Showing papers in "Organization Science in 1998"
TL;DR: In this article, the authors investigate the role of trust in inter-organizational exchange at two levels of analysis and assess its effects on negotiation costs, conflict, and ultimately performance.
Abstract: A conceptual challenge in exploring the role of trust in interorganizational exchange is translating an inherently individual-level concept-trust-to the organizational-level outcome of performance. We define interpersonal and interorganizational trust as distinct constructs and draw on theories of interorganizational relations to derive a model of exchange performance. Specifically, we investigate the role of trust in interfirm exchange at two levels of analysis and assess its effects on negotiation costs, conflict, and ultimately performance. Propositions were tested with data from a sample of 107 buyer-supplier interfirm relationships in the electrical equipment manufacturing industry using a structural equation model. The results indicate that interpersonal and interorganizational trust are related but distinct constructs, and play different roles in affecting negotiation processes and exchange performance. Further, the hypotheses linking trust to performance receive some support, although the precise nature of the link is somewhat different than initially proposed. Overall, the results show that trust in interorganizational exchange relations clearly matters.
3,927 citations
TL;DR: In this article, a co-evolutionary theory of strategic alliances is proposed, in which strategic alliances are embedded in a firm's strategic portfolio, and coevolve with the firm's strategy, the institutional, organizational and competitive environment, and with management intent for the alliance.
Abstract: This paper proposes a co-evolutionary theory of strategic alliances. The paper proposes a framework which views strategic alliances in the context of the adaptation choices of a firm. Strategic alliances, in this view, are embedded in a firm's strategic portfolio, and co-evolve with the firm's strategy, the institutional, organizational and competitive environment, and with management intent for the alliance. Specifically, we argue that alliance intent may be described, at any time, as having either exploitation or exploration objectives. We further discuss how the morphology of an alliance-absorptive capacity, control, and identification-may be isomorphic with its intent, and, in the aggregate, drive the evolution of the population of alliances.
1,259 citations
TL;DR: In this article, the authors developed a framework for understanding the dilemma through consideration of trade-offs between how collective learning is developed in alliances and how the joint learning outcomes are divided among the partners.
Abstract: Alliances are volatile key components of many corporations' competitive strategies. They offer fast a nd flexible means of achieving market access, scale economies, and competence development. However, strategic alliances can encounter difficulties that often lead to disappointing performance. The authors suggest that the way partners manage the collective learning process plays a central role in the success and failure of strategic alliances. Present understanding of interorganizational learning primarily focuses on how the individual organization can be a "good partner" or try to win the internal "race to learn" among the partners. The interorganizational learning dilemma is that (1) being a good partner invites exploitation by partners attempting to maximize their individual appropriation of the joint learning, and (2) such opportunistic learning strategies undercut the collective knowledge development in the strategic alliance. The authors develop a framework for understanding the dilemma through consideration of trade-offs between how collective learning is developed in alliances and how the joint learning outcomes are divided among the partners. They create a typology of five different learning strategies based on how receptive as well as how transparent an organization is in relation to its partners. The strategies are: collaboration (highly receptive and highly transparent); competition (highly receptive and nontransparent); compromise (moderately receptive and transparent); accommodation (nonreceptive and highly transparent); and avoidance (neither receptive nor transparent). Interorganizational learning outcomes are proposed to be the interactive results of the respective partners' type of adopted learning strategy. By synthesizing strategic alliance, organizational learning, collective action, and game theories, the framework contributes to understanding the variety in alliance development, performance, and longevity. Interorganizational learning is likely to be hindered by lack of either motivation or ability to absorb and communicate knowledge between the partner organizations. The dynamics of power, opportunism, suspicion, and asymmetric learning strategies can constitute processual barriers to collective knowledge development. In contrast, prior related interaction between the partners, high learning stakes, trust, and long-term orientation are likely to empower the collective learning process. Comparison of previous case studies and surveys of interorganizational learning provides partial empirical support for the proposed framework. The comparison also indicates several omissions in previous research, such as failure to consider either how receptive or how transparent the partners are, the interaction between their learning strategies, and their dynamic processes over time. Because these omissions are due partly to the methodological limitations of traditional case studies and crosssectional surveys, the authors suggest a bridging case survey design for a more comprehensive test of their interactive, dynamic, and situational framework.
1,121 citations
TL;DR: Hyundai Motor Company, the most dynamic automobile producer in developing countries, pursued a strategy of independence in developing absorptive capacity by acquiring migratory knowledge to expand its prior knowledge base and proactively constructed crises as a strategic means of intensifying its learning effort.
Abstract: Effective organizational learning requires high absorptive capacity, which has two major elements: prior knowledge base and intensity of effort. Hyundai Motor Company, the most dynamic automobile producer in developing countries, pursued a strategy of independence in developing absorptive capacity. In its process of advancing from one phase to the next through the preparation for and acquisition, assimilation, and improvement of foreign technologies, Hyundai acquired migratory knowledge to expand its prior knowledge base and proactively constructed crises as a strategic means of intensifying its learning effort. Unlike externally evoked crises, proactively constructed internal crises present a clear performance gap, shift learning orientation from imitation to innovation, and increase the intensity of effort in organizational learning. Such crisis cons truction is an evocative and galvanizing device in the personal repertoires of proactive top managers. A similar process of opportunistic learning is also evident in other industries in Korea.
1,063 citations
TL;DR: In this article, the authors examined the processes used by alliance partners to transfer knowledge from an alliance context to a partner context, and identified four key processes-technology sharing, alliance-parent interaction, personnel transfers, and strategic integration-that share a conceptual underpinning and represent a knowledge connection between parent and alliance.
Abstract: The management and processing of organizational knowledge are increasingly being viewed as critical to organizational success. By exploring how firms access and exploit alliance-based knowledge, the authors provide evidence to support the argument that the firm is a dynamic system of processes involving different types of knowledge. Using data from a longitudinal study of North American-based joint ventures (JVs) between North American and Japanese firms, they address three related research questions: (1) what processes do JV partners use to gain access to alliance knowledge; (2) what types of knowledge are associated with the different processes and how should that knowledge be classified; and (3) what is the relationship between organizational levels, knowledge types, and the transfer of knowledge? Although many generalizations have been drawn about the merits of knowledge-based resources and the creation of knowledge, few efforts have been made to establish systematically how firms acquire and manage new knowledge. Moreover, prior alliance research has not addressed in detail the nature of alliance knowledge and how knowledge is managed in the alliance context. The authors examine the processes used by alliance partners to transfer knowledge from an alliance context to a partner context. They identify four key processes-technology sharing, alliance-parent interaction, personnel transfers, and strategic integration-that share a conceptual underpinning and represent a knowledge connection between parent and alliance. Each of the four processes is shown to provide an avenue for managers to gain exposure to knowledge and ideas outside their traditional organizational boundaries and to create a connection for individual managers to communicate their alliance experiences to others. Although all of the knowledge management processes are potentially effective, the different processes involve different types of knowledge and different organizational levels. The primary types of knowledge associated with each process are identified and then linked with the organizational level affected by the transfer process. From those linkages, several propositions about organizational knowledge transfer and management are developed. The results suggest that although a variety of knowledge management strategies can be viable, some strategies lead to more effective knowledge transfer than others.
1,007 citations
TL;DR: In this article, a longitudinal case study of the interaction between two partners to a failed international joint venture is presented, where the authors develop a model of the collaboration process in partnership and alliances based on earlier work by Ring and Van de Ven (1994) and by Doz (1996).
Abstract: This paper reports on a longitudinal case study of the interaction between two partners to a failed international joint venture. We develop a model of the collaboration process in partnership and alliances based on earlier work by Ring and Van de Ven (1994) and by Doz (1996). We employ a series of events that occurred in the course of the relationship as the unit of analysis in order to trace the interactions between the partners, and to explicate the impact that external shocks have on their perceptions of efficiency and equity. The impact of these events, as well as the responses they elicit, on the quality of the relationship (and vice versa) are also considered. We find that the partners' assessments cause them to either engage in renegotiation of the terms of the contract, or to modify their behavior unilaterally, in an attempt to restore balance to the relationship. The process feeds back until a new mutual understanding of equity is restored, or else the relationship deteriorates gradually until a point when the venture is dissolved. We conclude that positive feedback loops are critical in the evolutionary process, that relationship quality is both an outcome and a mediating variable, and that procedural issues are critical from the start in fostering a climate for positive reinforcement and the building of mutual trust and confidence in the relationship.
985 citations
TL;DR: In this article, the authors make a crucial distinction between the potential value attainable through collaborations and its actual realization, and explain how a more inclusive and integrative perspective, one which combines elements from transaction costs and resource-based theory, provides more robust insight into collaboration formation, management, and instability.
Abstract: This paper offers a theoretical explanation for why interfirm collaborations form yet fail, and further suggests how firms might manage them for a more positive outcome. Based on a perspective of value, we explain how a more inclusive and integrative perspective, one which combines elements from transaction costs and resource-based theory, provides more robust insight into collaboration formation, management, and instability. In doing so, we differentiate rent-yielding firm-specific assets at the core of the resource-based view from the transaction specific assets at the core of transaction cost theory. The paper makes a crucial distinction between the potential value attainable through collaborations and its actual realization. The crux of our argument is that firms enter into collaborative relationships because these are expected to yield superior value relative to alternate organizational forms in certain situations, offering potentially synergistic combinations of complementary resources and capabilities, yet such relationships are frequently prone to failure because the partner firms tend not to recognize ex ante the nature and extent of transaction-specific investment that is required in the collaborative relationship to attain these synergies. In our argument, critically, the relationship between organizations is seen not simply as a governance structure of a hybrid nature but, more importantly, as a productive resource for value creation and realization. In this light, transaction-specific investment in what we term relational specificity becomes imperative. In the search for value, we explain why the transaction costs incurred in the exchange of resources are not independent of the nature of resources to be transacted and, similarly, why the returns realized from these resources are not independent of the relationship- and transaction-specific expenditures incurred in effectively combining them and maintaining the combination. The interdependence between the two, mediated by the quality of the relationship, has direct implications for the earning of rents through collaborations. These relationship-specific expenditures can be of an internally generated nature, endogenous to the alliance form itself, and need not exceed alternative forms, while the associated benefits have the capacity to potentially exceed the alternatives. This translates into potentially superior value. The paper contributes in three key related ways: (a) the explicit recognition of the relationship as a value-bearing asset embedded in a larger and endogenous institutional context, namely a system of resource relationships-both intraorganizational and inter-organizational-among partner firms and the collaboration, (b) the recognition of the evolving relationship between production and exchange which, at the level of the collaboration, is directly dependent on the nature, evolution, and dynamics of the relationship among the parties to the transaction, and (c) the provision of a nontrust explanation for why firms might knowingly forego opportunities to take advantage of their partners. Drawing from this, the paper occasions (a) a shift in focus from the form to the process of governance, which has direct implications for value creation and realization and (b) a shift in the primary identity of transaction-specific and relationship-specific expenditures from cost to investment in future value.
932 citations
TL;DR: In this article, the authors use the vehicle of jazz improvisation as the source of orienting ideas to improve the way we talk about organizational improvisation, using the vehicle as a vehicle of orientation.
Abstract: The purpose of this essay is to improve the way we talk about organizational improvisation, using the vehicle of jazz improvisation as the source of orienting ideas. I start with two brief descriptions of the complexity involved when musicians compose in the moment. Then I review several definitions intended to capture holistically what is happening when people improvise. Next, I take a closer look at selected details in improvisation, namely, degrees of improvisation, forms for improvisation, and cognition in improvisation. These understandings are then generalized from jazz to other settings such as conversation, therapy, and relationships of command. I conclude with implications for theory and practice.
809 citations
TL;DR: In this paper, the importance of guanxi and relational demography in Chinese employment settings was examined in a sample of 560 vertical dyads (i.e., between supervisor and subordinate) in Taiwan.
Abstract: Two studies were conducted to investigate the indigenous concept of guanxi and its applications in the Chinese context. Guanxi refers to the existence of direct particularistic ties between an individual and others. We relate the concept to the idea of relational demography, which refers to similarities or differences between an individual and others on such factors as age, gender, race, religion, education, and occupation. The two studies focused on the importance of guanxi and relational demography in Chinese employment settings. In study 1, their importance was examined in a sample of 560 vertical dyads (i.e., between supervisor and subordinate) in Taiwan. In study 2, the effects were analyzed in a sample of 205 horizontal dyads, specifically between business executives and their important business connections (e.g., key customers, suppliers, bankers, government officials) in mainland China. Results support the importance of both guanxi and relational demography for subordinate trust in the supervisor, but only guanxi is found to be (extremely) important for business executives' trust in their connections. Implications for future cross-cultural research on the effect of common ties are discussed.
643 citations
TL;DR: This article argued that the preferred alternative is not to split the difference, but to move beyond the positivism vs. antipositivism debate and work from an alternative framework, which allows researchers to put this debate to the side and, in the process, develop research that is focused on serving human purposes.
Abstract: The central claim of this paper is that organization studies needs to be fundamentally reshaped. Such change is needed to provideroom for ethics and to increase the relevance of research. We argue that the new pragmatism provides critical resources forthis change. Pragmatism is a particularly helpful tool to use in that it highlights the moral dimensions of organizing (is thisuseful for our purposes?) while at the same time avoiding entrenched epistemological distinctions that marginalize ethicsand make research less useful. The paper begins by discussing the relative absence of ethics within the mainstream of organization studies, indicates why this relative absence is problematic, and proceeds to show how pragmatism offers a preferable approach. Epistemology-specifically the debate between positivists and anti-positivists-becomes a central issue because the framework of positivism is overtly hostile to ethics (and other nonquantitative approaches to studying organizations), rendering it a marginal subject. While anti-positivism holds promise for overcoming this hostility towards ethics, it retains some of the destructive elements of positivism that create new and equally troubling difficulties. The paper claims, in contrast to the proposals of others (e.g., Zald's 1993 position) that the preferred alternative is not to split the difference, but to move beyond the positivism vs. antipositivism debate and work from an alternative framework. Pragmatism allows researchers to put this debate to the side and, in the process, develop research that is focused on serving human purposes-i.e., both morally rich and useful to organizations and the communities in which they operate.
547 citations
TL;DR: In this paper, the authors argue that collaboration is only one of several possible strategies of engagement used by organizations as they try to manage the interorganizational domain in which they operate.
Abstract: Many writers advocate interorganizational collaboration as a solution to a range of organizational and in tersectoral problems. Accordingly, they often concentrate on its functional aspects. We argue that collaboration deserves a more critical examination, particularly when the interests of stakeholders conflict and the balance of power between them is unequal. Using examples from a study of the UK refugee system, we argue that collaboration is only one of several possible strategies of engagement used by organizations as they try to manage the interorganizational domain in which they operate. In this paper, we discuss four such strategies: collaboration, compliance, contention and contestation. By examining the stakeholders in the domain and asking who has formal authority, who controls key resources, and who is able to discursively manage legitimacy, resear chers are in a stronger position to evaluate both the benefits and costs of these strategies and to differentiate more clearly between strategies that are truly collaborative and strategies that are not. In other words, we hope to demonstrate that collabo ration between organizations is not necessarily "good", conflict is not necessarily "bad", and surface dynamics are not necessarily an accurate representation of what is going on beneath.
TL;DR: In this paper, the authors developed a dynamic theory of alliances by examining certain outcome and process discrepancies that may emerge as the partners interact, highlighting issues that are especially relevant in knowledge intensive alliances, such as joint R&D or product development.
Abstract: Our paper develops a dynamic theory of alliances by examining certain outcome and process discrepancies that may emerge as the partners interact, highlighting issues that are especially relevant in knowledge intensive alliances, such as joint R&D or product development. Firms enter into these types of alliances to create economic value and to acquire knowledge to enhance their competencies. The degree to which the partners can realize their objectives is dependent on their absorptive capacities and the collaborative strategies adopted by the partners. Outcome and process discrepancies may emerge as collaboration unfolds. Outcome discrepancies concern the ability of the partners to achieve their economic and learning objectives. Process discrepancies relate to the partners' satisfaction with the pattern of interaction, and affect their feelings of psychological attachment to the relationship. How the partners assess and react to discrepancies shapes the developmental path of an alliance. The alliance flourishes in certain states but may collapse in others as the collaboration is subjected to environmental changes or shifts in the grand strategies of the partners. Guidelines for assessing and managing outcome and process discrepancies are suggested.
TL;DR: In this article, the duality of structure and the recursiveness of social praxis are studied in the context of structuration theory, which offers valuable insights into organizing networks, especially into how structures of signification, domination and legitimation shape network processes and how they are reproduced under the auspices of network effectiveness.
Abstract: Interfirm networks in general and strategic networks in particular are considered as an organizational form with distinct structural properties. Due to a lack of adequate theory, the working of network processes as well as the resulting network effectiveness is not very well understood. Structuration theory, developed by Anthony Giddens as a social theory, offers the potential not only to analyze network processes without neglecting structures but also to understand why many rather than few designs seem to be effective. As conceived here, this potential results, above all, from two interrelated theorems of structuration theory: the duality of structure and the recursiveness of social praxis. It will be concluded that these the orems offer valuable insights into organizing networks, especially into how structures of signification, domination, and legitimation shape network processes and how they are reproduced under the auspices of network effectiveness.
TL;DR: In this paper, the authors discuss the nature of improvisation and the unique challenges and dangers implicit in the learning task that jazz improvisers create for themselves, broadly outline seven characteristics that allow jazz bands to improvise coherently and maximize social innovation in a coordinated fashion.
Abstract: After discussing the nature of improvisation and the unique challenges and dangers implicit in the learning task that jazz improvisers create for themselves, the author broadly outlines seven characteristics that allow jazz bands to improvise coherently and maximize social innovation in a coordinated fashion. He also draws on his own experience as a jazz pianist. Finally, implications for organizational design and managing for learning are suggested.
TL;DR: In this article, a large-scale data set on product development organizations of Japanese manufacturing firms has been used to explore the effects of organizational capabilities on the product development performance, and the results show that the process capabilities emerging from dynamic interaction of knowledge play a crucial role as core capabilities for product development of Japanese firms.
Abstract: Using a large-scale data set on product development organizations of Japanese manufacturing firms, this paper explores the effects of organizational capabilities on product development performance. We present a conceptual framework assuming that organizational capabilities consist of multilayered knowledge. Based on the idea, we classify organizational capabilities into "local," "architectural," and "process" capabilities along two dimensions: modularity and designability. The empirical analysis demonstrates differential effects of different types of organizational capabilities on different types of product development performance, and compares the differential effects between two types of industries that differ in terms of their product characteristics: system based and material based. The central message from our analysis is that the process capabilities emerging from dynamic interaction of knowledge play a crucial role as core capabilities for product development of Japanese firms in the system-based industries in which Japanese firms are relatively competitive. In the material industries, ho wever, local capabilities have major effects on performance while effects of process capabilities are limited, which underlies the relative weakness of Japanese firms in developing material-based products. Our results raise some intriguing implications on the competitive advantages and challenges of Japanese firms' product development.
TL;DR: The role of the availability of the intended recipient or the interaction between recipient availability and task social presence variables which could have a significant impact on media choice was examined in an exploratory study and a subsequent controlled factor study.
Abstract: Recent innovations in organizational forms, such as delayered management, empowered workers, telework, and ad hoc work groups, have created a need to ensure that communication between dispersed knowledge workers can be supported. The movement toward a less cohesive workplace suggests a need to deploy computer-based media, but it is not clear which media should be deployed and under what circumstances. Addressing such significant issues must begin with insights into why knowledge workers choose particular media for particular tasks in the first place. Prior research theorizing about media choice has focused on: (1) task, (2) medium, (3) the fit between task and medium, and (4) social environment. It has not sufficiently considered the role of the availability of the intended recipient or the interaction between recipient availability and task social presence variables which could have a significant impact on media choice. To examine the effects of these two factors, the authors conducted an initial exploratory study and a subsequent controlled factor study. In the initial study, an analysis of 1,669 hypothetical scenarios from 100 knowledge workers at a worldwide transportation company indicated that social presence (SP) theory proves to be a good predictor of media choice, as does the recipient availability construct. The analysis also suggested that the interaction between recipient availability and task social presence might be a good predictor. With a partial replication, randomized treatment design, including 1,883 scenarios from 257 workers, the controlled factor study at a large financial institution generally confirmed the study hypotheses. The authors examine rival explanations simultaneously along the dimensions of task, medium, fit between task and medium, and social environment. They propose and test a new model of media choice and suggest directions for future testing of a new "task closure" model of media choice. They conclude by offering guidelines for managers deploying electronic communications in the workplace.
TL;DR: In this paper, the authors investigate the use of a pair of competing video telephone systems in a company over a period of 18 months and demonstrate that employees adopted and used the video systems for both utility and normative reasons.
Abstract: This natural experiment investigates the introduction and use of a pair of competing video telephone systems in a company overa period of 18 months. Both quantitative, time-series analyses and in-depth interviews demonstrate that employees adoptedand used the video systems for both utility and normative reasons. Consistent with utility explanations, people in the most communication-intensive jobs were the most likely to use video telephony. Consistent with social influence explanations, peopleused a particular system more when more people in general were using it and when more people in their work group wereusing it. There were two conceptually distinct, but empirically entangled, types of social influence. First, use by other people changed the objective benefits and costs associated with using the systems, and thus their utility. Second, use by others changed the normative environment surrounding the new technology. Both utility and normative influen ces were stronger in one's primary work group. Implementers, users, and researchers should consider both utility and normative factors influencing both the success and failure of new organizational communication systems.
TL;DR: In this paper, the authors analyzed the factors that affect the longevity of 355 Japanese stakes in U.S. manufacturing affiliates and found that Japanese parents are more likely to terminate their stakes in joint ventures than in wholly-owned subsidiaries.
Abstract: A number of well-known studies report that between one-third and two-thirds of international joint ventures eventually break up. While many generalizations, explanations, and prescriptions have been based on these statistics, their meaning is unclear. First, all foreign affiliates are subject to normal business risk, and to the risk that they will be divested by parents for strategic or financial reasons. Are these risks higher for joint ventures than for wholly-owned subsidiaries? Second, joint ventures may be shorter lived not because of their joint venture status, but because affiliates which are joint ventured have other characteristics that make them more likely to exit. To know whether joint ventures are shorter lived, one must control for the other factors that affect the longevity of affiliates, whether wholly owned or joint ventured. Third, many joint ventures contracts contain clauses that allow partners to sell their stakes to one another at specific intervals. Because they make exit easier, joint ventures should have shorter lives, but these shorter lives should only be due to sell-offs, not to liquidations. It is therefore important to see whether the supposedly higher termination rate of joint ventures stakes is due to a higher rate of selloffs or to a higher rate of liquidations. In this paper we (1) compare the longevity of stakes in joint ventures versus those in wholly-owned subsidiaries (2) while controlling for other factors that affect the longevity of such stakes and (3) while distinguishing between two types of exit, those through sale and those through liquidation. While past authors have addressed these three issues in piecemeal fashion, we believe we are the first to address them simultaneously. We analyze the factors that affect the longevity of 355 Japanese stakes in U.S. manufacturing affiliates. Controlling for all the factors that affect exit rates, we find that Japanese parents are more likely to terminate their stakes in U.S. joint ventures than in wholly-owned subsidiaries. This higher termination rate of joint venture stakes is explained by a higher probability of selling them, but not of liquidating them. Most of the other factors that have been found significant in explaining gross divestment of foreign affiliates do in fact only affect exits through sales, but not exits through liquidations. Hence it is true that joint ventures have shorter lives, but dangerous to interpret this finding as necessarily meaning that they are more likely to "fail".
TL;DR: In this paper, the authors develop the notion that the choice of alliance scope materially affects the character of benefits that alliance participants receive, and thereby affects a range of issues having to do with the initiation, evolution, and termination of the alliance.
Abstract: We develop the notion that the choice of alliance scope materially affects the character of benefits that alliance participants receive, and thereby affects a range of issues having to do with the initiation, evolution, and termination of the alliance. Indeed, while under-emphasized by academics, determining alliance scope ranks among the most important tasks undert aken by practitioners of alliances. Restricting ourselves to alliances where mutual learning is the primary raison d'etre, we first define private benefits as those that accrue to subsets of participants in an alliance, and common benefits as those that accrue collectively to all participants. We demonstrate how the choice of alliance scope affects the mix of private and common benefits, and draw on earlier work to show how this, in turn, affects alliance partners' incentives to invest in learning. As illustrations of the utility of the framework of private and common benefits, we consider two applications. A simple model illustrates the relationship between the choice of alliance scope, the realization of private and common benefits, and the stability, or lack thereof, of the alliance. A second application sheds light on alliance evolution. It examines factors affecting both (a) how a particular alliance evolves, and (b) how firms manage sequences of alliances. Two broader theoretical points also emerge from this discussion of alliance scope. First, we argue that an analytical focus solely on the individual alliance may be inappropriate for studying a wide range of issues. Of the multiple sources of benefits that accrue to alliance participants, there are some whose realization depends on activities in which the firm is engaged, but that may have little to do with the alliance in question. Second, in contrast to much of the literature on alliances, our analysis is based upon the primitives of benefit streams, rather than on transaction cost reasoning. This complementary perspective is better suited to the task of highlighting how activities not governed by an alliance might nonetheless affect multiple aspects of the alliance.
TL;DR: In this article, the authors test whether acquisitions and divestitures are related to environmental uncertainty and diversification strategy, and they find that increases in environmental uncertainty would reduce a company's ability to manage its subsidiaries efficiently and would lead to divestiture.
Abstract: The authors test whether acquisitions and divestitures are related to environmental uncertainty and d iversification strategy. Drawing from transaction cost economics, they predicted that increases in environmental uncertainty would reduce a company's ability to manage its subsidiaries efficiently and would lead to divestiture. Conversely, they predicted that decreases in environmental uncertainty would enable a company to manage its subsidiaries more efficiently and would lead to acquisition. Those predictions were expected to be strongest for firms with intermediate levels of diversification, as such firms are believed to be the most difficult to manage efficiently. Repeated measures analyses of a panel of 164 Fortune 500 companies supported the predictions for highly diversified firms (e.g., unrelated businesses) only. Less diversified firms reacted t o increases in uncertainty by acquiring and to decreases in uncertainty by divesting. The results suggest that the relationship between diversification strategy and portfolio restructuring depends on environmental uncertainty. In addition, the study findings imply that there may be limits in the hierarchy's governance efficiency in relation to market modes and that those limits may be affected by environmental uncertainty and diversification strategy.
TL;DR: In this article, the authors argue that a key component in a firm's strategic response to unfamiliar environmental events is the interpretations managers develop about the event itself and about key dimensions of their strategy using historical data from the pharmaceutical industry.
Abstract: This paper argues that a key component in a firm's strategic response to unfamiliar environmental events is the interpretations managers develop about the event itself and about key dimensions of their strategy Using historical data from the pharmaceutical industry, the revealed interpretations of top management from six firms over a ten-year period are analyzed and are compared to the timing and content of the changes in strategy each firm undertook following a significant change in regulation The results reveal two distinct patterns of interpretation development that appear to be linked to whether or not the target of interpretation is familiar Further, interpretations appear to be linked both temporally and in terms of content to the strategic change undertaken by each firm Both sets of results suggest that the interpretations of managers are linked to organizational actions
TL;DR: In this article, a typical improvisation workshop in developing six key areas that link improvisation exercises to the practice of management: interpreting the environment; crafting strategy; cultivating leadership; fostering teamwork; developing individual skills; and assessing organizational culture.
Abstract: It has often been proposed, or assumed, that improvisation is a useful metaphor to provide insight into managing a nd organizing. However, improvisation is more than a metaphor. It is an orientation and a technique to enhance the strategic renewal of an organization. The bridge between theory and practice is made through exercises used to develop the capacity to improvise, borrowed from theatre improvisation. This paper describes a typical improvisation workshop in developing six key areas that link improvisation exercises to the practice of management: interpreting the environment; crafting strategy; cultivating leadership; fostering teamwork; developing individual skills; and assessing organizational culture.
TL;DR: In this paper, the authors present a public goods-based theory that describes the process of producing multifirm, alliance-based, interorganizational communication and information public goods, which offer participants in alliances collective benefits that are available to all alliance partners whether or not they have contributed, and (b) jointly supplied, in that partners' uses of the good are noncompeting.
Abstract: This article presents a public goods-based theory that describes the process of producing multifirm, alliance-based, interorganizational communication and information public goods. These goods offer participants in alliances collective benefits that are (a) nonexcludable, in that they are available to all alliance partners whether or not they have contributed, and (b) jointly supplied, in that partners' uses of the good are noncompeting. Two generic types of goods produced are connectivity, the ability of partners to directly communicate with each other through the information and communication system, and communality, the availability of a commonly accessible pool of information to alliance partners. Four types of alliances that can produce these goods are identified: (a) precompetitive, (b) competitive, (c) joint value creation, and (d) value chain. The article examines a variety of factors that influence the production of alliancebased connective and communal goods. Twenty-three integrated propositions are presented. The article concludes with an example of the application of the theoretical model to research on connectivity and communality provided through an alliancebased interorganizational communication and information system linking more than 50 alliance partners.
TL;DR: The author argues that the conditions are so stringent that the search for an invariant law should not be the main objective of management studies, and contends that reliability/replicability and external validity are irrelevant not only for the case study, but for any method ofmanagement studies.
Abstract: The author questions the possibility of establishing invariant laws for social phenomena and presents an argument for the case study method. Despite the many alleged advantages of the case study method, its validity remains in doubt. Various concepts and techniques have been developed to make the method rigorous enough to meet the stringent criteria of nomothetical social science, but it often fails to meet two of them: (1) reliability and replicability, and (2) external validity. Those two criteria can be met only when social researchers find an invariant law. The author examines whether those two criteria are really necessary and attempts to clarify the conditions under which they are relevant, that is, the conditions under which an invariant law can be discovered in social phenomena. He argues that the conditions are so stringent that the search for an invariant law should not be the main objective of management studies, and he contends that reliability/replicability and external validity are irrelevant not only for the case study, but for any method of management studies. Without those two criteria, the validity of the case study can be forcefully reasserted. The author concludes by suggesting that serious consideration be given to whether the objective of management studies should be changed from a search for invariant laws of practical use to the encouragement of reflective dialogue in society.
TL;DR: In this paper, the authors investigated how latecomers compete successfully or even leapfrog early movers in the global semiconductor industry and classified successful latecomer strategies into two types: strategies for overcoming late-mover disadvantages and strategies for utilizing late-comer advantages.
Abstract: The effects of strategic order of entry on firms' performance have long been an issue in many areas of study. Past res earch efforts, however, have been concentrated mostly on first mover or early entrant advantages. To contribute to developing a theory of latecomer strategies, the authors investigate how latecomers compete successfully or even leapfrog early movers. They review previous studies on early mover advantages and disadvantages, and group the sources of such advantages or disadvantages into three areas: the firm, its market, and its competitors. The theoretical focus is how a firm converts the opportunities ste mming from entry order into performance. The authors seek to confirm and extend relevant theories by examining how late entrants have caught up with incumbent industry leaders in the global semiconductor industry. On the basis of in-depth case analysis of three Japanese and three Korean semiconductor companies, they identify and categorize successful latecomer strategies into two types: strategies for overcoming latecomer disadvantages and strategies for utilizing latecomer advantages. Focusing, thin margin or loss bearing, and volume building form the essence of strategies for overcoming disadvantages, whereas odd timing, time compression, human embodied technology transfer, benchmarking, technological leap frogging, and resource leveraging form the essence of strategies for utilizing advantages. Because many companies in Asia have had to face the reality of being latecomers, the Asian perspectives are particularly useful for studying and explicating latecomer strategies.
TL;DR: The authors found that hospitals use anticipatory impressio n management tactics to distract, diminish, or overwhelm patients' attention to hospital charges and induce emotions that lead patients to simplify their information processing of those charges.
Abstract: Existing theory and research on organizational impression management focuses on how spokespersons use remedial tactics, following image-threatening events, to put their organization in the best possible light. By contrast, little theory or research has considered how organizations use impression management tactics to avert undesirable responses to upcoming events. This paper uses a qualitative and inductive study of billing procedures at three large hospitals to develop theory about how organization members use impression management tactics to fend off specific, expected challenges to organizational practices that are ambiguously negative. We found that hospitals use anticipatory impressio n management tactics to: (1) distract, diminish, or overwhelm patients' attention to hospital charges; and (2) to induce emotions that lead patients to simplify their information processing of those charges. Hospitals appear to use such anticipatory obfuscations both to fend off patients' initial challenges and to prevent their existing challenges from escalating. We discuss these findings in terms of their contributions to theories of symbolic management, social influence, and routine service encounters.
TL;DR: The authors found evidence that the administrative approaches used by managers during merger integration from two nations partially reflect their different heritages, and that these differences are consistent with national differences and the theoretical perspectives of institutional development and cross-cultural studies.
Abstract: Top managers of British and French firms, which were recently acquired by either British or French firms, were surveyed as to their perceptions of the administrative approach-reflected in integrating mechanisms-used by the acquiring firms to establish headquarters-subsidiary control. Four types of integrative mechanisms were examined: structural, systems, social, and managerial. A multiple analysis of covariance model, coupled with a two-nation (British and French), two-merger type (domestic, cross-national) sampling design, found evidence that the administrative approaches used by managers during merger integration from two nations partially reflect their different heritages, and that these differences are consistent with national differences and the theoretical perspectives of institutional development and cross-cultural studies. Our findings, while exploratory, provide insight into the administrative difficulties of managing across borders and help us understand why many cross-national firms continue to use ethnocentric approaches in spite of the incentives for adopting a transnational approach. Moreover, our findings add one more voice to a growing chorus calling for a theory of the firm, as embedded, institutionally, culturally, and historically.
TL;DR: The influence of face on social interactions is both pervasive and powerful in Asia as discussed by the authors, but face has not gained general acceptance as an important theoretical concept in the literature on Asian organizational behavior and management.
Abstract: Research on cross-cultural psychology, sociology, and anthropology suggests that the influence of face on social interactions is both pervasive and powerful in Asia. Face, however, has not gai ned general acceptance as an important theoretical concept in the literature on Asian organizational behavior and management. In this paper, we propose face as a key variable that can explain much of the complexity of social interactions in Asian organizations. We attempted to elaborate on the concept and dynamics of face in Asia in such a way as to capture its pervasive, significant but often subtle influences on organizational behavior. We also examined conditions, functions, and consequences of face dynamics to generate testable propositions for future research. We argue that scholars have to go beyond the individualistic assumptions about human behavior implicit in theories of organizational behavior in the West to better understand the richness of organizational behavior in Asia. In Asia, organizational behavior is better predicted by an individual's external attributes such as face than internal attributes such as desires, emotions, and cognition.
TL;DR: In this article, the authors examine the link between a firm's resources and its efficient organization form with a focus on entrepreneurial resources, defined as the propensity of an individual to behave creatively, act with foresight, use intuition, and be alert to new opportunities.
Abstract: This paper examines the link between a firm's resources and its efficient organization form with a focus on entrepreneurial resources. Entrepreneurial resources are defined as the propensity of an individual to behave creatively, act with foresight, use intuition, and be alert to new opportunities. This paper assumes that these entrepreneurial resources can be distributed in two ways throughout the firm: they can be held by one or a few individuals- "individual entrepreneurial resources "-or they can be dispersed among a team of individuals- "team entrepreneurial resources. " Agency theory is used to consider how various organizational characteristics-such as the assignment of decision responsibilities, incentives and risk bearing, the number of hierarchical levels, horizontal linking structures, mutual monitoring and bonding devices, and information systems-will differ in the individual and team entrepreneurial forms. Generally, the individual entrepreneurial form resembles the"classic entrepreneurial firm " (Fama and Jensen 1983) in which various decision making roles and risk bearing are performed by a single entrepreneur. The team entrepreneurial form is similar to what Bartlett and Ghoshal (1993) call"beyond the m-form. " Responsibility for steps in the decision process is dispersed in the team form, and monitoring the decision process will occur at the organization's apex. The CEO will not make operational or strategic decisions; instead, he manages the internal market for managers and develops an organization's cultural context and information systems. Below the CEO level, team entrepreneurs are responsible for ratifying innovative decisions, and below this team entrepreneurs are responsible for initiating innovative decisions. After presenting these two entrepreneurial forms, this paper relates them to extant research on corporate entrepreneurship and organizational forms.
TL;DR: In this paper, the authors examine two tensions inherent in multi-party collaborative work: managing hybrid systems, which are composed of individual and group tasks and outcomes, and aligning partners' logics of action.
Abstract: Constellations-alliances among multiple firms-are used to perform complex, customized work in profes sional service. We examine two tensions inherent in multi-party collaborative work: managing hybrid systems, which are composed of individual and group tasks and outcomes, and aligning partners' logics of action. These two tensions provide firms the stra tegic choice with emphasizing individual or collective advantage. When constellation members pursue an individualist strategy, they employ an entrepreneurial logic. Constellations are a vehicle for honing their firm-distinctive expertise and enhancing the ir own opportunities. Given these firms' need for exposure to new learning and new markets from different partners and clients, the stability of the constellation is not of primary importance. This strategy promotes membership shifts in constellations and requires governance mechanisms for coordinating interactions among relative strangers. When constellation members pursue a collectivist strategy, they focus on their mutual benefits and employ a relational logic. Given these firms' need for intensifying relations with partners and clients, constellation members restrict interactions to certain select partners and clients and intensify their interactions. This strategy promotes stability in constellation membership and allows governance mechanisms specific to partners to develop. Due to positive feedback, these strategies develop certain capabilities and create specific relational patterns, which reinforce prior choices.