The theoretical rationale for the model of developing a strategy for competitiveness managing based on a combination of the positioning and provisions of the resource approach theory is given. The ...management strategy is being developed at the upper (strategic) and medium (tactical) levels. At the upper level, there is a positioning of the enterprise environmental requirements potential. At the level of individual strategic business units (SBU) – analysis by the method of M. Porter, the possibilities are determined on the basis of provisions of the resource approach. Formation of a common competitiveness management strategy is a compromise of a common strategy project with SBU enterprise strategies. The composition of the competitiveness management system of enterprise is validated: the main subsystems, their functions and interrelations between them are defined. Particular attention is paid to the management subsystem, which consists of three subsystems: structural and functional, self-development and informational and behavioral. The main functions of the decision, transforming and information controlling blocks at all management levels are defined. A model of structure of the enterprise competitiveness management system is proposed. Under strategic management, the development of functional strategies is proposed to be transferred to the upper and middle management levels. Using the matrix management structure of the functional units of the enterprise is suggested.
The main purpose of this article is to identify the main characteristics of Lean Six Sigma projects executed by efficient companies. To do so, this article explores a large empirical database, with ...112,421 projects, executed from 2001 to 2018 in 57 strategic business units from a heavy machinery producer, which is recognised as a worldwide reference in the use of Lean Six Sigma methodology. The research was conducted in two stages, first, the data was analysed with a Network Data Envelopment Analysis (DEA) model, which provided an efficiency ranking formed by the strategic business units. In the second stage, a Classification Tree (CHAID) method was used to identify the common characteristics of the projects accomplished by the most efficient ones. The findings show that these strategic business units are characterised by projects executed in departments closely related to senior management, especially Corporate Governance and Business Strategy. In addition, their projects usually focus on people, innovation, or cost reduction and are structured more frequently with the DMAIC cycle. These findings broaden the understanding of the criteria that should be considered in Lean Six Sigma project selection and prioritisation, by providing new insights (not identified in previous studies) to decision-makers and researchers, from projects associated with the efficient performance of Lean Six Sigma, which can be particularly valuable considering the multiple projects conducted in this initiative, that frequently compete for resources.
Research Summary
This paper examines whether ownership rights to strategic assets within firms affects innovation. Although existing research maintains that strategic assets can be leveraged freely ...within the firm, many firms allocate ownership rights to strategic assets to business units or subsidiaries. While scholars have examined strategic asset ownership rights as a tool for tax avoidance, scholars have yet to study its effects on innovation. In the context of multinational firms, I find evidence that subsidiaries with ownership rights produce more technological innovations and are more responsive to shocks to R&D opportunity than those without ownership rights. Additionally, the results provide evidence of the cost of tax avoidance strategies. When subsidiaries in technologically advantaged locations do not hold ownership rights, they produce fewer and less impactful innovations.
Managerial Summary
A key decision made by multinational firms is which subsidiaries should hold ownership rights to the firm's strategic assets. The choice often entails a trade‐off between allocating ownership rights to subsidiaries best positioned to innovate and manage the strategic asset versus to subsidiaries in income shielding locations to reduce the firm's tax bill. This paper examines whether subsidiary strategic asset ownership rights matter for subsidiary innovation. I find evidence that subsidiaries with ownership rights produce greater quantity and quality of innovations and are more responsive to changes in R&D opportunity than subsidiaries without ownership rights. This study highlights an important ramification of tax avoidance strategies: locating strategic asset ownership rights away from subsidiaries in regions of expertise can adversely affect innovation within the firm.
Organizations are coalitions of individuals with heterogeneous interests and perceptions (March and Simon, 1958/1993). We examine an important source of heterogeneity, namely the different ...perceptions individuals hold across hierarchical levels. We introduce the notion of a hierarchical erosion effect whereby individual perceptions about specific practices become less favourable the lower one goes in the hierarchy. Using data from 4,243 employees across four levels in 38 business units, we provide evidence that this effect exists, controlling for other factors, including the overall favourability of the business unit culture across eight practices. We show how the size of this hierarchical erosion effect varies depending on the nature of the organizational practice being evaluated and the extent to which executives share strategic information widely, and we also show that a lower hierarchical erosion effect is correlated with higher business unit growth. In doing so, we enrich understanding of two aspects of March and Simon's work, their notion of intra‐organizational heterogeneity and their distinctive view of the nature of hierarchy.
Research summary: The role of the strategic planning process in the ongoing generation of innovative knowledge is vital to the survival and growth of a firm, especially when technologies and market ...conditions are rapidly changing. We analyze data from a survey of firms in high-technology industries to determine whether it is possible to break the commonly experienced trade-off between strategic planning's positive influence on firm profitability and its negative influence on firm innovation. We draw on Adler and Borys 's (1996) conceptualization of bureaucratic process types to identify several firm characteristics that have the potential to affect whether employees perceive strategic planning as enabling to their creative endeavors. We find that contingent effects between strategic planning and the identified firm characteristics exist that can break the trade-off. Managerial summary: A tension exits in the literature about whether strategic planning hurts or helps innovative activity. Our analysis of data from 227 business units in high-technology industries indicates that strategic planning is a complex process that can be perceived by employees as enabling or coercive. Our results confirm that strategic planning negatively affects innovative activity but positively affects profitability for average firms. We find, however, controllable firm characteristics—risk-taking and knowledge-based reward systems—affect the trade-off Given the higher levels of risk-taking and knowledge-based reward systems, firms can use strategic planning to achieve both high returns on investment and a high level of innovative activity.
Research Summary
This article develops theory on how an organization's structure affects future reorganizations. I highlight that a firm's structure shapes not only the locus of decision‐making power ...(i.e., centralization and decentralization) but also the employees' interaction structure. I develop microlevel theory that connects the firm's structure to the interactions among its employees—for instance, its influence on the time employees spend adjusting their behavior after a reorganization. This theory predicts that some structures are more likely than others to promote a reorganization to occur sooner. I use a unique, hand‐collected data set of reorganizations in the cell‐phone manufacturing industry to test and find directional support for this theory.
Managerial Summary
I examine the effect of a firm's current structure on its corporate reorganization decisions, which are defined as the addition and/or removal of business units. I posit that the way employees are grouped into those business units may affect both the type and timing of subsequent reorganizations; the reason is that employees of similar (resp. different) backgrounds should need less (resp. more) time to achieve effective collaboration. Using data on the reorganizations of cell‐phone manufacturing firms during 1983–2008, I find directional support for the theory. This result implies that managers may need to watch closely any reorganization that shifts the firm toward more heterogeneous interaction structures—because its implementation may well require additional time.
This study examines how comprehensive performance measurement systems (PMS) affect managerial performance. It is proposed that the effect of comprehensive PMS on managerial performance is indirect ...through the mediating variables of role clarity and psychological empowerment. Data collected from a survey of 83 strategic business unit managers are used to test the model. Results from a structural model tested using Partial Least Squares regression indicate that comprehensive PMS is indirectly related to managerial performance through the intervening variables of role clarity and psychological empowerment. This result highlights the role of cognitive and motivational mechanisms in explaining the effect of management accounting systems on managerial performance. In particular, the results indicate that comprehensive PMS influences managers’ cognition and motivation, which, in turn, influence managerial performance.
We contribute to understanding the previously unrecognized consequences of individualized employment arrangements on the relationship between pay and performance. Increases in the application of ...pay-for-performance (PFP) idiosyncratic deals (PFP i-deals) raise questions about how individualized PFP arrangements affect the performance of peers who do not receive such customized deals. As pay systems become more individualized, understanding the economic ramifications of how PFP i-deals affect peer performance is essential for understanding the total unit effects of implementing PFP i-deals. To examine these peer effects, we explored peer responses to PFP i-deals and identified boundary conditions on broad theoretical assumptions underlying the conclusion that PFP increases unit performance. We tested our predictions by applying multilevel random-coefficient discontinuous growth models to a sample of 451 peers nested in 117 business units of a for-profit health-care organization. Immediately after PFP i-deal implementation in the unit, the performance level of peers was negatively affected. Additionally, peer performance trends after PFP i-deal implementation were lower than they were before the PFP i-deal implementation. Our study also identified contextual factors that influence peer responses to PFP i-deal implementation.
The COVID-19 pandemic has had a significant impact on the global banking industry, primarily because there has been an increase in non-performing loans, which has reduced bank profitability. ...Responding to this challenge, the Financial Services Authority has put in place a series of stimulus measures aimed at maintaining operational efficiency within the banking sector. It is crucial to thoroughly analyse the effects of the stimulus measures implemented by the Financial Services Authority (OJK) on the banking sector. This study seeks to assess the technical efficiency of banking in Indonesia prior to. during, and post the COVID-19 pandemic (2018-2022). In addition, the research highlights the countercyclical policies implemented by the Indonesian Banking Authority in reaction to the risks brought about by COVID-19. The study sample comprises data from 106 Commercial Banks (Conventional Banks). 13 Sharia Banks, 20 Sharia Business Units, and 167 Sharia Rural Banks. During the pandemic period in 2020, the Data Envelopment Analysis revealed that Commercial Banks. Sharia Business Units, and Sharia Rural Banks collectively faced inefficiency. Collectively, Sharia Banks were not operating efficiently both before and during the pandemic. In 2022, following the conclusion of the COVID-19 pandemic, all banks reached optimal efficiency levels. This study highlights the beneficial effects of implementing countercyclical policies by the Indonesian Financial Services Authority on the banking sector's resilience amid the COVID-19 pandemic. Based on the results, this study suggests that banking authorities in each country should adopt countercyclical policies in response to different crisis triggers.
The problem of resource allocation is central to economics. It is also central to the strategic management of companies. Despite considerable research by management scholars describing the process in ...firms first carried out in the 1960s and continuing since then, management theory of the process remains wedded to a financial model of capital budgeting that poorly fits the problem facing companies. Consulting firms stepped into the gap with models of business portfolios that helped frame the resource allocation choices among business units. But over time, changes in the capital markets, in the flows of technology, and in the patterns of global competition have meant that the dilemmas facing company managements are far more complex than the models and concepts academic researchers use to describe them. This may well be because the forces that must be taken into account are cognitive, organizational, and interpersonal as well as economic and thus cross the lines of academic disciplines, while the time horizon of these problems exceeds the scope of a typical academic research project. There is important research to be done.
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