William Hesterly

University of Utah | UOU

Research Summary This paper extends the relational view to offer a dynamic perspective on the factors that drive value creation and value capture over the alliance life cycle. We argue that access to complementary resources provides an initial rationale for forming alliances, but benefits from complementarity can attenuate over time. Indeed, viewed...

Extant research presents a conflicting picture of change dynamics during institutional discontinuities. Some studies propose or depict formal rules as changing first. Others argue that norms need to change before formal rules can be revisited, let alone change. An examination of the literature suggests a contingency theory. In mature organisational...

We examine how top management teams (TMTs) facilitate invention performance. We test our hypotheses with a sample of 185 biotech firms that issued initial public offerings (IPOs) between 1980 and 1997. We predict that the percentage of founders on TMT has an inverted U-shaped relationship with invention performance. Average intrafirm tenure will be...

We examine the role of institutional settings in determining rent appropriation by employees. Based on an inductive historical study of owner-player relations in Major League Baseball from the inception of professional baseball to the present, we show that both formal and informal institutional rules can dramatically influence rent appropriation. W...

At what level is new value created, or, put differently, what is the locus of knowledge? While knowledge and capabilities-based researchers argue that the locus of new value and knowledge lies at the firm level, we challenge this conceptualization and theoretically build toward more individualist foundations. We explicate the underlying philosophic...

We advance firm and network conditions that are favorable for the gestation of new spin-offs by entrepreneurial employees that exit the mother firm to constitute their own companies. This type of entrepreneurial activity has some unique characteristics. We suggest that spin-offs from certain parent firms have fundamental network benefits that incre...

The manner in which clusters emerge and evolve is important for public policy and corporate strategy. Understanding how and why clusters emerge and develop provides insights into agglomeration phenomena, innovation capacity, location advantages, and may influence local governments’ investments. Extant research has traced the origins of clusters to...

The factors propelling the competitiveness of industry clusters have been subject to extensive research. While these factors are reasonably understood, the conditions that lead to the emergence and evolution of clusters still warrant further examination. This chapter proposes that the emergence and development of at least some clusters are endogeno...

Major League Baseball is often seen as the epitome of constancy in American life and many even argue against change in this arena. This article argues that this view is actually outdated if not inaccurate. We examine patterns of innovation at both league and team levels of analysis, and conclude that innovation has been important to baseball from i...

This paper addresses whether cohesive networks of socially embedded ties or sparse networks rich in structural holes are more conducive to the success of new firms. We propose that the networks of emerging firms evolve in order to adapt to the firm's changing resource needs and resource challenges. As firms emerge, their networks consist primarily...

At what level is new value created, or, put differently, what is the locus of knowledge? While knowledge and capabilities-based researchers argue that the locus of new value and knowledge lies at the firm level, we challenge this conceptualization and theoretically build toward more individualist foundations. We explicate the underlying philosophic...

This paper examines the role of leadership structure and board composition in the context of poison pill adoptions. We distinguish, for the first time, independent, separated leadership structures from non-independent, separated leadership structures. Our results suggest that there is an important interaction effect between board composition and th...

Paradoxically, while knowledge-based employees (KBEs) serve as a central source of competitive advantage, they are also a threat to appropriate the rents generated by those advantages. Prior research argues that employeesí ability to appropriate rents is determined by their capability to engage in unified action, their access to information, and e...

This study examines make or buy decisions for 196 hospitals in the United States using transaction costs as the basis for analysis. We examine the potential effects of quality and economies of scale on these decisions. We find evidence to support the view that transaction costs, quality and economies of scale play an important role in the integrati...

This study examines the impact of uncertainty, as articulated in the transaction cost economics framework, and its interaction with asset specificity in determining make or buy decisions. Our analysis of a sample of over 2900 transactions supports the view that in the presence of specific assets increased uncertainty will induce firms to integrate...

A phenomenon of the last 20 years has been the rapid rise of the network form of governance. This governance form has received significant scholarly attention, but, to date, no comprehensive theory for it has been advanced, and no sufficiently detailed and theoretically consistent definition has appeared. Our objective in this article is to provide...

A phenomenon of the last 20 years has been the rapid rise of the network form of governance. This governance form has received significant scholarly attention, but, to date, no comprehensive theory for it has been advanced, and no sufficiently detailed and theoretically consistent definition has appeared. Our objective in this article is to provide...

A vast array of organizational innovations and changes are transforming US corporations. Large firms have dramatically downsized, refocused, and vertically disaggregated. They increasingly obtain goods and services, pursue complex development efforts, and exploit horizontal synergies without the aid of formal hierarchy. Large firms are also interna...

A vast array of organizational innovations and changes are transforming US corporations. This paper argues that these organizational innovations share an important underlying commonality: economic activity is converging towards exchange involving either internal (within-firm) or external (between- firm) networks of small, autonomous production or s...

In 1990, in the first issue of Organization Science, Paul Hirsch and his co-authors Ray Friedman and Mitchell Koza published a caveat to researchers about possible pitfalls of using economic models in behaviorally oriented strategy and policy research (Hirsch et al. 1990). “Crossroads” provides a context for a reply to this paper and Todd Zenger an...

Organizational economics (OE) is purported to offer a potential revolution in organization theory. This paper assesses the value of organizational economics for organization theorists. The conclusions are that OE is useful in extending theory building and empirical research in organization theory, but for OE to realize its full potential, it must d...