Business Group Affiliation and Firm Search Behaviour in India: Responsiveness and Focus of Attention

This paper investigates the effects of organizational form on problemistic search. We contrast how Indian firms affiliated with business groups and unaffiliated firms evaluate performance and react by adjusting their internal technology search and external market search. We propose that, compared with unaffiliated firms, business group--affiliated (BG-affiliated) firms are more externally oriented in setting aspiration levels and more likely to respond to low performance in the market domain. We find support for an external orientation of BG-affiliated firms and find that group affiliation determines the responsiveness to performance feedback in different search domains. The findings suggest a need to add considerations of organizational form and governance to the theory of organizational search.

[1]  Mauro F. Guillén,et al.  Business Groups in Emerging Economies: A Resource-Based View , 2000 .

[2]  Lung-fei Lee,et al.  Identification and Estimation in Binary Choice Models with Limited (Censored) Dependent Variables , 1979 .

[3]  Henrich R. Greve,et al.  Japan's Network Economy: Structure, Persistence, and Change , 2005 .

[4]  Claes Fornell,et al.  A Comparative analysis of two structural equation models : LISREL and PLS applied to market data , 1981 .

[5]  Daniel A. Levinthal,et al.  Perspective - Neo-Carnegie: The Carnegie School's Past, Present, and Reconstructing for the Future , 2007, Organ. Sci..

[6]  Damon J. Phillips.  Organizational Genealogies and the Persistence of Gender Inequality: The Case of Silicon Valley Law Firms , 2005 .

[7]  E. Romanelli,et al.  The New Institutionalism in Organizational Analysis , 1992 .

[8]  M. Hannan,et al.  Structural Inertia and Organizational Change , 1984 .

[9]  D. Hugh Whittaker,et al.  The Japanese Enterprise System: Competitive Strategies and Cooperative Structures. , 1992 .

[10]  Christina L. Ahmadjian,et al.  Keiretsu Networks and Corporate Performance in Japan , 1996 .

[11]  Sea Jin Chang,et al.  Strategy, Structure and Performance of Korean Business Groups: A Transactions Cost Approach , 1988 .

[12]  J. Birkinshaw,et al.  Weight Versus Voice: How Foreign Subsidiaries Gain Attention From Corporate Headquarters , 2008 .

[13]  Aya S. Chacar,et al.  Are emerging economies less efficient? Performance persistence and the impact of business group affiliation , 2005 .

[14]  E. Johnsen.  Richard M. Cyert & James G. March, A Behavioral Theory of The Firm, Prentice-Hall, Inc., Englewood Cliffs, New Jersey, 1963, 332 s. , 1964 .

[15]  Murali K. Mantrala,et al.  Allocating Marketing Resources , 2002 .

[16]  Krishna G. Palepu,et al.  The Evolution of Concentrated Ownership in India Broad patterns and a History of the Indian Software Industry , 2004 .

[17]  Tarun Khanna,et al.  The Evolution of Concentrated Ownership in India Broad Patterns and a History of the Indian Software Industry , 2004 .

[18]  Linda Argote,et al.  A Behavioral Theory of the Firm - 40 Years and Counting: Introduction and Impact , 2007, Organ. Sci..

[19]  Kent D. Miller,et al.  Variable Organizational Risk Preferences: Tests of the March-Shapira Model , 2004 .

[20]  R. K. Hazari,et al.  The structure of the corporate private sector : a study of concentration, ownership and control , 1968 .

[21]  T. Khanna,et al.  Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups , 2000 .

[22]  W. P. Barnett,et al.  Too Much of a Good Thing? Product Proliferation and Organizational Failure , 2001 .

[23]  W. Greene,et al.  计量经济分析 = Econometric analysis , 2009 .

[24]  Jacques Delacroix,et al.  Cosmetic, Speculative, and Adaptive Organizational Change in the Wine Industry: A Longitudinal Study , 1991 .

[25]  Mark Granovetter,et al.  Coase Revisited: Business Groups in the Modern Economy , 1995 .

[26]  H. Greve.  Performance, Aspirations, and Risky Organizational Change , 1998 .

[27]  Andrew Delios,et al.  What determines the scope of the firm over time and around the world? An Asia Pacific perspective , 2007 .

[28]  N. Leff,et al.  Industrial Organization and Entrepreneurship in the Developing Countries: The Economic Groups , 1978, Economic Development and Cultural Change.

[29]  Kent D. Miller,et al.  Situational and institutional determinants of firms' R&D search intensity , 2007 .

[30]  Jan W. Rivkin,et al.  Interorganizational Ties and Business Group Boundaries: Evidence from an Emerging Economy , 2006, Organ. Sci..

[31]  Wei-Ru Chen,et al.  Determinants of Firms' Backward- and Forward-Looking R&D Search Behavior , 2008, Organ. Sci..

[32]  Philip Bromiley,et al.  CORPORATE PLANNING AND CAPITAL INVESTMENT , 1986 .

[33]  Anne S. Miner,et al.  Ugly Duckling No More: Pasts and Futures of Organizational Learning Research , 1996 .

[34]  P. Allison.  CHANGE SCORES AS DEPENDENT VARIABLES IN REGRESSION ANALYSIS , 1990 .

[35]  Henrich R. Greve,et al.  Introduction: A multiunit, multimarket world , 2001 .

[36]  Whitney Berta,et al.  Transfer learning in ongoing and newly acquired components of multiunit chains: US nursing homes, 1991-1997 , 2006 .

[37]  Masahiko Aoki,et al.  The Japanese Main Bank System: Its Relevance for Developing and Transforming Economies , 1996 .

[38]  P. Jones,et al.  Social structure and organisation , 1985 .

[39]  Krishna G. Palepu,et al.  Policy Shocks, Market Intermediaries, and Corporate Strategy: 'The Evolution of Business Groups in Chile and India' , 1998 .

[40]  Chi-Nien Chung,et al.  When and How Does Business Group Affiliation Promote Firm Innovation? A Tale of Two Emerging Economies , 2006, Organ. Sci..

[41]  W. Reinartz,et al.  Balancing Acquisition and Retention Resources to Maximize Customer Profitability , 2005 .

[42]  Henrich R. Greve,et al.  Patterns of Competition: The Diffusion of a Market Position in Radio Broadcasting , 1996 .

[43]  Subimal Dutt.  Report of the Industrial Licensing Policy Enquiry Committee , 1969 .

[44]  Organizations , 1992, Restoration & Management Notes.

[45]  M. Shubik,et al.  A Behavioral Theory of the Firm. , 1964 .

[46]  Jan W. Rivkin,et al.  Estimating the performance effects of business groups in emerging markets , 2001 .

[47]  James G. March,et al.  Adaptive Coordination of a Learning Team , 1987 .

[48]  W. M. Fruin.  The Japanese Enterprise System , 1994 .

[49]  W. Ocasio.  TOWARDS AN ATTENTION-BASED VIEW OF THE FIRM , 1997 .

[50]  C. Barnard.  The Functions of the Executive , 1939 .

[51]  Jeffrey L. Bradach,et al.  Price, Authority, and Trust: From Ideal Types to Plural Forms , 1989 .

[52]  William G. Ouchi,et al.  Markets, Bureaucracies, and Clans. , 1980 .

[53]  Cristiano Antonelli,et al.  A failure-inducement model of research and development expenditure: Italian evidence from the early 1980s , 1989 .

[54]  Steven B. Andrews,et al.  Structural Holes: The Social Structure of Competition , 1995, The SAGE Encyclopedia of Research Design.

[55]  Eric D. Darr,et al.  The Acquisition, Transfer, and Depreciation of Knowledge in Service Organizations: Productivity in Franchises , 1995 .

[56]  Chi‐Nien Chung,et al.  Keeping it all in the Family: The Role of Particularistic Relationships in Business Group Performance during Institutional Transition , 2005 .

[57]  J. March.  Footnotes To Organizational Change , 1980 .

[58]  VissaBalagopal,et al.  Business Group Affiliation and Firm Search Behavior in India , 2010 .

[59]  M. Bolton,et al.  Organizational Innovation and Substandard Performance: When is Necessity the Mother of Innovation? , 1993 .

[60]  A. Ainslie,et al.  Investigating New Product Diffusion Across Products and Countries , 2002 .

[61]  Masahiko Aoki,et al.  The Japanese Main Bank System , 1995 .

[62]  P. Bromiley,et al.  Toward a Model of Risk in Declining Organizations: An Empirical Examination of Risk, Performance and Decline , 1996 .

[63]  Walter J. Ferrier.  Navigating the Competitive Landscape: The Drivers and Consequences of Competitive Aggressiveness , 2001 .

[64]  Hayagreeva Rao,et al.  Overcoming Resource Constraints on Product Innovation by Recruiting Talent From Rivals: A Study of the Mutual Fund Industry, 1986–1994 , 2002 .

[65]  Henrich R. Greve,et al.  Investment and the behavioral theory of the firm: evidence from shipbuilding , 2003 .

[66]  Jitendra V. Singh.  Performance, Slack, and Risk Taking in Organizational Decision Making , 1986 .

[67]  Tarun Khanna,et al.  Business groups and social welfare in emerging markets: Existing evidence and unanswered questions , 2000 .

[68]  P. Bromiley.  Testing a Causal Model of Corporate Risk Taking and Performance , 1991 .

[69]  Joel A. C. Baum,et al.  Dancing with Strangers: Aspiration Performance and the Search for Underwriting Syndicate Partners , 2005 .

[70]  Joel A. C. Baum,et al.  OPPORTUNITY AND CONSTRAINT: ORGANIZATIONS’ LEARNING FROM THE OPERATING AND COMPETITIVE EXPERIENCE OF INDUSTRIES , 1997 .

[71]  Joel A. C. Baum,et al.  Interorganizational Learning and Network Organization : Toward a Behavioral Theory of the Interfirm , 2000 .

[72]  M. Hannan,et al.  The Population Ecology of Organizations , 1977, American Journal of Sociology.

[73]  H. Greve.  A Behavioral Theory of R&D Expenditures and Innovations: Evidence from Shipbuilding , 2003 .

[74]  Michael X Cohen,et al.  A Garbage Can Model of Organizational Choice. , 1972 .

[75]  J. Ruiz Moreno.  [Organizational learning]. , 2001, Revista de enfermeria.

[76]  A. Stinchcombe.  Social Structure and Organizations , 2000, Political Organizations.

[77]  Damon J. Phillips.  A Genealogical Approach to Organizational Life Chances: The Parent-Progeny Transfer among Silicon Valley Law Firms, 1946–1996 , 2002 .

[78]  Frances J. Milliken,et al.  The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration , 1992 .

[79]  Joel A. C. Baum,et al.  Survival-enhancing learning in the Manhattan hotel industry , 1998 .

[80]  Laura B. Cardinal,et al.  Curvilinearity in the diversification–performance linkage: an examination of over three decades of research , 2000 .

[81]  A. Nerkar,et al.  Beyond local search: boundary‐spanning, exploration, and impact in the optical disk industry , 2001 .

[82]  A. Hoffman,et al.  Not All Events are Attended Equally: Toward a Middle-Range Theory of Industry Attention to External Events , 2001 .

[83]  Lisa A. Keister,et al.  Engineering Growth: Business Group Structure and Firm Performance in China's Transition Economy1 , 1998, American Journal of Sociology.

[84]  James R. Lincoln,et al.  Japan's Network Economy: Contents , 2004 .

[85]  T. Khanna,et al.  Business Groups and Risk Sharing Around the World , 2000 .

[86]  Pino G. Audia,et al.  Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry , 2006, Manag. Sci..

[87]  Reinier Kraakman,et al.  Stock Pyramids, Cross-Ownership, and Dual Class Equity: The Creation and Agency Costs of Separating Control from Cash Flow Rights , 1999 .