Session 79

Managing the Corporate Portfolio

Track F

Date: Tuesday, October 1, 2013

 

Time: 15:45 – 17:00

Common Ground

Room: Cottonwood Room AB


Facilitator:

  • Jerayr Haleblian, University of California, Riverside

Title: Absorptive Capacity and Performance: The Effect of Diversified Business Group Affiliation

Authors

  • Pasquale Massimo Picone, University of Catania
  • Naga Lakshmi Damaraju, Indian School of Business
  • Giovanni Battista Dagnino, University of Catania

Abstract: Absorptive capacity develops progressively and accumulatively over time by means of the interaction with a variety of inter-organizational elements. This study explores to what extend the diversity and overlap of knowledge among affiliated firms generated by the business group’s diversification strategy impact on the firm’s absorptive capacity. Furthermore, we aim to test whether absorptive capacity represents a generative mechanism through which the diversified business group affiliation is able to influence the affiliated firms’ performance.

Title: Broad or Narrow: Which Portfolio Suits Family Managers and Directors?

Authors

  • Christian Stadler, University of Warwick
  • Michael Mayer, University of Bath
  • Julia Hautz, University of Innsbruck
  • Kurt Matzler, Free University of Bozen-Bolzano

Abstract: This paper explores the impact of family managers and directors on the performance of firms with broad or narrow product portfolios. We test the effectiveness of family managers and directors in the context of these different strategies using a dataset of 384 publicly traded German firms from 2000 to 2009. We find that family members are better placed to manage and control firms that are narrowly focused rather than diversified as they may not have the expertise, skills and capabilities to manage the complexity of the latter. However, we also show that these initial constraints can be overcome with time.

Title: Integration Strategy or Strategic Integration? Including the Environment in M&A Integration Processes

Authors

  • Svante Schriber, Stockholm Business School

Abstract: Integration processes are increasingly identified as central for M&A. Integration process studies primarily have dealt with factors internal to the involved organizations. In contrast, little attention has been given influence on the integration process from the environment outside of M&A. The purpose of this study is to contribute to integration process theories by analyzing the external influence on M&A integration management. Findings based on qualitative data from the integration processes of two M&A show that integration strategies were insufficient in explaining how integration was managed. Opening up the integration process to influence from the environment has consequences both for the challenges meeting integration managers, and for valuating M&A, and contribute to explaining why M&A so often are reported to fail.

Title: The Value Traps Facing Corporate Functions

Authors

  • Sven Kunisch, University of St. Gallen
  • Guenter Mueller-Stewens, University of St. Gallen
  • Andrew Campbell, Ashridge Business School

Abstract: Corporate functions are the headquarters functions in a divisionalised company. These functions, such as corporate Finance, HR, IT, Marketing, and Strategy, have been increasing in their numbers, size and influence. While they can add significant value as part of the ‘corporate parent’, they also often subtract value, interfering in unhelpful ways and imposing bureaucracy and delays. Our research, with 30 European companies, exposed four typical value traps that are the root causes of subtracted value. These value traps appear to occur because of the different challenges that corporate functions face at different stages in their life cycle.

Title: Towards a Theory of Corporate-Level Ambidexterity: Portfolio Dynamism Heterogeneity and Company Performance

Authors

  • Martin Weiss, University of Erlangen-Nuremberg
  • Andreas König, University of Erlangen-Nuremberg

Abstract: We contribute to the dynamic capabilities literature by introducing and studying the concept of portfolio dynamism heterogeneity (PDH) – the cumulated between-businesses variation in industry dynamism represented in a company’s business portfolio. Extant theory suggests that managerial challenges differ substantially depending on the level of dynamism (the frequency, intensity, and uncertainty of change) in a given industry. We argue that it is therefore, ceteris paribus, counterproductive for companies to simultaneously manage businesses from industries that deviate strongly with regard to their dynamism. However, we also propose that companies can (over)compensate the effects of PDH if they develop “corporate-level ambidexterity.” A longitudinal test of our hypotheses on a global sample of 744 companies in the years 2003 to 2010 reveals both supporting and surprising results.

Title: Will Spun-off Units from Unsuccessful Parents Survive Better?

Authors

  • Mina Lee, Xavier University
  • Xiaoli Yin, City University of New York

Abstract: This study examines how prior performance of parent firms might subsequently affect the spun-off units’ survival. We propose that parent firms with strong performance tend to increase the likelihood of the spun-off units’ survival in the short run. However, parent firms with weak performance tend to increase the likelihood of spun-off units’ survival in the long term. We also suggest that the ownership of parent firms, as well as legacy spinoffs, will moderate the relationship between parent firms’ performance and spun-off units’ survival.

All Sessions in Track F...

Sun: 09:45 – 11:00
Session 160: Leadership and Strategic Change
Sun: 11:15 – 12:30
Session 159: Publishing Strategic Management Research
Sun: 15:15 – 16:30
Session 75: Managing the Boundaries of the Firm: Entry, Exchange, and Exit
Sun: 16:45 – 18:00
Session 297: Corporate Strategy Business Meeting
Mon: 08:00 – 09:15
Session 71: Corporate Diversification and Firm Performance
Mon: 09:45 – 11:00
Session 74: Acquisition Experience, Innnovation, and Performance
Mon: 14:00 – 15:15
Session 72: Corporate Divestiture and Portfolio Restructuring
Mon: 17:00 – 18:15
Session 76: Managers and Corporate Strategy
Tue: 08:00 – 09:15
Session 81: Corporate Strategy: Competition and Growth
Tue: 11:00 – 12:15
Session 77: Resources, Capabilities, and Corporate Strategy
Tue: 15:45 – 17:00
Session 79: Managing the Corporate Portfolio
Tue: 17:15 – 18:30
Session 78: International Corporate Strategy


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