Knowledge that Transforms

abstractResearch on strategic decision making has considered advice‐seeking behaviour as an important top management team attribute that influences organizational outcomes. Yet, our understanding about how top management teams utilize advice to modify current strategies and pursue exploratory innovation is still unclear. To uncover the importance of advice seeking, we delineate between external and internal advice seeking and investigate their impact on exploratory innovation. We also argue that top management team heterogeneity moderates the impact of advice seeking on exploratory innovation. Findings indicated that both external and internal advice seeking are important determinants of a firm's exploratory innovation. In addition, we observed that top management team heterogeneity facilitates firms to act upon internal advice by combining different perspectives and developing new products and services. Interestingly, heterogeneous top management teams appeared to be less effective to leverage external advice and pursue exploratory innovation.

abstractThis study investigates how an incumbent company's internal characteristics influence its propensity to form learning alliances. A firm may be reluctant to enter a research alliance when it has deep knowledge in a certain technological field due to concerns about knowledge leakage and the low possibility of being able to learn much from collaboration. On the contrary, when the firm has a broad knowledge base, it may have high propensity to enter alliances due to more self‐confidence in its ability to learn fast from partners. In addition, we argue that when a firm concentrates its R&D at a central location, this neutralizes the positive and negative influences of the two knowledge base features on alliance formation. We tested and found support for the hypotheses using a database of 1550 alliances undertaken by 78 large incumbent pharmaceutical, chemical, and agro‐food companies active in the biotechnology sector during 1993–2002.

abstractThis article examines the affect of family management on performance of the company. We examine how familiness can provide further insights beyond the classical demographic measures of top management teams (TMTs) in explaining variations in firms' financial performance. We combine arguments on the ‘bright’ and ‘dark’ side of family involvement in the firm; we complement positive predictions on family involvement with negative predictions and develop family firm‐specific measures of TMTs' familiness. Results indicate that while the presence of a family CEO is beneficial for firm performance, the coexistence of ‘factions’ in family and non‐family managers within the TMT has the potential to create schisms among the subgroups and consequently hurt firm performance. We find support for a hypothesized U‐shaped relationship between the ratio of family members in the TMT and firm performance. Additional evidence related to interactions between firm listing and CEO type on firm performance is then presented and discussed.

abstractWe investigated the relationship between middle managers' transformational leadership and the performance of frontline employees who are two levels below the middle managers. We identified two pathways through which this cross‐level influence occurs and tested two moderators operating on these two pathways. The first pathway is a direct effect from middle managers to employees, bypassing the influence of employees' immediate supervisor (the bypass effect). We further hypothesized that the bypass effect is moderated by the employees' collectivistic value. The second pathway is a cascading of leadership behaviours from middle managers to first‐line supervisors, whose transformational leadership then enhances employees' performance (the cascading effect). We further hypothesized that this cascading effect is moderated by the supervisors' power distance value. These hypotheses were tested with a sample of 491 frontline employees, 98 frontline supervisors, and 30 middle managers in three organizations in China. The three‐level hierarchical linear modelling results supported the four hypotheses.

abstractWe discuss the assumptions that underlie path dependence, as defined by Vergne and Durand, and then provide the outlines of an alternative perspective which we label as path creation. Path creation entertains a notion of agency that is distributed and emergent through relational processes that constitute phenomena. Viewed from this perspective, ‘initial conditions’ are not given, ‘contingencies’ are emergent contexts for action, ‘self‐reinforcing mechanisms’ are strategically manipulated, and ‘lock‐in’ is but a temporary stabilization of paths in‐the‐making. We develop these points using a narrative approach and highlight the theoretical and methodological implications of our perspective.

abstractWe examine the relationship between HRM practices, conceptualized at the workplace level, and individual employee attitudes and behaviour. We focus on two possible explanations for the relationship: social exchange and job influence/employee discretion. Findings from a study of employees in North‐East England suggest that there is a positive impact of HRM practices on organizational citizenship behaviour, through an effect on perceived job influence/discretion. There was no such effect for perceived organizational support. These findings provide support for a job influence and opportunity explanation of HRM effects on employee attitudes and behaviour.

abstractIn many countries governments not only regulate business activities, but also become involved in the corporate governance of individual firms through ownership and board ties. While existing studies usually focus either on benefits of political connections or on costs of government influence, a political embeddedness perspective helps us consider both advantages and constraints associated with ties to the government. In particular, firms with direct ties to the government will experience significant costs associated with government officials' involvement in the corporate governance process. In contrast, firms with ties to state‐owned enterprises (SOEs) are connected to the government indirectly and thus, while getting access to state‐owned resources, avoid costs associated with the government's interventions. This study compares the performance consequences of board and ownership ties to the government with the consequences of board and ownership ties to SOEs. I find that ties to SOEs are associated with higher profitability, while no significant differences are discovered for firms with direct ties to the government.

abstractFirm ownership is an increasingly influential form of corporate governance. Although firms might be owned by different types of owners, most studies examine owner influence on a particular firm outcome in isolation. This study synthesizes research from multiple disciplines on different types of owners and offers a unifying framework of governance through ownership. Using this framework, we describe the motivations of various types of owners, the tactics owners use to affect firms in which they are invested, and the dominant firm outcomes these owners seek to influence. We note how heightened managerial awareness of heterogeneous owner interests increases owner influence on firm‐level outcomes. We also provide a roadmap for future study and offer research questions about where scholars might turn their attention to better understand the role of owners in directing firm actions. Our study draws attention to emerging forms of ownership, such as hedge funds and sovereign wealth funds, and highlights the changing (and often competing) interests of shareholders and how this impacts theories of governance.

abstractFrom the perspective of the vendors in emerging countries (VECs), this article investigates how the vendor firms in China respond to cross‐border outsourcing trends differently by examining the different effects of entrepreneurial orientation (EO) and market orientation (MO), as well as their interaction, on local vendors' acquisition of knowledge from foreign outsourcers in cross‐border outsourcing. We find that the knowledge acquisition of the vendors positively affects firm performance. Thus, the vendors need to correctly choose their strategic orientation to improve the knowledge acquisitions. Our results show the EO of the vendors has a positive effect on the knowledge acquisition, but the relationship between MO and the knowledge acquisition is an inverted U‐shape. Further, the interactive effect between EO and MO on the knowledge acquisition is positive. All these findings extend the literature in organizational learning and cross‐border outsourcing, and suggest that VECs should not only correctly choose their strategic orientation, but also pay more attention to the orientation interaction in acquiring knowledge from their partners through cross‐border outsourcing so that they can more efficiently improve their performance.

abstractWe examine the relationships among three family firm specific sources of top management team (TMT) diversity (the generation in charge of the family firm, the number of family employees, and the number of employed generations) and family firm performance. By integrating upper‐echelons and team process research, we hypothesize that these TMT diversity sources interact with information exchange frequency among TMT members to affect family firm performance. Multisource survey data with lagged performance measurement, including CEOs and TMT members from 86 family firms, support our hypotheses. We discuss the implications of our findings and develop avenues for future research.