Erim - 07 omslag van Leeuwen 4/11/07 3:10 PM Pagina 1 Design: B&T Ontwerp en advies www.b-en-t.nl Print: Haveka www.haveka.nl Recovered-Resource Dependent Industries 109 ERIK P. VAN LEEUWEN and the Strategic Renewal of Incumbent Firms A Multi-Level Study of Recovered-Resource Dependence LEEUWEN VAN ERIK P. Management and Strategic Renewal in the European Paper and Board Industry Managing resource dependencies and strategic renewal is crucial for Recovered-Resource incumbent firms to survive. For firms operating in “recovered- resource dependent industries”, i.e. industries that to a large extent depend on recycled end-of-life-products for the continuation of Dependent Industries production processes, this is even more complex. To create and maintain a sustainable competitive advantage, the return of these products has to be strategically organised and managed as well. This Dependent Industries and the Strategic Renewal of Incumbent Firms Recovered-Resource and the Strategic study seeks to extend research on resource dependence theory to the context of recovered-resource dependent industries. Based on several theoretical lenses a conceptual managerial framework is developed Renewal of incorporating internal and external factors influencing strategic renewal and recovered-resource dependence management. A multi- level research design encompassing eight research settings is used to Incumbent Firms illustrate the conceptual framework. The results indicate why the European Paper and Board Industry and large incumbents belong to A Multi-Level Study of Recovered-Resource the best performing with regard to recycling rate. Furthermore, it is shown how management can influence a firm’s strategic renewal Dependence Management and journey and recovered-resource dependence, using several resource Strategic Renewal in the European dependence instruments, in order to contribute to sustainable competitive advantage. Paper and Board Industry ERIM The Erasmus Research Institute of Management (ERIM) is the Research School (Onderzoekschool) in the field of management of the Erasmus University Rotterdam. The founding participants of ERIM are RSM Erasmus University and the Erasmus School of Economics. ERIM was founded in 1999 and is officially accredited by the Royal Netherlands Academy of Arts and Sciences (KNAW). The research undertaken by ERIM is focussed on the management of the firm in its environment, its intra- and inter-firm relations, and its business processes in their interdependent connections. The objective of ERIM is to carry out first rate research in manage- ment, and to offer an advanced graduate program in Research in Management. Within ERIM, over two hundred senior researchers and Ph.D. candidates are active in the different research programs. From a variety of academic backgrounds and expertises, the ERIM community is united in striving for excellence and working at the forefront of creating new business knowledge. www.erim.eur.nl ISBN 90-5892-140-6 Recovered-Resource Dependent Industries and the Strategic Renewal of Incumbent Firms: A Multi-Level Study of Recovered-Resource Dependence Management and Strategic Renewal in the European Paper and Board Industry 1 2 Recovered-Resource Dependent Industries and the Strategic Renewal of Incumbent Firms: A Multi-Level Study of Recovered-Resource Dependence Management and Strategic Renewal in the European Paper and Board Industry Recovered-resource dependent industries en strategische vernieuwing van bestaande ondernemingen: Een multi-level studie naar recovered-resource dependence management en strategische vernieuwing in de Europese papier en karton industrie Proefschrift ter verkrijging van de graad van doctor aan de Erasmus Universiteit Rotterdam op gezag van de Rector Magnificus Prof.dr. S.W.J. Lamberts en volgens besluit van het College voor Promoties. De openbare verdediging zal plaatsvinden op vrijdag 1 juni 2007 om 13.30 uur door Erik Pieter van Leeuwen Geboren te Gouda 3 Promotiecommissie Promotoren: Prof.dr.ing. F.A.J. van den Bosch Prof.dr. H.W. Volberda Overige leden: Prof.dr. J.A. Aragón-Correa Dr. M.G. Baaij Prof.dr. H. Vredenburg Erasmus Research Institute of Management (ERIM) RSM Erasmus University / Erasmus School of Economics Erasmus University Rotterdam Internet: http://www.erim.eur.nl ERIM Electronic Series Portal: http://hdl.handle.net/1765/1 ERIM Ph.D. Series Research in Management 109 ISBN 978–90–5892–140–6 © 2007, Erik.P. van Leeuwen All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the author. 4 5 6 PREFACE The book in front of you is the result of a journey of about four years. A journey during which I have learned a lot. The most central theme in Resource Dependence theory is that firms depend on their environment. I learned that not only do firms depend on their environment; people do as well. Resource dependence means being dependent on others. When writing a PhD thesis, you depend on many “others”. I categorised the “others” in four groups: university, work, friends, and family. Without these four groups this book could not have been realised, therefore I will here address some words to them, starting with the group “university”. I want to thank Prof.dr. Frans A.J. van den Bosch and Prof.dr. Henk W. Volberda for their supervision. They spent many hours with me guiding me, helping me find the right direction, and motivating me to add just that little extra to the thesis. They taught me that it is important to continue exploring different possibilities before being satisfied with a result. They also taught me how to structure a manuscript and keep the overview of things yet to be done. Without their valuable insights, accomplishing this job would have been a lot more difficult. With regard to Carolien Heintjes and Patricia de Wilde, thank you for the pleasant hours we spent together and for your flexibility in always finding a place in the agenda of the Profs. so that I could have another appointment. To all the other colleagues at the RSM Erasmus University, thank you as well for providing a pleasant working atmosphere. Special acknowledgements are also owed to many people at Kappa Packaging (a leading European Paper & Board company with 16.000 employees). I want to thank Frits Beurskens for giving me the opportunity to follow a PhD trajectory where I could divide my time between both Kappa Packaging and the RSM Erasmus University. I experienced being an external PhD candidate as being very fruitful for relating theory and practice. It gave me the opportunity to live in two different worlds: the world of Kappa Paper Recycling and the world of the Department of Strategy and Business Environment of the RSM Erasmus University. To illustrate this there have been several occasions where representatives of both worlds have been around the same table. The chapters of this thesis were presented on five meetings at Kappa Packaging, attended by Frits Beurskens (CEO Kappa Packaging) Henri Vermeulen (Manager Director Kappa Paper Recycling), and Steven Stoffer (Managing Director Sourcing Kappa Packaging) and both my supervisors. On these occasions theory and practice were aligned which has been beneficial for the development of this thesis. I thank Henri Vermeulen for the many, many things he taught me about recovered paper. I cannot imagine that anybody could have taught me more about this subject. Moreover, he has shown me how important networking is to achieve your vii 7 target. I thank Saskia Willemsen for all the things she organised for me, for her “sunshine” and for her moral support. With regard to my other colleagues, thank you for giving me such a great time at the company. Furthermore, I thank my friends for their moral support, for their many e-mails and for their understanding when I was busy yet again. I want to thank my good friends and “paranimfen” Joy Kearney and Dennis Rietveld in particular. You were both great in both good and bad times. Last but certainly not least, I want to thank my parents. You were the ones that experienced those four PhD thesis years most closely. I thank you for your understanding and your unconditional confidence in me. I want to thank you also for your support in many ways, for being there. Bergambacht, juni 2007 Erik P. van Leeuwen viii 8 TABLE OF CONTENTS PREFACE VII TABLE OF CONTENTS IX PART ONE: INTRODUCTION 1 CHAPTER 1 INTRODUCTION 1 Introduction 1 Recovered-Resource Dependent Firms 2 Research Problem, Questions, and Approach 9 Structure of the Manuscript 17 PART TWO: THEORETICAL PERSPECTIVES, FRAMEWORK, AND PROPOSITIONS 19 CHAPTER 2 PERSPECTIVES ON RESOURCE DEPENDENCE MANAGEMENT, RECOVERED-RESOURCE DEPENDENT INDUSTRIES, AND RECOVERED- RESOURCE DEPENDENCE MANAGEMENT 20 Introduction 20 Perspectives on Strategy Formation and Resource Dependence Management 21 Previous Perspectives on Recovered-Resource Dependent Industries 26 Distinguishing External and Internal Factors Influencing Recovered-Resource Dependence Management 36 Resource Dependence Theory 38 Resource-Based View of the Firm 50 Dynamic Capabilities Theory 54 The Knowledge-Based View of the Firm 57 Institutional Theory 61 Characteristics of Factor and Product Markets 65 Conclusion 70 ix 9 CHAPTER 3 STRATEGIC RENEWAL AND RECOVERED-RESOURCE DEPENDENCE MANAGEMENT: CONCEPTUAL MANAGERIAL FRAMEWORK AND PROPOSITIONS 72 Introduction 72 Towards a Conceptual Managerial