The behavioral theory of the (community‐oriented) firm: The differing response of community‐oriented firms to performance relative to aspirations

Smulowitz, Stephen; Rousseau, Horacio Enrique; Bromiley, Philip

doi:10.1002/smj.3123

Cited by 52 publications

(34 citation statements)

References 106 publications

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“…Adding to previous work, we reveal how interactions with the ecosystem, and particular actors in it, influence the design of SSE business model components. Our work especially identifies a key role for the community in business model design, particularly for SSEs, complementing work by Dattée et al (2018) and Smulowitz et al (2020) amongst others. Through engaging the symbiotic ecosystem we argue SSEs can develop community-centred business models.…”

Section: Contributions To Social Entrepreneurship Bop and Small Business Literaturementioning

confidence: 75%

Engaging symbiotic ecosystems to build community centred business models for the BoP: Evidence from small social enterprises in East Africa

Sottini

Ciambotti

Littlewood

2022

International Small Business Journal: Researching Entrepreneurs

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This article examines how small social enterprises (SSEs) in East Africa build business models for base of the pyramid (BoP) markets, through engaging symbiotic ecosystems. Through in-depth qualitative research, a three-stage process is identified. First, SSEs learn and become sensitised to the manifold challenges of building business models for BoP markets. Second, SSEs identify and connect with key BoP actors, weaving them together to create a symbiotic ecosystem and to overcome the aforementioned challenges. Third, SSEs harness this symbiotic ecosystem to deliver community-centred business models for the BoP. This research contributes to social entrepreneurship, small business, and BoP literatures, by shedding light on the challenges faced by SSEs working in the BoP, and through novel elaboration of how SSEs develop and interact with symbiotic ecosystems to surmount these challenges. It also provides important practical insights, for social entrepreneurs and social enterprise managers in Africa and elsewhere.

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Section: Contributions To Social Entrepreneurship Bop and Small Business Literaturementioning

confidence: 75%

Engaging symbiotic ecosystems to build community centred business models for the BoP: Evidence from small social enterprises in East Africa

Sottini

Ciambotti

Littlewood

2022

International Small Business Journal: Researching Entrepreneurs

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“…By incorporating theory on industry consolidation and the formation of industry segments (Carroll, 1985; Hernandez and Torero, 2013; Ravenscraft, 1983), it is possible to identify the ways in which rising industry consolidation may provide more opportunity for local brands. Literature on brand image (Avery, 2012; Johansson et al , 2018; Park et al , 1986) and the core tenets of being a locally focused brand (Marquis and Battilana, 2009; Smulowitz et al , 2020) are then leveraged to argue that local brands will need to manage market share growth carefully. While this empirical investigation takes place solely in the banking industry, these findings have the potential to generalize to other industry contexts.…”

Section: Introductionmentioning

confidence: 99%

Growing the community bank in the shadow of national banks: an empirical analysis of the U.S. banking industry, 1994–2018

Hoskins

Abadi

2022

JPBM

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Purpose With rising industry consolidation in the banking industry, it is unclear whether community banks may find more or less market opportunities. This paper aims to investigate how industry consolidation may affect community banks’ market share outcomes. The second goal of this paper is to establish the ways in which community banks may successfully manage market share growth goals that may be antithetical to the principles of being a local brand. Design/methodology/approach The empirical analysis is on the US banking industry, spanning the years from 1994 to 2018. This comprehensive panel data set includes county-year level granularity for more than 15,000 banks. Panel regression models that include bank-, county- and year-specific fixed effects are deployed. Findings It is found that local brands, operationalized as community banks in this study’s empirical context, are having the most success in consolidated market contexts. When pursuing market share growth, a distribution strategy to saturate a local market is found to be advantageous while expanding across geographies is less advisable for community banks. Originality/value The findings shed empirical light on the challenges and opportunities for community banks, thereby contributing to the banking industry literature and to an emerging stream of research on local brand management. By demonstrating the means of which growth can be successfully managed by local brands, the important and largely unanswered question of how a local brand can effectively grow is addressed.

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“…Many of these strategic decisions are essentially related to technological choices between maintaining and altering a firm's technology, which may have a form of products, services, processes, organizational structures, and even game‐changing digital business models (Dong, Karhade, Rai, & Xu, 2020; Karhade & Dong, 2020a, 2020b; Levinthal & March, 1981; Miller & Arikan, 2004). Technological choices, driven by the comparison of performance feedback and organizational aspiration over time, are therefore of great importance for organizational outcomes such as performance and risk (e.g., Bromiley, 1991; Miller & Chen, 2004; Smulowitz, Rousseau, & Bromiley, 2020). Despite this importance, different types of organizational aspiration have been used in prior research (see Bromiley & Harris, 2014 for an overview).…”

Section: Introductionmentioning

confidence: 99%

Technological choices under uncertainty: Does organizational aspiration matter?

Dong

2020

Strategic Management Journal

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Research Summary The behavioral theory of the firm suggests that organizations make strategic choices to retain or search for a technology based on performance feedback in comparison to organizational aspiration. Such technological choices become challenging as decision makers face uncertainty not only in technological search, but also from technology deterioration and market turbulence. While different organizational aspirations have been used in prior research, their performance and risk implications for technological choices are unclear. I advance theory by conducting a simulation study to systematically investigate the performance and risk of technological choices with different organizational aspirations, and explore their contingencies on technological and market uncertainty. The simulation results provide novel insights into the indispensable role of goal setting to ascertain organizational performance. Managerial Summary Goal setting has important impacts on the performance and risk of strategic decisions. While it is often believed that processing more information can help managers cope with uncertainty, this study shows that paying attention to both internal and external performance goals may be suboptimal for technological choices. Solely relying on an internal performance goal may even do more harm than good. A superior way of goal setting is to focus on external performance information from a reasonable reference group, such as firms with a similar performance or all industry peers rather than the best‐in‐class in the industry. This is more beneficial when technologies rapidly change and is less useful when customer preferences shift due to unpredictable shocks (e.g., the COVID‐19 pandemic).

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The behavioral theory of the (community‐oriented) firm: The differing response of community‐oriented firms to performance relative to aspirations

Cited by 52 publications

References 106 publications

Engaging symbiotic ecosystems to build community centred business models for the BoP: Evidence from small social enterprises in East Africa

Engaging symbiotic ecosystems to build community centred business models for the BoP: Evidence from small social enterprises in East Africa

Growing the community bank in the shadow of national banks: an empirical analysis of the U.S. banking industry, 1994–2018

Technological choices under uncertainty: Does organizational aspiration matter?

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