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Charles Baden-Fuller Editorial
Networking and Partnering
Our first four papers deal with different dimensions of partnering
and networking. Successful networking can be vital for creating and maintaining
organisational growth and momentum, yet success requires attention to many
dimensions, from partner selection, to setting the right environment for the
deal and finally executing the details. Paul E. Bierly and Scott Gallagher
look at partner selection mechanisms. The text book rules of rational, well-informed
choice are often far away from the reality of imperfect information and the
need for speed. The authors look at how firms can best respond to these constraints,
and put forward tried and tested guides for better practice. Mathew Hughes,
R. Duane Ireland and Robert E. Morgan examine how incubators that foster young
high technology firms can do better in their tasks. They stress that a critical
role of an incubator is to foster the right kind of relationships between
the young firms to improve access to knowledge, as well as to enhance more
tangible resources. They present cases to provide practical tips. Anna Nosella
and Giorgio Petroni draw lessons from the single case of Carlo Gavazzi Space
to look at how small resource constrained firms can reach out to undertake
large projects successfully. They stress the importance of leadership in managing
the partnerships collectively. Finally, Gianluca Colombo, Valter Conca, Massimo
Buongiorno & Luca Gnan look at the ultimate alliance: the cross border
merger. Two factors appear critical for success here - speed and clarity of
purpose - and the authors explain how these can be achieved using statistical
work to reinforce their findings.
Exploiting the Internet
Our last two pieces explore the management of the internet
space. Peter J. Brews and Christopher L. Tucci look at the ‘internet-enabling’
of business operations. The pressure to move on-line is intense in many businesses,
and this brings a parallel pressure to restructure the organisation to make
it flatter and more responsive. Notwithstanding the considerable effort needed
to make internet working effective, the authors point out that, paradoxically,
it can be hard to create a sustainable advantage. Finally, George Balabanis
and Vangelis Souitaris look at on-line retail strategies and come up with
some practical guides on how to increase customer satisfaction and loyalty.
Paul E. Bierly III and Scott Gallagher Explaining Alliance
Partner Selection: Fit, Trust and Strategic Expediency bierlype@jmu.edu
The past decade has seen a sharp increase in the use of strategic
alliances between firms, especially in fast-moving industries such as biotechnology
or software. Well-matched alliances can bring synergies and competitive advantages
for both partners e but selecting the right partner can be a complex and challenging
business, and the failure rate is high. So what are the critical components
of successful partner selection? When managers have the time and information
available to evaluate the suitability of potential partners, they can make
rational, informed decisions based on ‘strategic fit’ between
the firms. Trust e between both firms and individual managers e also plays
a significant role, particularly where a decision must be with limited information.
But the authors argue that another factor, strategic expediency, plays a key
role in successful partnerships, particularly in hypercompetitive industries
where time is at the greatest premium and is increasingly treated as a strategic
resource in its own right. Thus, instead of searching for the best possible
partner (and in some cases failing to set up an alliance if it cannot be formally
justified in those terms), managers up against the clock may supplement their
use of formal analyses with intuitive judgements based on their own experiences.
Intuition, the authors assert, can be a powerful tool to supplement the rational
decision-making process. Moreover, firms can take various steps to hone their
strategic expediency capabilities, for example by developing a template of
critical issues to guide managers’ thinking when they assess potential
strategic partners.
Mathew Hughes, R. Duane Ireland and Robert E. Morgan Stimulating
Dynamic Value: Social Capital and Business Incubation as a Pathway to Competitive
Success direland@mays.tamu.edu
Studies of business incubation have tended to examine how
managing the incubator can help incubating firms create value. Emphasis has
centred on the provision of core business services and the design of the incubator,
while more recent approaches focus on the provision of a rich network through
which an incubating firm can engage in collaborations. This paper argues that
such provisions dictate only the opportunities for value creation; how incubating
firms choose to behave and pursue network opportunities dictates the extent
to which these opportunities can be realised and, thus, the value creation.
It contends that firms’ destiny lies in the hands of their combinations
of strategic networking activities, and incubation outcomes do not occur because
of a firm’s mere presence in an incubator. The authors identify two
value-stimulating behaviours (networking activities)dresource pooling activity
(resource-seeking behaviour) and strategic network involvement (knowledgeseeking
behaviour)dand develop a value matrix that classifies incubation into four
types of outcomes on the basis of the extensive versus narrow combinations
of these activities. Different combinations generate different levels of social
capital, which generates unique incubation outcomes that contain varying levels
of value creation potential. Each incubation outcome has merits and can be
used to inform the evaluation of incubating firms and the relational strategies
of their managers. The authors test this four-group typology using data generated
from a postal survey of young, high-technology incubating firms. They conclude
with a set of implications for incubating firms, incubator management teams,
public policymakers and incubator sponsors, and further research.
Anna Nosella and Giorgio Petroni Multiple Network Leadership
as a Strategic Asset: the Carlo Gavazzi Space Case gpetroni@unirsm.sm
In 1979 Carlo Gavazzi Space was a small company on the fringes
of the European space market. But visionary leadership from its CEO Lanfranco
Zucconi led the company towards the blossoming market in small satellites
for developing countries. The journey towards developing the capability to
serve this market led CGS to build, and act as the strategic guide to, a sophisticated
system of four strategic networks. The article focuses on CGS and its relationships
with its partners in these networks, who include suppliers, collaborator/
competitor space SMEs, universities and public research centres, and regional
and sector political structures. The authors analyse how the multiple network
system contributes to helping CGS gain the competitive advantages of increased
contractual power with public space agencies, increased innovation generation
and improved technological transfer opportunities which have underpinned its
successful entry into the small satellites market. They illustrate how the
lead company organizes and manages the system of networks, each of which require
different coordination mechanisms and degrees of formalization. They pay tribute
to the skill and determination of the lead company, and its CEO’s expertise
in recruiting, negotiating with and motivating network partners and creating
an environment of trust and respect where their interests converge on a common
goal, have been repaid with very positive results for both CGS and its network
partners.
Gianluca Colombo, Valter Conca, Massimo Buongiorno & Luca Gnan
Integrating Cross-Border Acquisitions. A Process-oriented Approach
gianluca.colombo@lu.unisi.ch
Acquisitions and mergers of equals often fail to deliver
shareholder value, largely because poor integration practices do not allow
synergies to be created. The issue has been addressed by several studies from
two different research streams: the first looks at the combination of resources
after the acquisitions and the second focuses on the human factor. This paper
proposes an integrated model where the effects of these key aspects are tested
simultaneously and where three independent variables are included: the extent
of planning and knowledge from previous acquisitions and knowledge from previous
relationships. The authors believe that through the model managers can prioritise
their actions and select an appropriate time horizon for the integration.
This paper considers managerial resources redeployment and the change in organisational
climate as endogenous variables of a structural model where the exogenous
variables are merger planning, knowledge from previous acquisitions, knowledge
from previous relationships and the temporal lag between the closing date
and the beginning of integration. The model is tested on a sample of cross-border
acquisitions. The results contain several lessons for managers. First, an
accurate and detailed merger plan helps in resources redeployment. Second,
the knowledge acquired through previous acquisitions and previous relationships
with the target positively affect the resource transfer. Surprisingly, the
acquisition experience has a negative effect on the organisational climate.
Finally, the sooner the integration process is begun, the more likely it results
in a successful acquisition.
Peter J. Brews and Christopher L. Tucci The Structural and
Performance Effects of Internetworking peter_brews@unc.edu
All over the world companies are spending many billions of
dollars on upgrading their information technology to internet-based systems.
They justify this expenditure on hardware and software that permits internetworking
saying it improves business operations. But is this money well spent? First
of all, the implementation of these systems fundamentally changes a company’s
organisational structure. Second, does such enabling actually improve operational
efficiency? And third, if every company is doing this, how will a competitive
advantage be achieved? This paper addresses these issues, drawing on data
gathered from a multinational sample of 550 firms. The authors’ research
shows that internet-enabling of business operations is profoundly affecting
the scope, structure and operational performance of firms. However, because
the majority of the internet-enabling done so far involves business processes
and activities that organisations perform in a similar way, little firm-level
competitive advantage can be achieved by it. The authors do stress though
that because the ‘‘non-strategic’’ effects of internetworking
are so profound in their own right, they warrant focused managerial attention.
They also outline the conditions under which internetworking is likely to
contribute to a firm’s competitive advantage. In particular, as new
and more complex applications of operational internetworking are still appearing,
late adopters may find that their tardiness in making the transition proves
very costly.
George Balabanis and Vangelis Souitaris Tailoring Online Retail
Strategies to Increase Customer Satisfaction and Loyalty v.souitaris@city.ac.uk
The growth of internet shopping has widened the retail environment and
created challenges for retailers. One of the main challenges is to build
up customer loyalty, and therefore repeat business, as shoppers are only
ever a few mouse clicks away from another website which may have similar
offers. Sites therefore must differentiate themselves and their offers and
focus their market scope. This paper examines how online retailers can combine
their differentiation and market scope strategies to increase customer satisfaction
and loyalty. It says that online shoppers fall into one of two broad categories
which define their motivation: goal-oriented and experiential. The majority
of shoppers are goal-oriented, are motivated by convenience, selection and
information, while experiential shoppers are the browsers, motivated by
recreation and experience. The authors examine differentiation and market
scope strategies from a demand-driven perspective, collecting data from
UK shoppers who buy groceries online. Respondents were categorised into
benefit segments, based on their responses to the two shopping motivations.
The authors found that differentiation strategies based on convenience and
customer care are more likely to retain the loyalty of goal-oriented shoppers
while experiential shoppers will be won over by differentiation based on
an eye-catching website, product assortment and customisation. The overall
message is that differentiation, if combined with the appropriate market
scope, can lead to a competitive advantage. Moreover, the authors suggest
that online retailers can satisfy both types of customers with different
strategies and that certain differentiation strategies can be more effective
in terms of satisfaction and loyalty generation when focused on specific
segments.
This issue is available in full on-line at www.sciencedirect.com
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