How big data alters value creation: through the lens of big data competency

PurposeAs various different and even contradictory concepts are proposed to depict a firm's capabilities related to big data, and extant relevant research is fragmented and scattered in several disciplines, there is currently a lack of holistic and comprehensive understanding of how big data alters value creation by facilitating firm capabilities. To narrow this gap, this study aims to synthesize current knowledge on the firm capabilities and transformation of value creation facilitated by big data.Design/methodology/approachThe authors adopt an inductive and rigorous approach to conduct a systematic review of 185 works, following the “Grounded Theory Literature-Review Method”.FindingsThe authors introduce and develop the concept of big data competency, present an inductive framework to open the black box of big data competency following the logic of virtual value chain, provide a structure of big data competency that consists of two dimensions, namely, big data capitalization and big data exploitation, and further explain the evolution of value creation structure from value chain to value network by connecting the attributes of big data competency (i.e. connectivity and complementarity) with the transformation of value creation (i.e. optimizing and pioneering).Originality/valueThe big data competency, an inclusive concept of firm capabilities to deal with big data, is proposed. Based on this concept, the authors highlight the significant contributions that extant research has made toward our understanding of how big data alters value creation by facilitating firm capabilities. Besides, the authors provide a future research agenda that academics can rely on to study the strategic management of big data.

What Drives Eco-Design Innovations in European SMEs?

Building on the natural-resource-based view, and using a sample of 7,165 European SMEs, this chapter investigates the drivers of eco-design innovations among SMEs under three categories: (1) sustainability-oriented firm capabilities, (2) technological capabilities, and (3) access to finance. The findings reveal that sustainability-oriented capabilities achieved through investments into circular economy are the strongest driver of SMEs' eco-design innovations. Firms' technological capabilities are also found to boost their ability to adopt eco-design innovations. While equity finance increases the possibilities for SMEs to devote resources to eco-design, grant finance is interestingly observed to decrease such possibilities. The more traditionally used form of debt finance remains detached from eco-design implementations. The study contributes to a better understanding of how eco-design practices can be broadened within SMEs and highlights policy recommendations in this regard.

EXPRESS: Learning to Set Prices

The authors empirically examine how firms learn to set prices in a new market. The 2012 privatization of off-premise liquor sales in Washington State created a unique opportunity to observe retailers learn to set prices from the point at which their learning process began. Tracking this market as it evolved through time, the authors find that firms indeed learn to set more profitable prices, that these prices increasingly reflect demand fundamentals, and they ultimately converge to levels consistent with (static) profit maximization. The paper further demonstrates that initial pricing mistakes are largest for products whose demand conditions differ the most from those of previously privatized markets, that retailers with previous experience in the category are initially better-informed, and that learning is faster for products with more precise sales information. These findings indicate that firm behavior converges to rational models of firm conduct, but also reveal that such convergence takes time to unfold and play out differently for different firms. These patterns suggest important roles for both firm learning and heterogeneous firm capabilities.

Corporate social responsibility and firm performance: a theory of dual responsibility

PurposeThe authors aim to develop and test a theory of dual responsibility to explain the relationship between corporate social responsibility (CSR) and firm performance. The authors empirically examine whether firms that meet their economic and social responsibilities simultaneously perform better than firms that fail to do so. In doing so, the authors theoretically extend and empirically test Barney's (2018) call to incorporate the stakeholder perspective with resource-based view (RBV). The authors also examine the moderating effects of firm status on this relationship.Design/methodology/approachThe authors use a longitudinal panel sample of 137 S&P 500 firms and data for the years between 2004 and 2013 collected from multiple data sources. The authors use stochastic frontiers analysis to measure firm capabilities in the areas of R&D, operations and marketing. These capability measures are then used along with CSR measures and a measure of firm status to test the hypotheses of this study. The authors also conducted several robustness checks and various supplementary analyses using different econometrics techniques and different operationalizations of the key variables of interests.FindingsThe results show that firm CSR is positively related to firm performance and that the effect of CSR on performance is stronger for firms with higher levels of R&D capability and operational capability. The authors also find support for the three-way interaction between CSR, economic responsibility and firm status, suggesting that firms high in both social and economic responsibilities and status will enjoy the highest levels of performance.Research limitations/implicationsThe findings of this study are based on large, publicly listed firms in North America. Therefore, their generalizability to other contexts and other types of firms require additional research. The reliance on KLD measures is also a limitation, especially because they have not reported CSR ratings after 2013.Practical implicationsFor practicing managers, the main implication of this study is that an optimal balance between market and nonmarket strategies is key for superior performance.Social implicationsThe continued debate regarding the firm's purpose can be understood by focusing equally on the two main responsibilities of firms: nonsocial responsibility and social responsibility toward all stakeholders.Originality/valueThe study answers the call to incorporate stakeholder theory into the RBV of the firm by highlighting the critical role of firm capabilities in the relationship between CSR and performance. The study also highlights the role that firm status plays in the relationship between market and nonmarket strategies and firm performance.

EXPRESS: Synergy vs. Tradeoff: the Influence of National Philanthropic Environment and Industry on the Relationship Between R&D and Corporate Social Responsibility

International marketing research has demonstrated that research and development (R&D) and corporate social responsibility (CSR) are firm capabilities that can lead to competitive advantages in the international marketplace. A synergy vs. tradeoff dilemma on the R&D/CSR relationship has emerged as an important topic in the literature. The synergy approach suggests a positive link, while the tradeoff approach suggests a negative link between R&D and CSR. The authors employ the resource-, institution-, and industry-based views to clarify this dilemma by examining two moderators at the country and industry levels. The authors envision that home country national philanthropic environment (NPE) influences whether managers should take the synergy or tradeoff approach because NPE reflects the institutional pressures for firms to be more philanthropic. Further, since research finds that CSR differs between manufacturing and service firms, this industry categorization is hypothesized to moderate the effects of NPE on the R&D/CSR relationship. Estimating a hierarchical linear model with a sample of 888 firms across 15 countries, the results show that in high NPE level countries, there is an R&D/CSR synergy, and in low NPE level countries, there is a tradeoff. Furthermore, these relationships are relevant only within service rather than manufacturing industries.

Corporate Social Innovation in Developing Countries

Although corporate social innovation studies in developing countries acknowledge the importance of firm resources and capabilities for attaining social goals, they overlook the way in which these interact with broader institutions to generate successful outcomes. We address this gap by exploring the relationship between firm resources-capabilities and institutions that is conducive to meeting both business and social interests in developing countries. By employing a fuzzy-set qualitative comparative analysis of corporate social innovation projects performed by joint ventures of Dutch SMEs and their local partners in developing countries, we show that firm resources and/or capabilities complement strong institutions in these countries. Corporate social innovation can also be facilitated by firm capabilities in running highly legitimate projects that substitute institutional voids in these economies, attesting to multiple paths that corporations can take to achieve social innovation.