Session 437

Corporate Structure, Resource allocation, and Portfolio planning

Track F

Date: Monday, September 22, 2014

Track H

Time: 14:45 – 16:00

Paper

Room: Londres


Session Chair:

  • Mathias Arrfelt, Arizona State University

Title: How Does Headquarters Create Value in a Diversified Multi-Business Firm: The Case of Wesfarmers

Authors

  • Johann Peter Murmann, University of New South Wales
  • George Shinkle, University of New South Wales

Abstract: Aside from emphasizing target setting, high-level monitoring, and aligning incentives, the strategy literature provides very little guidance on how headquarters of a large multi-business corporation should interact with its business units to create and capture value. We examine Wesfarmers Ltd. (Australia) because the long-term high performance of this unrelated conglomerate is unexpected by much of the strategy literature. Our investigation promises to shed light on effective management practices. Our preliminary research indicates, contrary to what the literature expects, the Wesfarmers CEO and headquarters (HQ) staff are deeply involved in defining, monitoring, and redefining the operational goals at the business unit level and the means (strategies and initiatives) to accomplish them. Furthermore, HQ adjusts its management practices to respond to particular needs of each business unit.

Title: Research on Regional Headquarters: Emergence of a Field?

Authors

  • Perttu Kahari, Aalto University

Abstract: The purpose of this paper is to review literature on regional headquarters (RHQ), its evolution over time and assess whether it will constitute a new, emerging field. Using systematic literature review, over 40 academic journal articles, book chapters and working papers were analyzed, covering a period from 1967 to 2013. Three focus areas were identified: the RHQ roles and reasons for establishing them, location and relocation issues, and RHQ life cycles and evolution. Finally, the arguments for performing research specifically on RHQ are discussed, with three characteristic attributes distinguishing them from other organizational forms, namely simultaneous principal-agent role, terminability and change-sensitive nature, leading to their inherent dynamism. Following these findings from the literature, suggestions are made for gaps in the current literature.

Title: Starting to Understand Capital Allocation: A Variance Decomposition Study

Authors

  • Mathias Arrfelt, Arizona State University

Abstract: Capital allocation has important implications for both firm performance and for firm risk. Despite this, we do not know all that much about the allocation process, including what determines the size and patterns of allocations. This study therefore takes a more holistic approach in examining the internal capital allocation process by focusing on determinants at three broad level of organization: industry, firm, and business unit levels. This provides direction for future research by showing what determines or drives the allocation decision and also where potential misallocation may be most likely.

Title: The Joint Effects of Strategy and Structure on the Performance of Professional Service Firms

Authors

  • Monika Schommer, University of Liverpool
  • Amit Karna, Indian Institute of Management Ahmedabad
  • Ansgar Richter, University of Surrey

Abstract: Extant theory and empirical evidence suggest that diversification strategy carries benefits and costs. Similarly, structural choices within the organization also involve trade-offs. However, the joint performance effects of strategic and structural choices are largely under-researched. We investigate these effects in the setting of professional service firms (PSFs). Our theory development suggests an inverted U-shaped relationship between service line diversification and leverage (defined as the ratio between junior and senior professionals) on the one hand, and PSF performance on the other. We test these relationships using fixed-effects panel regression and polynomial response surface analysis (RSA) on data from 75 law firms from 2003 to 2012. We find inverted U-shaped performance effects of diversification and leverage, as well as evidence of a complementarity between diversification and leverage.

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 400: Teaching Corporate Strategy: Insights and Opportunities
Sun: 11:15 – 12:30
Session 401: Research Synergies in Corporate Strategy and Entrepreneurship
Sun: 15:45 – 17:00
Session 398: Corporate Strategy and Corporate Finance: Continuing the Research Conversation
Sun: 17:15 – 18:30
Session 602: Corporate Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 308: How do firms grow? Canvasing Different Perspectives
Session 316: Acquisitions and Divestures: Antecedents and Consequences
Mon: 11:00 – 12:15
Session 319: International Corporate Strategy
Mon: 14:45 – 16:00
Session 437: Corporate Structure, Resource allocation, and Portfolio planning
Mon: 16:30 – 17:45
Session 325: Product Scope Strategy in Different Empirical Contexts
Tue: 08:00 – 09:15
Session 327: Market Response to M&A
Tue: 11:00 – 12:15
Session 328: New Angles of Examining Acquisition Strategies
Tue: 15:30 – 16:45
Session 399: The Role of Industry/Environmental Conditions in Corporate Strategy
Tue: 17:15 – 18:30
Session 318: The Boundary of the Firm

All Sessions in Track H...

Sun: 08:00 – 09:15
Session 311: The Power of Power: The Role of Power and Politics in Strategy Processes
Sun: 09:30 – 10:45
Session 312: Contributing to Strategy Process Scholarship and to the SMS Community: Honoring Steve Floyd and Bill Wooldridge
Sun: 11:15 – 12:30
Session 284: The Strategic Process and Competitive Dynamics of Industry Convergence
Sun: 15:45 – 17:00
Session 203: Acquisition Implementation
Sun: 17:15 – 18:30
Session 604: Strategy Process IG Business Meeting
Mon: 08:00 – 09:15
Session 205: Strategy Making Dynamics
Mon: 14:45 – 16:00
Session 204: Strategic Change and Adaptation Processes
Session 437: Corporate Structure, Resource allocation, and Portfolio planning
Mon: 16:30 – 17:45
Session 206: The Role of Middle Managers in Strategy Processes
Session 211: Knowledge Transfer and Learning
Tue: 11:00 – 12:15
Session 209: Design Issues: Tasks, Control and Risk
Tue: 15:30 – 16:45
Session 208: Interactions, Recombination and Adaptation Processes
Tue: 17:15 – 18:30
Session 207: TMTs, Strategic Planning and Agenda Building


Strategic Management Society

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