Explore the vast range of titles available.

To exploit first-mover advantages, pioneers may be motivated to amass customers before rivals enter the market. Likewise, when they enjoy increasing returns due to network effects, static scale economies, or learning effects, companies have incentives to invest aggressively in growth. This paper presents econometric analysis of factors that determined the intensity of Internet companies' investments in growth, and analyzes the long-term performance consequences of such investments. Results indicate that first movers spent significantly more on upfront marketing than non-pioneers. Contrary to expectations, however, firms in markets that exhibited increasing returns did not spend more on their early customer acquisition efforts than other sample companies. Although the typical sample company did not earn positive long-term returns, heavy early investments in growth were nevertheless economically rational. In most cases, reducing marketing outlays would have worsened a bad outcome, consistent with an inverted 'U' relationship between long-term returns and upfront marketing spending. Thus, the typical sample company invested in marketing, ex ante, at levels close to those that would have maximized returns, observed ex post.

This research explores the effects of CEO equity ownership and corporate diversification on firms' risk-taking and risk avoidance behaviors. Hypotheses regarding these effects are tested through econometric analysis of mergers in the U.S. cable television industry. Risk taking and avoidance are measured as horizontal expansion through acquisitions and as the divestiture of assets, respectively, in the face of increasing environmental turbulence.

Many researchers believe that bounded rationality prevents CEOs in large, complex, multidivisional (\"M-form\") corporations from personally formulating division-level strategies. Instead, CEOs are seen as guiding a \"bottom-up\" process whereby division managers propose strategies for review and approval by the corporate office. Contrary to this view, we argue that CEOs in global media firms frequently drive strategy in a \"top-down\" manner, especially when their firms seek to expand by integrating the activities of two or more existing divisions. We refer to such firms as \"Entrepreneurial M-forms,\" and maintain that their reliance on an activist CEO offers benefits: (1) in turbulent environments, when the use of slow, bottom-up planning processes risks forfeiting first-mover advantages; and (2) when expansion entails major capital commitments, and division managers may be reluctant to accept the career risks associated with sponsorship of \"bet-the-company\" projects.

Due to network effects and switching costs in platform markets, entrants generally must offer revolutionary functionality to win substantial market share. We explore a second entry path that does not rely upon Schumpeterian innovation: platform envelopment. Through envelopment, a provider in one platform market can enter another platform market, and combine its own functionality with that of the target in a multi-platform bundle that leverages shared user relationships. Envelopers capture market share by foreclosing an incumbent's access to users; in doing so, they harness the network effects that previously had protected the incumbent. We present a typology of envelopment attacks based on whether platform pairs are complements, weak substitutes, or functionally unrelated and we analyze conditions under which these attack types are likely to succeed.

Alfred D. Chandler, Jr., observed that under managerial capitalism, salaried managers tended to pursue policies that promoted the long-term stability and growth of their enterprises. The U.S. cable television industry provides a case study of how managers responded when stability and growth were mutually consistent objectives, and when they were mutually exclusive. From the late 1950s through the early 1980s, agent-led newspaper publishers and television broadcasters invested aggressively in the cable business. Beginning in the mid-1980s, however, investing in cable implied a tradeoff between stability and growth objectives. As a wave of mergers swept the cable industry, agent-led companies avoided acquisitions that might dilute earnings and depress stock prices. Confronting an increasingly turbulent competitive environment during the first half of the 1990s, agent-led companies were much more likely to divest cable assets than owner-managed firms. In agent-led companies, managers believed that their cable units would require massive capital investments, and they were reluctant to “bet the company” on a business facing so much competitive, technological, and regulatory uncertainty. Owner-managers, emotionally attached to the cable industry and to the firms they had built, and often harboring dynastic ambitions, were more reluctant to sell: they were willing to gamble on growth.

In Part III, we discussed how senior executives manage traditional, ‘bottom-up’ resource allocation processes to shape strategy. In Part IV, we now consider circumstances in which corporate executives bypass bottom-up processes altogether and assume responsibility for defining investment plans.Part IV explores two interrelated issues regarding the role of the corporate office within large, complex, diversified companies. First, when should a CEO play the primary role in defining unit-level strategies, rather than simply reviewing and ratifying proposals advanced by lower-level executives? Second, when should a diversified corporation reduce its equity ownership in certain business units below 100 per cent, thereby relaxing corporate control over strategic resource allocation processes within these units?.

The ‘pyramid’ headed by the single, all-powerful individual has become a symbol of complex organizations, but through historical and misleading accident. The all-powerful chief can maintain such control only to the extent that he is not dependent on others within his organization; and this is a situation of modest complexity , not one of a high degree of complexity.(James Thompson, Organizations in Action , 1967: 132) I think Sumner ends up with the biggest pyramid in the desert.(John Malone, CEO of TCI, referring to Sumner Redstone, Chairman and dominant shareholder of Viacom Inc.1)Organizational researchers contend that in large, complex, diversified corporations, the CEO cannot possibly have enough specific knowledge of the threats and opportunities facing individual business units personally to develop their strategies.

Blue Skies: A History of Cable Television, by Patrick R. Parsons, is reviewed.

This thesis examines the relationship between a firm's organizational structure and its propensity to take strategic risks in a turbulent environment. Two aspects of organizational structure are studied: a firm's level of diversification, and the extent of its CEO's equity ownership. Horizontal expansion through acquisition serves as a measure of risk taking; divestiture equates to risk avoidance. These relationships are examined in the U.S. cable television industry, which experienced a dramatic increase in environmental turbulence during the 1990s. Econometric analysis of 1986-1995 data for 201 cable companies indicates that after controlling for factors such as scale, diversification and CEO equity ownership are significant predictors of expansion and exit decisions. Compared with agent-led companies, at all levels of turbulence, owner-managed firms exhibited a greater propensity to expand through horizontal acquisition, and a lower propensity to exit the cable industry. At high levels of turbulence, diversified firms exhibited a greater propensity to exit and expand, compared with firms focused exclusively on cable. To understand the processes that linked organizational structure and risk taking behavior, interviews were conducted in eighteen companies. Two conclusions emerge regarding CEO equity ownership. First, secure in their positions, owner-managers' decisions often were influenced by personal priorities, e.g., emotional commitment to the business; a desire to build a family dynasty. Second, to a greater extent than owner-managers, agent CEOs felt obliged to justify strategic decisions to investors, board members, and subordinates. This need to justify decisions, and the challenge of doing so in a turbulent environment, increased the likelihood that agent-led firms would exit the cable business. The interviews also suggest that differences in the quantity and quality of information available to the CEOs of diversified and focused firms influenced their decisions. In contrast to their counterparts in focused firms, who had deep, first-hand knowledge of industry trends, CEOs in diversified firms were more reliant on information sources that provided a \"filtered\" perspective. With superior information, focused firms' CEOs had greater confidence that their companies could withstand competitive challenges, and were less inclined to sponsor decisions to exit.

Multimedia and the information superhighway are terms used so broadly that they have come to mean absolutely everything and, as a result, are beginning to mean virtually nothing. This is unfortunate because multimedia technologies are leading to a fundamental shift in the economics and competitive dynamics of entire industries. There are 7 major competitive battlegrounds in the multimedia landscape: 1. content creation, 2. content packaging, 3. distribution pipes, 4. access devices, 5. operating environments, 6. gateways, and 7. premises-based networks. As multimedia industry participants think through their choices, they should also scan the landscape for signposts that provide early indications of how key uncertainties will be resolved.