Daniel L. Gamache, Michael D. Pfarrer, Kevin Curran
Although research has explored how executive hubris shapes organizational actions, we theorize that hubris can also develop outside the executive suite. We introduce the construct organizational hubris, which we define as a durable, collective attitude marked by exaggerated pride and confidence in the organization. Organizational hubris differs from executive hubris in terms of level (individual versus collective) and target (self-focused vs. organization-focused). We argue that organizational hubris can develop among high-identification organizations via an external route (positive external attributions) or an internal route (charismatic messaging from top leaders), or both. Once developed, organizational hubris affects important outcomes by shaping (1) how external stakeholders perceive the organization, (2) how insiders treat external stakeholders, and (3) the relationship among internal stakeholders—particularly between employees and top managers.
{"title":"Organizational hubris: Its antecedents and consequences for stakeholder relationships","authors":"Daniel L. Gamache, Michael D. Pfarrer, Kevin Curran","doi":"10.1002/smj.3587","DOIUrl":"https://doi.org/10.1002/smj.3587","url":null,"abstract":"Although research has explored how executive hubris shapes organizational actions, we theorize that hubris can also develop outside the executive suite. We introduce the construct <i>organizational hubris</i>, which we define as a durable, collective attitude marked by exaggerated pride and confidence in the organization. Organizational hubris differs from executive hubris in terms of level (individual versus collective) and target (self-focused vs. organization-focused). We argue that organizational hubris can develop among high-identification organizations via an external route (positive external attributions) or an internal route (charismatic messaging from top leaders), or both. Once developed, organizational hubris affects important outcomes by shaping (1) how external stakeholders perceive the organization, (2) how insiders treat external stakeholders, and (3) the relationship among internal stakeholders—particularly between employees and top managers.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"59 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141547953","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}
Being able to sell a business not only allows a firm to exit an industry but is also a motivation for entrepreneurial entry. Therefore, factors that make acquisitions less desirable for potential acquirers could not only affect the rate of acquisitions, but also entry and exit. We test this in the context of judicial adoptions of product line exceptions, which increased acquirer exposure to potential accumulated liabilities. We find that after adoption, and relative to nonmanufacturing establishments, acquisitions of manufacturing establishments decrease, while exits through closure increase. Relative entry of manufacturing establishments declines. These effects are higher in industries where resalability of physical capital is lower and for smaller entrants. Interestingly, while the likelihood of acquisitions declines for older establishments, it increases for younger ones.
{"title":"Caveat emptor as an obstacle to business transfers: Effect of product line liability exceptions on acquisitions, entry, and exit","authors":"Natarajan Balasubramanian, Jagadeesh Sivadasan, Wenjian Xu","doi":"10.1002/smj.3584","DOIUrl":"https://doi.org/10.1002/smj.3584","url":null,"abstract":"Being able to sell a business not only allows a firm to exit an industry but is also a motivation for entrepreneurial entry. Therefore, factors that make acquisitions less desirable for potential acquirers could not only affect the rate of acquisitions, but also entry and exit. We test this in the context of judicial adoptions of product line exceptions, which increased acquirer exposure to potential accumulated liabilities. We find that after adoption, and relative to nonmanufacturing establishments, acquisitions of manufacturing establishments decrease, while exits through closure increase. Relative entry of manufacturing establishments declines. These effects are higher in industries where resalability of physical capital is lower and for smaller entrants. Interestingly, while the likelihood of acquisitions declines for older establishments, it increases for younger ones.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"142 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139910471","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}
During armed conflicts, when the rule of law collapses, bribery often becomes prevalent. Yet, the effect of bribery on firm performance under those circumstances remains unclear. Bribery could provide access to scarce resources, but it could also be the result of extortion. This study argues that bribes can improve firm performance during certain conflicts, when violence reduces public officials' ability to threaten firms. Using longitudinal data from businesses in Nigeria during the Boko Haram insurgency in 2009–2014, I find that firms exposed to Boko Haram attacks that bribed outperformed firms that did not bribe. Qualitative data suggest that the insurgency limited public officials' ability to threaten firms, making bribes less a means of rent extraction and more a way for firms to access resources.
{"title":"Bribery, insecurity, and firm performance: Evidence from the Boko Haram insurgency in Nigeria","authors":"Stefan Dimitriadis","doi":"10.1002/smj.3578","DOIUrl":"https://doi.org/10.1002/smj.3578","url":null,"abstract":"During armed conflicts, when the rule of law collapses, bribery often becomes prevalent. Yet, the effect of bribery on firm performance under those circumstances remains unclear. Bribery could provide access to scarce resources, but it could also be the result of extortion. This study argues that bribes can improve firm performance during certain conflicts, when violence reduces public officials' ability to threaten firms. Using longitudinal data from businesses in Nigeria during the Boko Haram insurgency in 2009–2014, I find that firms exposed to Boko Haram attacks that bribed outperformed firms that did not bribe. Qualitative data suggest that the insurgency limited public officials' ability to threaten firms, making bribes less a means of rent extraction and more a way for firms to access resources.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"66 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139647834","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}
Accelerator programs provide valuable market feedback and education to participants that may improve startup performance. However, it is unclear whether the average effect of accelerator participation on startup performance post acceleration is positive, and if so, how this effect varies with accelerator program design. We analyze data from 8580 startups that made it past the initial selection stage at 408 accelerators in 176 countries between 2013 and 2019. We compare accelerated and non-accelerated startups and find a positive average effect of accelerator participation on startup performance post acceleration. Moreover, we find that this effect varies substantially with program design, and depends on venture stage, industry, and founder expertise. Our findings highlight the impact of program design on the benefits that startups derive from accelerator participation.
{"title":"Poised for growth: Exploring the relationship between accelerator program design and startup performance","authors":"Valentina A. Assenova, Raphael Amit","doi":"10.1002/smj.3581","DOIUrl":"https://doi.org/10.1002/smj.3581","url":null,"abstract":"Accelerator programs provide valuable market feedback and education to participants that may improve startup performance. However, it is unclear whether the average effect of accelerator participation on startup performance post acceleration is positive, and if so, how this effect varies with accelerator program design. We analyze data from 8580 startups that made it past the initial selection stage at 408 accelerators in 176 countries between 2013 and 2019. We compare accelerated and non-accelerated startups and find a positive average effect of accelerator participation on startup performance post acceleration. Moreover, we find that this effect varies substantially with program design, and depends on venture stage, industry, and founder expertise. Our findings highlight the impact of program design on the benefits that startups derive from accelerator participation.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"174 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139590266","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}
While competition in the market for corporate control determines firms' ability to capture value from acquisitions, there is limited evidence of factors that influence such competition. This study explores whether airline routes intensify competition in this market and affect the target's returns. Targets can become better connected to distant latent acquirers (DLAs), which can increase the targets' bargaining power. Similarly, better connectivity can allow acquirers to reach distant latent targets (DLTs) and therefore increase the acquirers' bargaining power. Examining acquisitions between US public companies during 1980–2018, I find that lower travel time between the target and its DLAs increases the target's returns and the number of competing bids. Instead, the travel time between the acquirer and its DLTs does not play a role.
{"title":"Transportation networks and competition in the market for corporate control","authors":"Marco Testoni","doi":"10.1002/smj.3577","DOIUrl":"https://doi.org/10.1002/smj.3577","url":null,"abstract":"While competition in the market for corporate control determines firms' ability to capture value from acquisitions, there is limited evidence of factors that influence such competition. This study explores whether airline routes intensify competition in this market and affect the target's returns. Targets can become better connected to distant latent acquirers (DLAs), which can increase the targets' bargaining power. Similarly, better connectivity can allow acquirers to reach distant latent targets (DLTs) and therefore increase the acquirers' bargaining power. Examining acquisitions between US public companies during 1980–2018, I find that lower travel time between the target and its DLAs increases the target's returns and the number of competing bids. Instead, the travel time between the acquirer and its DLTs does not play a role.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"44 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139518640","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}
Startups are increasingly turning to incumbent firms for venture capital, anticipating access to the investor's knowledge and complementary assets. However, startups' eventual access to these resources varies widely. This article highlights one important driver of such variance, whether startups' managers were previously employed by an incumbent in the same industry. Using data from the life sciences, I find that such corporate experience can precipitate technical knowledge flows to startups by enabling the generation of relational capital with incumbent firm managers. It also helps startups navigate incumbents' decision-processes to formalize access to downstream complementary assets via alliances. The former effect is stronger when corporate experience is technology-focused, the latter when it is commercialization-focused. Corporate experience at the investing incumbent firm amplifies informal knowledge-flows but not formal alliances.
{"title":"The inside track: Entrepreneurs' corporate experience and startups' access to incumbent partners' resources","authors":"Sarath Balachandran","doi":"10.1002/smj.3576","DOIUrl":"https://doi.org/10.1002/smj.3576","url":null,"abstract":"Startups are increasingly turning to incumbent firms for venture capital, anticipating access to the investor's knowledge and complementary assets. However, startups' eventual access to these resources varies widely. This article highlights one important driver of such variance, whether startups' managers were previously employed by an incumbent in the same industry. Using data from the life sciences, I find that such corporate experience can precipitate technical knowledge flows to startups by enabling the generation of relational capital with incumbent firm managers. It also helps startups navigate incumbents' decision-processes to formalize access to downstream complementary assets via alliances. The former effect is stronger when corporate experience is technology-focused, the latter when it is commercialization-focused. Corporate experience at the investing incumbent firm amplifies informal knowledge-flows but not formal alliances.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"105 12S2 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139518482","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 on industry evolution highlights the role of knowledge-building activities of startups and established firms in shaping knowledge evolution in a nascent industry. Yet, research thus far has overlooked the possibility that differences between startups and established firms might also shape the diffusion of the knowledge that they build. This study abductively explores this conjecture in the context of solar energy by examining the extent to which the photovoltaic cell inventions that firms create spur subsequent inventions by other firms. In contrast with existing literature highlighting differences across firms in the types of inventions they create, this study reveals asymmetries between startups and established firms in the diffusion of the knowledge underlying their inventions, even when they create inventions with similar attributes.
{"title":"Knowledge diffusion in nascent industries: Asymmetries between startups and established firms in spurring inventions by other firms","authors":"Francisco Polidoro, Charlotte Jacobs","doi":"10.1002/smj.3568","DOIUrl":"https://doi.org/10.1002/smj.3568","url":null,"abstract":"Research on industry evolution highlights the role of knowledge-building activities of startups and established firms in shaping knowledge evolution in a nascent industry. Yet, research thus far has overlooked the possibility that differences between startups and established firms might also shape the diffusion of the knowledge that they build. This study abductively explores this conjecture in the context of solar energy by examining the extent to which the photovoltaic cell inventions that firms create spur subsequent inventions by other firms. In contrast with existing literature highlighting differences across firms in the types of inventions they create, this study reveals asymmetries between startups and established firms in the diffusion of the knowledge underlying their inventions, even when they create inventions with similar attributes.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"92 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2024-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139408831","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}
We examine to what extent and when multiunit firms internally redeploy managers between units. While theory has emphasized how changes in demand conditions affect redeployment, we argue that optimal internal resource allocation involves consideration of both demand and each unit's resource supply. We formalize this argument, showing how redeployment arises from “supply-side inducements”—return advantages in new over existing resource uses resulting from changes in resource supply. Empirical tests using manager deaths as an exogenous, supply-side shock to firms' resource stocks support our arguments, showing that firms frequently redeploy resources away from better-endowed and toward negatively affected units. Incorporating supply-side inducements into redeployment theory implies additional value-creation opportunities from redeployment and carries novel predictions for the direction of intra-firm resource flows.
{"title":"Supply-side inducements and resource redeployment in multiunit firms","authors":"Jasmina Chauvin, Christopher Poliquin","doi":"10.1002/smj.3573","DOIUrl":"https://doi.org/10.1002/smj.3573","url":null,"abstract":"We examine to what extent and when multiunit firms internally redeploy managers between units. While theory has emphasized how changes in demand conditions affect redeployment, we argue that optimal internal resource allocation involves consideration of both demand and each unit's resource supply. We formalize this argument, showing how redeployment arises from “supply-side inducements”—return advantages in new over existing resource uses resulting from changes in resource supply. Empirical tests using manager deaths as an exogenous, supply-side shock to firms' resource stocks support our arguments, showing that firms frequently redeploy resources away from better-endowed and toward negatively affected units. Incorporating supply-side inducements into redeployment theory implies additional value-creation opportunities from redeployment and carries novel predictions for the direction of intra-firm resource flows.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"15 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2023-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138632269","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}
Although patent races of leading technology firms have garnered significant attention in the prior literature, it remains unclear how the outcome of a patent race affects subsequent firm-level innovation. Drawing on agency theory, we propose that losing a patent race drives firms to pursue more technological innovation than winning due to managerial concerns. To investigate the mechanism, we hypothesize that the positive impact of a lost race on a firm's innovation is more pronounced when more shareholders hold near-term investment horizons and when a CEO is less protected against the pressure of shareholders. By constructing a unique dataset of simultaneous patent applications, we find evidence consistent with the proposed theory.
{"title":"Beyond the finish line: How losing in patent race drives post-race innovation","authors":"A-Sung Hong","doi":"10.1002/smj.3574","DOIUrl":"https://doi.org/10.1002/smj.3574","url":null,"abstract":"Although patent races of leading technology firms have garnered significant attention in the prior literature, it remains unclear how the outcome of a patent race affects subsequent firm-level innovation. Drawing on agency theory, we propose that losing a patent race drives firms to pursue more technological innovation than winning due to managerial concerns. To investigate the mechanism, we hypothesize that the positive impact of a lost race on a firm's innovation is more pronounced when more shareholders hold near-term investment horizons and when a CEO is less protected against the pressure of shareholders. By constructing a unique dataset of simultaneous patent applications, we find evidence consistent with the proposed theory.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"35 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2023-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138579462","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}
With increased political polarization, Americans are displaying more animus across, and affinity within, ideological identity groups. We argue this dynamic incentivizes firms to minimize ideological misalignments across their workforce by locating new establishments in areas that are ideologically proximate to their current operations. We further argue that the desire to minimize ideological distance to new establishments is stronger in knowledge-intensive industries and young organizations. We find support for these arguments through the analysis of over 220,000 new establishment openings from 2009 to 2014. Critically, we find the effect of ideological distance on location is stronger when societal polarization is high. Our theory, and findings, contribute to several literatures and advance our understanding of the impact of polarization on strategy.
{"title":"My kind of people: Political polarization, ideology, and firm location","authors":"Benjamin Barber, Daniel J. Blake","doi":"10.1002/smj.3572","DOIUrl":"https://doi.org/10.1002/smj.3572","url":null,"abstract":"With increased political polarization, Americans are displaying more animus across, and affinity within, ideological identity groups. We argue this dynamic incentivizes firms to minimize ideological misalignments across their workforce by locating new establishments in areas that are ideologically proximate to their current operations. We further argue that the desire to minimize ideological distance to new establishments is stronger in knowledge-intensive industries and young organizations. We find support for these arguments through the analysis of over 220,000 new establishment openings from 2009 to 2014. Critically, we find the effect of ideological distance on location is stronger when societal polarization is high. Our theory, and findings, contribute to several literatures and advance our understanding of the impact of polarization on strategy.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":"19 1","pages":""},"PeriodicalIF":8.3,"publicationDate":"2023-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138579234","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}
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