Faultline configurations in top management teams are of vital importance in predicting firm outcomes. Grounded in faultline theory, we hypothesise the positive effects of faultlines through the dual routes of coordination and information processing under conditions of various subgroup configuration types. Second-hand data from publicly traded Chinese information technology firms are used to test our hypotheses. The results demonstrate that TMT faultline strength is positively related to a firm’s short-term performance only when both the number and the balance of subgroups are high and is positively related to a firm’s innovation activities only when the number of subgroups is high and the balance of subgroups is low. This study contributes to faultline theory by enriching the connotation of faultlines with the configurational perspective and advancing the debate on the effects of team faultlines as we reveal the benefits of TMT faultlines.

This study examines the efficacy of the smiling curve, and clarifies the relationship between downsizing strategies (advertising, marketing, and research and development, respectively) and firm performance specifically in an economic downturn. This study tests hypotheses using 1996–2010 data from the Taiwan Economic Journal on 436 listed Taiwanese companies. The results indicate that the benefits for firms to follow the smiling curve may not occur in the short term and that downsizing strategies may not always be the appropriate strategy to improve firm performance. During an economic downturn, downsizing strategies do not appear to enhance firm performance, that is, the smiling curve should not frown during an economic downturn to enhance firm performance.

While ‘open innovation’ is often considered to be an organisational strategy with universal application, its generalisability and applicability to organisations operating within emerging economies has yet to be fully explored. This study provides empirical evidence of its importance within a substantial sample of Chinese large firms and small and medium enterprises. Using Tobit regression analysis, our findings indicate that external knowledge sources from inter-firm networking are more important in creating the benefits of open innovation for Chinese small and medium enterprises than their larger peers. Linkages to university and research institutes generally have few direct effects on the innovation performance of both large and small firms in China. However, the role of universities and research institutes is shown to be important among our large firm sample when combined with evident internal absorptive capacity. This interaction is generally limited to our large firm sample, and is not as evident among small firms.

Our study indicates that the barriers to the adoption of open innovation by Chinese firms might be largely related to the comparatively weak domestic research expertise and limited organisational absorptive capabilities, with this most particularly evident for small and medium enterprises.

These findings suggest that, based on this evidence, there is no need for emerging economies like China to mimic the emergence path from closed to open innovation followed by developed countries. Chinese firms will be more likely to garner the benefits available from openness when they develop the capabilities required to identify, assimilate and commercialise knowledge and technologies obtained from external sources.

This paper investigates the effects on knowledge creation of network size and partner diversity formed through alliance relationships. These effects are tested empirically in the biotech industry setting, which is representative of industries that emphasize external collaboration. Using patent count as a proxy of knowledge creation, Poisson regression was employed to test our predictions empirically. The statistical results show an inverted U-shaped relationship between network size and knowledge creation. In addition, a negative relationship was observed between partner diversity and knowledge creation. This research suggests that small biotech firms should strive to achieve a balanced network size. Knowledge creation is better promoted in these firms through alliances with firms of similar organizational type. The value of this research lies in the fact that it provides new insight into properties of alliance networks by highlighting potentially negative consequences of having an oversized alliance network and partner diversity.

In this article, we build on recent attempts to theorize about the evolution of boards of directors by juxtaposing firms’ strategies to gain, maintain, and repair legitimacy onto their life cycle to examine how board characteristics change – both symbolically and substantively – to reflect their firm’s evolving legitimating strategy. In doing so, we develop insights contributing to our understanding of the mechanisms underpinning the evolving structure and composition of boards of directors. We suggest that boards fulfill an important role ingrained in the firm’s legitimacy in addition to, and intertwined with, their substantive contribution to the firm’s performance at each life cycle stage. We also address firms’ real ability to effect change in their board as a function of the factors that pertain to each stage of life cycle. We conclude by expounding the implications of this novel framework for future research and managerial practice.

The debate on how firms govern their inter-organizational relationships to foster their business performance is far from being settled. While several arguments suggest both transactional and relational mechanisms may act as complementary or substitutive forces, this paper explores and demonstrates how both mechanisms can be jointly exploited to enhance performance. Adopting the context of the US equity underwriting market, this paper reveals that an issuer adopting a transactional governance mechanism to manage its inter-organizational relationships with underwriters obtains a lower cost offering (cost performance) but may not entail price premium (price performance) of that offering. In contrast, an issuer taking a relational governance mechanism has superior price performance but worse cost performance. Nevertheless, this paper uncovers that an issuer adopting a synthesized mechanism obtains better cost performance and price performance by leveraging the advantages from both of the transactional and relational mechanisms.

Understanding the value the right chief executive officer selection and tenure choices can bring to an organisation is under researched in legal jurisdictions such as Australia where there is strong separation of the role of the chief executive officer and chairperson. The chief executive officer is the key organisation strategist and plays an important role in formulating and implementing strategy as well as keeping the board of directors informed of the work of the executive team. This paper reviews and synthesises the corporate governance literature to develop the argument that a chief executive officer’s professional development background and work context will impact his or her ability to favourably influence organisation performance. A series of research propositions of interest to a range of stakeholders inside and outside the organisation are developed drawing on a number of corporate governance theories (e.g., agency theory, stewardship theory). This conceptual paper develops a substantial future empirical research agenda.

The confusion concerning the theoretical roots of the dynamic capabilities view and the fact that it was often being positioned as an extension to the resource-based view in strategic management, prompted a paper by Galvin, Rice, and Liao (2014) that suggested that the dynamic capabilities view would benefit from adopting a more explicit Darwinian approach. In response to this paper, Arndt and Bach (2015) highlighted that the seminal papers in the field do indeed take an evolutionary perspective and that in operationalizing the variation–selection–retention cycle in an empirical setting it is necessary to move away from firm performance as a dependent variable and instead use survival, which more closely aligns with the concept of natural selection. In this paper, we respond to this recent critique to articulate the benefits of a Darwinian nomenclature and how this will assist in positioning the dynamic capabilities view as an independent, though complementary, theory to the resource-based view. However, we do clearly recognize that until the key terms of variation, selection and retention can be operationalized at the routine, firm and industry level, such an approach may not in itself bring the field towards a common understanding of how dynamic capabilities operate in different environments.