Session 350

Governance, Organization and Competition

Track E

Date: Tuesday, September 23, 2014

 

Time: 11:00 – 12:15

Common Ground

Room: Viena


Facilitator:

  • Lyda Bigelow, University of Utah

Title: Barbarians at the Gate: How Firm Competition Affects Intraorganizational Conflict

Authors

  • Bryan Hong, Western University
  • Mu-Jeung Yang, University of Washington

Abstract: How does firm competition affect conflict among groups within an organization? Although intraorganizational conflict has been highlighted as a critical factor contributing to the realization of economic rents from a firm’s resources and capabilities, little is known about how external industry-level forces influence the likelihood and prevalence of conflict within firms. In this study, we derive a testable prediction using a formal economic model, and estimate the effect of foreign competition on the likelihood and prevalence of conflicts using data collected from a representative sample of establishments in the Canadian economy. In our results, we find systematic evidence that competition leads to a lower likelihood of strikes and fewer grievances, even after including a number of control variables accounting for alternative explanations.

Title: Competition and Firms' Pollution Emissions

Authors

  • Daniel H. Simon, Indiana University

Abstract: This paper examines how competition affects firms’ polluting behavior. Specifically, we examine whether firms in more competitive markets emit more toxic pollutants than firms in less competitive markets. To investigate the impact of competition on polluting behavior, we use data on firms’ pollution emissions from the Toxic Releases Inventory (TRI), and merge them with industry concentration data from the Census of Manufacturers. Our preliminary results indicate that competition reduces rather than increases industrial pollution emissions. As overall industry concentration increases, facility emissions increase, with each one percentage point increase in concentration causing a roughly two percent increase in toxic emissions.

Title: How Much Does Ownership Type Matter for Firm Performance?

Authors

  • Markus Fitza, Frankfurt School of Finance and Management
  • Laszlo Tihanyi, Texas A&M University

Abstract: What explains the heterogeneity of firm performance? Previous studies have emphasized the importance of industry, year, corporate parent, and firm effects on the variation firm performance. Building on recent research on the importance of ownership arrangements, this paper examines the extent to which ownership type effects can also explain such performance variation. We use a dataset of British firms to empirically decompose the variance of the performance of 7,607 firms between 2006 and 2012. Results show that ownership effects are statistically significant in explaining the variation of firm performance and are of similar size as industry effects. We further show that industry and firm effects vary depending on ownership type. Our findings highlight the importance of considering ownership arrangements in shaping firms’ strategy and performance.

Title: Institutional and Organizational Governance: Design Principles and Adaptation

Authors

  • Peter Klein, Baylor University
  • Joseph Mahoney, University of Illinois at Urbana-Champaign
  • Anita McGahan, University of Toronto
  • Christos Pitelis, Brunel University

Abstract: We show how Ostrom’s (1990) institutional design principles and Libecap’s (1989) theory of adaptive governance explain and predict when inter- and intra-firm adjustment toward efficient outcomes is likely. We argue that the principles developed to explain common-pool resource problems are isomorphic to governance club-goods problems, which are central to inter- and intra-firm coordination. We illustrate our integrative Libecap/Ostrom framework with several examples and discuss why adaptation is typically more effective in governance than in institutional design. We consider how the institutional governance literature enriches organizational governance research, and vice versa, especially through the emphasis of organizational governance research on appropriability.

Title: Sustainability Strategy Groups and Firm Performance

Authors

  • Christian Landau, EBS University of Business and Law
  • Julia Hartmann, EBS University

Abstract: To date, research seeking to provide the business case for sustainability produced mixed results. In this study, we suggest certain groups of firms benefit more from sustainability than others and, thereby, we contribute to our understanding of when sustainability pays off. Using strategic group theory and carrying out a cluster analysis of 89 firms from the food sector, we are able to carve out four strategic groups. These groups differ in terms of the extent to which they address one of the three sustainability dimension environment, society and governance. We examine performance differences across the four groups and find that the comprehensive sustainability and the governance focused sustainability strategy groups are associated with positive performance, while firms from the remaining two groups show negative performance.

Title: The Impact of Multimarket Contact on Efficiency and Profitability

Authors

  • Luz Elena Orozco Collazos, Los Andes University

Abstract: Our study of 39 Venezuelan banks from 2006-2010 provides theory and evidence that MMC has a U-shaped relationship with operational efficiency. At low levels of MMC, mutual forbearance leads to lower competitive intensity and to higher and more stable prices thus reducing pressures to be efficient. In contrast, at higher levels of MMC, the relationship turns positive as firms with MMC discover opportunities to coordinate on matters related to efficient operations thus leading to higher efficiency. Additionally, we provide theory and evidence that MMC’s impact on profitability is partially mediated through operational efficiency. The Venezuelan bank market has a limited number of rivals and is relatively closed to global banks, creating a local oligopoly with no new bank entry or exit during our study period.

All Sessions in Track E...

Sun: 08:00 – 09:15
Session 282: The Latest and Greatest in Empirical Methods for Strategy Scholars
Sun: 09:30 – 10:45
Session 1: Frontiers of Value Capture Research: Complementary Developments in the Theory and Empirics
Sun: 11:15 – 12:30
Session 284: The Strategic Process and Competitive Dynamics of Industry Convergence
Sun: 15:45 – 17:00
Session 341: Stakeholders, Board of Directors and Competitive Strategy
Sun: 17:15 – 18:30
Session 601: Competitive Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 366: Markets, Brands, Customers and Competition
Mon: 11:00 – 12:15
Session 342: Resource Based View
Mon: 14:45 – 16:00
Session 368: Firm Scope and Industry Competition
Mon: 16:30 – 17:45
Session 348: Differentiation and Competitive Strategy
Tue: 08:00 – 09:15
Session 349: Leaders, Laggards and Competition
Session 367: What Drives Firm Heterogeneity Across Time?
Tue: 11:00 – 12:15
Session 350: Governance, Organization and Competition
Tue: 15:30 – 16:45
Session 364: Conceptual developments in Competitive Strategy
Tue: 17:15 – 18:30
Session 343: What Drives Competition?


Strategic Management Society

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