Complex patterns of vertical integration in the forest products industry: systematic and bankruptcy risks
Article Abstract:
Empirical studies have found an association between vertical integration and low risk. However, other work has suggested that a complex pattern of vertical integration reduces ability to adapt to environmental turbulence and hence increases risk. This study examined the relationship between vertical integration and risk to shareholders (systematic risk) and creditors (bankruptcy risk) in the forest products industry. The results indicate that fully integrated firms have higher systematic and bankruptcy risk in turbulent product-market environments. In addition, environmental growth was associated with low creditor risk and environmental turbulence with high shareholder risk. These associations suggest the possibility of firms' using diversification strategies to shift risk between shareholders and creditors. (Reprinted by permission of the publisher.)
Publication Name: Academy of Management Journal
Subject: Business, general
ISSN: 0001-4273
Year: 1992
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Interpreting strategic issues: effects of strategy and the information-processing structure of top management teams
Article Abstract:
Understanding how managers interpret strategic issues is important to understanding strategic action, organizational change, and learning. However, little is known about how the context in which strategic issues are interpreted relates to the nature of interpretation. This study of 151 chief executive officers employed a cross-level analysis to investigate how two organization-level factors - strategy and the information-processing structure of the top management team - related to how chief executives in different organizations interpreted the same situation. Findings indicated that both strategy and information-processing structures are related to how chief executives label strategic situations and the range of variables they use during interpretation. (Reprinted by permission of the publisher.)
Publication Name: Academy of Management Journal
Subject: Business, general
ISSN: 0001-4273
Year: 1990
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