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MODES OF CHANGE Bocconi -Duke Seminar in Longitudinal Strategy 12/12/2010 CH Kim Luis Rios PowerPoint Presentation
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MODES OF CHANGE Bocconi -Duke Seminar in Longitudinal Strategy 12/12/2010 CH Kim Luis Rios. Strategy has a relatively complete theoretical and empirical picture of the modes of strategic change.

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slide1

MODES OF CHANGE

Bocconi-Duke Seminar in Longitudinal Strategy

12/12/2010

CH Kim

Luis Rios

slide2

Strategy has a relatively complete theoretical and empirical picture of the modes of strategic change

The field of strategy, by drawing on so many disciplines, has managed to cover essentially all facets of strategic change.

But though most of the individual pieces have been well postulated and tested, we still have a long way to go in understanding how they fit together, and how they themselves change over time.

slide3

Whether the unit of analysis is the individual, the routine, the firm, or the network, chances are that if an issue is relevant, someone has studied it.

Internal Organization (Silverman, Mayer)

Knowledge (Kogut & Zander, Ghoshal & Moran, Foss & Eriksen)

Capabilities (Penrose, Leonard, Mitchell)

RBV(Barney, Wernerfelt,

Eisenhardt, Helfat, Peteraf,

Teece)

IO Economics (Porter, Caves, Gimeno, Cool & Schendel, Rumelt)

Institutional Theory (Oliver)

Real Options (McGrath & Nerkar, Dixit, Kogut)

Networks (Granovetter, Rowley, Beherens & Krackardt)

TCE(Williamson, Coase)

Firm & Industry Dynamics

(Agarwal, Mitchell, Teece, Pisano, Shuen, Cattani, Alcacer)

Exploration/exploitation (Rosenkoft & Nerkar, Levinthal)

Institutional theory (DiMaggio & Powell, Oliver, Kogut & Zander, Scott)

Evolution(Helfat, Nelson & Winter,

Klepper& Simons)

Executives (Hambrick, Catterjee)

Boards (Fama,

Westphal& Fredickson)

KBV/Learning (Levitt & March, Zollo & Singh Argote, Dosi, Nelson & Winter, Cohen &

Levinthal)

Individual

Firm

Environment

Boundary

slide4

Similarly, there is good coverage and overlap in our understanding of the main business resource types

Managerial

Financial

R&D

Manufacture

Marketing

Business Resources

Barney, 1991, 1986

Teece, 1986

Bandiera, Barankay & Rasu, 2007

Chatterjee & Wernerfelt, 1991

Owen, 1997

Villanonga, 2004

Harford, 2005

Nelson & Winter, 1997

Teece, 1986

Dussauge, Hart, and

Ramanatsoa, 1992

Hayes & Wheelwright, 1988

Chi, 1994

Anderson & Scmittlein, 1984

Dierickx & Cool, 1989

Henart & Park, 1993

Focused Studies (sample)

Broad Studies (sample)

Bowman, 1980

C h a t t e r j e e & W e r n e r f e l t , 1 9 9 1

A m I t & S c h o e m a k e r , 1 9 9 3

T e e c e & P i s a n o , 1 9 9 4

Andersen, Denrell, Bettis, 2007

slide5

What remains to be elaborated are the relationships between these different modes and how they work as a system

Thus, to appropriate the cliché of the blind men, we likely will not gain much by exploring the nether-regions of the elephant.

slide6

Basic Framework

(Capron and Mitchell, 2009/Levitt and March, 1988)

Contract

External

Sourcing

Alliances

Evaluation Criteria

1. Is this framework mutually

Exclusive?

2. Is this framework

Collectively

Exhaustive?

Acquisition

Modes of

Strategic

Change

Learning

By Doing

Internal

Development

Learning

By Hiring

Learning

By Observing

slide7

Selection between External vs Internal

(Capron and Mitchell, 2009/2004)

Dimensions to be considered

  • The attributes of capability
    • Contractual Hazard (TCE)
    • Strategic Resource Gap (RBV)
    • Internal Legitimacy (NIT)
    • 2. External constraints
      • External availability
      • Importation capacity
      • 3. Firm’s search attributes(Moderating)
      • Internal reconfiguration
      • External reconfiguration

External

Sourcing

Modes of

Strategic

Change

Internal

Development

☞ Is there another relevant theory or aspect we should incorporate for identifying additional factor?

slide8

Dynamics Within External Sourcing

(Singh and Mitchell, 2005)

Org.

Theory

Network/

Knowledge

TCE

Modes of

Strategic

Change

Managerial Costs

Control

Depth

Contract

External

Sourcing

Alliances

Acquisition

Transaction

Costs

Flexibility

Width

☞ When the benefits outweigh the costs

or when the reverse is true?

 Many empirical studies are there on these issues.

slide9

Modes of Internal Development

Internal

Development

Modes

Of Learning

Learning by Doing

  • Learning Curve(BCG)
  • (Argote/Beckman/Epple, 1990)
  • - Learning by direct experience
  • (Levitt and March, 1988)

Modes of

Strategic

Change

Learning by Hiring

(Hybrid form)

  • Job Mobility
  • (Song/Almeida/Wu, 2003)

Learning by Observing

  • Vicarious Learning
  • (Baundra)
  • Learning by observation
  • (Baum/Ingram, 1998)
slide10

Dynamics Within Internal Development

Beyond

Local Search

Path-Breaking

Exploration

Learning by Doing

Modes

Of Learning

Learning by Hiring

(Hybrid)

Learning by Observing

Path-

Dependent

More

Local

Exploitation

  • ☞ Many studies are addressing issues of dynamics within internal development
  • Exploration vs Exploitation (March 1991)/ Core Competency(Prahalad and Hamel 1990)vs Core Rigidity(Leonard-Barton 1992)/ Absorptive Capacity(Cohen and Levinthal 1990)vs Dynamic Capability(Teece, Pisano, and Shuen, 1997)
  • Compared to external mode of strategic change, there is a difficulty related with measurement.
slide11

In conclusion, though we can think of small, esoteric holes in the literature, it is unlikely that we have overlooked a “magic bullet” mode of change, and we should concentrate on building links between our repertoire of theories, in order to generate new theories of change