This article aims to revisit the link between corporate governance, value, and firm performance by focusing on convergence, understood as the way that non-US firms are adopting US best practice in terms of corporate governance, and the implications of this adoption. We examine theoretical questions related to conventional models (agency theory, transaction cost economics, and new property rights theory), which tend to suggest rational adoption of best practice, and contributions that alternatively consider country- and firm-level differences as possible barriers to convergence. We contribute to the empirical literature by using a large international database to show how non-US firms’ adoption of US best practice is having an impact on performance.Leadership, corporate governance, Business, Principal–agent problem
The authors present the elements constituting an advantageous business model, and suggest how to achieve that competitive edge. They argue that traditional innovation processes with funnelling front-end, stage-gate with go/kill decisions, and similar processes have inherent limitations in such an inclusive concept. They propose an alternative approach, driven by strategic business options. A business model, like everything else, has a limited life span. Anew model requires radical changes in thinking and logics. Still, the move is not easy, and most attempts will fail. The right timing is tricky, plans to abandon an existing model might feel dispiriting, and the necessity to change can be blinded by past successes. This article discusses these complex aspects and the steps needed to overcome them. Finally, in ever-changing business competition it is not realistic to constantly renew inside-out. Instead, for a company to survive, its business model must have a very important quality known as resilience. This article is based on the authors’ extensive practical experience in a global business environment, as well as on their academic work.
- Content Type Journal Article
- Category Research Article
- Pages 43-54
- DOI 10.1260/1757-222.214.171.124
- Tapani Talonen, KONE Corporation, Global Technology, Finland
- Kari Hakkarainen, Virike Consulting, Finland
- Journal International Journal of Innovation Science
- Print ISSN 1757-2223
- Journal Volume Volume 6
- Journal Issue Volume 6, Number 1 / March 2014
With the majority of the world’s population now urban, cities are rising in prominence. Growing attention is being paid to cities’ potential to increase incomes and create jobs – whether through financial services and electronics manufacturing in Chennai, regionally integrated manufacturing around Guangzhou, or social and physical transformation in Medellin. Less prominent cities are asking how they can attain better economic performance. Hence economic competitiveness has become a preoccupation for city leaders – by which we mean a city’s ability to spawn, expand and attract businesses that create jobs for its residents, and to enlarge the overall economic pie.
So, how do cities make themselves more competitive? This year, the World Bank is investing in a Competitive Cities Knowledge Base (CCKB) initiative – a joint project between the World Bank Group’s departments working on Private Sector Development and Urban Development. The project includes in-depth case studies of economically successful cities across all continents. According to our current analysis, six of the most interesting cities for this work will be Bucaramanga (Colombia), Patna (India), Bandung (Indonesia), Agadir (Morocco), Kigali (Rwanda) and Izmir (Turkey). We are in the process of confirming these conclusions before beginning each of the case studies.
Publication date: April 2014Source:Technovation, Volume 34, Issue 4
Author(s): Marian Garcia Martinez , Bryn Walton
Online communities have become an important source for knowledge and new ideas. This paper considers the potential of crowdsourcing as a tool for data analysis to address the increasing problems faced by companies in trying to deal with “Big Data”. By exposing the problem to a large number of participants proficient in different analytical techniques, crowd competitions can very quickly advance the technical frontier of what is possible using a given dataset. The empirical setting of the research is Kaggle, the world׳s leading online platform for data analytics, which operates as a knowledge broker between companies aiming to outsource predictive modelling competitions and a network of over 100,000 data scientists that compete to produce the best solutions. The paper follows an exploratory case study design and focuses on the efforts by Dunnhumby, the consumer insight company behind the success of the Tesco Clubcard, to find and lever the enormous potential of the collective brain to predict shopper behaviour. By adopting a crowdsourcing approach to data analysis, Dunnhumby were able to extract information from their own data that was previously unavailable to them. Significantly, crowdsourcing effectively enabled Dunnhumby to experiment with over 2000 modelling approaches to their data rather than relying on the traditional internal biases within their R&D units.
The entrepreneurial process in emerging economies is receiving more interests but the critical role of bricolage is still in dearth. Entrepreneurs in these highly uncertain and dynamic environments discover, develop, and exploit opportunities with limited and idiosyncratic resources. They also navigate the entrepreneurial process within restrictive and unsupportive institutional environments. In this dynamic and often restrictive setting, entrepreneurs wanting to capitalise on opportunities must be able to manage with novel combinations of existing resources. Bricolage is therefore a relevant process in this entrepreneurial environment. This article argues that bricolage is a key mechanism to explore and explain entrepreneurship in emerging economies.
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Agricultural technology commercialisation: stakeholders, business models, and abiotic stressors – Part 1
Stephen Suffian; Arianna De Reus; Curtis Eckard; Amy Copley; Khanjan Mehta
International Journal of Social Entrepreneurship and Innovation, Vol. 2, No. 5 (2013) pp. 415 – 437
A wide range of innovative technologies have emerged to facilitate the creation, expansion, and streamlining of food value chains (FVCs) in developing countries. These technologies target agricultural production, processing, storage, marketing, distribution, and consumption. Technology has the potential to bolster food security and make FVCs more efficient. Commercialisation of technologies requires sound business strategies for products to sustain. A typology of business models is presented to assist entrepreneurs in integrating their technologies into FVCs. The impacts of abiotic stressors like access to capital, supply chain resiliency, and ownership dynamics are discussed to help entrepreneurs develop strategies for their own agricultural ventures.
Huggy Rao and I like to refer to scaling challenges as the “Problem of More” because they always involve getting some existing seed of excellence to take root in more people and more places. The language of “more” pervades discussions of the topic. Ask any group of executives or nonprofit leaders about scaling, run a web search on “scaling” or “taking to scale,” pore over articles, cases, or research on the topic, you’ll find the dominant words and phrases have to do with addition and multiplication: grow, expand, propagate, replicate, amplify, amass, clone, copy, enlarge, magnify, incubate, accelerate, multiply, roll it out to the masses, and so on.
Venture capitalist Ben Horowitz of Andreessen Horowitz kicks off an inspired post on scaling by quoting the rapper Dorrough, who tells anyone with “a dollar in your pocket, a twenty in your wallet” to focus on one thing: “Get big. Get big. Get big. Get big.”
Yet scaling is also a problem of less. A hallmark of skilled leaders and teams is that, as their organizations grow larger and older, as the footprint of a change program expands, they keep looking for signs of once useful but now unnecessary roles, rules, traditions, processes, products, strategies, and services. To borrow a phrase from author Marshall Goldsmith, they remain vigilant about “what got us here, but won’t get us there.”
A simple example is the all-hands meeting. When an organization is small enough that each member can have a personal relationship with every other, or at least recognize their faces and names, gathering everyone for regular meetings strengthens social bonds and bolsters the feeling that “we are one company.” But an intimate gathering with, say, 500 of your best friends isn’t feasible. My colleague Andy Hargadon noted this when he did an ethnography of the renowned innovation firm IDEO in the 1990s. When the company had 60 or 70 people working at its Palo Alto headquarters, founder and then CEO David Kelley (now Chairman) did a masterful job of orchestrating the “Monday morning,” a weekly 9:00 am gathering. After a brief opening with perhaps some news about the company, a self-deprecating story about himself, or a bit of indiscreet but juicy gossip, Kelley, a skilled facilitator, spent the rest of the meeting calling on people to describe new projects, introducing newcomers, recognizing birthdays, and asking if anyone had seen a good movie or discovered a new technology. Week after week, the field notes revealed that nearly every person in the room contributed at least one comment or joke during these 60-minute gatherings. But once IDEO grew to hundreds of Palo Alto employees, even Kelley couldn’t sustain the intimacy. The Monday all-hands meeting became a vestige of the past and was replaced with smaller gatherings organized around studios and design practices.
As an organization or project grows, and as its challenges change, it not only needs to recognize new priorities, it needs to delete or deemphasize old ones. Scaling becomes a problem of less because humans and human organizations can only handle so much cognitive load. In other words, successful scaling means finding ways to limit the number of things that people are expected to focus on and execute.
A company that Huggy and I have been studying in recent months called BuildDirect uses an intriguing approach to help its people do this. BuildDirect was founded in 1999 by CEO Jeff Booth with his good friend Rob Banks. Booth and Banks each invested $20,000 to start a company that could ship heavy home-improvement products more efficiently. The company has adopted an Amazon-esque strategy; it now owns and operates twelve large warehouses well located to deliver loads of flooring, roofing, and other heavyweight building materials to do-it-yourself homeowners and contractors. The average order size is 1,500 pounds. Early on, BuildDirect had its setbacks and near-death experiences, but in each of the last four years growth has accelerated. Sales doubled in 2013. And after withering down to 40 employees during the 2008 housing crisis, the company now has 175 employees. Just a couple of weeks ago, BuildDirect received $30 million in additional financing led by Venture Capital firm Mohr Davidow. It intends to open two more warehouses and add 300 more employees in 2014.
My conversation with CEO Jeff Booth, and especially, interviews conducted at company headquarters in Vancouver by Stanford graduate student Rebecca Hinds, revealed that BuildDirect uses a dynamic approach to setting priorities. It was inspired by author Steven Covey’s “five rocks” lesson: If you have a fishbowl, five large rocks, sand, and some pebbles, the only way to fit everything in the bowl is to place the five large rocks in first. If you try to fill the bowl with pebbles first, the larger rocks won’t fit on top.
BuildDirect actually displays its “fishbowl” in a central location, so everyone in the organization can be reminded what its five rocks, or key areas of focus, are. These are revisited every two months, and when a new set of rocks is announced, any employee, regardless of the division they are part of, is able to recite the five priorities that should be guiding their thoughts and actions. As Booth explained to Hinds, “Once we make the decision for the five rocks, right or wrong, we’re going to live them for the next 60 days.” (Until 2013, the rocks were reevaluated every 90 days. But BuildDirect’s rapid growth forced a change to that because “90 days was an eternity for us.”)
Each 60-day stretch is followed by a short period of “white space,” including an offsite meeting where employees think strategically and propose new rocks. BuildDirect encourages its people to propose imaginative, off-the-wall, and even downright weird ideas. After all, the company would never have survived the housing crisis if it had been afraid to change its accustomed ways of doing things. Recently, a “white space” brainstorm yielded a clever new idea for marketing, to cobble together a system that could combine customer-behavior insights gained through email, social media, pay-per-click marketing, and other sources. Implementing the model would cost only $100,000 – so the project was quickly declared one of BuildDirect’s five rocks. Based on better customer retention alone, management estimates this innovation has boosted annual revenues by $10 to $20 million.
But obviously, to create space for any new rock, BuildDirect must remove an old rock. In 2013, after people there identified an inefficiency in the order fulfillment process, a plan to automate part of the process was formulated. But the team later determined that implementing the solution would place such a great burden on the small company that it couldn’t be a top priority at that juncture. Without denying that the inefficiency was a problem, BuildDirect decided to take that rock, at least temporarily, out of the fishbowl.
To help more people go about scaling in the way IDEO and BuildDirect have, Huggy and I have created something we call “the subtraction game.” When we do scaling speeches or workshops, we ask people to think (first individually, then in duos or groups) about a few questions: What was once useful but is now in the way? What is adding needless friction? What is scattering your attention? Then we ask them to pick one or two targets that are ripe for subtraction.
We’ve played the subtraction game with groups as small as 16 and as large as 250. These include “high potentials” from a large retail chain, hospital administrators from Norway, and groups of managers and administrators at Stanford University. And while this is just a quick 10- to 15-minute game, we’ve already heard back from teams that followed through. For example, a Fortune 500 company decided to continue it for a month (with the group of 50 executives we initially worked with sending their ideas to the CEO). As a result, many meetings were eliminated and shortened, payment processes were streamlined, redundant work was driven out. On the chance you might try this yourself, I should probably reveal the added motivation, which might have mattered more in a huge company than it would in an entrepreneurial setting. Right before the brainstorming began, the CEO announced that each executive had $5,000 of bonus money riding on what it produced. Evidently it was worth it to him to put a lot of twenties in their wallets to get big. Get big! Get big! Get big!
A big thank you to Rebecca Hinds and Jeff Booth for their help with this post.3D modeling, Scalability, Business