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With the increasing availability of digital technologies, many firms are planning to develop digitally-enabled business models. Digital technologies can give an impulse to realign strategies through two channels: Initial use of digital technologies may help firms spot their potential and encourage firms to develop digitally-supported business models, or emerging digital technologies may present a threat to firms, who then initiate a process of strategic renewal to relieve the pressure. We study how the adoption of new digital technologies is associated with changes to the strategy of the firm, and how both are shaped by a firm’s perception of the competitive stress created by new technological developments. Using two detailed survey-based datasets on firms’ expectations, adoption and strategy renewal for a wide range of AI and digital technologies, we find a strong positive association between the degree of strategy change and the adoption of advanced digital technologies. This relationship does not seem mediated by the level of competitive stress from digital technology, which is itself strongly associated with strategy change. Our results suggest a tight coupling between (technological) structure and strategy.

Scholars have been investigating the quick emergence of digital platforms, essentially through the lens of digital native firms. If there is limited occurrence of platforms launched by incumbent firms such as Daimler (Car2Go, Moovel) or Johnson Controls (Panopix), the economics of their strategic responses through platforms by incumbents merit attention. This paper provides the first large-scale empirical evidence on the incidence, nature and profitability of incumbent platforms. Our contribution is threefold: (1) only 10 to 30% of incumbent firms have already engaged in some platform play, with substantial heterogeneity across industries, however; (2) incumbent firms engage in such strategies with a strong focus on their supply chain, suggesting that their platform initiatives are biased toward supply-side economies of scale, rather than demand-side; and (3) platform strategies contribute to revenue and/or profit growth only when they are combined with a priority attached to the demand-side of the business (i.e. customers, instead of the supply chain), typically through the unbundling or rebundling of products or services, and are part of an offensive digital strategy at scale. These results are robust to a Heckman-selection equation and a number of changes to the specification and key measures.

Why are so many on-line banking ventures—start-ups and incumbents alike—foundering? An industry which can theoretically conduct such a high proportion of its transactions electronically would seem well suited to a rapid move on-line. Yet, the rate at which customers around the world are adopting Internet banking remains relatively low; and furthermore the capability to convert or acquire customers on-line varies enormously among banks. This paper attempts to analyze and compare possible drivers of customer acquisition and conversion for European on-line banking at the light of various theories of bank innovations. The econometric model is consistent with “pull” market features playing a significant role, but only for customer conversion . In contrast, bank-specific factors are largely the driver for on-line customer acquisition strategy, especially organizational link to on-line activities and bank size. All in all, this paper confirms that, consistent with the strategic management literature, an “attacker” versus “conversion” strategy obeys significantly different paths, but also that some banks are notably better in executing their strategy than others, on-line.

This paper analyses the decision by firms under Cournot oligopoly as to recognize unions in order to gain market power despite higher costs. Considering classical models of union–firm bargaining, namely right-to-manage (RTM) and efficient bargaining (EB), we show that, for a sufficiently low level of union power EB firms might adopt cost-raising strategies. This theoretical prediction is compatible with some empirical evidence in favour of EB, and adds to the theoretical finding that EB might dominate RTM under unionized Cournot–Nash oligopoly. It also suggests closer antitrust scrutiny as whether unions can provide cartel-like services to oligopoly firms, allowing them to distort product market competition at the expense of consumers.

This paper shows how strategic managerial incentives weaken union power at Cournot-Nash duopoly equilibrium , although, because of a prisoner's dilemma, unions are not averse to those contracts. Thus, one should question whether oligopolists automatically maximize profits when bargaining with trade unions.

This chapter draws on findings from a unique global survey to analyze how Enterprise 2.0 has been adopted in developing economies and how much it contributes to individual company performance. Two results stand out. While the use of social technologies by companies is gaining momentum, adoption remains patchy and still lags in developed countries. Nevertheless, clear evidence exists that Enterprise 2.0 in developing countries, when used at scale, lifts company performance, especially when integrated into workflows and when companies redefine their processes and operating models through social technologies.

This research uses a unique survey on innovation conducted in Belgian high-tech industries to investigate (a) the effects of managerial efficiency on the firm's innovative activity; and (b) the effects of controlling explicitly for managerial efficiency on the Schumpeterian-like relationship that firm size and market concentration are both conducive to innovation. The key findings are: managerial efficiency is an important determinant of the firm's innovation performance; only when one controls for managerial variables considered as success factors for innovation, the Schumpeterian effect of the impact of the firm's market share emerges for a wide range of measures of performance, which confirms Rothwell's suggestion [18] that small firms have a advantage in the management of their innovation.

While a strategic imperative for financial institutions, major differences currently exist among banks' abilities to convert their customers to using the Internet. In addition, not a lot is known as to what drives those differences, although one can easily hypothesize that on-line banking adoption must be due to a combination of demand (“pull”) and firm (“push”) factors. This paper presents a statistical appraisal of the determinants of on-line customer penetration for a cross-sectional sample of the major incumbent banks in Western Europe for the combination of the years 1988 to 2000. “Pull” factors play a large role in explaining customer conversion to Internet banking, yet bank-specific factors (or “push” factors) are not marginal. Among others, banks with traditionally high cost-effectiveness and that already offer wide private ATM coverage for their customers are also the ones which have already started to migrate a larger proportion of their customer base on-line. Interestingly, among all “push” factors analyzed, cost-effectiveness emerges as the largest leverage effect on customer conversion. Finally, a cluster analysis supplements the regression results along the axes of “pull” and “push”, and identifies a set of early movers and laggards among the banks in our sample. Generally speaking, those first-movers already exhibit stronger off-line profitability than laggards, which may indicate that the on-line marketplace may reproduce performance off-line (i.e., currently successful banks have nothing to fear from aggressive start-ups).

The chapter develops a theory of the firm’s capital-labor ratio under unionization of its labor force. Using explicit game-theoretical solutions to union-firm bargaining, it is demonstrated how the firm’s product market power interacts with input allocation in such a way that unionism represents a new channel by which the firm’s capital intensity is related to imperfect product competition. Some tests are conducted on a panel of Belgian manufacturing firms, which confirm both the effects of market power on the capital-labor ratio as well as the diversity of the union-firm bargaining locus at the industry level.