Knowledge that Transforms

When organizations make important changes, such as introducing products based on new technologies, they may gain strategic advantages but they also experience disruptions. We argue that these disruptions are especially strong when organizations introduce multiple products simultaneously, leading to a temporary increase in the hazard of organizational failure. To test this hypothesis, we study the effects of new product introduction on the survival of U.S. semiconductor manufacturers. We find that having a large number of products—especially innovative products—lowers organizational mortality rates, but that mortality rates increase because of the simultaneous introduction of multiple products. This hazard is substantial, amounting to an increase in the market exit rate of over 40% for the “average” case of simultaneous product innovation. These results are robust in models that control for a wide variety of other factors. Our findings call into question the idea that organizations can overcome disruptions from structural inertia by introducing multiple products simultaneously.

The ability to integrate dispersed pockets of expertise and institute an organizational repository of knowledge is considered to be vital for sustained effectiveness in contemporary business environments. Information technologies provide cost-effective functionalities for building knowledge platforms through systematic acquisition, storage, and dissemination of organizational knowledge. However, in order to gain the value-adding potential of organizational knowledge, it is not sufficient to simply adopt and deploy IT-enabled knowledge platforms. These platforms must be assimilated into the ongoing work processes in organizations. Yet, theories of technology innovation and use suggest that a variety of institutional, social, and political factors blend together in influencing the extent to which complex information technologies are actually assimilated into organizational practice. Therefore, this research addresses a significant question: What forces influence the assimilation of knowledge platforms in organization? Given the significant gap between the adoption and actual assimilation of complex technologies into organizations, this is an important question. Empirical evidence is generated by examining the forces influencing the assimilation of CASE technologies in systems development projects in organizations. CASE is considered to be one of the most mature knowledge platforms in contemporary organizations. The empirical evidence sheds light on the role of institutional forces that influence the rate of assimilation of the technology. The findings have significant implications for further research and practice.

Numerous researchers from various disciplines seem to agree that trust has a number of important benefits for organizations, although they have not necessarily come to agreement on how these benefits occur. In this article, we explore two fundamentally different models that describe how trust might have positive effects on attitudes, perceptions, behaviors, and performance outcomes within organizational settings. In the first section of the article, we examine the model that has dominated the literature: Trust results in direct (main) effects on a variety of outcomes. In the second section of the article we develop an alternative model: Trust facilitates or hinders (i.e., moderates) the effects of other determinants on attitudinal, perceptual, behavioral and performance outcomes via two distinct perceptual processes. Lastly, we discuss the conditions under which each of the models is most likely to be applicable. The theory is supplemented with a review of empirical studies spanning 40 years regarding the consequences of trust in organizational settings. The theoretical framework presented in this article provides insight into the processes through which trust affects organizational outcomes, provides guidance to researchers for more accurately assessing the impact of trust, provides a framework for better understanding past research on the consequences of trust, and suggests ways that organizational settings can be modified to capitalize on high levels of trust or mitigate the effects of low levels of trust.

Empirical research indicates that more than half of strategic alliances fail, and the outcomes of alliance failure can be devastating. Despite the increased concern about managing strategic alliances, the field still lacks a theoretical framework to describe the conditions and dynamics leading to the failure of strategic alliances. This paper attempts to distill, derive, and integrate theories across different disciplines into a unified framework that offers a better understanding of alliance failure. The conceptual framework focuses on two primary sources of alliance failure: interfirm rivalry and managerial complexity. We propose that strategic alliances fail because of the opportunistic hazards as each partner tries to maximize its own individual interests instead of collaborative interests. Also, strategic alliances fail because of the difficulties in coordinating two independent firms (i.e., coordination costs), and in aligning operations at the alliance level with parent firms’ long-term goals (i.e., agency costs). The paper extends the theoretical framework by looking into a process model of alliance development and failure.

This article reports partial results of an eight-year field study of the Top Management Teams (TMTs) of a global multidivisional financial services corporation and compares those results with large-sample work in the TMT literature. In particular, it investigates the operationalization of TMT cognitive diversity by the proxies of age, team tenure, industry experience, and functional background heterogeneity most often used in statistical work, and compares those operationalizations with cognitive diversity itself. In addition to highlighting which proxies seemed to most closely approximate cognitive diversity and why, it demonstrates the confounding impact of power on all operationalizations. A comparison of the field results with three representative studies with respect to the operationalization of the dependent variables of diversification, innovation, and performance helps to explain why previous TMT heterogeneity research has often produced inconsistent results or nonfindings. It offers some suggestions that should improve the robustness of statistical research and demonstrates the reciprocal usefulness of case and large-sample research.

The complexity of a firm's strategy affects both the ease with which the firm can replicate the strategy in a new setting and the ease with which rivals can imitate it. Simple strategies are as readily imitated as replicated, and highly intricate strategies resist imitation and replication equally. At moderate levels of complexity, however, a wedge develops between the ease of replication and the difficulty of imitation, so long as the replicator has better information than the imitator about the original success. An agent-based simulation model clarifies the structural reasons that this is so. The model also shows how the wedge-maximizing level of complexity varies with the replicator's informational edge over the imitator. The results help to pinpoint situations in which strategies requiring replication are likely to defy imitation and generate sustained competitive advantage. More generally, the analysis sheds light on the value of superior but imperfect information about good solutions to hard problems. Finally, the results suggest that a pattern long observed by organization scholars--that “loosely coupled organizations” are especially effective competitors--may arise for a very different reason than is normally posited.

This paper develops and tests a theory of the historical contingency of the risk of acquisition using data from the higher education publishing market from 1958–1990. Interviews and historical analyses are combined to identify two forms of capitalism—personal and market, and in particular to publishing, to identify the institutional logics identified with each form of capitalism (an editorial and a market logic). Hazard-rate models are used to test for differences in the effects of these two logics on the organization and market determinants of acquisition. Publishers with relational network forms of organization in production and distribution were at a higher risk of acquisition in the market period but not in the editorial period. Competition in the product market increased the risk of acquisition in the market period, but not the editorial period. The covariates explaining the risk of acquisition change as a consequence of the evolution of capitalism and as a result of a firm's strategic and structural conformity with the institutional logic of the prevailing form of capitalism.

This multi-method field study examines the relative effects of two kinds of leader behaviors—design choices and hands-on coaching—on the effectiveness of self-managing teams. Findings show that how leaders design their teams and the quality of their hands-on coaching both influence team self-management, the quality of member relationships, and member satisfaction, but only leaders' design activities affect team task performance. Moreover, design and coaching interact, so that well-designed teams are helped more by effective coaching—and undermined less by ineffective coaching—than are poorly designed teams.