Incumbent Business Research Articles

How business challenges climate transformation: an exploration of just transition and industry associations in Australia

As the consequences of a warming world intensify and actions to mitigate climate change remain persistently slow, demands for a more radical political economic transition focused on climate and justice have grown. ‘Just transition’ is one such counter-hegemony that has gained wide appeal within the field and practice of international political economy. Through document analysis and interviews with industry associations in Australia, this article seeks to demonstrate the pliability of just transition, a plasticity that allows incumbent business interests to ‘remake’ what is just within a just transition. Underpinning this analysis is a novel theoretical framework based on ‘justification of worth’, which shows that fossil capital seeks to outmaneuver calls for just transition by discursively re-aligning justice with the ‘common good’ of fossil capital hegemony. The article therefore assists scholars of international political economy to understand the discursive strategies through which powerful incumbent actors endeavor to maintain fossil capital hegemony in response to justice focused counter-hegemonies.

Heat purchase agreements could lower barriers to heat pump adoption

Efficient electric heat pumps have the potential to significantly reduce greenhouse gas emissions from heating and cooling buildings. However, heat pumps’ initial costs can be prohibitively high and their lifetime costs are only situationally competitive with incumbent technologies. Here we show that a business model based on heat purchase agreements could lower these barriers to heat pump adoption. In this business model, a user hosts a heat pump owned by an aggregator. The aggregator installs the heat pump at low or no initial cost to the user. The user buys the heat pump’s heat or cooling output from the aggregator. The aggregator buys the heat pump’s input electricity in the wholesale energy market and sells the flexibility of their aggregate electrical load in ancillary service markets. This paper presents the first economic analysis of heat purchase agreements as a third-party ownership model for electric heat pumps. We derive conditions under which a heat purchase agreement is mutually beneficial to the user and the aggregator. We also provide a method to fairly price heat and cooling. A case study of a typical United States home shows that a heat purchase agreement could more than double the value of a heat pump investment relative to the incumbent business model. The potential impact of this work is to reduce emissions both directly, by accelerating replacement of fossil-fueled or inefficient heating or cooling equipment, and indirectly, by helping power system operators reliably integrate wind and solar generation.

Disruptive Innovation and Challenges in Healthcare 3.0

“Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Disruptive innovations are made possible because they get started in two types of markets that incumbents overlook. Health care is changing at a rapid pace, moving from a system that rewards volume to one that promotes and rewards value. At the same time, forces such as the rise of consumerism and the new digital economy are forcing even greater changes in the way health care is delivered and how providers interact with patients. These massive transformations make the health care field ripe for disruptive innovations as entrants from inside and outside of health care look for new ways to deliver services and new services to deliver. This disruption is not just limited to small start-up companies. In recent months, we’ve seen a deluge of mergers announced, with CVS and Aetna announcing plans to merge and Wal-Mart reportedly in talks to merge with Humana. Companies such as Amazon, Apple and Berkshire Hathaway have made waves with new potential health care alliances and ventures. And more is on the horizon. The healthcare industry has also undergone massive disruptive process from Health 1.0 to 3.0 and the technologies and challenges associated with it.

Strategic Patenting: Evidence from the U.S. Court of Appeals for the Federal Circuit

How should businesses adjust strategic patenting to changes in patent law? Theoretically, under particular conditions, if the legal protection of patents is stronger, incumbent businesses would reduce patenting. When the Court of Appeals for the Federal Circuit assumed jurisdiction over patent appeals, it strengthened the legal protection of patents. Importantly, the strengthening varied geographically by judicial circuit. Exploiting these changes as a natural experiment, we find that post-CAFC, patents were more valuable commercially but not technologically superior, businesses reduced patenting, and new entry fell. The reduction in patenting was more pronounced among continuations, larger businesses, and in less concentrated industries.

Business Power in Noisy Politics: An Exploration Based on Discourse Network Analysis and Survey Data

This study links voter-centred and interest group perspectives to assess the role structurally powerful businesses can play in contested political issues. Revisiting the literature on business influence in politics, incumbent businesses are theorised to strategically use their structural power to influence voters’ preferences. The conceptual framework is illustrated with a case study of a direct democratic vote related to Swiss energy policy. To empirically trace the role incumbent businesses played in the run-up to the vote, the study employs a two-step approach. First, it uses Discourse Network Analysis (DNA) to examine arguments and actor coalitions in the public debate preceding the vote. Second, the DNA results inform a statistical analysis of survey data on voting behaviour. The findings suggest that incumbent businesses can use their structural power strategically to shape voting behaviour. The study stimulates the discussion about political power relationships in societies and enriches the nascent debate about phasing out unsustainable energy infrastructure. Importantly, it opens up ways to combine DNA with other methods, an avenue that shows promise for use and further refinement in future applications.

Market formation, social movements and judgement devices: Creating the organic food market in Australia

A substantial literature demonstrates how social movements pioneer new economic spaces, engaging in activities that create the conditions for new markets. This article applies this insight to the creation of the organic food market in Australia. In doing so, it makes three contributions. First, it highlights the importance of judgement devices – notably a certification scheme – in the making of this market, given that organic and non-organic produce are visually indistinguishable. Second, it describes how judgement devices for organic foods draw commodity markets for mainstream agricultural foods into the symbolic realm, where health, ethical and aesthetic considerations inform value. Third, it demonstrates the socio-political construction of judgement devices, over and above their functional purposes. Specifically, it describes the struggle between challenger social movements and incumbent businesses in creating and promoting competing judgement devices directed towards the designation of value in new markets.

The liability of disruption

AbstractResearch SummaryWe study the internationalization‐related legitimacy challenges of firms with disruptive business models by using a case comparison of leading sharing economy companies Airbnb and Uber. We show that they are insulated from many traditional legitimacy challenges to multinationals entering host markets, but exposed to others that have not been noted previously. Specifically, we identify a novel market‐entry legitimacy challenge, “liability of disruption,” which manifests as regulatory, incumbent business, and societal pushback against firms with disruptive business models. After presenting our cross‐case analysis, we theorize about the nature and impacts of these three distinct but interconnected forms of host country institutional pushback on firms’ ability to achieve and maintain legitimacy, and how they are driven by national governance characteristics. Managerial SummarySharing economy companies Airbnb and Uber have engaged in rapid processes of global growth, but their practices and right to operate have been challenged by a variety of host country stakeholders. This study shows that their international expansion efforts have been affected by emergent regulatory scrutiny, incumbent businesses’ opposition, and other societal concerns about their impacts on employees, customers, competitors, and the communities where they operate. We label these challenges as the “liability of disruption” and illustrate their importance for understanding the internationalization‐related complexities faced by sharing economy firms and, more generally, internationalizing ventures with disruptive business models that aim to restructure entire industry sectors.

The implications of sustainable development for airport duty-free business models

This paper considers how the challenges underpinning sustainable development are likely to impact on duty- and tax-free retailing in airports and, by implication, in the entire aviation industry. The paper defines the role of retail as a vital source of airport revenues, before considering the carbon consequences of the sector’s incumbent business models. It finds that products taken onto aircraft increase aircraft weight and fuel burn and are a primary source of carbon emissions for duty-free retailers. The implications for the sector are discussed, and the potential for implementing more sustainable business models is presented. Here it is identified that the specific logistical, economic, and political constraints of operating in the airport make alternative business models difficult, if not impossible to implement. The specialisations that have helped this sector to flourish are constraining their ability to adapt to the climate challenge.

The effects of distributor relationship commitment and relationship exploration on opportunism: The moderating roles of exchange uncertainties and network factors

Channel management entails both the evaluating of incumbent business partners and simultaneously seeking potential new partners. In supplier–distributor exchanges, distributors can explore alternative suppliers while still committing to incumbent suppliers. While the current literature has demonstrated the importance of relationship commitment, the consequences of relationship exploration and whether that exploration is harmful to any incumbent relationships remain unclear. Drawing from relational governance and social network theories, this study thus examines how distributor dual relationship strategies of commitment and exploration influence their opportunistic behavior. The findings from a survey of 328 distributor firms indicate that relationship commitment leads to reduced opportunism; yet relationship exploration exerts no significant main effect on opportunism. More interestingly, these effects are subject to two types of uncertainty and two characteristics of distributor network wherein the focal exchange relationship resides. Specifically, behavioral uncertainty—an internal source of uncertainty—aggravates the opportunism that arises from both strategies, whereas, environmental uncertainty—an external source of uncertainty—alleviates both these effects. The distributor's network density weakens the effect of relationship commitment on opportunism, but network centrality strengthens this effect. By contrasting relationship commitment with relationship exploration under multiple moderating conditions, this study advances the extant channel relationship management literature and practice.

Development Dynamics in South-Eastern Europe: The Challenge of the New Paradigm of Cooperation

At the core of the process of revisiting the contemporary viewpoints regarding the issue of Development and International Relations, lies the Dynamic of Globalization. This does not cease to transform the evolutionary nature of global capitalism in all its dimensions, in all business, spatial and sectoral contexts. The Dynamic of Globalization which effectively makes a dent in the logic of the hedged about National Socioeconomic Space challenges our conventional wisdom. It also does not cease to build an unbreakable evolutionary unity of the different socioeconomic agents, gradually becoming more and more dense and strong in interactions and co-determinations, in uniform spatial terms. The issue of Competitiveness in the context of globalization is gradually emerging as the new epicenter of the Development and International Relations debate. Specifically, in globalizing process, Competitiveness is simultaneously produced by A) the accommodating Socioeconomic Space B) the incumbent Businesses and C) by materialization within the specific historical context of productive and Industrial Structures and dynamics articulated on a global scale. Searching Competitiveness the different socio-economic spaces, agents and industries are structurally unified in progressive manner. This approach of Competitiveness and Development in Global scale can help towards the progressive formation of a new Paradigm of Cooperation, which requires the upending of several conceptual fixations of the past.

Squeezing the Middle: the Consequences of Quality Oversight in Management Education

This study examines the linkage between quality and institutional dynamics with a focus on the business school sector. For this purpose, we consider the triad of quality management—quality assurance, reputation management, and risk management—and apply Fligstein and McAdam’s (A theory of fields, 2012) theory of fields to analyze its impact on the institutional dynamics of the sector. We observe that a large tranche of incumbent business schools is dependent upon field stability for its resources, but that stability is being unsettled by internal and external forces. We argue that, unlike the ranked (elite) schools, middle-of-the-pack incumbents lack the existential and material slack to abandon the status quo in times of change, and, unlike unranked (challenger) schools, they lack the irreverence to eschew quality management practices altogether. Our logic explains why “institutional entrepreneurs,” here defined as agents of innovative collective action, can mainly be found at the top end and the fringe of the business school sector.

Inter-temporal Scope Economies and Resource Reallocation in Global Semiconductor Industry

This study explores how firms reallocate resources dynamically when entering, retrenching from, or deepening a business. By examining the detailed product portfolios of firms in the global semiconductor industry, this study shows that both intra- and inter- temporal scope economies are in place when firms simultaneously decide in which businesses to further invest and from which businesses to withdraw resources. Our empirical findings suggest that new entry is a main driver of resource redeployment process. In other words, new entry – but not excess resources in incumbent business – spurs firms to redeploy resources from other businesses. This study further suggests that the dynamic capabilities that enable resource reallocation vary by firm.

Börsenzulassungsstellen, Reichsregierung und die (Selbst-)Regulierung der Mehrstimmrechtsaktie, 1919-1937

Abstract The German system of corporate governance changed considerably after the end of the Great War. This change was, among other things, marked by the rise of shares with multiple voting rights, often concentrated in the hands of incumbent business leaders. The development was publicly criticized by the promoters of a more equal corporate constitution and led the Imperial government as well as stock exchanges to consider reform. The article traces this debate based on source material from the Bundesarchiv and the Geheimes Staatsarchiv Preußischer Kulturbesitz. In doing so, I find that, contrary to John Coffee’s claim, public regulation followed the practice of private regulation until the late 1920s but that the latter was dismissed as a role model during the Great Depression. The quantitative evidence furthermore shows that public as well as private actors achieved their regulatory targets. Yet, these targets did not include the full removal of shares with multiple voting rights.

Business uncertainty, corporate decision and startups

In this paper, we argue that transformational entrepreneurs generate some uncertainty in business. This uncertainty must not be exaggerated; it is relatively low for incumbent business but is increasing and thus must be considered. One way of dealing with this non-probabilistic uncertainty is to have an adequate decision policy regarding startups, either following them and eventually acquiring them or encouraging innovation inside and facilitating swarming. We examine what can be the consequence: startup bubbling coming at its end or continuing.

Digitalization in retailing: multi-sided platforms as drivers of industry transformation

PurposeDigitalization has transformed several industries during the past two decades. In this paper the authors focus on the retail sector, where new business models help retailers and suppliers meet the ever changing and demanding needs of retail shoppers. One example of this business model innovation is multi-sided digital platforms, which have become popular as they connect consumers with suppliers from around the world with a large ecosystem to support the retail platform. The purpose of this paper is to provide an overview of how multi-sided digital platforms are transforming the retail exchange logic and assess the implications and impact of these platform-based businesses on the retail sector, especially for business managers and consumers.Design/methodology/approachIn this paper, the authors employ literature review, conceptual analysis and qualitative case study methodology. The authors provide an overview of how the platform economy is affecting the retail sector through the illustration of four digital multi-sided platforms: Alibaba Group, Amazon.com, eBay and Rakuten Group, and what differentiates them from incumbent business models in retailing.FindingsThe findings suggest that platforms transform the transaction logic of retailing as they simply intermediate transactions between buyers and suppliers rather than handling the entire supply and logistics chain themselves. The authors highlight the role of consumer understanding and Big Data as one example of how multi-sided digital platforms differentiate from their non-platform competitors.Practical implicationsThe paper highlights how incumbent retailers can compete against new forms of business, such as digital platforms, and the authors demonstrate some of the managerial capabilities needed to remain relevant amidst this new digital competition.Originality/valueVery little empirical studies in marketing and retail literature have focused on multi-sided digital platforms and their business models. The present study fills this gap with an overview of how multi-sided digital platforms transform the retail sector.

Producing and Consuming Inequality: A Cultural Sociology of the Cultural Industries

Even when shocks in a firm's environment are predictable, their consequences are not. Using the relocation of the Dallas Cowboys Stadium as a rich case of such a disruption, we investigate how combinations of strategic interpretation and spatial distance influence incumbent business owners' decisions to pursue temporal adaptation as a response. Temporal adaptation (TA) comprises timing rather than content changes by the firm seeking to adjust to the reconfigured environment. Survey data from 168 business owners show that strategic interpretation directly influences TA decisions. However, the effect of strategic interpretation on the TA decision is moderated by the spatial (geographic) distance of the incumbent firm from the locus of the disruption. Furthermore, results suggest that through strategic interpretation, spatial distance also indirectly affects the business owners' decisions to make temporal changes. Data collected 1.5 and 4 years later suggest that TA responses are related to performance and may be indicative of a particular type of TA, organizational entrainment (OE), which concerns the synchronization of organizational activity cycles with cycles in the environment

Does Business Cycle Have an Impact on Entrants and Exits?

Purpose: The role of entrants and exits has enlarged indisputably over recent years. The basic explanation is connected to the deepening of innovation's influence on industrial growth. Furthermore, new businesses have to be more effective, and based on products, technological or organizational innovations, and exits have to be ineffective (respectively unprofitable), based on denoted products or technology. Design/methodology/approach: According to the above-mentioned prerequisites, policymakers need to manage the role (respectively the impact) that entrants (new start-up companies) and exits play in industrial growth. Nevertheless, this impact is not a cornerstone of the Bulgarian National Strategy, or the Europe 2020 Strategy. Findings: The paper tries to answer the following two questions: 1) Do new start-up companies and exits have any role and influence on economic growth in Bulgaria? and 2) Does the role (respectively the impact) of entrants and exits in industrial growth change according to economic cycle? Research limitations/implications: In addition, according to the Lisbon Strategy, as well as the European Union's (EU) Strategy 2020, the current economic policy supports entrepreneurship and innovations. Thus, the establishment of innovative companies, as well as the development of innovative, incumbent business are core issues of EU economic policy for the past decade. Originality/value: The paper builds on the industrial dynamic methodology and on the understanding of how business decisions (entrepreneurship, innovations, and R&D) on micro level correspond to macro level (GDP growth and innovation policy).

The introduction of a competing business model: the case of eBay

In today's highly competitive business environment, the reasons for companies to engage in business model innovation (BMI) are manifold. The pressure on firms to innovate their business models results in either an adaptation of the incumbent business model, or the introduction of a new competing business model. Based on extant theory, we found that the reasons for a firm to engage in BMI can be clustered into three categories: 1) increased profitability; 2) improved strategic positioning; 3) customer attraction. By conducting an exploratory single case study approach, we confirmed these categories by identifying the distinct reasons for eBay to introduce a competing business model. We then highlight the impacts on the focal firm as a result of the new business model. We find that the introduction of a competing business model can create novel sources of value for the company and its customers. In total, the study emphasises that when firms launch competing business models, intended and unintended consequences can be both positive and negative.

The sharing economy: Your business model's friend or foe?

The sharing economy, a rising pattern in consumption behavior that is based on accessing and reusing products to utilize idle capacity, presents both tremendous possibilities and significant threats for emerging as well as incumbent businesses. As of today, it is unclear whether this economy is merely another ephemeral trend in consumption or whether we are experiencing a real shift in how goods are accessed, distributed, and used. Furthermore, little is known about how existing business models are affected by the sharing economy. These two issues represent the central motivation for the development of this article. Consequently, an examination of why the sharing economy has the potential to produce a long-term transformation in consumption behavior is followed by a consideration of how this change might affect companies’ business models. Based on a renowned business model framework and a variety of current illustrative examples, we propose central questions managers must ask themselves in order to be prepared to respond to changes brought about by this new economic trend.

Unpacking social divisions of labor in markets: Generalized blockmodeling and the network boom in stock photography

During the advent of digital technology, the market for stock photography has undergone radical transformations that have disrupted incumbent businesses and produced new divisions of labor. Picture agencies have responded to this challenge with a veritable proliferation of inter-firm alliances. In the attempt to understand this network boom, this paper develops a theoretical link between the concept of regular equivalence and its capacity to detect intra-industry divisions of labor. Based on a network survey of picture agencies in Germany, a prespecified generalized blockmodel yields a valid representation of an increasing functional specialization of new value stages that translates into an extended social and spatial division of labor in ways that challenge a dualist theory of the division of creative labor.