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Shifting gears: Enabling change in corporate aggressiveness

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  • Charles J. Fombrun
  • Ari Ginsberg

Abstract

This paper interprets the corporate strategies of multi‐business firms as patterns in their aggregate deployment of resources to functional uses across businesses. By integrating business and corporate levels in the study of strategy‐making, such a perspective facilitates analyzing aggressiveness in corporate posture as a concept distinct from, but complementary to, competitive strategy and diversification. Changes in aggressiveness, we argue, result from the interplay of two sets of forces: (1) inhibitors that create inertia; and (2) inductors that stimulate redeployments. Specific hypotheses are tested using data drawm from a random sample of 352 firms in ten economic sectors between 1977 and 1984. Results support the view that prior performance and sector volatility have a curvilinear impact on the propensity of firms to change their corporate aggressiveness. Change in corporate posture is significantly inhibited by size and prior resource deployments. However, the inductive forces of prior performance and volatility act to stimulate change.

Suggested Citation

  • Charles J. Fombrun & Ari Ginsberg, 1990. "Shifting gears: Enabling change in corporate aggressiveness," Strategic Management Journal, Wiley Blackwell, vol. 11(4), pages 297-308, May.
    • Handle: RePEc:bla:stratm:v:11:y:1990:i:4:p:297-308
    DOI: 10.1002/smj.4250110405
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    Cited by:

    1. Liao, Tung-Shan & Rice, John, 2010. "Innovation investments, market engagement and financial performance: A study among Australian manufacturing SMEs," Research Policy, Elsevier, vol. 39(1), pages 117-125, February.
    2. Parhankangas, Annaleena & Arenius, Pia, 2003. "From a corporate venture to an independent company: a base for a taxonomy for corporate spin-off firms," Research Policy, Elsevier, vol. 32(3), pages 463-481, March.
    3. Sapienza, Harry J. & Parhankangas, Annaleena & Autio, Erkko, 2004. "Knowledge relatedness and post-spin-off growth," Journal of Business Venturing, Elsevier, vol. 19(6), pages 809-829, November.
    4. Williams, Christopher & Lee, Soo Hee, 2009. "Resource allocations, knowledge network characteristics and entrepreneurial orientation of multinational corporations," Research Policy, Elsevier, vol. 38(8), pages 1376-1387, October.
    5. Johan Wiklund & Dean A. Shepherd, 2009. "The Effectiveness of Alliances and Acquisitions: The Role of Resource Combination Activities," Entrepreneurship Theory and Practice, , vol. 33(1), pages 193-212, January.
    6. Pearce, John II & Kramer, Tracy Robertson & Robbins, D. Keith, 1997. "Effects of managers' entrepreneurial behavior on subordinates," Journal of Business Venturing, Elsevier, vol. 12(2), pages 147-160, March.
    7. Weinzimmer, Laurence & Esken, Candace A. & Michel, Eric J. & McDowell, William C. & Mahto, Raj V., 2023. "The differential impact of strategic aggressiveness on firm performance: The role of firm size," Journal of Business Research, Elsevier, vol. 158(C).
    8. Moritz Belling & Ulrich Pidun & Dodo zu Knyphausen-Aufseß, 2021. "Unbundling Strategic Change in Family Firms: the Influence of Familiness on the Strategic Change Process," Schmalenbach Journal of Business Research, Springer, vol. 73(3), pages 381-411, December.
    9. Williams, Christopher, 2009. "Subsidiary-level determinants of global initiatives in multinational corporations," Journal of International Management, Elsevier, vol. 15(1), pages 92-104, March.
    10. Abdul Majid & Muhammad Yasir & Iftikhar Ahmad Khan & Naila Tabbassum, 2011. "Learning Dynamics in Transformational Change: A Study of Workforce Behavior in the Developing Economies," BRAND. Broad Research in Accounting, Negotiation, and Distribution, EduSoft Publishing, vol. 2(2), pages 8-15, October.
    11. Lewin, Jeffrey E., 2003. "An empirical investigation of the effects of downsizing on buyer-seller relationships," Journal of Business Research, Elsevier, vol. 56(4), pages 283-293, April.
    12. Martin, Xavier & Mitchell, Will, 1998. "The influence of local search and performance heuristics on new design introduction in a new product market," Research Policy, Elsevier, vol. 26(7-8), pages 753-771, April.
    13. Hildebrandt, Peter & Oehmichen, Jana & Pidun, Ulrich & Wolff, Michael, 2018. "Multiple recipes for success – A configurational examination of business portfolio restructurings," European Management Journal, Elsevier, vol. 36(3), pages 381-391.
    14. Williams, Christopher & Lee, Soo Hee, 2011. "Entrepreneurial contexts and knowledge coordination within the multinational corporation," Journal of World Business, Elsevier, vol. 46(2), pages 253-264, April.
    15. Mariadoss, Babu John & Johnson, Jean L. & Martin, Kelly D., 2014. "Strategic intent and performance: The role of resource allocation decisions," Journal of Business Research, Elsevier, vol. 67(11), pages 2393-2402.
    16. Zuniga-Vicente, Jose Angel & de la Fuente-Sabate, Juan Manuel & Suarez Gonzalez, Isabel, 2004. "Dynamics of the strategic group membership-performance linkage in rapidly changing environments," Journal of Business Research, Elsevier, vol. 57(12), pages 1378-1390, December.
    17. Walter J. Ferrier & Cormac Mac Fhionnlaoich & Ken G. Smith & Curtis M. Grimm, 2002. "The impact of performance distress on aggressive competitive behavior: a reconciliation of conflicting views," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(4-5), pages 301-316.
    18. Yang, Gangqiang & Nie, Yiming & Li, Honggui & Wang, Haisen, 2023. "Digital transformation and low-carbon technology innovation in manufacturing firms: The mediating role of dynamic capabilities," International Journal of Production Economics, Elsevier, vol. 263(C).
    19. Tan, Alvin & Brewer, Paul & Liesch, Peter, 2018. "Rigidity in SME export commencement decisions," International Business Review, Elsevier, vol. 27(1), pages 46-55.
    20. Morgan, Robert E. & Strong, Carolyn A., 2003. "Business performance and dimensions of strategic orientation," Journal of Business Research, Elsevier, vol. 56(3), pages 163-176, March.
    21. Christoph Feichter & Frank Moers & Oscar Timmermans, 2022. "Relative Performance Evaluation and Competitive Aggressiveness," Journal of Accounting Research, Wiley Blackwell, vol. 60(5), pages 1859-1913, December.
    22. J. Bruneel & B. Clarysse & M. Wright, 2009. "Linking Entrepreneurial Strategy and Firm Growth," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/571, Ghent University, Faculty of Economics and Business Administration.

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