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Long Range Planning

42/2 April 2009

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Charles Baden-Fuller Editorial

Effective partnering is the key to success in these turbulent times - few companies can go it alone. The first three pieces use robust data sets to examine the factors that determine what makes good partnering, and they all find that a systematic approach with a conservative touch pays off best. Sayan Chatterjee examines what makes successful serial acquirers, that is, firms that repeatedly acquire other businesses and integrate their activities. By closely inspecting those that do this well and comparing their actions with those that do things badly, he finds three factors to be important: identifying market opportunities, striving for win-win deals and (most important) not deviating from well established processes. Stevan Holmberg and Jeffrey Cummings look at a similar issue for those undertaking strategic alliances. They find that a fit with corporate objectives is key, and they develop a practical toolkit for managers to help them identify ‘goodness of fit’ with target factors at industry, segment or firm levels. Similarly Nieves García-Casarejos, Nuria Alcalde-Fradejas & Manuel Espitia-Escuer look at the history of Spanish banks and their alliances, and find that expansion (moving along the core) is better than diversification (moving away from the core): while the latter can be successful, it is more difficult and requires more care.
On the same theme of partnering, Bruno Cassiman, Maria Chiara Di Guardo and Giovanni Valentini look at the tensions that exist between cooperating and competing in the field of innovation. It is well known that partnering is essential here, but firms often find that they are competing with close allies. The authors show that a balance can be best achieved by aligning knowledge attributes and governance structures and show how this works out in practice.
Finally Stephen Cummings and Urs Daellenbach consider how the field of strategy has evolved over the last 40 years by examining how writers have addressed the topic over the nearly 2500 articles published since the founding of this journal. When strategic planning departments were common, and strategic plans were written documents and seen as separate from line functions, planning was common place and of central concern. Now that the world moves faster and organisations are leaner, strategy has overtaken planning as the major concern. Strategy making is no longer the preserve of a specialist department, but has been integrated into line functions, as well as being on top management and board agendas. Articles in management journals have reflected this shift, with strategizing, change, knowledge and other management topics filling our agenda: the hope is that this change not only reflects how things are today, but also where organisations are going tomorrow.

 

Sayan Chatterjee The Keys to Successful Acquisition Programmes sayan.chatterjee@case.edu

Many companies have embarked on the acquisition trail - some with more success than others. While some companies have bought on an ad hoc basis, others have deliberately set out to pursue a series of acquisitions. Just because they follow a programme, though, does not guarantee success. This paper looks for what makes a successful acquisition programme and what should be the sound business logic underpinning it. The author studies a sample of serial acquirers to find processes that are common to many acquisition programmes. It identifies the imperatives that drive all acquisitions: identification, negotiation and integration. Within these are three common traits of successful programmes: the ability to identify and exploit market inefficiencies, the conscious striving for a win-win deal and not deviating from established processes, with the latter paying the most dividends. Using case studies from serial acquirers such as Microsoft and Cisco, the author provides a framework of what makes for a successful acquisition programme, and what pitfalls to avoid.

 

Stevan R. Holmberg and Jeffrey L. Cummings Building Successful Strategic Alliances: Strategic Process and Analytical Tool for Selecting Partner Industries and Firms sholmbe@american.edu

As business becomes increasingly complex and globalised, and innovations remove old competitive advantages, traditional firm-to-firm rivalry is being replaced by network-vs.- network competition. So strategic alliances have increasingly been formed as offensive or defensive weapons over the past decade: but they seem to be dispiritingly unlikely to be able to deliver the goods. Why? The authors join those who have pointed the finger at unsuccessful partner selection, but this time bend their energies on producing a new management selection process and a dynamic evaluation tool to identify potential industries and firms as target partners.
The authors point out that partner selection motivations must link back to overall corporate objectives, and the critical success factors of the alliance and the partners align with those of the focal firm -otherwise, there will be trouble from the outset. The selection toolewhich can be used at industry, segment or individual firm level - weighs and rates the CSF ‘match’, and is designed to be dynamic, and capture how changes in factors will modify the goodness of fit of potential partners. All this is illustrated by applying process and tool to partner selection in the on-line segment of the alliance-rich (and alliance-complex) global travel industry.

 

Nieves García-Casarejos, Nuria Alcalde-Fradejas & Manuel Espitia-Escuer Staying Close to the Core: Lessons from Studying the Costs of Unrelated Alliances in Spanish Banking delray@unizar.es

Over the past 25 years, the Spanish banking industry has faced significant changes stemming from deregulation, competition and innovative practices. Strategic alliances have proliferated as major banks have sought to internationalise and medium/smaller players to expand scope to defend their markets. But who do these banks choose to partner with, for what purposes - and with what outcomes?
Using the proxy of abnormal returns on the day of announcement, the authors examine nearly 500 alliances from the viewpoint of the focal bank to compare market judgements on alliances where partners and the alliance business are in the same sector; where partners are, but the alliance is not; and where partners are not, but the alliance is. Considering relatedness between partners, and between partners and alliance business, and then between these two factors ‘crossed’ together, the authors report the first formulation as being the best received, with relatedness between focal partner and alliance activity sector being key: expansion is a safer bet than diversification. All alliance formulations can create shareholder value - but the less relatedness there is in the mix, the more management care will be needed.

 

Bruno Cassiman, Maria Chiara Di Guardo & Giovanni Valentini Organizing R&D Projects to Profit from Innovation: Insights from Co-opetition BCassiman@iese.edu

Such is the pace of innovation that companies are increasingly having to combine with other companies or research centres on research and development projects. However, managing these inter-organisational relationships requires skilful selection of which external agents to involve and when to involve them. For example, opening up a company’s innovation process can expose the company to the risk of opportunistic behaviour from its external partners. Balancing ‘‘co-opetition’’ - co-operation and competition - in the innovation process has therefore become crucial. This article describes the tension that is inherent between value creation and value capture in R&D projects. Through a case study of co-operative projects conducted by STMicroelectronics, Europe’s largest microelectronics company, the authors demonstrate how a balance can be achieved between co-operative and competitive forces by the careful alignment of three variables. These are: project knowledge attributes, project governance structure and project partner selection. While the key argument of the paper is related to the management of co-opetitve forces on R&D
projects that lead to innovation, it also provides insights into how companies can manage knowledge cogeneration to their competitive advantage.

 

Stephen Cummings and Urs Daellenbach A Guide to the Future of Strategy? The History of Long Range Planning Stephen.Cummings@vuw.ac.nz

When LRP was first published, oil was $3 a barrel, and England held the World Cup: who wouldn’t go back to those days, given the chance? Since 1968, the journal’s pages have seen the ebb and flow of approaches, methods, tool, fads, cases and analyses, structures and frameworks. The authors plunge into the LRP archive of nearly 2,500 articles, using textmining software to analyse the appearance of key-words in their titles and abstracts, with the aim of tracing the history of strategic management’s core concerns and drawing lessons for its future development. They note the smooth transition from planning to strategy as the
primary term, and find that organisation and process, creativity and innovation, and change have been ever-present. But the great variety of words is, at last, settling down to a set they feel must define what strategy is fundamentally all about. Noting the move from strategy to strategizing, they propose the advantages of being or becoming strategised as a conceptual stance. Following their exhaustive - and lavishly illustrated - tour of the past, and its implications for the present, they identify the ‘centred eclecticism’ signalled by the stabilising of strategy’s fundamental terms d together with concerns for the handling of knowledge by the ‘strategist as politician’, an aesthetic care for individualized strategy, a revaluation of forecasting, and an end to the smug dismissal of the past as an inevitably limited and outmoded ‘straw man’ - as offering valid approaches to the future.

 


This issue is available in full on-line at www.sciencedirect.com

 

 
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