Research

To stay successful over time, large Multinational Enterprises (MNEs) need to renew and transform. Organizations such as DSM, IBM, Nokia, or 3M have reinvented themselves multiple times in their history. However, renewal and transformation of an on-going business at the same time continues to be one the largest managerial challenges and many attempts at transformation fail.  

In this research project we investigate three distinct dimensions of renewal and transformation that have received only limited attention in prior research.

1. CEO and top management team roles in renewal and transformation. We examine the role of the CEO and top management team in instigating renewal. CEO and top management appointments are frequently key mechanisms to redirect the organization and the leadership executives provide in the renewal is an important yet still poorly understood element of renewal and transformation.
2. Corporate initiative programs. We examine the role of large scale corporate initiative programs. Many large firms execute their transformation through a coordinated program of strategic initiatives geared to coordinate and direct efforts. Specifically our research contributes to how firms design and manage these programs.

Organizational mechanisms to explore the future. To build renewal and transformation into the DNA of the organization, firms need to create a steady flow of initiatives that challenge the status quo and explore the future. Our research examines the organizational mechanisms (e.g. CVC investments, corporate accelerator programs, etc.) that large corporations use to create seeds it can base its renewal upon.

There is little doubt that the choice of the CEO is among the most important choices a board can make. However, research shows that there is substantial performance variation in CEO successions suggesting that practices related to the selection of new CEOs and their transition into the role likely differ. In this research program we examine several important questions related to CEO succession:

1. Performance of outside CEOs. The performance of externally hired CEOs often varies substantially. We examine causes related to the experience of outside CEOs and negative sentiment arising related to the appointment of an external CEO.
2. Hiring external CEOs for organizational transformation. External CEOs are often being hired to transform the organization. However, the performance of such external CEO led transformations often disappoints. We examine causes for performance differences based on the process of selection, transition, and initial transformation.
3. Personality characteristics and CEO succession. CEO personality influences how a CEO interacts with the organization and influences his or her leadership style. We examine how important CEO personality traits influence important decisions during CEO succession.

The behavioral theory of the firm originally developed within the Carnegie School has seen renewed attention as a theoretical basis for research in strategic management. Behavioral strategy explains strategic decision-making and firm behavior by drawing upon micro-foundations from cognitive and social psychology.

Developing the theoretical basis of behavioral strategy is one of the core thrusts of the Chair in International Management. Several projects at the chair focus on developing the theoretical basis of behavioral strategy and apply it to explain empirical phenomena such as acquisitions, divestments, organizational change, and risk-taking. In this research program we examine for instance:

1. CEO experience and firm responses to underperformance. In this project, we examine how CEO experience shapes the responses to performance shortfalls.
2. Management focus and organizational adaptation. We examine how organizations utilize knowledge about the structure of the problems they face to guide search for improvements.
3. Cognition, aspirations and processing of performance feedback. Prior research often suggests that performance shortfalls trigger search and organizational change. We investigate how the encoding of performance feedback through aspirations may lead to boundary conditions to this pattern.
4. Organizational experience and performance. Most research assumes that experience with a task leads to improved performance with that task. We develop a framework how in organization this benefit of experience may be reduced due to limits to applicability, limits accessibility and non-adoption of experience.
5. Unlearning and responses to discontinuities. Organizations often fail to adapt to discontinuous changes in the environment. Prior research often suggests that unlearning may play a positive role in addressing this difficulty to adapt. We examine when and how unlearning can help organizations to adjust to discontinuities.

In 2017 volumes of mergers and acquisitions (M&A) continued to exceed 4.5 Trillion USD for the fourth year in a row. Yet, performance of M&A continues to be decidedly mixed with many transactions being disappointing for the acquirer. One of the central research areas of the Chair in International Management continues to be M&A strategies. Research focuses on a variety of related questions:

1. Momentum in M&A. As organizations gain experience in M&A, they often develop momentum in different types of acquisitions. We examine how past experience with small and large acquisitions may lead to acceleration, escalation, de-escalation of acquisition behavior.
2. Processes of M&A. M&A transaction are often prone to strong psychological and social dynamics that may lead to irrational behavior and limit performance. We examine how disciplined acquisition processes during the negotiation stage may limit such negative dynamics.
3. Board of Directors and Firm Sale. Selling the firm is among the most important decisions a board can make. We examine how boards can maximize the returns for shareholders by through the negotiation process.
4. Innovation & Corporate Growth. Technology firms make up an important part of the overall M&A activity. We explore the performance implications of M&A activity in the context of technology firms.  

Successful new product introduction is central to the long-term survival and performance of firms in many technology-intensive industries and in particular in the global pharmaceutical industry. For successful product introduction, a firm needs to assemble a variety of technological inputs into a novel combination that meets the demands of the market. However, the novel combination of technologies, that is invention, is by no means enough for successful new product introduction as several studies have shown. A key finding in the innovation literature is that demand side factors and complementary assets are additional factors that positively affect the likelihood of successful new product development. Despite the broad acceptance that multiple factors may be needed for successful new product development, research is only beginning to examine how these factors interact during different stages of the innovation process.

In this research program, we intend to create a better empirical and theoretical understanding of innovation processes in the pharmaceutical industry by drawing upon resource-based and behavioral theories of strategic management.