IDEAS home Printed from https://ideas.repec.org/a/bla/stratm/v44y2023i1p343-366.html
   My bibliography  Save this article

The effects of strategy and institutions on value creation and appropriation in firms: A longitudinal study of three telecom companies

Author

Listed:
  • Philipp Kern
  • Howard Gospel

Abstract

Research Summary Strategic management has come to pay more attention to value creation and appropriation (VCA) among the firm's stakeholders, including customers, capital owners, and employees. Existing research has conceptualized this as a strategic choice bounded by the bargaining power of each stakeholder group, which, we argue, risks misattributing outcomes by neglecting structural constraints. Instead, these dynamics need to be understood within the wider institutional context shaping the behavior of managers and stakeholders. Using a question‐driven mixed‐methods approach, we investigate the evolution of VCA in three telecom companies located in different institutional systems—British Telecom, Deutsche Telekom, and Telecom Italia. Our findings suggest that national institutional and firm strategic effects must be considered together to understand patterns of VCA among stakeholders. Managerial Summary Using an emerging methodology, we quantify how three telecom firms (British Telecom, Deutsche Telecom, and Telecom Italia) have created and distributed economic value since privatization. Our focus is on explaining the extent to which various stakeholders—employees, customers, capital owners, and government—were able to appropriate the value created by the firms. Some similarities are found across the three companies, but we also found major differences. To explain patterns, we bring together (a) strategic decision making by managers within the firm and (b) constraints imposed by institutions outside the firm. We find both to be important, interlinked drivers of distributional patterns. The article gives managers and stakeholders a means to understand major changes and determinants of value creation and distribution.

Suggested Citation

  • Philipp Kern & Howard Gospel, 2023. "The effects of strategy and institutions on value creation and appropriation in firms: A longitudinal study of three telecom companies," Strategic Management Journal, Wiley Blackwell, vol. 44(1), pages 343-366, January.
    • Handle: RePEc:bla:stratm:v:44:y:2023:i:1:p:343-366
    DOI: 10.1002/smj.3129
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/smj.3129
    Download Restriction: no
    File URL: https://libkey.io/10.1002/smj.3129?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Rodolphe Durand & Robert M. Grant & Tammy L. Madsen, 2017. "The expanding domain of strategic management research and the quest for integration," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 4-16, January.
    2. Henk De Jong, 1997. "The Governance Structure and Performance of Large European Corporations," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 1(1), pages 5-27, March.
    3. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Joshua Gans & Michael D. Ryall, 2017. "Value capture theory: A strategic management review," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 17-41, January.
    4. Francesca Gambarotto & Stefano Solari, 2015. "The peripheralization of Southern European capitalism within the EMU," Review of International Political Economy, Taylor & Francis Journals, vol. 22(4), pages 788-812, August.
    5. Roberto Garcia-Castro & Ruth V. Aguilera, 2015. "Incremental value creation and appropriation in a world with multiple stakeholders," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 137-147, January.
    6. William Q Judge & Stav Fainshmidt & J Lee Brown III, 2014. "Which model of capitalism best delivers both wealth and equality?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(4), pages 363-386, May.
    7. Massimo Florio, 2003. "Does privatisation matter? The long-term performance of British Telecom over 40 years," Fiscal Studies, Institute for Fiscal Studies, vol. 24(2), pages 197-234, June.
    8. Marvin B. Lieberman & Roberto Garcia‐Castro & Natarajan Balasubramanian, 2017. "Measuring value creation and appropriation in firms: The VCA model," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1193-1211, June.
    9. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    10. Mads Mordhorst & Stefan Schwarzkopf, 2017. "Theorising narrative in business history," Business History, Taylor & Francis Journals, vol. 59(8), pages 1155-1175, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sophie Bacq & Ruth V. Aguilera, 2022. "Stakeholder Governance for Responsible Innovation: A Theory of Value Creation, Appropriation, and Distribution," Journal of Management Studies, Wiley Blackwell, vol. 59(1), pages 29-60, January.
    2. Reto Bürgisser & Donato Di Carlo, 2023. "Blessing or Curse? The Rise of Tourism‐Led Growth in Europe's Southern Periphery," Journal of Common Market Studies, Wiley Blackwell, vol. 61(1), pages 236-258, January.
    3. Michael A. Witt & Gregory Jackson, 2016. "Varieties of Capitalism and institutional comparative advantage: A test and reinterpretation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(7), pages 778-806, September.
    4. Jasiecki Krzysztof, 2022. "The coronavirus and center-peripheral relations in the economies of the European Union," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 58(3), pages 235-247, September.
    5. Kevin A. Bryan & Michael D. Ryall & Burkhard C. Schipper, 2022. "Value Capture in the Face of Known and Unknown Unknowns," Strategy Science, INFORMS, vol. 7(3), pages 157-189, September.
    6. Fan, Di & Li, Yi & Chen, Liang, 2017. "Configuring innovative societies: The crossvergent role of cultural and institutional varieties," Technovation, Elsevier, vol. 66, pages 43-56.
    7. repec:osf:socarx:qa8cd_v1 is not listed on IDEAS
    8. Michael J. Leiblein & Jeffrey J. Reuer & Todd Zenger, 2018. "What Makes a Decision Strategic?," Strategy Science, INFORMS, vol. 3(4), pages 558-573, December.
    9. Hugo Dias, 2021. "The evolution of Portuguese trade unionism: Political economies and power resources," Industrial Relations Journal, Wiley Blackwell, vol. 52(3), pages 237-254, May.
    10. Carney, Michael & Shapiro, Daniel & Estrin, Saul & Liang, Zhixiang, 2018. "National institutional systems, foreign ownership and firm performance: the case of understudied countries," LSE Research Online Documents on Economics 87042, London School of Economics and Political Science, LSE Library.
    11. Alessandro Zattoni & Emmanouil Dedoulis & Stergios Leventis & Hans Van Ees, 2020. "Corporate governance and institutions—A review and research agenda," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 465-487, November.
    12. Braun, Benjamin & Deeg, Richard, 2019. "Strong firms, weak banks: The financial consequences of Germany's export-led growth model," MPIfG Discussion Paper 19/5, Max Planck Institute for the Study of Societies.
    13. J. W. Stoelhorst, 2023. "Value, rent, and profit: A stakeholder resource‐based theory," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1488-1513, June.
    14. Jordi A. Surroca & Ruth V. Aguilera & Kurt Desender & Josep A. Tribó, 2020. "Is managerial entrenchment always bad and corporate social responsibility always good? A cross‐national examination of their combined influence on shareholder value," Strategic Management Journal, Wiley Blackwell, vol. 41(5), pages 891-920, May.
    15. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2019. "What if supply-side policies are not enough? The perverse interaction of flexibility and austerity," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 360-388.
    16. Samuel Klebaner, 2018. "Norm making and institutions dynamics: how the research program of the French Régulation Theory can be fertilized by the methodological concepts from the “Max-Planck-Institute for European Legal Histo," Cahiers du GREThA (2007-2019) 2018-25, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    17. Kamini Gupta & Donal Crilly & Thomas Greckhamer, 2020. "Stakeholder engagement strategies, national institutions, and firm performance: A configurational perspective," Strategic Management Journal, Wiley Blackwell, vol. 41(10), pages 1869-1900, October.
    18. Kalle Pajunen & Joonas Järvinen, 2018. "To survive or succeed? An analysis of biotechnology firms," Small Business Economics, Springer, vol. 51(3), pages 757-771, October.
    19. Robert Boyer, 2013. "The euro crisis: undetected by conventional economics, favoured by nationally focused polity," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(3), pages 533-569.
    20. Girardone, Claudia & Kokas, Sotirios & Wood, Geoffrey, 2021. "Diversity and women in finance: Challenges and future perspectives," Journal of Corporate Finance, Elsevier, vol. 71(C).
    21. Terence Gomez & Pietro Masina & Silvia Vignato, 2020. "“Development and Transformation in Southeast Asia: The Political Economy of Equitable Growth”," Post-Print halshs-03151964, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:stratm:v:44:y:2023:i:1:p:343-366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/0143-2095 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.