Corporate Growth Strategy Research Articles

SHAREHOLDER ACTIVISM AND INTERNATIONALIZATION IN THE FAMILY FIRM

We present the internationalization of the family firm (FF) as a corporate growth strategy that is sometimes necessary to ensure survival. The different generations running the family firm (GFF) are likely to be constrained, not only by the demands of the business itself, but also by activism from non-management family shareholders. In this paper, we perform an analysis of a sample of Spanish family firms, both domestic and multinational, for the period 2000–2009. The results of this analysis show evidence of a positive relationship between the scope of internationalization and two other variables: family activism (FAI) and life cycle duration of the family firm (DLFF). When it comes to seeking alternative ways to create economic value and obtain debt finance, each generation is less risk averse than the preceding one. However, increasing family conflict over successive generations instigates economic value-destroying behavior. Overall, our findings suggest that economic value creation, leverage and international diversification in FFs will be conditioned not only by the ownership structure and size of the company, but also by the firm's current point in the business life cycle, the generation that is in charge, and activism from other family members, all of which play a decisive role in the FF internationalization and economic value creation process.

Ethnic Social Structures and Mainstream Capital: The Ethnic Anchoring of "American" Franchise Growth

This article argues the significance of ethnic resource mobilization to certain corporate restructuring and growth trends in the U.S. mainstream economy with the expansion of franchising and the importance of branding in giant corporate America. While the field of ethnic economies continues to debate how ethnic social structures function in the mainstream economy, it has overlooked this important part of the economy. “Bounded solidarity” helps explain how particular Asian Indian business communities have been integral to the changing franchisor-franchisee relationship, franchise operation procedures, and consumer marketing strategies, and has worked to counterbalance the industry’s heightening demands. In this way, ethnic social structures are integral to corporate growth strategies and norms of efficiency.

Managing favors in a global economy

Managers engaged in the global economy continually encounter circumstances inwhichtheywishtoaskforortheythemselvesareapproachedforafavortoaccomplish business objectives. Favors are also important in personal relationships,but the focus of this Special Issue is on their use in business activities, includingfavors that spill over from a manager’s personal relationships into the business arena.Despite their importance in business, the use of favors has been an understudiedphenomenon in the field of management and international business. Favors span anumber of issues such as corporate growth strategies, foreign direct investment, jointventures and other alliances, multinational headquarters-subsidiary relations, knowl-edge transfer, human resources management, and business ethics. Thus, this SpecialIssue contributes to the development of this nascent field in those arenas, although werealize that the topic has been a prominent one for decades in other fields, particularlyanthropology (Malinowsky, 1922; Mauss, 1990/1950), sociology (Blau, 1964; Burt,1992; Homans, 1958; Scott, 2008), and economics (North, 1990; Polanyi, 1957).Additionally some management authors have addressed the topic of favors eitherdirectly (Flynn, 2003), or by discussing practices that would be considered favors.Examples would be work on guanxi in China (Luo, 2007), blat/sviazi in Russia(Ledeneva, 1998, 2006), jeito in Brazil (Amado & Brasil, 1991), and favors in India(Schuster, 2006), as well as the use of favors in all the BRIC countries (Puffer,McCarthy, Jaeger, & Dunlap, 2013).

Corporate Governance, Board Networks and Growth Strategies

This paper examines the relationship between board structure and risk taking behavior of emerging market firms by looking at firms’ growth strategies. I investigate two types of growth strategies –...

Sri Lanka: putting entrepreneurship at the heart of economic revival in the north, east, and beyond

Economic growth at the national level in Sri Lanka in the past few years has been largely state-led. Similarly, economic growth in the formerly civil war-affected northern province has also been largely state-led (including mushrooming military enterprises) during the past two years after the end of the civil war. This author is of the view that individual and corporate entrepreneur-led growth strategy is the appropriate strategy to revive the national economy and the formerly war-torn regional economies. Moreover, current military peace should be transformed into civil peace in the former war-torn areas.

Spillover on Alliances - Joint Venture of Siemens-Nokia to the Synergy of AT&T-T-Mobile

In venture of developing corporate growth strategy and business plan, alliances help clients identify and implement joint ventures, and alliance structures to achieve the benefits of working with a complementary partner. This paper uses fairness opinions to assess the synergy for the recent mergers between AT&T and T-Mobile, and to learn from the spillover effects to fulfill their fiduciary duties by providing independent financial analysis for shareholders, board of directors, trustees, and others.

Analyze dynamic value of strategic partners using Markov chain

With rapidly growing and increasingly competitive marketplace, companies are constantly performing strategic planning for growth strategy and repositioning itself for even more disruptive changes to achieve or regain market leadership, which makes selection of strategic partners play a very critical role in the corporate growth strategy. How to reallocate limited resources to maximize return on investment (ROI), significantly reduce budget overruns and effectively leverage customer value analysis has become a key research topic for both pragmatic and academic research groups. Previous strategy research findings are mostly focused on resource based view (RBV) and transaction cost to explore the selection strategy on strategic partners, while shed very little light on the value of strategic partners as this becomes an inevitable component in strategy management. In order to bridge such a gap, this research is in an attempt to perform a thorough value analysis of strategic partners using both Markov chain and Hierarchical Bayesian. With Markov chain as a base, this research performs data collection and analysis using previous value status of strategic partners, and their migration pathways, along with Hierarchical Bayesian, to establish individualized transition probability matrix and further predict the future migration pathways of strategic partners, eventually providing key insights for companies to develop strategies on how to manage and strengthen key partnerships.

Estrategia de mercado seguida por los grupos económicos en chile: efecto en el rendimiento y la rentabilidad1

The relationship between corporate growth strategy (diversification versus concentration) and corporate profit is the issue that has probably garnered most attention in the field of research on strategic management, but it is also one where evidence is disparate and inconclusive. Henee, this article focuses on providing a new background to this discussion, by making a comparison to determine which growth strategy yields better performance and profitability. To this end, the study concentrated on the analysis of 38 Chilean economic groups selected by simple random sampling. The main result of this research study is that concentrated economic groups achieve increased profitability and performance as compared with diversified groups, but ha ve a greater variation in their profit.

Value Implications of Corporate Branding in Mergers

Mergers are central to corporate growth strategies but they are disruptive events that cause customers, employees, and investors to reassess their relationships with the new merged entity. The choice of corporate branding is an important strategic decision in mergers as it provides a means to communicate context-appropriate positioning and messaging for the merged entity and can assist in securing the ongoing loyalty of customers, employees, and investors. We investigate the value implications of corporate branding in mergers. Using a sample of 216 large mergers undertaken during 1997–2006, we classify merger transactions into three groupings according to the post-merger corporate branding: acquisition (the identity of one of the merging companies is discarded and it is rebranded with the other firm’s name and symbol), business-as-usual (both firms continue to operate under their own corporate names and symbols), and amalgamation (elements of both corporate brands are maintained in the new brand). We undertake event study and time-varying calendar-time portfolio analyses to assess potential differences in the value implications of corporate branding in mergers. We find significant differences in the immediate market reaction to the merger announcements and significant differences in the post-merger performance across the three corporate branding types. Firms using the more expedient acquisition and business-as-usual branding strategies underperform firms that choose the more sophisticated amalgamation branding. Our findings provide insight into a signaling versus a market-based asset management role of corporate brands in mergers.

Bad Luck or Bad Policy: Why Do Firms Fail?

This paper investigates the effect of an aggressive corporate growth strategy on the failure risk of a firm using information on firm-level mergers and acquisitions (M&A) activities. I find that excessive acquisitiveness relative to an industry benchmark explain more variations in the failure risk of firms than exogenous economic disturbances. Excessive M&A activities are associated with a rise in immediate debt obligations and a fall in liquid assets to finance these obligations. This mismatch between debt maturity and asset liquidity translates into an increased amount of default risk for hyperactive acquirers. These results suggest that traditional line of argument - Blame It on the Market Tsunami - may not be well grounded and firms need to carefully examine their investment and financing policies in good times to cushion against shocks in bad times.

Learning, Knowledge Transfer, and Technology Implementation Performance: A Study of Time-to-Build in the Global Semiconductor Industry

Organizational growth and performance hinge upon the effective deployment of productive knowledge in new facilities. However, getting those facilities fully operational can be difficult and time consuming. Interestingly, we understand little about what determines the performance of that process. In this paper we help fill this gap by analyzing multiple determinants of time-to-build—i.e., the time it takes a firm to build and ramp up operations at a new manufacturing facility. Theoretically, we develop predictions regarding the effects of competitive, firm, and technology characteristics on time-to-build. Empirically, we test our predictions on a sample of plant construction projects in the memory segment of the global semiconductor industry. We find that competition from rivals with superior technology is associated with shorter time-to-build, at least up to a point. Firm and industry experience are associated with shorter time-to-build. International projects, and those that push the technological frontier, take longer. Findings from this study enrich the literatures on corporate growth, international expansion, and technology strategy. We discuss implications for research and practice.

Dow's novel approach to managing the human element of mergers and acquisitions

AbstractThe human element in mergers, acquisitions, and joint ventures is too critical to be left until late in the process. Dow's HR Center for M&As is on the scene early to uncover factors that could influence the viability and value of a deal, and then helps the business leaders plan and execute the implementation strategy. Having developed tried‐and‐true approaches, tools, and integrated HR solutions, along with practices for capturing key learnings from every deal, the center has become a repository of HR know‐how essential to a corporate growth strategy centered on M&As. © 2007 Dow Chemical Company

Dimensions of Corporate Ownership in For-Profit Higher Education

The recent growth of for-profit higher education has been marked by the rising importance of institutional ownership by publicly traded corporations. This paper looks at 13 publicly traded corporations that own degree-granting for-profit institutions of higher education in the United States, examining corporate growth strategies and their distinctiveness as Wall Street-owned institutions. The paper concludes that these institutions are different from their independently owned peers and that corporate growth strategies suggest the importance of foreign expansion.

Telecom Sector: Achieving Sustainable Corporate Growth

The paper presents a framework for achieving a sustainable corporate growth strategy for the Indian telecom sector. One sector in India where there is huge potential for sustainable growth is the telecom sector. Generally a monopoly, the sector is technologically intensive and is characterised by decreasing costs of operation with increasing scale and scope economies. Strategies for sustainable growth should be rooted on sensible strategic analysis based on the firms' distinctive capabilities and competencies. Based on this analysis, the appropriate implementation sequence has to be identified. The success and failure of the sequence of initiatives should provide valuable learning which acts as the most important ingredient in the organisational building activities. This learning is also essential in pointing out the errors made in strategic analysis as well as identification of core capabilities.

New directions for international retail joint venture research

This paper contends that a range of questions arising from the geographical and organizational dynamics of international retail joint ventures have been bypassed by studies in the international retail field. It argues that, despite its importance as a corporate growth strategy, comparatively less is known about the way in which retailers have employed joint ventures in international markets. Based on a review of the literature and illustrated with examples of international retail joint venturing activity, this paper reveals several gaps in our understanding of the internationalization process of retail firms. Suggestions for further research are made throughout the paper on the basis of gaps in the retailer internationalization literature.

Growth strategies in the Spanish hotel sector: determining factors

PurposeThe central aim of this paper is to identify some of the motives behind the type of growth strategy followed by Spanish hotel enterprises in recent years.Design/methodology/approachThis study was elaborated from secondary data corresponding to news published on the web page of a digital newspaper specialising in tourism – HostelTur. The information obtained in this way was completed and contrasted using other sources like the BARATZ database (where all the news items published in the economic press since 1981 are collected), and the web pages of hotel enterprises, since many of them publish news about their main actions along with the most relevant events that take place within these organizations.FindingsFrom a sample of 444 observations, the results suggest that initial profitability, size, age and indebtedness level of firms are some of the factors determining growth strategies in this sector.Originality/valueThe paper throws light on some of the reasons behind the behaviour of Spanish hotel enterprises as far as growth is concerned. The innovative approach of this study, which focuses on the causes rather than on the consequences of certain corporate growth strategies, is its main contribution.

Technology Transfer and Implementation Performance: A Study of 'Time-to-Build' in the Global Semiconductor Industry

Organizational growth and performance hinge upon the effective implementation and transfer of technological knowledge. Implementing and transferring such knowledge however can be difficult and time-consuming. Interestingly, we understand little about what determines the performance of implementation and transfer projects. In this paper we help fill this gap by analyzing multiple determinants of time-to-build - i.e., the time it takes for a firm to build and ramp up operations at a manufacturing plant. Theoretically, we develop predictions regarding the effects of market, firm, and technology characteristics on time-to-build. Empirically, we test our predictions on a sample of plant construction projects in the memory segment of the global semiconductor industry. Consistent with our theory, we find that competition from rivals with superior technology is associated with shorter time-to-build, as is firm experience; while international projects, and those that push the technological frontier, take longer. Findings from this study enrich the literatures on corporate growth, international expansion, and technology strategy. We discuss implications for research and practice.

Gentrification as Corporate Growth Strategy: The Strange Case of Charlotte, North Carolina and the Bank of America

ABSTRACT:In keeping with calls for gentrification research to show greater sensitivity to contextuality, this article uses Charlotte, North Carolina as a case study to illustrate a geography of gentrification in which motivations to gentrify and stage trajectories do not quite fit traditional expectations. In this mid-sized Southern city, gentrification was first introduced in the early 1970s when corporate leaders recognized the importance of revitalizing central city space in a manner that would enhance their corporate identity and advance their strategic goals. Early stage gentrification in Charlotte was characterized by the production of gentrifiable space in one of the city’s most deteriorated districts, the absence of marginal gentrifiers and traditional urban pioneers, unconventional profit motives, and significant deviations from traditional stage theory. Beyond providing an analysis of gentrification at a level of the urban hierarchy (and in a region) that has long been overlooked, the article contributes a critical and contextual perspective to our understanding of gentrification’s causality and process.

Interview with Dr. Dieter Thomaschewski, President European Strategy Program, BASF Aktiengesellschaft

Executive Overview BASF is the world's leading chemical company, offering high-quality products and intelligent system solutions for many industries under the motto “We don't make the products you buy, we make the products you buy better.” The company employs 87,000 people in 170 countries on all five continents and generated a turnover of 33.4 billion Euros in 2003. A graduate in business administration, Dr. Dieter Thomaschewski joined BASF AG more than 30 years ago. After several jobs in marketing and sales he became President of BASF Venezolana S.A. in 1987, subsequently becoming President of BASF Information Systems in the U.S. Since 1992 he has been in charge of BASF's fertilizer division and also President of BASF's Region Europe. Currently he is responsible for the European strategy program within BASF group. Dr Thomaschewski has published books on corporate growth strategies, business success factors, and synergies in acquisitions.

Want to grow the top line? Manage costs better

Slimmed down and operating more efficiently after the recession, many companies are looking for ways to boost sales and grow their way to higher profits. While news of this renewed focus on growth is encouraging, a diminished role for cost management on the corporate agenda is alarming. The only thing certain about planning for growth is that it will cost money. Continuing to manage costs aggressively during periods of economic expansion is the most efficient way to fund that growth. Companies that want to grow and grow profitably must be relentless in finding ways to free up costs and capital and must reinvest those funds in their most promising growth opportunities. In this article, we argue that cost management should be closely aligned with, and made an explicit part of, corporate growth strategies, for the challenge is not only to lower costs, but also to ensure competitors are “out‐invested” on growth. We then suggest four principles for achieving this alignment. Our approach involves the use of ambitious sales and earnings growth targets, tailored cost‐reduction targets, selective cost cutting and improved organizational capabilities.