Efficiency-oriented Strategies Research Articles

Opposing forces of business model innovation in the renewable energy sector: Alternative patterns and strategies

An increased focus on renewable energy use and the liberalisation and digitalisation of the energy market has led to the adoption of innovative business models by energy businesses. This paper explores business model innovation in the electrical sector. Using multiple case studies of businesses in the electrical market in Scandinavia, this study shows why and how their business models have changed. Change forces and environmental strategies leading to certain patterns of business model innovation serve as the main study objectives. The pricing models, servitisation and appearance of new actors have mostly pronounced patterns of innovative business models of energy businesses. These patterns are predetermined by external pressures, such as industrial advancements and social trends, and are supported by businesses’ efficiency-oriented strategies. The study outcomes have implications on practice, showing the need for proactiveness and a consequent action plan for energy businesses to implement alternative environmental strategies. This study contributes by providing a novel insight into business model innovation by revealing mechanisms catalysing change from the multidimensional perspective – embracing the ‘cause’ and ‘effect’ of the change within energy businesses.

Do non-financial factors influence corporate dividend policies? Evidence from business strategy

In this paper, we examine the influence of business strategy on dividend policy. We find that firms following an innovation-oriented strategy (prospectors) pay significantly lower dividends than those following an efficiency-oriented strategy (defenders). Our cross-sectional analyses show that such association is more pronounced among firms with greater investment opportunities and superior performance. Further analysis reveals that prospectors make significantly more capital investment, consistent with prospectors paying fewer dividends to finance their investment activities. Moreover, we address potential endogeneity concerns by implementing (i) a triple-difference analysis (DiDiD) that exploits an exogenous shock that hinders innovation through curbing the supply of highly skilled employees and (ii) an instrumental variable approach. Our results are robust to a propensity-score-matched (PSM) analysis, the inclusion of individual business strategy components, and the use of alternative measures of the dependent variables. Overall, our findings highlight business strategy as an inherent and non-financial determinant of dividend policies.

Does business strategy influence interfirm financing? Evidence from trade credit

This paper investigates the impact of business strategy on firms’ trade credit policies. We find that firms following an innovation-oriented strategy (prospectors) offer significantly more trade credit to their customers than those following an efficiency-oriented strategy (defenders). Furthermore, by exploiting two exogenous shocks to the supplies of high-skill employees and bank credit, we find that prospectors curtail trade credit in response to the reduction of talent mobility following the adoption of Inevitable Disclosure Doctrine, whereas defenders significantly increase provisions of trade credit following the increase in bank credit supply due to the relaxation in interstate branching regulations. Additional evidence substantiates that prospectors increasing trade credit provisions enjoy higher sales generation efficiency and superior performance. Finally, our supply chain analysis documents that prospectors also receive significantly more trade credit from their suppliers. Collectively, our findings highlight that business strategy is an important yet intrinsic determinant of supply chain financing.

Business Strategy and Corporate Social Responsibility

This study examines the relation between a firm’s business strategy and its corporate social responsibility (CSR) performance. Using a comprehensive measure of business strategy based on the Miles and Snow (Organizational strategy, structure, and process, McGraw-Hill, New York, 1978, Organizational strategy, structure, and process, Stanford University Press, Stanford 2003) theoretical framework, we find that firms following an innovation-oriented strategy (prospectors) are associated with better CSR performance than those following an efficiency-oriented strategy (defenders). Specifically, compared with defenders, prospectors engage in more socially responsible activities, fewer socially irresponsible activities, and perform better in both stakeholder- and third-party-related CSR areas. Taken together, our results suggest that business strategy is an important determinant of CSR performance. Prospectors take advantage of CSR, as their innovation-oriented strategy allows them not only to benefit more from CSR, but also to have more tolerance for the uncertainty, risk, and long time-horizon associated with CSR engagement.

Revealing mental health status in Iran's capital: Putting equity and efficiency together

Information about urban health is often based on averages, while to better understand health status in urban areas, inequality should also be included. In this paper, we applied an achievement index approach in order to surmount this defect and to examine mental health status in Iran's capital, Tehran. The data we required for this study were taken from the Urban Health Equity Assessment and Response Tool (Urban HEART) survey which was conducted in Tehran in 2007, covering people aged 15 and above. The concentration index, which is a commonly used measure of socioeconomic inequalities in health, was extended to enable the combination of inequality and averages and the formation of a mental health achievement index. Values from the standard concentration indices showed that mental disorders are concentrated disproportionately among the poor in Tehran. An extension of the standard concentration indices revealed that, in most of Tehran's districts, the mental health of populations in the poorest quintile is much worse than that of other groups. In addition, when we computed the achievement index and ranked districts according to this index, the ranking was different from the ranking by averages. These findings imply that mental health varies significantly across the economic groups of the population in Tehran and that efficiency-oriented strategies which target average level of mental health alone are not sufficient to improve mental health of all people especially mental health of the poor. Equity-oriented strategies which target the mental health inequalities should be considered as well.

International joint venture partner origin, strategic choice, and performance: A comparative analysis in an emerging economy in Africa

This study examines the competitive strategic choices of international joint ventures (IJVs) and their performance implications in a low-income emerging economy in Sub-Saharan Africa — Ghana. Using the resource-based view of the firm, it is argued that IJVs with partners from emerging economies are more likely to pursue an efficiency-oriented business strategy to strengthen their strategic positioning, competitiveness and performance. Conversely, IJVs with partners from advanced industrialized economies would be more likely to pursue a market effectiveness-oriented strategy to strengthen their strategic positioning, competitiveness and performance. The findings from 76 IJVs offer support for the hypothesized relationships. IJVs with partners from emerging economies implementing an efficiency-oriented strategy of cost leadership outperform those with partners from advanced industrialized economies implementing the same strategy. In contrast, IJVs with partners from advanced industrialized economies implementing a differentiation strategy outperform those with partners from emerging economies implementing a differentiation strategy.

Radio frequency identification (RFID) implementation in the service sector: A customer-facing diffusion model

Cost-conscious businesses traditionally have focused on using radio frequency identification (RFID) systems to enhance the efficiency in the supply management/logistics process. These firms go through an implementation process that focuses on the supplier-facing, back-office operations. Drawing from observations from three case studies in the service sector, we develop a complimentary customer-facing model, which focuses the diffusion of RFID as originating from those activities associated with the delivery of the actual service offering. Our diffusion model contrasts the potential impact on organizational performance from both a supplier-facing and a customer-facing perspective. By focusing a firm's RFID strategy on customer-facing activities, a firm can use the technology to change its basis of competition from an efficiency-oriented strategy to one where RFID has more strategic implications such as providing the foundation for new products or services or by providing the infrastructure to enhance customers’ value perceptions in order to strengthen customer loyalty.

Innovation business process reengineering based on workflow technology: a type of e-innovation

Being faced with more intensive global competition than ever, enterprise must nowadays transform from an efficiency-oriented strategy to an innovation-oriented strategy. The rapid development of information communication technology makes a great impact on the process of New Product Development (NPD). The theory of Business Process Reengineering (BPR) can be used in reengineering of NPD. This paper introduces the basic concepts of e-innovation and workflow, then puts forward a new model of New Product Development Workflow (NPDWF) which realises e-innovation.

German FDI and Integration of Production in the EU

In this paper, we investigate internationalization strategies of German manufacturing firms in the European Union. We give reasons for the hypothesis that traditional market strategies had been replaced by border-crossing production networking based on the comparative advantage of host countries and on specialisation and scale economies. Our empirical test of this hypothesis shows, on the one hand, that traditional market strategies are not outdated. On the other hand, there are clear signs of international network strategies. They form an important component in internationalization strategies of multinationals in the Internal Market. The location of foreign production of German multinationals is, among others, oriented towards the technological potential of host countries indicating the importance of asset-seeking strategies. Furthermore, the positive connection between foreign production and both exports and imports points at the significance of efficiency-oriented strategies with foreign affiliates taking over an active part and not only being recipient of components of the German parent companies. However, there is hardly evidence that significant changes towards network strategies took place between 1996 and 2000.

Market and efficiency-based strategic responses to environmental changes in the health care industry.

This study examined the linkages between perceived environmental changes in the health care industry, corresponding strategic adaptations, and their impact on select performance measures as reported by managers. Results from a sample of 187 hospitals indicate that efficiency-oriented strategy is chosen more often by organizations that perceive their industry environment to be relatively stable and certain while market-focused strategies are chosen more often by organizations that perceive greater environmental instability and uncertainty.