Research Summary
Transaction cost economics (TCE) holds that multinational corporations (MNCs) should select governance modes based on associated transactional hazards. However, MNCs often adopt ...theoretically misaligned governance modes. Applying a prospect theory (PT) perspective, we use the context of business‐process offshoring to explore why firms choose misaligned governance modes. We argue that theoretically misaligned governance modes are regarded as riskier than aligned governance modes, and we suggest that prior experiences of failure in an international context—especially in business functions that are relevant for the internationalization of a firm—prompt decision‐makers to choose theoretically misaligned governance modes. We enhance discussions on governance‐mode decisions with important behavioral perspectives on how such decisions materialize.
Managerial Summary
Experience with underperforming investments provides decision‐makers with an important motivation to search for riskier, nontraditional solutions, such as governance modes that do not necessarily comply with conventional logics. We show that such decisions, which have traditionally been conceived as managerial mistakes, are driven by behavioral insights found in the fields of human and organizational psychology. While we explore this idea in the context of international governance‐mode decisions, we believe such a behavioral perspective on international decision‐making is generalizable to other relevant contexts.
A great deal of has been written about the challenges of a legal profession that resists change and sub-optimizes clients' benefits, and even more ink has been spilled on the opportunities and ...threats of AI. As laws are falling further behind an accelerating, dynamic world, the gap between businesses and opaque legal functions widens with the latter being perceived often as fire-fighting cost centers. This article calls out the opportunity of AI, specifically machine learning, and its impact on decision making as an opportunity for business leaders to elevate lawyers to contribute further to corporate strategies and operations. Surveying the implications of machine learning through the lens of each element of decision making, the article aims to bring the relevance of today's ubiquitous transformations to the legal function. It also reminds business leaders that the legal function will need some help, such as corporate legal strategists, to drive and sustain change that resides in the intersection of law, business and technology.
This paper examines the relation between productivity and specialisation of firms in business functions. We distinguish between specialisation in R&D, fabrication and marketing based on the firm's ...employment composition over these functions using unique survey data of Dutch firms. Our results suggest that firms specialised in R&D and marketing are significantly more productive compared to firms specialised in fabrication. We find that measures of upstreamness based on input–output tables do not significantly relate to firm productivity and are uncorrelated to measures of functional specialisation.
Green product innovation (GPI) is a cornerstone of environmental management. Recent reviews on GPI have shown that research on GPI antecedents has mainly focused on identifying specific factors ...influencing the use of GPI. However, most studies lack a comprehensive theoretical explanation of the findings. In this study, which is based on a sample of 303 Swedish small manufacturing firms, antecedents to GPI are examined using the attention-based view of the firm. Two attentional perspectives, namely, entrepreneurial orientation and environmental sustainability orientation, were found to positively influence the use of GPI. Moreover, situated attention, in terms of competitive intensity, strengthens the relationship between entrepreneurial orientation and GPI. The study highlights the usefulness of an attention-based view on GPI and environmental management in small firms.
Managers must make critical disaster preparation decisions to protect firm assets from the threat of wildfire activity. Prior literature stresses the importance of past disaster experience as a key ...driver of disaster preparation. The article finds that, while experience with disasters is a critical condition, it is insufficient to explain disaster preparation activities by firms. Managerial perceptions including belief in anthropogenic climate change and the perception of increasing wildfires can substitute for direct negative wildfire experience. The article builds configural theory to explain how the psychological “closeness” of wildfire hazards can influence managerial decisions to prepare for disasters in the presence of key organizational characteristics. This study adopts a qualitative comparative analytical approach, drawing on manager surveys and biophysical wildfire data from 20 Canadian mining and resource extraction sites. The article also contrasts manager perceptions of wildfire risk with those of experts and captures a gap in risk perception.
Firms are increasingly held accountable for their suppliers’ environmental misconduct and often face significant stakeholder pressure to respond or even end their affiliations with misbehaving ...suppliers. Despite the importance of the subject, we know little about antecedents to supplier exclusion. In this article, we build on the assumption of stakeholder expectations being a core mechanism—and adopt an expectancy-violation theory lens. Drawing also on complementary insights into signaling theory, we argue that the severity of the misconduct affects the decision to cut ties. Furthermore, we argue that the engagement in environmental partnerships of client firms as well as suppliers moderates this relationship. To test our hypotheses, we use a unique sample of 434 client firm–supplier dyads, including 27 focal firms pressured by Greenpeace to remove “dirty” palm oil suppliers, accused of illegal deforestation. The study’s findings provide contributions to several literature streams related to inter-organizational dynamics and environmental sustainability.
Purpose
Although sustainability is a popular topic in the past decade, there is a lack of research to identify the driving factors for developing countries. The purpose of this paper is to ...investigate the driving factors for achieving eco-innovation.
Design/methodology/approach
An in-depth case study is employed to address the objective outlined above. A Chinese company with more than 1,200 employees was selected to address the research question.
Findings
By fuzzy decision-making trial and evaluation laboratory and interpretive structural modelling analysis, the driving factors for eco-innovation are identified, and the priority of different factors has also been extracted.
Originality/value
This is among the first studies to carry similar analysis regarding eco-innovation. More specifically, this is perhaps the first study to take this approach and to analyse this topic in a developing country.
Businesses have a responsibility to shareholders and other stakeholders. By establishing a direct link between sustainability and shareholder value, businesses can successfully include sustainability ...considerations in managerial decisions and create sustainable value. The value creation opportunities include cost reduction, risk reduction, product differentiation, and new products to address unsatisfied needs. However, the relevance of various aspects of sustainability changes from company to company depending on the context; this can involve the type of product systems, geographical scope, and related social and environmental drivers. This requires a framework and tool that can capture the complexity, yet provide holistic understanding of the interdependence of industrial systems and, more importantly, furnish sound metrics to include sustainability considerations in business decisions. This paper shows how value can be created by integrating environmental sustainability through Life Cycle Assessment in business, especially in the chemical industry and provides an implementation procedure for business value creation based on life cycle assessment. The application of life cycle assessment was contextualized to various drivers and situations of chemical companies with the help of sustainable value framework. Case studies from three companies were used to illustrate value creation by integrating environmental sustainability through life cycle assessment. A procedure was presented to translate life cycle assessment insights into value creation opportunities. This article provides a better understanding of employing life cycle assessment by business managers in day-to-day business decisions to create value.
•Sustainable value framework for chemical industry is presented.•Framework shows drivers, strategies, business functions and value creation.•Various applications of LCA in business are described using the framework.•Case studies showed how LCA can support business decision-making and create value.•A procedure was explained to integrate LCA in business to create sustainable value.
State forest nursery enterprises, which have strategic importance for forestry of our country, are public sector enterprises which have managed to survive since 1925. These enterprises are ...responsible for producing seedlings which are used both in artificial regeneration and afforestation activities carried out by the related units of the Republic of Turkey Ministry of Agriculture and Forestry and in planting activities to be carried out by all segments of the society. In this research, the current status of forest nursery enterprises in terms of supply, production, marketing and public relations, etc. functions are examined with the help of the nursery mangers opinions. Literature and document analysis, questionnaire and interview were used as methods in the research. And, all of the nursery managers were interviewed face to face. According to result of the research, the main problems of forest nursery enterprises are concentrated in the business economy rather than technique issues. Increasing marketing problems, low capacity utilization, quality and cost management problems, nursey establishment site problems, lack of a standard structure in terms of personnel, machinery and facilities, etc. factors have a negative impact on the success of these enterprises.
This article describes randomized field experiments implemented on two online labor market platforms examining the effect of employer charitable giving on a source of human capital that is becoming ...increasingly important to firms: the “gig” worker. It provides support that a message about charitable giving increases gig workers’ willingness to complete extra work, and that prosocially oriented gig workers are most responsive. A process experiment reveals that sharing information about charitable giving increases how close workers feel to their gig employer, and that the effect is greater if workers previously felt distant from (as opposed to already felt close to) their employer. This article provides insight into gig workers’ nonpecuniary motivation, explores heterogeneity in this type of workers’ responsiveness to charitable giving and illustrates how online platform labor markets can be used as a setting to implement field experiments examining effects of employer-level characteristics on gig worker behavior.
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