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Abstract “What determines the scope of the firm? ” is a fundamental question in strategy research. We argue that a new generation of diversification research needs to address the extended question: What determines the scope of the firm—both product and geographic— over time and around the world? This article has three goals: (1) to increase awareness among researchers on the necessity to add the much needed but often neglected time and geographic dimensions by introducing a new typology in diversification research, (2) to review how Asia Pacific research, including articles in this Special Issue, has contributed to our global understanding along both dimensions, and (3) to advance an institution-based view on diversification strategies that has largely been propelled by Asia Pacific research. Keywords Scope of the firm. Product diversification. Geographic diversification. Institution-based view What determines the scope of the firm? This is one of the most fundamental questions in strategy research (Rumelt, Schendel, & Teece, 1994). After more than 30 years of research

ABSTRACT Does CEO duality – the practice of one person serving both as a firm’s CEO and board chair – contribute to or inhibit firm performance? Agency theory suggests that CEO duality is bad for performance because it compromises the monitoring and control of the CEO. Stewardship theory, in contrast, argues that CEO duality may be good for performance due to the unity of command it presents. The empirical evidence, largely from developed economies, is largely inconclusive. This article joins the debate by extending empirical work to the largely unexplored context of institutional transitions. Our findings, based on an archival database covering 403 publicly listed firms and 1,202 company-years in China, offer stronger support for stewardship theory and relatively little support for agency theory. Finally, we also call for a contingency perspective to specify the nature of conditions such as resource scarcity and environmental dynamism under which CEO duality may be especially valuable.

In the context of privatization and restructuring in Russia, we test two standard agency theory hypotheses, namely, (1) outside board members and (2) new managers are positively related to firm performance. Based on a survey of 314 privatized firms, the evidence offers little support for the hypotheses. Historically, results refuting theories have been launch pads for scientific progress. Our findings, therefore, raise interesting questions about whether the underlying theory is appropriate, whether there are methodological problems, or whether there are institutional factors in Russia’s transition economy that need to be accounted for when we test agency theory in a new setting. We address these questions and discuss their implications for corporate governance theory, practice, and public policy.

This paper investigates a taken-for-granted assumption in the emotions literature that taking care of emotional needs of employees contributes to company performance. Although previous studies demonstrated the impact of emotions on individual performance, the linkages between emotions and company performance still remain to be empirically examined. In an attempt to shed light onto this relatively unexplored area, we analyzed the role of positive emotional climate for overall company performance. Specifically, we hypothesized that an entrepreneur's intention to maintain a positive emotional climate would have a positive impact on the company's a) revenue, b) strategic growth, and c) outcome growth. To test these hypotheses, we analyzed a longitudinal data collected from entrepreneurs and small business owners operating in Greater Vancouver, British Columbia. In the first wave of our study, we asked respondents a series of questions regarding their intention to maintain a positive emotio...

Relational exchanges versus arm’s-length transactions

Abstract Few scholars would dispute the argument that mergers and acquisitions (M&As) are different in China and the United States, but we know little about how they differ. This article reports one of the first studies that systematically compares and contrasts how M&As differ in these two countries. While prior research on M&As tends to emphasize economic and financial explanations while treating firms as atomistic actors severed from their institutional and network relations, we develop a new theoretical framework based on relational, behavioral, and institutional perspectives. We not only consider firms as learning actors embedded in network relations, but also compare and contrast their M&A patterns between China and the United States, two distinctive institutional contexts. We find that both a firm’s structural hole position and its learning orientation (exploration/exploitation) in alliances have direct and joint impacts on subsequent M&As. Further, such impacts differ across the two countries, due to their institutional disparities.

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The transformation of East-Central Europe deepens the debate about firm creation in a unique way: how do approaches to institutional creation impact the creation of firms? This paper theoretically and empirically explores this question by offering an alternative, embedded politics approach to explain the sharp contrasts in policy and SME manufacturing growth in the Czech Republic (CR) and Poland. Whereas Polish policies of gradual privatization and state intervention into restructuring led to significant growth in new firms, Czech policies of rapid, mass privatization produced stagnation. I argue that institutional experiments based on public actors becoming financial partners and conflict mediators enhance the ability of network actors to learn and monitor one another, and thus experiment with new forms of organization. Poland facilitated such institutional experiments not only in the ways it approached the creation of market institutions, but also in the ways it decentralized power and resources to local and regional political actors. The study utilizes data on manufacturing networks, privatization, bankruptcy, and regional government reforms collected over the past six years. 2 Non-Technical Summary