Research Methodology in Strategy and Management: Volume 3

Welcome to the third volume of Research Methodology in Strategy and Management. This book series’ mission is to provide a forum for critique, commentary, and discussion about key research methodology issues in the strategic management field. Strategic management relies on an array of complex methods drawn from various allied disciplines to examine how managers attempt to lead their firms toward success. The field is undergoing a rapid transformation in methodological rigor, and researchers face many new challenges about how to conduct their research and in understanding the implications that are associated with their research choices. For example, as the field progresses, what new methodologies might be best suited for testing the developments in thinking and theorizing? Many long-standing issues remain unresolved as well. What methodological challenges persist as we consider those matters? This book series seeks to bridge the gap between what researchers know and what they need to know about methodology. We seek to provide wisdom, insight, and guidance from some of the best methodologists inside and outside the strategic management field.

Most readers of this chapter are very familiar with OSSP. The book's basic proposition is that successful companies need to develop consistency among their strategy, the business model they adopt, including the choice of technology, and their organizational capability including human resource practices. The basic framing of the problem in OSSP is not a static analysis of fit but rather the dynamic problem of adaptation. How do organizations adapt to changing environments? Why do adaptive failures occur? These were the starting questions for M&S.

In theory, there is no difference between theory and practice. In practice, there is.– Yogi Berra

Upper echelons research considers the relationship of top executives to organizational attributes or outcomes, vis-à-vis, their individual or group demographic characteristics such as tenure or experience. The upper echelons perspective is typically associated with the theorizing of Hambrick and Mason in their 1984 Academy of Management Review article, but also has much broader and deeper organizational theory roots as demonstrated by Pfeffer's (1983) earlier exhaustive review of organizational demography. Since the early 1980s, hundreds of upper echelons studies have been published – some explicitly invoking the upper echelons theoretical perspective, while others employing its underlying methodology of relying on executive demographic characteristics as proxies for executive and top management team (TMT) related constructs. This chapter examines three important features and their related challenges and opportunities in future upper echelons research. Specifically, we focus on (1) the identification of upper echelons constructs, (2) embedding those constructs in a meaningful way to develop new theory or better our understanding of extant theory, and (3) the related operationalization and measurement of those constructs that are eventually included in qualitative and quantitative analyses using TMT demographics. We conclude our chapter by drawing these three features together to provide a benchmark process to gauge the theoretical and methodological contributions of upper echelons-related work, and ultimately improve the chances of getting such research published.

Survey research of top managers is critical to addressing many contemporary research questions in the field of strategic management. Yet, the threat of low response rates has discouraged many researchers from attempting this type of work, steering the field of strategic management away from issues related to strategic process. This article provides an empirical examination of factors that determine the likelihood and quality of response to top management surveys. More generally, we advance a theoretical perspective on survey response rooted in social influence theory that should help researchers make better choices about the design of their survey questionnaires.

Managerial constraint is a central theme in strategic management research. Although discussed using a variety of labels (including choice and determinism) and theoretical perspectives (including resource dependence and population ecology), the common question is the degree to which executives have choices or options when making decisions. Two of the most commonly used approaches for discussing constraint are organizational task environments (Dess & Beard, 1984) and managerial discretion (Hambrick & Finkelstein, 1987). These two papers share substantial commonalities in both their theoretical background and operationalization, raising the question of whether discretion and task environment are indeed separate constructs. This chapter reviews both conceptual and methodological issues associated with the use of task environment and discretion. Drawing on a review of published studies and original data analysis, we offer methodological suggestions for future research.

Organization theorists and strategy researchers have effectively leveraged archival assessments of the environment to better understand organizational actions and performance. Despite the successes, several issues continue to plague research. Vague constitutive definitions and mismatches between constitutive and operational definitions are among the most pressing of these issues. To further develop the archival tradition, we clarified existing definitions and proposed new definitions where warranted. Our work has implications not only for the selection of concepts and measures in future work but also for interpretations of past research.

The potential advantage of extreme value theory in modeling management phenomena is the central theme of this paper. The statistics of extremes have played only a very limited role in management studies despite the disproportionate emphasis on unusual events in the world of managers. An overview of this theory and related statistical models is presented, and illustrative empirical examples provided.

Since the publication of Venkatraman and Grant's (1986) article two decades ago, considerably more attention has been directed at establishing the validity of constructs in the strategy literature. However, recent developments in measurement theory indicate that strategy researchers need to pay additional attention to whether their constructs should be modeled as having formative or reflective indicators. Therefore, the purpose of this chapter is to highlight the differences between formative and reflective indicator measurement models, and discuss the potential role of formative measurement models in strategy research. First, we systematically review the literature on construct measurement model specification. Second, we assess the extent of measurement model misspecification in the recent strategy literature. Our assessment of 257 constructs in the contemporary strategy literature suggests that many important strategy constructs are more appropriately modeled as having formative indicators than as having reflective indicators. Based on this review, we identify some common errors leading to measurement model misspecification in the strategy domain. Finally, we discuss some implications of our analyses for scholars in the strategic management field.

Making links between micro and macro levels has been problematic in the social sciences, and the literature in strategic management and organization theory is no exception. The purpose of this chapter is to raise theoretical issues in developing micro-foundations for strategic management and organizational analysis. We discuss more general problems with collectivism in the social sciences by focusing on specific problems in extant organizational analysis. We introduce micro-foundations to literature by explicating the underlying theoretical foundations of the origins of individual action and interaction. We highlight opportunities for future research, specifically emphasizing the need for a rational choice programme in management research.

The psychological analysis of strategic management issues has gained a great deal of momentum in recent years. Much can be learned by entering the black box of strategic thinking of senior executives and bring new insights on how they see, make sense of, and interpret their everyday strategic experiences. This chapter will focus on a powerful cognitive mapping tool called the Repertory Grid Technique and demonstrate how it has been used in the strategy literature along with how a new and more refined application of the technique can enhance the elicitation of complex strategic cognitions for strategy and Board of Directors research.

Strategic management researchers have devoted increasing attention to the study of corporate reputation over the past two decades. Reputation has been conceptualized as a valuable intangible asset, and numerous studies have sought to identify its antecedents and foundations. This chapter recommends a dynamic approach toward reputation research. We argue that studies should examine the processes through which reputational assets are accumulated and depleted over time (i.e. that they should attend to reputational “flows” in addition to reputational “stocks”). We specifically suggest that research focus upon particular corporate actions, examining how (and if) corporate reputations change in their wake. We provide pragmatic and theoretical rationales for this approach toward reputation research. We construct a framework for conducting dynamic, action-focused studies of reputational change. We provide general guidelines for designing such studies, and also provide some specific (i.e. “nuts and bolts”) advice about executing them. We provide one in-depth example of research conducted within this framework. We also identify a number of other corporate actions that could be readily examined using the same methodological and theoretical approach.

Structural equation modeling (SEM) is a powerful multivariate statistical technique that requires careful application. The use of SEM in international business research has substantially increased recently, necessitating a critical evaluation of its use in the field. Through an analysis of 148 articles in the international business (IB) literature, we detail the state of current use of SEM in IB research and compare its use to the established best practices. In many instances, SEM's use in IB has been faulty, suggesting that authors may have drawn incorrect conclusions. To expand the IB field's knowledge base, methodological accuracy is essential. Based on our review of the technique's use in IB research coupled with the established practices in the social science literature, we provide practical suggestions for better applying SEM in the IB literature.