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Organizational Identity and Interorganizational Alliances

01 Jan 2012-
TL;DR: In this article, the authors examined the relationship between organizational identity and the formation and performance implications of interorganizational alliances and developed a theory of how this variation affects the search for alliance partners in terms of the speed of alliance formation and the diversity between the new organization and its partners.
Abstract: This dissertation examines the relationship between organizational identity and the formation and performance implications of interorganizational alliances. The first study investigates the effect of an organization's identity on its initial alliance portfolio formation, addressing how becoming comprehensible through organizational identity is a fundamental step in order for a new organization to be accepted by the market. Through different categorizations, some new organizations will be more comprehensible and possess clearer identities in the market than others. I develop a theory of how this variation affects the search for alliance partners in terms of the speed of alliance formation and the diversity between the new organization and its partners. The second study investigates how organizational identity affects the impact of alliances on performance outcomes. Alliances that explore and experiment tend to affect organizational outcomes negatively, at least in the short term. Although exploration strategies facilitate learning and adaptation in the long run, they incur costs due to the nature of experimentation. I advance an alternative perspective that organizational identity plays a role in this alliance-performance link. Depending on the strength of an organization's identity in terms of how coherent and taken-for-granted its categorization or social grouping is, the effect on performance may be more or less negative. Overall, this research indicates that organizational identity matters both to an organization's initial alliance portfolio formation and to the impact of this alliance portfolio on performance outcomes. This work contributes to the literature streams of both organizational identity and alliances, and presents the first systematic investigation of the link between them.

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Posted Content
TL;DR: In this paper, the influence of the structure and composition of a firm's alliance network on its exploratory innovation was examined, and the benefits of network closure and access to diverse information can coexist in a firms' alliance network.
Abstract: This study examines the influence of the structure and composition of a firm's alliance network on its exploratory innovation. In a longitudinal investigation of 77 telecommunications equipment manufacturers, I find the technological diversity of a firm's alliance partners increases its exploratory innovation. I also find that network density among a firm's alliance partners strengthens the influence of diversity. These results suggest the benefits of network closure and access to diverse information can coexist in a firm's alliance network and the combination of the two increases exploratory innovation.

54 citations

Posted Content
TL;DR: A review of the existing literature on alliance portfolio literature can be found in this paper, where three key research areas are identified: (a) the emergence of alliance portfolios, (b) the configuration of alliance portfolio, and (c) the management of portfolio.
Abstract: The engagement of firms in multiple simultaneous strategic alliances with different partners has become a ubiquitous phenomenon in today's business landscape This article offers a review of the extant alliance portfolio literature and organizes it around three key research areas: (a) the emergence of alliance portfolios, (b) the configuration of alliance portfolios, and (c) the management of alliance portfolios The article also highlights existing gaps in the present understanding of alliance portfolios and outlines a research agenda by identifying key research questions and issues in the areas where further research is needed

36 citations

References
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Journal ArticleDOI
TL;DR: Theories and analyses of organizational change seek to explain why organizations change as well as what the consequences are of change as discussed by the authors, but empirical evidence on both questions is fragmentary and occasionally contradictory.
Abstract: Organizational change can be usefully conceptualized in terms of both its process and its content. Process refers to how change occurs. Content describes what actually changes in the organization. Theories and analyses of organizational change seek to explain why organizations change as well as what the consequences are of change. Empirical evidence on both questions is fragmentary and occasionally contradictory. Models that consider both process and content show the greatest potential for resolving this situation. Such models can be used to test social science theories as well as to evaluate programs of organizational change promulgated by consultants and practitioners. Basic organizational theory would be enhanced by greater attention to organizational change.

640 citations

Journal ArticleDOI
TL;DR: This paper investigated the processes involved in forming an organizational identity, which they studied during the founding of a distinctive new college by using an interpretive, insider-outsider research a.k.a. insider outsider research.
Abstract: We investigated the processes involved in forming an organizational identity, which we studied during the founding of a distinctive new college by using an interpretive, insider-outsider research a...

608 citations

Journal ArticleDOI
TL;DR: In this paper, the authors survey 336 chief financial officers (CFOs) to compare practice to theory in the areas of initial public offering (IPO) motivation, timing, underwriter selection, underpricing, signaling, and the decision to remain private.
Abstract: We survey 336 chief financial officers (CFOs) to compare practice to theory in the areas of initial public offering (IPO) motivation, timing, underwriter selection, underpricing, signaling, and the decision to remain private. We find the primary motivation for going public is to facilitate acquisitions. CFOs base IPO timing on overall market conditions, are well informed regarding expected underpricing, and feel underpricing compensates investors for taking risk. The most important positive signal is past historical earnings, followed by underwriter certification. CFOs have divergent opinions about the IPO process depending on firm-specific characteristics. Finally, we find the main reason for remaining private is to preserve decision-making control and ownership. GREAT EFFORT, THEORETICAL AND EMPIRICAL, has been made to understand managerial decision-making in the initial public offering (IPO) process. Most empirical IPO research relies on publicly available stock return data or data contained in Securities and Exchange Commission (SEC) filings. In this study we extend the IPO literature by analyzing unique data from surveys of chief financial officers (CFOs) to compare CFO perspectives to prevailing academic theory. Specifically, we examine the following seven issues: motivations for going public, timing of the IPO, underwriter selection, underpricing, signaling, IPO process issues, and the decision to stay private. We survey three subsamples of firms, namely, those that successfully completed an IPO, those that began the process but chose to withdraw the issue, and those that are large enough to go public, but have not attempted an IPO.

576 citations

Journal ArticleDOI
TL;DR: In this paper, the authors examined the de-diversification activity of publicly held American firms from 1985 to 1994 and found that managers of such firms face pressure from analysts to dediversify so that their stock is more easily understood.
Abstract: The issue of corporate control is examined through an analysis of the de-diversification activity of publicly held American firms from 1985 to 1994. Prominent accounts of such behavior depict newly powerful shareholders as having demanded a dismantling of the inefficient, highly diversified corporate strategies that arose in the late 1950s and the 1960s. This paper highlights an additional factor that spurred such divestiture: the need to present a coherent product identity in the stock market. It is argued that because they straddle the industry categories that investors—and securities analysts, who specialize by industry—use to compare like assets, diversified firms hinder efforts at valuing their shares. As a result, managers of such firms face pressure from analysts to dediversify so that their stock is more easily understood. Results indicate that, in addition to such factors as weak economic performance, de-diversification is more likely when a firm's stock price is low and there is a significant mi...

535 citations

Journal ArticleDOI
TL;DR: This article found that the level of average initial returns at the time of filing contains no information about that company's eventual underpricing and that more companies tend to go public following periods of high initial returns.
Abstract: Both IPO volume and average initial returns are highly autocorrelated. Further, more companies tend to go public following periods of high initial returns. However, we find that the level of average initial returns at the time of filing contains no information about that company’s eventual underpricing. Both the cycles in initial returns and the lead-lag relation between initial returns and IPO volume are predominantly driven by information learned during the registration period. More positive information results in higher initial returns and more companies filing IPOs soon thereafter. THE PHENOMENON OF “HOT IPO MARKETS” has been recognized for a long time in the financial community. Ibbotson and Jaffe (1975) and Ibbotson, Sindelar, and Ritter (1988, 1994) show that there are pronounced cycles in the number of new issues per month and also in the average initial return per month. Further, there appears to be a lead-lag relation between the two series. Figure 1 shows monthly IPO volume and initial returns between 1960 and 2001. It seems that periods of high and rising initial returns tend to be followed by spurts of IPOs, which are themselves followed by periods of lower initial returns. For example, the high initial returns of early 1961 were followed by large numbers of companies going public in late 1961 and early 1962, and then by especially low average initial returns in late 1962. This pattern is repeated many times over the 41-year period.

527 citations