SMS 44th Annual Conference

Track Chairs: Subramanian Rangan, INSEAD, and Elizabeth L. Rose, Indian Institute of Management Udaipur

Geographic "compartmentalization" and strategy: Firm strategies and operations cut across multiple geographic regions with shifting multi-polar geopolitical alignments. What are the strategic implications of straddling these alignments on firms' organizational structures and strategies? Are the concepts of MNEs or M-Form still relevant? How do firms deal with the dissolution and emergence of economic blocks? Where do firms fit in the evolution of the (new) world order? How do firms manage operations across competing economic blocks, divergent institutional dynamics, and contradictory popular sentiments? Firm strategies in the shade or storm of nation-dyadic conflicts: Historical ties between nations, especially conflict and animosity, impact firm-level strategies. What are the strategic implications of national-level conflict, nationalism, negative sentiments, and rhetoric on firm strategies and outcomes? Are the theories and practices of corporate governance ready for CEOs as political figures? How do firms manage human capital and knowledge in a polarized world? Firm strategies in geopolitical (cold) wars: Business history and lessons learned from prior conflicts can shed light on whether the current conflicts are “new” with their implications for strategic management. How do firms manage wars’ ongoing or impending impact (e.g., Ukraine-Russia)? Do the critical and cultural industries pose different dynamics for firms? Subsidies (protection) and sanctions (regulation): International relations (IR) consider sanctions low-cost and low-risk policy tools. Often, these sanctions involve industries, and firms are either agents that implement these sanctions or are the recipients. Contrary to the IR perspective, sanctions are high risk and high cost for firms. How do firms manage corporate policy under regimes of subsidies and sanctions? What are the mechanisms by which publicly traded firms become agents of governments, and how is that relationship managed? What are the strategic implications of sanctions for firms? What does competition look like in industries with a high likelihood of sanctions? If the proverb “what does not kill one makes one stronger” holds, how do sanctions imprint firms? Corporate geopolitics of upstream versus downstream firms: Upstream industries such as natural resources and energy especially have firms with close ties with their home governments, yet they also have global operations. How are upstream firms in the energy and other critical natural resource industries managed? How do the downstream firms deal with the geopolitical tensions that engulf the upstream industries? Does the nationality of the managers matter for managing corporate geopolitics? If so, how?

Track Chairs: Alvaro Cuervo-Cazurra, Northeastern University and Marvin Lieberman, University of California, Los Angeles

The proliferation of new paradigms has directly or indirectly defined strategic management in competing ways or hollowed it out altogether, creating theoretical fault lines. This web of theoretical fault lines likely dissolves the firm into a soupy construct without boundaries or structure. Similarly, the definitions and measurements of performance are blurrier than ever. Stakeholders versus owners: What is a firm? Who are the stakeholders, and what are the boundary conditions for a stakeholder perspective?  How does the firm emerge as a coalition of stakeholders given divergent ex-ante incentives in pursuing contradictory and uncertain outcomes? Are the owners’ and other stakeholders’ roles and expectations dependent on the control rights over different types of capital like social, human, moral, and financial? Stakeholder theory also emerged as a solution to managing the firm’s negative externalities, especially between the shareholders and other stakeholders. As a result, and perhaps inadvertently, stakeholder theory diverges from (or contradicts) different theoretical perspectives about firms. For instance, what do the theories of power and politics, impression management, information asymmetries, resource-based view, organizational design and structure, legal frameworks, and public policy have to say about the stakeholder theory and vice versa?  If ownership is not privileged with the voting rights and rights to residual cash flow, what is the incentive for the owners to invest in the firm when they can be in one of the other stakeholder categories (e.g., members of the society at large)? Are there any costly conflicts of interest between stakeholders other than the owners? If so, how are these conflicts managed? One of the reasons why societies construct governance institutions, such as the governments of nation-states, is to address positive and negative externalities. Democratic or not, governments emerge and sustain themselves through legitimization, as explained by political theories. The majority will determine who (and how) can manage negative and positive externalities in political systems with democratically elected governments. What is the equivalent legitimization process of governing externalities in the stakeholder theory of the firm? Strategy as Theory versus Experimentation: Under external conditions, firms decide what to do, given their internal resources, capabilities, and dynamics. Traditionally, this perspective defined strategy based on the types of strategic actions (e.g., business and corporate strategies). Recently, a reframed process perspective emerged that defines strategy as theory or experimentation, such as the scientific approach, including searching for patterns and solving problems. While the strategy as theory suggests a deductive process, experimentation and scientific methods that primarily systematize the process of trial and error are inductive. How do these perspectives relate to each other and other strategic management theories? What is the explanatory power of these perspectives in an empirical horse race with other theories? Micro-foundations versus Ecosystems: These two paradigms effectively dissolve the firm itself, negating any need to strategize at the firm level but possibly requiring a new way to define what Strategy is at the level of coalitions (of people and organizations) and the associated strategy-making processes. The first strand dissolves the firm into atomized individuals by focusing on the micro-foundations of organizations. The second strand focuses on ecosystems and suggests that firms and industries dissolve into a pool of complementarities (relationships). So, which is it? What are the functions of firms in these paradigms?

Track Chairs: Turanay Caner, North Carolina State University and Brian Wu, University of Michigan

In recent years, the firm’s role seems to (re)expand beyond economic value creation and appropriation to incorporate other value(s). The definitions of “value” and “performance” are stretched at the seams to include psychological, behavioral, political, humanistic, and societal outcomes. This newly emerging paradigm of purpose creates several dramatic fault lines between the normative, legal, economic, and strategic definitions of the firm and ownership rights, participatory democracy and corporate statism, and corporations as political actors and policymakers.

For-profit organizations generating social goods: Describing the for-profit firms as economic versus social entities generating profits versus social goods suggests an increasingly deepening fault line in strategic management. If this is not a new phenomenon, can we generate comparative insights from the business history of the early industrialists and their corporations? If it is, how should the existing theories reconcile the fault line between the two perspectives beyond an earnest appeal? What is the societal or global net benefit of firms pursuing social goods? Is the firm a substitute for the government? Non-profit organizations generating profits: Most not-for-profits have positive profits and pursue profit-generating businesses (e.g., Wikimedia licensing Wikipedia to Apple and Amazon for Siri and Alexa, respectively), just like for-profit firms. How should not-for-profits organize, strategize, and compete? What is the role of donors in not-for-profit organizations that pursue profit-generating business opportunities? Innovating for purpose, profits, profitable purpose, or purposeful profits: If purpose defines the motivation to innovate, how does it relate to profits? What if there are multiple contradictory purposes for innovating? Whose (e.g., scientists, managers, shareholders, government, institutional investors) purpose(s) takes precedence for managing innovation and commercialization?  Are there cultural differences in motivation for innovation, and does it matter for performance and other outcomes?

Does purpose fit in with the paradigm of creating and appropriating economic value? The classic definition of economic value added is the difference between the perceived value to the buyer and the supplier’s total cost of providing the goods or services. For instance, when sourcing from the Amazon Marketplace, firms (or government agencies and not-for-profit organizations) can filter suppliers based on their EDI and ESG certifications and indicate that they would accept prices higher than the competitive levels. Does pursuing a purpose beyond the economic activity impact total cost, perceived value, or both? Or do we need a new theory of values, one of which is the economic value? How does purpose impact value appropriation? How would a firm organize to achieve purpose versus profits? How does the governance of firms for purpose versus profit differ, if at all? Purposeful categorizations or categories of purposes: DEI initiatives rely on the emergence and divergence of viable categorizations. Beyond legal compliance, how do firms identify and reconcile the divergence in their DEI initiatives' cognitive, pragmatic, and normative legitimacy? How do firm-specific DEI initiatives emerge, and what are the competitive implications of such initiatives? How do firms manage power politics and power struggles between coalitions of identities inside the firm? Is the firm an actor in identity politics? If so, how do firms align the conflicting preferences over categories of identities across their stakeholders? Is the "invisible" hand of the market reconcilable with the "identity-conscious" organizational structures? How does the "identity-conscious" firm organize and compete?

Origins of purpose, profits, profitable purpose, or purposeful profits: Current entrepreneurship paradigms also relate to pursuing economic value creation and appropriation. Are these paradigms similarly relating social or moral entrepreneurship to value creation and appropriation? Can social or moral entrepreneurs pivot, experiment, or adopt bricolage? How do social or moral entrepreneurs seek funding? Generally, not-for-profit organizations pursue solutions to societal or moral problems. Their primary source of income or funding is donations. Is the donation model applicable to a for-profit social or moral venture? Or what is an appropriate business model for social or moral ventures? Can social or moral entrepreneurship be independent of political, religious, or other institutions of values that generate, sustain, and legitimize social and moral constructs? If (yes) not, then what does that (in)dependency mean for entrepreneurial pursuits and outcomes? Purpose as moral capital or purposeful human capital: Can (or should) the human capital paradigm be generalized to include the moral capital of individuals with identities? How does human capital's firm-specific component evolve in the labor market for identities? Are the concepts of transactional inefficiencies like hold-up, adverse selection, and moral hazard relevant for purposeful human capital management or, if possible, the acquisition, management, and investment of moral capital? How would the DEI and ESG goals as the sets of values (purposes) factor into these exchange hazards for human capital in the internal and external markets? The market for purposes: Is purpose an input, output, or both?  Suppose firms are bundles of resources and capabilities or stocks of financial, human, social, and moral capital. Along those lines, is purpose another type of capital (i.e., input) or intermediate output generated by a combination of other input types? What are the origins of a firm's purpose (as opposed to or in addition to profit)?  How do purposes get imprinted, maintained, changed, and transplanted within and between firms? How do firms converge, select, adopt, or create a single purpose in the market for purposes? What is the role of organizational structure in achieving a single purpose or reconciling multiple ones?  In a multibusiness firm, transfer pricing or subsidies help manage the resource allocation process. Is this process compatible with the values-based M-form?

Purpose as a new paradigm or measurement problem: Most academic and practical work on equity, social issues, and governance (ESG) focuses on developing measures related to a firm’s activities and outcomes. Nevertheless, we will likely make headways in measurement with at least a theory of purpose in business. How do firms formulate and reconcile ESG intentions across heterogeneous local, national, and global institutional environments, countries, regions, industries, stakeholders, or business units? For instance, while one subsidiary is a polluter, another is helping shrink the carbon footprint–the same founder owns both.  A state-owned corporation that tops the list of global polluters in the petrochemical industry has investors and numerous subsidiaries active in countries where environmental concerns are center stage. Major global corporations in various sectors, such as consumer goods, are engaged policymakers providing lists of demands and solutions to the United Nations for global regulation of pollution while proliferating the use of non-biodegradable sachets as packaging, lobbying to disincentivize the recycling of plastics, and encouraging the burning of plastics as fuel which is a pollutant. Does ownership matter for the pursuit of ESG outcomes? If so, why, and how? Does the firm's intent for positive ESG outcomes match the implementation across different contexts (e.g., underdeveloped countries increasingly becoming the wastebasket of developed economies)? The divergence between the DEI intentions versus implementation: What is the role, if any, of conflict management, information asymmetries, stakeholder power and politics, and impression versus symbolic management in this divergence between intentions and implementation? How do we determine the firm's boundary as a bundle of responsibilities to social, human, financial, and moral capital holders? What is the societal gain and cost of for-profit entities generating social goods?

Track Chairs: Karen Schnatterly, Virginia Tech and Metin Sengul, Boston College

Artificial Intelligence (AI) is rapidly evolving and is already of significant interest to people, businesses, consultants, regulators, and governments. There is an acceleration in the adoption rates of AI by firms which outpaces the knowledge of what it can do, what the users think it can do, and what the regulators think it should do. Interestingly, AI developers and firms are calling for regulation, as exemplified by the testimony of Sam Altman in a Senate hearing. Surprisingly, when one of the senators asked Mr. Altman (CEO, OpenAI) whether he would be interested in heading up the regulatory effort and the response was that he would be glad to share several names who would be fit for the task, not many at the hearing or in the media afterward were taken aback. Large technology firms also directly pursue developing and implementing regulation (versus indirectly by lobbying), which is one of the fundamental tasks of governments. Can and should firms develop and implement regulations for their industry and businesses? How does AI matter for strategy? Is AI a substitute or a complement for human capital? How would organizational theories change when one party is an AI, not a human? Can AI be incentivized or controlled? AI meets the theory of the firm: How does AI impact the delegation of authority and responsibility in firms?  Who is the principal, and who is the agent? What are the strategic implications of an "electronic person" in business, legal, and ethical domains? AI and ethics: Can AI generate ethical principles independent of the organization deploying it? If it does, what determines the legitimacy of AI- and Human-generated ethical principles? If AI is not capable of morality, then who gets to “teach” AI values, social responsibility, and ethics (and what would those be)? Competitive advantage and adoption of AI: Why do firms invest in AI, and what are the expected outcomes? Are there limits to AI in creativity/imagination, and what does that mean for innovation, entrepreneurship, and strategy? What are the strategic implications of AI as a new business tool? Are AI and Industry 4.0 strategically the same as the Industrial Revolution? If AI can replace human decision-making, how would it impact the relationship between human capital and the competitive advantage of firms? AI in action: The Health Care, Finance, and Education sectors are a few early adopters of AI, and its use is rapidly expanding with competitive dynamics and strategic implications. What are the challenges in integrating this technology with the rest of the organizational resources and capabilities? There needs to be a scholarly focus on between-industry differences since AI technology will likely have industry-specific implications. Is adopting this technology predictable by the existing theories in strategic management? Strategic implications of AI and ecosystems: Depending on its deployment, AI can have substitutive or complementary effects on coopetition (simultaneously competitive and collaborative interactions) between firms. How does AI impact the inner workings of ecosystems and platform businesses? AI as the creator of new or filler of existing holes in organizational structures: What are the implications of AI on coordination, cooperation, human capital, and knowledge management? AI as an evolutionary force on human capital: Will the strategically important human capital be condensed to the ability to program and use AI? AI and Entrepreneurship: Can AI, as an electronic entrepreneur, create or discover entrepreneurial opportunities? Is AI an entrepreneurial opportunity created or discovered, and does it matter? What are the cognitive processes of entrepreneurship? Does motivation matter for entrepreneurship?  How do entrepreneurs reconcile the divergent values of different stakeholders?