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A Social Capital Model of High Performance Work Systems
Get PDFIn this paper we explore a causal mechanism through which high performance work systems affect performance outcomes.
We propose a model in which a particular type of high performance work system – a relational work system – enhances
organizational performance by creating a framework that encourages the development of social capital between employees
who perform distinct functions. In a nine-hospital study of patient care, we show that the adoption of a relational work
system predicts high levels of social capital among doctors, nurses, physical therapists, social workers and case managers in
the form of relational coordination, in turn predicting quality and efficiency outcomes for patients. Results suggest that
social capital models of high performance work systems are a promising counterpart to models that focus on employee skills
or commitment
An Examination of Strategic Drivers Impacting U.S. Multinational Lodging Corporations
Get PDFTop executives from four major multinational lodging corporations were interviewed on corporate strategies to identify key
strategic drivers for creating value in the global lodging industry. In the face of greater environmental uncertainty, global
competition, and technological change, it is imperative that multinational lodging firms develop strategies for protecting
their domestic franchises and expanding internationally. The findings reveal shifts in current business models, strategies for
changing brand architecture, searches for profitable new markets, commoditization and differentiation of the product, and
development of customer-centered functional strategies. Implications of these strategic changes for the lodging industry are
discussed
"Innovation Shift" to the Emerging Economies: Cases From IT and Heavy Industries
Get PDFThe current shift of technology development work by multinationals to the emerging economies is distinctive, as many are
now observing, though less understood are the implications for innovative capacity and location. It is now high-end (rather
than adaptive) development that is being carried out in countries like India, China, Brazil and Mexico. And, increasingly,
multinationals from the U.S., Japan and Europe are finding themselves competing against, or working with, new
technology-based companies from the emerging economies. Our study focuses on the processes and outcomes of globally
distributed engineering. Field work was carried out at 67 engineering headquarters or development sites in eight countries.
The firms in our study were in IT and a range of other industries, though in this paper we concentrate on the IT and heavy
industries sectors. Based on our fieldwork we conclude that this new shift in the location of technology work at the top of
the value chain is not only distinctive, but it is also disjunctive, not following past trajectories of offshoring. We also find
that it is occurring as a matter of incremental value chain creep, rather than being guided by “strategy.” We believe current
trends are inconsistent with some widely accepted postulates and prescriptions of organization and innovation theory. We
find that the consequences of these trends have not been well conceptualized by managers and policy-makers
Intermediate Steel-Industry Suppliers in the Pittsburgh Region: A Cluster-Based Analysis of Regional Economic Resilience
Get PDFThe experience of intermediate steel-industry suppliers in the Pittsburgh region offers valuable insight into how traditional
industrial clusters can serve as a source of economic resilience in regions, like Pittsburgh, where a “signature” industry
contracts or relocates. We find that intermediate steel-industry suppliers in Pittsburgh remain an important part of the
region’s economic base, serving as a significant source of export income from national and international markets. Survey
results reported here offer a description of the cluster’s characteristics. An important subset of firms in this cluster relies on
“key” contacts in the region, such as suppliers, partners, and business networks for collaboration on product development or
marketing. By recognizing and supporting such local linkages, policy initiatives can help to strengthen the cluster and
contribute to the region’s economic resilience
Globalization and the Real Estate Industry: Issues, Implications, Opportunities
Get PDFGlobalization has reached the local and "non-tradable" bastion of real estate. In the last decade, cross-border transactions,
portfolio and direct investments have surged in real estate, impacting prices, volumes and industry structure. A significant
share of U.S. builders, brokers, consulting firms, real estate finance firms and investors have extended their areas of
operation beyond local markets to a world-wide base. This paper draws on prior research, published data, trade
publications, an industry workshop, interviews and a short survey to present a preliminary overview of how real estate is
globalizing. The paper reviews questions of measurement of international trade and investment in real estate, theoretical
issues surrounding the interplay of globalization and real estate, the impact on the real estate supply chain, issues of risk
diversification and contagion, and the global competitiveness of the U.S. real estate industry, particularly in emerging
economies. A survey of industry leaders indicates that while Europe has historically been a strong base for U.S. real estate
activity, Asian markets now offer diversification opportunities due to rapid economic growth, urbanization, demographic
trends and demand backlog. We point to some future research questions, such as the link between banking, capital markets
and real estate in the context of global financial integration, competitiveness in global markets and employment generation,
and the impact of offshoring and global sourcing on U.S. industrial agglomerations, among others
Internal Labor Markets and Diversification Strategies in Financial Services
Get PDFThis paper assesses the fit between firm-level Internal Labor Markets (ILMs) and firm diversification in the U.S. financial
services sector. The sector comprises a number of related sub-industries and recent deregulation has allowed firms to
construct increasingly diversified portfolios of activities across these sub-industries. Recent deregulation, particularly in
banking, has also loosened geographic restrictions on firm activities. Drawing on the “resource-based view” of firm strategy,
we hypothesize that firms with stronger ILMs are more likely to diversify. We find support for this view in analysis of data
from the Longitudinal Household-Employer Dynamics program matched to the Longitudinal Business Database. Firms
with lower net turnover, lower wage dispersion, and greater opportunities for workers inside the firm tend to be those that
diversify more subsequently
Innovation and Technology Policy: Lessons From Emission Control and Safety Technologies in the U.S. Automobile Industry
Get PDFThis research explores processes of innovative activities that lead to the development of automobile
emission-control and safety technologies in the U.S. automobile industry. Understanding the construction of
these two automotive technologies is interesting for two reasons: 1) they were developed under
command-and-control type government regulations designed to force the industry to develop new technologies
by setting standards beyond industry’s current technical capability (“Technology-forcing” regulations); and 2)
the two key federal agencies responsible for designing and implementing the two sets of regulations (the
National Highway Traffic Safety Administration and the Environmental Protection Agency) were established in
the same period, the late 1960s, creating an ideal “natural experiment” for analyzing processes of technological
changes that involve development of two different technological systems under two different sets of federal laws
and federal agencies, and one common regulated industry -- the automobile industry. Our key motivation in
this research is to investigate whether “technology-forcing” federal regulatory standards imposed upon the U.S.
automobile industry stimulated industry innovation; and more importantly, whether federal regulations
conferred any competitive advantage on the domestic U.S. firms in the automobile industry, which has long
been crowded by foreign automakers as well as foreign suppliers.
By using patent application as a measure of innovative activities, we identified relevant patents in both
automobile emission-control and safety technologies in the last forty years from c. 1960 to c. 2000. In addition
to compiling patent application records, we extensively studied both existing secondary literature and published
government and industry records and conducted targeted interviews with important actors across a variety of
related institutions involved in the development. This qualitative and quantitative information was used to
construct a historically based study on two simultaneously-developing automotive safety and emission-control
technologies, so that we could compare and contrast not only the patterns of innovation but also the
socio-political processes of technological development under regulatory pressures.
Statistical results reveal a strong correlation between overall patent applications and major regulatory events in
both automotive emission-control and safety technologies. This finding supports the idea that
“technology-forcing” regulatory instruments can be effective in driving technological change. More importantly,
for a separate model that tested the impact of regulation on patent applications by U.S. firms (after controlling
for foreign patenting activities and firm market share), regulation was also found to be effective in driving
innovation, but its impact was significant only in the early phase of technological change when regulations were
first introduced in the early 1970s.
Findings of this research provide interesting new insights on the “Porter hypothesis,” which claims that
appropriately designed regulation will increase corporate competitiveness and motivate new process and product
innovation. While this study provides an empirical evidence for the Porter hypothesis; the study also implies
that the most significant impact of regulation on innovation and industrial competitiveness may only be
positive and significant in the early phase of technological change when the market for new technology is
immature and when more radical technological innovation is necessary to meet new, stringent regulations.
Interestingly, the study also shows that the auto industry reacted differently to the expectations of the regulatory
agencies; that is, the auto industry developed and introduced catalyst-based emission control systems in the
1970s as expected by the EPA. Yet the auto industry resisted implementing the airbag system for automobile
safety that NHTSA actively pushed for in the early 1970s
The Evolution of a Competence's Market Specificity and the Emergence of Advantage During a Technological Disruption
Get PDFI present an exploratory study to investigate the evolutionary path of a competence (rDNA/fermentation technology) during
a technological discontinuity and its impact on the performance heterogeneity across incumbents and both diversifying and
de novo entrants. As such, this paper is based in detailed, direct industry observation, complemented with large-sample
secondary data collection when necessary. Through such combination of industry observation and accompanying
quantitative analysis, I find that this competence evolved with increasing market specificity. Such evolutionary path
determined a significant part of performance heterogeneity during the technological disruption. Diversifying entrants
outperformed incumbents only in the variant of the new technology that required rDNA/fermentation technology, that is,
only in the variant with this particular evolutionary path. This case study supports the theoretical conclusion that
incumbents do not necessarily fail to successfully execute R&D for all radically new technologies, as previously argued in
studies of incumbents’ structural inertia. Incumbents in the present case fail to execute the R&D of the new technology
only for that variant in which they cannot foresee the applicability to their own markets. That is, incumbents as
organizations are distinctively subject to structural inertia in their R&D structure, and to inertia in the structure with which
they monitor the environment
Growth Possibilities Found, Taken, and Lost
Get PDFGrowth possibilities found and taken affect long-term growth, profit, and competitiveness, but so do those that were missed.
Due to limited literature on how opportunities are lost, this paper used field data to develop theoretical explanations of the
decision-making process behind the phenomenon. The case research method was used to analyze comprehensive archival
decision-making data on exploration and exploitation over a 20-year period at the DuPont Company, complemented by
contemporaneous newspaper articles. Lost opportunities were analyzed using the counterfactual method of business and
economic historians. Choices of which new domain to explore were based on attempts to manage risk from various sources.
The decision whether to exploit new growth possibilities generated from exploration was influenced by the following
heuristics: risk of action vs. inaction, few vs. many links with current and future businesses, and brief vs. long time horizon.
When there was a significant deviation between the preferences of powerful individuals and the exploration-exploitation
considerations of the organization, they exercised their power to influence choices. These cognitive and power dynamics
combined to result in growth possibilities being found, taken, and lost
Investments in Modernization, Innovation and Gains in Productivity: Evidence From Firms in the Global Paper Industry
Get PDFThis paper examines the impact of investments in modernization and innovation on productivity in a sample of firms in the
global pulp and paper industry. Our motivation for this paper arose from plant-visits the authors made to pulp and paper
mills in North America and Europe, focusing on issues related to productivity, innovation and competition. In contrast to
much of the existing literature which focuses on the impact of R&D and patents on firms’ performance and productivity,
we collected data and information on actual investment transactions in four main areas of operations: (i) mechanical, (ii)
chemicals, (iii) monitoring devices and (iv) information technology. We find that firms which made decisions to implement
a greater number of investment transactions in modernization achieved higher productivity, and these estimated quantitative
effects are greater than the impact of standard innovation variables such as patents and R&D. Investment transactions in the
information technology and digital monitoring devices imparted a particularly noticeable boost to productivity. These
results are obtained after controlling for other firm-specific variables such as capital-intensity and mergers and acquisitions.
Two broad messages emerge from our study. First, firms’ decisions to undertake investments in modernization and various
forms of incremental innovations appear to be critical for achieving gains in productivity. While these may typically generate
small gains on a year-to-year basis, they can compound to form meaningful differences in performance, productivity and
competitive position across firms in the longer-run. Second, for some of the traditional industries like pulp and paper, R&D
and patents seem to be particularly poor indicators of innovation and, more generally, how firms go about achieving gains in
productivity. While this paper focuses on the pulp and paper industry, our broad framework and methodology is general
and can be applied to understanding firms’ strategies related to enhancing performance and productivity in a variety of
industries