Microfoundations of Global Strategy: Role of Leadership and Manager Characteristics

Purpose

Recent trends in much macro-management research, notably microfoundations (Foss & Lindenberg, 2013) and behavioral strategy (Gavetti, 2012), emphasize the role of heterogeneous individuals, top management and their interaction in driving firm-level outcomes.  These approaches stress the interaction between individuals, decisions makers and top management within a firm in understanding its performance and outcomes.  By contrast, in much of the global strategy literature the unit of analysis in studying competitiveness has primarily been the firm or industry. Researchers traditionally have explained firm-level outcomes mainly using firm-level variables, such as capabilities, or industry structure.

Thus, a relatively unexplored research area has been to examine the behavioral and individual-level characteristics of corporate leadership and managers. Important decisions, especially those related to global operations, are made by top managers/the Top Management Team, and endorsed and spearheaded by firm’s leadership/upper echelons.  These decisions are taken by individuals who, depending on the multinational firm involved, may sometimes differ substantially in terms of cultural and educational background, age, education, and so on. The roles of leadership and individual manager characteristics as they relate to intention, choice, action, and interaction (Foss & Pedersen, 2014) have been under-researched.

This special issue seeks papers that will unpack and enrich the global strategy literature by focusing on its microfoundations (individuals and their interactions) as they relate to the firm’s internationalization process, knowledge transfer across boundaries, HQ-subsidiary relationships, global innovation and so on (Griffith, Cavusgil, & Xu, 2008). Papers may also use a behavioral strategy perspective (Gavetti, 2012) relating to leadership and top managers as explanations for the competitiveness and international expansion paths of firms.

Background

Microfoundations research aims at decomposing macro-level constructs (e.g., organizational routines, dynamic capabilities, strategic problem formulation) in terms of actions and interactions of members at various levels in an organization (Baer et al., 2013; Foss & Pedersen, 2014). It suggests that since any macro phenomenon is caused by micro-level mechanisms, it makes sense to focus at the micro level to identify the microfoundations or roots of the phenomenon. Felin and Foss (2005: 452) observed that “[I]ndividuals after all provide the nested antecedent to numerous collective phenomena and thus deserve careful theoretical and empirical consideration in our theorizing.” The same theme echoes in Barney and Felin (2013: 145) who note that “[T]hus, organizational analysis should be fundamentally concerned with how individual level factors aggregate to the collective level”.

The behavioral strategy perspective calls for scholarship that is grounded in cognitive psychology. Behavioral signifies “being about mental processes” (Gavetti, 2012). Executive judgments can be complex owing to self-confirming beliefs, competitive blind spots, self-interested causal attributions, perceptual filtering etc. (Powell et al., 2011: 1377).

Emerging country markets are culturally, institutionally and economically dissimilar or distant from developed country markets (Cuervo- Cazurra, 2012; Khanna & Palepu, 2013) and have a greater likelihood of having family-controlled businesses (Arregle et al., 2012). A subordinate research question is how the microfoundations of emerging market firms influence their international expansion and adaptation in distant markets? How do their mental processes affect collective leadership behavior? The role of leadership and manager characteristics become even more interesting for emerging market firms as they are generally less resource-endowed and often lack world-class managerial and leadership expertise (Contractor, 2013). Gavetti (2012) avers that “when markets are efficient, opportunities for superior …courses of action or strategic opportunities” are more limited than say in emerging markets where “…the behavioral roots of superior opportunities” can have greater play.

Suggested Research Questions

The special issue seeks theoretical or empirical papers that are ideally multidisciplinary in scope and interdisciplinary in content and methodology, and represent cutting-edge research. New or emerging methodologies for empirical studies are particularly welcome. Research questions (illustrative but not exhaustive) are shown below:

• What are the microfoundations of global strategic issues such as internationalization, knowledge transfer, HQ-subsidiary relationship, value chain disaggregation, innovation, competitive advantage etc.?
• How does a micro-foundational or behavioral strategy perspective supplement current conceptual understanding of global strategy decisions and structure?
• How do global strategy microfoundations differ for firms from developed country markets vis-à-vis firms from developing or emerging markets?
• How does the behavioral strategy perspective explain the role of family ownership in explaining competitiveness and internationalization?
• Do top managers in family controlled firms manage mental processes differently than top managers in non-family controlled firms?
• What are the microfoundations perspectives on the so-called “late-comer” advantage which is sometimes the case in the internationalization of emerging market firms?
• How does the microfoundations perspective explain the role of top managers and leadership in managing, interacting and benefitting from social networks and ethnic diasporas?
• Does utilizing a micro-foundational or behavioral perspective in global strategic issues call for new research methodologies?

References

Arregle, J.L., Naldi, L., Nordqvist, M., & Hitt, M.A. (2012). Internationalization of family-controlled firms: A study of the effects of external involvement in governance. Entrepreneurship Theory and Practice, 36(6): 1115-1143.

Baer, M., Dirks, K.T., & Nickerson, J.A. (2013). Microfoundations of strategic problem formulation. Strategic Management Journal, 34(2): 197-214.

Barney, J., & Felin, T. (2013). What are microfoundations? Academy of Management Perspectives, 27(2): 138-155.

Contractor, F. J. (2013). “Punching above their weight”: The sources of competitive advantage for emerging market multinationals. International Journal of Emerging Markets, 8(4), 304-328.

Cuervo-Cazurra, A. (2012). Extending theory by analyzing developing country multinational companies: Solving the Goldilocks debate. Global Strategy Journal, 2(3): 153-167.

Foss, N. J., & Lindenberg, S. (2013). Microfoundations for strategy: A goal-framing perspective on the drivers of value creation. Academy of Management Perspectives, 27(2): 85-102.

Foss, N.J., & Pedersen, T. (2014). Microfoundations in strategy research. Strategic Management Journal, DOI: 10.1002/smj.2362 (accepted article).

Felin, T., & Foss, N.J. (2005). Strategic organization: A field in search of micro-foundations. Strategic Organization, 3(4): 441-455.

Gavetti, G. (2012). Toward a behavioral theory of strategy. Organization Science, 23(1): 267 – 285.

Griffith, D.A., Cavusgil, S.T., & Xu, S. (2008). Emerging themes in international business research. Journal of International Business Studies, 39: 1220-1235.

Khanna, T., & Palepu, K. (2013). Winning in emerging markets: A road map for strategy and execution. Harvard Business Press.

Powell, T.C., Lovallo, D., & Fox, C.R. (2011). Behavioral strategy. Strategic Management Journal, 32(13): 1369-1386.

Submission Instructions
The deadline for submission of papers is May 31, 2016. All manuscripts will be reviewed as a cohort for this special issue and will go through the GSJ regular double-blind review process following procedures established by the journal (see gsj.strategicmanagement.net).

More information:
To obtain additional information, please contact the special issue editors:

·         Farok Contractor, Rutgers Business School: farok@andromeda.rutgers.edu

·         Nicolai J. Foss, Copenhagen Business School: njf.smg@cbs.dk

·         Sumit Kundu, Florida International University: kundus@fiu.edu

·         Somnath Lahiri, Illinois State University: slahiri@ilstu.edu

For questions about submitting to the special issue please contact the GSJ Managing Editor, Sara DiBari (gsjeditorial@wiley.com).