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Showing papers in "Organization Science in 1996"


Journal ArticleDOI
TL;DR: In this article, the authors develop a knowledge-based theory of organizational capability and draw upon research into competitive dynamics, the resource-based view of the firm, organizational capabilities, and organizational learning.
Abstract: Unstable market conditions caused by innovation and increasing intensity and diversity of competition have resulted in organizational capabilities rather than served markets becoming the primary basis upon which firms establish their long-term strategies. If the strategically most important resource of the firm is knowledge, and if knowledge resides in specialized form among individual organizational members, then the essence of organizational capability is the integration of individuals' specialized knowledge. This paper develops a knowledge-based theory of organizational capability and draws upon research into competitive dynamics, the resource-based view of the firm, organizational capabilities, and organizational learning. Central to the theory is analysis of the mechanisms through which knowledge is integrated within firms in order to create capability. The theory is used to explore firms' potential for establishing competitive advantage in dynamic market settings, including the role of firm networks...

4,974 citations


Journal ArticleDOI
TL;DR: In this article, the authors develop a resource-based knowledge-based theory of why firms are formed, based on irreducible knowledge differences between individuals rather than the threat of purposeful cheating or withholding of information.
Abstract: This paper develops a resource-based—knowledge-based—theory of the firm. Its thesis is that the organizational mode through which individuals cooperate affects the knowledge they apply to business activity. We focus on the polar cases of organization within a firm as compared to market contracting. There will be a difference in the knowledge that is brought to bear, and hence in joint productivity, under the two options. Thus, as compared to opportunism-based, transaction-cost theory, we advance a separate (yet complementary) answer to the question: why do firms exist? Our aim is to develop an empirically relevant and complementary theory of why firms are formed: a theory based on irreducible knowledge differences between individuals rather than the threat of purposeful cheating or withholding of information. We assume limited cognitive abilities on the part of individuals (bounded rationality), and assume that opportunistic behavior will not occur. The latter allows us to determine whether resource-based...

3,245 citations


Journal ArticleDOI
TL;DR: In this article, the authors return to Coase's original insight in understanding the cost and benefits of a firm but based on a view that individuals are characterized by an "unsocial sociality".
Abstract: Firms are organizations that represent social knowledge of coordination and learning. But why should their boundaries demarcate quantitative shifts in the knowledge and capability of their members? Should not knowledge reside also in a network of interacting firms? This line of questioning presents the challenge to state an alternative view to the “theory of the firm,” a theory that has moved from Coase's early treatment of what firms do to a concern with ownership, incentives, and self-interest. We return to Coase's original insight in understanding the cost and benefits of a firm but based on a view that individuals are characterized by an “unsocial sociality.” Does the perception of opportunism generate the need to integrate market transactions into the firm, or do boundaries of the firm lead to the attribution of opportunism? This basic dichotomy between self-interest and the longing to belong is the behavioral underpinning to the superiority of firms over markets in resolving a fundamental dilemma: p...

3,138 citations


Journal ArticleDOI
TL;DR: In this paper, the authors combine these alternative social and strategic explanations for alliance formation and find that alliances form when firms are in vulnerable strategic positions either because they are competing in emergent or highly competitive industries or because they attempting pioneering technical strategies.
Abstract: Why do firms form strategic alliances? The traditional theoretical answer has been transaction cost explanations. Yet, these explanations which center on transaction characteristics, static efficiency, and routine situations do not capture the strategic and social factors which propel many firms into alliance formation. In this study, however, we combine these alternative social and strategic explanations for alliance formation. Consistent with these explanations, we find that alliances form when firms are in vulnerable strategic positions either because they are competing in emergent or highly competitive industries or because they are attempting pioneering technical strategies. We also find that alliances form when firms are in strong social positions such that they are led by large, experienced, and well-connected top management teams. The underlying logic of alliance formation is, thus, strategic needs and social opportunities. We develop these findings by extending the resource-based view of the firm...

2,677 citations


Journal ArticleDOI
TL;DR: The authors developed a theoretical model to explain the turnover and mixed performance consequences of demographic diversity in work groups and classified each demographic diversity variable (e.g., diversity with respect to age, gender, race, group tenure, organization tenure, education, or functional background) according to their level of visibility and its level of job-reward.
Abstract: Research has suggested that, within a work group, diversity with respect to members' demographic backgrounds can have a powerful effect on both turnover from the group and on the group's performance on cognitive tasks (i.e., “thinking” tasks that involve generating plans or ideas, solving problems, or making decisions). While such diversity tends to increase turnover, its effects on cognitive task performance are more mixed, sometimes enhancing performance and sometimes impairing it. An understanding of how diversity leads to these outcomes may help managers enhance work group effectiveness. Thus, in this paper I develop a theoretical model to explain the turnover and mixed performance consequences of demographic diversity in work groups. The proposed model suggests that each demographic diversity variable (e.g., diversity with respect to age, gender, race, group tenure, organization tenure, education, or functional background) can be classified according to its level of visibility and its level of job-re...

1,438 citations


Journal ArticleDOI
TL;DR: In this article, a survey of advice seekers and those who replied was conducted to test hypotheses about the viability and usefulness of such electronic weak tie exchanges, and the usefulness of this help may depend on the number of ties, the diversity of ties or the resources of help providers.
Abstract: People use weak ties—relationships with acquaintances or strangers—to seek help unavailable from friends or colleagues. Yet in the absence of personal relationships or the expectation of direct reciprocity, help from weak ties might not be forthcoming or could be of low quality. We examined the practice of distant employees (strangers) exchanging technical advice through a large organizational computer network. A survey of advice seekers and those who replied was conducted to test hypotheses about the viability and usefulness of such electronic weak tie exchanges. Theories of organizational motivation suggest that positive regard for the larger organization can substitute for direct incentives or personal relationships in motivating people to help others. Theories of weak ties suggest that the usefulness of this help may depend on the number of ties, the diversity of ties, or the resources of help providers. We hypothesized that, in an organizational context, the firm-specific resources and organizational...

1,303 citations


Journal ArticleDOI
TL;DR: In this article, what organizational forms lead to success in hypercompetitive environments has been studied, and the important question has not been answered: What organizational forms can lead to successful organizations in a hypercompetitive environment?
Abstract: Hypercompetition has received much attention, but an important question has not been answered: What organizational forms lead to success in hypercompetitive environments? Hypercompetition forces fi...

1,006 citations


Journal ArticleDOI
TL;DR: In this article, the authors examine how two highly successful new biotechnology firms (NBFs) source their most critical input, scientific knowledge, and find that scientists at the two NBFs enter into large numbers of collaborative research efforts with scientists at other organizations, especially universities.
Abstract: We examine how two highly successful new biotechnology firms (NBFs) source their most critical input—scientific knowledge. We find that scientists at the two NBFs enter into large numbers of collaborative research efforts with scientists at other organizations, especially universities. Formal market contracts are rarely used to govern these exchanges of scientific knowledge. Our findings suggest that the use of boundary-spanning social networks by the two NBFs increases both their learning and their flexibility in ways that would not be possible within a self-contained hierarchical organization.

944 citations


Journal ArticleDOI
TL;DR: In this article, a dialogic analysis of the four-paradigm grid of sociological Paradigms and Organisational Analysis is presented, and the lines of division and arguments that extend from this can be redrawn.
Abstract: When Gibson Burrell and Gareth Morgan wrote Sociological Paradigms and Organisational Analysis, I doubt that they, or anyone else, would have anticipated the widespread impact or resultant contestation that their four-paradigm grid would have. Many grids had appeared before in sociology and after in organizational studies, but none have gained the almost hegemonic capacity to define the alternatives in organizational analysis. In my development below, I will privilege programmatic differentiations rooted in what I will develop as a dialogic perspective. What Burrell and Morgan called “functionalist” research will thus be implicitly represented as an “other.” In doing so, both the lines of division and the arguments that extend from this can be redrawn. “Functionalist” style work can be reclaimed as legitimate in specifiable ways as reunderstood from dialogic conceptions. Nondialogic research programs will not be seen as alternative routes to truth, but as specific discourses which, if freed from their cla...

808 citations


Journal ArticleDOI
TL;DR: In this paper, the authors argue that when control theory is applied to a complex, non-routine task such as the management of information systems development, the theory of control is incomplete and propose that knowledge of the task is a key determinant of type of control.
Abstract: Control theory attempts to explain how one person or group in an organization can ensure that another person or group works toward and attains a set of organizational goals. Prior empirical work investigating control theory has shown that characteristics of the task and of the organizational environment predict the use of various types of control. However, this paper argues that when control theory is applied to a complex, nonroutine task such as the management of information systems development, the theory of control is incomplete. In particular, it proposes that knowledge of the task is a key determinant of type of control. Four modes of control behavior, outcome, clan, and self art identified from the organizational literature; each high-lights different aspects of control in organizations. Building on prior empirical work, this paper integrates the different theoretical perspectives and predicts the circumstances under which each type of control will be implemented. Survey responses from 96 participants of 32 systems development efforts suggest that the extent to which behaviors are monitored interacts with the project sponsor's level of systems development knowledge to determine the amount of behavior control; that outcome control is a function of the extent to which behaviors are monitored and outcomes are measurable; and that self-control is dependent on the extent to which outcomes are measurable and the level of the project sponsor's knowledge about systems development activities. No relationship between clan control and the independent variables was found.

691 citations


Journal ArticleDOI
TL;DR: In this paper, the authors present an overview of contributions in this area and evaluate the empirical implications of the resource-based view of the firm's resources and capabilities on its performance.
Abstract: Interest in the resource-based view of the firm continues to grow in the field of business policy and strategy. Recently, most of this interest seems to have been focused on understanding the empirical implications of this theory and especially on how a firm's resources and capabilities can affect its performance. Evaluating the empirical implications of the resource based view is, of course, a worthwhile endeavor. We present an overview of contributions in this issue.

Journal ArticleDOI
TL;DR: The authors argued that Kogut and Zander erred in the specific way in which they claimed that a distinct theory of the multi-person firm can be constructed on the basis of a theory of organizational knowledge or from resource-based insights.
Abstract: It is argued that Kogut and Zander (Kogut, B., U. Zander. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organ. Sci. 3 383–397.) and Conner (Conner, K. R. 1991. A historical comparison of resource-based theory and five schools of thought within industrial organization economics: Do we have a new theory of the firm? J. Management 17 121–154.) erred in the specific way in which they claimed that a distinct theory of the multi-person firm can be constructed on the basis of a theory of organizational knowledge or from resource-based insights. It is not possible to tell very much of a story about why there should be firms in lieu of notions such as “opportunism” or “moral hazard.” However, properly interpreted, knowledge-based theories may help shed light on issues relating to the boundaries and internal organization of the firm.

Journal ArticleDOI
TL;DR: In this article, the authors suggest that Japanese automotive firms have been able to achieve a competitive advantage over their U.S. counterparts by effectively using hybrid/alliance governance for three primary reasons: (1) Japanese automotive value chains are characterized by greater interfirm asset co-specialization than U.,S. chains.
Abstract: This empirical study suggests that Japanese competitive advantage in complex-product industries is at least partly due to differences in value chain governance and interfirm asset co-specialization. Comparative data are offered which indicate that U.S. firms rely largely on markets and hierarchies to facilitate exchange, whereas Japanese firms rely largely on “hybrid” governance or alliances. The empirical findings suggest that Japanese automotive firms (value chains) have been able to achieve a competitive advantage over their U.S. counterparts by effectively using hybrid/alliance governance for three primary reasons: (1) Japanese automotive value chains are characterized by greater interfirm asset co-specialization than U.S. chains. In particular, greater human asset co-specialization between firms results in superior coordination, information sharing, and learning which is critical in complex-product industries, (2) hybrids/alliances as employed by Japanese automakers realize virtually all of the advan...

Journal ArticleDOI
TL;DR: The authors argue that the paucity of such research may have resulted less from defensiveness than from the demanding requirements of doing crisp, systematic learning research, and suggest ways to supplement traditional organizational research methods.
Abstract: This article addresses theoretical and research frontiers for learning research, a second theme of Professor Argyris essay---the lead article in the “Crossroads” section. We outline three key theoretical questions for further work. We call for more systematic empirical learning research, suggesting that the paucity of such research may have resulted less from defensiveness than from the demanding requirements of doing crisp, systematic learning research. The need for scholarly empirical work is enhanced, we believe, by the growing popularity of organizational learning models among practitioners. Concurring with Professor Argyris' broad concern with enhancing research fruitfulness, we suggest ways to supplement traditional organizational research methods. In particular, we argue that it makes sense to cast wider nets for models of learning and adaptation, to sustain qualitative investigation, to use simulation techniques, and to maintain stronger---and perhaps even experimental---linkages between applied and theoretical research.

Book ChapterDOI
TL;DR: In this article, the global technology strategy of Olivetti, a leading European computer firm, is analyzed over the last decade in order to illustrate how high-tech firms undergo transformations which not only tend to destroy their best core competencies, but also affect their very business identity.
Abstract: The global technology strategy of Olivetti, a leading European computer firm, is analyzed over the last decade in order to illustrate how high-tech firms undergo transformations which not only tend to destroy their best core competencies, but also affect their very business identity. Task uncertainty is so pronounced that conventional ways of looking at the organizational structures and processes, such as the transaction costs approach or the strategy-structure link, need to be amended in favor of a more dynamic perspective. Such a perspective looks at organizations as platforms, or contexts, out of which specific structures are extracted, tried out and discarded in a pragmatic manner. A platform is a metaorganization, a formative context that molds structures, and routines shaping them into well-known forms, such as the hierarchy, the matrix and even the network, but on a highly volatile basis. Hence, the platform organization may appear to be confused and inefficient but its value lies in its readiness to sport whatever organizational form is required under the circumstances. Platforms are characterized by surprises, and organization members, no matter how they see themselves after the fact, are busy improvising and tinkering. Drawing on similar studies carried out in Silicon Valley, one can draw the conclusion that high-tech firms can survive if they are smart at doing what ‘savages do daily’, i.e. bricolage In searching out the truth be ready for the unexpected, for it is difficult to find and puzzling when you find it. (Heraclitus)

Journal ArticleDOI
TL;DR: The two most commonly-used explanations of the innovation process, that it follows either an orderly periodic sequence of stages or a random sequence of “blind” events, are not valid where chaos is found.
Abstract: This paper examines whether the developmental process of two biomedical innovations followed either (1) an orderly periodic progression of stages or phases, (2) a random sequence of chance “blind” events, or (3) a seemingly random process of chaotic events. Various diagnostics are applied to distinguish periodic, chaotic, and random patterns in time series data on innovation development events. We find that the actions and outcomes experienced by innovation teams exhibit a chaotic pattern during the initial period of innovation development, and an orderly periodic pattern during the ending development period: however, exogenous context events exhibit a random pattern during both the beginning and ending periods of innovation development. These research findings, if substantiated in other studies, significantly alter prior views of innovation and learning processes. The two most commonly-used explanations of the innovation process, that it follows either an orderly periodic sequence of stages or a random s...

Journal ArticleDOI
TL;DR: The ability to compete in hypercompetitive markets depends on the acquisition of know-how that is applicable to a wide set of market opportunities as mentioned in this paper, and such capabilities serve as platforms into quickly evolving markets.
Abstract: As the invention of fundamental new sciences spawns subsequent research, discovery, and commercialization, core technologies branch into new applications and markets. Some of them evolve over time into many derived technologies, whereas others are essentially “dead ends.” The pattern of evolution and branching is called a “technological trajectory.” An intriguing question is whether some firms can ride the trajectory by developing proprietary experience in a “platform technology.” Because the knowledge is proprietary, firms that originate in industrial fields based on a platform technology acquire the technological skills to diversify and to mimic the branching of the underlying technological trajectory. The ability to compete in hypercompetitive markets depends on the acquisition of know-how that is applicable to a wide set of market opportunities. Such capabilities serve as platforms into quickly evolving markets. To respond rapidly to market changes, a firm must have already acquired fundamental compet...

Journal ArticleDOI
TL;DR: In this article, a new construct of Organizational Misbehavior (OMB) is defined, and the theoretical implications of such a construct are discussed, as well as different types of OMB.
Abstract: Observers of organizations recognize now that work related misconduct is both pervasive and costly. There is ample evidence that members of organizations sabotage processes, steal company property, harass others, cheat the government, or mislead customers. Companies and the public pay dearly. What are the motivational forces that drive organizational members to exhibit such varied forms of misconduct? Are these forces different from those that drive them to engage in constructive behavior? What kinds of personal and organizational factors influence such acts of intentional misbehavior? Our basic objectives in this paper are three-fold; first, to formally define a new construct of Organizational Misbehavior (OMB), and to discuss the theoretical implications of the definition; second, to identify different types of OMB; and third, to develop a conceptual framework that would allow the inclusion of OMB in a comprehensive theory of work motivation, applicable to both proper and improper conduct. We define Org...

Journal ArticleDOI
TL;DR: This article examined the risk of firms in decline based on the behavioral theory of the firm, including six basic variables: (1) performance, (2) slack, (3) aspirations, expectations, risk (income stream uncertainty), and (6) organization size as a measure of decline.
Abstract: Scholars who study organizational decline have argued that declining organizations reduce or eliminate their riskier activities such as innovation. Further, they cite reduced risk-taking as a primary contributor to further decline. Scholars with an interest in risk per se come to the opposite conclusion: low performing firms often take more risks than other firms and such risks reduce subsequent performance. This study attempts to resolve these conflicting views by examining the risk of firms in decline. Our model, based on Cyert & March's (Cyert, R. M., J. G. March. 1963. A behavioral theory of the firm. Prentice-Hall, Englewood Cliffs, NJ.) behavioral theory of the firm, includes six basic variables: (1) performance, (2) slack, (3) aspirations, (4) expectations, (5) risk (income stream uncertainty), and (6) organization size as a measure of decline. The estimated model includes prior levels of risk and performance in the risk and performance equations respectively as controls. This study uses data on 34...

Journal ArticleDOI
TL;DR: In this paper, the authors present and test a dynamic model of competitive activity and performance, drawing on the Austrian school of economics and the structure-conduct-performance paradigm of industrial organization.
Abstract: Drawing on the Austrian school of economics and the structure-conduct-performance (s-c-p) paradigm of industrial organization, the authors present and test a dynamic model of competitive activity and performance. They examine the model in two stages. First, they explore the influence of industry-level and firm-level cooperative mechanisms on firm-level competitive activity. Second, they examine the effect of firm- and industry-level competitive activity on firm performance. The authors use the dynamic model of competitive activity to examine the complex linkages between the firm's environment, its actions, and its performance outcomes. They report a longitudinal analysis of a sample of 1,903 competitive moves undertaken in the software industry. Hypothesis testing supports the relationships in the model argued from the Austrian perspective, but provides only partial support for those derived from the s-c-p paradigm. Firm-level cooperative mechanisms are found to increase the firm's competitive activity, a...

Journal ArticleDOI
TL;DR: In this paper, the effect of intra-industry heterogeneity on hypercompetitive escalation and de-escalation in a multimarket environment is examined, and the authors study two critical dimensions of intra industry heterogeneity: strategic similarity, which captures similarity in competitive orientation, and multi-market contact, which represents the degree of overlap between rivals in the multiple markets of the industry.
Abstract: The effect of intra-industry heterogeneity on hypercompetitive escalation and de-escalation in a multimarket environment is examined. The authors study two critical dimensions of intra-industry heterogeneity: strategic similarity, which captures similarity in competitive orientation, and multimarket contact, which captures the degree of overlap between rivals in the multiple markets of the industry. Theory predicts that both variables influence the intensity of rivalry and competitive disruption. The predictions in the literature about the effect of strategic similarity on the intensity of rivalry are mixed. While strategic group theory proposes that strategic similarity may lead to lower rivalry, other theories (focusing on product differentiation, the resource-based view of the firm, and hypercompetitive escalation) predict that strategic similarity may actually increase rivalry. Those diametrically opposed propositions are captured as alternative hypotheses of the effect of strategic similarity. With r...

Journal ArticleDOI
TL;DR: In this paper, the authors argue that transaction cost economics is fundamentally incapable of being a complete theory of economic organization, since it basically ignores the essential notion of the firm as a bundle of knowledge, and the underlying processes there.
Abstract: In a recent 1993 paper in Organization Science, Hennart discussed the underlying logic, based on transaction cost and agency theory, for explaining the choice between firms and markets and the reason why most transactions have both firm-like and market-like properties. Relying on Williamson's comparative institutional approach, which studies economic organization from a transaction cost minimizing point of view under the assumption of opportunism, the argument was made that transaction cost (TC) logic provides a complete theory of the organization of economic activity. In this paper, I argue that, with its purely incentive-based logic governed by assumptions of opportunism, TC economics is fundamentally incapable of being a complete theory of economic organization. The notion of the firm as a bundle of transactions or contracts is an inadequate and shallow basis for a theory of the firm since it basically ignores the essential notion of the firm as a bundle of knowledge, and the underlying processes there...

Journal ArticleDOI
TL;DR: In this paper, the authors demonstrate that a dramatic and far-reaching shift has occurred in the nature of competition in most of the world's major economies, including the United States, Europe, Latin America and Asia.
Abstract: Strong forces of change—globalization, demographic shifts (e.g., aging population and declining fertility rates), advances in information technology, demassification of society, and hypercompetition—are reshaping the competitive landscape worldwide. As a result, companies in most industries are not only undergoing rapid and radical change, but are also experiencing a fundamental shift in the rules of competition and the way the game of competition is played. The old, genteel, stable oligopolies that defined competition during the 20th century are rapidly restructuring. In their place are emerging markets fraught with uncertainty, diverse global players, rapid technological change, widespread price wars, and seemingly endless reorganization. That transition is occurring not only in the United States, but also in Europe, Latin America, and Asia. In this issue, we demonstrate that (as predicted by those early researchers) a dramatic and far-reaching shift has occurred in the nature of competition in most ind...

Journal ArticleDOI
TL;DR: In this paper, a process model of how divisions change their domains in hypercompetitive contexts is presented, focusing on the specific question of how division lose all or portions of their business charters.
Abstract: Modern corporations have become synonymous with the multidivisional form of organization. Variously interdependent divisions are “chartered” to look after one or more business areas, in effect defining the “turf” of the division and its purpose within the corporation, and collectively defining the corporate domain. However, once created, these divisional charters should not be regarded as rigid; they are susceptible to change. Particularly in fast-paced environments, such as in high-technology industries, divisional charters are liable to change as divisions add or subtract businesses to their charter responsibilities. These charter changes are seen as an adaptive device for large, multidivisional corporations in fast-paced environments. This paper presents a process model of how divisions change their domains in hypercompetitive contexts, focusing on the specific question of how divisions lose all or portions of their business charters. The paper is based on a larger inductive study of charter changes in...

Journal ArticleDOI
TL;DR: In this paper, the authors empirically examined differences between automatic and controlled processing by executives in an increasingly dynamic industry and found that cognitive inertia affects judgments in both modes, but the effect is stronger with automatic processing.
Abstract: The authors empirically examine differences between automatic and controlled processing by executives in an increasingly dynamic industry. The results suggest that cognitive inertia affects judgments in both modes, but the effect is stronger with automatic processing. Specifically, the authors conducted two studies examining executives' cognitive maps of competitive positioning. First, they explored differences in ways strategists categorize competitors in a cross-sectional field study conducted during a period of significant environmental upheaval. They found that managers relied on cognitive maps that reflected obsolete industry boundaries rather than configurations representative of the deregulated marketplace. Hence, managers must be mindful to incorporate new information proactively from many sources and to actively discard old, automatic maps in order to develop reliable maps for changing environments. In a second study, managerial competitive schemas of competitive positioning were compared longitudinally across three research projects conducted in the financial intermediary industry. An eight-year time frame provided a unique opportunity to explore the content of mental models in an industry undergoing an accelerating rate of change. The longitudinal results indicate that change creates diversity of thought across managers in the same environment. Managers at competing firms are therefore apt to view competition quite differently in turbulent environments. Implications of the study findings for strategic decision making, consensus and conflict, and organizational learning and executive succession in turbulent environments are discussed. Issues are identified that warrant further research.

Journal ArticleDOI
TL;DR: Fashion apparel is a highly competitive business where product life is short and differentiation advantages are built on brand image and product styling that can be quickly imitated as mentioned in this paper, which can be easily copied.
Abstract: Fashion apparel is a highly competitive business where product life is short and differentiation advantages are built on brand image and product styling that can be quickly imitated. Over the past ...

Journal ArticleDOI
TL;DR: In this article, the authors present a model of the learning process in a regional network organization, based on a six-year study of Nordvest Forum, perhaps the only multifirm network in the world to have been used for such a study.
Abstract: The authors present a model of the learning process in a regional network organization. The model is based on a six-year study of Nordvest Forum, perhaps the only multifirm network in the world to ...

Journal ArticleDOI
TL;DR: In this paper, the authors describe the hypercompetitive shift in the US manufacturing sector from static to dynamic, where the strategic focus of firms shifts from careful exploitation of given, highly durable strategic assets to the steady creation of many new, rapidly depreciable ones.
Abstract: Competition in the American economy has fundamentally changed over the last few decades, from static to dynamic. This study labels this important change the hypercompetitive shift, and documents it across 200 industries of the US manufacturing sector during I958 to 1991. For industries that undergo a hypercompetitive shift, there is an increase in the cross-firm variance in performance and a rotation in the value-rivalry relationship from a negative association to an inverted-U. As a consequence of these competitive changes, the strategic focus of firms shifts from careful exploitation of given, highly durable strategic assets to the steady creation of many new, rapidly depreciable ones. The key driver of hypercompetitive shift is the dynamic resourcefulness of an industry, or the ease with which new strategic assets can be created. Determinants of dynamic resourcefulness include the dynamism of related transactors (notably consumers and suppliers). the knowledge base of the industry, and structural condi...

Journal ArticleDOI
TL;DR: In this article, Quinn and Rohrbaugh's competing values model was used to identify and measure the four competing values (internal process value, rational goal value, human relations value, and open system value) across organizations.
Abstract: Managers recognize that they must satisfy a variety of demands, some contradictory. The authors investigated this circumstance using Quinn and Rohrbaugh's competing values model. They report the findings of a study that identified and measured the four competing values (internal process value, rational goal value, human relations value, and open system value) across organizations and investigated whether contextual and structural variables were systematically associated with those value sets. Data were gathered from a large sample of United States Air Force Commands. Results showed that the operating units pursued the four values defined by the model, but did not emphasize them equally. Certain environmental characteristics (information and resource scarcity and technological uncertainty) and aspects of the units' technology (their task routineness, workflow interdependence, and training complexity) were associated with organizational value sets. The values emphasized were associated in turn with the coor...

Journal ArticleDOI
TL;DR: In this paper, the authors argue that Kogut and Zander attempt to explain firm organization in terms of a preference for such organization and that Conner and Prahalad fail to sufficiently characterize the nature of the firm, because they identify firm organization with the employment contract and neglect asset-ownership.
Abstract: This paper continues the critique of knowledge-based theories of the firm that was undertaken in Foss (Foss, N. J. 1996a. Knowledge-based approaches to the theory of the firm: Some critical comments. Organ. Sci. 7(5) 470–476.), specifically criticizing the reasoning in Kogut and Zander (Kogut, B., U. Zander. 1996. What firms do? Coordination, identity, and learning. Organ. Sci. 7(5) 502–518.) and Conner and Prahalad (Conner, K. R., C. K. Prahalad. 1996. A resource-based theory of the firm: Knowledge versus opportunism. Organ. Sci. 7(5) 477–501.). I argue that Kogut and Zander (Kogut, B., U. Zander. 1996. What firms do? Coordination, identity, and learning. Organ. Sci. 7(5) 502–518.) attempt to explain firm organization in terms of a preference for such organization—a distinctly non-economic mode of explanation—and that Conner and Prahalad fail to sufficiently characterize the nature of the firm, because they identify firm organization with the employment contract and neglect asset-ownership.