Session 246

Strategic Responses to Turbulent Environmental Conditions

Track A

Date: Wednesday, October 14, 2009


Time: 11:30 – 12:45

Common Ground

Room: Meeting Room 10

Stephen B Tallman, University of Richmond

Title: Managing Strategic Risk: Exploring the Role of Innovation


  • Torben Juul Andersen, Copenhagen Business School

Abstract: Turbulent business conditions accentuate the need for strategic response capabilities. This extends conventional risk management perspectives to consider both the ability to gain upside potential and circumvent adverse effects from environmental change. Hence, we argue that effective strategic risk management outcomes are associated with investment in innovation supported by a conservative capital structure. An analysis of 896 companies provides initial support for this proposition.

Title: How Helpful Can the Uncertain World be?


  • Denise Fleck, Federal University of Rio de Janeiro

Abstract: This paper submits that when the earth is included among the organization’s stakeholders, the uncertain world can help the organization to develop a propensity to long-term success. Organizational success is examined in the context of organizational archetypes of success and failure (Miller & Friesen, 1977; Fleck, 2005). Building on the two approaches, theoretical development suggests that the organizational concern for environmental sustainability contributes variety, and can potentially help neutralize the organizational tendency for triggering simplicity processes. The paper examines General Motors’ trajectory of success and decline in light of the ideas put forward, suggesting, among other things, that by failing to perceive itself dissociated from the environment, the company failed to benefit from environmental uncertainty and to strengthen its chances of long-term survival.

Title: Slow versus Fast – Synchronizing Strategy Speed with Environmental Uncertainty


  • Klaus K. Meyer, Pantheon-Assas Paris II University

Abstract: The recent global economic disturbances have had an important impact on the business organization's strategy options. This article posits that the change in business dynamics has resulted in a reduced importance of speed in organizational actions. It is therefore proposed that conscious slowness in strategy building can help alleviate the profound uncertainty in the economic environment. Strategic slowness focuses on long-term goals replacing short term fast-paced organizational actions. The article uses an in-depth case study for an explanation of the theoretical framework.

Title: How Does Subsidiary Response to Major Risks Vary Based on the Type of Risk and the Quality of Country Governance


  • Chang Hoon Oh, Simon Fraser University
  • Jennifer Oetzel, American University

Abstract: We argue that subsidiary response to major event risks - like terrorist attacks, technological, and natural disasters - will vary depending upon the type of event, but not necessarily the severity of the disaster. We also argue that the quality of the institutions and governance in the host country will be related to continued subsidiary investment after a major event risk. An implication of our study is that the severity of the event risk is less important than the host country’s ability to respond to it. Our hypotheses are tested with a panel dataset of 71 large European multinational corporations and their subsidiaries, with a total of 31,285 observations for the years 2001-2006. Results indicate that higher quality country governance positively moderates the relationship between event risks and subsidiary investment.

Title: What Keeps Them Going: Examination of Subsidiary Resilience to Terrorist Attacks in the Host Country


  • Seemantini Pathak, University of Missouri - St. Louis
  • Katalin Takacs Haynes, University of Delaware
  • Barbara Carlin, University of Houston

Abstract: Terrorism has become a part of today's business environment. We examine two sets of capabilities that enable multinational enterprise subsidiaries to bounce back from the performance decline caused by institutional disruption arising from a terrorist attack. Capabilities that help overcome institutional inefficiencies and those that enable a subsidiary to draw upon the multinational enterprise's prior experience with terrorism or weak institutional environments are likely to increase subsidiary resilience. We also discuss the roles played by host country cultural environment and interaction among a multinational enterprise's subsidiaries in building these capabilities.

Title: How Do Firms Strategically Respond to Violent Conflict Risk


  • Jennifer Oetzel, American University
  • Kathleen Getz, American University

Abstract: The aim of this paper is to explore the factors that affect the likelihood that firms will respond to violent conflict in countries where they operate, and to identify specific strategies used to do so. Building on the literature in international strategy and political science, we hypothesize that firm characteristics and stakeholder pressures will affect the likelihood that firms will respond to violent conflict. Results of a survey of United Nations Global Compact members (based on 471 responses) indicates that firms facing external stakeholder pressures were significantly more likely to adopt strategies that have a direct affect on the conflict than those firms without such pressure.

All Sessions in Track A...

Mon: 12:45 – 14:00
Session 188: Market Pressure, Social Responsibility and Firm Performance
Mon: 15:45 – 17:00
Session 187: Market Conditions and Firm Internationalization
Mon: 17:15 – 18:30
Session 189: Risk Management in Uncertain Environments
Tue: 10:00 – 11:15
Session 190: Building up Firm Capabilities for Unstable Environments
Tue: 11:30 – 12:45
Session 191: The Role of Managers in Adapting to Uncertain Conditions
Wed: 10:00 – 11:15
Session 247: Managing Innovation in Uncertain Environments
Wed: 11:30 – 12:45
Session 246: Strategic Responses to Turbulent Environmental Conditions

Strategic Management Society

Washington DC