جایگاه کارآفرینی کنترل و استراتژی های رقابتی - اثر تعدیل پویایی زیست محیطی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|22512||2007||24 صفحه PDF||سفارش دهید||11928 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Economic Psychology, Volume 28, Issue 5, October 2007, Pages 566–589
Past research suggests that entrepreneurs with an internal locus-of-control personality trait tend to undertake innovative strategies, whereas their external counterparts tend to prefer low-cost strategies. This paper examines the impact of environmental dynamism on this entrepreneurial locus of control–competitive strategy relationship, arguing that the strategy preferences driven by the locus-of-control personality trait produce unconventional strategy–environment (mis)matches. Drawing upon a social learning theory framework, we examine the competitive strategies of 84 entrepreneurs. The results show that internal entrepreneurs prefer product innovation strategies in stable environments, whereas external entrepreneurs opt for low-cost strategies in dynamic environments. Extant strategy contingency thinking suggests that these unconventional strategy–environment combinations may well lead to business failure.
Research in the past decades into the impact of the chief executive’s personality has revealed that the locus-of-control trait – i.e., the disposition of perceived control – is a stable predictor of a small firm’s performance (e.g., Anderson, 1977, Boone et al., 1996, Brockhaus, 1975, Brockhaus, 1980, Brockhaus, 1982, Kets de Vries, 1977, Lee and Tsang, 2001, Miller and Toulouse, 1986a, Miller and Toulouse, 1986b, Pandey and Tewary, 1979 and Powell, 1992). Several scholars show that the locus-of-control personality trait relates to action orientation, proactiveness, transformational leadership, high information-processing abilities, and a proclivity for complex and unstructured tasks (see, for detailed overviews, Boone et al., 1996, Boone et al., 2005, Miller et al., 1982 and Spector, 1982). Accordingly, persons with a high level of perceived control (internals) have been associated with entrepreneurial behavior and a preference for innovative strategies (Boone et al., 1996, Brockhaus, 1975, Hansemark, 2003, Kets de Vries, 1977, Miller, 1983, Miller and Toulouse, 1986a, Miller and Toulouse, 1986b, Miller et al., 1982 and Mueller and Thomas, 2001), whereas those with a low level of perceived control (externals) have been associated with conservative behavior and a preference for low-cost strategies (Baron, 1968, Boone et al., 1996, Govindarajan, 1989 and Spector, 1982). The central thesis of the current study is that these strategy preferences driven by the locus-of-control personality trait may well produce unconventional strategy–environment (mis)matches. An in-depth examination of why unconventional strategy–environment (mis)matches occur is important, since strategy contingency theorists (Burton and Lauridsen, 2002, Miller, 1988, Miller, 1991 and Porter, 1985) claim that firms with misaligned strategies are likely to fail.1 In the present paper, we focus on dynamic versus stable environments, where dynamism is defined with reference to the nature of and speed at which consumer preferences and producer offerings change. Dynamic environments are characterized by major and rapid changes in consumer preferences and producers’ offerings, and stable environments by gradual changes in consumer preferences and producers’ offerings (Miller, 1988). This implies that future consumer preferences and competitor actions are harder to predict in dynamic environments, due to the disruptive and fast nature of changes in the firm’s environment, than they are in stable environments. For instance, firms competing in dynamic industries such ICT or life sciences face tremendous uncertainties about the viability of their competing technologies and products. When sudden changes occur in customer preferences or in their competitors’ core technologies, these companies may face disastrous consequences (Tushman & O’Reilly, 1996). Therefore, strategy contingency scholars suggest that a product innovation strategy is an effective strategy in a dynamic environment in order to meet or anticipate the changes. In contrast, they suggest that such a strategy does not align well with a stable environment. This is because in stable environments there is not much demand for product changes. Pursuing a product innovation strategy in stable environments increases the chance that the company can ultimately not recoup the costs of its product innovations. Accordingly, this strategy–environment misalignment exposes the firm to the risk of failure. Another strategy–environment misalignment occurs when the firm employs a low-cost strategy in a dynamic environment. Products and methods that help to produce against low costs cannot be altered quickly, which exposes the firm’s current products to the risk of obsolescence. Taking the principles of the strategy–environment (mis)alignment argument into account, financers may face high risks when funding entrepreneurs who fail to match their strategies with the extent of dynamic change in their environments. So far as we know, just a few studies (Miller and Toulouse, 1986a and Miller and Toulouse, 1986b) examined the influence of environmental dynamism on the locus-of-control trait–product innovation strategy relationship. Miller and Toulouse, 1986a and Miller and Toulouse, 1986b report high correlations between internal entrepreneurs and components of product innovation strategies for both high and low perceived environmental dynamism subgroups. However, they do not analyze interaction effects by using moderated regression techniques. Even though their subgroups show quite similar correlations between the locus-of-control trait and product innovation strategies, the form (or slope) of these relationships could be significantly different otherwise (see Cohen & Cohen, 1975, p. 66; Podsakoff, MacKenzie, & Lee, 2003, p. 430). Therefore, the present study takes competitive strategies as a function of the entrepreneur’s locus-of-control personality trait and environmental dynamism in the context of an interaction-effect model. Specifically, we examine the locus-of-control – competitive strategy relationship for two strategic dimensions – i.e., product innovation and low-cost strategies – using objective measures for the moderator environmental dynamism variable. Strategy contingency theory has produced robust findings as to which type of strategies fit with what type of environment (see above). Similarly, Rotter’s social learning theory ( Rotter & Hochreich, 1975) and a great number of empirical studies inspired by this theory have produced robust findings as to which locus-of-control type fit with what type of task environment. This paper argues that the components of Rotter’s social learning theory perfectly align with the very nature of strategy contingency theory, particularly environmental fit reasoning. In essence, Rotter’s social learning theory holds that the individual’s expectancy that certain actions will lead to successful outcomes depends upon the predictability of the task environment ( Krovetz, 1974 and Rotter, 1966). The level of predictability is an important distinction between stable and dynamic environments. Dynamic environments are less predictable than stable environments, because changes in future consumer preferences and competitor actions are often disruptive, occurring at a fast speed, whilst changes in stable environments occur more gradually over time ( Miller, 1988 and Tushman and O’Reilly, 1996). By integrating Rotter’s social learning theory with strategic contingency logic this paper produces a novel perspective on the impact of environmental dynamism on the locus-of-control trait–product innovation strategy relationship. That is, we argue that internal entrepreneurs may perceive that their actions and abilities are more bounded in dynamic environments than in stable environments, because outcomes are more difficult to control due to a higher level of unpredictability in customer preferences and producer offerings. Particularly in environments that are less predictable or more dependent upon chance, social learning theorists suggest that internal individuals tend to perceive that outcomes are less contingent upon their own behavior or more beyond their own control (Krovetz, 1974 and Rotter, 1966). In all, this implies that we integrate the personality – environment fit argument from Rotter’s social learning theory into the strategy contingency tradition in a full-blown interaction-effect model. As a result, we introduce a novel theoretical argument, producing new hypotheses that explain the occurrence of unconventional (mis)matches between personality, strategy and environment. The ability to predict the formation of such potentially maladaptive strategies could help both investors and at-risk entrepreneurs to prevent them from happening, and to develop adaptive strategies instead.
نتیجه گیری انگلیسی
This study shows that personality-environment congruency combinations derived from Rotter’s social learning theory explain the occurrence of unconventional strategy–environment (mis)matches. That is, internal entrepreneurs tend to prefer product innovation strategies in stable environments, whereas external entrepreneurs are likely to opt for low-cost strategies in dynamic environments. Rotter’s social learning theory suggests that internal entrepreneurs who operate in stable industries prefer innovative strategies because they favor relatively complex tasks in skills-dependent situations, whereas external entrepreneurs who operate in dynamic industries prefer low-cost strategies because they favor relatively simple tasks in chance-dependent situations. Particularly in stable environments, we find that internal entrepreneurs are likely to believe that they can exert control, as they are significantly associated with pursuing product innovation strategies. In dynamic environments, the entrepreneur’s task environment resembles for a great deal a chance-dependent process, which is likely to deflate the internal entrepreneur’s belief that by putting higher effort in product innovation higher organizational performance can be achieved. Accordingly, we find a significant bi-linear interaction effect of entrepreneurial locus of control and environmental dynamism on pursuing product innovation strategies. For external entrepreneurs who operate in dynamic environments, we report a high association with pursuing low-cost strategies. Rotter’s social learning theory suggests that externals tend to favor relatively simple tasks in chance-dependent environments. Particularly in dynamic environments, external entrepreneurs are more likely to become non-responsive than their internal counterparts – i.e., by not reacting to changes in competitors’ positions and customers’ preferences.13 Being involved in this personality-environment congruency situation, the external entrepreneur is likely to show a great involvement in performing the routine-like tasks of the low-cost strategy, whereas in a stable environment the external entrepreneur’s motivation is likely to decrease due to the skills-dependent nature of the task environment, which requires the external entrepreneur to compete with other low-cost providers. Accordingly, we find a significant bi-linear interaction effect of the entrepreneur’s locus-of-control trait and environmental dynamism for low-cost strategies. The managerial implications of this study relate to the finding that both the internal and external entrepreneurs’ behaviors are dysfunctional at one level of the moderator from a strategy contingency point of view (Podsakoff, MacKenzie, & Fetter, 1993). That is, the internal entrepreneur’s preference for innovative behavior tends to be dysfunctional in stable environments, whereas the external entrepreneur’s orientation towards achieving low costs tends to be dysfunctional in dynamic environments. For the other level of the moderator – i.e., dynamic environments for internal entrepreneurs and stable environments for external entrepreneurs – the locus-of-control personality trait is not associated with individual differences. Therefore, from a strategy contingency theory perspective, it is clear that our results reveal that individual differences in the locus-of-control personality trait explain the occurrence of unconventional strategy–environment combinations. Accordingly, this study has demonstrated that the formation of maladaptive strategies can be predicted. The ability to predict the formation of maladaptive strategies could help both investors and at-risk entrepreneurs to prevent them from happening, and to develop adaptive strategies instead. For instance, as Smart (1999) finds that in 42% of the deals venture capitalists fail in their judgment about the quality of the investee’s companies’ management, it can be argued that given the robust findings that entrepreneurial internality facilitates organizational performance it is always better to hire an internal rather than an external entrepreneur (Boone et al., 1996). Assessing an entrepreneur’s locus-of-control score can be done easily, since both validated interview and questionnaire instruments are readily available. However, consistent with Boone et al.’s (1996) findings, this study demonstrates that particularly in stable environments internal entrepreneurs tend to choose the ‘wrong’ strategy. Pursuing product innovation strategies in stable environments may suggest the existence of unrealistic or illusion-of-control beliefs of internal entrepreneurs that lead them to persist in their attempt to control their environment, instead of seeking adaptation to this environment. Therefore, training techniques can be applied in order to raise the awareness among internal entrepreneurs of the causes of unrealistic control beliefs in relatively skills-dependent situations, and to develop strategies to avoid the adverse performance effects of these illusion-of-control beliefs (Fenton-O’Creevy, Nicholson, Soane, & Wilman, 2003). Furthermore, investors may develop structures that reduce illusion-of-control beliefs. For instance, ensuring assistance of a well-functioning board of directors may help to add objectivity to the decision-making processes, challenging narrow thinking, escalating commitment and weak strategy analysis (Baysinger & Hoskisson, 1990). Whereas unrealistic control beliefs of internal entrepreneurs become salient in stable environments, external entrepreneurs’ unrealistic beliefs that they are not able to adapt to the environment become salient in dynamic environments in which they tend to pursue low-cost strategies. These unrealistic beliefs may be prevented by so-called Outward Bound programs, which may facilitate a locus-of-control shift toward internality (Marsh, Richards, & Barnes, 1986). By doing so, these techniques may help external entrepreneurs to become more adaptive to their environments – or, put differently, to avoid choosing a strategy that does not align with the environment, but rather opt for an adaptive strategy instead. Of course, the current study has its limitations. For one, following well-known contingency logic, future research is needed to investigate the impact of the unconventional strategy–environment combinations – as a result of individual differences in the entrepreneurs’ locus-of-control personality trait – on organizational performance. For example, the circle of contingency thinking can be closed by examining whether the personality – strategy match of external entrepreneurs and low-cost strategies in dynamic environments does indeed cause an environment – strategy misfit that ultimately forces those firms to drop out from the market altogether. After all, as Miller, 1986 and Miller, 1988 argues, uncertain environments offer little chance for low-cost strategies because this would require too much change and flexibility. Developing a panel dataset on the basis of further Chambers of Commerce information of later years would offer opportunities to carry out survival analyses of this sort, also for the entrepreneurial internality – product innovation – stable environment misalignment. Due to the fact that Dutch SMEs have limited obligation to publish their performance results in the Chambers of Commerce database, though, we do not have suitable performance data to test the impact of the strategy-personality-environment (mis)fits. A survival analysis is not possible, yet, due to the short time frame and hence relatively small number of failed companies. Ideally, performance data for research in strategy should be longitudinal, because the impact of a concept like ‘competitive strategy’ on performance is not likely to be reflected in a company’s performance overnight. This is a limitation of our study. Nevertheless, we do want to point to the fact that there have been a vast number of studies (cited in this paper) that demonstrated the negative performance consequences of maladaptive strategies, which may suggest that the theory and its empirical support are well-established and robust. However, less well-known and explored so far is the question as to why these maladaptive strategies occur. Addressing this question from a behavior-based perspective is the main contribution of our paper. In a panel data context, another research idea might be to study the change in the companies’ business-level strategies over time as a function of the entrepreneur’s locus-of-control personality trait. The theoretical framework illustrated in Fig. 1 could be used to take account of the change in the nature of industry life cycles. For instance, in stable environments, internal entrepreneurs and their innovative strategies might shake up the level of competition in the market, causing environmental dynamism (see also Miller et al., 1982). As the competitive environment is getting more dynamic over time, our framework suggests that internal entrepreneurs are likely to reduce their innovative activities as environmental dynamism increases, maybe re-focusing on fine-tuning existing innovative products or starting to screen opportunities in other markets. This line of reasoning suggests a process of reciprocal causalities in which the entrepreneurs’ personality plays a key role, driving endogenously transitions over the industry’s life cycle.