Showing papers in "Organization Science in 2010"

Marginality and Problem-Solving Effectiveness in Broadcast Search

Abstract: We examine who the winners are in science problem-solving contests characterized by open broadcast of problem information, self-selection of external solvers to discrete problems from the laboratories of large research and development intensive companies, and blind review of solution submissions. Analyzing a unique data set of 166 science challenges involving over 12,000 scientists revealed that technical and social marginality, being a source of different perspectives and heuristics, plays an important role in explaining individual success in problem solving. The provision of a winning solution was positively related to increasing distance between the solver's field of technical expertise and the focal field of the problem. Female solvers---known to be in the “outer circle” of the scientific establishment---performed significantly better than men in developing successful solutions. Our findings contribute to the emerging literature on open and distributed innovation by demonstrating the value of openness, at least narrowly defined by disclosing problems, in removing barriers to entry to nonobvious individuals. We also contribute to the knowledge-based theory of the firm by showing the effectiveness of a market mechanism to draw out knowledge from diverse external sources to solve internal problems.

PERSPECTIVE---Absorbing the Concept of Absorptive Capacity: How to Realize Its Potential in the Organization Field

Abstract: The purpose of this perspective paper is to advance understanding of absorptive capacity, its underlying dimensions, its multilevel antecedents, its impact on firm performance, and the contextual factors that affect absorptive capacity. Twenty years after the Cohen and Levinthal 1990 paper, the field is characterized by a wide array of theoretical perspectives and a wealth of empirical evidence. In this paper, we first review these underlying theories and empirical studies of absorptive capacity. Given the size and diversity of the absorptive capacity literature, we subsequently map the existing terrain of research through a bibliometric analysis. The resulting bibliometric cartography shows the major discrepancies in the organization field, namely that (1) most attention so far has been focused on the tangible outcomes of absorptive capacity; (2) organizational design and individual level antecedents have been relatively neglected in the absorptive capacity literature; and (3) the emergence of absorptive capacity from the actions and interactions of individual, organizational, and interorganizational antecedents remains unclear. Building on the bibliometric analysis, we develop an integrative model that identifies the multilevel antecedents, process dimensions, and outcomes of absorptive capacity as well as the contextual factors that affect absorptive capacity. We argue that realizing the potential of the absorptive capacity concept requires more research that shows how “micro-antecedents” and “macro-antecedents” influence future outcomes such as competitive advantage, innovation, and firm performance. In particular, we identify conceptual gaps that may guide future research to fully exploit the absorptive capacity concept in the organization field and to explore future fruitful extensions of the concept.

The Multiplicity of Institutional Logics and the Heterogeneity of Organizational Responses

Abstract: This paper shows that organizations in market settings face complex institutional contexts to which they respond in different though patterned ways. We show how both regional state logics and family logics impact on organizational responses to an overarching market logic. Regional logics are particularly potent when the activities of firms, especially of large firms, are concentrated in regions whose governments champion regional distinctiveness and where the regional activities of the firm are significant. Family logics affect the decision to downsize, especially in smaller firms. This paper advances institutional theory by showing the influences of nonmarket institutions on market behavior, contributes to the growing recognition of community influences, and highlights the importance of historical context.

CROSSROADS---Microfoundations of Performance: Balancing Efficiency and Flexibility in Dynamic Environments

Abstract: Our purpose is to clarify the microfoundations of performance in dynamic environments. A key premise is that the microfoundational link from organization, strategy, and dynamic capabilities to performance centers on how leaders manage the fundamental tension between efficiency and flexibility. We develop several insights. First, regarding structure, we highlight that organizations often drift toward efficiency, and so balancing efficiency and flexibility comes, counterintuitively, through unbalancing to favor flexibility. Second, we argue that environmental dynamism, rather than being simply stable or dynamic, is a multidimensional construct with dimensions that uniquely influence the importance and ease of balancing efficiency and flexibility. Third, we outline how executives balance efficiency and flexibility through cognitively sophisticated, single solutions rather than by simply holding contradictions. Overall, we go beyond the caricature of new organizational forms as obsessed with fluidity and the simplistic view of routines as the microfoundation of performance. Rather, we contribute a more accurate view of how leaders effectively balance between efficiency and flexibility by emphasizing heuristics-based “strategies of simple rules,” multiple environmental realities, and higher-order “expert” cognition. Together, these insights seek to add needed precision to the microfoundations of performance in dynamic environments.

A Relational Model of How High-Performance Work Systems Work

Abstract: In this paper we explore a causal mechanism through which high-performance work systems contribute to performance outcomes. We propose that high-performance work systems can improve organizational performance by strengthening relationships among employees who perform distinct functions, a pathway that is expected to be particularly important in settings characterized by highly interdependent work. In a nine-hospital study of patient care, we identify high-performance work practices that positively predict the strength of relational coordination among doctors, nurses, physical therapists, social workers, and case managers, in turn predicting quality and efficiency outcomes for their patients. Relational coordination mediates the association between these high-performance work practices and outcomes, suggesting a relational pathway through which high-performance work systems work.

When Callings Are Calling: Crafting Work and Leisure in Pursuit of Unanswered Occupational Callings

Abstract: Scholars have identified benefits of viewing work as a calling, but little research has explored the notion that people are frequently unable to work in occupations that answer their callings. To develop propositions on how individuals experience and pursue unanswered callings, we conducted a qualitative study based on interviews with 31 employees across a variety of occupations. We distinguish between two types of unanswered callings---missed callings and additional callings---and propose that individuals pursue these unanswered callings by employing five different techniques to craft their jobs (task emphasizing, job expanding, and role reframing) and their leisure time (vicarious experiencing and hobby participating). We also propose that individuals experience these techniques as facilitating the kinds of pleasant psychological states of enjoyment and meaning that they associate with pursuing their unanswered callings, but also as leading to unpleasant states of regret over forgone fulfillment of their unanswered callings and stress due to difficulties in pursuing their unanswered callings. These propositions have important implications for theory and future research on callings, job crafting, and self-regulation processes.

Balancing Exploration and Exploitation Through Structural Design: The Isolation of Subgroups and Organizational Learning

Abstract: The classic trade-off between exploration and exploitation in organizational learning has attracted vigorous attention by researchers over the last two decades. Despite this attention, however, the question of how firms can better maintain the balance of exploration and exploitation remains unresolved. Drawing on a wide range of research on population and organization structure, we argue that an organization divided into semi-isolated subgroups may help strike this balance. We simulate such an organization, systematically varying the interaction pattern between individuals to explore how the degree of subgroup isolation and intergroup connectivity influences organizational learning. We also test this model with a range of contingency variables highlighted in the management research. We find that moderate levels of cross-group linking lead to the highest equilibrium performance by enabling superior ideas to diffuse across groups without reducing organizational diversity too quickly. This finding is remarkably resilient to a wide range of variance in factors such as problem complexity, environmental dynamism, and personnel turnover.

Cognitive Processes of Opportunity Recognition: The Role of Structural Alignment

Abstract: Substantial gains can be made by individuals and organizations adept at detecting new opportunities. But how do business leaders do that concretely? Organization research shows that managers are more inclined to identify threats than opportunities, but it is still not clear why this is the case. Likewise, research points to several factors that may facilitate the recognition of opportunities. Yet empirical observations have been limited by retrospective biases and other conceptual challenges. As a result, key questions remain not only about what factors facilitate the recognition of opportunities, but also about why these factors play such a role. To further understanding of these issues, we study the reasoning strategies that individuals mobilize for recognizing opportunities. We develop a model of opportunity recognition as a cognitive process of structural alignment, and analyze the think-aloud verbalizations of executive entrepreneurs as they try to recognize opportunities for new technologies. In contrast to prior research, the qualitative and quantitative data do not provide evidence that individuals use prototypes to recognize opportunities. Instead, we find that different kinds of mental connections play different roles in the process of recognizing opportunities, with different consequences. We also document why and how prior knowledge may facilitate this process. By drawing attention to the cognitive underpinnings of opportunity recognition, we cast light on why it constitutes such a challenging task for individuals and organizations. In turn, this provides a useful basis for exploring the factors that explain why some individuals/organizations are able to recognize opportunities that others simply fail to see.

CROSSROADS---Organizing for Fluidity? Dilemmas of New Organizational Forms

Abstract: An important new stream of thought stressing the importance of organizational fluidity has emerged in recent years. It represents a reaction to the increasing complexity and environmental turbulence that organizations have to master. The solutions proposed are highly flexible and fluid organizational forms, based on relentlessly changing templates, quick improvisation, and ad hoc responses. This approach is in sharp contrast to other recent organizational research that emphasizes identity, path dependence, economies of specialization, and recursive practices. We juxtapose the idea of organizational fluidity with this latter stream of research. If taken to its final conclusion, then the idea of promoting organizational fluidity would imply losing the very essence of organizing. Nevertheless, achieving organizational flexibility remains imperative in increasingly complex and volatile environments. To deal with this dilemma, an alternative approach is needed. We suggest a conceptualization of this dilemma that emphasizes the complementary dynamics between the two perspectives. We therefore provide an alternative conception that favors the idea of balancing countervailing processes in organizations with respect to the conflicting demands of organizational efficiency and fluidity.

Speaking Up to Higher-Ups: How Supervisors and Skip-Level Leaders Influence Employee Voice

Abstract: In this qualitative research, we enhance understanding of leader influences on employee voice perceptions by examining which leaders influence these perceptions and why these influences occur. We conducted 89 interviews in a high-tech multinational corporation with employees at multiple levels in two manufacturing and two R&D units that differed significantly on “speak up”-related items on a company-wide employee survey. Systematic analysis of the interview data led us to conclude that a broad spectrum of leaders from supervisors to senior managers influences individual employee voice perceptions in both direct and indirect ways. For example, informants referred to “skip-level leaders,” those leaders two to five levels above themselves, as reasons to view voice as risky or futile nearly as often as they referred to immediate bosses. We present evidence related to “how” and “why” these patterns of influence occur by reviewing the direct and indirect modes of influence identified and by outlining the managerial functions that provide occasions for skip-level leaders to have direct influences on employee voice perceptions. We also point to differences in the specific echelons of leadership that were most influential across the units studied. We propose that multilevel, multileader influences on voice perceptions result naturally from modern workflows, the essential functions performed by skip-level leaders, and deep-seated employee attitudes about authority in hierarchical organizations. We propose further that differences in which levels of skip-level leadership are most critical to employee voice perceptions in different units depend on which leaders have the power to handle strategic contingencies and to resolve key uncertainties within particular work environments. Finally, we delve into the theoretical implications of our findings to offer a set of research propositions that can be tested in future research. Collectively, our findings point to a complex and nuanced picture of multilevel leader influences on employee voice perceptions with important practical implications for management.

The Role of Analogy in the Institutionalization of Sustainability Reporting

Abstract: We study institutional entrepreneurship in an emergent field by analyzing the case of the Global Reporting Initiative (GRI) and its efforts to purposefully institutionalize the practice of sustainability reporting. We suggest that analogies affect institutionalization processes through two mechanisms. In the early stages of institutionalization, analogy operates primarily as a normative mechanism, and adoption is driven mainly by an instrumental logic. This emphasis on similarity to existing institutions stresses conformity and promotes legitimacy. Yet analogies can also have a cognitive effect on institutional design, especially once initial acceptance from the environment has been secured, by directing attention toward incongruences between the emergent institution and its analogical source. Institutional entrepreneurship can spur innovation and departure from existing institutions by highlighting limitations of the analogical source and providing a compelling value-rational argument that underscores the worth of the new institution. This theoretical contribution helps explain how analogies to existing institutional practices can both provide legitimacy to novel institutions and constitute the basis for a creative process of institutional design.

Perspective---Finding the Organization in Organizational Theory: A Meta-Theory of the Organization as a Social Actor

Abstract: Organization theory is a theory without a protagonist. Organizations are typically portrayed in organizational scholarship as aggregations of individuals, as instantiations of the environment, as nodes in a social network, as members of a population, or as a bundle of organizing processes. This paper hopes to highlight the need for understanding, explicating, and researching the enduring, noun-like qualities of the organization. We situate the organization in a broader social landscape by examining what is unique about the organization as a social actor. We propose two assumptions that underlie our conceptualization of organizations as social actors: external attribution and intentionality. We then highlight important questions and implications forming the core of a distinctively organizational analytical perspective.

Event Attention, Environmental Sensemaking, and Change in Institutional Logics: An Inductive Analysis of the Effects of Public Attention to Clinton's Health Care Reform Initiative

Abstract: We explore attention to Clinton's health care reform proposal, ongoing debates, and its political demise to develop theory that explains how events create opportunities for cognitive realignment and transformation in institutional logics. Our case analysis illustrates how a bottom-up process of environmental sensemaking led to the emergence and adoption of a logic of managed care, which provided new organizing principles in the hospitals' organizational field. In addition to theorization, highlighted by prior research, we propose a second mechanism of environmental sensemaking: representation of change through exemplars and environmental features. The interplay between theorization, representation, and ongoing event attention can lead to change in institutional logics over an event's life course. We found that the managed care logic did not emerge in a fully formed fashion, but that actors theorized individual dimensions of the logic consistent with changing representations of hospitals' relationships with other actors in the field. As the event unfolded, the individual dimensions came to be theorized as part of an overall managed care logic. The label “managed care,” previously understood as a specific organizational form, took on a new meaning to symbolize the organizing principles for hospitals' relationships with a variety of institutional actors as alternative models not congruent with the changing organizational field were abandoned.

A Recursive Perspective on Discursive Legitimation and Organizational Action in Mergers and Acquisitions

Abstract: This paper challenges the predominant view that legitimation is merely a specific phase in merger or acquisition processes. We argue that a better understanding of postmerger organizational dynamics calls for conceptualization of discursive legitimation as an inherent part of unfolding merger processes. In particular, we focus on the recursive relationship between legitimation and organizational action. We have two objectives: to outline a theoretical model that helps one to understand the dynamics of discursive legitimation and organizational action in postmerger organizations, and to examine a revealing case to distinguish the inherent risks and problems in discursive legitimation. Our case analysis focuses on the merger between the French pharmaceutical companies BioMerieux and Pierre Fabre. We adopt a critical multimethod approach and distinguish specific discursive dynamics and pathological tendencies in this case. The analysis highlights the unintended consequences of discursive legitimation, the central role of sensegiving and sensehiding in discursive legitimation, the inherently political nature of legitimation and the risks associated with politicization, the special problems associated with fashionable discourses and the role of the media, the use of specific discursive strategies for legitimation and delegitimation, and the crucial role of actual integration results. This analysis adds to the existing research on mergers and acquisitions by treating discursive legitimation as part of the merger dynamics. In particular, our case analysis provides a new explanation for merger failure. We also believe that the recursive model connecting discursive legitimation and delegitimation strategies to concrete organizational action makes a more general contribution to our understanding of organizational legitimation.

Go (Con)figure: Subgroups, Imbalance, and Isolates in Geographically Dispersed Teams

Abstract: Research regarding geographically dispersed teams (GDTs) is increasingly common and has yielded many insights regarding the effects of spatio-temporal and socio-demographic factors on GDT functioni...

Structure and Learning in Self-Managed Teams: Why “Bureaucratic” Teams Can Be Better Learners

Abstract: This paper considers the effect of team structure on a team's engagement in learning and continuous improvement. We begin by noting the uncertain conceptual status of the structure concept in the small groups literature and propose a conceptualization of team structure that is grounded in the long tradition of work on formal structure in the sociology and organization theory literatures. We then consider the thesis that, at least in self-managed teams dealing with stable tasks, greater team structure---i.e., higher levels of specialization, formalization, and hierarchy---can promote learning by encouraging information sharing, reducing conflict frequency, and fostering a climate of psychological safety; that is, we examine a mediated model in which the effect of structure on learning and improvement in teams is mediated by psychological safety, information sharing, and conflict frequency. This model was largely supported in a study of self-managed production teams in a Fortune 100 high-technology firm, although the observed pattern of mediation was more complex than anticipated. Higher structure was also associated with actual productivity improvements in a subsample of these teams. The theory and results of this study advance our understanding of team learning and underscore the importance of team structure in research on team processes and performance.

Different Roles, Different Strokes: Organizing Virtual Customer Environments to Promote Two Types of Customer Contributions

Abstract: In recent years, many companies have established virtual customer environments (VCEs) that offer facilities ranging from online discussion forums to virtual product design centers to partner with their customers in product development and product support activities. In this study, we focus on one form of VCE, online customer forums, and propose that the relevance of four distinct theoretical perspectives---social capital theory, social exchange theory, involvement, and social identity theory---to explaining customer participation will be contingent on the nature of the customer contribution context, that is, whether the contributions are to the customer community (through product support) or to the company (through product ideation). We propose a model suggesting that customers' prosocial behavior and expectations of private rewards will shape contributions to the community, whereas their perceived innovation partnership with the company and expectations of private rewards will shape a contribution to the company. We also contend that these effects will be moderated by customers' identification with the community and with the company. Our empirical findings offer support for the model and indicate that online customer forums (and more broadly VCEs) should be tailored to fit the nature of customer contribution sought. Implications for research and practice in customer co-innovation, online peer-to-peer communities, and customer relationship management are discussed.

Investigating the Antecedents of Team-Based Clan Control: Adding Social Capital as a Predictor

Abstract: Organizations are increasingly relying on team-based structures as work becomes more complex, nonroutine, and knowledge intensive. Teams comprised of individuals with diverse skills and expertise may be well suited to perform such work. However, as teams become more prevalent, organizations may struggle with ways to exercise control. Formal controls, with their focus on prespecified rules, performance targets, and hierarchical relationships, may be less effective in a teamwork environment than clan control, in which work-related behavior is motivated by shared norms and values, as well as a common vision, and individuals attempt to be accepted or “regular” members of a team. However, little is known about the antecedents of clan control. Much of the existing empirical research on the antecedents of control has been influenced by Ouchi's (Ouchi, W. G. 1977. The relationship between organizational structure and organizational control. Admin. Sci. Quart.22 95--113) framework, which posits clan control is used when managers lack knowledge of means--ends relationships and are unable to measure outcomes. This paper adopts the view that clan control is a “people” or social process and argues that social capital, a construct that reflects connections and relationships among individuals, is a missing, key antecedent of clan control. In particular, we posit that the existence of social capital enables team members, as well as project managers, to facilitate clan control within a team, i.e., team-based clan control. A model is developed and hypotheses are tested using survey data collected from 95 information systems project teams. The results suggest that social capital assets are associated with team-based clan control. Recognizing that the project manager typically has a different level of organizational authority than team members, additional hypotheses are developed relating characteristics of the project manager to team-based clan control. The results of these tests suggest that team-based clan control is also dependent on the manager's knowledge of business processes and the application area, coupled with the extent to which he observes the behaviors of the project team. Thus, our results suggest that there are conditions under which team-based clan control is facilitated by the project team as a whole (including team members and project managers), as well as conditions under which team-based clan control is facilitated by project managers in their role as team leaders. Implications and suggestions for future work are discussed.

Securities Analysts and Incumbent Response to Radical Technological Change: Evidence from Digital Photography and Internet Telephony

Abstract: A large body of research has explored the factors that impede established firms' responses to radical technological changes. While it is widely acknowledged that managers face pressures from financial markets to choose strategies that maximize shareholder value, little work in the technological change literature has considered the possible influences of public equity markets and the securities analysts who mediate them on incumbent firms challenged with technological change. In this paper, I begin to address the topic by empirically exploring how securities analysts react to the different strategies undertaken by incumbent firms faced with radical technological change. I study the question in two settings: the shift to digital technology in photography and the advent of Voice over Internet Protocol (VoIP) technology in wireline telecommunications. I find evidence that analysts are more attentive and positive toward incumbents' strategies that extend and preserve the existing technology than toward strategies that respond directly to the new technology. In these settings, analysts largely ignore incumbents' strategies that directly incorporate the new technology for several years following the discontinuity. This study provides insights into the nature and direction of analysts' reactions to firms' strategies in the context of technological change, and is a first step toward better understanding of the potential role of analysts' and financial markets in incumbent adaptation.

Intraorganizational Networks, Interorganizational Networks, and the Impact of Central Inventors: A Longitudinal Study of Pharmaceutical Firms

Abstract: This paper proposes that a mechanism through which a firm's location in the interorganizational network influences the firm's internal innovation activities is modifying the amount of information flowing within the firm. Exploring a firm's internal innovation activities, I hypothesized that structural centrality of an inventor in the intrafirm coinventing network is associated with her impact on her firm's innovation activities in an inverted-U-shape relation. I further hypothesized that this relationship is moderated by the firm's centrality and span of structural holes in the interfirm network. I found strong support for these hypotheses in a longitudinal study of eight large pharmaceutical firms. The findings in this paper, apart from having managerial implications, have implications for research on alliances, network studies, and innovation processes.

Experience Spillovers Across Corporate Development Activities

Abstract: This study develops and tests a theory of experience spillovers across corporate development activities. In particular, we investigate the impact of prior alliance experience on the performance implications of corporate acquisitions. We start with the simple suggestion that such experience spillovers will depend on the similarity among the managerial processes characterizing these activities. The empirical evidence confirms that the more the focal acquisition is managed in ways that are typical of partnerships (e.g., with low integration or with high relational quality levels), the more positive is the effect of past alliance experience on acquisition performance. However, we also find that alliance experience can be detrimental under certain circumstances, such as when the acquisition is managed with more aggressive post-acquisition integration approaches. This paper proposes a more sophisticated model of experience spillovers that can accommodate both positive and negative experience spillover effects across complex organizational tasks.

Social Capital for Hire? Mobility of Technical Professionals and Firm Influence in Wireless Standards Committees

Abstract: The movement of personnel between firms has been shown to have important implications for firms, yet there has been little direct investigation of the underlying mechanisms. We propose that in addition to their human capital, mobile individuals carry social capital, affecting the outcomes of the firms they join and leave by altering the patterns of interaction between firms. In this study, we examine how job mobility affects firm influence in a technical standards setting committee for U.S. wireless telecommunications. We hypothesize and find that hiring individuals who are richer in social capital increases firm influence in technical standards setting committees by increasing the hiring firm's social capital. We also find the benefits of hiring social capital are attenuated when an interfirm relationship is maintained by multiple individuals. In contrast, we find that the loss of personnel does not affect a firm's social capital or influence over standards directly but that it does have an effect on firm social capital and influence contingent on changes in the firm's business strategy. In advancing these arguments, we address the broader question of individuals as carriers of social capital and the conditions under which interpersonal connections are appropriable by firms.

External Learning Activities and Team Performance: A Multimethod Field Study

Abstract: This paper reports on a study of external team learning activities and their performance effects. It proposes and tests a model that consists of two sets of external learning activities: those that allow a team to learn from external experienced others about its task (vicarious learning activities) and those that allow a team to learn from external sources about its context (contextual learning activities). Qualitative data from six teams in one pharmaceutical firm are used to develop measures. Survey data from 62 additional teams in six other pharmaceutical firms are used, first to test the measurement model using structural equation modeling and second to test the relationships between external learning activities and team performance using random-effects regression models. Results show that vicarious learning activities are more strongly associated with performance when teams engage in more internal learning activities. Furthermore, vicarious learning activities in the absence of sufficient amounts of internal learning activities can hurt performance. The positive performance associated with contextual learning activities, by contrast, is unaffected by the level of internal learning activities. The paper contributes by distinguishing between two kinds of external learning activities and showing that they put different demands on teams to be effective. This is important because it helps us better understand how teams engage effectively in learning activities across their boundaries.

Unlocking Knowledge Transfer Potential: Knowledge Demonstrability and Superordinate Social Identity

Abstract: This study presents a conceptual model of when and how knowledge demonstrability and superordinate social identity impact the likelihood that organizations capitalize on their knowledge resources. To test the model, an experimental methodology was used in which a member transfers from one group to another, transmitting knowledge in the form of a production routine. As predicted, work groups unlocked the knowledge transfer potential arising from personnel movement more often when they shared a superordinate identity than when they did not share such an identity, and this identity effect was moderated by knowledge demonstrability. When knowledge was less demonstrable with concealed merits, it was more likely to transfer between groups that shared a superordinate identity, compared to groups that did not share such an identity. By contrast, when knowledge was more demonstrable with apparent merits, it was as likely to transfer between groups that shared a superordinate identity compared to groups that did not share such an identity. As predicted, superordinate identity induced knowledge consideration, the focusing of group attention on determining the value of another's knowledge. Mediated moderation analyses revealed that this process underlies knowledge transfer. Superordinate social identity induced thorough knowledge consideration, which was more important for recognizing the value of knowledge when its merits were concealed rather than apparent. Because the merits of many organizational routines and practices are concealed and superordinate identity appears to be a key to unlocking the knowledge transfer potential of less demonstrable knowledge, this study has important implications for managing knowledge resources.

Business Group Affiliation and Firm Search Behavior in India: Responsiveness and Focus of Attention

Abstract: This paper investigates the effects of organizational form on problemistic search. We contrast how Indian firms affiliated with business groups and unaffiliated firms evaluate performance and react by adjusting their internal technology search and external market search. We propose that, compared with unaffiliated firms, business group--affiliated (BG-affiliated) firms are more externally oriented in setting aspiration levels and more likely to respond to low performance in the market domain. We find support for an external orientation of BG-affiliated firms and find that group affiliation determines the responsiveness to performance feedback in different search domains. The findings suggest a need to add considerations of organizational form and governance to the theory of organizational search.

Fostering Team Innovation: Why Is It Important to Combine Opposing Action Strategies?

Abstract: We develop a framework that provides a general theoretical rationale for the claim made by several authors that combining opposing action strategies fosters team innovation. We distinguish between open and closed strategies and posit that these are opposing but complementary in that each fosters one of two processes necessary for team innovation: open action strategies (e.g., delegative leadership) promote knowledge generation, and closed action strategies (e.g., directive leadership) enhance knowledge integration. We argue that each pole of a pair of opposing action strategies both energizes and detracts from elements of innovation. Thus, it could be expected that combining opposing action strategies leads to an impasse, as the negative effects of each strategy might offset the positive effects of the opposite strategy. There is currently no viable explanation in the literature for why this mutual neutralization may not occur. We aim to fill this gap by explicating why and how opposing action strategies, when implemented simultaneously, do not countervail each other's positive effects, but rather yield positive synergies that fuel team innovation.

The Successful Intelligence of High-Growth Entrepreneurs: Links to New Venture Growth

Abstract: We develop a model of successful intelligence in entrepreneurship. The model was tested through interviews with 22 printing industry CEOs and responses from 143 founders of early-stage, high-growth printing and graphics businesses. Successful intelligence combined with entrepreneurial self-efficacy to predict swift action and multiple improvement actions (repeated goal-driven changes). Swift action and multiple improvement actions predicted higher subsequent venture growth across four years. This field study confirmed that successful intelligence consists of practical, analytical, and creative intelligence and that, together with entrepreneurial self-efficacy, it enables and motivates successful entrepreneurial behavior. Intelligence has received little entrepreneurship research attention; however, this empirical study suggests that specific intelligences should be included as predictors in studies of venture outcomes. The two entrepreneurial behaviors developed here are useful concepts beyond the entrepreneurship domain.

When Truces Collapse: A Longitudinal Study of Price-Adjustment Routines

Abstract: We analyze the microfoundations of the routine in a study of price-adjustment processes at a manufacturing firm. Existing theory says that truces balance cognitive and motivational differences across functions, but there is scant evidence on how truces work. We show both stability and change in routines. For minor price adjustments, routines incorporate truces in stable but separate market interpretations by the sales and marketing groups. Major price changes put truces at risk, as latent conflict over information and interests becomes overt. The ensuing battle shows how interests, information, and truces are intertwined in performing the routine. Routines are not just stable entities, but adaptive performances that include conflict. We illustrate how our approach addresses fundamental problems such as how firms perform economics, how routines incorporate economic theory, and how routines shape macroeconomic dynamics. We argue that our approach can be extended to any routine-based organizational work.

Prior Alliances with Targets and Acquisition Performance in Knowledge-Intensive Industries

Abstract: An important focus of the research on mergers and acquisitions is the conditions under which acquisitions create value for the acquiring firm's shareholders. Given that the acquisition process is plagued by serious issues of information asymmetry, which are exacerbated in the context of knowledge acquisitions, we examine whether prior alliances with potential targets reduce the information asymmetry enough to create “partner-specific absorptive capacity” and yield superior stock returns on acquisition, compared with acquisitions not preceded by alliances. We test our hypotheses on a sample of high-technology acquisitions by U.S. firms during 1990--1998 using an event study methodology to assess abnormal stock returns. We find, unexpectedly, that no significant general effect emerges for acquisitions with prior alliances. However, international acquisitions following alliances show significantly better returns relative to both acquisitions without prior alliances and domestic acquisitions. Additionally, stronger forms of prior alliances lead to better acquisition performance than weaker forms of alliances. Together, the results broadly support our thesis that partner-specific absorptive capacity may be at work and suggest that under certain prior alliance conditions, acquisitions can indeed create value for acquirers.

Repeated Interactions and Contractual Detail: Identifying the Learning Effect

Abstract: Organizations interacting repeatedly on similar transactions may learn from prior experiences, allowing contracts to be specified in greater detail. In this study, we analyze the conditions under which this learning effect is most likely to manifest itself. We do this by focusing on different parts of a contract as well as differences across transacting parties. Using a survey of information technology procurement contracts from 788 Dutch small- and medium-sized enterprises, we show that the learning effect is stronger for technical than for legal detail in contracts and is stronger for firms with information technology expertise than for firms without such expertise.