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Strategic Renewal of Europe's Largest Telecom Operators (1992-2001):: From Herd Behaviour Towards Strategic Choice?

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  • Stienstra, Marten
  • Baaij, Marc
  • Van den Bosch, Frans
  • Volberda, Henk

Abstract

Forces of deregulation, internationalisation and technological innovation have dramatically changed the European telecommunications industry. To cope with these forces, incumbent telecommunication operators had to strategically renew their companies. What can be learned from these incumbents and which managerial challenges are ahead? To address these questions, we investigated trajectories of strategic renewal of Europe's five largest incumbent operators and the impact on financial performance for the period 1992-2001. Remarkably, we did not find significant differences between the renewal trajectories of these incumbents. These findings suggest herd behaviour, indicating a preference for adopting similar organizational templates due to institutional forces resulting in a common 'follow the industry' renewal trajectory. In the years to come, however, we expect such herd behaviour will not be viable anymore. On the contrary, top management should make firm-specific strategic choices. The analysis and findings discussed in this paper provide insights for top management of incumbent firms in other deregulating European industries as well, such as the financial services and energy industries.

Suggested Citation

  • Stienstra, Marten & Baaij, Marc & Van den Bosch, Frans & Volberda, Henk, 2004. "Strategic Renewal of Europe's Largest Telecom Operators (1992-2001):: From Herd Behaviour Towards Strategic Choice?," European Management Journal, Elsevier, vol. 22(3), pages 273-280, June.
    • Handle: RePEc:eee:eurman:v:22:y:2004:i:3:p:273-280
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    Cited by:

    1. Tao Bai & Stephen Chen & Xiao He, 2019. "How Home-Country Political Connections Influence the Internationalization of Service Firms," Management International Review, Springer, vol. 59(4), pages 541-560, August.
    2. IKOTUN, Morenike Abiola & BELLO, Sunday Ade & OYEWUSI, Bose Mary, 2024. "The Effect of Organizational Renewal on the Performance of Lafarge Africa PLC," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 3030-3042, July.
    3. van den Bosch, F.A.J. & Baaij, M.G. & Volberda, H.W., 2005. "How Knowledge Accumulation changed the Competitive Advantage of Strategy Consulting Firms," ERIM Report Series Research in Management ERS-2005-026-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Whalley, Jason & Curwen, Peter, 2012. "Incumbency and market share within European mobile telecommunication networks," Telecommunications Policy, Elsevier, vol. 36(3), pages 222-236.
    5. Curwen, Peter & Whalley, Jason, 2013. "Mapping worldwide mobile networks: Some problems and indicative solutions," Telecommunications Policy, Elsevier, vol. 37(11), pages 1150-1165.
    6. Riku Laanti & Fred McDougall & Georges Baume, 2009. "How well do Traditional Theories Explain the Internationalisation of Service MNEs from Small and Open Economies? – Case: National Telecommunication Companies," Management International Review, Springer, vol. 49(1), pages 121-144, February.

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