DEPARTMENT of MANAGEMENT and INFORMATION SYSTEMS

revised July 20121 MGT 9913

DEPARTMENT OF MANAGEMENT and INFORMATION SYSTEMS COLLEGE OF BUSINESS and INDUSTRY MISSISSIPPI STATE UNIVERSITY

Lecture 01: Fall, Wednesdays, 5:30pm – 8:30pm, Room 308. Professor: James J. Chrisman, McCool 308A, 662-325-1991, [email protected]

COURSE OBJECTIVES and DESCRIPTION

The objectives of this seminar are to (1) investigate major seminal works and theories of the firm in the fields of entrepreneurship, family business, and strategic management, (2) develop ability to craft and critique theory, 3) produce a publishable theoretical research paper; and 4) generate excitement about testing the frontiers of knowledge.

The course should equip students to think conceptually. Students should also develop skills on how to understand, synthesize, and frame issues and problems facing business enterprises. In addition, the course will allow students to develop expertise in communicating new ideas to their peers in a manner which will both encourage further interchange of knowledge and lead to acceptance of those ideas. Finally, students will have the opportunity to apply these skills to conceptual issues confronting scholars in their own disciplines.

TEACHING METHODOLOGY, CLASS PREPARATION, ATTENDANCE, and PARTICIPATION

The primary teaching method for this course will be small group discussions and student presentations. Other approaches will be used if warranted.

Students are expected to attend all class sessions, except under the most extreme circumstances. Make-up work will be required for any class session missed no matter what the reason and excessive absence (more than one) will not be tolerated.

Each student will be required to read a number of books and articles during the semester. In addition, students are to develop a theoretical article, and make presentations to the class on that article. The specific assignments will be jointly determined by students and instructor.

Regardless of specific assignment, students are expected to make consistent, high quality contributions to class discussions through commentary, critiques, and the generation of new ideas. The following questions may help in preparation for class.

1 I am grateful for Hanqing Fang’s helpful assistance in revising this version of the syllabus. 1 1. What is the basic argument of the author(s)?

2. What are the key concepts and relationships the author(s) describes?

3. What methodology, if any, was employed to test these concepts?

4. What are the critical conceptual and methodological assumptions and trade- offs made by the author(s)?

5. What is you evaluation of the work? Do the concepts make sense? Are the assumptions and trade-offs reasonable? Is the methodology appropriate?

6. Was the study it carried out in a manner consistent with its intent? Are the results interpreted appropriately?

7. How useful is the work to managers? Researchers? Teachers?

8. What relationship, if any, does the work have with other works you have studied?

9. What implications does the work have for future research? For practice? What research questions are raised? How would you go about answering them?

WRITTEN ASSIGNMENTS

The major written assignment required for this course is described below. Papers are to be typed, double spaced, on standard typing paper using Times Roman 12 font, with 1” margins. (No plastic covers please!) Copies of all assignments should be provided to all participants in the class.

1. A theoretical or empirical article on management or organizations. Students and instructor will jointly determine the specific topic. This paper should be written following the style guidelines of the Academy of Management Review. In general the paper should: 1) define a problem area and the contributions of your approach; 2) review the relevant literature; 3) construct a conceptual model; 4) suggest several propositions (potentially testable hypotheses) that derive from the model; and 5) discuss the application of the model in research.

Notes:

1. All assignments must be completed, as specified in the syllabus, to pass the course regardless of circumstance. One letter grade will be deducted from papers that are late. Papers more than one day late receive an "F". Papers or presentations that deviate from the guidelines provided in this syllabus will be downgraded.

2. Plagiarism or academic dishonesty will result in penalties consistent with University guidelines.

2 3. Papers prepared in this class are the property of the students. The instructor, however, reserves intellectual property rights to the ideas he presents in class, and any contributions to the articles completed in the class. Barring this, students who may wish to work with the instructor to further develop their work after the completion of the course are invited, but not required, to do so.

ORAL ASSIGNMENT

The final session of the course will be devoted to student presentations of their original articles. Students will have 15 minutes to present their papers.

Time permitting, students will also be expected to field questions from the instructor and the remainder of the class on their presentations.

COURSE GRADE BREAKDOWNS

Article Weight

1. First Draft of Article 10% 2. Final Draft of Article 40% 3. Article Presentation 10% 4. Class Participation 40% 100%

3 COURSE OVERVIEW

1. August 22 INTRODUCTION

2. August 29 THEORIES OF THE FIRM (163)

Coase, R.H. (1937). The nature of the firm. Econometrica, 4, 386-405.

Akerlof, G.A. (1970). The market for “lemons”: Quality uncertainty and market mechanisms. Quarterly Journal of Economics, 84, 488-500.

Alchian, A. and Demsetz, H. (1972). Production, information costs and economic organization. American Economic Review, 62, 777-795.

Conner, K (1991). A historical comparison of resource-based theory and five schools of thought within industrial organization economics: Do we have a new theory of the firm? Journal of Management, 17, 121-154

Foss, N.J. (1996). Knowledge-based approaches to the theory of the firm: Some critical comments. Organization Science, 7, 470-476

Conner, K and Prahalad, C.K (1996). A resource-based theory of the firm: Knowledge versus opportunism. Organization Science, 7, 477-500

Foss, N.J. (1996) More critical comments on knowledge-based theories of the firm. Organization Science, 7, 519-523.

Hoskisson, R.E., Hitt, M.A., Wan, W.P. and Yiu, D. (1999). Theory and research in strategic management: Swings of a pendulum. Journal of Management, 25 (3), 417-456.

Kim, J., and Mahoney, J.T. (2010). A strategic theory of the firm as a nexus of incomplete contracts: A property rights approach. Journal of Management, 36, 806-826.

3. September 5 THEORY OF ECONOMIC DEVELOPMENT

Schumpeter, J.A. 1934. The Theory of Economic Development, (New Brunswick, NJ: Transaction Publishers).

4. September 12 AUSTRIAN THEORY OF ENTREPRENEURSHIP

Kirzner, I.M. (1973). Competition and entrepreneurship. Chicago: University of Chicago Press.

4 Cheah, H. B. (1990). Schumpeterian and Austrian entrepreneurship: Unity within duality. Journal of Business Venturing, 5: 341-347.

5. September 19 THEORETICAL PERSPECTIVES ON ENTREPRENEURSHIP (166)

Katz, J.A., and Gartner, W.B. (1988). Properties of emerging organizations. Academy of Management Review, 13, 429-441.

Chrisman, J.J., Bauerschmidt, A., and Hofer, C.W. (1998). The determinants of new venture performance: An extended model . Entrepreneurship Theory and Practice, 23 (1), 5-29.

Sharma, P., and Chrisman, J.J. (1999). Toward a reconciliation of the definitional issues in the field of corporate entrepreneurship. Entrepreneurship Theory and Practice, 23 (3), 11-27.

Shane, S., and Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1): 217-226.

Hitt, M.A., Ireland, R.D., Camp, S.M. and Sexton, D.L. (2001). Strategic entrepreneurship: entrepreneurial strategies for wealth creation. Strategic Management Journal. 22(6–7), 479–491.

Sarasvathy, S. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26, 243-263.

Minniti, M. (2004). Entrepreneurial alertness and asymmetric information in a spin-glass model. Journal of Business Venturing, 19, 637-658.

Alvarez, S., and Barney, J.B. (2004). Organizing rent generation and appropriation: Toward a theory of the entrepreneurial firm. Journal of Business Venturing, 19, 621-635.

Alvarez, S., and Barney, J.B. (2007). Discovery and creation: Alternative theories of entrepreneurial action. Strategic Entrepreneurship Journal, 1, 11-26.

Harper, D.A. (2008). Towards a theory of entrepreneurial teams. Journal of Business Venturing, 23, 613-626.

6. September 26 FAMILY BUSINESS OVERVIEW (167)

Chua, J.H., Chrisman, J.J., and Sharma, P. (1999). Defining the family business by behavior. Entrepreneurship Theory and Practice, Summer, 19-39.

Carney, M. (2005). Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29, 249-265.

5 Chrisman, J.J., Kellermanns, F.W., Chan, K.C., and Liano, K. (2010). Intellectual foundations of current research in family business: an identification and review of 25 influential articles. Family Business Review, 23, 9-26.

Gomez-Mejia, L. R., Cruz, C., Berrone, P., and De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. Academy of Management Annals, 5, 653- 707.

Lumpkin, G. T. and Brigham, K. H. (2011), Long-Term Orientation and Intertemporal Choice in Family Firms. Entrepreneurship Theory and Practice, 35: 1149–1169.

Le Breton-Miller, I., and Miller, D. (2011). Commentary: Family firms and the advantage of multitemporality. Entrepreneurship Theory and Practice, 35: 1171–1177.

Gedajlovic, E., Carney, M., Chrisman, J.J., and Kellermanns, F.W. (2012). The adolescence of family firm research: Taking stock and planning for the future. Journal of Management, 38, 1010-1037.

Chrisman, J.J., Chua, J.H., Pearson, A.W., and Barnett, T. (2012). Family involvement, family influence, and family-centered non-economic goals in small firms. Entrepreneurship Theory and Practice, 36, 267-293.

7. October 3 RESOURCE-BASED VIEW OF THE FIRM (159)

Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 171- 180.

Dierickx, I., and Cool, K. (1989). Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12), 1504-1514.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.

Peteraf, M.A. (1993). The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 14, 179-191.

Coff, R. W. (1999). When competitive advantage doesn't lead to performance: The resource based view and stakeholder bargaining power. Organization Science, 10(2), 119-133.

Priem, R.L. and Butler, J.E. (2001). Is the resource-based “view” a useful perspective for strategic management research? Academy of Management Review, 26, 22-40.

Barney, J.B. (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Academy of Management Review, 26, 41-56.

6 Priem, R.L., and Butler, J.E. (2001). Tautology in the resource-based view and the implications of externally determined resource value: Further comments. Academy of Management Review, 26, 57-66.

Makadok, R. (2001). A pointed commentary on Priem and Butler. Academy of Management Review, 26, 498-499.

Priem, R. (2001). “The” business-level RBV: Great wall or Berlin wall? Academy of Management Review, 26, 499-501.

Bowman, C., and Ambrosini, V. (2001). “Value” in the resource-based view of the firm: A contribution to the debate. Academy of Management Review, 26, 501-502.

Rugman, A.M., and Verbeke, A. (2002). Edith Penrose’s contribution to the resource-based view of strategic management. Strategic Management Journal, 23, 769-780.

Barney, J., Ketchen, D. J. Jr. and Wright, M. (2011). The future of resource-based theory: Revitalization or decline? Journal of Management. 37(5), 1299-1315

Makadok, R. (2011). The four theories of profit and their joint effects. Journal of Management. 37(5), 1316-1334.

8. October 10 NO CLASS: FINISH 1ST DRAFT OF PAPERS

9. October 17 DISCUSSION OF 1st DRAFT OF PAPERS

1st DRAFT OF PAPERS DUE 9:00 AM, MONDAY, OCTOBER 15

10. October 24 RESOURCE-BASED VIEW AND FAMILY FIRM (150)

Habbershon, T.G., Williams, M., and MacMillan, I.C. (2003). A unified systems perspective of family firm performance. Journal of Business Venturing, 18, 451-465.

Chrisman, J.J., Chua, J.H., and Litz, R. (2003). A unified systems perspective of family firm performance: An extension and integration. Journal of Business Venturing, 18, 467-472.

Sirmon, D.G., and Hitt, M.A. (2003). Managing resources: Linking unique resources, management, and wealth creation in family firms. Entrepreneurship Theory and Practice, 27, 339-358.

Chrisman, J.J., Chua, J.H., and Zahra, S. (2003). Creating wealth in family firms through managing resources: Comments and extensions. Entrepreneurship Theory and Practice, 27, 359- 365.

7 Ensley, M.D., and Pearson, A.W. (2005). An exploratory comparison of the behavioral dynamics of top management teams in family and nonfamily new ventures: Cohesion, conflict, potency, and consensus. Entrepreneurship Theory and Practice, 29, 267-284.

Nordqvist, M. (2005). Familiness in top management teams: Commentary on Ensley and Pearson’s “An exploratory comparison of the behavioral dynamics of top management teams in family and nonfamily new ventures: Cohesion, conflict, potency, and consensus.”. Entrepreneurship Theory and Practice, 29, 285-291.

Arregle, J-L., Hitt, M.A., Sirmon, D.G., and Very, P. (2007) The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44, 73-95.

Pearson, A. W., Carr, J.C., and Shaw, J. (2008). Toward a theory of familiness: A social capital perspective. Entrepreneurship Theory and Practice, 32, 949-969.

Sharma, P. (2008). Commentary: Familiness: Capital stocks and flows between family and business. Entrepreneurship Theory and Practice, 32, 971-977.

Patel, P., and Fiet, J. (2011). Knowledge combination and the potential advantages of family firms in searching for opportunities. Entrepreneurship Theory and Practice, 35, 1179-1197.

Sharma, P., and Salvato, C. (2011). Knowledge combination and the potential advantages of family firms in searching for opportunities. Entrepreneurship Theory and Practice, 35, 1199- 1205.

11 October 31 AGENCY THEORY AND STEWARDSHIP THEORY (172)

Jensen, M.C. and Meckling, W.H. (1976). Theories of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3, 305-360.

Fama, E., and Jensen, M.C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 301-325.

Morck, R., Shleifer, A., and Vishny, R.W. (1988). Management ownership and market valuation. Journal of Financial Economics, 20, 293-315.

Eisenhardt, K. (1989). Agency theory: An assessment and review. Academy of Management Review,14, 57-74.

Davis, J.H., Schoorman, F.D., and Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22, 20-47.

Hernandez, M. (2012). Toward an understanding of the psychology of stewardship. Academy of Management Review. 37(2), 172-193

8 12. November 7 AGENCY THEORY AND FAMILY BUSINESS (150)

Gomez-Mejia, L.R., Nunez-Nickel, M., and Gutierrez, I. (2001). The role of family ties in agency contracts. Academy of Management Journal, 44, 81-95.

Schulze, W.S., Lubatkin, M.H., Dino, R.N., and Buchholtz, A.K. (2001). Agency relationships in family firms: Theory and evidence. Organization Science, 12, 99-116.

Anderson, R., and Reeb, D.M. (2003). Founding family ownership and firm performance: Evidence from the SandP 500. Journal of Finance, 58, 1301-1329.

Chrisman, J.J., Chua, J.H., and Litz, R. (2004). Comparing the agency costs of family and nonfamily firms: Conceptual issues and exploratory evidence. Entrepreneurship Theory and Practice, 28, 335-354.

Corbetta, G., and Salvato, C. (2004). Self-serving or self-actualizing? Models of man and agency costs in different types of family firms: A commentary on “Comparing the agency costs of family and non-family firms: Conceptual issues and exploratory evidence.” Entrepreneurship Theory and Practice, 28, 355-362.

Morck, R., and Yeung, B. (2004). Family control and the rent-seeking society. Entrepreneurship Theory and Practice, 28, 391-409.

Villalonga, B., and Amit, R. (2006). How do family ownership, control and management affect firm value? Journal of Financial Economics, 80, 385-417.

Chua, J.H., Chrisman, J.J., and Bergiel, E.B. (2009). An agency theoretic analysis of the professionalized family firm. Entrepreneurship Theory and Practice, 33, 355-372.

13. November 14 PROSPECT THEORY AND SOCIOEMOIONAL WEALTH (175)

Kahneman, D., A. Tversky. (1979). Prospect theory: An analayis of decision under risk. Econometrica 47(March), 263-291.

Kahneman, D., J.L. Knetsch, R.H. Thaler. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. Journal of Economic Perspectives 5(1), 193-206.

Levy, J.S. (1992). An introduction to prospect theory. Political Psychology, 13( 2), 171-186

Kahneman, D., D. Lovallo. (1993). Timid choices and bold forecasts: a cognitive perspective on risk taking. Management Science 39, 17-31.

9 Wiseman, R.M., and Gomez-Mejia, L.R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review, 23, 133-153.

Gomez-Mejia, L.R., Haynes, K.T., Nunez-Nickel, M., Jacobson, K.J.L., and Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52, 106-137.

Gomez-Mejia, L.R., Makri, M., and Larraza-Kintana, M. (2010). Diversification decisions in family-controlled firms. Journal of Management Studies, 47: 223-252.

Zellweger, T.M., Kellermanns, F.W., Chrisman, J.J., and Chua, J.H. (2012). Family control and family firm valuation by family CEOs: The importance of intentions for transgenerational control. Organization Science, 23, 851-868.

14. November 21 THANKSGIVING HOLIDAY

15. November 28 NO CLASS

16. December 10 CONCLUSIONS, FINAL PRESENTATIONS OF PAPERS

FINAL PAPERS DUE 9:00 AM, FRIDAY, DECEMBER 7