Senthil Kumar Muthusamy

Learning and Knowledge Transfer in Strategic Alliances: A Social Exchange View

Although social interactions and exchanges between partners are emphasized as imperative for alliance success, comprehensive examination of how social exchanges facilitate learning and knowledge transfer in strategic alliances is lacking. Drawing on social exchange theory, we examined the effects of social exchange processes between alliance partners on the extent of learning and knowledge transfer in a strategic alliance. An empirical examination of data collected from alliance managers of 144 strategic alliances revealed that social exchanges such as reciprocal commitment, trust, and mutual influence between partners are positively related to learning and knowledge transfer in strategic alliances.

Applying the Toyota Production System to a Healthcare Organization: A Case Study on a Rural Community Healthcare Provider

Over the last five decades the Toyota Production System (TPS) has evolved from an advanced sociotechnical concept in manufacturing to a participative design for large-scale change management. Toyota has been able to sustain a strategic competitive advantage by applying TPS as a process innovation and intervention, as measured by quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization. Many organizations are trying to replicate Toyotas success with TPS in their respective business/industry environments. It could be argued that the correlation between the application of TPS as part of organizational strategy and Toyotas documented success in achieving the aforementioned outcomes creates an “industrial engineering paradigm” or “social change intervention” that crosses multiple industries. In this light, TPS can be a powerful intervention technique, even in industries unaccustomed to advanced production techniques such as the healthcare industry. Because the healthcare industry is under enormous pressure to reduce costs, increase reliability and quality, and enhance organizational effectiveness, TPS-like interventions are significant to healthcare organizations. This article captures the process of applying TPS to a healthcare organization. It analyzes the challenges, problems, and outcomes, and addresses remedies for enhancing the success of TPS implementation.

Leveraging Cognition for Competitive Advantage: A Knowledge-Based Strategy Process

The organisation that wants to build competitive advantages has to create and leverage its capabilities. One of the central bases for achieving competitive advantage is the organisational capability to create new knowledge and transfer it across various levels and parts of the organisation. Because knowledge is central to strategy formulation and implementation, knowledge management has become a key strategic task facing managers for achieving success in todays complex and dynamic environments. A major challenge facing strategic management is engineering and managing the individual and group level knowledge that facilitates better strategies and invokes commitment. A knowledge management based model of strategy formulation process is presented. Traditional strategy frameworks are evaluated and a comprehensive cognition and learning centered strategy framework is suggested as a better model of strategy formulation and implementation for achieving competitive advantage. The implications of the knowledge-based approach for strategic management practice and research are highlighted.

Leveraging Knowledge in Buyer-Supplier Alliances: A Theoretical Integration

Global competition, ever-demanding customer expectations, and rapid technological changes are forcing firms to restructure the scope of operations and then outsource non-core processes to outside suppliers. Such organisational efforts have resulted in increased dependence on supplier firms to sustain competitive advantage. This paper provides a theoretical model to understand the process of successful learning and knowledge transfer in buyer-supplier alliances. The proposed model uses a social exchange framework for effective knowledge exchange and learning. Reciprocal commitment, interorganisational trust, power sharing, and socialisation are identified as essential for collaborative behaviour for successful learning and knowledge transfer between alliance partners. Specific testable propositions are presented.

Role of Context and Contest in the Structuring of Alliance Governance

The alliance governance – whether equity or nonequity based – through which an alliance is governed serves as a mechanism to protect a firm from partner’s opportunistic behavior, manage resource dependence and facilitate knowledge sharing. Alliance governance structure also reflects the risk, reward and control that partners perceive in a relationship. In light of the conflicts and instabilities reported in strategic alliances, it is critical to examine the interorganizational domain that affects the endurance and continuity of collaboration and explain how the alliance interface contexts determines the structuring of alliance governance. An empirical examination, using survey and archival data, revealed that the complexity of alliance task, balance of power, and competitive scope between partners are significantly related to the mode of alliance governance – whether nonequity, minority-equity, or joint venture.

Toward a Strategic Role for Employees in Corporate Governance

As the economies are becoming knowledge intensive and industries are encountering hypercompetitive technology environments, and the markets undergoing large scale globalization with firms experiencing wild fluctuations in financial performance, firm governance structure and the functioning of corporate boards in particular are under serious scrutiny. Given the economic crisis, the spate of scandals and corporate failures due to irregularities, systemic corruption, and complaints on managerial whims in recent years, there is a renewed emphasis on reforming the corporate boards to protect the interests of all stakeholders in addition to shareholders. This article accentuates the significance of employee representation in the corporate boards, as the employees’ knowledge has become a major competitive resource and the employees also have become the primary stakeholders. In this context, what role the employees are supposed to play in the corporate governance, and what responsibilities they need to assume for firm performance and shareholders’ wealth are becoming paramount to modern management and economics. We argue how codetermination, i.e., employee participation in corporate governance board, augments the organizational performance and productivity, how it limits the corporate excesses, and further highlight the significance of codetermination in the context of knowledge work and economy.

Shoaling (School of Fish) as Competitive Strategy

Managers of established firms as well as emerging firms continually search for unique strategies that ensure better returns with minimal risk, and that enable their businesses to effectively outsmart the competitive challenges by attaining the advantages in terms of innovation, cost efficiency and market responsiveness. While large firms struggle to sustain the innovativeness and market responsiveness as they experience inertia due to size, Whereas the small firms on the growth trajectory search for strategic means to overcome the competitive challenges and explore ways to break the industry barriers. Managers and organizational design experts have been proposing a variety of strategic and organizational solutions to sustain the dynamism and enable the firms to match the competition in terms of new products, lower cost, quality, and customer service. We propose in this paper, how a shoaling (school of fish design) approach will serve as distinctive corporate and business strategy and will benefit the firms to operate in a most nimble and effective way. This unique strategy will enable a large firm operate like a smaller firm as well as offer the small firm(s) many ways to cope with rivalry from larger players. On the one hand, this strategy reduces the opportunity cost of not exploiting the fleeting opportunities, and on the other hand reduces the sunk cost and investment risk by operating as dispersed but in a synchronized manner like the school of fish. We contemplate the economic and managerial rationale of the ‘shoaling strategy or disaggregated and dispersed organization’, and its significance in the context of knowledge economy and turbulence experienced in several markets and industries.

Markets, Corporate Governance and Efficiency or Lack Thereof: Arguments in Favor of Reforms

The untenable volatility of financial markets and fleeting nature of stock ownership on one side and corporate scandals, high-risk managerial whims and empire building attitudes of corporate managers on the other have rekindled a three-decade old debate on whether financial markets, especially stock markets hold efficient mechanisms for investment and resource allocation (Khachaturyan, 2003; Vitols, 2008; Coffee, 2005). And the recent Nobel prize (for the year 2013) awarded to Robert Shiller, Eugene Fama, and Lars Hansen for their research contributions with regard to functioning of financial markets and price evaluation of stocks has reinforced the importance of efficient resource allocations and the need to regulate stock-market to safeguard the interests of investors and corporations. For instance, the Aspen Institute’s Corporate Values Strategy Group (Aspen Institute, 2009) which has been working on promoting long-term orientation in business decision making and investing has issued a call to end the value-destroying short-termism in financial markets and create public policies that reward long-term value creation, which is endorsed by twenty-eight leaders representing business, investment, government and academia (including Warren Buffett - CEO of Berkshire Hathaway, Lou Gerstner - former CEO of IBM, Roger Ferguson - President of TIAA-CREF, and James Wolfensohn - former President of the World Bank). In this light, this article critically reviews the stock-market behavior, its influence on firm management, and the corporate factors that induce market anomalies, and to recommend measures that would curtail stock-market-volatility and corporate practices neglecting long-term investor-interests. The major assumptions of market-efficiency are critically reviewed in light of new evidences pointing to the failures of market mechanisms and corporate governance practices. This article further articulates the need for creating effective regulations and long-term incentives that are of interest to both investors and corporate managers.

What If Larger Public Firms are Sliced into Smaller Ones

Large firms are increasingly facing existential crisis. While knowledge and information era organizations are replacing industrial age giants in the honor rolls of technocratic leadership, quality, excellence, and profitability, the large industrial era firms (whether banking, utilities, automobile, metals) are struggling to retain their financial attractiveness and are increasingly becoming unsustainable.

Reforming Stock Markets & Firm Governance and Argument for Mini Regional Stock Exchanges (Toward Disaggregation of Economy)

With the Nobel Prize in economics for the year 2013 awarded to the scholars who have juxtaposed the theories on efficiency, and doubtlessly asserting the inefficiency of financial markets by reasoning disconnect and volatility in asset prices, reforming stock markets and corporate governance practices have regained global significance in the fields of economics, finance and management. I would like to draw following implications, from my discussions in previous two posts on markets and mini-stock exchanges that are of much significance to the whole economy as they are to individual investors. Before listing implications, I would like to draw attention to empirical studies that have identified the sources of ‘bias’ and ‘volatility’ to factors such as information asymmetry, insider trading, playing-to-the-gallery attitude (attractive announcements), greed, fashion, fads, and bubbles, suggesting how market inefficiency occurs and why speculative prices do not sail along with either intrinsic value of assets or potential future returns. Scholars would like to call these sources and their consequences as anomalies of stock market. (Please refer to full article for the references: http://ssrn.com/abstract=2592843)