Knowledge that Transforms

I evaluate two processes, niche formation and resource-partitioning, that could independently account for the entry of firms into new market segments in mature industries. The niche formation argument focuses on environmental changes that promote the entry of new firms whereas the research-partitioning argument is based on the internal differentiation of a mature industry into subgroups composed of specialist and generalists. In other words, the niche formation and resource-partitioning accounts emphasize forces that are exogenous and endogenous to the industry, respectively. I attempt to resolve this theoretical tension by modeling the effects of niche formation and resource-partitioning together on the founding of firms in the microbrewery and brewpub segments of the U.S. brewing industry. I find that niche formation provides a better explanation for both microbrewery and brewpub foundings. In addition, I find limited evidence that the process of resource-partitioning is being played out again within the microbrewery segment of the industry. Implications for the evolution of organizational heterogeneity within industries are discussed.

This paper illustrates the usefulness of game theory for strategic management through theoretical and empirical analysis of price competition in the presence of production backlogs. Game-theoretic analysis predicts a different relationship between relative prices and backlog levels than does analysis that ignores the sorts of interactive considerations emphasized by game theory. Empirical analysis based on data for the U.S. market for large turbine generators between 1951 and 1963 corroborates the game-theoretic prediction. The paper concludes with a discussion of the sorts of situations in which game-theoretic reasoning is particularly likely to prove useful.

In this study I develop and empirically test hypotheses delineating how a set of industry- and firm-level factors are differentially associated with postentry performance of de novo and acquisitive entrants. First, I conceptualize structural entry barriers as sunk costs or irrecoverable investments that entrants must make in the entered industry to be competitive vis-à-vis incumbents. I then argue that de novo and acquisitive entrants differ in three important ways: (1) incremental vs. up-front sunk cost investments in overcoming impediments to entry; (2) increasing productive capacity vs. changing ownership in the entered industry; and (3) low vs. high costs of integration when realizing synergies with parent firms. I use the Trinet, FTC-ALB, and Compustat data bases to construct a sample comprising de novo and acquisitive entries made during the period 1980–82. Next, I evaluate postentry survival and growth between 1982 and 1986. Overall, empirical tests provided partial support for the hypotheses, and the explained variance in my models ranged from 17 percent to 37 percent.

Working from the perspective of the resource-based view of strategy, this paper addresses whether academics, consultants, and other sources of general managerial prescriptions can affect firms' long-run rent streams. The answer is affirmative. To demonstrate this, I discuss the use of motivational techniques as a well-understood and common managerial choice that may affect a firm's chance of generating rents. This paper interprets extant empirical research on goal setting and discusses the conceptualization of temporal rent patterns. I build upon an empirical finding in goal-setting research to compare the temporal patterns of rents for managerial choices embedded in path-dependent vs. path-independent processes.