Legitimation work in sustainable entrepreneurship: Sustainability ventures’ journey towards the establishment of major partnerships

Sustainable entrepreneurship, that is, venturing with the aim of contributing to a shift of practices towards environmental and social sustainability, is an increasingly prominent phenomenon. This article investigates how sustainability ventures orient between dual – commercial and environmental – logics when conducting the legitimation work necessary to secure their first major partnership with an incumbent firm. Specifically, we study multiple cases of partnerships on food waste reduction. This setting is characterised by limited tension between the two logics, which implies that ventures are not forced into hybridity. We find some indications that ventures are able to draw on both types of logic to legitimate their ventures. However, the dominant pattern is that sustainability ventures tend to orient their legitimation work around a salient founding logic. Our analysis suggests that this pattern can be attributed partly to organisational imprinting, but also to legitimation work in this context being inherently logic-specific to a significant degree. This seems to be particularly true for ventures with a salient environmental logic.

Investment-Timing and the Threat of Disruption

<p>An incumbent firm needs to determine how to best manage the risk of the arrival of a disruptive technology. The numerous actions available to the incumbent firm indicates a complex real-options model of investment is required. This thesis investigates the behaviour of an incumbent firm, with assets-in-place, when they have access to an investment opportunity. The incumbent must not only choose when to invest in the opportunity, but also the optimal structure with which to compete against a new entrant who also has this investment opportunity. In order to delay competition in the market the incumbent can elect to permanently abandon the innovative option rather than seek to compete with the new entrant. The assets-in-place contributes significant value to the incumbent and by delaying the competition effect, the incumbent can reduce the cannibalization of assets-in-place. This is despite the fact that the incumbent can attempt to profitably invest in the innovation before the entrant. Clearly the assets-in-place provide a benefit to firm value for the incumbent, but act as a burden for the growth option’s development. Should consumer preferences begin to favour the innovation, then the decision to abandon the growth option loses its value. The incumbent in this instance does not care that they may accelerate the entrant’s investment as they can still profitably preempt the entrant. In a competitive market, when the incumbent efficiently produces the innovation at no extra cost compared to an independent firm, the incumbent will elect to internalise, rather than spin off, the growth option. When the incumbent produces the innovation at a higher cost, than other market participants, they will spin off the growth option instead of internalising. When consumers favour the innovation, the incumbent becomes indifferent between spinning off and internalising the growth option as the objective functions in both cases converge to maximising the value of the growth option.</p>

Investment-Timing and the Threat of Disruption

<p>An incumbent firm needs to determine how to best manage the risk of the arrival of a disruptive technology. The numerous actions available to the incumbent firm indicates a complex real-options model of investment is required. This thesis investigates the behaviour of an incumbent firm, with assets-in-place, when they have access to an investment opportunity. The incumbent must not only choose when to invest in the opportunity, but also the optimal structure with which to compete against a new entrant who also has this investment opportunity. In order to delay competition in the market the incumbent can elect to permanently abandon the innovative option rather than seek to compete with the new entrant. The assets-in-place contributes significant value to the incumbent and by delaying the competition effect, the incumbent can reduce the cannibalization of assets-in-place. This is despite the fact that the incumbent can attempt to profitably invest in the innovation before the entrant. Clearly the assets-in-place provide a benefit to firm value for the incumbent, but act as a burden for the growth option’s development. Should consumer preferences begin to favour the innovation, then the decision to abandon the growth option loses its value. The incumbent in this instance does not care that they may accelerate the entrant’s investment as they can still profitably preempt the entrant. In a competitive market, when the incumbent efficiently produces the innovation at no extra cost compared to an independent firm, the incumbent will elect to internalise, rather than spin off, the growth option. When the incumbent produces the innovation at a higher cost, than other market participants, they will spin off the growth option instead of internalising. When consumers favour the innovation, the incumbent becomes indifferent between spinning off and internalising the growth option as the objective functions in both cases converge to maximising the value of the growth option.</p>

Competition, Productive Capabilities and Structural Transformation in South Africa

Competition law has been promoted across developing countries as part of a market liberalisation package which is premised on a neo-classical model of competition, privileging static allocative efficiency and largely ignoring production. This article critiques this approach through an assessment of its application in South Africa where substantial weight was given to competition law. Building on the critical assessment, the article proposes an alternative framework based on the conception of ‘optimal competition’ of Amsden and Singh (The optimal degree of competition and dynamic efficiency in Japan and Korea. Eur Econ Rev 38:940–951, 1994). It does this through assessing the relationship between competitive rivalry, productive investment and the development of capabilities in two key industry groupings in South Africa, metals and machinery, and plastics and chemicals. We argue that the failure to develop diversified production capabilities in South Africa reflects the entrenched incumbent firm advantages and the lack of a coordinated policy agenda which proceeds from a recognition of economic power and the need to reshape markets to alter competitive rivalry. An optimal competition framework allows analysis of dynamic rivalry and capabilities development.

Evolving a Value Chain to an Open Innovation Ecosystem: Cognitive Engagement of Stakeholders in Customizing Medical Implants

While open innovation ecosystems allow a firm to harness external sources of value creation, these external ties can also constrain its ability to adapt its innovation strategy to pursue new opportunities. This article looks at how an incumbent firm approached such constraints, and used cognitive artifacts to transform its value chain into a collaborative ecosystem. It examines the case of a 3D printing-enabled shift to mass customization of orthopedic medical implants. The results demonstrate how firms can use artifacts to build a shared understanding across heterogeneous stakeholders as they explore and develop new open innovation models, and how this process can be managed flexibly to avoid adopting a locally (rather than globally) optimal strategy.

Threat of Entry and Organizational-Form Choice: The Case of Franchising in Retailing

Retail expansion is led by multistore firms, which often mix two organizational forms: franchised and company-owned outlets (“franchising decisions”). The authors examine whether strategic considerations in entry and expansion play a role in organizational-form decisions (e.g., franchising) in retailing. The authors utilize store count and revenues for franchised and company-owned outlets of nationwide convenience store chains in 47 geographical markets in Japan between 1984 and 2010. The empirical analyses show that strategic considerations in entry and expansion, ignored in the literature on franchising, appear to influence an organizational-form decision: firms rely more on company-owned outlets for expansion when the threat of entry from competitor firms in adjacent markets increases. The authors examine two interpretations: the convenience of quick deployment and a credible signal. Numerical analyses of a simple dynamic model of entry and franchising confirm that company-owned-outlet-based expansion arises under heightened entry threat. The simulation analysis highlights how franchising decisions in response to an elevated threat of entry may be beneficial (or harmful) for an incumbent firm, which yields key implications for firms, consumers, and policy makers.

Competitive Landscape Shift: When does a competitor matter?

This research broadens the Strategic Entrepreneurship construct. This research aims to clarify the relationship between strategic and entrepreneurial activities with competitive landscape changes by questioning is the firm limited to the current boundary of competition? By integrating the competitive dynamics and multimarket competition theory, the study finds the correlative relationship between Strategic Entrepreneurship activities with competitive landscape shifts. The study found that explorative activities do not have any commonalities with traditional competitors. Also, the high involvement competitive tension with rival causes the firm to go beyond its current landscape, which enables the incumbent firm to increase the market commonality with new competitors and traditional competitors. The research also looking for the anomalies that emerged within the process of it and give several explanations for that. By analyzing the M&A history (between 1995 - 2019) of big players in the consumer goods industry which has a similar core (Procter & Gamble and Unilever) I found the support to the hypothesis.Keywords: explorative activities, exploitative activities, competitive tension, competitive landscape

“Don’t leave me this way!” Drivers of parental hostility and employee spin-offs’ performance

Many entrepreneurs commercialize an idea they initially developed as employees of an incumbent firm. While some face retaliatory reactions from their (former) employer, others are left alone or even supported. It is not clear, however, why some employee spin-offs face parental hostility while others do not, and to what extent this parental hostility affects employee spin-offs’ performance. Integrating the resource-based view with insights on competition and retaliation, we propose that parental hostility increases with the (perceived) competitive threat posed by an employee spin-off. Specifically, we advance employee spin-offs’ initial strategic actions (offering substitute products, hiring employees of the parent, and attempting to first develop the idea inside the parent) as key drivers of parental hostility and consequent spin-off performance. Results from a pooled dataset of 1083 employee spin-offs in Germany confirm that these initial strategic actions trigger parental hostility, which in turn, and contrary to expectations, positively affects employee spin-offs’ innovation and economic performance. These results advance the literature on employee spin-offs in several ways and have important practical implications.

Entry Deterrence, Coordinating Advertising and Pricing in Markets with Consumption Externalities

This paper extends the entry deterrence literature by examining coordinating advertising and pricing in markets with consumption externalities using a stochastic success function. Optimal advertising and pricing strategies are analysed when an incumbent firm faces a challenger with a product of equal quality. I show that strategic entry deterrence using advertising is possible and optimal entry deterrence involves strategic pre-commitment to over-investment relative to the non-strategic simultaneous advertising benchmark. I show that when entry deterrence is not possible the incumbent does not possess a first mover advantage and optimal entry accommodation involves strategic investment in advertising with intensified price competition congruent with the non-strategic simultaneous advertising benchmark. The findings suggest that an incumbent’s ability to deter entry through coordinating advertising in a market with products of equal quality is sensitive to the size of the fixed cost of entry that the challenger must incur and the consumption externality parameter.

A Intervening Role of Co-creation Strategy on Relationship between on Business Model Innovation and Customer Experience

The Study proposed three hypothesis to assess the direct impact on relation between customer and business model innovation and between customer experience and co-creation strategy, and to assess the indirect impact through intervening role of co-creation strategy on relationship between business model innovation and customer experience. The study has unit analysis of Indonesia telecommunication incumbent firms. The result shows that co-creation strategy plays significant role on relationship between business model innovation and customer experience, while customer experience could not have direct significant impact on developing business model innovation. This finding has implication for incumbent firm in managing digital transformation has to develop collaboration with stakeholder including customer based on the development customer experience to strengthen business model innovation.