In the broad domain of strategic management, resource and competence are the rudimentary constructs, and they play critical roles in organizational management.
However, while the nature of these two constructs have been discussed for more than a half century, they remain confusing to scholars. The nature of managerial competence, in this vein, also has been a puzzle. Furthermore, insufficient comprehensive works directing organizations to improve managerial competences allow the divergent propositions to confuse practitioners when adopting them in corporate situations.
Organizational growth, a central subject of strategic management, results from the interaction of managerial competences and environmental opportunities and also results in the change of organizational boundaries. With this perspective, the influence of managerial competences is critically extensive to economic organization and necessitates the importance of researching the relationship between managerial competences and organizational growth.
In light of these research gaps, this dissertation focuses on the fundamental outcomes of managerial competences and the issues of organizational growth. Stemming from the domain of resource-based view (Grant, 2002; Penrose, 1959), in Chapter 2, the first essay attempts to clarify resources, competences and the nature of managerial competences.
Recognizing shared vision and organizational synergy as the fundamental outcomes of managerial competences, the relationship between the fundamental outcomes and organizational growth are proposed. Based upon the literatures of upper echelons theory (Hambrick, 1994; Hambrick & Mason, 1984), this study identifies three principal dimensions of managerial teams (composition, coordination and compensation) to synthesize an integrative view for incorporating the collective managerial characteristics.
Furthermore, by considering these principal dimensions as the main factors in promoting fundamental managerial outcomes, this essay provides new insight about the managerial factors that lead to the increase of fundamental managerial outcomes.
Chapter 3, following with the central argument of Chapter 2, proposes that the availability of entrepreneurial visions, viewed as the crucial managerial outcome for organizational growth, enables the firm along the path to maintain the growing momentum. According to upper echelons theory (Hambrick, 2007; Hambrick & Mason, 1984) and Penrose’s theory of firms’ growth (Penrose, 1959), this study suggests that altering the collective characteristics of managerial teams will expedite the emergence of entrepreneurial visions and, in turn, contribute to reducing the managerial limitation and continuing the corporate growth. In this manner, the detrimental role of managerial competences in organizational growth is more likely to be disabled and the firms will counterbalance the Penrose effect (Kor & Mahoney, 2000; Lockett, Wiklund, Davidsson,
& Girma, 2011; Thompson, 1994).
The third essay, Chapter 4, asserts that the influence of external factors on the consequence of spin-off approaches is as significant as the internal factors which are widely documented in prior research (Sapienza, Parhankangas, & Autio, 2004; Semadeni
& Cannella, 2011; Seward & Walsh, 1996). Building on a sample of spin-off events, the findings suggest that the environmental opportunities of spun-off firms and the supportive endowments of divesting firms are notably related to the profitability of spun-off firms.
Therefore, with the intention of undertaking spin-offs for organizational growth or restructuring business, the firm must evaluate the overall performance, including the divesting firm and the spun-off firm, from the perspectives of both the inside and the outside.
In order to complement current understanding of the managerial outcomes and
organizational growth, the intended contributions of this dissertation are as follows. First, the first essay identifies the principal dimensions of managerial teams to synthesize an integrative view categorizing the important roles of disparate managerial characteristics played in developing the fundamental managerial outcomes. Furthermore, recognizing three collective characteristics of managerial teams as the factors for nurturing the firm’s entrepreneurial visions, the second essay demonstrates the applicability of this integrative view to the issue of organizational growth, which is a major subject of research on strategic management. Extending these theoretical propositions would be a prominent direction for further research.
Second, along with clarifying the rudimentary constructs, competence and resource, the first essay proposes the nature of managerial competences and its fundamental outcomes. The positive relationship between the fundamental managerial outcomes and organizational growth forms a theoretical basis for further empirical study.
Next, the second essay explicates that the emergence of entrepreneurial visions contributes to the diminishing of the Penrose effect. This illuminates the debate of the existence of the Penrose effect, as well as revealing a new direction of explaining the random rate of organizational growth (Geroski, 2005). The entrepreneurial visions guide the firm to reduce managerial limitation and sustain its growth probably in a variable rate.
For this reason, the detrimental role of managerial competences is incapacitated and the situation is similar to the nonexistence of the Penrose effect.
Finally, the findings of the third essay contribute to the literature by advocating the ignored role of environmental elements, which are as important as organizational elements, in the consequence of spin-off approaches. This provides an interesting foundation for further investigating the effect of other extrinsic factors, and suggests that firms reciprocally contemplate the inside situations and the outside conditions when they
intend to adopt spin-offs as a strategy for restructuring its business or pursuing organizational growth.