David Souder, J. Myles Shaver, Jared Harris, Abdullatif Alrashdan
Abstract Research Summary We discuss two research design considerations that jointly influence the choice of financial performance metrics in strategy research: (a) expected temporal payoff of the strategic choice and (b) source of variation invoked in the research design (i.e., within‐firm vs. between‐firm comparisons). We map existing performance metrics commonly used in the research literature to these considerations, and highlight the lack of performance metrics well suited for the combination of strategies with not‐well‐defined temporal payoffs and within‐firm research designs. To remedy this, we introduce a value partitioning methodology that provides a performance metric we call dynamic value. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance. Managerial Summary This article introduces the value partitioning methodology for interpreting two distinct elements of stock market valuations: (a) the firm's implied future value from continuing operations in a “steady state” and (b) the market's estimate of dynamic future value associated with the firm's strategic choices or competitive positioning. We describe situations where the latter element is useful for measuring strategy performance. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance.
{"title":"Performance metrics in strategy research: A new metric and method for assessing dynamic value","authors":"David Souder, J. Myles Shaver, Jared Harris, Abdullatif Alrashdan","doi":"10.1002/smj.3550","DOIUrl":"https://doi.org/10.1002/smj.3550","url":null,"abstract":"Abstract Research Summary We discuss two research design considerations that jointly influence the choice of financial performance metrics in strategy research: (a) expected temporal payoff of the strategic choice and (b) source of variation invoked in the research design (i.e., within‐firm vs. between‐firm comparisons). We map existing performance metrics commonly used in the research literature to these considerations, and highlight the lack of performance metrics well suited for the combination of strategies with not‐well‐defined temporal payoffs and within‐firm research designs. To remedy this, we introduce a value partitioning methodology that provides a performance metric we call dynamic value. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance. Managerial Summary This article introduces the value partitioning methodology for interpreting two distinct elements of stock market valuations: (a) the firm's implied future value from continuing operations in a “steady state” and (b) the market's estimate of dynamic future value associated with the firm's strategic choices or competitive positioning. We describe situations where the latter element is useful for measuring strategy performance. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136313847","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}
Abstract Research Summary This article explores how technology adoption can shape innovative activity. We study this issue within the historical context of the introduction and expansion of airmail across the United States between 1918 and 1935 using archival material and a novel dataset of early 20th century patents. A joint qualitative and quantitative investigation indicates that local individual and corporate actors applied diverse pools of knowledge and intensified their work with aviation innovations following airmail entry into their county. Moreover, we find evidence that the co‐location of aircraft manufacturing and airmail operations was associated with more corporate innovations that facilitated economies of scale and corresponded to increased technological diversification of firms' aviation patent portfolios. Ultimately, this paper deepens our understanding of the antecedents, consequences, and organizational processes that underpin innovation. Managerial Summary This research investigates how aviation innovation in the United States was influenced by the postal service's early 20th century introduction and expansion of airmail routes. Our results indicate that counties with an airmail route experienced increased aviation‐related patenting by individual and corporate inventors relative to similar counties that did not receive an airmail route. Moreover, we find that corporate inventors working in airmail counties that also contained aircraft manufacturers were particularly active in technological areas that enhanced aircraft economies of scale and patented in a wider range of aviation‐related domains. An implication of this work for managers and policymakers is that early access to nascent technology can be a driver of local innovation and that spillovers can benefit diverse economic actors working in close proximity.
{"title":"Technology adoption and innovation: The establishment of airmail and aviation innovation in the <scp>United States</scp>, 1918–1935","authors":"Eunhee Sohn, Robert Seamans, Daniel B. Sands","doi":"10.1002/smj.3555","DOIUrl":"https://doi.org/10.1002/smj.3555","url":null,"abstract":"Abstract Research Summary This article explores how technology adoption can shape innovative activity. We study this issue within the historical context of the introduction and expansion of airmail across the United States between 1918 and 1935 using archival material and a novel dataset of early 20th century patents. A joint qualitative and quantitative investigation indicates that local individual and corporate actors applied diverse pools of knowledge and intensified their work with aviation innovations following airmail entry into their county. Moreover, we find evidence that the co‐location of aircraft manufacturing and airmail operations was associated with more corporate innovations that facilitated economies of scale and corresponded to increased technological diversification of firms' aviation patent portfolios. Ultimately, this paper deepens our understanding of the antecedents, consequences, and organizational processes that underpin innovation. Managerial Summary This research investigates how aviation innovation in the United States was influenced by the postal service's early 20th century introduction and expansion of airmail routes. Our results indicate that counties with an airmail route experienced increased aviation‐related patenting by individual and corporate inventors relative to similar counties that did not receive an airmail route. Moreover, we find that corporate inventors working in airmail counties that also contained aircraft manufacturers were particularly active in technological areas that enhanced aircraft economies of scale and patented in a wider range of aviation‐related domains. An implication of this work for managers and policymakers is that early access to nascent technology can be a driver of local innovation and that spillovers can benefit diverse economic actors working in close proximity.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136306638","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}
Abstract Research Summary How do new entrepreneurial ventures effectively deploy linguistic frames to attract customer demand? Drawing on framing and categories research, we develop and test theory about how category dynamics shape the effectiveness of two commonly observed frames—social impact framing and innovativeness framing—in the context of prosocial categories. We test our predictions by tracking entrepreneurial ventures in the market category for massive open online courses over the category's first 10 years of existence (2012–2021). Our fixed‐effects models show that higher levels of category salience increase the effectiveness of a social impact framing but decrease the effectiveness of an innovativeness framing; conversely, higher levels of category crowdedness decrease the effectiveness of a social impact framing but increase the effectiveness of an innovativeness framing. Managerial Summary This research explores how startups can strategically frame themselves to attract customers. We specifically compare the effectiveness of a “social impact framing” (emphasizing the startup's benefits to society) versus an “innovativeness framing” (emphasizing innovativeness) under different market conditions. Our longitudinal study finds that startups benefit most from a social impact framing when their market attracts a lot of attention or has low competition. While an innovativeness framing can backfire under such conditions, it effectively helps to attract customers in a market that receives little attention or exhibits fierce competition. Entrepreneurs and managers can leverage our insights to more effectively tailor their framing strategies to their market environment and ultimately gain more customer traction.
{"title":"Entrepreneurial framing: How category dynamics shape the effectiveness of linguistic frames","authors":"Karl Taeuscher, Hannes Rothe","doi":"10.1002/smj.3554","DOIUrl":"https://doi.org/10.1002/smj.3554","url":null,"abstract":"Abstract Research Summary How do new entrepreneurial ventures effectively deploy linguistic frames to attract customer demand? Drawing on framing and categories research, we develop and test theory about how category dynamics shape the effectiveness of two commonly observed frames—social impact framing and innovativeness framing—in the context of prosocial categories. We test our predictions by tracking entrepreneurial ventures in the market category for massive open online courses over the category's first 10 years of existence (2012–2021). Our fixed‐effects models show that higher levels of category salience increase the effectiveness of a social impact framing but decrease the effectiveness of an innovativeness framing; conversely, higher levels of category crowdedness decrease the effectiveness of a social impact framing but increase the effectiveness of an innovativeness framing. Managerial Summary This research explores how startups can strategically frame themselves to attract customers. We specifically compare the effectiveness of a “social impact framing” (emphasizing the startup's benefits to society) versus an “innovativeness framing” (emphasizing innovativeness) under different market conditions. Our longitudinal study finds that startups benefit most from a social impact framing when their market attracts a lot of attention or has low competition. While an innovativeness framing can backfire under such conditions, it effectively helps to attract customers in a market that receives little attention or exhibits fierce competition. Entrepreneurs and managers can leverage our insights to more effectively tailor their framing strategies to their market environment and ultimately gain more customer traction.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136309287","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}
Abstract Research Summary Extant research offers conflicting views about the size and nature of gender‐related disparities in venture financing and venture performance. We theorize that gender‐related frictions in debt financing, the most common source of capital for new ventures, materially impair the performance of women‐led ventures but that these frictions decline with financial development. We find strong support for these predictions in a meta‐analysis of 63 primary studies in which we use financial development to instrument for the impact of gender‐related financial frictions on venture performance; in fact, in the absence of gender‐related financial frictions, ventures led by women would modestly outperform ventures led by men. We also find that gender‐related financial frictions are greater for access to, than the terms of, debt financing. Managerial Summary We use meta‐analysis to offer a quantitative synthesis of the research on gender, venture finance, and venture performance. We find evidence that women encounter gender‐related frictions in obtaining debt financing for their ventures, materially impairing their ventures' performance. In fact, in the absence of these frictions, ventures led by women would modestly outperform ventures led by men. We also find that gender‐related frictions in venture finance are greater for access to, than the terms of, debt financing and that these frictions tend to be stronger in countries with less developed financial institutions and markets.
{"title":"Do financial market frictions hurt the performance of <scp>women‐led</scp> ventures? A <scp>meta‐analytic</scp> investigation","authors":"David Gaddis Ross, Dong Hyun Shin","doi":"10.1002/smj.3553","DOIUrl":"https://doi.org/10.1002/smj.3553","url":null,"abstract":"Abstract Research Summary Extant research offers conflicting views about the size and nature of gender‐related disparities in venture financing and venture performance. We theorize that gender‐related frictions in debt financing, the most common source of capital for new ventures, materially impair the performance of women‐led ventures but that these frictions decline with financial development. We find strong support for these predictions in a meta‐analysis of 63 primary studies in which we use financial development to instrument for the impact of gender‐related financial frictions on venture performance; in fact, in the absence of gender‐related financial frictions, ventures led by women would modestly outperform ventures led by men. We also find that gender‐related financial frictions are greater for access to, than the terms of, debt financing. Managerial Summary We use meta‐analysis to offer a quantitative synthesis of the research on gender, venture finance, and venture performance. We find evidence that women encounter gender‐related frictions in obtaining debt financing for their ventures, materially impairing their ventures' performance. In fact, in the absence of these frictions, ventures led by women would modestly outperform ventures led by men. We also find that gender‐related frictions in venture finance are greater for access to, than the terms of, debt financing and that these frictions tend to be stronger in countries with less developed financial institutions and markets.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135109872","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}
Steven J. Hyde, Eric Bachura, Jonathan Bundy, Richard T. Gretz, Wm. Gerard Sanders
Abstract Research Summary Organizations are punished by analysts and investors when material deceit by their CEO is uncovered. However, few studies examine analysts' responses to deceptive CEOs before their deceit is publicly known. We use machine learning (ML) models to operationalize the likelihood of CEO deception as well as analysts' suspicion of CEO deception on earnings calls. Controlling for analysts' suspicion of deception, we show that analysts are prone to assigning superior recommendations to deceptive CEOs, particularly those deemed as All‐Star analysts. We find that the benefits of CEO deception are lower for habitual deceivers, pointing to diminishing returns of deception. This study contributes to corporate governance research by enhancing our understanding of analysts' reactions to CEO deception prior to public exposure of any fraud or misconduct. Managerial Summary Undetected deception by CEOs can impact the stock market by influencing analysts' recommendations. Using an advanced ML model, our study measures the likelihood of deception more accurately than previous methods and identifies a tendency among financial analysts to favor deceptive CEOs, particularly high‐status analysts. However, deception is less effective with analysts who are repeatedly exposed to deception. These findings underscore the importance of awareness of potential deception in CEO communications and the need for continuous scrutiny, learning, and adaptability among analysts.
{"title":"The tangled webs we weave: Examining the effects of CEO deception on analyst recommendations","authors":"Steven J. Hyde, Eric Bachura, Jonathan Bundy, Richard T. Gretz, Wm. Gerard Sanders","doi":"10.1002/smj.3546","DOIUrl":"https://doi.org/10.1002/smj.3546","url":null,"abstract":"Abstract Research Summary Organizations are punished by analysts and investors when material deceit by their CEO is uncovered. However, few studies examine analysts' responses to deceptive CEOs before their deceit is publicly known. We use machine learning (ML) models to operationalize the likelihood of CEO deception as well as analysts' suspicion of CEO deception on earnings calls. Controlling for analysts' suspicion of deception, we show that analysts are prone to assigning superior recommendations to deceptive CEOs, particularly those deemed as All‐Star analysts. We find that the benefits of CEO deception are lower for habitual deceivers, pointing to diminishing returns of deception. This study contributes to corporate governance research by enhancing our understanding of analysts' reactions to CEO deception prior to public exposure of any fraud or misconduct. Managerial Summary Undetected deception by CEOs can impact the stock market by influencing analysts' recommendations. Using an advanced ML model, our study measures the likelihood of deception more accurately than previous methods and identifies a tendency among financial analysts to favor deceptive CEOs, particularly high‐status analysts. However, deception is less effective with analysts who are repeatedly exposed to deception. These findings underscore the importance of awareness of potential deception in CEO communications and the need for continuous scrutiny, learning, and adaptability among analysts.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135938546","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}
Liinus Hietaniemi, Simone Santamaria, Aleksandra Kacperczyk, Juhana Peltonen
Abstract Research Summary The timing of talent acquisition is a central decision for new ventures. On one hand, hiring after demand is proven minimizes losses. On the other hand, hiring before demand is proven allows new ventures to start developing unique capabilities. We resolve this tension by proposing that the timing depends on human resource redeployability. We test our theory with the population of Finnish ventures showing that portfolio entrepreneurs hire more employees early on because of higher redeployment potential and that they hire employees with more transferable skills in order to benefit from the redeployment option. To probe our mechanisms, we examine how talent acquisition strategies in portfolio and standalone ventures vary with external conditions that reduce or amplify the benefits of redeployment. Managerial Summary This paper explores when startups begin scaling their team. Our findings suggest that the potential to redeploy employees (to another startup, for example) motivates entrepreneurs to scale earlier. At the same time, we find that the entrepreneurs who scale earlier due to redeployment potential tend to hire employees with skills that can be transferred more easily. We further show that our results are affected by the level of rigidity in the labor market. When labor markets become more flexible, the impact of easy redeployment on an entrepreneur's hiring strategy becomes less important. Our findings provide important insights into how the external environment and policy changes can affect the trajectory of startups even at their earliest stages.
{"title":"Human resource redeployability and entrepreneurial hiring strategy","authors":"Liinus Hietaniemi, Simone Santamaria, Aleksandra Kacperczyk, Juhana Peltonen","doi":"10.1002/smj.3547","DOIUrl":"https://doi.org/10.1002/smj.3547","url":null,"abstract":"Abstract Research Summary The timing of talent acquisition is a central decision for new ventures. On one hand, hiring after demand is proven minimizes losses. On the other hand, hiring before demand is proven allows new ventures to start developing unique capabilities. We resolve this tension by proposing that the timing depends on human resource redeployability. We test our theory with the population of Finnish ventures showing that portfolio entrepreneurs hire more employees early on because of higher redeployment potential and that they hire employees with more transferable skills in order to benefit from the redeployment option. To probe our mechanisms, we examine how talent acquisition strategies in portfolio and standalone ventures vary with external conditions that reduce or amplify the benefits of redeployment. Managerial Summary This paper explores when startups begin scaling their team. Our findings suggest that the potential to redeploy employees (to another startup, for example) motivates entrepreneurs to scale earlier. At the same time, we find that the entrepreneurs who scale earlier due to redeployment potential tend to hire employees with skills that can be transferred more easily. We further show that our results are affected by the level of rigidity in the labor market. When labor markets become more flexible, the impact of easy redeployment on an entrepreneur's hiring strategy becomes less important. Our findings provide important insights into how the external environment and policy changes can affect the trajectory of startups even at their earliest stages.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136024678","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}
Alicia DeSantola, Pavel I. Zhelyazkov, Benjamin L. Hallen
Abstract Research Summary This paper investigates how reputation affects firm responses to resource mobilization opportunities. We theorize that lower‐reputation firms are likely to be particularly responsive to resource mobilization opportunities because they are otherwise constrained. By contrast, higher‐reputation firms have access to greater resource supply and may self‐restrain demand. We test these arguments in the context of venture capital (VC) firms raising investment funds. We indeed find that lower‐reputation VCs are more responsive to opportunities presented by recent successes. Unexpectedly, we find that high‐reputation VCs are more responsive to market‐wide heat. Through multi‐method follow‐on analyses, we propose that while recent successes constitute “windows of opportunity” upon which firms act with individual discretion, hot market conditions serve as “waves of opportunity,” exerting a push on the resource mobilization of all firms and influencing their propensity toward scaling up. Managerial Summary We explore how low‐ and high‐reputation venture capital (VC) firms respond to fundraising opportunities such as recent successes or hot market conditions. We show that low‐reputation VCs are more likely to fundraise from limited partners in response to firm‐specific “windows of opportunity” (such as after a portfolio company IPO) because it is a rare chance to attract resource provider attention. By contrast, high‐reputation firms are more likely to fundraise at their own pace, regardless of short‐term successes. However, we unexpectedly find that high‐reputation firms are more likely than low‐reputation ones to take advantage of market‐wide “waves of opportunity” (i.e., hot markets), likely because they benefit from increased fundraising process efficiency. Our study illustrates how hot market periods may be unusually advantageous fundraising opportunities for high‐reputation firms and may be a key driver of when such firms scale up.
{"title":"Windows versus waves of opportunity: How reputation alters venture capital firms' resource mobilization","authors":"Alicia DeSantola, Pavel I. Zhelyazkov, Benjamin L. Hallen","doi":"10.1002/smj.3552","DOIUrl":"https://doi.org/10.1002/smj.3552","url":null,"abstract":"Abstract Research Summary This paper investigates how reputation affects firm responses to resource mobilization opportunities. We theorize that lower‐reputation firms are likely to be particularly responsive to resource mobilization opportunities because they are otherwise constrained. By contrast, higher‐reputation firms have access to greater resource supply and may self‐restrain demand. We test these arguments in the context of venture capital (VC) firms raising investment funds. We indeed find that lower‐reputation VCs are more responsive to opportunities presented by recent successes. Unexpectedly, we find that high‐reputation VCs are more responsive to market‐wide heat. Through multi‐method follow‐on analyses, we propose that while recent successes constitute “windows of opportunity” upon which firms act with individual discretion, hot market conditions serve as “waves of opportunity,” exerting a push on the resource mobilization of all firms and influencing their propensity toward scaling up. Managerial Summary We explore how low‐ and high‐reputation venture capital (VC) firms respond to fundraising opportunities such as recent successes or hot market conditions. We show that low‐reputation VCs are more likely to fundraise from limited partners in response to firm‐specific “windows of opportunity” (such as after a portfolio company IPO) because it is a rare chance to attract resource provider attention. By contrast, high‐reputation firms are more likely to fundraise at their own pace, regardless of short‐term successes. However, we unexpectedly find that high‐reputation firms are more likely than low‐reputation ones to take advantage of market‐wide “waves of opportunity” (i.e., hot markets), likely because they benefit from increased fundraising process efficiency. Our study illustrates how hot market periods may be unusually advantageous fundraising opportunities for high‐reputation firms and may be a key driver of when such firms scale up.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136024568","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}
How firms strategically balance legitimacy and distinctiveness has garnered significant attention but reflects inconsistent perspectives. This inconsistency may stem from the inherent complexity of optimal distinctiveness (OD), which are sensitive to both the context and temporality. This article explores dynamic changes in institutional and competitive pressures and how they co‐evolve with different OD strategies. Through an exploratory, multi‐case study, we propose a pressure‐response model to uncover how firms dynamically pursue OD in response to different combinations of pressures. Furthermore, our findings reveal the mechanisms that drive the dynamic interactions between distinctiveness and legitimacy across different OD strategies. In essence, this study contributes to the OD research agenda by providing insights into the evolution of OD strategies, addressing the how and why behind their development.Can enterprises effectively balance their needs for legitimacy and distinctiveness by achieving an optimal level of similarity and differentiation from their competitors? This article demonstrates that, in the face of multiple pressures with varying intensities, enterprises continuously adapt their strategic choices to achieve optimal distinctiveness (OD). As institutional and competitive pressures gradually intensify, an enterprise's OD strategies may transition from isomorphic and balancing approaches toward deviation. However, when accumulated inertia hinders the enterprise's ability to respond to emerging pressures, adjustments to the OD strategy may become necessary. Therefore, this study offers entrepreneurs a practical guide on how to dynamically maintain their enterprise's OD by selecting appropriate strategies based on the specific circumstances at hand.
{"title":"Positioning for optimal distinctiveness: How firms manage competitive and institutional pressures under dynamic and complex environment","authors":"Jingqin Su, Xin Gao, Justin Tan","doi":"10.1002/smj.3549","DOIUrl":"https://doi.org/10.1002/smj.3549","url":null,"abstract":"How firms strategically balance legitimacy and distinctiveness has garnered significant attention but reflects inconsistent perspectives. This inconsistency may stem from the inherent complexity of optimal distinctiveness (OD), which are sensitive to both the context and temporality. This article explores dynamic changes in institutional and competitive pressures and how they co‐evolve with different OD strategies. Through an exploratory, multi‐case study, we propose a pressure‐response model to uncover how firms dynamically pursue OD in response to different combinations of pressures. Furthermore, our findings reveal the mechanisms that drive the dynamic interactions between distinctiveness and legitimacy across different OD strategies. In essence, this study contributes to the OD research agenda by providing insights into the evolution of OD strategies, addressing the how and why behind their development.Can enterprises effectively balance their needs for legitimacy and distinctiveness by achieving an optimal level of similarity and differentiation from their competitors? This article demonstrates that, in the face of multiple pressures with varying intensities, enterprises continuously adapt their strategic choices to achieve optimal distinctiveness (OD). As institutional and competitive pressures gradually intensify, an enterprise's OD strategies may transition from isomorphic and balancing approaches toward deviation. However, when accumulated inertia hinders the enterprise's ability to respond to emerging pressures, adjustments to the OD strategy may become necessary. Therefore, this study offers entrepreneurs a practical guide on how to dynamically maintain their enterprise's OD by selecting appropriate strategies based on the specific circumstances at hand.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":8.3,"publicationDate":"2023-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43517255","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}
J. Greenberg, Daniel B. Sands, G. Cattani, J. Porac
We investigate the extent to which the increasing availability of ratings information has affected heterogeneity in firm performance and, if so, what market segments are responsible for these changes. A unique dataset was constructed with restricted‐access government data to examine these questions in the context of the New York City restaurant industry between 1994 and 2013. We find that firms serving tourist and expensive price point market segments experienced increasing sales discrepancies as a function of rating differentials when ratings information became more easily accessible with the advent of online rating platforms. These findings depict how the prevalence of online rating systems have shaped competition and value capture, thus providing insight into the determinants of firm performance heterogeneity.We examine the extent to which increasing availability of ratings information has affected firm performance by estimating changes in comparative sales between New York City restaurants between 1994 and 2013. Analyses indicate that increased access to ratings information during this period had a considerable effect on comparative sales for firms serving the tourist and the expensive price point market segments. These results provide insights into other industries where access to evaluations and rating systems have also increased. This work suggests that online ratings have affected how firms compete and capture value, and managers have opportunities to use rating systems to their advantage.
{"title":"Rating systems and increased heterogeneity in firm performance: Evidence from the New York City Restaurant Industry, 1994–2013","authors":"J. Greenberg, Daniel B. Sands, G. Cattani, J. Porac","doi":"10.1002/smj.3545","DOIUrl":"https://doi.org/10.1002/smj.3545","url":null,"abstract":"We investigate the extent to which the increasing availability of ratings information has affected heterogeneity in firm performance and, if so, what market segments are responsible for these changes. A unique dataset was constructed with restricted‐access government data to examine these questions in the context of the New York City restaurant industry between 1994 and 2013. We find that firms serving tourist and expensive price point market segments experienced increasing sales discrepancies as a function of rating differentials when ratings information became more easily accessible with the advent of online rating platforms. These findings depict how the prevalence of online rating systems have shaped competition and value capture, thus providing insight into the determinants of firm performance heterogeneity.We examine the extent to which increasing availability of ratings information has affected firm performance by estimating changes in comparative sales between New York City restaurants between 1994 and 2013. Analyses indicate that increased access to ratings information during this period had a considerable effect on comparative sales for firms serving the tourist and the expensive price point market segments. These results provide insights into other industries where access to evaluations and rating systems have also increased. This work suggests that online ratings have affected how firms compete and capture value, and managers have opportunities to use rating systems to their advantage.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":8.3,"publicationDate":"2023-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47780256","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}
This study examines commission and omission errors in the evaluation of technological opportunities. Integrating structural and cognitive perspectives, we propose that inventors with more cohesive collaboration networks within the firm or geographically closer to the corporate headquarters exert greater influence on the dominant representations shaping opportunity evaluation within the firm. Thus, their inventions are more likely to be positively assessed, even if quality considerations suggest otherwise. Conversely, even when superior in quality, inventions from individuals with less cohesive collaboration networks within the firm or located far from the corporate headquarters are less likely to be positively evaluated, leading to omission errors. The study provides evidence based on 22 interviews and archival data from the mobile phone and personal digital assistant industry between 1990 and 2010.This study examines commission and omission errors in decision‐making about technologies. Studying patent renewal decisions of 42 firms in the mobile phone and personal digital assistant industry between 1990 and 2010, we show that inventors with more cohesive collaboration networks within the firm or located close to the corporate headquarters have their inventions positively assessed even when of lower quality, leading to commission errors. On the other hand, inventors with less cohesive collaboration networks within the firm or located far away from the corporate headquarters have their inventions disregarded even when of higher quality, causing omission errors. These findings call for managerial vigilance in technology evaluation decisions, ensuring valuable ideas are not overlooked due to an inventor's network position or location.
{"title":"Missed chances and unfulfilled hopes: Why do firms make errors in evaluating technological opportunities?","authors":"Amit Kumar, Elisa Operti","doi":"10.1002/smj.3543","DOIUrl":"https://doi.org/10.1002/smj.3543","url":null,"abstract":"This study examines commission and omission errors in the evaluation of technological opportunities. Integrating structural and cognitive perspectives, we propose that inventors with more cohesive collaboration networks within the firm or geographically closer to the corporate headquarters exert greater influence on the dominant representations shaping opportunity evaluation within the firm. Thus, their inventions are more likely to be positively assessed, even if quality considerations suggest otherwise. Conversely, even when superior in quality, inventions from individuals with less cohesive collaboration networks within the firm or located far from the corporate headquarters are less likely to be positively evaluated, leading to omission errors. The study provides evidence based on 22 interviews and archival data from the mobile phone and personal digital assistant industry between 1990 and 2010.This study examines commission and omission errors in decision‐making about technologies. Studying patent renewal decisions of 42 firms in the mobile phone and personal digital assistant industry between 1990 and 2010, we show that inventors with more cohesive collaboration networks within the firm or located close to the corporate headquarters have their inventions positively assessed even when of lower quality, leading to commission errors. On the other hand, inventors with less cohesive collaboration networks within the firm or located far away from the corporate headquarters have their inventions disregarded even when of higher quality, causing omission errors. These findings call for managerial vigilance in technology evaluation decisions, ensuring valuable ideas are not overlooked due to an inventor's network position or location.","PeriodicalId":22023,"journal":{"name":"Strategic Management Journal","volume":null,"pages":null},"PeriodicalIF":8.3,"publicationDate":"2023-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45936776","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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