Nicolai J. Foss

Nicolai J. Foss
Università commerciale Luigi Bocconi | Bocconi · Department of Management and Technology

PhD

About

392
Publications
291,900
Reads
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28,125
Citations
Introduction
Nicolai Foss is a Professor of Organization Theory at Bocconi University. His main research interests lie in the intersection of organizational and strategic theory, as well as in the entrepreneurship and methodology fields. Foss' research has been published in the leading management journals (except ASQ ;-)). He is a member of the Academia Europaea. His GS citations are approx 23,000.

Publications

Publications (392)
Article
The strategic management and international business fields have followed, in some respects, quite similar intellectual trajectories, as reflected in the push for a field of “global strategy.” However, a key distinction in the strategy literature—namely, Williamson's distinction between “strategizing” and “economizing”—has not been explicitly recogn...
Article
Policymakers, commentators, and academics have called for a Great Reset, a deepseated overhaul of the organization of the global economy. Some suggest that management theory needs a reset of its own. We argue that Great Reset proponents fail to appreciate the power of markets to bring about desirable social outcomes and are overly sanguine about wh...
Chapter
Academics, pundits, and policymakers have recently called for a stronger governmental role in the economy to tackle social issues such as inequality and grand challenges like global warming. Despite a general recognition among economists and management scholars that government efforts to guide and control innovation or subsidize private entrepreneu...
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Research on business model innovation (BMI) processes is blossoming and expanding in many directions. Hence, the time is ripe to summarize and systematize this body of knowledge for the benefit of current and future BMI scholars. In this article, we take stock of the current literature to clarify the concept of a BMI process, develop a categorizati...
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The purpose of this article is to reinvigorate research in the intersection of corporate strategy and the theory of the firm in light of the rapid advancement of digital technologies. Using the theory of the firm as an interpretive lens, we focus our analysis on the implications of the emerging digital age for three broad domains of corporate strat...
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Henry Mintzberg’s celebrated critique of the “design school” argued that strategy is best thought of as adaptive, bottom-up, and based on dispersed knowledge and learning. Yet Mintzberg’s account lacks a clear and comprehensive theoretical underpinning, especially regarding how to guide emergent strategy in dynamic environments, and leverage it to...
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What is now called the judgment-based approach to entrepreneurship (JBA) has a rich pedigree in Austrian economics and continues to grow rapidly in that tradition as well as in various research fields in business and management. The JBA has also attracted some criticisms. Frédéric Sautet’s recent review essay is an example. Sautet’s main concern is...
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Our understanding of the link between women managers and firm-level innovation remains incomplete. Building on recent research on gender and leadership styles, we argue that there is a positive association between women managers and firm innovation. We highlight the selection process of women managers as an important underlying mechanism and discus...
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We study what determines delegation of authority over innovation decisions in firms. Extant research that addresses this topic in an open innovation context, suggests that firms that engage in open innovation tend to delegate authority over innovation decisions. We provide a more nuanced argument that considers important contingencies. Thus, we arg...
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Digital transformation is fundamentally changing the business landscape. It is also affecting the roles of top managers within firms. Our survey of more than 160 senior managers in Europe suggests that digitalization, rather than encouraging more decentralized forms of management, will lead to an expanded role for headquarters and further empowerme...
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Online communities have emerged as important organizational forms, but there are many gaps in our understanding. In particular, researchers have mainly focused on individual-level drivers of behaviors in communities, while downplaying (formal, informal) context at various levels. We theorize that different dimensions of context (i.e. omnibus and di...
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Research identifies different modes of ambidexterity (sequential, contextual and structural ambidexterity) that, however, are implicitly seen as mutually exclusive. Accordingly, the copresence of structural and contextual ambidexterity modes—here called “blended ambidexterity”—has been given little attention, although it may be characteristic of (s...
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Research summary Research has examined how “economizing” and “strategizing” mechanisms interact in driving competitive outcomes, but the role of coalitions in this process has received little attention. Coalitions are formed to create more value (i.e., economizing) and to strengthen competitive positions (i.e., strategizing). Based on a formal coal...
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Research summary Ownership is fundamental to firm strategy, organization, and governance. Standard ownership concepts—mainly derived from agency and incomplete contracting theories—focus on its incentive effects. However, these concepts and theories neglect ownership's role as an instrument to match judgment about resource use and governance with t...
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Entrepreneurship has emerged as a major research theme across a number of disciplines and fields, including the industrial dynamics tradition. Entrepreneurship is often seen as closely linked to firms and firm formation. However, the links between economic organization and entrepreneurship are unclear. Do entrepreneurs always need firms to realize...
Article
The introduction of mobile devices (e.g., smartphones and tablets), to the workplace has had many positive effects. While research also indicates that mobile devices may lead to the misallocation and depletion of attention, the negative effects, particularly on interactions in organizations, remain less well understood. We draw on micro-sociology t...
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Full-text available
Online communities have emerged as important organizational forms, but there are many gaps in our understanding. In particular, researchers have mainly focused on individual-level drivers of behaviors in communities, while downplaying (formal, informal) context at various levels. We theorize that different dimensions of context (i.e., omnibus and d...
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Full-text available
While considerable research interest has been devoted to university governance (i.e., the allocation of authority over decisions in a university), little is known about the formation and content of university strategy and how it relates to university governance and organization. To further our knowledge about university strategy and its relation to...
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Using data from the European Value Survey, covering more than 300,000 respondents in 32 countries between 2002 and 2012, we offer new insight into the consequences for subjective well-being of self-employment. We hypothesize that the positive link between entrepreneurship and well-being is influenced by the extent to which the decision to engage in...
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The corporate headquarters (CHQ) is an important part of the organization of large firms; yet, it is neglected in organization design theory. In this brief essay, I argue that we need a better understanding of the CHQ to further our understanding of the link between the top-management team and the rest of the organization, and to improve our unders...
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We used the dynamic capabilities approach to study environmental sustainability and development in the fashion industry. To achieve green transformation, companies need to develop effective dynamic capabilities, which entails changing their current organizational design by realigning their activities, partnerships, and routines with the changed ext...
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Elert and Henrekson (2019) draw important connections between Austrian economics and the Schumpeterian literatures on “development blocs” and “the experimentally organized economy.” We appreciate their emphasis on experimentation and think that Austrian ideas on the time structure of production and the multiple specificities of capital offer comple...
Book
Cambridge Core - Strategic Management - Microfoundations - by Nicolai J. Foss
Book
Cambridge Core - Strategic Management - Austrian Perspectives on Entrepreneurship, Strategy, and Organization - by Nicolai J. Foss
Article
Microfoundations have become an important theme in recent macro-management research. However, the international management (IM) field is an exception to this. We document the lack of attention on microfoundations in IM research by focusing on knowledge sharing – a key IM research field – which we investigate by means of a keyword-based literature s...
Chapter
Social identity has entered the discourse of social scientists, pundits, and politicians to an extent that no one could have anticipated only about a decade ago. Thus, recent electoral events have strongly pointed to the importance of identity.
Article
Research Summary The global strategy literature highlights the role of headquarters (HQ) in realizing global integration benefits while enabling independent subsidiary strategic initiatives. We construct a game‐theoretic model of the interaction between HQ and subsidiaries, and, building on procedural justice theory, we analyze the motivational cos...
Chapter
The authors argue that organization design needs to play a more active role in the explanation of differential performance and outline a set of ideas for achieving this both in theoretical and empirical research. Firms are heterogeneous in terms of (1) how well they do things, capturing persistent productivity differences, and (2) how they do thing...
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The economics and management literatures pay increasing attention to the technological, competitive, and institutional environment for entrepreneurship. However, less is known about how context influences the judgment of entrepreneurs. Focusing on the emerging judgment‐based approach to entrepreneurship, we argue that economics can say much about h...
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The past decade has witnessed a surge of research interest in social entrepreneurship (SE). This has resulted in important insights concerning the role of SE in fostering inclusive growth and institutional change. However, the rapid growth of SE research, the emerging nature of the literature, and the fact that SE builds on different disciplines an...
Chapter
We argue that the stakeholder and CSR literature can benefit from more systematic thinking about ownership. We discuss general notions of ownership in the economics and legal literature and the entrepreneurial notion of ownership we have developed in prior work. On this basis, we argue that stakeholder theory needs to deal more systematically with...
Article
How well do managers know the capabilities of the firms they manage? Such knowledge, which we refer to as managerial meta-knowledge, has not been systematically addressed in the management and governance literature—which is problematic, as managerial meta-knowledge influences governance choice. In fact, transaction cost economics, the dominant theo...
Article
Organizational goals are central in management theory, yet our understanding of their antecedents, formation and dynamics, and consequences contains many gaps, in particular concerning the microfoundations of how goals are formed and changed and through which they may affect individual and organizational performance. We distill a number of key them...
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Much research suggests that entrepreneurial opportunities in established firms result from bottom-up initiative in a diverse workforce, senior management's main role in the entrepreneurial process is to select among opportunities generated in the bottom-up process, and it should refrain from directly getting involved in this process. We develop an...
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We reassess the concept of the hypothetical monopolist as a device for relevant market definition. The hypothetical monopolist test (also known as the Small but Significant Non-transitory Increase in Price test) is a clever, intuitive way of thinking the relevant market in antitrust, and is gaining ground in strategic management. The test, however,...
Article
A central construct in competitive strategy research is market power, the ability to raise price above marginal cost. Positioning research focuses on attempts to build, protect, and exercise market power. However, this approach contains hidden assumptions about transaction costs. Parties made worse off by the exercise of market power can negotiate,...
Article
The use of external knowledge for innovation (i.e., inbound or outside-in open innovation) has received substantial attention in the innovation literature. However, the “human side” of open innovation is still poorly understood. We consider the role of employee characteristics with respect to predicting firm-level openness. Drawing on the human cap...
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While research on business models and business model innovation continue to exhibit growth, the field is still, even after more than two decades of research, characterized by a striking lack of cumulative theorizing and an opportunistic borrowing of more or less related ideas from neighbouring fields in the place of cumulative theory. We argue that...
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This chapter argues that new venture team (NVT) processes are relatively ill-understood in the entrepreneurship literature, and describes various theoretical and empirical research avenues that may be pursued in order to improve our understanding of these processes. It then focuses on the widely established input-processes-outcome (IPO) framework....
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The paper argues that organizational capabilities are comprised of two fundamental components: resources and activities. The starting point of the argument is that resources are best conceptualized by Barney’s (1991) and others’ research on the resource-based view, while activities are best conceptualized by Porter’s (1985) writings on the activity...
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Team identity has received little research attention even though an increasing number of firms are moving to team-based organizations and there is evidence that teams form identities. We explore the extent to which team identity can be institutionalized as a central organizing principle of team-based firms. We argue that managerial and stakeholder...
Chapter
and Keywords Agency theory studies the impact of and remedies to asymmetrically distributed information in principal-agent relations. Yet, it does so in a surprisingly binary manner: It assumes the principal to be perfectly knowledgeable of some pieces of information (such as the agent's risk aversion), while others (such as the agent's true effort...
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We briefly summarize the contributions of Oliver Hart and Bengt Holmstrom, two key founders of modern contract theory, and describe their significance for the analysis of organizations and institutions. We then discuss the foundations of modern contract theory and review some criticisms related to modeling strategy, assumptions about knowledge and...
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Over the last 15 years, business model innovation (BMI) has gained an increasing amount of attention in management research and among practitioners. The emerging BMI literature addresses an important phenomenon but lacks theoretical underpinning, and empirical inquiry is not cumulative. Thus, a concerted research effort seems warranted. Accordingly...
Article
A commonly held view is that strategic organization theories progress as a result of a Popperian process of bold conjectures and systematic refutations. However, our field also witnesses vibrant debates or disputes about the specific assumptions that our theories rely on, and although these debates are often decoupled from the results of empirical...
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A letter to the editor is presented in response to commentary by Fabrice Lumineau and Alain Verbeke published in the issue on the authors' article "Moving Opportunism to the Back Seat: Bounded Rationality, Costly Conflict, and Hierarchical Forms" in volume 41 of the periodical.
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We review the literature that links institutions, entrepreneurship, and economic growth outcomes, focusing in particular on empirical research. Most of the literature has an economics orientation, but we also review relevant literature from other social science and from management research. The review helps identify a number of conceptual, theoreti...
Article
Having a large network of colleagues means having several opportunities to help those colleagues, as well as a higher chance of receiving requests for help from them. Employ- ees with large networks are therefore expected to help more in the workplace than those with small networks. However, large networks are also associated with cognitive costs,...
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ABSTRACT I briefly take stock on the microfoundations project which has become influential in macro-management research over the past decade or so. While the project has now moved into distinct theory-building, it still need to engage in serious empirical research. I discuss a number of challenges and solutions associated with the empirical side of...
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Research summary: We study the association between firms' entrepreneurial outcomes and their gender composition. Though highly topical, there is little solid empirical knowledge of this issue, which calls for an inductive approach. We match a paired-respondent questionnaire survey with population-wide employer-employee data, and find evidence that...
Article
A cooperative organizational climate is often argued to promote knowledge-sharing behaviors among employees. However, research indicates that managerial interventions aimed at shaping the organizational climate can be difficult to execute. We develop and test a contingency model of intrinsic motivation and job autonomy as moderators of this relatio...
Chapter
This article briefly surveys the relations between key Austrian economics themes such as the market process aspects of competition, the subjectivity of economic value, methodological individualism, resource heterogeneity, distributed knowledge, the time-structure of production and the entrepreneur, and modern strategy thinking. Parallels can be fou...
Chapter
The economic analysis of property rights was pioneered in the 1960s, and has had some impact on strategic management theory over the last decade. These ideas redefine resources as endogenous outcomes of transaction cost economizing, link transaction costs and value creation and capture, and highlight the role of contracting in competitive strategy.
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Ronald H. Coase was one of the most innovative and provocative economists of the twentieth century. Besides his best known papers on ‘The Nature of the Firm’ and ‘The Problem of Social Cost’, he had a major role in the development of the field of law and economics, and made numerous influential contributions to topics including public utilities, re...
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Managers delegate the right to make decisions to employees because delegation economizes on scarce managerial attention, fosters the use of local knowledge, and positively impacts employee motivation. This is particularly important in knowledge-intensive organizations that operate in uncertain environments, where employees have specialized knowledg...
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Firms need to invest their scarce resources into the most promising new business opportunities (e.g., new engineering technologies). Yet, the literature on strategic entrepreneurship pays little attention to how, and how thoroughly, firms appraise potential opportunities based on technical as well as managerial criteria. Given that such evaluation...
Article
How can a firm develop new ideas and turn them into profitable innovations on a sustained basis? We address this fundamental issue in a novel way by developing an integrative framework of absorptive capacity (AC) and inbound open innovation that is rooted in the attention-based view of the firm. We specifically address why a balance between open an...
Article
Innovation in family firms is often driven by family assets, valuable resources that are particularly prevalent in family firms. For example, they have particularly strong networks that can be deployed in an innovation context. These family assets can over time atrophy and stifle rather than stimulate innovation performance. However, family firms c...
Article
Research summaryBuilding on the problem-solving perspective, we study behaviors related to projects and the communication-based antecedents of such behaviors in the free open source software (FOSS) community. We examine two kinds of problem/project-behaviors: Individuals can set up projects around the formulation of new problems or join existing pr...
Article
Physical separation is pervasive in organizations, and has powerful effects on employee motivation and organizational behaviors. However, research shows that workplace separation is characterized by a va- riety of tradeoffs, tensions, and challenges that lead to both positive and negative outcomes. We develop new theory on the nature, antecedents,...
Chapter
This chapter focuses on the process of knowledge creation in firms from an organizational economics perspective. The coordination and incentive problems that processes of creating, sharing, and exploiting knowledge inside firms may give rise to are discussed and how various aspects of governance may be understood as a response to such problems are...
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The attention-based view (ABV) of the firm highlights the role of decision makers' attention in firm behavior. The ABV vastly improves our understanding of decision makers' focus of attention; how that focus is situated in an organization's procedural and communication channels; and how the distribution of the focus of attention among decision make...
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We study a model of adverse selection, hard and soft information, and mentalizing ability—the human capacity to represent others' intentions, knowledge, and beliefs. By allowing for a continuous range of different information types, as well as for different means of acquiring information, we develop a model that captures how principals differential...
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Puranam and Håkonsson (2015) challenge us to ponder what we as organization design theorists make of Valve’s way (see also Jeppesen, 2008). We believe that Valve, in spite of its radical vision, does not represent a challenge to fundamental organization design theory and that it is questionable to what extent it represents a new blueprint for organ...
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This study picks up on earlier suggestions that control theory may further the study of strategy. Strategy can be formally interpreted as an idealized path optimizing heterogeneous resource deployment to produce maximum financial gain. Using standard matrix methods to describe the firm Hamiltonian, it is possible to formalize useful notions of a bu...
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Over the last three decades entrepreneurship has become a hot topic in economics and management. Much of the entrepreneurship research literature has built upon insights of economists such as Schumpeter, Knight, and Kirzner, each of whom has inspired a distinct strand of entrepreneurship theory and application. Schumpeterian innovation and Kirzneri...
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Microfoundations have received increased attention in strategy and organization theory over the past decade. In this paper, we take stock of the microfoundations movement, its origins and history, and disparate forms. We briefly touch on similar micro movements in disciplines such as economics and sociology. However, our particular focus is on the...
Article
The panel symposium turns spotlight on the corporate headquarters (CHQ), which is the contemporary corporation’s central organizational unit. Knowledge about the CHQ is critical to understand the “functioning” and governance of modern organizations. The starting point of the symposium is a comprehensive review of the existing knowledge about the co...
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Research on open innovation suggests that companies benefit differentially from adopting open innovation strategies; however, it is unclear why this is so. One possible explanation is that companies' business models are not attuned to open strategies. Accordingly, we propose a contingency model of open business models by systematically linking open...
Article
The strategic HRM literature suggests that HRM influences employees in combinations of practices that “fit” each other rather than as stand-alone practices; however, it pays little attention to the underlying individual-level mechanisms. In contrast, the HRM literature on knowledge sharing examines the influence of single practices on individual-le...
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Extant research offers conflicting predictions about the effect of pay dispersion on team performance. We collected a unique dataset from the Italian soccer league to study the effect of intra-firm pay dispersion on team performance, under different definitions of what constitutes a "team". This peculiarity of our dataset can explain the conflictin...
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Managerial Meta-Knowledge, Uncertainty, and Adaptation: Governance Choice when Firms do not Know their Capabilities Much research on economic organization (e.g., transaction cost economics) is based on an assumption that firms accurately know their own capabilities. In terms of what managers know about the resources of the firm (including employee...
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An influential body of literature in macro-management research (notably, organization theory and strategic management) associates pro-social motivation solely with firm-like organizations, suggesting that such motivation cannot thrive under more market-like arrangements. We question this argument on theoretical, as well as empirical, grounds. As...
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The Industrial Revolution brought the decline of small-scale, cottage production and the rise of large, integrated businesses; Adam Smith's invisible hand was replaced with what business historian Alfred D. Chandler Jr., called the "visible hand" of management. But now that pendulum appears to be swinging the other way - to a system of loose networ...