Adaptation to Temporal Shocks: Influences of Strategic Interpretation and Spatial Distance KILHO SHIN

Transcription

1 Adaptation to Temporal Shocks: Influences of Strategic Interpretation and Spatial Distance KILHO SHIN

2 Contents Introduction Theoretical Background Hypotheses Methods Results Discussion

3 Introduction

4 Introduction Perez-Nordtvedt et al., (2014), research on firms responses to environmental disruptions has focused on the what and how of strategic adaptation rather than when. This is an important omission in the adaptation literature in the field of strategic management. The purpose of this study is to investigate how temporal adaptation (TA) serves as a response of business owners to the environmental disruptions.

5 Theoretical Background

6 Theoretical Background How firms cope with the changing environment and its impact on strategies, structures, processes, and performance have been theoretically and empirically investigated by researchers (Goll & Rasheed, 2011; Hambrick & D Aveni, 1988). Successful adaptation to its environment depends on decision makers who identify opportunities and threats, develop strategies, assemble resources and operate the strategies (Child, 1972). The major concentration of strategic adaptation has mostly focused on contents analysis such as what processes to adopt or structure analysis such as what organizational design to use (Ginsberg & Venkatraman, 1985). Modification to the timing of firm activities (TA) has received less attention at the time when environmental disruptions occur.

7 Theoretical Background

8 Hypotheses

9 Hypotheses: H1 Opportunities are likely to lead to positive outcomes (Dutton & Jaclson, 1987). Business owners search their business opportunities in which they exploit idea (Dutton, 1993), deploy resources, take strategic actions, and ultimately improve their competitive position in the market. Therefore, business owners who perceive environmental changes as opportunities would have strong TA intentions Hypothesis 1: Perceived opportunity is positively related to TA intentions.

10 Hypotheses: H2 Threats imply situations where a firm faces business crisis and negative outcomes (Dutton & Jackson, 1987). The probability of not meeting aspiration levels of outcome spurs decision-makers to go on searching for alternatives (Greve, 2010). Hypothesis 2: Perceived threat is positively related to TA intentions.

11 Theoretical Background

12 Hypotheses: H3 Fellmann, Getis and Getis (1997), proximity to the disruption increases interaction between the change and the firm. The spatial proximity is closely related to the amount and accuracy of information Among the decision makers, those who operate their firm spatially near to the event would be more actionable and active to change their strategy Hypothesis 3: The positive relationship between perceived opportunity and TA intentions will be stronger with shorter spatial distances than longer spatial distances.

13 Hypotheses: H4 The business owners who perceive the disruption as a threat and whose firms are closer to the event might feel endangered of their business. Among the owners, those who operate their firm spatially near to the event would be more actionable and active to change their strategy Hypothesis 4: The positive relationship between perceived threat and TA intentions will be stronger with shorter spatial distances than longer spatial distances.

14 Theoretical Background

15 Hypotheses: H5&H6 Individuals are continuously engaged in the criterion and adjustment of personal conception about their environment (McNamara, 1986; Tversky, 2000) Personal conception reflects a number of biases including overemphasis on near and larger structures and underemphasis on further and smaller structures (Lee & Tversky, 2005). Hypothesis 5: Perceived opportunity mediate the relationship between spatial distance and TA intentions. Hypothesis 6: Perceived threat mediate the relationship between spatial distance and TA intentions.

16 Methods

17 Methods: Empirical context The Dallas Cowboys, a professional American football team, is one of the most well-known and highly valued sports franchises in the world (Associated Press, 2008). Relocation of Dallas cowboys (AT&T) stadium served as a temporal disruption in Arlington.

18 Methods: Data Collection Data: Dr. Prerez-Nordtvedt, department of management, college of business administration, University of Texas at Arlington. Data Type: survey and archival data Geographic sampling area: 10-mile radius from the Stadium Response rate : 84.5 %, which yielded total 169 sampled firms Sample representation: Arlington businesses in various industry Small sized firm: median size - 14 employees Firm age: median age - 7 years Distance: median distance miles

19 Methods: Measures A set of questions was based on Thomas, Clark, and Gioia (1993). Perceived Opportunity (1) new stadium is mainly good for my business, (2) new stadium is creating positive opportunities, and (3) new stadium is providing benefits to my firm overall. Perceived Threat (1) new stadium is primarily a threat to my firm s interests, (2) new stadium will make my business worse off in the future, and (3) new stadium puts competitive pressure on my firm s goods/services. 7 point-likert-scale: not at all (1) to a great extent (7).

20 Methods: Measures TA Intentions: how much the business owners would increase/decrease the following time-related activities in response to the disruption: (1) how long my business stays open each day (2) how many days my business operate during the week (3) how long my business s busy or peak season will be (4) the number of hours employees will work. 7-point-Likert scale was used; 1= major decrease, 2 = decrease, 3 = minor decrease, 4 = no change, 5 = minor increase, 6 = increase, and 7 = major increase.

21 Methods: Measures A set of control variables firm age, size, industry, owner, and supported tax referendum

22 Methods: Results Table 1 Descriptive Statistics and Correlations Variable Mean s.d TA 2. AGE 3. SIZE 4. INDUST 5. OWNER 6. VOTE 7. PO 8. PT 9. DIST ** p < 0.01 level (2-tail) * p < 0.05 level (2-tail) ** ** 0.157* ** ** * * ** ** **

23 Methods: Results Analyses method: Hierarchical regression analysis in SPSS

24 Methods: Results Table 2 Variables (DV= TA) Model 1 (CVs) Model 2 (IVs) Model 3 (Mod) Model 4 (Mod) AGE SIZE INDUST 0.184* OWNER VOTE 0.263** DIST PO 0.279** 0.25** 0.207** PT PO*DIST * PT*DIST R^ F ** ** 19.37** ΔR^2 ** p < 0.01 level (2-tail) * p < 0.05 level (2-tail) from Model ** from Model ** from Model2.050**

25 TA Intention Methods: Results Graphical verification (the interaction effect between perceived opportunity and spatial distance on TA intentions) : Aiken and West (1991) approach Figure Low Distance High Distance Low Perceived Opportunity High Perceived Opportunity

26 Methods: Results Mediation effect (Hypotheses 5 and 6): Baron and Kenny s (1986) approach (1) An independent variable (IV) significantly affects a mediator (M), (2) The IV significantly affects the dependent variable (DV) in absence of the mediator. (3) The mediator (M) has a significant effect on the DV. (4) the effect of the IV on the DV becomes zero when adding the mediator to the model, which indicates full mediation. If the first three conditions are met but condition (4) is not, then partial mediation is indicated.

27 Methods: Results Table 3 (Mediation) Model 1 Model 2 Model 3 Model 4 Model 5 Dependent variable Perceived Opportunity TA intention TA intention Perceived Threat TA intention AGE * * SIZE E-05 INDUST OWNER VOTE 0.512** * DIST ** ** ** ** PO.201** PT PO*DIST PT*DIST R^ F ** ** ** 2.725* ** p < 0.01 level (2-tail) * p < 0.05 level (2-tail)

28 Methods: Results Table 4 (Bootstrap CIs) Preacher and Hays Process Macro CI CI DIST/PO/TA DIST/PT/TA Predictor Direct effect Mediation effect 2.5%LCI 2.5%UCI 2.5%LCI 2.5%UCI

29 Discussion

30 Discussion Hypotheses 1, 3, and 5 were generally supported, whereas the other three were not supported Perceived Opportunity: Those business owners who perceived the environmental disruption as opportunity were more likely to be involved in time-related adaptations. Perceived Threat: Positive perception may have stronger effect on human perception than negative perception. Distance: it matters on to time-related strategies

31 Discussion Study Comparison: In comparing with the original study (Perez-Nordtvedt, Khavul, Harrison, & Mcgee, 2014), my replication provided somewhat different results especially regarding hypothesis 4. Extension: I additionally included the process macro developed by Preacher, Rucker, and Hayes (2007), which provide bootstrapped confidence intervals. Contribution: Overall, I believe that this study contributes to building a concrete concept of temporal adaptation.

32 Thank You!