GSOC - Summary
Growth Strategies and Organizational Challenges
Week 1..................................................................................................................................... 3
Lecture 1.1 Business planning vs. effectuation.................................................................. 3
Lecture 1.2 Growth vs. survival in international markets..................................................10
Article 1 - Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan
or just storm the castle? A meta-analysis on contextual factors impacting the business
planning–performance relationship in small firms. Journal of Business Venturing, 25(1),
24-40................................................................................................................................ 17
Article 2 - Sarasvathy, S.D. (2001). Causation and effectuation: Toward a theoretical shift
from economic inevitability to entrepreneurial contingency. Academy of Management
Review, 26(2), 243-263.................................................................................................... 23
Article 3 - Lu, J.W., & Beamish, P.W. (2004). International diversification and firm
performance: The S-curve hypothesis. Academy of Management Journal, 47(4),
598-609............................................................................................................................ 29
Article 4 - Sapienza, H.J., Autio, E., George, G., & Zahra, S.A. (2006). A capabilities
perspective on the effects of early internationalization on firm survival and growth.
Academy of Management Review, 31(4), 914-933.......................................................... 34
Week 2................................................................................................................................... 41
Lecture 2.1 Organic vs. non-organic growth.................................................................... 41
Lecture 2.2 Growing through innovation or imitation........................................................49
Article 1 - Klier, H., Schwens, C., Zapkau, F.B., & Dikova, D. (2017). Which Resources
Matter How and Where? A Meta‐Analysis on Firms’ Foreign Establishment Mode
Choice. Journal of Management Studies, 54(3), 304–339............................................... 56
Article 2 - Puranam, P., Singh, H., & Chaudhuri, S. (2009). Integrating acquired
capabilities: When structural integration is (un) necessary. Organization Science, 20(2),
313-328............................................................................................................................ 62
Article 3 - Pisano, G., & Teece, D. (2007). How to capture value from innovation: Shaping
intellectual property and industry architecture. California Management Review, 50(1),
278-296............................................................................................................................ 66
Article 4 - James, S. D., Leiblein, M. J., & Lu, S. (2013). How firms capture value from
their innovations. Journal of management, 39(5), 1123-1155.......................................... 73
Week 3................................................................................................................................... 82
Lecture 3 Stakeholder- vs. shareholder-oriented growth................................................. 82
Article 1 - Margolis, J.D., & Walsh, J.P. (2003). Misery loves companies: Rethinking
social initiatives by business. Administrative Science Quarterly, 48(2), 268-305.............93
Article 2 - Bosse, D. A., Phillips, R. A., & Harrison, J. S. (2009). Stakeholders, reciprocity,
and firm performance. Strategic Management Journal, 30(4), 447-456.........................100
Article 3 - Jones, T. M., Harrison, J. S., & Felps, W. (2018). How applying instrumental
stakeholder theory can provide sustainable competitive advantage. Academy of
Management Review, 43(3), 371-391............................................................................ 106
Week 4................................................................................................................................. 114
Lecture 4 Growing with personal or self-services...........................................................114
Article 1 - Minto, B. (1998). Think your way to clear writing. Consulting to Management,
10 (1), 33........................................................................................................................ 121
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, Article 2 - Scherer, A., Wünderlich, N. V., & Von Wangenheim, F. (2015). The value of
self-service. MIS quarterly, 39(1), 177-200.................................................................... 129
Article 3 - Collier, J. E., Breazeale, M., & White, A. (2017). Giving back the “self” in
self-service: customer preferences in self-service failure recovery. Journal of Services
Marketing........................................................................................................................138
Week 5................................................................................................................................. 145
Lecture 5 Related versus unrelated diversification.........................................................145
Article 1 - Chatterjee, S., & Wernerfelt, B. (1991). The link between resources and type of
diversification: Theory and evidence. Strategic management journal, 12(1), 33-48...... 154
Article 2 - Palich, L. E., Cardinal, L. B., & Miller, C. C. (2000). Curvilinearity in the
diversification–performance linkage: an examination of over three decades of research.
Strategic management journal, 23(2), 155-174..............................................................160
Week 6................................................................................................................................. 166
Lecture 6 Growing with products or services................................................................. 166
Article 1 - Huikkola, T., & Kohtamäki, M. (2017). Solution providers’ strategic capabilities.
Journal of Business & Industrial Marketing, 32(5)..........................................................170
Article 2 - Oliva, R., Gebauer, H., & Brann, J. M. (2012). Separate or integrate?
Assessing the impact of separation between product and service business on service
performance in product manufacturing firms. Journal of Business-to-Business Marketing,
19(4), 309-334................................................................................................................178
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,Week 1
Lecture 1.1 Business planning vs. effectuation
Growth strategies:
In the 20th century it was more about numbers, finance etc.
In the 21st century it is about sustainability.
Managed growth involves deliberate planning, effort, and strategy to achieve success,
making it predictable and sustainable over time. It relies on setting goals, analyzing risks,
and making informed decisions. In contrast, sheer luck is random and unplanned, leading to
unpredictable outcomes that happen by chance. While managed growth builds on systems
and is repeatable, luck is fleeting and can't be controlled or relied upon for long-term
success. Managed growth gives you control over the process, whereas luck leaves
outcomes to chance.
Article of Brinckmann, Grichnik and Kapsa
Research interest (about B,G and K)
● Universities worldwide teach students the importance of business plans (BP) and the
techniques of writing them.
○ 78 of the top 100 business schools in the U.S. offer courses on BP
preparation (Honig, 2004).
○ Entrepreneurship professors rate BP development as the most important
content in their courses (Hills, 1988).
● BP competitions are a key instrument to facilitate entrepreneurship and regional
development across the globe (Russell et al., 2008).
● Professional investors require nascent entrepreneurs to write a BP before they will
consider an investment.
Research gap (about B,G and K)
● Two opposing theoretical perspectives:
○ BP fosters firms’ development due to increased decision speed and more
efficient resource utilization. Goal setting fosters the identification of effective
steps to realize these goals.
○ BP prevents dedicating time to activities such as acquiring resources or
organizational development (Bhide, 2000). BP can lead to cognitive rigidities,
organizational inertia, and limited strategic flexibility (Vesper, 1993).
● Largely inconsistent empirical research on the planning–performance relationship in
entrepreneurship:
○ Studies finding negative, null, or positive relations (e.g., Bracker et al., 1988;
Lange et al., 2007; Gartner & Liao, 2005).
● Extant empirical research base is heterogeneous:
○ Studies draw from both new and established small firm samples neglecting
contextual differences between these different types of firms.
● Without systematic integration of individual empirical findings, the external validity /
generalizability of findings remains questionable.
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, ● Relying on few individual studies reporting a positive influence without considering
studies with opposing evidence gives way to the risk of type one errors (i.e., false
positives: assuming a positive influence of BP on performance when in fact there is
none).
→ Evidence-based approach.
Research aim - evidence-based approach (EBA)
EBA (Rauch & Frese, 2006) to overcome limitations of individual findings and narrative
reviews.
● Individual findings can suffer from cognitive / normative biases, sampling and
measurement problems, stochastic effects, or questionable external validity.
● Narrative reviews often include stereotypes and biases.
Originating from medical research (Rosenberg & Donald, 1995), EBA is a systematic
analysis and appraisal of extant empirical findings.
Research aim (about B,G and K)
1) The paper analyzes the general (i.e., main / direct) relationship between business
planning and performance.
2) The paper analyzes specific planning-contexts where a planning-based approach creates
better performance. To this end, the paper draws on three moderating factors:
a) the development stage of the firm,
b) the form of business planning undertaken
c) the cultural context in which the planning–performance relationship occurs (a
country’s level of uncertainty avoidance, UA).
Contribution (as outlined by the authors) (about B,G and K)
The analysis …
● … shapes our understanding of the information requirements for effective planning
and the limits of planning in light of complexity and uncertainty.
● … addresses the question whether a liability of newness can be overcome through
BP.
● contributes insights concerning effective resource utilization.
● provides insights into how the legitimization and communication-based benefit of a
written BP compares to a learning benefit the entrepreneurs obtain in the
business-planning process.
● contribute insights with regard to the functions business planning fulfills for
individuals in different cultural contexts and how different environments respond to
the business planning efforts.
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,Theory / research model (about B,G and K)
Purpose of a meta-analysis
Meta-analysis: purpose & advantages
● Assessment of overall direction(s) and effect size(s) by aggregating prior empirical
evidence.
● Aggregated effect sizes incorporate weighted (by sample size) magnitude and
direction of each primary study.
● Synthesized effect size estimate has higher statistical power than the integrated
primary studies.
● Accounts for moderating variables causing variance of effect sizes across primary
studies.
● Reduces subjectivity bias and enhances statistical accuracy.
● Meta-analytic results provide more than a summation of the integrated findings by
generating additional insights and directions for future research.
Meta-analysis method = statistical method used in research to combine and analyze the
results from multiple individual studies (study of studies) to address a set of related research
hypotheses.
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,Meta-analysis is done when there is no clear conclusion. Why:
- Increased statistical power: by pooling data from multiple studies, a meta- analysis
can increase the effective sample size, enhancing the statistical power of the
analysis. This can make it easier to detect effects that might be too small to identify in
individual studies.
- Evidence-based decision making: a Meta-analysis helps in synthesizing the evidence
across different studies, leading to more robust conclusions.
- Generalizability: when studies are conducted in different settings with different
populations, a meta-analysis can help in understanding the extent to which the
findings can be generalized to other settings or groups.
Meta-analysis does more than just combine the results of different studies; it also provides
new insights and suggests what to explore in future research. Here is why it is useful:
- It looks at all the evidence from previous studies to understand the general trend and
strength of an effect.
- The combined result considers the size of each study, giving better studies more
influence on the overall result.
- By putting all the study results together, the meta-analysis has a better chance of
finding true effects than an individual study.
- It helps to reduce personal judgment in interpreting results and gives a clearer
statistical picture.
Data & methods (about B,G and K)
Literature search
● Keyword-search in electronic databases (e.g., EBSCO Host, JSTOR)
● 4000 hits (= different articles) based on the keyword combinations (e.g., “planning”,
“small firm” (“small business”), “performance” , …)
● Issue-by-issue search in selected journals
● Search in previous review articles
Study selection process:
● Review of each title / abstract to check eligibility (initially 119 articles)
● Only empirical studies
● Only samples of small firms (< 500 employees or < 1m $ in sales)
● Studies with non-operational performance measures and long-term planning
Final sample: 47 studies with 52 independent samples
Results (about B,G and K)
H1 = correct.
H2 = correct.
H3 = incorrect.
H4 = correct.
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,Implications for theory (about B,G and K)
● Overall, BP is a value creating activity (despite the required resources and small
firms’ resource constraints).
● However, BP is not equally beneficial under all circumstances.
● Findings challenge conventional entrepreneurship wisdom that BP is particular
important for new firms:
○ High uncertainty and missing information reduce the positive effect of BP on
performance in new firms (Forbes, 2007).
● Higher UA reduces the benefits of BP:
○ Adhering to BP limits strategic flexibility and openness to changes.
Unpredicted events as opportunities/exploitable contingencies (Sarasvathy,
2001).
● Benefits stem from both the symbolic and the learning effects of BP.
Implications for practitioners (about B,G and K)
● Basic BP activities sufficient in the firm’s initial years.
○ Allocate resources to other activities enabling information gathering,
uncertainty reduction, and learning.
○ Long pre-planning activities detached from market interaction and feedback
appear detrimental.
● Mental preparation and willingness to adjust BPs is critical. Close execution of BP is
not beneficial per se.
Limitations (about B,G and K)
● Possible overlaps between new and established small firms (studies usually do not
report the size distribution of the sampled firms).
● Hofstede's four-dimensional concept of culture over-reduces cultural diversity and
complexity factors (McSweeney, 2002).
● Meta-analysis estimates the strength of a relationship, but cannot determine its
causality (even if some primary studies are longitudinal).
→ à importance of theory (!).
Article of Sarasvathy
Effectuation vs. causation (about S)
So, planning is good, BUT…
● How do we make pricing decisions when the market for the product/service does not
yet exist (i.e., no demand function given )?
● How do we make pricing decisions when the firm does not yet exist (i.e., no revenue /
cost functions given )?
● How do we hire someone for an organization that does not yet exist?
● How do we even get people to apply to such an organization whose existence hinges
upon acquiring able employees (e.g., a knowledge-intensive firm)?
● How do we value firms in an industry that did not exist some years ago and is barely
forming at the moment (e.g., autonomous driving)?
● How do we create a capitalist economy from a formerly communist economy?
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,Causation = the causator takes a particular effect as given and focuses on selecting
between means to create that effect.
Effectuation = The effectuator takes a set of means as given and focuses on selecting
between possible effects that can be created with that set of means.
Effectuation: basic principles
1) Bird in hand (given means)
● Expert entrepreneurs seeking to build a new venture start with their given means:
○ Who am I?
○ What do I know?
○ Who do I know?
● Using a combination of these means, entrepreneurs start to imagine possibilities and
take actions.
● Goals result from the entrepreneur’s imaginations / aspirations and interactions
during the process.
2) Affordable loss
● Entrepreneurs decide what they are willing to lose rather than what they expect to
make.
● The affordable loss does not depend on the venture, but on the person.
● By this, entrepreneurs stop depending on prediction and focus on cultivating
opportunities with perceived low failure costs that generate future options.
● New venture opportunities are difficult to value upfront, while time, money, and other
resources are quantifiable and controllable.
3) Lemonade
● If you come across lemons, make lemonade!
● Expert entrepreneurs learn not only to work with surprises, but also to take
advantage of them.
● In most BPs, surprises are bad—the worst-case scenarios. But because
entrepreneurs do not tie their idea to any theorized or preconceived “market”,
surprises can lead to valuable opportunities.
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,4) Crazy quilt
● Focus on building partnerships rather than beating competitors.
● In the absence of a predetermined market, competitive analyses have little value.
● Instead, entrepreneurs take the product to the nearest potential customer.
● Some of the interactions lead to commitments and self-selections into the
new-venture creation process.
● The expanding network of strategic partnerships determines which market/s the firm
ends up entering or creating.
5) Pilot in the plane
● Entrepreneurs should focus on the controllable aspects in their environment.
● To the extent entrepreneurs can control the future, they don’t need to predict it.
● In fact, the future is shaped by human actions.
● Thus, it is much more useful to understand and work with people who are engaged in
the actions that bring it into existence.
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, Lecture 1.2 Growth vs. survival in international markets
Article of Sapienza, Autio, George and Zahra
Research interest (about S, A, G and Z)
● Early internationalizers (i.e., born global firms that go abroad shortly after their
inception) challenge traditional theories of internationalization.
● Process theory of internationalization (Johanson & Vahlne, 1977, 1990):
○ Internationalization is an incremental process that starts late in firms’ lifecycle.
○ Potentially negative outcomes of early internationalization on firms’ survival.
● Early internationalization of firms in dynamic and technology-intensive sectors as an
accelerator for growth (Oviatt & McDougall, 1994; Zahra et al., 2000).
Traditional view: process theory of internationalization (PTI) (about S, A, G and Z)
● PTI (Johanson & Vahlne, 1977, 1990): internationalization as a process in which
firms incrementally increase their international involvement.
● Interplay between the development of knowledge about foreign markets and an
increasing commitment of resources to foreign markets.
● Assumes that survival is of central importance to the firm. It implies that firms see
internationalization as a ‘shock’ to the organizational knowledge base and fear that
premature entry will threaten survival.
● Firms are seeking to avoid uncertainty while simultaneously seeking growth.
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