Area of Expertise
- Competitive Advantage
- Cooperative Strategies
- Emerging Economies
- International - Strategy
- International Alliances and Partnerships
- International Business
- International Joint Ventures
- Mergers and Acquisitions
- Multi-National Corporations
- Strategic Alliances
- Strategic Management
I am a Professor of Strategy and the Distinguished Scotiabank Professor in International Business & Entrepreneurship at the Schulich School of Business, York University, Toronto, Canada. My work spans the domains of strategic management and global business and my research interests include interfirm collaboration, economic organization and firm boundaries, among others. My current research addresses digital platforms and ecosystems, with a particular emphasis on their governance.
2019 Global Strategy Journal Best Paper Award 2019 (for 2012 article)
2009 McGill University Desautels Faculty of Management Distinguished PhD Alumnus Award
2006 Identified as one of 8 academics who are considered as both prolific and influential in global strategy, Journal of International Management
2005 Journal of International Business Studies Paper of the Decade Award
2001 Identified as one of the top contributors worldwide (and top 10 is US) to the resource-based view and international business (Journal of Management, 9, 2001: 803-829).
2003 Identified among top contributors worldwide (and top 10 in US) in international strategic management research (Journal of International Management vol 9 no 2, 2003).
2003-2004, 2004-2005, 1997-1998, 1998-1999 University of Utah Faculty Fellow Award, 1999-2000
2002 Strategic Management Journal paper identified as among the most influential in the domain of dynamic capabilities
David Eccles Faculty Fellow, School of Business, University of Utah
Madhok, A., Pilar, C. and Pla-Berber, J. (2021), "Exploration-Exploitation and Acquisition Likelihood in New Ventures", Small Business Economics.Keywords
The market for acquisitions has been a blind spot in exploration-exploitation research in the new venture context. The introduction of the acquisition exit outcome as a performance dimension for new ventures, especially among high-tech ventures, shifts the traditional temporal logic of exploration-exploitation theory by introducing previously unacknowledged short-term benefits of exploration. We bring the acquisition outcome into the picture and investigate the relationship between the exploration-exploitation continuum and profitability, survival, and acquisition likelihood simultaneously. Using the Kauffman Firm Survey data, we provide evidence for a link between exploration and the likelihood of acquisition (defined as the business being sold to or merged with another business), although industry technology level poses a boundary condition such that the association is not observed in low- and medium-technology firms. An inverse U-shaped relationship that is monotone negative for most of the data range was found between exploration and the profitability of low- and medium-tech firms, and a negatively linear relationship was found for exploration and the profitability of high-tech firms. Our findings lend some support to the viability of “born to flip” strategies involving comparatively higher exploration levels in high-tech start-ups and sacrifice of short-term profitability.
Madhok, A., Puig, F. and Shen, Z. (2020), "Outward Foreign Direct Investment and Agglomeration: Exploring Firm Heterogeneity in Country-of-origin Cluster Location Choice Decisions", Multinational Business Review, 28(2), 221-244.
Purpose This paper aims to analyse which firm-level characteristics drive their location decisions when investing in a foreign country. Focusing on origin clusters, the authors will study the potential influence of the home country context and, in particular, the impact of firm-level factors, both investor- and investment-related, underlying heterogeneity in their location choice decisions. Design/methodology/approach The empirical analysis draws on data gathered from mainland Chinese MNEs that have invested in Germany between 2005 and 2013 (269 firms). The authors chose a single host (Germany) and a single home (China) country for their representativeness and for methodological reasons to control for country effects. The authors used a multinomial logit model to assess the effects of the independent variables on the probability that each of the three location possibilities would be selected. Findings The results suggest that investors preferring co-location in origin clusters have distinct structural and strategic characteristics. From a more structural point of view, Chinese foreign direct investment (FDI) undertaken by smaller firms and those without prior experience in the EU prefer an area where there are other Chinese investors. From a more strategic perspective, these FDI flows are more likely to tap into industry agglomerations when the investors’ objective is strategic asset seeking, and they have less knowledge-intensive investments. Practical implications The findings may be of great practical value to practitioners and policymakers. Knowledge of the advantages and disadvantages of the types of agglomeration networks can help managers to balance the rewards and risks in their decision-making and to select a suitable development path for their FDIs. For policymakers, an understanding of the structure and formation of different groups of firms in one location and the characteristics of investors who may enter the location can help them to improve their regulatory work and to develop policies to attract investments, thereby enhancing local economic development and community stability. Originality/value The research shifts the emphasis of the location choice decision beyond just where to locate toward with whom to collocate. It also contributes to the growing research on emerging market multinationals by providing further insight into understanding of FDI location behavior by firms from emerging economies.
Keyhani, M., Madhok, A. and Tajedin, H. (2019), "A Theory of Firm-designed Markets: Circumventing Knowledge Constraints in Crowds and Marketplaces", Strategy Science, 4(4), 323-342.Keywords
In this paper, we investigate the ways in which new forms of organization enabled by digital technologies, such as crowdsourcing and digital marketplaces, are allowing firms to circumvent and defy traditional knowledge constraints. This is part of the broader question of when and why these forms of organization are more efficient relative to alternatives, given that some firms simultaneously utilize crowdsourcing, marketplaces, and traditional forms of organization. We observe that an important cluster of these new organizational forms are able to circumvent knowledge constraints, because they combine elements of market and hierarchical organization in firm-designed hybrid arrangements. We further categorize these firm-designed markets into one-sided market arrangements (crowds) and two-sided market arrangements (marketplaces). To explain their efficiency relative to hierarchies and relative to each other, we take a knowledge-based perspective and review ways in which firm-designed markets reduce or remove both first-order (known unknown) and second-order (unknown unknown) knowledge constraints compared with hierarchies. Our argument hinges on the notion that firm-designed markets provide semidirected and undirected search and generativity mechanisms that allow firms to go beyond what is possible with centrally directed search.
Madhok, A., Pla-Berber, J. and Pilar, C. (2018), "Co-Parenting Through Subsidiaries: A Model of Value Creation in the Multinational Firm", Global Strategy Journal, 8(4), 536-562.Keywords
Research Summary – We analyze a novel way to configure and manage multinational networks and propose a model of “co‐parenting,” characterized by the sharing of parenting roles and distribution of responsibilities between two units. We develop our argument around the notion of the springboard subsidiary, an operating subsidiary that assumes headquarters’ functions since it shares greater institutional closeness with both the headquarters’ country as well as with the host region. Based upon qualitative data, our inductive model revolves around three stages: establishment, consolidation, and maturity, each of which reflects distinct roles and loci of decision making among the three actors involved: headquarters, springboard subsidiary, and local subsidiary. Overall, our study sheds distinct light on when and how headquarters add value by matching parenting to context. Managerial Summary In expanding across regions, multinational firms often face a situation where neither the local unit nor the corporate headquarters possesses the competencies to be at the competitive forefront. This article analyzes a model of interregional expansion of multinational firms by using springboard subsidiaries—operating subsidiaries that can serve as a bridge between headquarters and local subsidiaries since they share institutional and business ties with both. We develop a model in which some parenting functions—coordination, control, and knowledge creation—are distributed between headquarters and the springboard subsidiary along an accumulative process of capabilities. By demonstrating how a springboard subsidiary can help align control to context, the model offers a tool for strategic analysis that helps avoid potential value destruction by headquarters.
Deutsch, Y., Keyhani, M., Lévesque, M. and Madhok, A. (2015), "Exploration-Exploitation Strategies and Exit Outcomes of New Ventures", Frontiers of Entrepreneurship Research BCERC Proceedings, 34(11), 1-17.
The theory of exploration and exploitation is based on the logic of trade-offs and yet empirical research has rarely investigated these trade-offs as manifested between different dimensions of performance. In the context of start-ups, getting acquired is an additional performance dimension previously ignored in the ambidexterity literature. This paper utilizes the recently completed Kauffman Firm Survey data to investigate the relationship between exploration and the profitability, survival, and acquisition likelihood of start-ups simultaneously. A balance-is-best relationship is found for profitability of survived firms and for the acquisition likelihood of high tech firms, while an exploitation focus is found to maximize the survival chances of low and medium tech firms. For low and medium technology start-ups we find evidence of a trade-off between survival likelihood and profitability-given-survival, and for high tech start-ups we find evidence of a differently shaped trade-off between acquisition likelihood and profitability-given-survival.
Bossink, B., Keyhani, M. and Madhok, A. (2015), "Understanding Alliance Evolution and Transformation: Adjustment Costs and the Economics of Resource Value", Strategic Organization, 13(2), 91-116.Keywords
Alliances have been studied extensively in the past and various arguments have been suggested to explain their evolution and eventual termination. We argue that one important explanation of alliance termination has remained overlooked, one where the mechanism revolves around resource value and is independent of any mismanagement, opportunism, lack of trust, interpretive misunderstanding, or perceptions of inequity. In this explanation, we recognize explicitly that resources undergo transformation through an alliance, and this transformation reveals new previously imperfectly predicted costs to remain in the alliance as well as new opportunities outside the alliance. We apply the concepts of direct and indirect adjustment costs and inter-temporal economies of scope to explain these phenomena and demonstrate that, depending on the particular structure of incentive asymmetry between the two firms after alliance formation, the new circumstances may motivate a revised cost/profit sharing arrangement, a change in ownership of alliance resources, or a complete dissolution of the alliance. Some determinants of adjustment costs are explored in detail, covering resource characteristics, resource combination characteristics, and environment characteristics. Based on the economics of resource value, our argument has implications not just for alliance evolution and termination but also provides a distinct lens to explain the evolution of firm boundaries and the manner of transition of alliances into acquisitions.
Keyhani, M., Lévesque, M. and Madhok, A. (2015), "Towards a Theory of Entrepreneurial Rents: A Simulation of the Market Process", Strategic Management Journal, 36(1), 76-96.
While strategy theory relies heavily on equilibrium theories of economic rents such as Ricardian and monopoly rents, we do not yet have a comprehensive theory of disequilibrium or entrepreneurial rents. We use cooperative game theory to structure computer simulations of the market process in which acts of creation and discovery disequilibrate and equilibrate the market over time. Using simulation experiments, entrepreneurial rents can be isolated from structural rents by keeping initial structural advantages constant. We impute entrepreneurial rents to underlying actions of creation and discovery under various combinations. Our results have relevant implications for entrepreneurship strategy, particularly for firm boundaries and resource allocation decisions.
Madhok, A. (2015), "A Critical Assessment of Firm Advantage and Implications for Multinationals and Multinationalizing Firms", Journal of World Business, 50, 627-630.
The notion of advantage is central to many of the arguments regarding the multinational enterprise (MNE), both with respect to the existence of the MNE as an institution, (i.e. why the MNE), as well as challenges in managing the MNE. In this paper, I critically examine three aspects of advantage: the firm advantage, the multinational firm advantage and the implications of advantage for multinational and multinationalizing firms. With respect to the first, I complement the market failure argument with the relational failure argument. With respect to the second, I complement the multinational as ‘internalizer of externalities’ perspective with that of the multinational as a knowledge integrator. With respect to the third, I question the (over) emphasis on extant firm specific advantages and introduce elements of entrepreneurship into the argument, shifting the emphasis from ability to agility.
Madhok, A. and Marques, R. (2014), "Towards an Action-Based Perspective on Firm Competitiveness", Business Research Quarterly, 17(2), 77-81.
Existing theoretical frameworks typically revolve around sustainability of competitive advantage and attribute superior firm performance to its position in the industry structure and/or the possession of critical resources. However, the equilibrium-oriented logic implicit in these perspectives is not consonant with today’s environment, characterized by more dynamic and complex behavior of markets and firms, which renders competitive advantages obsolete faster than ever. We propose an alternative action-based perspective on firm competitiveness one that revolves around the logic of action and emphasizes an entrepreneurial orientation and firm agility as the basis of firm competitiveness. This logic of action shifts the focus away from just industry position or resource possession and provides more scope for less advantaged firms to compete with the incumbents.
Guerras-Martín, L., Madhok, A. and Montoro-Sánchez, A. (2014), "The Evolution of Strategic Management Research: Recent Trends and New Directions", Business Research Quarterly, 17(2), 69-76.
Strategic management is a relatively youthful discipline that has steadily matured over the past fifty years. The field has become consolidated over this period, while simultaneously expanding the range of topics analyzed and research methodologies used. Different theories and approaches, addressing different research topics, have been developed to explain the reasons underlying firms’ competitive advantage and success. In this paper, we posit the existence of two pendulums in constant motion that, on the one hand, reflect the tension that has historically existed between the focus on internal firm factors and external environmental attributes respectively and, on the other hand, the tension between a more macro level of analysis, i.e., the firm and its environment, and a more micro level one, i.e., individuals and their relations within the firm. The frontier of research in strategic management is shaped by the simultaneous movement of both pendulums.
Li, S., Madhok, A. and Wang, U. (2014), "Agglomeration and Clustering Over the Industry Life Cycle: Toward a Dynamic Model of Geographic Concentration", Strategic Management Journal, 35(7), 995-1012.
Research on agglomeration finds that either a higher survival rate of incumbent firms or a higher founding rate of new entrants, or both, can sustain an industry cluster. The conditioning effects of time on the two distinct mechanisms of survival and founding are, however, rarely examined. We argue that the forces driving geographic concentration vary across the industry life cycle. Data from Ontario’s winery industry from 1865 to 1974 demonstrates a dynamic model of geographic concentration: agglomeration attracts more new entry in the growth stage only, whereas it contributes to firm survival in the mature stage only. The results not only establish the importance of understanding the temporal dynamics underlying agglomeration externalities, but also provide a possible explanation for the mixed empirical results found in previous studies.
Keyhani, M. and Madhok, A. (2012), "Acquisition as Entrepreneurship: Asymmetries, Opportunities and the Internationalization of Multinationals from Emerging Economies", Global Strategy Journal, 2, 26-40.Keywords
We investigate the rapid internationalization of many multinationals from emerging economies through acquisition in advanced economies. We conceptualize these acquisitions as an act and form of entrepreneurship, aimed to overcome the ‘liability of emergingness’ incurred by these firms and to serve as a mechanism for competitive catch‐up through opportunity seeking and capability transformation. Our explanation emphasizes (1) the unique asymmetries (and not necessarily advantages) distinguishing emerging multinationals from advanced economy multinationals due to their historical and institutional differences, as well as (2) a search for advantage creation when firms possess mainly ordinary resources. The argument shifts the central focus from advantage to asymmetries as the starting point for internationalization and, additionally, highlights the role of learning agility rather than ability as a potential ‘asset of emergingness.’
Krishnamurthy, R. and Madhok, A. (Forthcoming), "Platform Sponsor Scope and Ecosystem Emergence: A Problem-Solving Perspective", Journal of Management Studies.
Madhok, A. (Forthcoming), "Globalization, De-globalization and Re-globalization: Some Historical Context and the Impact of the COVID Pandemic", Business Research Quarterly, 24.
Courses TaughtPHD Seminar Courses:
Economic Foundations of Strategy
Platforms and Ecosystems
Alliances, Joint Ventures and Networks
Strategic Management of Technology and Innovation
International Management and Strategy
Managing Joint Ventures and Strategic Alliances
International Management and Strategy
Project Title Role Award Amount Year Awarded Granting Agency Project TitleTowards a more comprehensive understanding of platform-based business RolePrincipal Investigator Award Amount$ Year Awarded2019 Granting AgencySSHRC