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In this article, we investigate whether environmental capabilities influence firms' corporate strategies, a topic that has received little attention to date. We hypothesize that firms are more likely to acquire facilities when ownership facilitates the transfer of capabilities either to or from the facility. Using a panel from the U.S. government's Toxics Release Inventory Program, we find firms with superior environmental capabilities are significantly more likely to acquire physically proximate facilities with inferior environmental capabilities and vice versa. Our results extend theories of both corporate and environmental strategy.

In multidivisional firms, the corporate staff is central to the implementation of corporate-level strategy, but empirical evidence on its function is limited. We examine one corporate staff through e-mail analysis. We find sharp cross-sectional differences in communication patterns: staff members have networks that are larger, more integrative, and richer in structural holes. However, much of this difference is attributed to sorting processes, rather than being caused by employment in the corporate staff per se. Further, once people receive the 'corporate imprimatur,' they retain aspects of it even when they move back to the line organization. These results imply that the literature's emphasis on structure as a means to achieve coordination undervalues a selection process in which individuals with broad networks match to coordination-focused jobs in the corporate staff.

The globalization of markets and industries has fundamentally changed the competitive conditions facing firms. Yet, how globalization has influenced the international diversification strategies of firms is an issue largely overlooked in both the strategic management and international business literatures. This paper develops a theoretical framework to understand how industry globalization, foreign competition, and firm product diversification may influence a firm's choice of its degree and scope of international diversification. Utilizing a panel dataset of U.S. manufacturing firms for the period 1987-99, we provide the first empirical evidence that industry globalization and foreign-based competition are statistically significant factors explaining the degree and scope of international diversification by U.S. firms.

We explore why and how corporations seek to build community resilience as a strategic response to grand challenges. Based on a comparative case study analysis of four corporations strategically building community resilience in five place-based communities in South Africa, as well as three counterfactual cases, we develop a process model of corporate practices and contingent factors that explain why and how some corporations commit to community resilience building and whether they try to do so directly or indirectly. We thus help explain corporations' strategic contributions to community resilience, and we emphasise the role of place-specific resources, social-ecological system viability, and limited statehood in motivating such organisational responses to grand challenges.

In the face of advancing globalization, societies have undergone a significant transformation over the last decades. The resulting environmental, social, economic and institutional challenges have made the issue of sustainability more relevant than ever, touching every aspect of our lives. To respond to these challenges, institutions and companies must jointly pursue the common goal of sustainable development. However, to integrate sustainability in strategic decision-making, academics and managers require a clear view of the advantages, key value drivers and potential solutions. Accordingly, we focus on two questions: What are the advantages of integrating sustainability initiatives in strategic decision-making? How can sustainability be integrated in the corporate strategy with a view to sustainable development? Based on semi-structured interviews with 85 managers specialized in sustainable governance, we provide a clear picture of the role of sustainability in the value creation process. Our proposed conceptual model suggests a positive correlation between implementing sustainability initiatives and corporate performance. Moreover, our findings show that firms that effectively implement sustainability improve the conditions of their surrounding communities. Indeed, a sustainable corporate strategy can lead not only to superior performance, but also to improving the wellbeing of all stakeholders.

In this paper, we argue that managers confront a paradox in selecting strategy. On one hand, capital markets systematically discount uniqueness in the strategy choices of firms. Uniqueness in strategy heightens the cost of collecting and analyzing information to evaluate a firm's future value. These greater costs in strategy evaluation discourage the collection and analysis of information regarding the firm, and result in a valuation discount. On the other hand, uniqueness in strategy is a necessary condition for creating economic rents and should, except for this information cost, be positively associated with firm value. We find empirical support for both propositions using a novel measure of strategy uniqueness in a firm panel data set between 1985 and 2007. This paper was accepted by Bruno Cassiman, business strategy.

This grounded theory-building multiple-case study examines the executive leadership group that comprises the general manager (GM) that heads each of the firm's business units in a multibusiness organization. Because each GM exercises control and authority over their business unit's resources, they operate at the nexus of firm-level strategy and strategy implementation through the development of business-unit-level strategy and tactics. Moreover, they play an essential role in adapting the organization by collectively sensing, seizing, and reconfiguring resources and thereby capturing product-market opportunities that emerge. However, there is little direct empirical understanding of this important executive leadership group. This study begins to address this gap in the literature by exploring the relationship between the characteristics of the set of business-unit general managers and firm performance in six firms operating in the high-dynamic software industry with an in-depth comparative case study. New theory is developed that begins to open the \"black box\" of executive leadership groups, and in so doing contributes new understanding of executive leadership groups and dynamic managerial capabilities, and thereby introduces the notion of an episodic team.

This paper investigates “legacy divestitures,” the sale or spinoff of a company’s original, or “legacy,” business. The central tension considered in this work is that the historical presence of a firm’s legacy business should simultaneously make that unit very interdependent with the company’s remaining operations and make the firm’s managers highly likely to take those same interdependencies for granted. Consistent with these predictions, the post-divestiture operating performance of firms that divest their legacy businesses falls short of that of firms that retain comparable legacy units, especially when the divested unit operates in the same industry as others of the divesting firm’s businesses. Newer chief executive officers (CEOs) are more likely to undertake legacy divestitures than their longer-tenured peers, and the most recently appointed CEOs undertake the most costly legacy divestitures. In summary, this paper provides insights into how historical interdependencies create value in diversified firms, as well as the decision-making processes that managers follow in overseeing these companies.

Most traditional research on mergers and acquisitions tends to focus on the role of similarity in explaining acquisition performance. While scholars have recently begun to examine acquisition complementarity, there is still little evidence concerning how complementarity influences acquisition performance. Further, previous research has not drawn the connections between related contexts and the potential benefits from complementarity. In this article, we move the study of acquisition complementarity forward by investigating the effects of strategic and market complementarity on acquisition performance in the context of related horizontal acquisitions. We also propose that two key attributes of acquirers--strategic focus and out-of-market acquisition experience--will moderate this relationship. We investigate our research questions in the context of all 2,204 acquisitions made by publicly traded U.S. commercial banks during the 12-year period from 1989 to 2001. Our findings are generally supportive, suggesting complementarity is an important antecedent of acquisition performance, and raising important issues on the nature of acquisition research in general.

We examine the relationship between growth along the product and international dimension in the short run. We argue that while the presence of fungible intangible resources and economies of scope may create opportunities for a firm to expand along both dimensions, the effect of short-run constraints may lead to a trade-off and a negative association between the two dimensions. In addition, we suggest that rather than being independent, decisions concerning the extent of growth along the two dimensions are likely to be made simultaneously and endogenously by firms after taking into consideration the availability of various resources. We test these propositions by observing a sample of 1,299 firms over the period of 1993-1997. Our results show strong evidence of endogeneity and a negative association between growth along the two dimensions. These findings provide important support for theories of firm growth that have long held that firms are limited in the number of opportunities they can exploit in the short run by various constraints.