The transition to a circular economy demands collaborative structures and requires ecosystem-level transformation. Similarly, digital transformation requires a perspective that extends beyond organizational boundaries. The convergence of these two transformation paradigms (i.e. green and digital) constitutes what scholars refer to as the twin transition. While previous studies have highlighted the potential of digital technologies to accelerate circularity in ecosystems and demonstrated their role in enhancing circularity, it is also crucial to examine the bright and the dark side of the twin transition. Building on case studies that consider the perspectives of diverse actors within two packaging recycling ecosystems, this study investigates how firms use digital technologies to pursue circularity. Based on these findings, we develop a theoretical framework of the twin transition in ecosystems that identifies the ecosystem strategies employed by actors and the tensions that emerge among participants. More specifically, we identify four ecosystem strategies: 1. Twin offering strategy; 2. Twin flow strategy; 3. Twin engagement strategy; and 4. Twin justice strategy. These strategies extend beyond the isolated actions of the focal firm and reveal how multiple ecosystem members coordinate activities, resources, and relationships to generate value from both circular and digital perspectives. When these strategies are not successfully implemented or coherently combined across the ecosystem, tensions emerge that not only limit the effectiveness of individual strategies but may also hinder the overall transformation process by creating misalignments between digital and circular dimensions.
Orchestrating circular innovation ecosystems to co-develop circular solutions has been increasingly recognized as an important driver of competitive advantage. While the successful emergence of such ecosystems has attracted increasing attention, little is known about how the co-evolution between organizational design inside the orchestrator and partners in the ecosystem contribute to success. Such an inside perspective is critical, as ecosystems typically span multiple circular strategies (i.e., repair, reuse, refurbishing, and recycling), each connected to separate functional responsibilities in the orchestrator's organization. To explore this gap, we conducted a longitudinal process study in the largest German telecommunications provider and developed a two-dimensional process framework of circular innovation ecosystem emergence from the perspective of established organizations. It shows multilevel dynamics (organizational-level design, ecosystem-level orchestration, market-level experimentation) across three stages of emergence (circular compliance, circular strategy-specific subsystems, integrated circular system). We contribute to circular innovation ecosystems research by (1) adding a multilevel and dynamic perspective linking evolving organizational design inside the orchestrator to the ecosystem, (2) showing the evolution from individual circular strategy subsystems to fully integrated systems, and (3) suggesting a sequencing of emergent and deliberate strategies. Our framework also contributes to managerial practice by providing practical steps for developing circular innovation ecosystems.
This article examines why some organizations act while others adopt a wait-and-see posture when confronted with discontinuous disruption. While the literature has documented the diversity of business model responses to disruptions, it has primarily focused on what organizations do, and far less on the factors explaining why, when exposed to the same exogenous shock, some choose to act while others remain inactive. This gap limits our understanding of the drivers underlying strategic (in)action in contexts of discontinuous disruption. Drawing on a longitudinal qualitative study of French Michelin-starred restaurants during the major disruption of COVID-19 pandemic, we develop a framework of business model adaptation trajectories, ranging from action to inaction, encompassing BM maintenance, temporary BM innovation, BM innovation, BM pivot, and BM portfolio diversification. By doing so, this study makes two main contributions: an integrative contribution to the business model adaptation literature, and an explanatory contribution to the literature on cognitive framing and organizational slack in contexts of discontinuous disruption. First, at an integrative level, we propose a unified, processual account of the full range of trajectories organizations may pursue under discontinuous disruption, from deliberate inaction to radical strategic action. Second, at an explanatory level, we show that the interplay between organizational slack and cognitive framing constitutes the key explanatory mechanism shaping strategic (in)action when facing disruption.
Understanding firms’ strategy dynamics during systemic shocks has gained renewed importance following recurrent financial crises since the early 20th century. Explaining how firms simultaneously adjust domestic and international strategies in response to global disruptions requires approaches that integrate subnational spatial heterogeneity with the multidimensional nature of strategic responses – a capability not yet captured by established strategic management theories. Systemic shocks reshape firms’ strategic trajectories by altering the relative advantages of locally embedded agglomeration forces. Building on this mechanism, this study develops a framework that conceptualises firms’ multidimensional strategy dynamics as the outcome of interacting global disruptions and multi-factor agglomeration forces, integrating investment, location, and internationalisation decisions as interdependent processes within multilayered firm networks. By digitising multiple archival data sources, I reconstruct microgeographic evidence on the strategic behaviour of Canadian banks’ branch and interbank networks during consecutive periods of regulatory change and financial stringency (1900–1919). The novel longitudinal dataset traces intra- and inter-firm network dynamics, by disentangling banks’ new branch investments and de-investments, new city entries and exits, and cross-border interbank linkages. Modelling strategy dynamics as a system of simultaneously evolving micro-processes reveals pronounced regional heterogeneity in banks’ strategic responses to global and local shocks. Multidimensional scaling of branching strategies further demonstrates that regulatory change and financial crises produce divergent strategic trajectories across subnational regions. These findings advance strategy research by introducing a complex-systems perspective on interdependent strategic adaptation under systemic shocks and demonstrating how multi-factor agglomeration forces shape heterogeneous strategic responses to global disruptions.
Thirty years after Long Range Planning published the first article in the field, this Perspective proposes a continuum for Strategy as Practice (SAP) research, stretching from humanist to post-humanist. Post-humanism is increasingly relevant in the face of Artificial Intelligence and climate change and demonstrates SAP's capacity to continuously renew itself.
To reduce global heating, many governments have implemented climate policies of varying stringency that are likely to have a marked effect on sunset-industry firms, which are often heavy polluters and rely on outmoded technologies. The ‘pollution haven hypothesis’ posits that firms in polluting industries will relocate their activities to countries with weaker climate regulations. Using transaction-cost economics, we extend this research. Sunset-industry firms’ cross-border acquisitions (CBAs) are marked by high asset specificity and stranded-asset risk, making transaction costs pertinent. Yet, existing empirical PHH tests often overlook how transaction costs associated with host-country 1) public expropriation, and 2) policy uncertainty influence CBAs. We hypothesize that stringent host-country climate policies are associated with sunset-industry firms’ higher 1) investment amounts and 2) equity stakes in CBAs, with host-country public expropriation risks and policy uncertainty moderating these relationships. Using multi-level regressions and a large sample (up to 21,442 CBAs) between 2006 and 2022, we find stringent host-country climate policies are associated with higher financial outlays and equity stakes. A complementary ‘gate and chain’ configurational analysis supports these findings. While stringent host-country climate policies attract acquisitions, this association reverses when host-country public expropriation risks or policy uncertainty is high. By identifying how transaction costs and the stringency of climate policies combine to influence sunset-industry firms’ CBAs, we reveal the complexity of these investments and the implications for climate policies. We provide some boundary conditions for the PHH, highlighting the importance of asset specificity, stranded-asset risk and transaction costs for firms’ responses to host-country climate policies.
Politically connected firms face rising volatility as ties that once provided resources can quickly turn into liabilities when governments retaliate against associations with political opponents. Existing research highlights the contingent value of political capital but offers limited guidance on how firms can effectively manage these toxic ties. We develop and test a framework based on resource dependence theory to explain how corporate divestments help firms manage their toxic ties. Using the 2016 impeachment of Brazilian President Rousseff as an exogenous shock that made political ties toxic, we estimate fixed-effects models with a panel dataset of 193 Brazilian publicly traded firms and their divestments from 2010 to 2022, along with a new measure of board political connections from over 37,000 CVs. Results show that firms with toxic ties significantly increase divestments to reduce resource dependence, and that shedding related units leads to better performance than portfolio refocusing. We expand the literature on the conditional value of corporate political ties and show that divestments offer a novel strategy for managing toxic ties following political upheaval.
The economy is locked into a 'take-make-waste' logic, in which materials are extracted, processed, and often quickly discarded. This orientation to production and consumption is adding to the toll of an already stressed natural environment. Despite the growing recognition of the need to shift this linear logic to a more circular one, successful circular projects have consistently failed to catalyze broader systems-wide transformation. Drawing insights from 25 interviews with 30 actors and 4 workshops with 38 participants from Canada's construction industry, I examine how actors can strategically coordinate project ecosystems to enable the transition towards a systems-wide circular economy. I find that the key to understanding these challenges lies in strategically designing project ecosystems, not isolated projects, and recognizing the different roles of direct actors, who physically handle materials, and enabling actors, who shape institutional frameworks. I propose a process with three stages that build on each other: enabling actors reduce systemic frictions, direct actors then implement pilots under more favorable conditions, and share the resulting learnings with enabling actors to reduce frictions further. Each turn of the spiral lowers the cost of the next, allowing what would otherwise be isolated experiments to compound into systems-wide change. This approach provides a pathway to address the coordination challenges in project ecosystems and support a transition towards a circular built environment.
How organizations translate ethical commitments into environmental, social, and governance (ESG) outcomes remains a challenge in corporate governance. The study examines how the Ethical Linguistic Architecture Framework (ELAF) of corporate ethics codes-particularly modal obligation language (e.g., "must," "shall," "will")-is associated with ESG performance, and how different forms of ethical reasoning moderate this relationship. Analyzing corporate ethics codes using computational linguistic analysis from 252 S&P 500 firms, we find that modal obligation language is not associated with ESG performance. However, this relationship is positively moderated by ethical deliberation, which enables organizations to translate commitments into flexible practices. Conversely, conditional reasoning is associated with amplifying this negative effect in the main specification, though this finding shows sensitivity to model specification. These findings demonstrate that effective ethical communication requires balancing prescriptive clarity with interpretive flexibility.
Extant research maintains that firms benefit from strong institutional protection as they exploit the proprietary intellectual property. We reexamine this contention in a prominent platform context where complementors, rather than the platform firm, create and own much of the intellectual property. Drawing on the insights of institutional economics, we theorize about platform firms holding bundles of property rights to user contributions and explicate how platforms deploy property rights to user-generated content differently than proprietary content. We argue that both platforms’ proprietary content and user-generated content are positively associated with platform performance. However, while IPR protection of the host country strengthens the association between proprietary content and platform performance due to institutional protection on proprietary resources, it weakens the association between user-generated content and performance, as stronger IPR protection also enhances complementors’ ability to appropriate returns from their own creations. Our analysis using a unique large-scale cross-country dataset finds empirical support for the hypotheses. We discuss our contributions to research on intellectual property rights, platforms and institutions.
A firm's inventors are repositories of its core expertise that constitutes its competitive advantage. This knowledge is subject to erosion when an inventor exits the firm. Little is known, however, about what makes an inventor with core knowledge susceptible to exit. We develop a model of exit in which inventor knowledge may be core, unique, and complex, which determines the likelihood of her or his exit from a firm. We study inventor exit from IBM using a long panel of USPTO data (1975-2010) and find that an inventor with core knowledge is more likely to exit from IBM when she or he has more unique and less complex knowledge. These factors also determine whether the inventor subsequently joins a rival firm or a non-rival firm.
Although the positive influence of women on environmental innovation has been studied before, its effects within the context of Multinational Corporations (MNCs) remain under-explored. This is an important matter since MNCs reach across borders by means of their foreign subsidiaries, whose activities play an important role in global climate change. Hence, this study examines how foreign subsidiaries' environmental (product and process) innovation objectives are affected by the representation of women in their R&D teams and moderated by the ecological institutions in the home countries of their parent companies. Using a sample of 974 foreign subsidiaries located in Spain over the 2008-2016 period, our results indicate that the MNCs' home-country environmental institutions can reinforce the expression of socially constructed female roles that support environmental innovation at the subsidiary level. Specifically, this effect tends to be greater for product-related environmental innovations than for process-related ones. These findings further our understanding of the role of female R&D workers in the MNC context and provide evidence that a higher representation of women in their subsidiaries' R&D teams can be considered a strategic asset with regard to environmental endeavors.
In response to growing institutional complexity, corporations are increasingly adopting dutybased purpose strategies that challenge shareholder primacy in favour of moral obligations to multiple stakeholders. However, distinguishing between authentic purpose integration and purpose-washing represents a complex challenge for management scholars. Our study examines the relationship between purpose talk and purpose walk by investigating the strategic role of rhetoric in shaping how duty-based purpose is communicated and discursively legitimized. Drawing on rhetorical theory of diffusion, we analyse 120 extra-financial reports from U.S. companies that signed the 2019 Business Roundtable Statement. Specifically, we use semantic-linguistic methods to assess purpose talk and compare these results with purpose walk measures based on cognitive-linguistic analysis of the same reports and external multistakeholder performance ratings. Our findings reveal a significant negative correlation: companies that rhetorically use a "copyand-paste" language of the Statement exhibit greater decoupling of purpose talk from purpose walk. Conversely, companies that adopt a distinctive rhetorical style demonstrate greater talkwalk coupling. By unpacking the rhetorical form of corporate purpose communication, we show how corporations may leverage rhetorical mimicry to discursively legitimise the introduction of purposedriven strategies. Our cross-sectional insights suggest that purpose talk-walk decoupling should not be interpreted a priori as opportunistic purpose-washing, thereby contributing to a more nuanced theoretical interpretation of its implications under conditions of institutional complexity.
This study introduces the concept of integrated planning as a dynamic capability, exploring the roles and relationships of planning and implementation in enhancing planning outcomes. We argue that planning alone does not directly enhance firm performance; instead, the benefits are realized when plans are fully integrated, adapted, and enacted during implementation. Using a sequential explanatory mixed-methods design, we first analyze survey data from 103 high-end hotels in the Gulf Cooperation Council (GCC) region using PLS-SEM, and then draw on 17 in-depth interviews with senior hotel executives to explain and contextualize the quantitative findings. The quantitative results show that integrated planning significantly improves implementation success but does not directly affect firm performance. Rather, implementation success mediates the relationship, enabling plans to be adapted and enacted in ways that lead to superior performance outcomes. The qualitative findings provide further insights into the mechanisms at play, unpacking the complex and interactive nature of planning and implementation. We outline several theoretical implications and offer practical guidance for managers seeking to strengthen their firms’ planning and performance.
Research on entry modes often overlooks how informal institutions shape choices in temporary mega-infrastructure projects (MIPs). We address this by integrating a "time-compression" perspective with a "legitimacy supply-and-demand" framework. We posit that host-country social trust acts as a swift governance mechanism, substituting for long-term relationship building and making non-greenfield modes-which offer immediate embeddedness-more attractive than greenfield control. Analyzing 2540 Chinese overseas MIPs (2005-2020), we find that higher social trust significantly reduces the likelihood of greenfield entry. However, this mechanism is contingent. On the demand side, political sensitivity reveals the structural limits of trust, showing no intensification effect in high-stakes environments. Conversely, on the supply side, firm global reputation attenuates the impact of trust. High reputation acts as a strategic substitute for partnerbased legitimacy, allowing firms to retain autonomy via greenfield entry. These findings demonstrate that the interplay of external constraints and internal resources fundamentally reshapes the strategic value of social trust in temporary organizations.
Industries such as coal mining, oil and gas, and steel are widely considered to be in the sunset stage of their lifecycle in advanced democracies, yet global demand and supply for these very industries continue to reach record highs. This disconnect between imposed decline in one part of the world and economics-driven growth in another reveals a fundamental gap in international business strategy theory. We argue that Vernon’s (1966) classic product lifecycle framework, and its subsequent extensions, cannot account for a world in which non-market stakeholders mandate sunset status for entire industries, irrespective of global market realities. This paper makes two contributions. First, we extend Vernon’s lifecycle theory to incorporate the phenomenon of mandated industry sunsetting, showing that the geography of supply and demand has re-emerged as a critical strategic variable, but now driven by non-market forces rather than economics-based considerations. Second, we develop a typology of MNE strategic responses based on two parameters: the ability to redeploy resources across industries and the ability to recombine firm-specific advantages with country-specific advantages in new geographies. Using illustrative cases from the mining equipment industry, we identify four strategic archetypes and demonstrate how firms from both sunset-mandated and growth-oriented countries are repositioning themselves. Our analysis carries significant implications for MNE managers navigating a world where political decisions override market signals, and for public policy makers who must recognize that sunset mandates may inadvertently strengthen foreign competitors while eroding domestic industrial ecosystems and national competitiveness.
Research has long examined how hierarchical structures shape organizational outcomes, yet the effects of alignment between different hierarchies remain underexplored. We address this gap by investigating how alignment between power and status hierarchies influences incremental innovation in professional service firms. Drawing on a longitudinal dataset of U.S. law firms, we find that hierarchy alignment enhances the creation of new practice areas, but its impact depends on the steepness of the underlying hierarchies. Alignment weakens innovation under flat power hierarchies but improves it under steep power hierarchies. Status hierarchy steepness shows a similar but weaker moderating pattern, with alignment having no significant effect under flat status hierarchies but improving innovation under steep status hierarchies. By reconceptualizing hierarchy as a multidimensional construct, our study highlights alignment as a powerful yet contingent mechanism through which firms foster innovation.
