Thatchenkery, S. and Katila, R. (2022)
Innovation and profitability following antitrust intervention against a dominant platform: The wild, wild west?
Strategic Management JournalAbstract: This study examines whether “unblocking” competition through antitrust intervention against a dominant platform can spur complementor innovation in platform ecosystems. Using a novel dataset on enterprise infrastructure software and a difference-in-differences design, we examine the relation between the U.S. antitrust intervention against Microsoft (dominant enterprise platform) and subsequent innovation and profitability of infrastructure applications firms (complementors). The data show that innovation among complementors—particularly ones with low market share—soared when the competitive pressure on the dominant platform amplified. However, the profitability of these complementors dropped. Our results contribute to understanding links between competition and innovation in platform ecosystems, as well as the opportunities and threats related to dominant platforms in those ecosystems.
Thatchenkery, S. and Katila, R. (2021)
Seeing What Others Miss: A Competition Network Lens on Product Innovation
Organization Science, 32(5): 1346-1370Abstract: How a firm views its competitors affects its performance. We extend the networks literature to examine how a firm’s positioning in competition networks—networks of perceived competitive relations between firms—relates to a significant organizational outcome, namely, product innovation. We find that when firms position themselves in ways that allow them to see differently than rivals, new product ideas emerge. Simply put, firms with an unusual view of competition are more innovative. We situate our analysis in the U.S. enterprise infrastructure software industry, examining the relationship between the firm’s position in competition networks and its innovation over the period of 1995–2012. Using both archival and in-depth field data, we find that two factors—the focal firm’s spanning of structural holes in the network and the perception of peripheral firms as competitors—are positively associated with its product innovation. At the same time, turnover in firms perceived as competitors has an unexpected negative association with innovation. Overall, the findings suggest that firms benefit when they see the competitive landscape differently than their competitors. The findings also show that what we know about innovation-enhancing positioning in collaboration networks does not necessarily hold in competition networks.
Ahuja, G., and Katila, R. (2004)
Where Do Resources Come From? The Role of Idiosyncratic Situations
Strategic Management Journal, 25(8-9): 887-907Abstract: In this paper, we examine the emergence of resources. Our analysis of technological capability acquisition by global U.S.-based chemical firms shows that the emergence of resources is inherently evolutional. We find that path-creating search that generates resource heterogeneity is a response to idiosyncratic situations faced by firms in their local searches. Two such idiosyncratic situations, technology exhaustion and expansion beyond national markets, trigger firms in our sample to create unique innovation search paths. We also find that along a given path firms experiment in order to find the correct investment;in fact, some organizations seem to take a step backward for two steps forward;further demonstrating the evolutionary nature of the resource creation process.
Ahuja, G., and Katila, R. (2001)
Technological Acquisitions and the lnnovation Performance of Acquiring Firms: A Longitudinal Study
Strategic Management Journal, 22(3): 197-220Abstract: This paper examines the impact of acquisitions on the subsequent innovation performance of acquiring firms in the chemicals industry. We distinguish between technological acquisitions, acquisitions in which technology is a component of the acquired firm’s assets, and nontechnological acquisitions: acquisitions that do not involve a technological component. We develop a framework relating acquisitions to firm innovation performance and develop a set of measures for quantifying the technological inputs a firm obtains through acquisitions. We find that within technological acquisitions absolute size of the acquired knowledge base enhances innovation performance, while relative size of the acquired knowledge base reduces innovation output. The relatedness of acquired and acquiring knowledge bases has a nonlinear impact on innovation output Nontechnological acquisitions do not have a significant effect on subsequent innovation output.
Bahceci, E., Katila R., Miikkulainen, R. (2015)
Evolving Strategies in Social Innovation Games
Proceedings of the Conference on Genetics and Evolutionary ComputationAbstract: While evolutionary computation is well suited for automatic discovery in engineering, it can also be used to gain insight into how humans and organizations could perform more effectively in competitive creative domains. This paper formalizes human creative problem solving as competitive multi-agent search, and advances the hypothesis that evolutionary computation can be used to discover effective strategies for it. In experiments in a social innovation game (similar to a fantasy sports league), neural networks were first trained to model individual human players. These networks were then used as opponents to evolve better game-play strategies with the NEAT neuro-evolution method. Evolved strategies scored significantly higher than the human models by innovating, retaining, and retrieving less and by imitating more, thus providing insight into how performance could be improved in such domains. Evolutionary computation in competitive multi-agent search thus provides a possible framework for understanding and supporting various human creative activities in the future.
Bingham, C.B., and Eisenhardt, K.M. (2014)
Heuristics in Strategy and Organizations: Response to Vuori and Vuori
Strategic Management Journal, in pressAbstract: We recently introduced a research program on how firms can effectively capture fleeting opportunities using heuristics. Heuristics, we advocate, are the essence of strategy, especially in unpredictable markets where opportunities are often numerous, fast moving, and uncertain. Our emphasis on heuristics invites comparison with prominent research programs in cognitive psychology. We address this opportunity by comparing our “simple rules” heuristics approach with “heuristics-and-biases” and “fast-and-frugal” heuristics research. Collectively, the three approaches offer a rich understanding of heuristics.
Bingham, C. B., and Eisenhardt, K. M. (2011)
Rational Heuristics: the ‘simple rules’ that strategists learn from process experience
Strategic Management Journal, 32(13): 1437-1464.Abstract: While much research indicates that organizational processes are learned from experiences, surprisingly little is known about what is actually learned. Using a novel method to measure explicit learning, we track the learned content of six technology-based ventures from three diverse countries as they internationalize. The emergent theoretical framework indicates that firms learn heuristics. These heuristics have a common structure centered on opportunity capture and are learned in a specific developmental order. This results in a deliberately small, yet increasingly strategic, portfolio of heuristics. Broadly, we contribute to the psychological foundations of strategy by highlighting the rationality of heuristics as strategy, capability creation as the cognitive transition from novice to expert heuristics, and simplification cycling as a critical dynamic capability for sustaining competitive advantage.
Bingham, C., and Eisenhardt, K. M. (2008)
Position, Leverage and Opportunity: A Typology of Strategic Logics Linking Resources With Competitive Advantage
Managerial and Decision Economics, 29(2-3): 241-256.Abstract: The resource-based view’s (RBV) contribution toward understanding competitive advantage remains unfulfilled. A reason is the confounding of the concept of resources with RBV’s strategic logic. We disentangle these by developing a typology of strategic logics that specify alternative theoretical pathways linking resources with competitive advantage. We clarify their market assumptions, relevant performance objectives, and managerial challenges. Besides introducing the logic of opportunity, we indicate the central insight that competitive advantage stems from the linkages among resources, not just their attributes. Thus, while VRIN resources may be useful for creating advantage, they may be neither necessary nor sufficient for competitive advantage to ensue.
Chen, E., Katila, R., and Eisenhardt, K. (2010)
Life in the Fast Lane: Origins of Competitive Interaction in New vs. Established Markets
Strategic Management Journal, 31: 1527-1547Abstract:Prior work examines competitive moves in relatively stable markets. In contrast, we focus on less stable markets where competitive advantages are temporary and moves are essential. Using evolutionary search theory and an experiential simulation with in-depth fieldwork, we find that the relationship between performance and subsequent competitive moves depends on the type of market, not just on whether performance is high or low. High performers seek to maintain status quo, but this requires different strategies in different markets. They are conservative in established markets and bold in new ones. In contrast, low performers seek to disrupt the status quo. Again, this requires different strategies in different markets. Unlike high performers, low performers are bold in established markets and conservative in new ones where they lack understanding of how to disrupt rivals. Overall, our results incorporate unstable markets in theories of competitive dynamics and competitive interaction in theories of evolutionary search. By examining R&D moves, we also extend competitive dynamics research to include technology-based firms for whom temporary advantages are often essential.
Cox Pahnke, E., Katila, R. and Eisenhardt K. (2015)
Who takes you to the dance? How partners’ institutional logics influence innovation in young firms
Administrative Science Quarterly, 60: 561-595.Abstract: Drawing on institutional theory, we examine how the institutional logics of different types of funding partners influence young firms and their search for innovations. We test our hypotheses in a longitudinal study of a complete population of ventures in the minimally invasive surgical device industry in the U.S. Intriguingly, we find that types of funding partners vary significantly from one another. Specifically while they all provide resources, their institutional logics differ. Venture capitalists pick young firms with significant patented technologies, and help firms launch products, and high-status VCs strengthen both the patenting and product innovations of young firms. In contrast, while corporate venture capitalists and government agencies also select patent-intensive firms, these types of partners are less effective in helping ventures during the relationship. While these partners often have impressive technical and commercial resources for innovation, their institutional logics – i.e., taken-for granted norms, structures and practices – constrain how effectively young firms can access their resources. Our results extend the institutional logics literature to inter-organizational relationships, and suggest that the choice among types of funding partners may have unanticipated effects on firm innovation beyond the financial resources gained through the relationship.
Dahlander, L., and Piezunka, H. (2014)
Open to Suggestions: How organizations elicit suggestions through proactive and reactive attention
Research Policy, 43(5): 812-827Abstract: This paper analyzes organizations’ attempts to entice external contributors to submit suggestions for future organizational action. While earlier work has elaborated on the advantages of leveraging the knowledge of external contributors, our findings show that organizational attempts to attract such involvement are likely to wither and die. We develop arguments about what increases the likelihood of getting suggestions from externals in the future, namely through (1) proactive attention (submitting internally developed suggestions to externals to stimulate debate) and (2) reactive attention (paying attention to suggestions from externals to signal they are being listened to), particularly when those suggestions are submitted by newcomers. Findings from an analysis of about 24,000 initiatives by organizations to involve external contributors suggest these actions are crucial for receiving suggestions from external contributors. Our results are contingent upon the stage of the initiative because organizations’ actions exert more influence in initiatives that lack a history of prior suggestions. Our work has implications for scholars of open innovation because it highlights the importance of considering failures as well successes: focusing exclusively on initiatives that reach a certain stage can lead to partial or erroneous conclusions about why some organizations engage external contributors while others fail.
Davis, J. P., and Eisenhardt, K. M. (2011)
Rotating Leadership and Collaborative Innovation Recombination Processes in Symbiotic Relationships
Administrative Science Quarterly, 56(2): 159-201.Abstract: Using a multiple-case, inductive study of eight technology collaborations between ten organizations in the global computing and communications industries between 2001 and 2006 this paper examines why some interorganizational relationships produce technological innovations while others do not. Comparisons of more and less innovative collaborations show that high-performing collaborative innovation involves more than possessing the appropriate structural antecedents (e.g., R&D capabilities, social embeddedness) suggested by prior alliance studies. Rather, it also involves dynamic organizational processes associated with collaboration partners’ leadership roles that solve critical innovation problems related to recombination across boundaries. While dominating and consensus leadership processes are associated with less innovation, a rotating leadership process is associated with more innovation. It involves alternating decision control that accesses the complementary capabilities of both partner organizations, zig-zagging objectives that engender deep and broad technological search for potential innovations, and fluctuating network cascades that mobilize different participants who bring variable inputs to recombination. The paper also discusses recombination mechanisms in the organization of collaborative innovation, variations in the performance of dynamic interorganizational ties, and how organizations develop symbiotic relationships that overcome the tendency of long-lived relationships toward inertia.
Davis, J. P., Eisenhardt, K. M., and Bingham, C. B. (2009)
Optimal Structure, Market Dynamism, and the Strategy of Simple Rules
Administrative Science Quarterly, 54(3): 413-452.Abstract: Using computational and mathematical modeling, this study explores the tension between too little and too much structure that is shaped by the core tradeoff between efficiency and flexibility in dynamic environments. Our aim is to develop a more precise theory of the fundamental relationships among structure, performance, and environment. We find that the structure-performance relationship is unexpectedly asymmetric, in that it is better to err on the side of too much structure, and that different environmental dynamism dimensions (i.e., velocity, complexity, ambiguity, and unpredictability) have unique effects on performance. Increasing unpredictability decreases optimal structure and narrows its range from a wide to a narrow set of effective strategies. We also find that a strategy of simple rules, which combines improvisation with low-to-moderately structured rules to execute a variety of opportunities, is viable in many environments but essential in some. This sharpens the boundary condition between the strategic logics of positioning and opportunity. And juxtaposing the structural challenges of adaptation for entrepreneurial vs. established organizations, we find that entrepreneurial organizations should quickly add structure in all environments, while established organizations are better off seeking predictable environments unless they can devote sufficient attention to managing a dissipative equilibrium of structure (i.e., edge of chaos) in unpredictable environments.
Davis, J., Bingham, C., and Eisenhardt, K. M. (2007)
Developing Theory Through Simulation Methods
Academy of Management Review, 32 (2): 480-499Abstract: We describe when and how to use simulation methods in theory development. We develop a roadmap that describes theory development using simulation and position simulation in the “sweet spot” between theory-creating methods, such as multiple case inductive studies and formal modeling, and theory-testing methods. Simulation strengths include internal validity and facility with longitudinal, nonlinear, and process phenomena. Simulation’s primary value occurs in creative experimentation to produce novel theory. We conclude with evaluation guidelines.
Eberhart, R., Eesley, C. and Eisenhardt, K. (2016)
Failure is an Option: Institutional Barriers to Failure, Bankruptcy, and New Firm Performance in Japan (in press)
Eesley, C. (2016)
Institutional Barriers to Growth: Entrepreneurship, Human Capital and Institutional Change (in press)
Organization ScienceAbstract: Prior research often focuses on how many entrepreneurial firms are created, rather than on institutions that encourage specific types of firms or entrepreneurs. This paper identifies institutional changes that reduce barriers to growth as an important factor influencing the propensity of individuals to start a business. The findings suggest that the impact of lower barriers to growth is shaped by the extent of the reduction in barriers to growth and the level of human capital of the individual. Only a large reduction in barriers to growth has a stronger impact in increasing the likelihood of founding at higher levels of human capital. I capitalize on two reforms lowering barriers to growth as natural experiments. One reform in 1988 only slightly lowered barriers to growth. The second reform in 1999 more strongly lowered barriers to growth with an amendment to the Chinese constitution that reversed regulations that favored firms with foreign investors. This made it easier for domestic entrepreneurs to compete. I collected unique data through a survey of 2,966 alumni who graduated from a top Chinese university. Results show that reducing the institutional barriers to growth differently affects college-educated individuals with different levels of human capital.
Eesley, C.; Decelles, K.; Lenox, M. (2015)
Through the Mud or in the Boardroom: Activist Types and their Strategies in Targeting Firms for Social Change (in press)
Strategic Management JournalAbstract: The purpose of this study was to examine how different types of activist groups behave differently when targeting firms for social change. We find that traditional activist groups rely on boycotts and protests, whereas religious groups and activist investors rely more on lawsuits and proxy votes. Additionally, we find that protests and boycotts are associated with greater media attention, whereas lawsuits and proxy votes are associated with investor perceptions of risk.
Eesley, C. E., and Hannah, D. (2012)
Ion B. Vasi: Winds of Change: The Environmental Movement and the Global Development of the Wind Energy Industry
Administrative Science Quarterly, 57(2): 359-362.Abstract: Though often considered a darling success of the new green economy, wind power actually displays a fairly spotted success record globally, with deployment having progressed fitfully and unevenly over the past several decades. Conventional explanations fail to explain much of the observed variation in wind power deployment. For instance, why is it that Denmark derives 24 percent of its generating capacity from wind despite having only moderate wind resources, while the United States draws a mere 3 percent of its power from some of the best wind resources on Earth? What accounts for discrepancies like this, of which there are many? In Winds of Change, Ion Vasi begins to answer this question and, in doing so, not only tells an engaging tale from an exciting industry but also shines light on the fundamental social processes that shape industry evolution, as well as entrepreneurship and the deployment of new technologies.
Eesley, C., Hsu, D.H., and Roberts, E.B. (2013)
The Contingent Effects of Top Management Teams on Venture Performance: Aligning Founding Team Composition with Innovation Strategy and Commercialization Environment
Strategic Management Journal, in pressAbstract: How does the relationship between founding team composition and venture performance depend on the venture’s strategy and business environment? Using data from a novel survey of 2,067 firms, we show that while diverse founding teams tend to exhibit higher performance, this is not universally true. We find that founding teams that are diverse are likely to achieve high performance in a competitive commercialization environment. On the other hand, technically-focused founding teams are aligned with a cooperative commercialization environment and when the enterprise pursues an innovation strategy. These results are robust to corrections for endogenous team formation concerns. The findings suggest that ventures cannot ignore founding team composition and expect to later professionalize their top management teams to align with their strategy and environment.
Eesley, C., Li, J.B. and Yang, D. (2016)
Does Institutional Change in Universities Influence High-Tech Entrepreneurship?: Evidence from China’s Project 985
Organization Science, 27(2): 446-461Abstract: This paper contributes to institutional theory on cognitive and normative institutional change targeted at altering beliefs, behaviors, and ultimately firm performance. Prior work emphasizes institutional changes where the ideas and beliefs originate from those within the institutional context. Under examined are cases of institutional changes in beliefs and behaviors imposed from outside of the context, which may result in inconsistencies among cognitive, normative, and regulatory institutional pillars. Project 985 was a program implemented by the Chinese government that provided funding for a set of universities to build new research centers. We found that graduates of these universities subsequently expressed greater beliefs in innovation and founded more high-tech ventures, but that entrepreneurs influenced by the reform were not as financially successful as entrepreneurs who founded firms before the reform or from non-985 universities. We explain this surprising finding as caused by the fact that Project 985 was institutionally inconsistent with China’s broader institutional environment. An important implication is that institutional changes may alter beliefs and behavior, but they must be consistent with the broader institutional environment to improve firm performance.
Eesley, C., and Wang, Y. (2017)
Social influence in career choice: Evidence from a randomized field experiment on entrepreneurial mentorship
Science DirectAbstract: How do different sources of social influence impact the likelihood of entrepreneurship? We examine this question in the setting of an entrepreneurship class in which students were randomly assigned to receive mentorship from either an entrepreneur or a non-entrepreneur. Using a longitudinal field experiment with a pre-test/post-test design, we find that randomization to an entrepreneur mentor increases the likelihood of entrepreneurial careers, particularly for students whose parents were not entrepreneurs. Additional analysis shows the mentor influences the decision to join an early-stage venture, but not to become a founder. Performance data suggests that entrepreneurial influence is not encouraging “worse” entrepreneurship and may have helped students in joining or founding better-performing ventures. We contribute to the literature on social influence in entrepreneurship by examining the interaction between multiple sources of social influence and by using a randomized field experiment to overcome the endogenous process of tie formation.
Eesley, C., and Yang, D. (2011)
Changing Entrepreneurial Strategies to Developing Capitalist Institutions: A look at Chinese technology entrepreneurs
In Technology Management Conference (ITMC), 2011 IEEE International (pp. 1016-1035). IEEE.Abstract: Our understanding of institutional change and strategy is limited. Institutions will influence the types of strategies that result in higher performance in entrepreneurial firms. This paper shows that different strategies and firm characteristics will explain variation in performance as institutional change occurs. Exploiting variation in the institutional environment over time and across regions in China, this paper examines the impact of institutional change on the effectiveness of firm strategies. Unique data were collected through survey responses from alumni who graduated from a Chinese university. The results show that different factors determine firm performance during different stages of institutional reform. These factors differ from those identified in the literature using data from well-developed economy contexts. The results indicate a significantly strong role for entrepreneur-government connections in the less developed institutional environment and a shift towards factors associated with competition in the market. Most entrepreneurs do not find themselves in a developed economy and few scholars have looked at drivers of entrepreneurial performance in a developing country context (Gollin, 2002, p. 466). Many developing countries are currently attempting to encourage successful entrepreneurship by transitioning away from more centralized economic structures and implementing institutional changes (Hoskisson, 2000). Eesley (2010) shows that with institutional changes there are shifts in the type of person becoming an entrepreneur, but do the paths and strategies leading to success in entrepreneurship change as well? While there is growing consensus that institutions are important (North, 1990) and affect entrepreneurship (Aldrich and Fiol, 1994; Sine, Haveman and Tolbert, 2005), the relationship between institutional change and firm strategy is still unclear. This paper asks whether shifts in the institutional environment allow new paths to successful entrepreneurship to open up in society.
Eesley, Charles E., and Roberts E.B. (2012)
Are You Experienced: When Does Talent vs. Experience Drive Entrepreneurial Performance
Strategic Entrepreneurship Journal, 6(3): 207-219.Abstract: Our understanding of institutional change and strategy is limited. Institutions will influence the types of strategies that result in higher performance in entrepreneurial firms. This paper shows that different strategies and firm characteristics will explain variation in performance as institutional change occurs. Exploiting variation in the institutional environment over time and across regions in China, this paper examines the impact of institutional change on the effectiveness of firm strategies. Unique data were collected through survey responses from alumni who graduated from a Chinese university. The results show that different factors determine firm performance during different stages of institutional reform. These factors differ from those identified in the literature using data from well-developed economy contexts. The results indicate a significantly strong role for entrepreneur-government connections in the less developed institutional environment and a shift towards factors associated with competition in the market. Most entrepreneurs do not find themselves in a developed economy and few scholars have looked at drivers of entrepreneurial performance in a developing country context (Gollin, 2002, p. 466). Many developing countries are currently attempting to encourage successful entrepreneurship by transitioning away from more centralized economic structures and implementing institutional changes (Hoskisson, 2000). Eesley (2010) shows that with institutional changes there are shifts in the type of person becoming an entrepreneur, but do the paths and strategies leading to success in entrepreneurship change as well? While there is growing consensus that institutions are important (North, 1990) and affect entrepreneurship (Aldrich and Fiol, 1994; Sine, Haveman and Tolbert, 2005), the relationship between institutional change and firm strategy is still unclear. This paper asks whether shifts in the institutional environment allow new paths to successful entprepreneurship to open up in society.
Eisenhardt, K. M., Furr, N. R., and Bingham, C. B. (2010)
CROSSROADS—Microfoundations of Performance: Balancing Efficiency and Flexibility in Dynamic Environments
Organization Science, 21(6): 1263-1273.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, throughunbalancing 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.
Eisenhardt, K. M., and Galunic, C.D. (2000)
Coevolving: At last, a Way to Make Synergies Work
Harvard Business Review (January-February): 91-101Abstract: Capturing cross-business synergies is at the heart of corporate strategy, but synergies are notoriously challenging to capture. Companies including Shell, United Airlines, Amazon.com and PlanetAll have failed. Companies such as GE Capital and NovaMed Eyecare Management have successfully achieved synergies because they have mastered a corporate strategic process called coevolving. These companies routinely change the web of collaborative links–everything from information exchanges to share assets to multibusiness strategies. The term coevolution originated in biology but biological coevolution is just one kind of complex adaptive system. Recently, computer simulations have uncovered general laws of how these systems work, including social systems such as multicountry economies and multibusiness corporations. For today’s multibusiness companies, coevolving means managers must: assume that links among businesses are temporary–the number of connections, not just their content, matters; set the context for collaborative strategy and don’t try to control or predict it; and reward business units for individual performance, not for collaboration. The essentials of coevolving are: frequently reconnect the relationships among businesses; blur collaboration and competition; manage the number of connections, and uncover high-leverage links. Capturing cross-business synergies is an essential part of corporate strategy, yet many managers collaborate in too many areas or for too long, or they focus on the wrong opportunities. Coevolving is a subtle strategic process.
Eisenhardt, K. M. (2002)
Has Strategy Changed?
MIT Sloan Management Review, Winter: 88-91Abstract: Has strategy changed in the wake of the recent economic frenzy and subsequent downturn? Is the New Economy finished? Has the Old Economy returned? At this point, most managers understand what the advent of the Internet implies — operating efficiency for most companies, a terrific channel for some and a fundamentally new business opportunity for only a few. So is it back to “strategy as usual”?
Eisenhardt, K. M., and Brown, S. L. (1998)
Time Pacing: Competing in Markets that Won’t Stand Still
Harvard Business Review (March-April): 56-69Abstract: Most companies change in reaction to events such as moves by the competition, shifts in technology, or new customer demands. In fairly stable markets, “event pacing” is an effective way to deal with change. But successful companies in rapidly changing, intensely competitive industries take a different approach. They change proactively, through regular deadlines. Kathy Eisenhardt of Stanford and Shona Brown of McKinsey have studied this alternative approach, which they call time pacing. Like a metronome, time pacing creates a rhythm to which managers can synchronize the speed and intensity of their efforts. For example, 3M dictates that 25% of its revenues every year will come from new products, Netscape introduces a new product about every six months, and Intel adds a new fabrication facility to its operations approximately every nine months. Time pacing creates a relentless sense of urgency around meeting deadlines and concentrates people on a common set of goals. Its predictability also provides people with a sense of control in otherwise chaotic markets. The authors show how companies such as Banc One, Cisco Systems, Dell Computer, Emerson Electric, Gillette, Intel, Netscape, Shiseido, and Sony implement the two essentials of time pacing. The first is managing transitions–the shift, for example, from one new-product-development project to the next. The second is setting the right rhythm for change. Companies that march to the rhythm of time pacing build momentum, and companies that effectively manage transitions sustain that momentum without missing important beats. This piece presents important new thinking on one of the most demanding challenges managers face today.
Eisenhardt, K. M., and Graebner, M. (2007)
Theory Building From Cases: Opportunities And Challenges
Academy of Management Journal, 50 (1): 25-32Abstract: This article discusses the research strategy of theory building from cases, particularly multiple cases. Such a strategy involves using one or more cases to create theoretical constructs, propositions, and/or midrange theory from case-based, empirical evidence. Replication logic means that each case serves as a distinct experiment that stands on its own merits as an analytic unit. The frequent use of case studies as a research strategy has given rise to some challenges that can be mitigated by the use of very precise wording and thoughtful research design.
Eisenhardt, K. M., and Martin, J. A. (2000)
Dynamic Capabilities: What are They?
Strategic Management Journal, 21(10-11): 1105-1121Abstract: This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and allowancing. They are neither vague nor tautological Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets.
Eisenhardt, K. M., and Sull, D. (2001)
Strategy as Simple Rules
Harvard Business Review, 79(1): 107-116Abstract: The secret of companies such as Yahoo!, eBay, and America Online, despite unattractive industry structure, few apparent resource advantages, and constantly evolving strategies, is strategy as simple rules. Strategy as simple rules makes sense for all kinds of companies because the new economy’s most profound strategic implication is that companies must capture unanticipated, fleeting opportunities in order to succeed. Managers of such companies know that the greatest opportunities for competitive advantage lie in market confusion, so they jump into chaotic markets, probe for opportunities, build on successful forays, and shift flexibly among opportunities as circumstances dictate. Strategy as simple rules is about being different. That difference arises from focusing on key strategic processes and developing simple rules that shape those processes. These simple rules fall into five broad categories: How-to Rules, Boundary Rules, Priority Rules, Timing Rules, and Exit Rules. A company’s particular combination of opportunities and constraints often dictates the processes it chooses.
Ferraro, F., Pfeffer, J., & Sutton, R. I. (2009)
How and Why Theories Matter: A comment on Felin and Foss
Organization Science, 20(3), 669-675.Abstract: Theories matter because they affect behavior and can, under certain circumstances, become self-fulfilling. For a theory to become self-fulfilling, people must be aware of the theory and have the ability to make choices according to its dictates, social and physical arrangements are altered on the basis of the theory’s prescriptions, and the proponents have the power to implement social arrangements consistent with the theory. Economics and other social science theories often fulfill these conditions, with implications not only for the work of scholars, but also for how we think about testing theories that can change the world they describe.
Ferraro, F., Pfeffer, J, & Sutton, R.I. (2005)
Economic Language and Assumptions: How Theory Can Become Self-Fulfilling
Academy of Management Review, 30: 8-24Abstract: Social science theories can become self-fulfilling by shaping institutional designs and management practices, as well as social norms and expectations about behavior, thereby creating the behavior they predict. They also perpetuate themselves by promulgating language and assumptions that become widely used and accepted. We illustrate these ideas by considering how the language and assumptions of economics shape management practices: theories can win in the marketplace for ideas, independent of their empirical validity, to the extent their assumptions and language become taken for granted and normatively valued, therefore creating conditions that make them come true.
Ferraro, F., Pfeffer, J., & Sutton, R.I. (2005)
Prescriptions Are Not Enough
Academy of Management Review, 30: 32-35not. We challenge his argument by showing that other social sciences do offer prescriptive advice but are nonetheless rarely influential. We argue that the mechanisms through which economics and other social sciences gain influence and affect practice should be investigated more carefully by management scholars seeking to understand how to have greater impact on both public policy and management practice.
Galunic, D. C., and Eisenhardt, K. M. (2001)
Architectural Innovation and Modular Corporate Forms
Academy of Management Journal 44(6): 1229-1250Abstract: Based on an intensive and inductive study of a Fortune 100 corporation, this article describes how dynamic capabilities that reconfigure division resources–that is, architectural innovation–may operate within multi-business firms. We suggest envisaging corporate divisions as combinations of capabilities and product-market areas of responsibility (charters) that may be recombined in various ways, highlighting the interplay of economic and social imperatives that motivate such recombinations. We detail the microsociological patterns by which such recombinations occur and then theorize about an organizational form, termed ‘dynamic community,’ in which these processes are embedded.
Graebner, M. E., Eisenhardt, K. M., and Roundy, P. T. (2010)
Success and Failure in Technology Acquisitions: Lessons for Buyers and Sellers
The Academy of Management Perspectives, 24(3): 73-92.Abstract: Technology acquisitions can benefit firms by providing valuable resources, increasing market power, and initiating strategic renewal. Yet despite these opportunities, technology acquisitions often present a significant challenge for both buyers and sellers. In this article, we review the research on technology acquisitions and outline what is known and what remains to be studied. First, we examine firms’ motivations for engaging in technology acquisitions. Second, we explore the features and challenges that make technology acquisitions unique. Third, we summarize the research on how both buyers and sellers can improve the performance of technology acquisitions. Fourth, we propose a research agenda to address unanswered questions and emerging issues related to technology acquisitions, placing particular emphasis on cross-border deals and the effects of acquisition activity on an industry’s competitive dynamics.
Graebner, M. E., and Eisenhardt, K. M. (2004)
The Seller’s Side of the Story: Acquisition as Courtship and Governance as Syndicate in Entrepreneurial Firms
Administrative Science Quarterly, 49(3): 366-403Abstract: In contrast to the prior acquisitions literature, which has emphasized the buyer’s perspective, we examine the seller’s perspective. This has important implications for understanding both the acquisition process and, more broadly, corporate governance in successful firms. Using a multiple-case, inductive study of 12 technology-based ventures, we find that acquisition occurs when sellers are pushed toward acquisition by difficult, albeit natural strategic hurdles, such as a chief executive search or funding round, and by strong personal motivations for sale, such as past failures and investments by friends. Sellers are also more likely to be pulled toward acquisition by attractive buyers that offer synergistic combination potential and organizational rapport, factors usually associated with the long-term interests of buyers. We reframe acquisition as courtship and corporate governance as a syndicate, indicating joint decision making with some common goals, and explore the generalizability of these views for private versus public firms and other contingencies. Together, courtship and syndicate suggest a behaviorally informed account of organization that belies the rhetoric of price and self-interest.
Hallen, B. L., and Eisenhardt, K. M. (2012)
Catalyzing Strategies and Efficient Tie Formation: How Entrepreneurial Firms Obtain Investment Ties
Academy of Management Journal, 55(1), 35-70.Abstract: Although network ties are crucial for firm performance, the strategies by which executives actually form ties are relatively unexplored. In this study, we introduce a new construct, tie formation efficiency, and clarify its importance for superior network outcomes. Building on fieldwork in nine Internet security ventures seeking investment ties, we unexpectedly identify two “equifinal” paths for how executives form ties efficiently. One relies on existing strong direct ties and is only available to privileged firms. The other relies on a second new concept, catalyzing strategies, a means by which executives advantageously shape opportunities and inducements to form ties that is available to many firms. Overall, we add insights to the network and signaling literatures and to the nascent literature on how strategic action, especially by low-power actors such as entrepreneurs, shapes critical network outcomes.
Hallen, B. Katila, R. and Rosenberger, J. (2014)
Unpacking Social Defenses: A Resource-Dependence Lens on Technology Ventures, Venture Capital, and Corporate Relationships
Academy of Management Journal, in press.Abstract: Inter-organizational relationships offer many potential benefits, but they also expose firms to dangers, such as misappropriation, that pull partners apart. This tension between collaboration and competition is central to tie formation, especially for young technology-focused firms who have both high need for resources and high appropriability of their own resources. Prior work has examined legal and timing defenses that enable inter-organizational ties; we focus here on social defenses. In a longitudinal study of equity tie formation between young firms and established corporations, spanning 5 technology-based industries and 25 years, we unpack the effects of social defenses and find, intriguingly, that third-party social defenses are particularly significant when more traditional defenses are unavailable. Beyond providing resources and legitimacy, ties with centrally positioned third parties are a critical mechanism whereby young low-power firms can enhance their power in tie formation. Our study also sheds light on how a portfolio of ties helps young technology firms mobilize resources and manage resource vulnerabilities.
Hargadon, A. and Sutton, R.I. (2000)
Building an Innovation Factory
Harvard Business Review, (May-June):157-166Abstract: Ask any CEO in the world to write a top-five wish list, and we guarantee that “more ideas—better ideas!” will show up in some form. Most likely it’ll be right at the top. CEOs know that ideas and innovation are the most precious currency in the new economy—and increasingly in the old economy as well. Without a constant flow of ideas, a business is condemned to obsolescence.
Helfat, C., and Eisenhardt, K. M. (2004)
Inter-temporal Economies of Scope, Organizational Modularity, and Dynamics of Diversification
Strategic Management Journal, 25: 1217-1232Abstract: The article focuses on the intertemporal economies of scope derived from the redeployment of firm resources between businesses over time, as firms exit some product-markets while entering others. Inter-temporal economies of scope in dynamic markets can benefit from an organizational form that consists of a modular, decentralized organizational structure along with processes for recombining businesses among modular organizational units. This sort of repeated recombination of organizational units to match changing business opportunities is a form of patching that results in an evolving path of related diversification through time. Although firms can obtain intra-temporal economies of scope after diversification into related markets, the standard treatment of economies of scope does not deal directly with the dynamic aspects of related diversification. Furthermore, most empirical studies of diversification examine a crosssectional snapshot of company business portfolios. Only occasionally do studies analyze diversification moves from an existing product-market into another domain. In reality, managers often diversify their firms through a series of moves that occur over an extended time period.
Katila, R., Chen, E., and Piezunka, H. (2012)
All the Right Moves: How Entrepreneurial Firms Compete Effectively
Strategic Entrepreneurship Journal, 6(2): 116-132Abstract: In this article, we examine competitive moves by which firms achieve superior performance. In contrast to prior work that has focused on moves and the related competitive advantages of large firms, we draw attention to entrepreneurial firms. Based on 32 runs of a multi-round experiential simulation and in-depth participant interviews, we find that entrepreneurial firms require competitive strategies that are different from those of a control group of comparable large firms. Entrepreneurial firms that stay below the radar in established markets and are quick to explore in new markets perform better. They succeed in established markets with a strategy that works around large firm competition but ultimately surprises them, and in new markets with a strategy that sets the standards of competition swiftly by continuously creating and destroying new strongholds ahead of large firms. Overall, successful entrepreneurs use a combination of selective, invisible, and asynchronous strategies that vary depending on whether the market is established or new. Our findings contribute to literatures on evolutionary learning, exploration and exploitation, and competitive dynamics.
Katila, R. (2008)
Technology Perspective on Network Resources
Academy of Management Review, 33: 550-553. Book symposium.
Katila, R. (2002)
New Product Search Over Time: Past Ideas in Their Prime?
Academy of Management Journal, 45(5): 995-1010Abstract: This study is an investigation of how the age of the knowledge that firms search affects how innovative they are. Two seemingly contradictory propositions are examined: (1) old knowledge hurts by making innovation activities obsolete and (2) old knowledge helps because its reliability and legitimacy promote innovation. Results based on longitudinal data on 131 robotics firms reconcile the contradictory propositions: while old intraindustry knowledge hurts, old extraindustry knowledge promotes innovation.
Katila, R., and Ahuja, G. (2002)
Something Old, Something New: A Longitudinal Study of Search Behavior and New Product Introductions
Academy of Management Journal, 45(6): 995-1010Abstract: We examine how firms search, or solve problems, to create new products. According to organizational learning research, firms position themselves in a unidimensional search space that spans a spectrum from local to distant search. Our findings in the global robotics industry suggest that firms’ search efforts actually vary across two distinct dimensions: search depth, or how frequently the firm reuses its existing knowledge, and search scope, or how widely the firm explores new knowledge.
Katila, R., and Chen, E. (2008)
Effects of search timing on product innovation: The value of not being in sync
Administrative Science Quarterly, 53(4): 593-625Abstract: This paper investigates the effects on product innovation of firms’ search to innovate, taking into account how a firm’s search relates to that of its competitors. Drawing on organizational learning theory, we hypothesize that search timing relative to competitors matters and test two seemingly contradictory views: that competitors take away the exclusivity of search and therefore suppress innovation or, in contrast, sharpen and validate the focal firm’s search and thus promote innovation. Our analysis of 15 years of longitudinal data on 124 Japanese, European, and U.S. industrial automation organizations reconciles these views. Results show that firms introduce more new products if they search after their competitors do, and they introduce more innovative new products if they search ahead of their competitors. The most innovative firms combine these two approaches, bridging their own and their rivals’ hitherto isolated clusters of knowledge, but avoid engaging in learning contests in which they search at the same time as their rivals. The key insight for innovating firms, then, is not necessarily to strive to perform as well as possible in absolute terms, but to be different from the competition.
Katila, R., and Mang, P. (2003)
Exploiting Technological Opportunities: The Timing of Collaborations
Research Policy, 32(2): 317-332Abstract: High-technology companies that discover new technological opportunities face two critical decisions: whether and when to collaborate in exploiting these opportunities. Prior research has examined factors such as transaction costs that determine whether firms decide to collaborate. In this study, we aim to understand when firms collaborate in exploiting opportunities. To this end we study the history of 86 biopharmaceutical product-development projects. We find that factors that reduce articulation and appropriation uncertainties in these projects—patent protection, high R&D intensity of the discoverer, partners’ prior collaboration experience, and support infrastructures in the industry—can speed up collaboration. Interestingly, project-specific factors do not seem to affect timing.
Katila, R., Rosenberger, J., and Eisenhardt, K. (2008)
Swimming with sharks: Technology ventures, defense mechanisms, and corporate relationships
Administrative Science Quarterly, 53(2): 295-332.Abstract: This paper focuses on the tension that firms face between the need for resources from partners and the potentially damaging misappropriation of their own resources by corporate “sharks.” Taking an entrepreneurial lens, we study this tension at tie formation in corporate investment relationships in five U.S. technology-based industries over a 25-year period. Central to our study is the “sharks” dilemma: when do entrepreneurs choose partners with high potential for misappropriation over less risky partners? Our findings show that entrepreneurs take the risk when they need resources that established firms uniquely provide (i.e., financial and manufacturing) and when they have effective defense mechanisms to protect their own resources (i.e., secrecy and timing). Overall, the findings show that tie formation is a negotiation that depends on resource needs, defense mechanisms, and alternative partners. These findings contribute to the recent renaissance of resource dependence theory and to the discussion on the surprising power of entrepreneurial firms in resource mobilization.
Katila, R., and Shane, S. (2005)
When Does Lack of Resources Make New Firms Innovative?
Academy of Management Journal, 48: 814-829Abstract: We extend the resource-based perspective to explain innovation in new firms that have yet to develop resources. Using data on firms’ efforts to commercialize technological inventions, we tested a model of the environmental conditions under which new firms’ lack of resources alternately promotes or constrains innovation. We found that new firm innovation is greater in competitive and small markets, and in environments that do not demand extensive production assets.
Li, Q., Smith, K., Maggitti, P, Tesluk, P., and Katila, R. (2013)
Top Management Attention to Innovation: The Role of Search Selection and Intensity in New Product Introductions
Academy of Management Journal, 56: 893-916Abstract: We develop and test an attention-based theory of search by top management teams and the influence on firm innovativeness. Using an in-depth field study of 61 publicly traded high-technology firms and their top executives, we find that the location selection and intensity of search independently and jointly influence new product introductions. We have three important findings. First, in contrast to the portrait of local managerial search, we find teams that select locations that contain novel, vivid, and salient information introduce more new products. Next, unlike information-gathering approaches that merely “satisfice,” persistent search intensity may lead to increases in new product introductions. Finally, level of search intensity must fit the selected location of search to maximize new product introductions.
Maggitti, P., Smith, K., and Katila, R. (2013)
The Complex Search Process of Invention
Research Policy, 42(1): 90-100Abstract: We inductively develop a process model of individual search in the context of technological invention, an important aspect of economic development that is also fundamental to the success of many organizations. Using an extensive archival content analysis of notable inventors we find that the search and discovery process of invention is inherently complex, non-linear, and disjointed. Successful inventors are skilled at managing these complex systems, receptive to feedback, and able to revisit and change course. Our search model includes a stimulus, net casting for information, categorizing that information, linking unrelated ideas, and discovery. Our findings articulate the search process as a complex progression through a series of simple stages. As such, the study contributes to our understanding of complexity and the complex systems view of the invention process.
Martin, J. A., and Eisenhardt, K. M. (2010)
Rewiring: Cross-business-unit Collaborations in Multibusiness Organizations
Academy of Management Journal, 53(2): 265-301.Abstract: Cross-business-unit collaboration is central to large firms’ value creation, yet empirical support for the prevailing view that a corporate process best fosters such collaboration has been unconvincing. This study of six firms asks how executives create collaborations that perform at high levels. Our emergent theory unexpectedly emphasizes that a BU-centric process led by “multibusiness teams” of general managers leads to better collaborations than a corporate-centric process. We contribute to concepts in information processing, transaction cost economics, and social network theories. Our most fundamental insight extends complexity theory: we find that multibusiness organizations with strong performance operate as complex adaptive systems.
McEvily, S. K., Eisenhardt, K. M., and Prescott, John E. (2004)
The Global Acquisition, Leverage, and Protection of Technological Competencies
Strategic Management Journal, 25(8/9): 713-722Abstract: How managers acquire, leverage, and protect technological competencies in order to innovate successfully and enhance firm performance is central to the field of strategic management. When tensions across acquisition, leverage, and protection activities are resolved and synergies are captured, the value derived from technological competencies can be used to fuel a virtuous cycle in which fewer resources are needed to perpetuate a firm’s advantage. The papers in this issue examine the mechanisms underlying acquisition, leverage, and protection, and are particularly useful in resolving these tensions and highlighting potential synergies. We develop a typology to describe the research domain and relate these papers to one another. Based on gaps in this typology and issues raised by these papers, we offer observations for future research on the acquisition, leverage, and protection of technological competencies.
Okhuysen, G. A. and Eisenhardt, K. M. (2002)
Integrating Knowledge in Groups: How Formal Interventions Enable Flexibility
Organization Science, 13(4): 370-386Abstract: Recent perspectives have focused on the role of the firm in the generation and use of knowledge. These perspectives suggest that, while knowledge is “owned” at the individual level, the integration of this knowledge to a collective level is necessary. This integration of knowledge typically takes place in groups. In our experimental study, we examine how individuals in groups engage in micro-level interactions to effectively integrate knowledge by examining the effects of using three formal interventions: Information Sharing, Questioning Others, and Managing Time. In particular, we observe that simple formal interventions can improve knowledge integration when they lead to “windows of opportunity” for group members to consider ways to improve their work process that go beyond the formal intervention instructions. The most effective groups used these formal interventions to focus their attention into organized clusters of activity, during which they significantly changed their work process and improved their subsequent knowledge integration. In particular, groups in the Questioning Others and Managing Time conditions exhibited greater knowledge integration than groups in the Information Sharing and Control conditions. Groups with high-knowledge integration paced their attention to both adaptive improvements to their process and task execution. Overall, this study identifies simple structures, interruptions, and time pacing as central to the emerging concept of group flexibility by which members enhance their performance on novel and/or ambiguous tasks. We note links to complexity theory and knowledge-based thinking as well.
Ozcan, P., and Eisenhardt, K. M. (2009)
Origin of Alliance Portfolios: Entrepreneurs, network strategies, and firm performance
Academy of Management Journal, 52(2), 246-279.Abstract: Alliance portfolios are ubiquitous and influential for firm performance. Extant research addresses attributes of high-performing alliance portfolios but not how executives originate such portfolios. In our inductive case study of six entrepreneurial rivals in the wireless gaming industry, we find that executives are more likely to originate high-performing portfolios when they visualize their portfolios in the context of the entire industry as opposed to a series of single ties and when they simultaneously form ties with multiple partners. The emergent theoretical framework emphasizes agency and strategic action in contrast to a deterministic account of dyadic interdependence and social embeddedness.
Pfeffer, J., & Sutton, R. I. (2007)
Suppose We Took Evidence-Based Management Seriously: Implications for Reading and Writing Management
Academy of Management Learning &Education, 6(1), 153-155.Abstract: The article relates a response from the authors of “Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting From Evidence-Based Management” to a discussion within the March 2007 issue of “Academy of Management Learning & Education.” The authors hope to engage others in the conversation about the reading and writing of management research and theory. The authors respond to specific criticism of the book and challenge others to respond in hopes that this conversation will stimulate data gathering, thinking, and writing that will make organizations more productive and humane.
Pfeffer, J., and Sutton, R. (2006)
Harvard Business Review, 84: 62-74Abstract: A bold new way of thinking has taken the medical establishment by storm in the past decade: the idea that decisions in medical care should be based on the latest and best knowledge of what actually works. Dr. David Sackett, the individual most associated with evidence-based medicine, defines it as “the conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients.” Sackett, his colleagues at McMaster University in Ontario, Canada, and the growing number of physicians joining the movement are committed to identifying, disseminating, and, most importantly, applying research that is soundly conducted and clinically relevant.
Pelled, Lisa H., Eisenhardt, K. M., and Xin, K. R. (1999)
Exploring the Black Box: An Analysis of Work Group Diversity, Conflict, and Performance
Administrative Science Quarterly 44(1): 1-28Abstract: In this paper we present an integrative model of the relationships among diversity, conflict, and performance, and we test that model with a sample of 45 teams. Findings show that diversity shapes conflict and that conflict, in turn, shapes performance, but these linkages have subtleties. Functional background diversity drives task conflict, but multiple types of diversity drive emotional conflict. Race and tenure diversity are positively associated with emotional conflict, while age diversity is negatively associated with such conflict. Task routineness and group longevity moderate these relationships. Results further show that task conflict has more favorable effects on cognitive task performance than does emotional conflict. Overall, these patterns suggest a complex link between work group diversity and work group functioning.
Piezunka, H., and Dahlander, L. (2014)
Distant Search, Narrow Attention: How Crowding Alters Organizations’ Filtering of Suggestions in Crowdsourcing
Academy of Management Journal, in pressAbstract: In their search for innovation, organizations often invite external contributors to make suggestions. Soliciting suggestions is a form of distant search, since it allows organizations to tap into knowledge that may not reside within their organizational boundaries. Organizations engaging in distant search often face a large pool of suggestions, an outcome we refer to as crowding. When crowding occurs, organizations, whose attention is limited, can pay attention to only a subset of suggestions. Our core argument is that crowding narrows organizations’ attention; that is, despite organizations’ efforts to reach out to external contributors to access suggestions that capture distant knowledge, they are more likely to pay attention to suggestions that are familiar, not distant. We test our theory with a unique longitudinal dataset that captures how 922 organizations responded to 105,127 crowdsourced suggestions from external contributors. After distinguishing between three different dimensions of distance (content, structural and personal), we find that (1) all three types of distance have independent negative effects on the likelihood of attention; (2) crowding amplifies these negative effects; and (3) there are differences among the effects’ magnitudes. We elaborate on the broader implications of these findings for the literatures on attention, search, and crowdsourcing.
Roberts, Edward B., and Eesley, Charles E. (2011)
Entrepreneurial Impact: The Role of MIT — an Updated Report
Foundations and Trends in Entrepreneurship: Vol. 7: No 1-2, pp 1-149Abstract: The ultimate value of this study is to help us understand the economic impact of the entrepreneurial ventures of university graduates. We know that some universities play an important role in many economies through their core education, research and development, and other spillovers. However, in order to support economic growth through entrepreneurship, universities must create a culture and programs that make entrepreneurship widely accessible to students. While MIT’s leadership in developing successful entrepreneurs has been evident anecdotally, this study — one of the largest surveys of entrepreneur alumni ever conducted — quantifies the significant impact of MIT’s entrepreneurial ecosystem that supports firm start-ups. Furthermore,The ultimate value of this study is to help us understand the economic impact of the entrepreneurial ventures of university graduates. We know that some universities play an important role in many economies through their core education, research and development, and other spillovers. However, in order to support economic growth through entrepreneurship, universities must create a culture and programs that make entrepreneurship widely accessible to students. While MIT’s leadership in developing successful entrepreneurs has been evident anecdotally, this study — one of the largest surveys of entrepreneur alumni ever conducted — quantifies the significant impact of MIT’s entrepreneurial ecosystem that supports firm start-ups.
Roberts, Peter W. Eisenhardt, K. M. (2003)
Austrian Insights on Strategic Organization: From Market Insights to Implications for Firms
Strategic Organization, 1(3): 345-352Abstract: Argues that the principal tenets of Austrian economics suggest the possibility of fresh strategic and organizational thinking at the firm level. Information on the market process in Austrian economics; Details of the market disequilibrium in Austria; Implications of Austrian economics for strategic organization.
Santos, F. M., and Eisenhardt, K. M. (2009)
Constructing Markets and Shaping Boundaries: Entrepreneurial Power in Nascent Fields
Academy of Management Journal, 52(4), 643-671.Abstract: We examine how entrepreneurs shape organizational boundaries and construct markets through an inductive, longitudinal study of five ventures. Our central contribution is a framework of how successful entrepreneurs attempt to dominate nascent markets by co-constructing organizational boundaries and market niches using three processes: claiming, demarcating, and controlling a market. We propose that power is the underlying boundary logic and indicate the “soft-power” strategies by which entrepreneurs compete in highly ambiguous markets. Overall, we develop a holistic view of organizational boundaries and offer insights into institutional entrepreneurship and resource dependence theories. Our most important contribution is reinvigorating the study of interorganizational power.
Santos F. M., and Eisenhardt, K. M. (2005)
Organizational Boundaries and Theories of Organization
Organization Science, 16: 491-508Abstract: Organizational boundaries are a central phenomenon, yet despite their significance, research is dominated by transaction cost economics and related exchange-efficiency perspectives. While useful, it is time to engage in a broader view. Our purpose is to provide a deeper understanding of organizational boundaries. First, we develop four boundary conceptions (efficiency, power, competence, and identity) and their distinctive features including organizational and environmental assumptions, unique conception of boundaries, theoretical arguments, empirical validity, contributions, and limitations. Efficiency takes a legal-ownership view of atomistic boundary decisions. In contrast, the power conception emphasizes the sphere of influence of the organization, while competence focuses on the resource portfolio and its related configuration, and identity centers on the often unconscious mind-set by which organizational members understand “who we are.” We also indicate relationships, both coevolutionary and synergistic, among the conceptions. Second, we juxtapose these conceptions with the current literature to create a springboard for a renewed research agenda. This agenda includes greater focus on nonefficiency perspectives, relationships (not competition) among boundary conceptions, studies that take the normative implication of theories more seriously, and problem-driven research on contemporary boundary issues such as contract employment and business ecosystems.
Sutton, R. I. (2009)
How to be a Good Boss in a Bad Economy
Harvard Business Review, 87(6), 42-50.
Sutton, R.I. (2004)
More Trouble Than They’re Worth
Harvard Business Review, 83(2): 19-21Abstract: The article examines the toleration of business organization when it comes to hiring and promoting people. Some behavioral scientists refer to them in terms of psychological abuse, which they define as the sustained display of hostile verbal and nonverbal behaviors. The difference is that some organizations allow people to get away with abusing one person after another and even reward them for it. Certainly, a person can look like a sinner to one person and a saint to another. The difference between the ways a person treats the powerless and the powerful is as good a measure of human character. Research on both deviance and norm violations shows that if one example of misbehavior is kept on display, everyone else is more conscientious about adhering to written and unwritten rules. The problem is that people can hide their dark sides until they are hired, or even are promoted to partner or tenured professor.
Sutton, R. I. (2004)
Why These Ideas Work, But Seem Weird
Design Management Journal, 15(1): 43-49Abstract: To innovate, organizations need to enhance variance, see old things in new ways, and break from the past. They need to do things that make money later rather than now and to be open to creative failure. Robert Sutton refers to this as “organizing for exploration,” and in this excerpt from a recent book, he posits 11½ “weird” ideas that nurture an innovative spirit managerial toys that expand the frontiers and fuel the long-term success of corporate activities.
Sutton, R.I. (2001)
The Weird Rules of Creativity
Harvard Business Review. September: 94-103Abstract: For the past decade at least, managers have been emphasizing innovation, efficiency, and productivity, but this has not fostered creativity. As important as innovation is, it is not, and never will be, the primary activity of companies. The author believes that managing for creativity means discounting what is known about management. Managing for creativity begins with hiring people who make you comfortable, even those you don’t like and those with skills you don’t think you need. Next, encourage people to ignore and defy superiors and peers, and get them to fight among themselves. Rather than rewarding success and punishing failure, companies should reward both. Companies should demote, transfer, and even fire those who talk but don’t act. Your company needs to be a place that generates and tests many disparate ideas. What makes for effective management practice can look very different, depending on whether the aim is to exploit already-proven ideas or explore new ones. These practices succeed by increasing the range of a company’s knowledge, by causing people to see old problems in new ways, and by helping companies break from the past.
Sutton, R. I. (2004)
Prospecting for Valuable Evidence: Why Scholarly Research Can be a Goldmine for Managers
Strategy & Leadership, 32(1): 27-33Abstract: States the top reason why managers should take notice of scholarly research is because actions based on sound evidence beat those based on suspect intuition every time. Posits that even academic research at its best is perhaps not that much of a better alternative to guru’s fads and fantasies.
Sutton, R. I. (2002)
Why Innovation Happens When Happy People Fight
Ivey Business Journal, 67(2): 1-6Abstract: Focuses on promoting, managing and sustaining innovation in organizations. Concept of constructive conflict; Effects of destructive conflict on the organization; Benefits of humor and positive emotion in work environments.
Sutton, R. I. (2002)
Weird Ideas that Spark Innovation
MIT Sloan Management Review, 43(2): 83-87Abstract: Every manager knows that innovation requires drastically different practices from those required for routine work, yet many companies still struggle to switch gears when shifting from the routine to the innovative. Even when managers say they want more innovation, their organizations often undermine it. A big part of the problem is that managers instinctively recoil when they see what innovation actually requires: The right practices seem strange, even wrongheaded. In particular, many managers can’t bring themselves to lose money right now to test ideas that may never make money, in hopes that a tiny percentage of those ideas will make money later.
Sutton, R. I. (2002)
When Ignorance is Bliss
Industrial Management, 44(1): 8-12Abstract: Discusses ways of encouraging innovation in business. Arguments for the claim that people who are ignorant about a process or industry may be the best source of innovative ideas; Virtues of using outside experts in encouraging innovation.
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