Corporate-Level Strategies
Text Discussion Sessions
Olivier Furrer
Radboud University Nijmegen
SESSION #1: What is Corporate Strategy?
Texts:
1. Abell, Derek F. and John S. Hammond (1979), “Defining the Business and Making
the Bridge to Other Strategic Decisions.” Strategic Market Planning: Problems and
Analytical Approaches, Ch. 8: 389-407.
2. Haspeslagh, Philippe (1982) “Portfolio Planning: Uses and Limits.” Harvard Business
Review, January-February: 58-73.
3. Porter, Michael E. (1987) “From Competitive Advantage to Corporate Strategy.”
Harvard Business Review, May-June: 43-59.
4. Prahalad, C. K. and Gary Hamel (1990) “The Core Competence of the Corporation.”
Harvard Business Review, May-June: 79-91.
Discussion Questions: What is corporate strategy? How should a multibusiness corporation
define a business unit? What are the advantages for a corporation to be
in multiple businesses?
SESSION #2: Justification for the Multibusiness Firm
Texts:
1. Williamson, Olivier E. (1991), “Comparative Economic Organization: The Analysis
of Discrete Structural Alternatives,” Administrative Science Quarterly, 36(2): 269296.
2. Teece, David J. (1982) “Toward an Economic Theory of the Multiproduct Firm.”
Journal of Economic Behavior and Organization, 3(1): 39-63.
3. Peteraf, Margaret A. (1993), “The Cornerstones of Competitive Advantage: A
Resource Based View,” Strategic Management Journal, 14(3): 179-191.
4. Jensen, Michael C. (1989), “Eclipse of the Public Corporation,” Harvard Business
Review, 67(5): 61-74.
Additional/Alternative Texts:
1
5. Williamson, Olivier E. (1975), Markets and Hierarchies, Free Press: New York, 8-10;
39-40; 132; 137-138; 141-151; 156-162; and references.
6. Fligstein, Neil (1985), “The Spread of the Multidivisional Form among Large Firms,
1919-1979,” American Sociological Review, 50(3): 377-391.
7. Hoskisson, Robert E., Charles W. L. Hill, and Hicheon Kim (1993), “The
Multidivisional Structure: Organizational Fossil or Source of Value?” Journal of
Management, 19(2), 269-298.
8. Montgomery, Cynthia A. and S. Hariharan (1991), “Diversified Expansion by Large
Established Firms,” Journal of Economic Behavior and Organization, 15(1): 71-89.
Discussion Questions: What is corporate strategy? What are the rationales for the
multibusiness firms? What are the advantages for a corporation to be
in multiple businesses?
SESSION #3: Economies of Scale and Economies of Scope
Texts:
1. Chandler, Alfred D. Jr. (1990) “Scale, Scope, and Organizational Capabilities.” Scale
and Scope: The Dynamics of Industrial Capitalism, Ch. 2: 14-46.
2. Leonard-Barton, Dorothy (1992) “Core Competencies and Core Rigidities: A Paradox
in Managing New Product Development.” Strategic Management Journal, 13(SSI):
111-125.
3. Lieberman, Marvin B. (1984) “The Learning Curve and Pricing in the Chemical
Processing Industries.” RAND Journal of Economics, 15(2): 213-228.
4. Teece, David J. (1982) “Toward an Economic Theory of the Multiproduct Firm.”
Journal of Economic Behavior and Organization, 3(1): 39-63.
Discussion Questions: How do multibusiness firms build market power? How do
multibusiness firms create synergies? What is the effect of transaction
costs on the scope of multibusiness firms?
SESSION #4: Diversification and Performance
Texts:
1. Amit, Raphael and Joshua Livnat (1988) “Diversification Strategies, Business Cycle
and Economic Performance,” Strategic Management Journal, 9(2): 605-617.
2. Rumelt, Richard P. (1974) “Definitions, Concepts, and Methodology.” Strategy,
Structure, and Economic Performance, Ch. 1: 9-46.
2
3. Farjoun, Moshe (1998) “The Independent and Joint Effects of the Skill and Physical
Bases of Relatedness in Diversification.” Strategic Management Journal, 19(7): 611630.
4. Palich, Leslie E., Laura B. Cardinal and C. Chet Miller (2000) “Curvilinearity in the
Diversification-Performance Linkage: An Examination of Over Three Decades of
Research.” Strategic Management Journal, 21: 155-174.
Discussion Questions: Why do firms diversify? What are the different types of diversification
strategies? What is the impact of diversification on firms
performance?
SESSION #5: Resource Allocation and Portfolio Composition
Texts:
1. Stein, Jeremy C. (1997), “Internal Capital Markets and the Competition for Corporate
Resources,” Journal of Finance, 52 (1), 111-133.
2. Prahalad, C. K. and Yves L. Doz (2003), “The Rationale for Multi-SBU Companies,”
in The Oxford Handbook of Strategy, David O. Faulkner and Andrew Campbell
(Eds.), Oxford University Press: Oxford, Volume II, Corporate Strategy, 43-71.
3. Haspeslagh, Philippe (1982) “Portfolio Planning: Uses and Limits.” Harvard Business
Review, January-February: 58-73.
4. Prahalad, C. K. and Gary Hamel (1990),“The Core Competence of the Corporation.”
Harvard Business Review, May-June: 79-91.
Additional/Alternative Texts
5. Armstrong, J. Scott and Roderick J. Brodie (1994), “Effects of Portfolio Planning
Methods on Decision Making: Experimental Results,” International Journal of
Research in Marketing, 11(1): 73-84.
6. Folta, Timothy B. (1998), “Governance and Uncertainty: The Trade-Off between
Administrative Control and Commitment,” Strategic Management Journal, 19(11):
1007-1028.
Discussion Questions: How should corporations allocate resources among business units?
What are the limits of the BCG matrix? What is the impact of
different types of relatedness on portfolio composition?
3
SESSION #6: The Question of Relatedness
Texts:
1. Stimpert, J. L. and Irene M. Duhaime (1997), “In the Eyes of the Beholder:
Conceptualizations of Relatedness Held by the Managers of Large Diversified Firms,”
Strategic Management Journal, 18 (2), 111-125.
2. Porter, Michael E. (1987) “From Competitive Advantage to Corporate Strategy.”
Harvard Business Review, May-June: 43-59.
3. Markides, Constantinos C. and Peter J. Williamson (1996), “Corporate Diversification
and Organizational Structure: A Resource-Based View,” Academy of Management
Journal, 39 (2), 340-367.
4. Prahalad, C. K. and Richard A. Bettis (1986), “The Dominant Logic: A New Linkage
Between Diversity and Performance,” Strategic Management Journal, 7, 485-501.
Additional/Alternative Texts
5. St. John, Caron H. and Jeffrey S. Harrison (1999), “Manufacturing-Based Relatedness,
Synergy, and Coordination,” Strategic Management Journal, 20: 129-145.
6. Kim, Hicheon, Robert E. Hoskisson and William P. Wan (2004), “Power Dependence,
Diversification Strategy, and Performance in Keiretsu Member Firms Strategic
Management Journal, 25: 613-636.
Discussion Questions: What does relatedness mean? How do multibusiness firms create
synergies? What is the impact of top management teams on a firm’s
diversification pattern?
SESSION #7: Corporate Governance and Agency Theory
Texts:
1. Fama, Eugene F. and Michael C. Jensen (1983), “Separation of Ownership and
Control,” Journal of Law and Economics, 26 (June): 301-325.
2. Davis, James H., F. David Schoorman and Lex Donaldson (1997), “Toward a
Stewardship Theory of Management,” Academy of Management Review, 22 (1): 2047.
3. Clarke, Thomas (1998), “The Stakeholder Corporation: A Business Philosophy for
Information Age,” Long Range Planning, 31 (2): 182-194.
4. Gordon, Jeffrey N. (2002), “What Enron Means for the Management and Control of
the Modern Business Corporation: Some Initial Reflections,” University of Chicago
Law Review, 69 (Summer): 1233-1250.
5. Coffee, John C. Jr. (2003), “What Caused Enron?: A Capsule Social and Economic
History of the 1990s,” Columbia Law School Working Paper No. 214.
4
Additional/Alternative Texts:
6. Ghoshal, Sumantra (2006), “Bad Management Theories Are Destroying Good
Management Practices,” Academy of Management Learning & Education, 4(1): 75-91.
Discussion Questions: What are the consequences of the separation of ownership and control
in modern corporations? Toward who are managers responsible? How
efficient are governance mechanisms?
SESSION #8: Vertical Integration: The Fisher Body-General Motors Story
Texts:
1. Klein, Benjamin (1988), “Vertical Integration as Organizational Ownership: The
Fisher Body-General Motors Relationship Revisited,” Journal of Law, Economics,
and Organization, 4(1), 199-213.
2. Coase, R. H. (2000), “The Acquisition of Fisher Body by General Motors,” Journal of
Law and Economics, 43(1), 15-31.
3. Freeland, Robert F. (2000), “Creating Holdup Through Vertical Integration: Fisher
Body Revisited,” Journal of Law and Economics, 43(1), 33-66.
4. Casadesus-Masanell, Ramon and Daniel F. Spulber (2000), “The Fable of Fisher
Body,” Journal of Law and Economics, 43(1), 67-104.
5. Klein, Benjamin (2000), “Fisher-General Motors and the Nature of the Firm,” Journal
of Law and Economics, 43(1), 105-141.
Additional/Alternative Texts
6. Klein, Benjamin, Robert G. Crawford, and Armen A. Alchian (1978), “Vertical
Integration, Appropriable Rents, and the Competitive Contracting Process,” Journal of
Law and Economics, 21(2), 297-326.
Discussion Questions: Why did General Motors acquire Fisher Body? What alternatives to
acquisition could have been considered? What were the consequences
of this acquisition for General Motors?
SESSION #9: Mergers & Acquisitions
Texts:
1. Cording, Margaret, Petra Christmann, and L. J. Bourgeois III (2002), “A Focus on
5
Resources in M&A Success: A Literature Review and Research Agenda to Resolve
Two Paradoxes,” Academy of Management Meeting, August 12, 2002.
2. Walter, Gordon A. and Jay B. Barney (1990), “Management Objectives in Mergers
and Acquisitions,” Strategic Management Journal, 11(1), 79-86.
3. Brouthers, Keith D. (2002), “Institutional, Cultural and Transaction Cost Influences on
Entry Mode Choice and Performance,” Journal of International Business Studies,
33(2), 203-211.
4. O’Shaughnessy, K. C. and David J. Flanagan (1998), “Determinants of Layoff
Announcements Following M&As: An Empirical Investigation,” Strategic
Management Journal, 19(10), 989-999.
Discussion Questions: How do M&As create corporate value? What are the advantages and
disadvantages of M&A compared to internal development? Why do
M&As often fail?
SESSION #10: Refocusing and Divestment
Texts:
1. Hoskisson, Robert E. and Thomas A Turk (1990) “Corporate Restructuring:
Governance and Control Limits of the Internal Capital Market.” Academy of
Management Review, 15(3): 459-477.
2. Markides, Constantinos C. (1992) “Consequences of Corporate Refocusing: Ex Ante
Evidence.” Academy of Management Journal, 35(2): 398-412.
3. Anand, Jaideep and Harbir Singh (1997) “Asset Redeployment, Acquisitions and
Corporate Strategy in Declining Industries” Strategic Management Journal, 18(SSI):
99-118.
4. Gibbs, Philip A. (1993) “Determinants of Corporate Restructuring: The Relative
Importance of Corporate Governance, Takeover Threat, and Free Cash Flow”
Strategic Management Journal, 14(SSI): 51-68.
Additional/Alternative Texts
5. Chang, Sea Jin and Harbir Singh (1999), “The Impact of Modes of Entry and
Resources Fit on Modes of Exit by Multibusiness Firms,” Strategic Management
Journal, 20 (11), 1019-1035.
6. Hoskisson, Robert E., Richard A Johnson and Douglas D. Moesel (1994), “Corporate
Divestiture Intensity in Restructuring Firms: Effects of Governance, Strategy, and
Performance,” Academy of Management Journal, 37 (5), 1207-1251.
7. Hoskisson, Robert E., Albert A. Cannella, Jr., Laszlo Tihanyi and Rosario Faraci
(2004), “Asset Restructuring and Business Group Affiliation in French Civil Law
Countries,” Strategic Management Journal, 25: 525-539.
6
Discussion Questions: What are the limits to the scope of the firm? Why do firms
overdiversify? What is the impact of corporate refocusing on a firm’s
performance?
SESSION #11: Multipoint Competition
Texts:
1. Li, Stan Xiao, and Royston Greenwood (2004), “The Effect of Within-Industry
Diversification on Firm Performance: Synergy Creation, Multi-Market Contact and
Market Structuration,” Strategic Management Journal, 25(12), 1131-1153.
2. Young, Greg, Ken G. Smith, Curtis M. Grimm and Daniel Simon (2000),
“Multimarket Contact and Resource Dissimilarity: A Comparative Dynamics
Perspective,” Journal of Management, 26(6), 1217-1236.
3. Golden, Brian R. and Hao Ma (2003), “Mutual Forbearance: The Role of Intrafirm
Integration and Rewards,” Academy of Management, 28(3), 479-493.
4. Gimeno, Javier and Carolyn Y. Woo (1999), “Multimarket Contact, Economies of
Scope, and Firm Performance,” Academy of Management Journal, 43(3), 239-259.
Additional/Alternative Texts
5. Karnani, A. and B. Wernerfelt (1985), “Multipoint Competition,” Strategic
Management Journal, 6: 87-96.
6. Jayachandran, S., J. Gimeno and P. R. Varadarajan (1999), “The Theory of
Multimarket Competition: A Synthesis and Implications for Marketing Strategy,”
Journal of Marketing, 63: 49-66.
Discussion Questions: How does multipoint competition influence the rivalry intensity
between firms? What are the consequences of multimarket contact?
How does multipoint competition affect corporate strategy?
SESSION #12: Multipoint Competition: Market Entry and Exit
Texts:
7. Stephan, John, Johann Peter Murmann, Warren Boeker, and Jerry Goodstein (2003),
“Bringing Managers into Theories of Multimarket Competition: CEOs and the
Determinants of Market Entry,” Organization Science, 14 (4): 403-421.
8. Haveman, Heather A. and Lynn Nonnemaker (2000), “Competition in Multiple
Geographic Markets: The Impact on Growth and Market Entry,” Administrative
Science Quarterly, 45 (June): 232-267.
7
9. Fuentelsaz, Lucio and Jaime Gómez (2002), “Multipoint Competition, Mutual
Forbearance and Entry into Geographic Markets,” Working Paper Universidad de
Zaragoza.
10. Baum, Joel A. C. and Helaine J. Korn (1999), “Dynamics of Dyadic Competitive
Interaction,” Strategic Management Journal, 20: 251-278.
11. Boeker, Warren, Jerry Goodstein, John Stephan and Johann Peter Murmann (1997),
“Competition in a Multimarket Environment: The Case of Market Exit,” Organization
Science, 8 (2): 126-142.
Discussion Questions: How does multipoint competition influence the rivalry intensity
between firms? What is the effect of multipoint contact on firms’
market entry and exit? Which factors moderate this relationship?
8