Knowledge that Transforms

Research Summary Firms asserting their patents globally face a dilemma: a legal verdict is binding only in the country of litigation, and yet litigating country by country is prohibitively expensive. Thus, firms have to be strategic in deciding where to sue. In this paper, we argue that global patent litigation is not only about winning a case, but also about making a case, that is, leveraging litigation in one country to shape expectations on litigation outcomes elsewhere. Our analyses on patent litigation in 50 countries over 13 years show that firms tend to concentrate litigation in few countries when the relevant markets historically share similar litigation outcomes, so litigation in one country can effectively inform the litigants of future trajectories, reducing the need for repetitive litigation across countries. Managerial Summary While legal enforcement of intellectual property (IP) rights remains national, the battleground for IP has become increasingly global, especially for firms competing across countries. In this paper, we argue that the location choice for global patent litigation depends not only on country characteristics, such as market size and competition intensity, but also on the relationships across countries, that is, how similar or different the IP regimes are. When the relevant countries historically share similar litigation outcomes, firms can use litigation in one country to influence the expectations of litigants and potential infringers in other markets, which reduces the need for repetitive litigation. Thus, examining the global landscape of patent litigation as a whole can provide insight beyond the sum of IP strategies in individual countries.

Research Summary This study introduces category interaction codes—knowledge regarding the expected interactions around entities in a given category—as a critical dimension of category strategy. Through historical analysis of Wang Laboratories in the early computer industry, we demonstrate how these codes shape strategic categorization and competitive dynamics. We show that firms can exploit ambiguous interaction codes to access advantageous decision makers and organizational routines, circumventing entrenched competitors. Further, firms can institutionalize preferred interaction codes through product design, reshaping category prototypes and market dynamics. However, overcommitment to specific interaction codes creates competitive vulnerabilities when market conditions shift. By developing an “inhabited” view of categories that emphasizes socially embedded practices, this study reveals how market categories are enacted through interactions and offers new insights into category‐based competition. Managerial Summary This study introduces category interaction codes —expectations about where, when, how and by whom products are evaluated, used, and purchased within a market. Using the case of Wang Laboratories in the early computer industry, we show that companies can gain a competitive advantage by leveraging and reconfiguring category interaction codes . For example, Wang Laboratories sidestepped direct competition with IBM by categorizing its products for engineers and department managers rather than MIS executives, and outperformed IBM in word processing by innovating how actors interact with the new category. For managers, the key insight is that success depends not only on product features but also on how your product fits into the daily decisions, roles, and behaviors that define a category.

Research Summary Scholars have long investigated the possible benefits of corporate social responsibility (CSR). One of the most influential of these studies tests and supports the hypothesis that CSR increases access to finance. Yet, I show here that the finding is unsound because the report's empirical method limits what can be inferred from its analysis. I rectify a key weakness and replicate the study. I observe a cross‐sectional association but find no evidence that CSR increases access to finance. My analysis suggests new directions for research on the effect of CSR. Managerial Summary Numerous articles have explored the possible benefits of CSR. A highly influential study claims that CSR improves a corporation's ability to access capital, and this finding has been widely used by scholars, fund managers, and policymakers. Unfortunately, the finding is unsound because the study's research method used predicted values of access to capital rather than direct measures. A rectification and extension of the original analysis fails to uncover evidence that firm‐level changes in CSR are associated with access to capital.

Research Summary Research on inter‐firm cooperation often focuses on long‐term strategic alliances while overlooking the distinct form of arm's‐length resource exchanges. Our study addresses this gap using the National Basketball Association (NBA) data for precise resource exchange measurements. Contrary to strategic alliances, where competitive pressure fosters cooperation, we find that competitive pressure reduces cooperation in arm's‐length exchanges. However, relational capital helps to facilitate resource exchanges. We also found that while resource bundling exacerbates the negative effect of competitive pressure, it amplifies the positive effect of relational capital. Interestingly, relational rivalry intensifies the impact of competitive pressure but does not diminish the effect of relational capital. These insights have important implications for the coopetition and the Strategic Factor Markets (SFM) literature. Managerial Summary In competitive environments, organizations may cooperate to reduce competition, often through long‐term strategic alliances. However, our research reveals different behaviors in arm's‐length resource exchanges. Analyzing NBA player transaction data, we found that competition generally discourages resource exchanges due to opportunism concerns, particularly when multiple resources are involved. Interestingly, organizations are more likely to engage in arm's‐length exchanges when key members have prior cooperative histories, especially in complex scenarios. Historical rivalries also heighten the competitive impact on resource exchanges but do not significantly diminish the benefits of prior cooperation. This study offers valuable insights for managers, helping them navigate resource exchange dynamics among competitors and make more informed strategic decisions.

Research Summary New labels with symbolic value may constitute a strategic resource for firms in established market categories, but these labels must also provide audiences with classificatory utility. We explore this tension and develop a process explanation of how firms in established market categories appropriate new labels under audience scrutiny. Analyzing eleven years (2011–2022) of earnings calls transcripts of eight leading Information Technology services firms, we theorize around their interest in appropriating the label ‘digital.’ We find that such appropriation is shaped by category work – forged in the tension between contrary impulses of the firm and the audience, and enacted through their claims, probes, and claim calibrations. We also highlight the symbolic appropriation dilemma and the unintended consequences of label appropriation for incumbents in established market categories. Managerial Summary Incumbent firms in established market categories may strive to satisfy their stakeholders' demands for demonstration of both continuity and novelty by developing symbolic management strategies. In doing so, these incumbents may come to view novel category labels as valuable resources for symbolic action. However, the incumbent's pursuit of symbolic action in an established market category is often constrained by the conservative scrutiny of securities analysts. Our study of the global Information Technology services industry reveals the mechanisms of claim calibration deployed by executives to evade or blunt analyst scrutiny while appropriating the digital label. Our study also alerts leading incumbent firms to a dilemma of symbolic management that compels them to confront the trade‐off between symbolic appropriability and symbolic flexibility.

Research Summary Research on competitor identification has primarily focused on intra‐industry competition. However, cross‐industry competitive threats are prevalent and consequential. We adopt a consumer‐oriented perspective to examine how consumer perceptions shape de facto competition across industry boundaries. Drawing from social cognition theories, we introduce two mechanisms—cultural embeddedness and social salience—that lead consumers to perceive products in an emerging industry as viable substitutes for those in an established industry, thereby intensifying competitive pressures on established firms. We further hypothesize that the impact of these mechanisms varies across heterogeneous customer groups, specifically with respect to income, education, and immigration status. Event history analyses of Illinois movie theater failures during television's rise in 1944–1962 support our theorizing. Managerial Summary Identifying competitors can be a complex managerial task. While it often suffices to monitor only within‐industry competitors, unexpected cross‐industry rivals selling seemingly different products can create competitive blind spots. To identify cross‐industry competitive threats, we propose a demand‐based view to complement managerial perceptions: Do your customers view your offerings as interchangeable with emerging products? We find that when an emerging industry's products embody cultural elements borrowed from the established industry's offerings or resonate better with public discourse, customers are likely to perceive substitutability and switch to the emerging products. However, this tendency varies among customers with different profiles, making it essential to recognize which customer segments are more vulnerable when facing cross‐industry competition.

Research Summary This article advances the understanding of alliance instability by integrating organizational stigma and signaling theories to explain unplanned alliance dissolution after potentially stigmatizing adverse events. We highlight the media as a key intermediary influencing whether partners stick together or break apart. We also argue that firm status and external corporate governance serve as signals that key stakeholders interpret differently, that is, amplifying media vilification but mitigating the event's impact on partners' decision to dissolve the alliance. Using a sample of US passenger airlines from 1985 to 2016, our findings support the view that it takes more than a stigmatizing event to disrupt an alliance. By establishing boundaries for stigmatization effects and contextualizing firm‐specific signals, we offer a nuanced explanation of the mechanisms driving alliance instability. Managerial Summary Firms inevitably face adverse events, from uncontrollable accidents to errors, resulting in severe consequences such as diminished valuation and damaged reputation. In such situations, executives of the firm affected by an adverse event must decide whether to rely on their alliance partners to stick with their firm or prepare for the eventuality that partners will run away. To address this question, we conducted a 31‐year study of 40 publicly traded US airline companies. Our findings underscore the impact of negative media coverage on unplanned alliance dissolution, surpassing the influence of event characteristics; they draw the attention of affected firms’ executives to the dual implications of their firms’ status and external corporate governance – a double‐edged sword that requires careful consideration.

Research Summary Rankings often create tiered status hierarchies—for example, top, middle, and lower status tiers—of the ranked organizations. We study how an organization's position within a tier, particularly near tier boundaries, influences its competitive behavior. We propose a tier‐aspiration effect , where those at the top of a lower tier pursue more and riskier competitive actions to advance to the higher tier, and a tier‐maintenance effect , where those at the bottom a tier engage in more and riskier competitive actions to maintain their position when there is a greater threat from competitors at the top of the neighboring lower tier. Empirical analyses of Korean business groups' rankings and acquisitions between 2001 and 2018 support these predictions, revealing how positional differences shape competitive actions within tiered status hierarchies. Managerial Summary Rankings often group organizations into tiers—like top, middle, and lower tiers—but not all companies within a tier behave the same. We analyze acquisitions of Korean business groups ranked in an asset‐based ranking and find that firms near the top or bottom of a tier act more competitively than those in the middle. More specifically, those at the top of a lower tier tend to engage in greater and more unrelated acquisitions to move up to a higher tier. Meanwhile, those just above a tier cut‐off engage in greater and more unrelated acquisitions to retain their tier position, especially if they face strong competition from below. These insights can help managers better understand how rankings drive competitive behavior, beyond economic motivations.

Research Summary Mimetic products like fake wood and fake meat pose a dilemma for producers. On the one hand, their core value lies in faithfully replicating a “real” referent. On the other hand, they must differentiate themselves. I explore this tension through a qualitative historical investigation of the first electronic musical organs: The Orgatron was a low‐cost close imitation of the pipe organ, whereas the Hammond was a lesser imitation that attempted to augment the pipe organ. Ironically, the Orgatron's superior imitation limited its success, whereas Hammond's lesser imitation enabled it to identify and develop new markets. My study suggests that the best product‐imitation strategy may not be faithful mimicry, but rather rapid augmentation. More generally, it contributes to the literatures on imitative products, positioning, and authenticity. Managerial Summary Mimetic products like fake wood and fake meat pose a dilemma for producers. On the one hand, their core value lies in faithfully replicating “the real thing.” On the other hand, they must differentiate themselves. I explore this tension through a historical investigation of the first electronic musical organs. One pioneer, the Orgatron was a pure imitation of the pipe organ, whereas the other, Hammond, was a lesser imitation that attempted to augment it. Ironically, the Orgatron's superior imitation limited its ultimate success, whereas Hammond's lesser imitation enabled it to identify and develop new markets. My study suggests that the best product‐imitation strategy may not be faithful mimicry, but rather rapid augmentation. More generally, it contributes to our understanding of imitation, positioning, and market exploration.

Research Summary We develop an ex ante measure of commercial potential of science, an otherwise unobservable variable driving the performance of innovation‐intensive firms. To do so, we rely on large language models and neural networks to predict whether scientific articles will influence firms' use of science. Incorporating time‐varying models and the quantification of uncertainty, the measure is validated through both traditional methods and out‐of‐sample exercises, leveraging a major university's technology transfer data. To illustrate the methodological contributions of our measure, we apply it to examining the impact of university reputation and university privatization of science, finding that firms' reliance on reputation may lead to foregone opportunities, and privatization (i.e., patenting) appears to increase firms' use of the science of one university. We make our measure and method available to researchers. Managerial Summary Using machine learning, we develop a measure that estimates the probability that a scientific discovery will contribute to a commercially valuable innovation. This work addresses a key challenge: the inability to observe what scientific discoveries are worth pushing forward into commercial application. We illustrate the usefulness of this measure with two examples: 1.) firms’ use of research from prestigious universities over equally promising work from less prominent ones; and 2.) how patenting affects the diffusion of commercially relevant science across firms. For practitioners, this measure can inform R&D, licensing, and other innovation related decisions by guiding firms’ search for commercially relevant scientific research. The measure and the associated code are publicly available.