Person: Giarratana, Marco
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Marco
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Giarratana
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IE University
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IE Business School
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Strategy
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Publication Publication The value of flexibility in multi-business firms(Wiley, 2022-05-29) Santaló, Juan; Folta, Timothy; Giarratana, Marco; Dickler, Teresa; Spanish Ministry of Science and Innovation; Agencia Estatal de Investigación; https://ror.org/02jjdwm75Whether diversified firms have advantages over their single-business counterparts is the focus of much research in strategic management. Indeed, there is sparse evidence that corporate advantage exists, on average. We explore one potential driver of corporate advantage—that multi-business firms have more flexibility than single-business firms to cope with uncertainty, because they can internally redeploy resources across businesses. Using Compustat data, we show that uncertainty increases the relative advantage of multi-business firms, a finding robust to controls for endogeneity. Consequently, the paper provides important insight and evidence around when corporate advantage might obtain. Moreover, we find that growth option value is accentuated in the presence of switching flexibility. Finally, multi-business firms with redeployment experience and businesses with more inversely correlated returns benefit more from uncertainty.Publication Leveraging synergies versus resource redeployment: Sales growth and variance in product portfolios of diversified firms(Wiley, 2021-04-02) Pasquini, Martina; Giarratana, Marco; Santaló, Juan; State Research Agency; https://ror.org/02jjdwm75Research Summary This article analyzes the relationship between sales growth and variance for diversified firms. Distinguishing product niches linked by scale free versus non-scale free resources, this study predicts that the more a firm diversifies leveraging on a non-scale free resource, the more likely its sales growth and variance are positively correlated. However, this relationship is negatively moderated by the presence of a scale-free resource such that the presence of scale-free resources of high value implies a negative correlation. These theoretical intuitions are consistent with data from 2008 to 2013, reflecting firm sales growth rates in five industries spanning 45 product niches in seven EU countries and the United Kingdom. These industries prioritize shelf space as a non-scale free resource, and brand as a scale free resource. Managerial Summary Diversifiers may base their value creation either in pursuing synergies or in exploiting the benefits derived by internal resource redeployment across products or across industries. Here, we highlight the different managerial implications on risk/performance structure derived from diversification based on resource redeployment compared to diversified companies exploiting synergies. Can the disparity of sales growth between products of the same firm's portfolio be good for the corporate performance? Here, we show that diversification based on resource redeployment goes hand in hand with a positive relation between overall firm growth and variance of results within the same firm. On the contrary, firm diversification based on synergies implies a negative relationship between within firm disparity and overall firm growth.Publication Product portfolio performance in new foreign markets: The EU trademark dual system(Elsevier, 2018-07-24) Barroso, Alicia; Pasquini, Martina; Giarratana, Marco; European Commission; https://ror.org/02jjdwm75How do intellectual propriety rights (IPRs) help firms profit from their innovation? Innovation literature frequently turns to patents to measure innovative IPR, but more recent work shifts focus to the other side of IPR, namely, trademarks. This article therefore discusses the effects of trademark strategies when companies decide to introduce their product portfolios in a new foreign market. Entrants might opt for a common trademark across different country markets (integration) or use several country-specific trademarks (responsiveness). This empirical study exploits the quasi-natural experiment created by the tariff shock that affected Spain when it joined the European Union in the 1990s. Data from the automotive industry reveal how non-European companies that already operated in other European countries sought to enter Spain rapidly, using various trademark strategies. The product portfolio characteristics are fixed at entry, so this study can specify how and when trademark responsiveness versus integration affects firm performance. The results reveal that trademark responsiveness increases firm performance if the firms suffer high liabilities of foreignness or newness.Publication Diversification, Branding and Performance of Professional Service Firms(SAGE Publications Inc., 2018) Castaldi, Carolina; Giarratana, Marco; https://ror.org/02jjdwm75This article analyzes the effects of diversification and brand breadth on firm performance for professional service firms (PSFs). The research aim is two-fold. First,we test whether moving into products may put at risk the core resources that sustain PSFs’ competitive advantage. Second,we study which branding strategies best match their diversification attempts. Broad (narrow) brands characterize a branding strategy with scarce (plentiful) associations to specific product characteristics. We analyzed trademark portfolios of 47 U.S.-based management consulting firms in the 2000 to 2009 time period. Panel regression results suggest that (1) PSFs always benefit from diversification when they remain pure-service providers; (2) performance is positively related to a strategy of specialized narrow brands. © 2018,The Author(s) 2018.Publication For Purpose Enterprises and Hybrid Organizational Forms: Implications for Governance and Strategy(2023-09-20) Pasquini, Martina; Giarratana, Marco; https://ror.org/02jjdwm75Nowadays, a company’s social purpose has become a key factor that should be considered in organisational design and strategic decision-making. For-purpose enterprises are for-profit, financially self-sustained organisations, which embed a social aim as one of their main objectives. Companies that simultaneously must envisage a double purpose, namely, social and competitive, face an even greater complexity, i.e., a likely risk of internal logics’ tensions and structural drifts. Scholars have proposed different theoretical and operative frameworks; on the one hand, they describe ad hoc business models to foster synergies between the social impact and economic and competitive-oriented actions. On the other hand, they also try to focus on an organization’s governance, suggesting incentive schemes and organizational designs that could smooth trade-offs and tensions, which could jeopardize a company’s viability. This piece aims at building a comprehensive overview of the studies that, in different fields, have contributed to the understanding of businesses with purposes under different angles. Following Mitnick et al. (2021), scholars have differentiated two clusters of studies: i) instrumental–strategic–economic stream; ii) injunctive–social–behavioural. The first approach perceives as critical the balance between social-oriented aims and profit with a viable business model. Under this perspective, the concept of synergies between the two aims is critical. Its mainstream framework is the stakeholder theory approach, while recent approaches, rooted especially in marketing and strategic human capital studies, bring to the central stage how corporate social responsible actions develop social identity processes with focal stakeholders, which are responsible for reciprocity behaviours. These different perspectives, although complementary, could imply significant differences for the organisation design, product strategy, and the role and power of the chief sustainability officer as well as allocation of resources and capabilities. The second group of studies, i.e., injunctive–social–behavioural, is focused on understanding how to maintain active social aims under economic and competitive constrains. These works are particularly focused in investigating the intrinsic motivations of doing good and the type of tensions that could arise in organizations with a social mission. The works thus analyse the potential drifts, risks, and solutions that could mitigate tension and trade-offs. In this stream, the first line of work is related to social entrepreneurship, especially in developing countries, while the second is more focused on human resource incentive schemes and organizational designs that preserve a company’s social goals under economic constrains. In sum, providing a general and actualized map of the research related to for-purpose enterprises, this article aims to highlight the focal points of investigation that could generate new management theory developments.Publication Product-Market Competition and Resource Redeployment in Multi-Business Firms(Wiley, 2020-06-02) Giarratana, Marco; Santaló, Juan; Morandi Stagni, Raffaele; https://ror.org/02jjdwm75This article investigates how diversified firms reallocate internal non-scale free resources when one of their product business units (BUs) experiences increased exposure to international competition driven by a sharp decrease in trade tariffs. On average, firms tend to fight, by reallocating resources toward the BU affected by the trade shock and away from other BUs within the same firm. Two variables moderate this first-order effect with opposite signs. The level of sunk costs of the assets allocated to the BU affected by the shock is a positive moderator of resource reallocation to it. The presence of technological synergies between the BU affected and the rest of BUs instead moderates the relationship negatively. This negative moderation seems to only take place when competition increases the value of technology as a competitive resource.Publication Transaction Costs in Resource Redeployment for Multi-niche Firms(Informs PubsOnline, 2020-02-24) Giarratana, Marco; Santaló, Juan; https://ror.org/02jjdwm75Transaction costs strongly influence diversification dynamics, as predicted by resource theory. A mainstream view links the profitability of diversification with the existence of transaction costs that prevent a firm from trading in fungible, scale-free resources. This study applies a neo-Penrosian perspective to transaction costs, with the notion that diversification may be driven by the redeployment of non-scale-free resources. An empirical analysis, using tax changes in the drink sector as a measure of exogenous demand variation, offers results consistent with the prediction that redeployment is particularly relevant when retailing is concentrated and single-product competition within a focal product niche (e.g., beer) is fragmented. This study also measures redeployment across a portfolio of a multiniche firm when changes in its sales-growth rates for a particular product niche might imply contrasting changes in other product niches. The resulting evidence is consistent with predictions that demand uncertainty, and transaction costs create viablePublication Resource partitioning and strategies in markets for technology(2018-07-25) Giarratana, Marco; Fosfuri, Andrea; Szilard Sebrek, Szabolcs; https://ror.org/02jjdwm75By bridging literature on resource partitioning and research on markets for technology, this article predicts that companies that pursue a broad (focused) product strategy buy more (less) technology in the market but sign fewer (more) deals as sellers. The proposed framework reveals that a thicker technology market increases the survival chances of both firms with focused product strategies and firms with broad product strategies; a misalignment between the product strategy and the strategies in the market for technology reduces those chances. To test these contentions, the authors consider a population of 736 firms that entered the security software industry between 1989 and 2002.