empirical studies for the manager’s attention. In the last decade, however, a small but growing evidence-based management (EBMgt) movement has taken shape. EBMgt’s influence can be seen in the increasing numbers of meta-analyses, a greater interest in experimental studies, the newfound acceptance of replication studies, and practical approaches such as fact-based consulting. This chapter provides an overview of EBMgt along with a practical resource list of evidence-based sources in three key areas: managing people, managing process and systems, and managing strategy.

The emerging transnational dimension of organisational and individual identity: transnational technical communities as economic actors

An important feature of globalisation is the formation of ‘transnational technical communities’, groups of immigrants active in both home and host country technical networks. Viewed through the lens of identity, such communities demonstrate the intriguing interpenetration of individual identities and organisational identity. Further, building on the insight that such communities may be emerging as economic actors in their own right, we conceptualise them as a new type of knowledge conduit between nations. As such, their emergence has important implications for multinational corporations (MNCs), which have hitherto been viewed as the primary knowledge conduit between nations, suggesting the need for MNC managers to pay attention to the evolving identities of their own enterprises.