New member in the boardroom and subsequent strategic change in the product-market scope of the firm

Purpose The purpose of this paper is to explore the linkages between the appointment of a new management board member and the following strategic change (SC) in the product-market scope of the firm. Design/methodology/approach The study is based on the whole population of Estonian firms, in total 16,941 observations and the data are retrieved from Estonian Business Register. First, the authors focus on the association between the appointment of a new board member and the likelihood of different types of SC. Second, the authors focus on the association between the new board member’s previous export experience and export-related SC. Logistic regressions are applied for all models. Findings The results indicate that there is a significant association between the appointment of a new board member and the subsequent start of exports and also continuing it, entrance into a new industry and making an SC in more broad terms, though the significance levels vary across the composed models. No significant relationship was found with the entrance into the additional geographic market(s) for already exporting firms. There was also a significant association between the previous export experience of a new board member and the subsequent start of exporting. Originality/value The authors look at SC in the product-market domain holistically by applying the same data on both geographic and product portfolio expansion options. The authors also introduce the scale and stability contexts of SCs. These aspects are usually neglected from similar studies.

Identification and Categorization of Disruptive Innovations According to the Strategic Scope of the Firm

The concept of innovation has for a long time been considered as the drive behind the ever-changing positions and functioning of the global community. Since the beginning of twenty-first century, creative individuals and entrepreneurs have without influence declined to accept the existing products and services as being the ultimate solution to challenges the society faces. This scholarly analysis builds on the theory of disruptive innovation to categorize and analyze the impact of disruptive innovations on key sectors of an economy in terms of their impact on the strategies and commercialization from a sectorial perspective. This analysis offers insightful information in terms of disruptive innovations which can be categorized into market-driven, product-driven, and competency-driven disruptive innovations.

Identification and Categorization of Disruptive Innovations According to the Strategic Scope of the Firm

The concept of innovation has for a long time been considered as the drive behind the ever-changing positions and functioning of the global community. Since the beginning of twenty-first century, creative individuals and entrepreneurs have without influence declined to accept the existing products and services as being the ultimate solution to challenges the society faces. This scholarly analysis builds on the theory of disruptive innovation to categorize and analyze the impact of disruptive innovations on key sectors of an economy in terms of their impact on the strategies and commercialization from a sectorial perspective. This analysis offers insightful information in terms of disruptive innovations which can be categorized into market-driven, product-driven, and competency-driven disruptive innovations.

Do family-managed and non-family-managed firms internationalize differently?

Purpose Although the concepts of family business, internationalization, and agency theory have received some attention in the relevant literature, these concepts and theories have been used independently. The purpose of this paper is to help close the gap between what is known and what needs to be known about the decision-making processes of internationalization of family managers (FM) and non-family managers (NFMs). Design/methodology/approach The paper analyzes the story of Busscar, a Brazilian firm that began internationalization under an FM and ended it under an NFM. The management transition took place suddenly, as the family CEO died in a tragic accident, and the company appointed an NFM to replace him virtually overnight. These circumstances, as well as the fact that Busscar accelerated its internationalization process after the transition only to go bankrupt a few years later makes this case critical. Findings The paper concludes that under NFMs, the speed and scope of the firm internationalization processes were accelerated and the financial risks were augmented, which is in line with the agency theory hypothesis and contradicts suggestions that NFMs tend to be more structured. Research limitations/implications Many researchers argue that it is important to professionalize the management of family firms. It is expected that an NFM leads to a more structured strategy. The study shows otherwise; changing the manager leads to opportunistic internationalization using emerging strategies rather than deliberate ones. Originality/value This study suggests that firms, networks, entrepreneurship, and ownership are not the only important variables. Manager origin (inside or outside the family) can change everything.

Sequential expansion in a foreign market

Purpose A multinational firm’s expansion in a foreign market is a key issue of international business. The purpose of this study is to extend the understanding of essential drivers that will facilitate firm’s assessment of alternative modes of sequential expansion. Design/methodology/approach The study applies the knowledge-based view and explores a multinational firm’s sequential post-entry expansion in a foreign market. Event histories of Swedish industrial firms’ establishments of wholly owned subsidiaries in Germany, the UK and the USA were explored using Cox regression. Findings Broad market experiences stemming from corporate strategy and deep experiences from the preceding subsidiary increase the likelihood of a sequential investment. Effects of broad experiences are contingent on the context specified by the geographic scope of the firm and its general subsidiary experience. Research limitations/implications The study contributes to international expansion theory and integrates sources of knowledge originating from strategy theory and internationalization theory. The study shows that the dual approach is needed to understand international expansion. Practical implications In evaluating a further subsidiary investment in a foreign market, the multinational firm is advised to assess whether it possesses enough market experiences to justify the investment. The experiences should be associated with corporate strategy, the previous wholly owned subsidiary and the context specifications identified in the study. Originality/value The study is unique, as it addresses the simultaneous impact of broad and deep market experiences. Also, the inclusion of central context specifications makes the study novel.

CEO Personal Risk-Taking and Corporate Policies

This study analyzes the relation between chief executive officer (CEO) personal risk-taking, corporate risk-taking, and total firm risk. We find evidence that CEOs who possess private pilot licenses (our proxy for personal risk-taking) are associated with riskier firms. Firms led by pilot CEOs have higher equity return volatility, beyond the amount explained by compensation components that financially reward risk-taking. We trace the source of the elevated firm risk to specific corporate policies, including leverage and acquisition activity. Our results suggest that nonpecuniary risk preferences revealed outside the scope of the firm have implications for project selection and various corporate policies.