Jorge Walter's Blog

New Article Forthcoming in the Academy of Management Journal:

Corporate Control and the Speed of SBU-Level Decision Making

Maximilian Kownatzki*, Jorge Walter**, Steven W. Floyd***, & Christoph Lechner****

* Oliver Wyman, ** The George Washington University, *** University of Massachusetts–Amherst, **** University of St. Gallen

Decision speed has long been recognized as a critical determinant of firm performance, particularly in dynamic environments. Extending prior studies, which have largely focused on firm-level decision speed in small- and medium-sized organizations, this study explores how control mechanisms set by corporate headquarters in multi-business firms influence decision speed at the strategic business unit (SBU) level. Using a multi-method approach, we first inductively derive six types of corporate control, before deductively examining their effects on SBU-level decision speed in five international multi-business organizations. Our results suggest that three corporate control types enhance decision speed (goal setting, extrinsic incentives, and decision process control), two have no effect (negative incentives and conflict resolution), and one has a negative effect (strategy imposition). By integrating results from our qualitative and quantitative analyses, we are also able to identify transparency/alignment, outcome orientation, participation, trust, and timely feedback as the key mechanisms accounting for these effects.

Keywords: Strategic decision processes; decision speed; multi-business organizations; SBUs; corporate control; executives’ mental models; multi-method field study

For a copy of this article, please see here or contact me.

Just returned from Prague and this year’s Strategic Management Society’s Annual International Conference, where I presented the paper:

• “Levin, D. Z., Walter, J., Appleyard, M. M., & Cross, R. (2012). Relational enhancement: How to unlock the value of network bridges.”

For more information, check the SMS Website.

New Article Forthcoming in R&D Management:

The influence of firm and industry characteristics on returns from technology licensing deals: Evidence from the U.S. computer and pharmaceutical sectors

Jorge Walter*

* The George Washington University

This study examines the relationships between firm and industry characteristics and firms’ abnormal stock-market returns accompanying the announcement of technology licensing deals. In particular, I examine the fit between firms’ licensing activities, their resource endowments, and their industry context, and develop hypotheses on its impact on abnormal stock-market returns after licensing deals. Analysing eleven years of inward and outward licensing transactions in the U.S. computer and pharmaceutical industries between 1990 and 2000, I find support for my argument that while firms profit from both inward and outward licensing, the magnitude of such profits is determined by licensing firms’ resource endowments, and that these determinants have a different impact in different industry contexts. Understanding these relationships helps explain when firms should use licensing to exploit their proprietary technologies and make better predictions about the impact of licensing transactions on firm performance.

Keywords: Technology licensing, abnormal stock-market returns, industry comparison.

For a copy of this article, see here or contact me.

This year’s Academy of Management Annual Meeting took place from August 3-7 in Boston, MA. Under the conference theme “The Informal Economy,” my colleagues and I presented in the following sessions:

• “Deeds that help and words that hurt: Helping and gossip as moderators of LMX to advice network centrality” with Berrin Erdogan & Talya N. Bauer (both Portland State University);
• “Exclusivity in biotech licensing deals: What makes licensors restrict their options?” with Ted A. Khoury (Portland State University) & Erin Pleggenkuhle-Miles (University of Nebraska); and
• “Publish or perish goes global: International scholars’ strategies for publishing in top journals.” Professional Development Workshop organized by Corinne Post (Lehigh University) & Cerdin, Jean-Luc (ESSEC Business School).

For more information, check the AOM Website.

Our article “The power of reconnection—How dormant ties can surprise you.” published last year in the MIT Sloan Management Review has been recognized as an “Editor’s Pick: Top Ten Articles from 2011.”

According to the MIT Sloan Management Review, “The top 10 articles of 2011 came from some of the most exciting thinkers around the world. They were the articles that subscribers, followers and bloggers were most keen to engage on.

For a copy of the article, please visit the MIT SMR website.

The 31st Annual International Conference of the Strategic Management Society took place from November 6-9 in Miami, FL. Under the conference theme “Strategies for a Multi-Polar World: National Institutions And Global Competition” my co-authors Ted Khoury (Portland State University) and Erin Pleggenkuhle-Miles (University of Nebraska, Omaha) presented our paper:

• “Exclusivity in biotech licensing deals: What makes licensors restrict their options?”

For more information, check the SMS Website.

New Article Forthcoming in the Journal of Business Research:

A Judgment-Analysis Perspective on Entrepreneurs’ Resource Evaluations

Benedict Kemmerer*, Jorge Walter**, Franz W. Kellermanns***, V. K. Narayanan****

* BSH Bosch und Siemens Hausgeraete GmbH, ** The George Washington University, *** University of Tennessee, **** Drexel University

Our study extends resource-based theory (RBT) by developing an understanding of how entrepreneurs judge the importance of the resource attributes of value, rareness, inimitability, and nonsubstitutability for the success of their ventures, and whether they make trade-offs between these attributes or follow RBT, which maintains that all attributes must be attained simultaneously. Resource judgments made by a sample of 181 entrepreneurs reveal that, while value and inimitability have a positive impact on resource importance, nonsubstitutability is only marginally positive, and rareness has a negative impact. Moreover, and contrary to RBT, entrepreneurs make trade-offs between resource attributes. Given prior empirical support for the critical influence of all four attributes on venture success, our findings uncover a systematic influence of judgment heuristics, cognitive biases, and institutional constraints in entrepreneurial resource judgments, and thereby provide a starting point for researchers and entrepreneurs alike to improve both theoretical models and outcomes of resource judgments.

Keywords: Judgment analysis, cognitions, behavioral decision making, resource-evaluation frameworks

For a copy of the article, please see here or contact me.

From August 12-16, the 2011 Academy of Management Annual Meeting took place in San Antonio, TX. Under the conference theme “West meets East. Enlightening. Balancing. Transcending,” we presented our paper:

• “Reconnection choices and the dominance of the irrelevant past” with Daniel Z. Levin (Rutgers) & J. Keith Murnighan (Kellogg).

For more information, check the AOM Website.

Just came back from a 2 1/2-day workshop on structural equation methods held at Virginia Commonwealth University in Richmond, VA, and highly recommend this and the other CARMA shortcourses.

For more information, please check out the CARMA website, which also has a video library on selected methodological topics as well as other resources for research methods.

New Article Published in the MIT Sloan Management Review:

The power of reconnection–How dormant ties can surprise you

Daniel Z. Levin*, Jorge Walter**, & J. Keith Murnighan***

* Rutgers University, ** The George Washington University, *** Northwestern University

The Web has made it easier than ever to reconnect with long-lost professional colleagues. Does it pay to do so? New research says yes–and suggests that every smart manager should try.

Keywords: Dormant ties, social capital, networking

For a copy of the article, please see the MIT Sloan Management Review website.

It is my pleasure to announce a new book chapter on “Strategic Decision Processes in the Realm of Strategic Alliances” as part of the edited volume:

Handbook of Research on Strategy Process

Pietro Mazolla & Franz W. Kellermanns (editors)

Williston, VT: Edward Elgar Publishing

For a copy of my chapter, please contact me directly.

On November 12, I presented the following paper at the 5th Fifth Annual Mid-Atlantic Strategy Colloquium at the University of Maryland:

• Kellermanns, F. W., Walter, J., Matherne, C., Floyd, S. W., & Veiga, J. F. “Decision alignment: A missing link in the relationship between strategic consensus and organizational performance.”

Thanks to all the participants for the great feedback we received.

From August 6-10, the 2010 Academy of Management Annual Meeting took place in Montreal, Canada. Under the conference theme “Dare to care,” my colleagues Daniel Levin (Rutgers University) & Melissa Appleyard (Portland State University) presented our paper:

• “Trusted bridging ties: A dyadic solution to the brokerage-closure dilemma.”

For more information, check the AOM Website.