The Recent Growth Performance of US Firms in the Industrial Design Sector: An Exploratory Study

This paper assesses the competitive factors associated with company growth in the US industrial design sector. This small but technologically advanced sector delivers critical innovation inputs to firms that produce durable goods. Evidence from a survey of 85 US design companies suggests that competitive success hinges upon service diversity. Specifically, the most commercially buoyant companies have diversified their service offerings beyond product or component design. These firms have developed strategic competencies in fields such as contract research, prototype development, product testing, technological forecasting, market analysis and even advertising. Although most US design companies are small-to-medium-sized enterprises, successful firms do not differ from their less successful counterparts in terms of employment size, occupational structure, regional location or market focus (client sectors). Instead, the key differences lie in service diversity and the quality of human capital. The paper concludes with a brief discussion of the implications of the empirical findings for future research on the dynamics of the design industry.     

Maturing,Technology-Based,Born-Global Companies: Surviving Through Mergers and Acquisitions

To date, there has been little research about the corporate growth of born-global companies and relatively little data exist about their maturation, survival as independent companies (or failure to do so) and their international strategies. The present paper is based on an empirical study of Israeli technology-based companies that were identified in the late 1990s as born global. We collected data about the continuing development of these firms for the decade spanning 2000–2009. Our findings show that maturing technology-based, born-global companies can increase their chances of survival by acquiring other firms. Although such acquisitions do not increase profits, they allow born-global firms to continue increasing their sales and to expand and upgrade their product line, which in turn increases their chances of remaining independent. The data also show that if the firms prefer to merge with another company, they are in a better position if they do not acquire any other firms beforehand. Finally, our data show that although the majority of born-global companies can continue operations if they survived the first decade, they are not highly successful on the measures of growth and shareholder wealth. One of the recommendations of this study is that for maturing, technology-based, born-global companies to remain successful, they must be more aggressive in their M&A strategy than they are at the moment.     

The 'stage’ model of growth of small firms—an alternative hypothesis

Amongst the types of problem faced by production managers in a wide variety of Canadian industries, those concerned with growth and change are encountered frequently and are especially severe in small firms. This paper proposes and tests the hypothesis that as small companies grow they pass through alternating phases of good and poor performance. During the latter phases there is a high probability of failure brought about by common problems in a homogeneous group of small companies in an industry. The analysis of data so far supports the hypothesis in commercial printing firms of up to 70 employees, but requires modification for larger companies,     

The Road Taken: Origins and Evolution of Employment Systems in Emerging Companies

Drawing on a unique archive of qualitative and quantitativedata describing 100 Bay Area high technology firms within theirfirst decade, this paper examines the models of employment relationsespoused by company founders and how those models shaped theevolution of human resource management within their organizations.Information gleaned from interviews suggests that founders andothers involved in designing and launching these companies hadblueprints for the employment relation that varied along threekey dimensions: the primary basis of employee attachment andmotivation, the primary means for controlling and coordinatingwork, and the primary criterion emphasized in selection. Basedon combinations of these three dimensions, firms in our samplecluster fall into one of four distinct types, which we labelthe star, factory, engineering, and commitment models. Multivariatestatistical analyses document how the founder's employment modelshaped the subsequent adoption and timing of various human resourcepolicies and documents over these companies' early histories,as well as the speed with which the first full-time human resourcemanager was appointed. The findings are strongly suggestiveof complementarities and a tendency toward internal consistencyamong dimensions of human resource management, and of strongpath dependence in the evolution of employment systems in organizations.Some implications of these findings for transactions cost perspectiveson the employment relationship are discussed.     

The Performance of Independent Active SMEs in French Competitiveness Clusters

This article analyses the evolution of independent members of French independent competitiveness clusters. It compares small and medium-sized enterprises (SMEs) that participated in collaborative research projects, funded by French competitiveness clusters, against similar control companies that were not part of such projects and not funded by the policy, over the period 2005–2013. French competitiveness clusters seek to enhance SMEs’ size, performance, innovation and employment; the current study therefore assesses their outcomes in terms of capital invested and equity returns. The findings from a difference-in-differences analysis reveal that sales, employment, R&D investments, and value added all increase in relative terms, but financial returns exhibit significant relative decreases for the smallest companies, whereas larger firms record strong increases. The inability of the smallest SMEs to reap gains from their cluster membership should be a matter of great concern to both companies and policy-makers.     

Manufacturing strategy,the business environment,and operations performance in small low-tech firms

This paper reports on a ten-year study of ten manufacturing companies in New Zealand. Over the period the firms endured a turbulent environment where they were subject to large changes in exchange rate, and some faced forced changes in products, and markets as a result of changes in ownership and government policy. The paper examines the stability of manufacturing strategies in such an environment, the emphasis placed on improvement initiatives and what impact these decisions had on manufacturing performance. The study uses a multi-case, longitudinal approach. It found the strategy configurations were not stable and many firms moved towards a price-based configuration, contrary to other literature. The more successful firms put greater investments into infrastructural categories of their operations strategy in accordance with the resource-based view. Operations performance indicators showed some improvement on manufacturing costs but other indicators showed no real pattern.     

The choice of strategic alternatives under increasing regulation in high technology companies.

The strategic response of U.S. high technology companies in the medical X-ray manufacturing industry to increased governmental regulations from 1962 to 1977 is examined. Results suggest that regulations increase consumer and competitor uncertainty, with the consequence that firms select less risky strategies and decrease the riskier new product invention strategy. Larger firms reduce inventions less than smaller firms.     

The effect of a toy industry product recall announcement on shareholder wealth

The widely publicised product recalls of lead-paint tainted toys in 2007 caused serious concerns among consumers, investors and the government. The widespread practice of global outsourcing in toy industry further intensifies consumers and investors’ uncertainties about toy safety. This paper assesses the stock market reaction to recent toy recall announcements. Based upon the theoretical underpinnings from agency theory, signalling theory and prospect theory, it also develops an understanding of factors that influence the direction and magnitude of the stock market reaction. One hundred and forty-five toy recall announcements in 2000–2014 were analysed using event study and linear regression. The results show that the announcement of a toy recall was associated with a negative stock market reaction. The stock market reaction was more negative for toy product recall announcements by retailers or distributors, smaller source firms, toys with more severe hazards and source firms with higher growth potential. This paper contributes to the product harm crisis literature by extending the automotive industry-based literature to toy industries and studying their unique features. It is important that toy industry managers are aware that the stock market penalty for a product recall increases with the degree of hazard. Moreover, toy companies, retailers and distributors with high growth potential should be aware of the signal sent by following a proactive recall strategy.     

The Industry-focused International Strategy

• Many firms facing low-cost international competition can reposition into niches. This study examines one such niche: industry-focused international firms, defined as companies that produce, sell, and expand internationally within one industry. Analysis of the global pharmaceutical industry finds a group comprising of about 20 % of the firms that pursue this strategy. This strategy is distributed internationally, but not uniformly.
• It is relatively more prevalent among firms based in emerging countries compared to industrialized nations. These firms invest in R&D in order to create deep specialized expertise that they exploit internationally.

     

Taxonomy of information technology strategy and its impact on the performance of third-party logistics (3PL) in China

This paper develops a taxonomy of information technology strategies used by third-party logistics (3PL) firms in China based on a cluster analysis of survey data from 105 of these 3PL firms. The information technology strategies have been classified into three major groups: supportive, technological, and aligned. The paper also investigates the effect of information technology strategies on information technology advantage, competitive advantage, and financial performance. The results of the study indicate that efforts to improve information technology systems can only be effective if the information technology improvements are properly aligned with a company's overall strategy. It is found that companies that attempt to improve their information technology systems without the proper alignment of information technology with the company's overall strategy can achieve information technology advantages relative to their competitors, but not competitive advantages or improved financial performance. This study is the first attempt to develop an information technology strategy taxonomy for 3PL companies in China. It provides valuable guidance and insights for managers in the development of information technology strategies in 3PL companies.     

Does contracting with owner operators lead to worse safety outcomes for US motor carriers? Evidence from the Motor Carrier Management Information System

Using data from the Motor Carrier Management Information System, we model crashes as a function of firm characteristics, with a focus on the employment relationship. We find that very small firms (one driver, one truck) and firms that contract with owner operators have fewer crashes than employee-only companies, once other firm characteristics and exposure are controlled. Additionally, though very small firms are more likely to have severe crashes, we find no relationship between the share of owner operators and crash severity.     

Born Global or Born to Run? The Long-Term Growth of Born Global Firms

Born global firms have stimulated substantial academic attention as regards their start up but research has neglected their subsequent, ongoing internationalisation. This contribution extends analysis from the inception and childhood to the growth and maturity of such firms. We investigate whether born global are also “born to run” companies; we also try to reconcile the analysis of international new ventures in international entrepreneurship studies with the approaches based on fast growing firms and gazelles. We initially present the latest advances in the modelling of accelerated internationalisation over time; we then discuss and develop a conceptual framework and a model that captures the variables that affect born global firms’ evolution in an holistic perspective; finally, we match case study analysis with the framework and discuss our findings. The results show two groups of firms that differ significantly in long-term internationalisation paths and growth cycles. We highlight turning points in these paths and discuss the drivers which lead to sustained high growth. The characteristics of the entrepreneurial/management teams, strategic partnerships and the entry in complex markets are the main differentiators in growth patterns, irrespectively of the industry. The “openness” of the founders and the early preparation for growth determine both the extent of organizational learning and the speed at which it is developed and used. We see said learning and its speed in development and use as the underlying, necessary mechanism of sustained high growth.     

Inertia and Change in the Early Years: Employment Relations in Young, High Technology Firms

This paper considers processes of organizational imprintingin a sample of 100 young, high technology companies. It examinesthe effects of a pair of initial conditions: the founders' modelsof the employment relation and their business strategies. Ouranalyses indicate that these two features were well alignedwhen the firms were founded. However, the alignment has deterioratedover time, due to changes in the distribution of employmentmodels. In particular, the ‘star’ model and ‘commitment’model are less stable than the ‘engineering’ modeland the ‘factory’ model. Despite their instability,these two blueprints for the employment relation have strongeffects in shaping the early evolution of these firms. In particular,firms that embark with these models have significantly higherrates of replacing the founder chief executive with a non-founderas well as higher rates of completing an initial public stockoffering. Some implications of these findings for future studiesof imprinting and inertia in organizations are discussed.     

Theory and practice of manufacturing strategy

This paper first proposes a methodology for manufacturing strategy development based on a critical review of the theory of manufacturing strategy. The methodology captures the essential factors that must be considered, and the steps that must be taken, by a firm attempting to design a viable manufacturing strategy. An exploratory study of the process of formulating and implementing manufacturing strategy practised by three firms is conducted. Their experiences in the manufacturing strategy process are reported and analysed. While the practice of each firm is different, the process of manufacturing strategy formulation seems to be in line with the conceptual models discussed in the literature. Our findings offer some evidence that manufacturing is slowly shedding its image as the ‘missing link’ in corporate strategy. While managers of the studied firms are fully aware of the competitive advantages that manufacturing can provide, they are not totally committed to articulating a manufacturing strategy because of concerns about its successful implementation. It is proposed that further research on manufacturing strategy focus on such implementation issues as the infrastructure, corporate culture, performance measurements, decision-making and managerial styles.     

Research into the use of statistical quality control in british manufacturing industry — part I

The work described in this paper is part of a large, Government-funded investigation into the usage of statistical methods of quality control (SQC) in British manufacturing industry. This paper reports the results of an investigation of fifteen firms which claimed in earlier work to be successful users of SQC. It is shown that six of the companies were in fact not regularly using recognized SQC techniques. Some general conclusions are drawn from the activities of these, and the remaining nine companies which were examined in detail.     

Knowledge, Finance and Human Capital: The Role of Social Institutional Variables on Entrepreneurship in Japan

New technology-based firms are acknowledged as playing an important role in the knowledge-based economy. Policy makers in Japan have advocated the creation of such firms, focusing on two primary fields--biotechnology and information technology (IT)--which are expected to make major contributions to Japan's international competitiveness, to the creation of new industries, and to employment opportunities. Although several empirical studies have been conducted into such firms in the West, few comparable studies have been undertaken in Japan using original data from indigenous firms. This paper addresses this gap by examining several firm-level and managerial characteristics of Japanese biotechnology and IT venture firms, in the context of three social institutional variables that impact on entrepreneurship and the growth of such firms: knowledge, finance and human capital.     

Innovation in Creative Cities: Evidence from British Small Firms

Creative cities are seen as important sites for the generation of new ideas, products and processes. Yet, beyond case studies of a few high-profile cities, there is little empirical evidence on the link between local creative industries concentration and innovation. This paper addresses this gap with an analysis of around 1,300 UK small- and medium-sized enterprises. The results suggest that firms in local economies with high shares of creative industries employment are significantly more likely to introduce entirely new products and processes than firms elsewhere, but not innovations which are simply new to the firm. This effect is not exclusive to creative industries firms and seems to be largely due to firms in medium-sized, rather than large, cities. The results imply that creative cities may have functional specialisations in new content creation and so firms are more innovative in them.     

The impact of market focus on operations practices

A key element of successful organisations is the alignment of their strategy and tactics. This study explores the relationship between a firm's competitive strategy and its operations practices in the context of a developing economy. Two competitive strategies are examined; a niche market strategy characterised by targeting specific market segments, and a broad market strategy characterised by serving a wide range of market segments. Three sets of operations practices consistent with the adoption of lean manufacturing, Total Quality Management, and relationship development in a supply chain context, are explored. Using survey data from senior managers in Thailand, results show that for firms adopting a niche market focus, competitive strategy directly influences process management and relationship development, which in turn affect workforce commitment. Only workforce commitment has a direct effect on operational performance. In contrast, for firms adopting a broad market focus, competitive strategy directly influences workforce commitment, which in turn affects process management and relationship development practices. It is the latter practices that directly influence operational performance.     

Strategic Alliances: Lessons from the New Biotechnology Industry

ABSTRACT

Strategic partnerships or strategic alliances have been called the “life blood” of companies in the new biotechnology industry, and a large number of firms are now participating in such collaborations. However, for a variety of reasons, not all such partnerships are successful. This paper describes some initial results from research conducted on a sample of small new biotechnology firms to identify the types and incidences of their strategic alliances, the reasons why they were formed, and the factors that contributed to their success or failure. Based on these preliminary findings, several recommendations are made for facilitating successful alliances in the new biotechnology and other industries.     

The impact of M&;As on company innovation: evidence from the US medical device industry

The acquisition of new technologies represents a vitally important and fundamental goal of many corporate managers, particularly those within the medical device industry. We collect data on ten medical device companies as our sample in this study, covering the period from 1990 to 2006; this sample is drawn from the top 20 companies in the US, on the basis of international sales performance. We also collect details on all of the acquisitions undertaken by these companies, along with their patenting performance. The empirical results of this study suggest that technological acquisitions are only likely to be of help to the acquiring firms, in terms of improving their innovative performance, if they set out to acquire those companies that are in similar proximity, in terms of their technological field. There is also a clear need for such acquiring firms to ensure their continuing commitment to internal R&D investment in order to maintain their own versatility.