Strategy as practice is one of the most vibrant approaches to strategy research. Yet, there is significant ambiguity around what characterizes an activity as strategic and thus as falling into the domain of strategy as practice. In this article, we address this fundamental concern by differentiating four distinctive views of what qualifies activities as strategic: (1) activities that have important consequences, (2) activities that are labeled strategic, (3) activities carried out by strategists, and (4) activities that perform an important recurrent pattern. Each of these views is associated with different research questions resulting in different research insights. We discuss how the four views together form a new research framework that expands the notion of strategy and thereby the research domain of strategic management.
{"title":"What makes activities strategic: Toward a new framework for strategy-as-practice research","authors":"David Seidl, Shenghui Ma, Violetta Splitter","doi":"10.1002/smj.3668","DOIUrl":"https://doi.org/10.1002/smj.3668","url":null,"abstract":"Strategy as practice is one of the most vibrant approaches to strategy research. Yet, there is significant ambiguity around what characterizes an activity as strategic and thus as falling into the domain of strategy as practice. In this article, we address this fundamental concern by differentiating four distinctive views of what qualifies activities as strategic: (1) activities that have important consequences, (2) activities that are labeled strategic, (3) activities carried out by strategists, and (4) activities that perform an important recurrent pattern. Each of these views is associated with different research questions resulting in different research insights. We discuss how the four views together form a new research framework that expands the notion of strategy and thereby the research domain of strategic management.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"140 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142253266","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research SummaryIn this article, we examine the multidimensional and multilevel nature of diversity in the context of corporate boards. Using the concept of faultlines, we argue that when gender and racial background aligns with human capital attributes of board members, faultlines may be formed with negative implications for firm performance. However, the potential negative impact of faultlines can be alleviated by overlaps in the characteristics of the CEO and minority directors. Specifically, we find that higher overlaps in tenure and personal range of functional experiences help overcome some of the disadvantages that minority directors face and moderate the relationship between board faultline strength and firm performance. Empirical tests using 14 years data on 262 firms belonging to S&P500 index largely support our theoretical ideas.Managerial SummaryBoards often suffer from unhealthy team dynamics. In this article, we explore how alignment of board members' attributes may lead to potential subgroup formation within boards. Specifically, we examine how, under existing pressures to increase demographic diversity on corporate boards, alignment of human capital characteristics with gender and racial minority status may lead to the formation of board faultlines that negatively influence firm performance. Our results suggest that the CEO plays a pivotal role in overcoming negative consequences of board faultlines by utilizing shared tenure on board and common functional experiences with minority board members. Our research suggests that board selection needs to focus beyond scrutinizing individual‐level human capital and instead understand alignments of directors' profiles that enable optimal board functioning.
{"title":"Gender and racial minorities on corporate boards: How board faultlines and CEO‐minority director overlap affect firm performance","authors":"Esha Mendiratta, Sabina Tasheva","doi":"10.1002/smj.3666","DOIUrl":"https://doi.org/10.1002/smj.3666","url":null,"abstract":"Research SummaryIn this article, we examine the multidimensional and multilevel nature of diversity in the context of corporate boards. Using the concept of faultlines, we argue that when gender and racial background aligns with human capital attributes of board members, faultlines may be formed with negative implications for firm performance. However, the potential negative impact of faultlines can be alleviated by overlaps in the characteristics of the CEO and minority directors. Specifically, we find that higher overlaps in tenure and personal range of functional experiences help overcome some of the disadvantages that minority directors face and moderate the relationship between board faultline strength and firm performance. Empirical tests using 14 years data on 262 firms belonging to S&P500 index largely support our theoretical ideas.Managerial SummaryBoards often suffer from unhealthy team dynamics. In this article, we explore how alignment of board members' attributes may lead to potential subgroup formation within boards. Specifically, we examine how, under existing pressures to increase demographic diversity on corporate boards, alignment of human capital characteristics with gender and racial minority status may lead to the formation of board faultlines that negatively influence firm performance. Our results suggest that the CEO plays a pivotal role in overcoming negative consequences of board faultlines by utilizing shared tenure on board and common functional experiences with minority board members. Our research suggests that board selection needs to focus beyond scrutinizing individual‐level human capital and instead understand alignments of directors' profiles that enable optimal board functioning.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"1 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142253267","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research SummaryMakerspaces are physical spaces that offer individuals fabrication tools and materials (e.g., 3D printers) to make artifacts. Although not designed specifically for entrepreneurs, these spaces offer affordable access to rapid prototyping infrastructure. This study examines whether makerspaces affect entrepreneurship and, if so, who, how, and when. Leveraging hand‐collected data on US makerspaces and large archival data on Kickstarter projects, I show that makerspaces positively affect entrepreneurial participation and subsequent commercialization outcomes. However, these effects are mostly specific to hardware (vs. nonhardware) activities that typically involve physical prototypes. I find that the effect on entry is driven more by new (vs. established) but intentional (vs. accidental) entrepreneurs and that the effect on commercialization comes from two operating and complementary channels—resource provision and social facilitation.Managerial SummaryDespite a few high‐profile anecdotal entrepreneurial successes that emerged from the increasingly popular makerspaces, whether these spaces have large‐scale effects on entrepreneurship remains unclear. Do makerspaces encourage entrepreneurial participation, if so, who? Do makerspaces benefit entrepreneurial commercialization, if so, how? Are there any conditions determining when these effects would occur? This study demonstrates meaningful broad‐based impacts of makerspaces on particular types of entrepreneurship with growth potential. The findings suggest that competitive, prominent accelerators and incubators are not the only avenues for entrepreneurs to achieve commercialization success. Useful insights are discussed for entrepreneurial program managers and policy makers designing systems and structures that support inclusive prosperity for entrepreneurs.
{"title":"Do makerspaces affect entrepreneurship? If so, who, how, and when?","authors":"Jiayi Bao","doi":"10.1002/smj.3664","DOIUrl":"https://doi.org/10.1002/smj.3664","url":null,"abstract":"Research SummaryMakerspaces are physical spaces that offer individuals fabrication tools and materials (e.g., 3D printers) to make artifacts. Although not designed specifically for entrepreneurs, these spaces offer affordable access to rapid prototyping infrastructure. This study examines whether makerspaces affect entrepreneurship and, if so, <jats:italic>who</jats:italic>, <jats:italic>how</jats:italic>, and <jats:italic>when</jats:italic>. Leveraging hand‐collected data on US makerspaces and large archival data on Kickstarter projects, I show that makerspaces positively affect entrepreneurial participation and subsequent commercialization outcomes. However, these effects are mostly specific to hardware (vs. nonhardware) activities that typically involve physical prototypes. I find that the effect on entry is driven more by new (vs. established) but intentional (vs. accidental) entrepreneurs and that the effect on commercialization comes from two operating and complementary channels—resource provision and social facilitation.Managerial SummaryDespite a few high‐profile anecdotal entrepreneurial successes that emerged from the increasingly popular makerspaces, whether these spaces have large‐scale effects on entrepreneurship remains unclear. Do makerspaces encourage entrepreneurial participation, if so, who? Do makerspaces benefit entrepreneurial commercialization, if so, how? Are there any conditions determining when these effects would occur? This study demonstrates meaningful broad‐based impacts of makerspaces on particular types of entrepreneurship with growth potential. The findings suggest that competitive, prominent accelerators and incubators are not the only avenues for entrepreneurs to achieve commercialization success. Useful insights are discussed for entrepreneurial program managers and policy makers designing systems and structures that support inclusive prosperity for entrepreneurs.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"4 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214481","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research SummaryResource‐based‐view scholars have mainly examined two resource allocation approaches for competitive advantage in multiunit firms: resource sharing and resource redeployment. These approaches emphasize allocative efficiency—the optimal allocation of resources to maximize their current value. In technology‐intensive industries, firm success also requires achieving dynamic efficiency to increase its future value‐creation. We propose that the redundant allocation of resources—the parallel deployment of non‐scale‐free resources towards the same objective—although allocatively inefficient, increases dynamic efficiency by stimulating inter‐unit competition. Firms' structural features moderate these effects. An analysis of large pharmaceutical firms reveals that redundant R&D increases innovations with high firm‐specific value but simultaneously increases project terminations to reduce wastage. Organizational proximity increases the former effect and decreases the latter. Firm's R&D centralization amplifies the effect of unit proximity.Managerial SummaryIn technology‐intensive industries, multiunit firms often employ redundant allocation of R&D resources, that is, the parallel deployment of scientists and equipment in different units towards realizing the same business objective. Although common, there is little managerial guidance on how this practice impacts firms' R&D outcomes, and how organizational characteristics influence this relationship. An analysis of large pharmaceutical firms reveals that redundant allocation of R&D resources across units increases wastage but also stimulates competing units to create innovations with high firm‐specific value. Organizationally proximate units are less likely to have their redundant projects terminated, while creating more high‐value‐innovations. Centralization of the firm's R&D amplifies the effect of unit proximity.
{"title":"Balancing allocative and dynamic efficiency with redundant R&D allocation: The role of organizational proximity and centralization","authors":"Vivek Tandon, Anand Nandkumar, Ronak Mogra, Kannan Srikanth","doi":"10.1002/smj.3662","DOIUrl":"https://doi.org/10.1002/smj.3662","url":null,"abstract":"Research SummaryResource‐based‐view scholars have mainly examined two resource allocation approaches for competitive advantage in multiunit firms: resource sharing and resource redeployment. These approaches emphasize allocative efficiency—the optimal allocation of resources to maximize their current value. In technology‐intensive industries, firm success also requires achieving dynamic efficiency to increase its future value‐creation. We propose that the redundant allocation of resources—the parallel deployment of non‐scale‐free resources towards the same objective—although allocatively inefficient, increases dynamic efficiency by stimulating inter‐unit competition. Firms' structural features moderate these effects. An analysis of large pharmaceutical firms reveals that redundant R&D increases innovations with high firm‐specific value but simultaneously increases project terminations to reduce wastage. Organizational proximity increases the former effect and decreases the latter. Firm's R&D centralization amplifies the effect of unit proximity.Managerial SummaryIn technology‐intensive industries, multiunit firms often employ redundant allocation of R&D resources, that is, the parallel deployment of scientists and equipment in different units towards realizing the same business objective. Although common, there is little managerial guidance on how this practice impacts firms' R&D outcomes, and how organizational characteristics influence this relationship. An analysis of large pharmaceutical firms reveals that redundant allocation of R&D resources across units increases wastage but also stimulates competing units to create innovations with high firm‐specific value. Organizationally proximate units are less likely to have their redundant projects terminated, while creating more high‐value‐innovations. Centralization of the firm's R&D amplifies the effect of unit proximity.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"4 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214465","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Marianne Hock‐Doepgen, Sohvi Heaton, Thomas Clauss, Jörn Block
Research SummaryAlthough business model innovation (BMI) is said to be underpinned by managerial capabilities, there is a lack of studies that delve into the mechanisms through which these capabilities support BMI. In this study, we highlight internal and external advice seeking as underlying microfoundations of dynamic managerial capabilities for BMI and examine the mediating role of coordination flexibility capabilities (CFCs). With a survey dataset of 254 senior managers, our research reveals that external advice seeking capabilities positively influence BMI. Interestingly, the impact of internal advice seeking on BMI is fully mediated by CFC. Furthermore, our results indicate that the extent to which internal advice seeking impacts CFC is strengthened in firms with high levels of digitalization.Managerial SummaryWhile business model innovation (BMI) is often linked to the skills of managers, there is a lack of research exploring which particular skills actually drive BMI. In our study, we focus on how seeking advice internally and externally are crucial skills for managers in contributing to BMI, with coordination flexibility capabilities (CFC) playing a mediating role. Using data from a survey of 254 senior managers, we found that seeking external advice has a positive impact on BMI. Surprisingly, the influence of seeking internal advice on BMI is only significant when firms have high CFC at the organizational level. Additionally, we discovered that the relationship between internal advice seeking and CFC is stronger in highly digitalized firms.
{"title":"Identifying microfoundations of dynamic managerial capabilities for business model innovation","authors":"Marianne Hock‐Doepgen, Sohvi Heaton, Thomas Clauss, Jörn Block","doi":"10.1002/smj.3663","DOIUrl":"https://doi.org/10.1002/smj.3663","url":null,"abstract":"Research SummaryAlthough business model innovation (BMI) is said to be underpinned by managerial capabilities, there is a lack of studies that delve into the mechanisms through which these capabilities support BMI. In this study, we highlight internal and external advice seeking as underlying microfoundations of dynamic managerial capabilities for BMI and examine the mediating role of coordination flexibility capabilities (CFCs). With a survey dataset of 254 senior managers, our research reveals that external advice seeking capabilities positively influence BMI. Interestingly, the impact of internal advice seeking on BMI is fully mediated by CFC. Furthermore, our results indicate that the extent to which internal advice seeking impacts CFC is strengthened in firms with high levels of digitalization.Managerial SummaryWhile business model innovation (BMI) is often linked to the skills of managers, there is a lack of research exploring which particular skills actually drive BMI. In our study, we focus on how seeking advice internally and externally are crucial skills for managers in contributing to BMI, with coordination flexibility capabilities (CFC) playing a mediating role. Using data from a survey of 254 senior managers, we found that seeking external advice has a positive impact on BMI. Surprisingly, the influence of seeking internal advice on BMI is only significant when firms have high CFC at the organizational level. Additionally, we discovered that the relationship between internal advice seeking and CFC is stronger in highly digitalized firms.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"96 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214466","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Goran Calic, François Neville, Santi Furnari, C. S. Richard Chan
Research SummaryResearch is scant on how multiple venture attributes combine as “whole packages” of signals (or cognitive configurations) in resource holders’ eyes, shaping a venture's ability to mobilize resources. Drawing on a qualitative comparative analysis of 1,395 crowdfunding campaigns, we identified different configurations of signals for high and low resource mobilization, theorizing abductively their underlying mechanisms through the analysis of case‐level qualitative data. Our results explain some past mixed findings, such as the contradictory effects of social value and entrepreneurial narratives, showing that these narratives can instead be successfully combined in the presence of signals of venture quality and community embeddedness. We show that there is no single best way to impress resource holders, but multiple recipes to holistically communicate a venture's value.Managerial SummaryAnalyzing Kickstarter crowdfunding campaigns, we examine how entrepreneurs combine four signals to raise money: 1) the venture's underlying quality; 2) social networks; 3) narratives; 4) embeddedness in the crowdfunding community. We identified four successful configurations of these signals (500% above the funding goal) and two failing configurations (4% of the funding goal). Narratives per se are not sufficient to mobilize resources, unless backed by signals of quality and community embeddedness. A simpler narrative is supported by cheaper quality signals (product images). More complex narratives (combining social value, entrepreneurial orientation, positive psychology) are supported by more costly signals (videos). Our results encourage entrepreneurs to look beyond “silver bullet” solutions and think holistically how to communicate their ventures as “whole packages”.
{"title":"Seeing the whole: Configurational cognition and new venture resource mobilization","authors":"Goran Calic, François Neville, Santi Furnari, C. S. Richard Chan","doi":"10.1002/smj.3654","DOIUrl":"https://doi.org/10.1002/smj.3654","url":null,"abstract":"Research SummaryResearch is scant on how multiple venture attributes combine as “whole packages” of signals (or cognitive configurations) in resource holders’ eyes, shaping a venture's ability to mobilize resources. Drawing on a qualitative comparative analysis of 1,395 crowdfunding campaigns, we identified different configurations of signals for high and low resource mobilization, theorizing abductively their underlying mechanisms through the analysis of case‐level qualitative data. Our results explain some past mixed findings, such as the contradictory effects of social value and entrepreneurial narratives, showing that these narratives can instead be successfully combined in the presence of signals of venture quality and community embeddedness. We show that there is no single best way to impress resource holders, but multiple recipes to holistically communicate a venture's value.Managerial SummaryAnalyzing Kickstarter crowdfunding campaigns, we examine how entrepreneurs combine four signals to raise money: 1) the venture's underlying quality; 2) social networks; 3) narratives; 4) embeddedness in the crowdfunding community. We identified four successful configurations of these signals (500% above the funding goal) and two failing configurations (4% of the funding goal). Narratives per se are not sufficient to mobilize resources, unless backed by signals of quality and community embeddedness. A simpler narrative is supported by cheaper quality signals (product images). More complex narratives (combining social value, entrepreneurial orientation, positive psychology) are supported by more costly signals (videos). Our results encourage entrepreneurs to look beyond “silver bullet” solutions and think holistically how to communicate their ventures as “whole packages”.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"38 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214479","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research SummaryWhile the literature highlights the benefits of internally redeploying resources, there is less empirical guidance on which resources are most likely to be redeployed. We examine the relationship between inventor characteristics and redeployment decisions, motivated by the tension between costs and benefits of keeping a resource at the source unit versus moving it to a new target unit. We argue that inventors with inventive breadth are more likely to be redeployed, whereas broker inventors are less likely to be redeployed. Moreover, we consider two source‐unit characteristics that influence internal opportunity costs: resource slack and knowledge interdependence. We test our arguments on the redeployment of inventors following an exogenous profitability shift in the US petrochemical industry in 2012 and find support for our predictions.Managerial SummaryManagers move resources between business units to respond to profitability shocks, but which specific resources do they move? Examining the inter‐unit transfers (redeployments) of inventors between business units following the unexpected profitability disparity between ethylene‐based business units and others in the US petrochemical industry, we find that generalist inventors are more likely to be redeployed, while brokers in the collaboration network (inventors who connect others) are less likely to be redeployed. In addition, conditions that alter opportunity costs at the source unit matter. Larger proportions of generalists (and brokers) facilitate redeployment of either type, and knowledge interdependencies in the source unit mitigate redeployment.
{"title":"Who gets redeployed? Inventor characteristics and resource redeployment decisions","authors":"Kyungsoo Kim, Isin Guler, Samina Karim","doi":"10.1002/smj.3661","DOIUrl":"https://doi.org/10.1002/smj.3661","url":null,"abstract":"Research SummaryWhile the literature highlights the benefits of internally redeploying resources, there is less empirical guidance on which resources are most likely to be redeployed. We examine the relationship between inventor characteristics and redeployment decisions, motivated by the tension between costs and benefits of keeping a resource at the source unit versus moving it to a new target unit. We argue that inventors with inventive breadth are more likely to be redeployed, whereas broker inventors are less likely to be redeployed. Moreover, we consider two source‐unit characteristics that influence internal opportunity costs: resource slack and knowledge interdependence. We test our arguments on the redeployment of inventors following an exogenous profitability shift in the US petrochemical industry in 2012 and find support for our predictions.Managerial SummaryManagers move resources between business units to respond to profitability shocks, but which specific resources do they move? Examining the inter‐unit transfers (redeployments) of inventors between business units following the unexpected profitability disparity between ethylene‐based business units and others in the US petrochemical industry, we find that generalist inventors are more likely to be redeployed, while brokers in the collaboration network (inventors who connect others) are less likely to be redeployed. In addition, conditions that alter opportunity costs at the source unit matter. Larger proportions of generalists (and brokers) facilitate redeployment of either type, and knowledge interdependencies in the source unit mitigate redeployment.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"47 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214480","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Priscilla S. Kraft, Teresa A. Dickler, Michael C. Withers
Research SummaryWhile prior upper echelon research has shown that overconfident CEOs are beneficial for innovation, less is known about how firms can harness the benefits of these CEOs for breakthrough innovations. To extend this stream of research, we identify crucial board characteristics that enable firms to benefit from overconfident CEOs in the context of promoting breakthrough innovations. Using longitudinal data of US high‐tech firms, our results emphasize that overconfident CEOs guided by boards with expertise and power strongly outperform fellow CEOs who are monitored by boards lacking either or both of these characteristics. By theorizing and empirically demonstrating how powerful expert boards are important for firms to profit from their CEO's overconfidence, our study provides important contributions to the CEO overconfidence, corporate board, and breakthrough innovation literatures.Managerial SummaryCan boards harness the benefits of overconfident CEOs to increase breakthrough innovation for their firms? We examine this question using a longitudinal dataset of US high‐tech firms and find that board expertise and power enable firms to benefit from CEO overconfidence in the context of breakthrough innovations. Our results suggest that boards need both power and expertise to effectively channel an overconfident CEO's drive toward breakthrough innovations. Interestingly, powerful boards that lack expertise may be detrimental to harnessing CEO overconfidence for breakthrough innovations. For governance practitioners, ensuring that a board is composed of directors with knowledge and understanding of breakthrough innovations and a balance of power with their CEOs will create a beneficial context for firms led by CEO overconfidence to produce breakthrough innovations.
{"title":"When do firms benefit from overconfident CEOs? The role of board expertise and power for technological breakthrough innovation","authors":"Priscilla S. Kraft, Teresa A. Dickler, Michael C. Withers","doi":"10.1002/smj.3657","DOIUrl":"https://doi.org/10.1002/smj.3657","url":null,"abstract":"Research SummaryWhile prior upper echelon research has shown that overconfident CEOs are beneficial for innovation, less is known about how firms can harness the benefits of these CEOs for breakthrough innovations. To extend this stream of research, we identify crucial board characteristics that enable firms to benefit from overconfident CEOs in the context of promoting breakthrough innovations. Using longitudinal data of US high‐tech firms, our results emphasize that overconfident CEOs guided by boards with expertise <jats:italic>and</jats:italic> power strongly outperform fellow CEOs who are monitored by boards lacking either or both of these characteristics. By theorizing and empirically demonstrating how powerful expert boards are important for firms to profit from their CEO's overconfidence, our study provides important contributions to the CEO overconfidence, corporate board, and breakthrough innovation literatures.Managerial SummaryCan boards harness the benefits of overconfident CEOs to increase breakthrough innovation for their firms? We examine this question using a longitudinal dataset of US high‐tech firms and find that board expertise and power enable firms to benefit from CEO overconfidence in the context of breakthrough innovations. Our results suggest that boards need both power and expertise to effectively channel an overconfident CEO's drive toward breakthrough innovations. Interestingly, powerful boards that lack expertise may be detrimental to harnessing CEO overconfidence for breakthrough innovations. For governance practitioners, ensuring that a board is composed of directors with knowledge and understanding of breakthrough innovations and a balance of power with their CEOs will create a beneficial context for firms led by CEO overconfidence to produce breakthrough innovations.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"2019 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214467","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Hyuck David Chung, Yue Maggie Zhou, Christine Choi
How will a platform firm's diversification affect its existing business? Using datasets on the rideshare and food delivery businesses in New York City, we find that the launch of Uber Eats reduced Uber's and Lyft's rideshare trip volumes, but these effects were weaker during rush hours. Additional theoretical and empirical analyses suggest that, while platform diversification enables complementors to share some resources across businesses, it may also create opportunities for complementors to oscillate other complementary resources, thereby diverting complementor resources in the existing business from both the diversifying and competing platform firms. Such sharing-enabled resource oscillation may be due to resource exclusivity at the transactional level and the lack of control by platform firms over resources at the organizational level.
{"title":"When Uber Eats its own business, and its competitors' too: Resource exclusivity and oscillation following platform diversification","authors":"Hyuck David Chung, Yue Maggie Zhou, Christine Choi","doi":"10.1002/smj.3659","DOIUrl":"https://doi.org/10.1002/smj.3659","url":null,"abstract":"How will a platform firm's diversification affect its existing business? Using datasets on the rideshare and food delivery businesses in New York City, we find that the launch of Uber Eats reduced Uber's and Lyft's rideshare trip volumes, but these effects were weaker during rush hours. Additional theoretical and empirical analyses suggest that, while platform diversification enables complementors to share some resources across businesses, it may also create opportunities for complementors to oscillate other complementary resources, thereby diverting complementor resources in the existing business from both the diversifying and competing platform firms. Such sharing-enabled resource oscillation may be due to resource exclusivity at the transactional level and the lack of control by platform firms over resources at the organizational level.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"21 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214482","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Marvin Hanisch, Lorenz Graf‐Vlachy, Carolin Haeussler, Andreas König, Theresa S. Cho
Research SummaryAn intriguing yet underexamined phenomenon in strategic alliance contracts is the use of good faith provisions. These provisions appeal to parties' integrity and fair dealing but are often ambiguous, and their enforcement in court is unpredictable. Adopting a sociocognitive perspective, we predict a positive relationship between the similarity of partners' organizational‐level cognitive frames and the number of good faith provisions in alliance contracts. We further posit that technological uncertainty strengthens this relationship, whereas each alliance partner's cumulative contracting experience weakens it. We also expect a more positive relationship in instances of “genuine” good faith, which serves as a substitute for an explicit clause, compared with “guarded” good faith, which supplements an explicit clause. Our analysis of 1225 strategic alliance contracts from the biopharmaceutical industry supports our arguments.Managerial SummaryManagers negotiating strategic alliances often face a dilemma: they negotiate detailed contracts to reduce legal risk but limit flexibility or opt for less codification, saving time and retaining flexibility but increasing legal risk. Good faith provisions offer a potential solution because they are flexible yet legally enforceable, but they require a shared interpretation of the relevant contingency, raising questions about when managers find this approach reasonable. We analyzed 1225 biopharmaceutical alliance contracts and found that such provisions are more common when alliance partners have similar cognitive frames, as evidenced by similar “About Us” web pages. This effect is stronger under conditions of greater technological uncertainty but weakens with more alliance experience. Our study elucidates the use of good faith provisions to aid managers in navigating alliance negotiations efficiently.
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