The role of home country demand in the internationalization of new ventures

My article with Salih Ozdemir and Deepak Sardana was just published in Research Policy.

Abstract: International new ventures (INVs) have been documented to exist all around the world, but the literature is silent on the frequency of such companies in different countries. We contend that the propensity of new ventures to internationalize by forming international partnerships is higher in small-domestic demand countries because they have a greater motivation given their limited local demand. After discussing the methodological challenges in testing this hypothesis, we do such a test by studying alliances in the health segment of the biotech industry in relatively small-domestic demand countries (Australia, Israel, and Taiwan) and by comparing the results with five large-domestic demand countries (UK, Germany, France, US, and Japan). We find that young firms in the countries with smaller domestic demand are at least 3 times more likely to enter into international partnerships than their counterparts in countries with larger domestic demand. We further demonstrate that this difference can primarily be explained by the difference in the size of domestic healthcare markets rather than other underlying opportunity structure related factors.

Keywords: International new ventures; Internationalization; Small vs. large demand countries; Young biotechnology firms; International partnerships; Business development partnerships

Read and Download Full Article here

Murmann Lecture: What constitutes a compelling case study?

I gave a 50-min keynote lecture on what constitutes compelling case study.  The video from the event at the Forum for Case-based and Qualitative Research in Business Administration may be useful for anyone who is attempting to publish case based studies in field of management.

The slides from the lecture are visible in the video and can also be downloaded here.  Murmann Slides

The lecture is also available within China on the youku platform.  Click here if you want to access video from China:  China Video Access.  Alternative China Video Access

Click on “more” for a written summary of lecture both in English and in Chinese.

Key Note Title: What constitutes a compelling case study?

Summary:  I first show data that during the past 20 years it has become easier to publish case studies and qualitative research in top journals such as the Academy of Management Journals. Then I suggest that a case for teaching is very different for case for research. Next I present examples of compelling case studies and it will discuss why they are good case studies. One of the key features of influential case studies is that they contribute to building better theories. This is often done by selecting a case that seems puzzling from the perspective of one or more existing theories.  More specifically, I highlight that excellent case studies at least display one of these three characteristics.

• Readers would not expect the case (it is counterintuitive)
• Theories say that the case should not exist or cannot explain it
• The case sheds light on a phenomenon that no one has studied before

I then review five compelling case study papers and highlight that they displayed it least one of these features.

1. Mirabeau, L., & Maguire, S. 2014. From autonomous strategic behavior to emergent strategy. Strategic Management Journal, 35(8): 1202-1229.
2. Danneels, E. (2011). “Trying to become a different type of company: dynamic capability at Smith Corona.” Strategic Management Journal 32(1): 1-31.
3. Siggelkow, N. (2002). “Evolution toward Fit.” Administrative Science Quarterly 47(1): 125-159
4. Miller, R., M. Hobday, T. Leroux-Demers and X. Olleros (1995). “Innovation in Complex System Industries: the Case of Flight Simulation.” Industrial and Corporate Change 4(2): 363-400.
5. Murmann, J. P. (2013). “The Coevolution of Industries and Important Features of their Environments.” Organization Science 24(1): 58-78.

I conclude from this review that: 

• All of the case example studies reviewed were extremely good identifying theoretical gaps
• They were able to make a clear contribution to developing new theoretical ideas
• They all had very deep understanding of the empirical context
• They all offered data that had never been presented at that level of detail

台湾大学黄光国教授
接下来，来自澳大利亚新南威尔士大学Johann Peter Murmann教授为大家带来了第二场主题报告——“What constitutes a compelling case study?（什么是一个令人信服的案例研究？）”。首先，Murmann教授用过去20年的数据向大家表明，在顶级期刊上发表的案例和质性研究论文已经越来越多，目前已达14%。他指出，作为一个有影响力的案例研究，其关键特性之一就是它们能够构建更好的理论。往往那些看起来和现有某个或多个理论相悖的案例研究就能做到这点。Murmann教授借用了一个有趣的概念，把好的案例比喻为一头“会说话的猪（talking pig）”具体来讲，这头“talking pig”至少具备以下三点特性之一：读者意想不到（违反直觉）；现有理论认为这个案例不存在或者不能对其进行解释；该案例揭示了一个前人从未研究过的现象。
随后，Murmann教授带领大家回顾了5篇案例研究范文，并分析了它们如何具备了上述条件。他总结到，这5篇案例都非常好的识别出了现有理论的缺陷、明确地构建新的理论观点、深刻的理解现实情景，都能从前所未有的细节程度展示相关数据。选择案例的成功、描述问题的准确，很大程度上决定了一篇研究报告的质量，Murmann教授鼓励大家留心观察、深入思考，找出企业管理实践中的“talking pig”进行研究。他幽默风趣的演讲得到了在场听众的热烈掌声。  (Taken from Renmin University website)

主题报告：

What constitutes a compelling case study?
什么是一个令人信服的案例研究？
Johann Peter Murmann

内容提要：

首先，我将用过去20年的数据来向大家表明，在诸如《Academy of Management Journals》这样的顶尖期刊上发表案例研究和质性研究论文已经越来越容易了。当然，我会向大家解释教学案例和研究案例是截然不同的。接下来，我将呈现给大家几个令人信服的研究案例，并与大家探讨为何它们都是好的案例研究。作为一个有影响力的案例研究，其关键特性之一就是它们能够构建更好的理论。往往那些看起来和现有某个或多个理论相悖的案例研究就能做到这点。更具体来讲，我要向大家强调，一个优秀的案例至少具备以下三条特性中的一条：

  1 读者意想不到（违反直觉）；
  2 现有理论认为这个案例不存在或者不能对其进行解释；
  3 该案例揭示了一个前人从未研究过的现象

我将会带领大家回顾5篇令人信服的案例研究论文，大家会看到这些论文都至少具备上述三条特性之一。这5篇论文及其摘要如下：

1. Mirabeau, L., & Maguire, S. 2014. From autonomous strategic behavior to emergent strategy. Strategic Management Journal, 35(8): 1202-1229.
摘要：本研究构建了一家大型电信公司的浮现战略形成模型（a model of emergent strategy formation）。该模型借助现有战略过程研究中一些代表性的理论——如模式化行动战略、迭代资源分配战略、实践战略（strategy as patterned action, as iterated resource allocation and as practice）——来说明浮现战略如何通过自主战略行为孵化成一个项目、继而发展成为现实，从而能动员更广泛的力量来支持战略推动、通过将项目构造成现有战略概念的补充来操控战略环境从而使项目合法化，以及改变结构情境从而将新的战略根植到组织的每个单元、例程和目标之中。本研究将“战略清晰化的实践过程”在形成浮现战略中的角色进行理论化，并解释为何有些自主战略行为只是“暂时”的并最终消失，而没有最终转变成持久的浮现战略。

2. Danneels, E. (2011). “Trying to become a different type of company: dynamic capability at Smith Corona.” Strategic Management Journal 32(1): 1-31.
摘要：Smith Corona曾经是世界领先的打字机制造商之一，当其主要产品种类都面临消失时，它需要运用动态能力来应对挑战。本文通过对Smith Corona过去20年发展的研究，揭示其如何通过利用现有资源、创造新的资源、借力外部资源和放弃某些资源来改变自身资源基础。本文运用多种案例研究方法，通过一个实证案例发展了动态能力理论。Smith Corona案例通过研究动态能力的运作来深刻剖析了资源变化过程，同时强调了资源认知，而这一点正是现有动态能力理论缺失的。

3. Siggelkow, N. (2002). “Evolution toward Fit.” Administrative Science Quarterly 47(1): 125-159
摘要：本文通过对先锋集团（Vanguard Group）这家共同基金管理公司的纵贯案例研究，揭示了组织构造和配置的发展过程。本文构建了一种新的判定组织核心要素的方法，并识别出四种过程来描述这些核心要素的产生及随后的细化：厚化（通过新的细化要素来强化现有的核心要素）、补充（产生新的核心要素，并通过新的细化要素来加以强化）、顺势而为（在一段时间内不再细化新的核心要素）、修剪（去掉某个核心要素及其细化要素）。这四个过程通常可以描述组织的配置发展路径和在各种配置间转换的路径，除了众所周知的两条配置间转换的路径——间断平衡的路径和通过线性发展重新定位路径，还包括两条新的理想路径，可称之为“由薄到厚”（thin-to-thick）路径和“补丁再补丁”（patch-by-patch）路径。

4. Miller, R., M. Hobday, T. Leroux-Demers and X. Olleros (1995). “Innovation in Complex System Industries: the Case of Flight Simulation.” Industrial and Corporate Change 4(2): 363-400.；
摘要：本文指出复杂系统概念非常适合用来描述大规模的、客户定制产品的和有供应关系的企业集群。例如飞行模拟器制造、电信交换机制造、军工系统、飞机制造、化工处理企业、重型电器设备制造等等。由众多相互关联的客户定制产品构成的复杂系统，在适应客户需求的变化的过程中，会逐步浮现出一些新的特性。本文以飞行模拟器制造业为例，探索出该产业中一些创新的基本规则。这些规则与在传统市场竞争模型中发现的规则形成了鲜明的对比。飞行模拟器产业的创新是通过由供应商、用户、监管机构、行业协会和专业机构构成的制度结构协调完成的。与传统的市场选择不同，新设计是在产品开发前协商而得。尽管因为有部分专业供应商不时进出产业链而导致整个产业的调整从而引发某种程度的技术动荡，但是我们仍然看到这个产业保持着长期的稳定。在这个产业中，没有通常意义上的主导设计，没有传统上的大量竞争，也没有将密集的创新应用于发展过程。竞争策略只是保持专注于设计、工程和原型开发，而不是不断的过程创新。由自己构成的组织中的成员相互合作以便于利用创新和允许新产品市场的开拓。考虑到单案例研究缺乏说服力，本文认为其他复杂系统可能也会表现出类似的创新治理和降低风险及不确定性的过程，而这些在传统熊彼特市场机制中并未提及。

5. Murmann, J. P. (2013). “The Coevolution of Industries and Important Features of their Environments.” Organization Science 24(1): 58-78.
摘要：随着创新速度增加，组织环境变化更快并且更加复杂，对组织施加了更大压力去进行变革。本研究认为，协同进化概念为组织变革中的预见性调整和事后选择两种观点架起了一座桥梁，以便解释变革速度为何不断加快。协同进化关系中的相互因果影响有助于解释相互竞争的企业或者单个企业为什么能够占领产品市场的主要份额。通过历史比较法和来自五个国家60年时间里的证据，本文探讨了准确的协同进化过程是如何作用于产业进化及其环境重要特征的形成的。本文识别出——在合成染料产业背景下——三种因果机制（个体交换、商业关系、游说），并揭示三者是如何在产业进化的基础机制中扮演杠杆角色的。理解这种杠杆角色很重要，因为这有利于人们在不断变得协同进化的世界中掌控变化，促进管理者更多的关注他们所处环境中不断浮现的、系统层面的属性。

回顾之后，我们可以看到这5篇案例：
1 都非常好的识别出了现有理论的缺陷；
2 都能明确地构建新的理论观点；
3 都能很深刻的理解现实情境；
4 都能从前所未有的细节程度来展示相关数据。

 

Carol Dweck: Differences between Growth and Fixed Mindsets

Carol Dweck has spent her career studying how personality traits impact life outcomes. Here is it summarized into one chart.

You can see a larger image by clicking here: Full Size Image

Attributes of a Fixed Mindset

Intelligence here is static, and leads to a desire to look smart, and therefore a tendency to:

Avoid challenges
Give up easily
Sees effort as fruitless
Ignores useful feedback
Feels threatened by the success of others

Attributes of a Growth Mindset

This person believes intelligence can be developed, and leads to a desire to learn and a tendency to:

Embrace challenges
Persist in the face of setbacks
Sees effort as the path to mastery
Learns from criticism
Finds lessons and inspiration in the success of others.

Useful if you consider submitting to AMJ: Editorial Statement by Current Editor of AMJ

I just read the editorial statement of the current editor of AMJ. If you would like to write about big problems that managers are facing in a scholarly way, AMJ may be a great outlet.

Gerry George writes:

A compelling way to frame a study for theoretical contribution is by asking questions on important anomalies or patterns that are intriguing, useful, and nonintuitive. In an earlier editorial with Jason Colquitt, I suggested that we need to explore “Grand Challenges” in management (see the June 2011 “From the Editors” [vol. 54: 432–435]). The principle is to pursue bold ideas and adopt less conventional approaches to address significant, unresolved problems. Not all our studies understandably will be grand, nor will they all challenge conventional wisdom, but considering the relative importance and scale of a problem will likely make a study more relevant to managers, and make it more interesting for our readers. There are multiple ways by which manuscripts can be better positioned for a theoretical and empirical contribution using a problem focus (Alvesson & Sandberg, 2011; Pillutla & Thau, 2013; also see the October 2011 “From the Editors” [vol. 54: 873–879]). What is important to recognize is that this team places emphasis on how a central research problem or question is articulated. Bringing organizational problems to the forefront would ease the burden on vaguely scripted “Managerial Implications” sections of manuscripts (Bartunek & Rynes, 2010).

My editorial team will look for clearly articulated problem statements or research questions motivated by managerial challenges. This problem-based focus shifts the emphasis away from motivating articles using pure theories to tackling important problems through an enriched theoretical lens. For example, Hekman and colleagues (Hekman, Aquino, Owens, Mitchell, Schilpzand, & Leavitt, 2010) motivate their study on gender and racial biases in customer satisfaction surveys by emphasizing the importance of the managerial problem that a 1 percent change in customer satisfaction creates a 5 percent change in return on investment. Understanding the scale and scope of the problem and asking the right question takes primacy over the deftness of theoretical manipulation using constructs, moderators, and moderated mediators. We prefer manuscripts that emphasize how constructs provide a coherent explanation of the phenomenon rather than framing and motivating studies by adding untested moderators and mediators. Such an effort would rightly dissuade authors from identifying smaller “gaps” in the literature and shift the discussion to managerial, organizational, and societal problems that need to be addressed.

Read the Full Editorial

Superb Example of Strategy Process Research:  New Paper by Laurent Mirabeau and Steve Maguire in SMJ

I just read a fantastic research paper that I recommend highly to anyone who is interested in strategy process research.

Mirabeau, L., & Maguire, S. 2014. From autonomous strategic behavior to emergent strategy. Strategic Management Journal, 35(8): 1202-1229.

The authors do wonderful job first summarizing the different strands in strategy process research.  Then they present new findings on how autonomous strategic initiatives become emergent strategy. They introduce the new idea of Ephemeral Autonomous Behavior to balance out the traditional Mintzberg model of emergent strategies.  I have added the paper to my list of exemplary case studies worthy of imitation.

The core of the paper is nicely summarized in these two figures.

(Right click on each figure to open it in a larger format on a new page.)

Read the entire paper if you are interested in strategy process research or if you want to see another great template for how to present qualitative research.

Will give two presentations at Strategic Management Conference in Madrid, Sep 21-22

1. The Strategic Process and Competitive Dynamics of Industry Convergence

Date: Sunday, September 21, 2014
Time: 11:15 – 12:30
Room: Viena
Session Co-Chairs:

Samina Karim, Boston University
John Prescott, University of Pittsburgh

Panelists:

  * Alfonso Gambardella, Bocconi University
  * Anita McGahan, University of Toronto
  * Johann Peter Murmann, University of New South Wales
  * Fernando Suarez, Boston University

Understanding how industries change has attracted considerable attention because it blurs industry boundaries, redefines the competitive landscape, creates opportunities for new strategies to emerge, destroys competitive advantages while solidifying others, challenges cognitive maps and establishes new institutional arrangements. In this session, expert panelists will bring us up-to-date on the phenomenon of industry convergence (IC) by sharing their perspectives regarding (1) the antecedents, dynamics, and consequences of IC; (2) how to conceptualize strategic management processes and how they may inform the dynamics of IC; (3) how scholars should evaluate the attractiveness of, and rivalry within, IC industries; and (4) promising research directions including theory development and empirical studies.

 

2. How Does Headquarters Create Value in a Diversified Multi-Business Firm: The Case of Wesfarmers 
by Johann Peter Murmann and George Shinkle

Session on Corporate Structure, Resource allocation, and Portfolio planning
Date: Monday, September 22, 2014 Time: 14:45 – 16:00 Room: Londres (our talk is at the beginning of the session)

Abstract: Aside from emphasizing target setting, high-level monitoring, and aligning incentives, the strategy literature provides very little guidance on how headquarters of a large multi-business corporation should interact with its business units to create and capture value. We examine Wesfarmers Ltd. (Australia) because the long-term high performance of this unrelated conglomerate is unexpected by much of the strategy literature. Our investigation promises to shed light on effective management practices. Contrary to what the literature expects, the Wesfarmers CEO and other headquarters (HQ) staff (chiefly the CFO and Business Development personnel) are significantly involved in defining, monitoring, and redefining the operational goals at the business unit level and the means (strategies and initiatives) to accomplish them. Furthermore, HQ adjusts its management practices to respond to particular needs of each business unit, being most involved in the period following and acquisition and when units are not meeting the targets set by HQ.

Who Matters More? The Impact of Functional Background and Top Executive Mobility on Firm Survival

Do some top executives matter more than others? Integrating insights from upper echelons and executive mobility research, we suggest that the functional roles performed by top executives shape their value to the firm. We examine the effects of inter-firm executive mobility on firm survival for New York City advertising firms from 1924 to 1996. We find that, while losing any top executive is damaging, the loss of a top executive whose functional role focuses on internal firm processes is more detrimental to firm survival than losing a top executive whose functional role focuses on managing external exchange relationships. Additionally, in situations when multiple executives leave simultaneously, firms are more negatively affected when the group departing is functionally heterogeneous.

Bermiss, Y. S., & Murmann, J. P. 2014. Who Matters More? The Impact Of Functional Background And Top Executive Mobility On Firm Survival. Strategic Management Journal:

Download article here.

An earlier version that placed more emphasis on heterogeneity of top management teams influencing firm survival is available at SSRN.

Read about article on the HBR Blog.

How Fast Can Firms Grow?

Abstract: Building on recent research on dynamic, high-growth firms—so-called “gazelles”—this paper explores a simple question that is important in both theoretical and practical terms: What is the fastest rate at which firms can grow? Based on a sample of seven high-growth firms (Cisco, GM, IBM, Microsoft, Sears, Starbucks, and US Steel), we find that 162% is the maximum sales growth rate in any one year that an established company can grow without mergers and acquisitions, while the maximum rate of employee growth is approximately 115% even including some mergers and acquisitions. All of the companies in our sample attained a maximum sales growth rate of above 50%, with most hovering around 75%. Furthermore, the firms’ growth rates exhibit similar patterns. No company experienced its maximum sales growth rate toward the latter part of its history. Every company experienced its slowest employee growth rate after attaining its maximum employee growth rate, usually within a decade of one another. Most importantly, all firms show an average sales growth that exceeds the average employee growth. This finding is an indication that successful growing firms have a superior capability to continuously improve employment efficiency and adjust organizational structures to suit an increasing workforce.

Murmann, J. P., Korn, J., & Worch, H. 2014. How Fast Can Firms Grow? Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 234(2-3): 210-233.  Download Article

Another Great Example of Serendipity in Scientific Discovery

People underestimate that scientists often make progress by chance.  Here is the story of researchers studying a species that has invaded Florida’s Everglades made an unanticipated discovery: deadly Florida pythons have internal GPS.

“We found that Burmese pythons have navigational map and compass senses,” said Shannon Pitman of North Carolina’s Davidson College, the lead researcher of a team of scientists that released six captured snakes back into the wild, then tracked them through the Everglades National Park for up to nine months.

“It wasn’t what we expected. We thought we’d see a kind of aimless, wandering behaviour, but the pythons made their way pretty quickly back to where to where they were captured. It was more sophisticated in terms of movement than we’ve seen in other species of snake.”

What makes the discovery more remarkable is that it was completely accidental. Pitman’s team originally wanted to release the snakes closer to their capture points within the Everglades, as they were more interested in studying the habitat through which they were moving than the actual distances they travelled.

But wildlife officials, whose efforts to eradicate or contain the up to 100,000 non-native snakes estimated to have spread through the park’s 1.5m acres, refused permission.

That led to the team releasing the snakes at more remote locations between 13 and 23 miles away, outside the National Park’s boundaries, and then watching in amazement as one python after another made its way back “home”.

Each snake was fitted with a radio tracker and its position monitored by GPS one to three times per week. All six moved in a near-straight line towards their capture points and five ended up within a couple of miles. The snake with the longest journey took nine months to reach its destination.

Full Story: Guardian

Joel Mokyr Sees no End to Innovation

Mokyr points out the modern GDP measures are not accounting for improvements in quality of products and life.
He sees no end to innovation. Basic science needs to be funded by governments because private individuals and corporations cannot appropriate the returns from these investments. He sees culture that encourages natural skepticism of students as a key ingredient for furthering innovation of a country.