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This study sought to explain how both middle managers' strategic knowledge and the prevailing social structure of the organization interact to help bring about strategic renewal. Accepting the notion that middle managers play a vital role in the strategy making process (Wooldridge and Floyd, 1992), this study focused on how middle managers help develop new capabilities, initiate and implement key strategic initiatives, and shape long-term performance of the firm. In essence, this study was designed to empirically “unbundle” the socially complex nature of organizational change. This dissertation explored the following three research questions: (1) How does the strategic knowledge of middle managers lead to the accumulation of new capabilities in organizations? (2) How does social structure affect the activities of managers in the renewal process? (3) How do strategic knowledge and social structure interact to effect organizational change? To test the proposed hypotheses, an empirical analysis was conducted. After interviewing top managers of a medium-sized hospital, a quantitative survey instrument was developed and administered to 97 middle managers. Extraordinary measures were taken to garner data from the entire population of middle managers in the organization and 95 managers completed the survey. Results indicated that strategic knowledge was significantly related to middle management renewal activities. Also, analysis of the prevailing social structure of the organization found that all elements of social structure were highly related to these activities. In subsequent empirical tests, the evidence for an interaction effect was clearly found. In both formal and informal networks, the importance of strategic knowledge vanished when the model was analyzed in conjunction with measures of social structure. In short, knowledge is a necessary, but not sufficient variable in the capability development process. These findings have important implications for the field of strategic management and, in particular, the capability accumulation process. First, it provided an empirical test of how strategic knowledge affects renewal efforts. To date, research concerning knowledge-based assets has been largely conceptual and not subjected to statistical tests of proof. Second, while a middle management perspective has experienced significant growth in recent years, it has not been fully explored in the context of renewal. Thus, the study offered more depth to the importance of middle management layers within this process. Finally, adopting a social network perspective is more consistent with the notion of socially constructed organizational knowledge. Rather than viewing change as an outcome of individual champions and “intrapreneurs,” the research accepted change as a deeply embedded, socially constructed process. Taken together, the results of the current investigation provide a strong rationale for the integration of social network analysis and the strategic knowledge of mid-level actors in the capability accumulation process. (Abstract shortened by UMI.)

The project of strategic management research includes the explanation and prediction of organizational performance (Hambrick, 1989). Hence it is to a large extent a prescriptive project. In particular, many researchers have advanced and empirically supported the proposition that, in the interests of economic performance, organizations should align their strategies and structures. A classic example is provided by Rumelt's (1974) study of corporations. Rumelt's classic study is based on a prescriptive structural contingency theory. It is prescriptive, in that it includes a recommendation, or prescription, to be followed in the interests of organizational performance. It is based on contingency theory, in that the prescription is one of fit between structure and a contingency variable (corporate strategy). However, not all theories of organizational structure are prescriptive. Others are descriptive, in that they offer explanation and prediction of what managers and organizations actually do, whether or not their actions improve organizational performance. For example, from the institutional perspective, organizations within a given field tend towards similarity, rather than towards efficiency (DiMaggio & Powell, 1983). This dissertation adopts and tests both prescriptive and descriptive perspectives. The research described here is to a large extent a generalization (Tsang and Kwan, 1999) of prior descriptive and prescriptive research. Its distinctive contribution to these streams of research is that its unit of analysis is different from those of prior studies. The unit of analysis of this dissertation is the business unit of the multibusiness corporation. Little prior research has taken as its unit of analysis the business unit. The paucity of research at this level is surprising in the light of the robust finding that a considerable proportion of variance in performance is due to business unit effects (Rumelt, 1991). Hence choice of this unit of analysis is consistent with strategic management's performance-oriented project. Results from this study show positive association between the strategic variable of low cost and the structural variable of formalization. They further show a negative effect on performance associated with similarity amongst business units of the same corporation.

This dissertation investigated the relationship between firm resources and firm strategies in response to economic recession. While economic recessions represent one of the most significant environmental influences on firms, markets, and industries, little research has focused on how firms cope with recessionary pressures. Perhaps Josef Schumpeter offered the most concise assessment of the implications of economic recession for firm survival maintaining that, “During recession…much dead wood disappears” (Schumpeter 1939, 143). He also stated that a firm's strategy could only be evaluated under the tumultuous conditions of recession, not the perennial lull of growth. By relying on the resource-based view of the firm as its theoretical frame, this study investigated whether firm heterogeneity and firm strategy influenced within- and postrecession performance. It addressed the following three research questions: First, did firm initial conditions before the recession separate the “dead wood” from viable firms? Second, did firms' resources at the onset of recession constrain their strategic responses to recession? Finally, what were the linkages between within-recession strategy and post-strategy and post-recession performance? This research effort applied rigorous statistical methods to examine the strategies and characteristics of 500 publicly traded information technology firms during the last recession (2000–2003). It also took a detailed look through primary survey data, at the recession strategies of approximately 150 additional firms, both public and private. The study offers several contributions. First, it extended the limited research that examined how firm strategy interacts with economic recession. This study was an attempt to offer a finer level of analysis, in contrast to the larger body of economic literature that only examined macro-economic issues. In doing so, the study offers a strong policy component by helping better understand how recessions affect firms and industries. Second, the study was designed and executed with the resource-based view of the firm as its primary theoretical foundation. Consistent with the theory, the study focused on firm-specific attributes as mitigating factors to recessionary effects. Third, the study relied on innovative statistical models, which not only help yield insightful findings in this study, but they can also be utilized again to study historic or future recessions.

In this dissertation, I explore the evolution of corporate board structures in leveraged buyouts (LBOs). As a particular form of corporate restructuring activity, the LBO is deemed the most efficient in enhancing corporate performance (Bowman, Singh, Useem & Bhadury 1999). To account for the LBO's success and staying power, the discipline of debt and the incentives of managerial equity participation represent the leading explanations (Halpern, Kieschnick & Rotenberg 1999; Jensen 1989). A third, although much less studied, source of value in the LBO is the board of directors. To explore board restructurings in LBOs, I focus on the reverse leveraged buyout, or R-LBO. Because an R-LBO involves a going-private transaction that re-enters the public markets via a secondary initial public offering (SIPO), its use allows for a "peek behind the curtain" to observe organizational changes accomplished during the private phase of the restructuring and the impact of those changes on post-buyout firm performance. Specifically, I examine changes in the board composition of 65 R-LBOs and 65 time-, size- and industry-matched Continuing Firms spanning a 25-year period (1979-2004). I rely on agency theory and the resource dependence perspective to investigate the following three research questions: Do board structures predict companies engaging in buyouts versus those that do not engage in buyouts? To what extent are the boards of R-LBOs altered during the buyout phase? What are the linkages between changes in the R-LBOs' board characteristics and the performance changes of these restructured firms? This dissertation contributes to the ongoing debate on whether the LBO creates value, and if so, how and for whom. I report several results from the descriptive statistics and econometric analyses of the data. For instance, firms with a dual (CEO-chair) structure are more likely to engage in R-LBO. I find that modifications to R-LBO boards are strongly related to changes in performance. As such, my dissertation finds support for both agency and resource dependence arguments for the board as a distinctive source of value in leveraged buyouts. I discuss the implications of these and additional results for research and practice.

In the first essay, we survey the literature on R&D in both economics and finance. We see that in finance, the focus has been on the impact of R&D on market value, but without including any measure of R&D output, such as patent counts or citations, whereas in economics the focus has been on measuring R&D, but without a forward-looking stock portfolio perspective. We propose to expand on both areas, in the following fashion. In the second essay, we investigate the impact of R&D on the fundamentals of the firm. This in itself is new, since most of the literature focuses on market values and uses firm fundamentals mostly as a way to subdivide the sample into high-growth/low-growth, high-tech/low-tech etc. We explore the relationship between R&D and growth (as represented by sales growth) and profitability (as represented by ROE). Finally, in the third essay, we explore the impact of R&D activities on market values. The novel factor here relative to the financial literature is the inclusion of measures of R&D output. We include patent counts as a measure of R&D quantity and patent citations as a measure of R&D quality. Relative to the literature in economics, we add the forward-looking, portfolio-based abnormal performance view characteristic to the financial field. Economists use all the measures of R&D that we use, but do so in a snapshot-like, "hedonic" market value equation. We find that R&D efforts tend to increase the sales growth of companies, but to decrease ROE, consistent with the observation that high-tech companies are typically growth companies (i.e. growth stocks) that forego current earnings for (hopefully much higher) future ones. When used to form stock portfolios, the R&D spending and citations intensities are effective at discerning winners from losers. The top (bottom) quintile outperforms (underperforms) by about 5% per year both on a cumulative and risk-adjusted basis. Furthermore, in a Fama and French-style regression of returns versus size, B/M and R&D variables, the citations variable is significant, with one additional citation per patent contributing 0.4% to annual cumulative returns.

The design and management of supply chains in today's competitive business environment presents one of the most important challenges to managers. The competitiveness of products and services in the global economy is increasingly measured not only by individual product or service characteristics but also by the efficiency and effectiveness of their underlying supply chain in catering to differentiated customer requirements. Facing shrinking product life cycles, differentiation and diversification of customer requirements, and cost transparency and accountability, managers are ever eager to pursue strategic, tactical and operational initiatives that will lead to supply chain configurations that afford greater competitive advantage. In fact, the pursuit of such competitive advantage might explain recent mergers such as those of Kmart and Sears in November 2004, Proctor & Gamble and Gillette in January 2005, Coors and Molson in January 2005, and Federated and May in April 2005. To what extent might the core strategic impetus of these mergers be more of capitalizing on potential supply chain synergies than stemming from other levers such as financial, market expansion, product line expansion or technology acquisition? In 2002, the S & P 500 Survey indicated that improvement of supply chain operations, such as a twenty percent reduction in inventory, or a one percent decrease in operational expense can increase a company's stock by as much as six percent. A company's logistics operations comprise a significant share of overall costs and their efficiency can favorably impact the company's supply chain performance and its valuation. A Bain & Company study concluded that the difference in the profitability of companies that have employed sophisticated supply chain methodologies can be as much as a factor of twelve. This dissertation investigates the potential of supply chain synergistic gains brought about by a merger or an acquisition using mathematical programming models. The models are used to assess the extent to which defining characteristics of the two companies such as product structure and cost, distribution network configuration, temporal market demand patterns, and spatial market dispersion, favorably impact a potential merger. The models are used in computational studies which quantify supply chain performance in terms of truck or fleet utilization, inventory levels, and logistics costs. The computational studies examine a variety of scenarios of two prospective companies seeking to merge, to reveal the impacts of different supply chain networks, product characteristics, clustering of market regions, and the granularity of time period that defines operations on potential synergistic gains.