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Research SummaryWe apply a resource-based view to investigate how the adoption of Artificial Intelligence (AI) affects competitive capabilities and performance. Following prior work on using chess as a controlled setting for studying competitive interactions, we compare the same players’ capabilities and performance across conventional, centaur, and engine chess tournaments. Our analysis shows that AI adoption triggers interrelated substitution and complementation dynamics, which make humans’ traditional competitive capabilities obsolete, while creating new sources of persistent heterogeneity when humans interact with chess engines. These novel human-machine capabilities are unrelated, or even negatively related, to traditional capabilities. We contribute an integrated view of substitution and complementation, which identifies AI as the driver of these dynamics and explains how they jointly shift the sources of competitive advantage.Managerial SummaryAI-based technologies increasingly substitute and complement humans in managerial tasks such as decision making. We investigate how such change affects the sources of competitive advantage. AI-based engines’ adoption in chess allows us to investigate competitive capabilities and performance in human, AI, and hybrid settings. We find that neither humans nor AI in isolation explain performance differences in the AI and hybrid settings. Instead, a new decision-making resource emerges at the human-AI intersection, which drives performance but is unrelated or even negatively related to humans’ original capability. Our results document how AI adoption changes the sources of competitive advantage and, in turn, requires managers to develop new capabilities to stay relevant in an AI-based competitive landscape.

Digital firms tend to be both narrow in their vertical scope and large in their scale. We explain this phenomenon through a theory about how attributes of firms' resource bundles impact their scale and specialization. We posit that highly scalable resource bundles entail significant opportunity costs of integration (versus outsourcing), which simultaneously drive "hyperspecialization" and "hyperscaling" in digital firms. Using descriptive theory and a formal model, we develop several propositions that align with observed features of digital businesses. We offer a parsimonious modeling framework for resource-based theorizing about highly scalable digital firms, shed light on the phenomenon of digital scaling, and provide insights into the far-reaching ways that technology-enabled resources are reshaping firms in the digital economy.

Scholars and managers routinely point to various uncertainties in explaining why manufacturing firms struggle with green product innovation and why green product innovation is different from conventional product innovation. This explanation is yet unsatisfactory as a thorough understanding of how a firm deals with uncertainty exists in conventional innovation literature. At the same time, there is a lack of agreement and understanding how a firm's capabilities shape its green product innovation practices, which could contribute to this gap. Based on a case study at five multinational manufacturers, this paper sets out to contribute to the capability perspective on green product innovation by understanding how manufacturing firms learn and innovate in order to make and sell greener products. A powerful and favored way for firms to learn and innovate under uncertainty is through strategic ambidexterity. With this learning strategy, firms rely on existing competences in one area (exploitation) while they simultaneously explore new competences in another area (exploration). However, our results show that strategic ambidexterity is oftentimes unachievable due to several factors, and as result, firms are forced to choose between a highly uncertain and risky alternative strategy and a more conservative but also less green strategy based on exploitation only, which is often the preferred option. In addition, our findings shed a new light on the role of uncertainty in green product innovation as we conclude that uncertainties firms face in green product innovation are indeed abundant, but are fundamentally not new nor caused by external sources only.

This paper aims to study the performance implications of sustainable product attributes (SPA) of US manufacturing firms. Specifically, it analyzes the influence of aggregate and disaggregated SPA on firm profitability. The study further explores the moderating influence of marketing resource intensity on aggregate and disaggregated SPA and firm profitability relationships. The fixed-effect regression analysis of 433 US manufacturing firms’ panel dataset reveals that aggregate and disaggregated SPA positively influence the firm profitability. The moderation analysis also confirms the positive influence of marketing resource intensity on aggregate and disaggregated SPA and firm profitability relationship. The current paper contributes to the triple-bottom-line and theory-of-the-firm literature streams by empirically studying the influence of aggregate and disaggregated SPA on firm profitability. Furthermore, this study uses the resource-based view to complement theory-of-the-firm model of SPA and empirically study the moderating role of marketing resource intensity between aggregate and disaggregated SPA and firm profitability. Finally, the findings inform the managers of the increased firm profitability by aggregate and disaggregated SPA, and the pivotal role of marketing resource intensity in strengthening the positive influence of aggregate and disaggregated SPA on US manufacturing firms’ profitability.

The aim of this research is to understand the complex and relatively understudied relationship between human and behavioral factors and low‐carbon management practices from the perspective of the resource‐based view (RBV). Research application is in the “biodiversity sector” and consists of a survey and multiple‐case study in Brazil, the richest country globally in terms of biodiversity but a country that also faces challenges in protecting biodiversity. The research problem considers the relationship between human critical success factors and the adoption of low‐carbon management practices. Quantitative analysis through structural equation modeling shows the three branches of hypothesis to be accepted—the first with a higher coefficient than the second and the second with a higher coefficient than the third. It was observed that human factors influence low‐carbon product management practices the most, followed by process practices and finally logistics practices. Qualitative multiple‐case study research shows that companies are at different stages of maturity in relation to low‐carbon management organizational practices, ranging from the highest stage to the lowest. It was found that the intensity of the presence of human critical success factors was higher where organizations had greater adoption of low‐carbon management practices.

The greatest competition among rivals in many industries is not for market share but human capital. In the so-called talent war, organizations compete aggressively to attract star employees—individuals with disproportionate productivity and external visibility—in pursuit of competitive advantage. Building on human capital and resource-based view theories, we argue that firms’ compensation strategies are influenced by the intangible assets that define stars. With data from Major League Baseball, we find that organizations are likely to pay higher wages to stars based on their prior performance and visibility. Furthermore, our data indicate that firm competitive position influences which of these intangible assets holds greater value for managers. We discuss the implications of these findings for organizations waging war for talent and suggest directions for future research on a matter that is far from over.

This study investigates the relationship between environmental management practices (EMPs) and financial performance (FP) and consequently ascertains whether environmental performance (EP) can mediate the EMPs–FP nexus. Distinctly using data envelopment analysis and generalised method of moments techniques to analyse a comprehensive dataset of Nikkei 225 listed firms from 2007 to 2018 (1920 firm-year observations), our findings first suggest that EMPs have a positive effect on FP. Second, the desired EP can be achieved through the adoption of comprehensive EMPs. Third, improved EP has a substantial impact on shaping the EMPs' effect on FP. These findings are consistent with the predictions of resource-based view and institutional theories. The results are robust to controlling for different types of alternative measures and endogeneities. The findings have important implications for academics, investors, managers, policymakers and regulators.

Strategic human resource management (SHRM) has been an important strand of research in the HRM field for over three decades, and has attracted heated debates in recent years. One main critique of the state of SHRM research is its increasing detachment from HRM practice, in the pursuit of more theoretical rigor and methodological sophistication. Our review article has two main tasks. First, we review SHRM research published in two leading HRM journals—Human Resource Management and Human Resource Management Journal—in the light of the criticisms on SHRM research and use this as a backdrop of our second task. Second, we critically examine SHRM research conducted in the Chinese context by drawing on a systematic review on extant literature. In doing so, we draw on a wider range of HRM journals such as Human Resource Management Review, The International Journal of Human Resource Management, and so forth. We find that while the trend of psychologization in SHRM research is gathering pace, the range of theoretical perspectives mobilized to inform the studies is actually expanding. We call for SHRM research to be more contextualized and more practical phenomenon‐driven SHRM research. We indicate several avenues for future research, using China as an example.

This study aims to examine how stakeholder pressure, managerial perceptions, and resource availability influence the adoption of sustainable operations (SO) in Chinese manufacturing firms. A conceptual model is proposed on the basis of relevant literature and tested using structural equation model (SEM) with data from 217 Chinese manufacturing firms. The results show that stakeholder pressure is grouped into three categories: governmental pressure, primary stakeholder pressure, and secondary stakeholder pressure. Among the three kinds of stakeholder pressure, only primary stakeholder pressure can significantly affect SO adoption. Moreover, the results reveal that managerial perceptions of SO and resource availability significantly influence the adoption of SO. Additionally, the results indicate that the relationship between resource availability and SO adoption is partially mediated by managerial perceptions of SO and that the relationship between primary stakeholder pressure and SO adoption is fully mediated by managerial perceptions of SO. This study provides some implications for both policy makers and firm managers and meanwhile suggests limitations and opportunities for future research.

Organizations partner for strategic reasons and sustainability is a strategic opportunity. However, organizations' strategic engagement in sustainability partnerships has been mainly qualitatively studied. This research aims to determine if structures, a key component of the strategy, are implemented within organizations when joining sustainability partnerships, whether organizational structures mediate between goals and outcomes achieved from partnering, if highly structured organizations achieve highly valued outcomes, and if organizational structures differ according to the sector. Data from 224 organizations from the public, civil society, and private sectors partnering in large cross‐sector partnerships for the sustainability of four cities were collected and quantitatively analyzed finding that structures are implemented by organizations when partnering for sustainability, that is, sustainability partnerships are strategic; structures do not mediate between goals and outcomes; being highly structured is not enough for accomplishing valuable outcomes; and informal structural features are the most implemented by organizations, with public sector organizations differing from other sectors.

In the presence of environmental policy, how do regulated firms respond? The answer is crucial for the design and effectiveness of policy regimes intended to mitigate environmental damage. We investigate whether particular types of firms are more likely to be proactive; in other words, which firms tend to behave in a manner most consistent with the desired policy outcomes. Using data on per-firm 'verified' and 'allocated' emissions from the European Union's Emissions Trading System (EU ETS) from 2005 till 2016, and given that some firms exceed or undershoot the allocated allowances by a large margin, we posit that this and related measures are useful proxies for a firm's proactiveness in responding to environmental policy. We find that public firms are less likely than private firms to be proactive, whilst the same is found for firms in common rather than civil law countries and for state-owned firms. Strikingly, proactiveness is associated both with greater reductions in greenhouse gas emissions and poorer firm performance, suggesting there is an economic cost to good environmental behaviour. Whilst the EU ETS is reducing emissions, it is not yet adequately compensating proactive firms or penalizing those who pollute - better system design could aid this further.

Research summary The network resources a firm can access through its strategic alliances are critical precursors to innovation: They provide the information and know‐how needed to generate new knowledge. Yet prior literature has not directly considered the congestion of network resources stemming from constraints on their capacity to be applied without loss of value across multiple settings. I examine the degree to which this form of resource congestion influences the innovation benefits a focal firm realizes from its alliance portfolio. In a panel dataset of biopharmaceutical firms, I find that the knowledge‐based resources of a focal firm's alliance partners can be congested due to multiple claims on these resources from the firm's partners’ partners. This insight bridges the network and resource‐based perspectives on alliances and innovation. Managerial summary Strategic alliances are an essential tool for managers in knowledge‐intensive settings: They allow firms to access diverse information and know‐how which can be of critical importance as inputs to the innovation process. What managers may overlook, however, is that the knowledge‐based resources of their alliance partners can be congested due to competing claims on these resources from the other alliances in which their partners are engaged. In such cases, firms may end up competing for resources such as partner time and attention with their partners’ other partners. Consequently, when engaging in alliances, managers should be attentive not only to the knowledge resources an alliance partner may hold but also to whether these partner knowledge resources may ultimately be congested due to their partners’ other relationships.

Environmental information transparency is a key policy instrument in environmental governance, which has been emphasized in most of the literature. Although a large body of research has focused on its role at the national or industrial level in the developed countries, few studies have extended it to emerging economies and tested its role in the subnational context. In this paper, we have empirically examined how government environmental disclosure shapes corporate environmentalism in the context of China. It is argued that the information transparency of government environmental disclosure can promote corporate environmentalism by providing supports for governments' decision‐making of environmental governance, the activeness of environmental nongovernment organizations, and the participation of general public in environmental issues. Especially, we have highlighted two kinds of influences on focal relationship: booster role of bureaucratic capability in the diffusion of environmental institutional pressure and receiver role of organization slack and industrial competition in the perception of environmental institutional pressure. Using a panel dataset of Chinese publicly listed firms from 2008 to 2015, a positive relationship between government's environmental information transparency and corporate environmentalism is found. In addition, our result has shown that this relationship will be stronger for regions where government bureaucracy capabilities are stronger. This study contributes to understanding of the process of firms' strategic choice facing environmental and institutional changes in emerging economies.

This paper investigates and explores the link between the resilience of organisations, its human capital and firm performance. We base our analysis on the resource based view of the firm, cluster strategy and conservation of resources theories. Our contribution is contextualized by comparing the performance of business clusters across two observational periods, namely pre-recession (2005-2007) and recession (2008-2009) period. We identify six relevant indicators from the extant literature that capture economic dynamism, human capital and financial viability of firms in order to capture the performance across clusters and capture resilience to the global financial crisis. We contribute by identifying organisations in business clusters that perform better due to being more resilient, particularly during challenging times. Through triangulation we find overwhelming evidence of the overarching role and importance of human capital (people) in driving more successful organisations in business clusters as they possess greater resilience during challenging times such as the recent global financial crises. We show that strong clusters not only improve regional employment and turnover growth over time, but improve resilience of regional economies to downturns through resource gain and crossover processes. We further illustrate that understanding the impact of resource reservoirs, resource passageways and crossover provides a framework for further research and intervention to promote resilience in organisations.

We study how state ownership affects the international expansion of emerging-market firms. Building on agency theory and the resource-based view, we propose an S-curve relationship: Firms with a low level of state ownership have a limited level of international expansion, those with a medium level of state ownership have an increasing level, and those with a high level of state ownership have a decreasing level. This S-curve is the outcome of the interaction between the “hindering hand” of state ownership, arising from multilevel agency problems, and the “helping hand,” arising from state-ownership advantages. Analyses of 674 publicly traded firms from 16 emerging markets support these ideas and reveal that the inflection points in the S-curve appear at state-ownership levels of 20 percent and 43 percent.

Australian supermarkets had one of the highest levels of concentration among developed economies by 2000. This paper explores the making of a duopoly comprising Coles and Woolworths. We present historical data on market shares in Australia and international comparisons for around 2000. We identify the evolution of their dynamic capabilities through the lens of Teece, Pisano and Shuen's positions, paths and processes (1997). The industrial organisation literature stresses interaction become rivals, notably pre-emptive strategies including sunk costs (Lee and Ng 2007; Sutton 1991). We argue that the development of dynamic capabilities enabled the execution of various pre-emptive strategies.

We argue that while the business model construct may not be entirely new, it can still provide a novel lens, complementary to Resource Based View and Market Positioning, to develop new theoretical insights in strategy. We propose that the consideration of interdependencies among the activities of a business model provides such a lens. We show that by starting strategy development with interdependencies among activities, we can: (i) develop new insights on how to build superior strategies; and (ii) explain company performance variance especially when heterogeneity in resources and capabilities is not strong and barriers to imitation are weak. Overall, we propose that a promising research avenue for the business model literature is to integrate complexity theory with demand-side and supply-side theories of strategy to generate more nuanced insights on what activities to connect and how to develop superior interdependencies among activities that can form the basis of superior strategies.

Research Summary This paper presents a formal model of how higher‐order resources affect profit persistence. Higher‐order resources provide an abstract representation of dynamic capabilities, and are defined as resources that do not affect profit directly, but can affect other resources that in turn affect profit over time. The model shows that higher‐order resources lead to persistence not only in the level of profit, but also in its growth. Estimation of the model using empirical profit data of more than 4,000 U.S. firms over 30 years implies an average duration of competitive advantage of about 18 years, which is almost four times as long as implied by traditionally used autoregressive models that exclude the effect of higher‐order resources. Managerial Summary If firms want to make more profit than their competitors for prolonged periods of time, they must have access to resources that competitors cannot effectively obtain, such as brands, patents, captive customers, or specialized plants. This paper shows that not only these “operating resources” drive long‐term profit differences across firms, but also “higher‐order resources,” such as strategic planning, M&A capabilities, and superior forecasts. Such higher‐order resources do not affect profits directly, but allow firms to obtain superior operating resources over time. A mathematical model incorporating higher‐order resources suggests an average duration of competitive advantage of about 18 years, almost four times as long as implied by traditionally used models.

Research Summary: We use a formal model, motivated by a case study from the airline industry, to consider an industry structure wherein a firm may find that improving its competitiveness hurts its performance. Specifically, we examine the possibility that a superior incumbent may, by getting stronger, drive a weak rival from the market, and thereby allow a stronger rival to enter in its place. Such “adverse competitor replacement” reduces the profit of the superior incumbent and may even, in an extreme case, cause the superior incumbent to be driven from the market as well. We show that adverse competitor replacement can arise under a rational equilibrium and may become more likely if a firm improves its capability for self‐improvement. Managerial Summary: Managers are consistently advised to improve the competitiveness of their firms and beat the competition. We examine the possibility that beating out the competition may have adverse consequences. Specifically, a strong incumbent may, by getting stronger, outcompete a weaker rival to such an extent that the weaker rival exits the market, thereby creating an open market niche for a stronger rival to enter, in effect, a form of adverse competitor replacement. Competing with this stronger rival may in turn reduce the strong incumbent's profits below what they had been before driving the weak rival out. We illustrate adverse competitor replacement with a case study from the airline industry and discuss implications for a firm's investment in its own competitiveness.

Based on an extensive literature review on intelligent cities, smart cities, and happy cities, and on their conceptual connections with citizens' well†being, quality of life, and happiness, we developed a resource†based view on City Quality: the PESNAT (political, economic, social, natural, artificial, and technological) framework. The concept of City Quality rests on the idea of cities interconnected sub†habitats—PESNAT—which are powerful analytical categories needed for understanding cities as complex and intricate loci. This framework eventually aims at assessing the cities' power to attract businesses and people, to contribute to a sustainable development of the city and an increased quality of life. Furthermore, two hypotheses are outlined regarding the level of importance of each sub†habitat in relation to happiness, and the level of controversy of each one for citizens, city planners, and decision makers.

In this paper, we provide an introduction to the Special Issue entitled ‘Divide and Rule? The Emergence and Implications of Increasingly Disaggregated and Dispersed Headquarters Activities in Contemporary Firms’. The purpose is two-fold. First, we propose a conceptualization of headquarters activities as a dynamic system in which activities can be distributed organizationally and spatially. We explicitly break with the dominant view of the prior research on ‘the headquarters’ as a single, identifiable unit in one specific location. Second, building on the manuscripts accepted for publication in this Special Issue, we outline research implications and put forward an agenda for research on the emergence and continuous management of disaggregated and dispersed headquarters systems.

Research Summary: This article proposes a formal organizational economics approach to strategic management. Using a Property Rights Theory (PRT) framework, it rationalizes and provides a constructive contribution to two of the main strategy theories: the Resource-Based View (RBV) and Porter Generic Strategies (PGS). The article shows that the welfare maximizing PRT conditions that characterize the existence and boundaries of a firm parallel both the RBV and Porter conditions for a sustainable competitive advantage, and provides a formal rationalization of Barney’s categorization of resources and Porter’s generic strategies. The article reveals some underexplored aspects of current informal theories, and extends their scope with the integration of strategic networks of complementors and social welfare considerations, opening up new avenues for research. Managerial Summary: This article brings two new insights for managers. First, showing that a firm can garner rents when it is a socially optimal form of organization for the assets it controls, it rationalizes the importance of control and adds a social welfare perspective to strategy. The Resource-Based View (RBV) and Porter Generic Strategies (PGS), besides theories of competitive advantage, can also be viewed as theories of control. Second, taking into consideration the growing importance of networks and complementors in the knowledge economy, this article highlights the strategic importance of two resource characteristics—collaborative and easy to combine—and opens up new doors for the consideration of two business strategies for managers—platform and coordination—in addition to the traditional cost, differentiation, and focus strategies.

With the deterioration of the environment and the shortage of natural resources, firms are facing increasing pressures to implement environmental management practices in their daily operation management. Drawing on institutional theory and environmental management literatures, this research tries to explore how institutional pressures motivate firms to implement environmental management practices, and how such effects are moderated by firms' environmental commitment and resource availability. The results of a survey of 188 Chinese firms suggest that regulatory pressures and normative pressures are positively and significantly related to firms' propensity to implement environmental management practices. Moreover, the results indicate that firms' environmental commitment positively moderates the relationships between institutional pressures and environmental management practices, while firms' resource availability plays different roles depending on the types of pressure (regulatory or normative pressures). Implications and suggestions for future research are provided. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

In this retrospective article, we outline the rationale for starting Strategic Entrepreneurship Journal. We provide evidence on the percentage of published papers in SEJ in each of 10 key themes in strategic entrepreneurship identified when the journal was founded. Evidence on progress toward goal achievement in terms of trends in submissions, desk reject and acceptances rates, and downloads, plus examples of highly cited papers and entry into key indicators such as the Financial Times list of 50 journals. We outline developments in strategic entrepreneurship and their implications for future research, notably the need to consider multiple levels of analysis and the role of context variety. Finally, we discuss some of the lessons we learned from SEJ in terms of general challenges that arise in starting a new journal. Copyright © 2017 Strategic Management Society.

Research summary Strategic human capital research sits at the intersection of strategy and employee mobility research. Employee entrepreneurship research sits at the intersection of entrepreneurship and employee mobility research. We demonstrate how a shared focus on labor market frictions connects these two complementary but largely disparate literatures through their mutual emphasis on employee mobility. Our examination of the impact of various labor market frictions on employee mobility to competitor firms and employee transitions to entrepreneurship suggests that the outcomes of some frictions are divergent across the two literatures, the outcomes of some are aligned, and the outcomes of some are ambiguous. The complex interplay of labor market frictions provides opportunities for future research specifically exploring the intersection of the strategic human capital and employee entrepreneurship literatures. Managerial summary Our research suggests that some factors that prevent employees from leaving their employers to join competitor companies may also keep those employees from leaving to start new companies. Other factors that prevent employees from leaving their employers, however, may actually encourage employees to leave to start new companies. We identify areas for future research to help us understand better when companies’ efforts to hold on to their workers are effective at preventing both movement to competitor companies as well as to entrepreneurship. Copyright © 2017 Strategic Management Society.

Prior research provides evidence that lesbian, gay, bisexual, and transgender (LGBT)-supportive corporate policies are related to important human resource functions, such as enhanced recruitment and retention. In addition, prior research indicates that investors view the adoption of such policies positively. We examine the firm-performance mechanisms underlying favorable stock-market reactions based on an integration of perspectives from corporate social responsibility and the business case for diversity. Specifically, we estimate a hierarchical linear model (HLM) to account for the nested nature of our data (firms nested within states) and find that (1) the presence of LGBT-supportive policies is associated with higher firm value, productivity, and profitability; (2) the firm-value and profitability benefits associated with LGBT-supportive policies are larger for companies engaged in research and development (RD and (3) the firm-value and profitability benefits of LGBT-supportive policies persist in the presence of state antidiscrimination laws. In supplemental analyses, we find that firms implementing (discontinuing) LGBT-supportive policies experience increases (decreases) in firm value, productivity, and profitability. We are among the first to link LGBT-supportive policies specifically to financial performance outcomes as well as to develop and test a multilevel model of these relationships. Our results have important implications for theory and research on LGBT issues in organizations, human resource managers, and policymakers.

Research summary: The dominant view has been that businesses that are more related to each other are more often combined within diversified firms. This study uses a dynamic model to demonstrate that, with inter-temporal economies of scope, diversified firms are more likely to combine moderately related businesses than the most-related businesses. That effect occurs because strong relatedness reduces redeployment costs and makes firms redeploy all resources to better performing businesses. The strength of that effect depends on inducements for redeployment measured as the current return advantage of one business over another business, volatilities of business returns, and correlation of those returns. This study develops hypotheses for those relationships and suggests empirical operationalizations, encouraging empiricists to retest the implications of relatedness for the dynamics of corporate diversification. Managerial summary: It is believed that diversified firms are more likely to combine more-related businesses because relatedness enables sharing of resources between businesses. Indeed, a firm can apply knowledge created in one business to another business, avoiding costly duplication in knowledge development. Resource sharing also adds value when a firm offers several products, adding the convenience of one-stop shopping and charging higher prices. However, resource sharing is not the only motivation for corporate diversification. In environments where profitability of businesses changes frequently, firms diversify by redeploying part of resources from an underperforming business to a better performing business. This study uses a dynamic model to demonstrate that, with that second motivation for corporate diversification, firms end up combining moderately related businesses rather than the most-related businesses. Copyright © 2017 John Wiley & Sons, Ltd.

German Mittelstand firms are globally recognized for their innovation, especially regarding product, process, and service innovation. So what can scholars and managers across the globe learn from the success story of German Mittelstand innovation? Drawing on information collected on innovative Mittelstand firms and extant knowledge on innovation, the resource-based view, and family firm research, the authors investigate how these highly innovative firms flourish and achieve high innovation performance despite the severe financial and human capital resource constraints they face as compared with larger corporations. The authors then present a model identifying and integrating six salient traits of such firms that allow them to efficiently orchestrate their resources to innovate and outcompete their competitors in the global market, enabling those firms to overcome their resource-related weaknesses and turn them into strengths. Specifically, these traits are: niche focus and customer collaboration, globalization strategy, preference for self-financing, long-run mindset, superior employee relations, and community embeddedness. The power of this Mittelstand approach takes full effect only when all six traits operate in an integrated fashion, and the proposed resource-based model serves as a starting point for a more holistic and comprehensive understanding of firm ability to innovate and successfully compete within a specific context. The article outlines the implications of the model of German Mittelstand innovation for research conducted in different fields including innovation, entrepreneurship, strategy, dynamic capabilities, ecosystems, and family business. Finally, the article proposes a future research agenda aimed at improving current understanding of the German Mittelstand “innovation strategy” and its transferability to other contexts, and outlines practical implications for owners and managers worldwide wanting to emulate the German Mittelstand innovation model.

Research summary This study develops a framework that links a typology of spinouts with distinct product/market strategies and the characteristics of localization economies to study location choice. Specifically, we examine focal spinouts and user-industry spinouts entry into generic and market-specific product categories and localization economies related to the focal industry and to downstream, user industries. We test our hypotheses on a sample of 413 spinouts in the U.S. semiconductor industry from 1997 to 2007. Our findings show that focal spinouts make different location choices than user-industry spinouts and that such choices are mediated by product strategy at entry. Our results contribute to the literatures on location choice and strategic entrepreneurship. Managerial summary This study concerns the location choices of different types of spinouts at the moment of entry. Our study suggests that location may be a key decision for entrepreneurs to increase their exposure to potential knowledge spillovers. Location, therefore, should not be taken as a given in either studies or business plans related to entrepreneurship. Rather, location needs to be treated as a strategic choice to be exercised by new firms as they enter an industry. Our research also underscores the importance of downstream industries both as a source of entrepreneurship and as a source of knowledge. In some cases, localization economies related to downstream industries might offer greater potential to entrants than localization economies related to the focal industry. Copyright © 2016 Strategic Management Society.

The transition to a low carbon economy demands new strategies to enable organizations to take advantage of the potential for “green” growth. An organization's environmental stakeholders can provide opportunities for growth and support the success of its low carbon strategies, as well as potentially acting as a constraint on new initiatives. Building environmental capabilities through engagement with environmental stakeholders is conceptualized as an important aspect for the success of organizational low carbon strategies. We examine capability building across a range of sectors affected by the sustainability agenda, including construction, rail, water, and health care. We identify a number of emergent environmental stakeholders and explore their engagement with the development of environmental capabilities in the context of the transition toward a low carbon economy. Our conceptual framework offers a categorization of environmental stakeholders based on their position in relation to a focal organization and the potential for the development of environmental capabilities.

The resource-based view (RBV) of the firm has been consistently used as a backdrop in strategic human resource management (SHRM) research and has the potential to bridge the ‘micro–macro’ divide. The tension between the SHRM and the strategic human capital literature, however, signifies that RBV has not reached its potential. In this paper, we begin with a brief review of the conceptual logic linking human resource management (HRM) practices and firm outcomes that aim at highlighting the different treatment of RBV in the SHRM and strategic human capital literatures. We then propose a conceptual model that suggests that HRM practices are not simple levers that enable firms to create sustainable competitive advantage, as most of the strategic human capital research postulates. On the contrary, we argue that HRM practices can contribute to a firm's sustainable competitive advantage not only by enhancing employees' ability, and offering motivation and opportunities, but also by shaping supply-side and demand-side mobility constraints.

Based on a sample of 208 Turkish firms, this paper investigates the integration of two management systems, quality management and environmental management, and explores the effect of this integration on firm performance. First, a conceptual framework was developed, relying on the premises of the resource‐based view. Second, mediating roles of quality performance and environmental proactivity were examined on the association between integrated quality and environmental management systems and firm performance. Among the underlying trends, both quality performance and environmental proactivity were found to fully mediate the relationship between integrated quality and environmental management and firm performance.

Research summary: Building on research in strategic management that has found that high levels of pay dispersion are detrimental to firm performance; we examine the potential dependence of those findings on similar dispersion in the latent potential of those resources to contribute to performance. We find that congruence between resource value dispersion and pay dispersion is positively related to organizational performance. Additionally, we find that this congruence moderates the effects of both organizational resources and organizational pay levels on organizational performance. These findings contribute to a growing line of research that explores the implications of key human resource value and pay combinations for organizational performance. Managerial summary: While differences in income between key employees (i.e., dispersed pay) can instill feelings of inequity and be detrimental to organizational performance, such differences may also increase the odds of attracting star talent and help performance. In the context of Major League Baseball (MLB), we find that performance improves when dispersions in pay are congruent with the dispersion in the contributions that team members make to their organizations. We also find that the positive effects on performance of higher total pay and of level of organizational talent are enhanced by congruent pay and contribution dispersions. These findings suggest organizations may benefit from consistent dispersions in pay and talent and that important contributions by key organizational members need to be visible when organizations have dispersed pay structures. Copyright © 2016 John Wiley & Sons, Ltd.