Article

Beyond Local Search: Boundary-Spanning, Exploration, and Impact in the Optical Disk Industry

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

Recognition of the firm's tendency toward local search has given rise to concepts celebrating exploration that overcomes this tendency. To move beyond local search requires that exploration span some boundary, be it organizational or technological. While several studies have encouraged boundary-spanning exploration, few have considered both types of boundaries systematically. In doing so, we create a typology of exploration behaviors: local exploration spans neither boundary, external boundary-spanning exploration spans the firm boundary only, internal boundary-spanning exploration spans the technological boundary only, and radical exploration spans both boundaries. Using this typology, we analyze the impact of knowledge generated by these different types of exploration on subsequent technological evolution.In our study of patenting activity in optical disk technology, we find that exploration that does not span organizational boundaries consistently generates lower impact on subsequent technological evolution. In addition, we find that the impact of exploration on subsequent technological evolution within the optical disk domain is highest when the exploration spans organizational boundaries but not technological boundaries. At the same time, we find that the impact of exploration on subsequent technological development beyond the optical disk domain is greatest when exploration spans both organizational and technological boundaries. Copyright © 2001 John Wiley & Sons, Ltd.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Exploration by R&D employees refers to their efforts to explore domainstechnologies, disciplines, or industriesbeyond what they already know. Although exploration has often been studied as a firmlevel innovation strategy that is typically accomplished through acquisitions or alliances (Benner and Tushman, 2003;Lavie et al., 2010;Rosenkopf and Nerkar, 2001;Turner et al., 2012;Vagnani, 2015;Jiang et al., 2010), an increasing number of studies have focused on exploration by individuals (Arts and Fleming, 2018;Conti et al., 2014;Rosing and Zacher, 2017;Schilling and Green, 2011). These studies recognize that individuals are an important locus of a firm's knowledge creation activities (Felin and Hesterly, 2007;Foss, 2011). ...
... 2 DOIC is a form of boundary spanning within an organization (e.g., Tortoriello et al., 2011), but we label it differently to distinguish it from other forms of boundary spanning (e.g., inter-organizational) that are more commonly studied. Boundary spanning has been used mostly to refer to learning and collaboration activities across firm boundaries, such as communities of practice (Brown and Duguid, 1991), open collaboration (Laursen and Salter, 2014), between a firm and its environment (Dollinger, 1984), customers (Singh et al., 1994), unions (Friedman and Podolny, 1992), and other organizations (Rosenkopf and Nerkar, 2001). Boundary spanning has also been referred to as searching for and acquiring information across knowledge domain boundaries (Fleming and Waguespack, 2007). ...
... Relatedly, this study contributes to the research on boundary spanning. Boundary spanning has been used in reference to seeking knowledge across knowledge boundaries, across firms (Rosenkopf and Nerkar, 2001), and across intra-organizational boundaries (Tortoriello and Krackhardt, 2010). We advance this literature by examining the interactions of two types of boundary spanning: boundary spanning across knowledge domains (i.e., exploration) and across intra-organizational boundaries (i.e., DOIC). ...
Article
Drawing upon the notion of boundaryless organizations and upon the information processing perspective of organizational design, we investigate the decompartmentalization of internal communication as a unique organizational context that moderates the relationship between R&D employees’ exploration behaviors and their individual inventive performance. We test our hypotheses using a novel combination of survey and archival data. We find that R&D employees who explore more generate inventions that are more valuable only when in workplaces characterized by high communication decompartmentalization. Such workplaces have more frequent communication between R&D and other units, more employee mobility via cross-unit project rotations, or greater managerial support for decompartmentalization. Our findings suggest the importance of communication decompartmentalization, especially for companies that need employees to engage in exploration.
... Finally, cross-border search refers to the actions of firms to acquire heterogeneous resources from external subjects across their organizational boundaries [20,21]. Earlier studies have proved that CBS can often have an expanding effect on the performance results of corporate behavior because it helps to get rid of the conceptual limitations of local exploration [22]. From the perspective of the KBV, a CBS may help expand the knowledge spillover effect brought about by DT, thereby expanding the impact on the information recipients' (agricultural enterprise managers) awareness of environmental protection. ...
... Second, the relationship between DT and EPC may be affected by the company's CBS capabilities. Early research has proved that CBS can enable companies to maintain information advantages when absorbing and using externally diverse knowledge, which helps to get rid of the conceptual limitations of local exploration, and thus has an expanding effect on the performance results of corporate behaviors [22]. From the perspective of KBV, a CBS may help expand the knowledge spillover effect brought about by DT, thereby expanding the impact on the cognition of information recipients. ...
... No enterprise has all the resources and capabilities it needs, so the CBS is a key factor for enterprises to acquire knowledge from the external environment to uphold a sustainable competitive advantage [41]. Early research has proved that CBS has a significant association with behavioral results [22]. Simultaneously, CBS has also been proved to be related to DT and has a significant positive effect on the successful construction of knowledge [42]. ...
Article
Full-text available
The increase in the world's population and the significant changes in climate have put huge pressure on agricultural production land. Digital technologies have the potential to help improve this problem, however, there is currently a lack of commensurate attention from both academia and business. From the perspective of a knowledge-based view, this study establishes a theoretical framework to examine the influence of digital transformation on pro-land behavior, the mediating role of environmental protection cognition, and the moderating role of cross-border search. To test the theoretical model, the authors conduct empirical assessments based on survey data from a large number of Chinese agricultural companies. The results show that (1) digital transformation positively enhances enterprises' pro-land behavior; (2) environmental protection cognition partially mediates the positive relationship between digital transformation and pro-land behavior; (3) cross-border search positively moderates the relationship between digital transformation and environmental protection cognition; (4) cross-border search positively moderates the mediating role of environmental protection cognition in the relationship between digital transformation and pro-land behavior. The research expands the theoretical application of digital transformation and knowledge-based view in the field of land protection, and creatively constructs measurement indicators of related variables, which can provide decision-making references for related academic research and policymaking.
... These alliances are usually described as agreements among the organizations. Solid establishment of alliances enhances the possible advantages that firms can get from KBAs Rosenkopf & Nerkar, 2001). In KBA formation, Meier (2011) has studied how knowledge-based determinants and identity-based drivers undertake individual paths. ...
... This search for external knowledge is especially vital for knowledge intensive industries; for example, resource-constrained biotechnology companies seek to form alliances with external organizations to gain access to a larger amount of knowledge, resources and skills that can provide them with the bases for firm innovation Maurer & Ebers, 2006;Oliver, 2001). KBAs have been accepted as being especially analytical in dynamic and emerging industries, where very few firms would own the required internal knowledge to manage improbabilities with regards to the high rates of technology development (Rosenkopf & Nerkar, 2001;Subramanian et al., 2018). Existing studies also investigated the importance of formally cooperating with developing technological sectors, as previous studies had assumed the knowledge base of firms for the development of KBAs (Preacher et al., 2010;Subramanian et al., 2018). ...
... According to Doz et al. (2000), the nature of the trigger will affect the content and direction of technological search. For example, in the case of a radical technological shift in the industry, a firm will likely invest in acquiring specific knowledge relevant to the new technology (Rosenkopf & Nerkar, 2001). ...
Book
Full-text available
This monograph investigates the involvement of firms in strategic alliances and the interplay with organizational absorptive capacity and organizational ambidexterity. The theoretical work highlights the positive aspects, as well as the negative aspects, for firms engaging in strategic alliances. The main contribution relates to the evaluation of both positive and negative outcomes of various types of strategic alliances. This monograph presents different avenues for firms regarding how to benefit from strategic alliances in terms of innovation, while avoiding threats such as unintended knowledge spillovers.
... The search was performed with the keywords of boundary-spanning search, ambidextrous learning, and sustainable development. First, with regard to research on the definition of boundaryspanning search, it was found that Rosenkopf and Nerkar [14] were the first to introduce boundary-spanning search into the field of strategic management, and defined boundaryspanning search as the process of acquiring external heterogeneous knowledge across organizational and technological boundaries in a complex and dynamic environment for firms. Since then, scholars have conducted more and more studies on boundaryspanning search with different understandings of boundary-spanning search, and there is not yet a unified understanding of the definition and connotation of boundary-spanning search. ...
... Existing studies mainly define its concept and connotation from three perspectives: knowledge distance perspective, resource base perspective, and organizational learning perspective; the main views are shown in Table 1. [14] Boundary-spanning search is derived from remote search, as opposed to local search, which is a search for new knowledge that is far away from the enterprise and in a different field. ...
... Boundary-spanning search originates from the theory of organizational search, which refers to the process of repositioning and reorganizing various types of knowledge and creating new knowledge in an organization [13]. Rosenkopf and Nerkar [14], who focused on the process of acquiring heterogeneous knowledge across organizational and technological boundaries by enterprises in a complex and dynamic environment, proposed the concept of boundary-spanning search, and defined it as an external search activity conducted by enterprises across organizational boundaries and knowledge bases based on the knowledge distance perspective. Subsequently, many scholars have defined the boundaries of boundary-spanning search from organizational and knowledge perspectives, where organizational boundaries mainly include corporate boundaries [14] and industrial boundaries [5], while knowledge boundaries include cognitive boundaries [27], geographical boundaries [28], and temporal boundaries [29]; in addition to the above unidimensional boundary definition, Choi [17] and Flor [30] focus on the combination of organizational and knowledge boundaries and the combination between different knowledge boundaries to define the boundary of boundary-spanning search in a multidimensional combination. ...
Article
Full-text available
Boundary-spanning search and ambidextrous learning are the key means for organizations to absorb and internalize external heterogeneous knowledge and play an important role in the sustainable development of enterprises. From the perspective of organizational learning and value co-creation, this paper constructs a theoretical model of the impact of boundary-spanning search on sustainable development performance and conducts multiple regression analysis and a bootstrap test based on the sample data of Chinese start-up technology enterprises. The results show that the following: (1) boundary-spanning search contributes to the sustainable development performance of technology start-ups; (2) the role of ambidextrous learning as a partial mediator between boundary-spanning search and the sustainable development performance of technology start-ups; (3) value co-creation positively regulates the relationship between boundary-spanning search and exploratory learning, while the regulation effect between boundary-spanning search and exploitative learning is not significant; (4) value co-creation strengthens the intermediary role of exploratory learning between boundary-spanning search and the sustainable development performance of start-up technology enterprises. The findings help reveal the mechanisms by which boundary-spanning search affects the sustainable development performance of technology start-ups and their boundary conditions.
... Sluggish functions present a barrier to endurance that inspires organizations to explore novel learning outside their skill areas ( Cyert and March, 1992 ). This challenge to boost new technologies encourages organizations to adjust and react to the changing environment ( Levinthal and March, 1993 ). Rosenkopf and Nerkar (2001) demonstrate that this ongoing flourishing exploitation creates opportunities for further exploration in the coming periods, which leads to innovative outputs and new technologies. Belderbos et al. (2010) , and Rosenkopf and Nerkar (2001) argue that explorative innovation that crosses technological and organizational barriers significantly improves sequential technological improvement. ...
... Rosenkopf and Nerkar (2001) demonstrate that this ongoing flourishing exploitation creates opportunities for further exploration in the coming periods, which leads to innovative outputs and new technologies. Belderbos et al. (2010) , and Rosenkopf and Nerkar (2001) argue that explorative innovation that crosses technological and organizational barriers significantly improves sequential technological improvement. In fact, the revenues from exploration need time to reach a level of achievement, but once success is accomplished, it generates innovative experience and technologies that allow the organization to shift to better adapt to the variable environment ( Rosenkopf and Nerkar, 2001 ). ...
... Belderbos et al. (2010) , and Rosenkopf and Nerkar (2001) argue that explorative innovation that crosses technological and organizational barriers significantly improves sequential technological improvement. In fact, the revenues from exploration need time to reach a level of achievement, but once success is accomplished, it generates innovative experience and technologies that allow the organization to shift to better adapt to the variable environment ( Rosenkopf and Nerkar, 2001 ). Zhou and Wu (2010) find that exploration improves innovative technologies that will be exploited as a kind of profit from stocks and operating methods. ...
Article
Full-text available
The purpose of this paper is to study the evolution of corporate investors’ exploitation-exploration allocations and their long-term performance outcomes. The sample consists of 243 North American firms pursuing corporate venture capital (CVC) investments from 1993 to 2017. The results show that dynamic sequential ambidexterity promotes higher firm performance than balanced or simultaneous forms of ambidexterity. Alternating pursuit of exploitation and exploration characterized by a regular frequency of change over time enhances corporate investors’ financial performance. The results suggest that CVC firms develop additional expertise in pursuing both exploitation and exploration activities over time which helps to enhance their performance. The findings also show that in times of crisis, the combined use of both exploration and exploitation in CVC investments enables firms to enhance their financial performance. The results are robust to alternative measures of financial performance and to endogeneity concerns. This paper provides insights to policymakers and managers of firms that are investing in CVC activities.
... A technical knowledge search refers to the behavior of enterprises by crossing their organizational boundaries to search for and obtain knowledge related to product design, technology, and processes from outside [69,70]. Technical knowledge mainly comes from universities, scientific research institutions, suppliers, and other external enterprises. ...
... Through formal search activities, companies can quickly acquire the knowledge they need and build inter-organizational trust to foster sustainable innovation [98]. An informal search is more conducive to the transfer of tacit knowledge, and the cost is lower [69,99]. In addition, new ventures applying this driving path also emphasize the importance of organizational learning and strategic flexibility in terms of capabilities. ...
Article
Full-text available
With the external environment becoming increasingly complex and changeable, how we can effectively enhance the innovation of companies in sustainability has become the focus of research. For startups, due to their lack of resources and poor independent innovation capabilities, they need to search for external knowledge from outside to meet their own needs. Therefore, obtaining external knowledge sources and adopting appropriate methods for knowledge search is the key to affecting innovation in sustainability. Moreover, enterprise capability is also an important factor restricting sustainable innovation. In this paper, we construct an integrated framework of resources and capabilities based on theoretical learning and practice between 2018 and 2021, containing technical knowledge, market knowledge, a formal search, an informal search, organizational learning, and strategic flexibility. Taking 450 new ventures in China as the research sample, we adopt the fsQCA method and derive the path driving the sustainable innovation of new ventures. The results show that resources and enterprise capabilities combine to influence sustainable innovation, and there are two configuration paths driving the sustainable innovation of new ventures. In the first pathway, a technical knowledge search, a market knowledge search, organizational learning and strategic flexibility are the core conditions; in the second pathway, a formal search, an informal search, organizational learning, and strategic flexibility are the core conditions.
... Bruck et al. (2016) found that the development of technologies in the technological field with a high centrality index had been attributed to the interaction (i.e., recombination) among technologies from the various technological fields. Hence, creating new knowledge through the recombination of existing knowledge (Fleming & Sorenson, 2001;Granstrand, 1998;Granstrand & Oskarsson, 1994;Kodama, 1992;Kogut & Zander, 1992;Rosenkopf & Nerkar, 2001) is more likely to be stimulated for firms with both high technology portfolio centrality and a large spectrum of the available technological knowledge base; this will improve innovation efficiency through technological diversification (Granstrand, 1998;Huang & Chen, 2010). Third, firms conducting R&D in high centrality technological fields are more likely to face larger potential knowledge spillover pools caused by active knowledge flows and high technological demands (Dechezleprêtre et al., 2014;Jaffe, 1986Jaffe, , 1989. ...
... 12 The more technologically related a technology portfolio is, the more synergetic effect, such as the economies of scope in R&D, is expected. Firms with technologically related or complementary technology portfolios can better utilize the knowledge stock of similar technological nature (Ahuja & Katila, 2001;Matusik & Fitza, 2012;Rosenkopf & Nerkar, 2001) and are more likely to enjoy the cross-fertilization effect for problem-solving and internal knowledge spillovers across a firm's R&D projects (Besanko et al., 2012;Cohen & Levinthal, 1990;Granstrand, 1998;Granstrand & Oskarsson, 1994;Leten et al., 2007;Miller, 2006). Furthermore, closely related and diversified technology portfolios accelerate the knowledge recombination to create novel knowledge (Argyres, 1996;Leten et al., 2007). ...
Article
Full-text available
This study aims to examine the differential effect of technological diversification on research and development (R&D) productivity based on the qualitative properties of technology portfolios (i.e., the direction of technological diversification). Using the U.S. patent database from 1980 to 2010, we divided overall technological diversification into related and unrelated technological diversification; furthermore, the two potential moderating factors of technology portfolio centrality and R&D consistency were tested across the different types of technological diversification. The notable findings are as follows: First, technology portfolio centrality has a positive moderating effect that is more pronounced as the degree of technological diversification increases. Second, R&D consistency has a positive and linear moderating effect. Third, the positive (negative) effect of technological diversification is more pronounced under related (unrelated) technological diversification. Consequently, firms can better utilize the R&D-productivity-enhancing effect of technological diversification by considering both the current degree of technological diversification and the properties of their technology portfolios.
... This shift is possible because we introduce the construct of root concepts with the recombinatory approach. Previous research focuses on combinatory patterns between elements and highlights the benefits of (and challenges in) connecting dots remotely located in knowledge fields [82]. By contrast, the construct of root concepts led us to shift our focus to differences between various elements to be recombined with root concepts, not the distance between such elements and root concepts. ...
... The literature often attributes the difficulty of finding novel recombination patterns to creators' limited cognitive capacity and the resulting local search [82,85]. Cognitive costs cause them to limit their search in, for instance, the neighborhood of familiar ideas or experiences. ...
Article
Full-text available
This study proposes the notion of “root concepts” in cultural production, defined as a novel style and mode that a creator expresses at the initial field development phase, and that has a great influence on subsequent creators. We explore the role of root concepts in cultural evolution by focusing on their capacity to generate new combinations with other elements and examine how creators use root concepts jointly with other elements. Using data on artists and albums in the rap genre from the online database Allmusic, we view music moods as a type of experience that music generates and focus on music moods as a phenotype in studying styles and modes. We constructed a dataset of recombinatory patterns in the subsequent cultural production and identified two types of root concepts: implosive concepts, which artists use jointly with similar elements; and explosive concepts, which artists use in conjunction with highly diversified elements. Implosive concepts are exclusive because they require creators to have network contagions with those familiar with the root concepts and have strong and specific socio-economic identities. Previous research has suggested that finding a new combination is challenging owing to creators’ limited cognitive capacities and the resulting local search. Our finding presents an alternative explanation: some root concepts (i.e., implosive ones) possess innate characteristics that limit creators from experimentally integrating diversified elements. This study develops new opportunities for future research on the evolutionary growth of cultural production and knowledge fields.
... Introduced in the corporate behaviour literature in the 1970s and 1980s, the term "cross-boundary" mainly refers to activities spanning corporate boundaries (Kinnie & Swart, 2020). Rosenkopf and Nerkar, professors from the University of Columbia, later proposed the same concept in strategic management and argued that this way of thinking promotes new ideas and breaks through the innovation dilemma to search for new knowledge and resources across enterprises' organizational and technological boundaries (Dziallas & Blind, 2019;Rosenkopf & Nerkar, 2001). More firms try to innovate in response to the accelerating global economic integration processes and the continuously intensifying competition in the market. ...
... Some scholars have also described the influencing factors and mechanism of cross-boundary innovation from a qualitative perspective (Pershina et al., 2019;Ungureanu et al., 2020). In their strategic research, Rosenkopf and Nerkar (2001) explored cross-boundary activities, explained the crossboundary knowledge flow among organizational knowledge sharing processes, and argued that cross-boundary knowledge flow facilitates the construction of collaborative innovation models that break through disciplines, regions, organizations, and other limits. Amara and Landry (2005) and Nieto and Santamaría (2007) emphasized that a single enterprise cannot easily achieve breakthrough innovation and argued that cross-boundary innovation can help firms effectively cope with competition in a complex and uncertain environment. ...
Article
Full-text available
This study attempts to identify and evaluate the key elements associated with triggering and facilitating the cross‐boundary innovation of manufacturing enterprises. For this purpose, we used discourse analysis to construct a research framework of cross‐boundary innovation risks based on the in‐depth interview and semi‐structured questionnaire responses of the senior executives of 15 manufacturing enterprises in the central provinces of China. Results identify five main categories of cross‐boundary innovation risks, namely, cross‐boundary characteristics, cross‐boundary innovation process, subject intention, subject capability, and subject relationships. These categories are further refined into subcategories to theorize their interconnections, which guide the researchers in formulating strategies for reducing risks from cross‐boundary innovation. This study also proposes some strategies for controlling cross‐boundary innovation risks based on the case study findings and proposes an interesting viewpoint that adds to its theoretical and managerial implications. Specifically, this study identifies risk identification as the foundation of risk control and management for cross‐boundary innovation. The outcomes of this research not only introduce opportunities for future researchers to examine our propositions based on grounded theory but may also help practitioners in identifying the critical elements of cross‐boundary innovation.
... In this innovation process, search acts as a way for firms to scan through the varieties of knowledge that are held by these sources in order to identify and act upon different types of opportunities (McKelvey, 2016). While acknowledging the crucial role regarding how organizations search (Gavetti and Levinthal, 2000;Lopez-Vega et al., 2016), in this article our main focus is on where organizations search, by way of organizational boundary-spanning (Rosenkopf and Nerkar, 2001;Katila and Ahuja, 2002;Laursen and Salter, 2006), i.e., search directed at the external (and/or internal) knowledge sources they draw upon. The innovation management literature has widely studied the sources, processes and outcomes of research, development, and innovation in industry, particularly in the context of large firms and manufacturing industries (Levin et al., 1987;Klevorick et al., 1995;Cohen et al., 2002;Laursen and Salter, 2006;Criscuolo et al., 2018). ...
... Particularly relevant issues are how such search may enable KIE firms to bridge (or close) cognitive distances between themselves and other knowledge providers-including innovation intermediaries (Lopez-Vega et al., 2016)-to internalize new scientific or technological knowledge (cf. Rosenkopf and Nerkar, 2001). ...
Article
Full-text available
Although knowledge-intensive entrepreneurial firms experiencing high growth and generating innovations are widely acknowledged as important for economic growth, surprisingly little is known about how such firms achieve and maintain a high level of knowledge intensity through which to innovate. Our article further develops the concept of knowledge intensity by proposing that it is augmented by external and internal search activities carried out by the entrepreneurial firm and analyzes how these activities affect innovation performance. We use principal component analysis to derive formal and informal search channels from summated rating scales—measuring reliance on internal and external sources of knowledge—and then use fractional logit regression to explore how these channels relate to a firm’s innovative performance, i.e., the share of innovative goods and services sold. We find that searching via informal channels, and formal channels toward scientific and technological knowledge, improves innovation performance of both goods and services, while searching via formal channels toward market knowledge positively affects only innovative goods. Overall, informal channels matter more than formal channels. Lastly, we find substitution rather than complementarity effects between external and internal search channels in their effect on innovation performance in both goods and services. Thus, we interpret that building up knowledge intensity per se through search matters more for innovation performance than whether search is internally or externally focused. Our work contributes to the growing literature on knowledge-intensive entrepreneurship, to the related literature on new technology-based firms and young innovative firms, and to the general understanding of knowledge intensity at the firm level.
... One of the most representative organizational activities that can reveal the extent to which a firm keeps pace with its environment is the selection of the knowledge inputs that a firm relies upon to create new inventions, and in particular the recency of the inputs (Wuyts & Dutta, 2014). Although prior studies have demonstrated mixed views and evidence concerning the effect of the recency of the knowledge used to develop new inventions on innovation output (Capaldo et al., 2017;Heeley & Jacobson, 2008), one can argue that the empirical evidence in general suggests that the recency of the knowledge inputs is a positive predictor of innovation performance rather than a negative (Ahuja & Katila, 2004;Joshi & Nerkar, 2011;Rosenkopf & Nerkar, 2001). ...
... More specifically, we accounted for Firm Size, computed as the log of the number of employees (Argyres & Silverman, 2004;Katila, 2002;Lahiri & Narayanan, 2013), R&D Expenditure, measured as the log of R&D Expenditure (Ahuja & Morris Lampert, 2001;Katila, 2002;Rothaermel & Alexandre, 2009), and Firm Profitability, calculated as the log of operating profit (Ahuja & Morris Lampert, 2001;Yayavaram & Ahuja, 2008). Additionally, we controlled for Knowledge Stock, measured as the log of the number of patents a firm had applied for in the previous 5 years (Hoetker & Agarwal, 2007;Petruzzelli et al., 2012;Quintana-García & Benavides-Velasco, 2008;Rosenkopf & Nerkar, 2001), Number of IPCs, computed as the average number of the distinct international patent classes (based on the first four alphanumeric symbols) per patent (Fleming, 2001;George et al., 2008;Petruzzelli et al., 2018;Sorenson & Fleming, 2004), and Designated States, calculated as the log of the average number of states the patent has designated as territories in which to take effect (Harhoff & Reitzig, 2004). Moreover, since DII constructs its patent data based on the full patent family and not on single patents (i.e., all the patents that are related to the same invention are incorporated in one patent family), we controlled for Patent Family Size, computed as the average number of patents of each patent family, to eliminate the positive bias introduced by counting the same invention multiple times (Gittelman & Kogut, 2003;Lettl et al., 2009). ...
Article
Full-text available
The timely disengagement of a firm from its old technological achievements and the update of its core technological competencies are important issues for both management scholars and practitioners. However, a firm is naturally reluctant to abandon or replace technologies created internally and on which a large amount of resources has been spent and with which the firm is to a large extent familiar. Addressing the temporal dimension of knowledge inputs, this study develops two hypotheses that examine the effect of the recency of internal knowledge inputs on innovation performance and how this effect is moderated by internal focus. We test these hypotheses on longitudinal economic and patent data from a sample of 139 firms from the pharmaceuticals, biotechnology, and chemicals industries for a 7-year period, using fixed-effects negative binomial regression models. Findings support that the recency of internal knowledge inputs is a positive predictor of both innovation productivity and impact; however, when the recency interacts with internal focus, both the effects become negative.
... According to Nelson & Winter (1982), understanding how knowledge-seeking organizations help explain innovative behaviour is a perspective that has since been widely used in innovation discourse (Chiang & Hung, 2010). For example, Rosenkopf & Nerkar (2001) investigated how the local search for solutions, using current knowledge, opposes remote search or what Rosenkopf & Almeida (2003) call exploratory learning. Katila & Ahuja (2002) focused on search depth (how deeply existing knowledge is used) and search scope (how extensively new knowledge is explored), while Greve (2003) investigated complex searches caused by low performance and negligent search caused by excess resources. ...
Chapter
Full-text available
Digitalisation and sustainability are by far the two most dominant megatrends in the latest decades. The business implications of these two areas and the relationship between the two trends are popular research topics among both academics and practitioners. Each company has its own ability to adapt and respond to changing environmental challenges and it is an unfortunate fact that some of them are not always able to implement the latest technologies to their practices. Small- and medium-sized enterprises are particularly vulnerable in this respect, for whom digitalisation in particular is not just a competitive advantage but an unavoidable imperative of development, without which their survival may be at stake. Based on the opinions of 112 Hungarian small- and medium-sized company owners and top managers, this paper aims to explore the relationship between digitalisation and corporate sustainability in the SME environment, in order to identify the most appropriate development strategies to meet the needs of such businesses. The results showed that respondents have a realistic view of the impact of digitalisation on the sustainability dimensions and that they see the benefits of digital transformation mainly in terms of positive economic impacts.
... Firms active within a strict technology domain are likely to achieve short-term success within their own area of expertise. In contrast, firms active in different technology domains might explore newer domains and gain success in the long-term (Rosenkopf and Nerkar, 2001). In the SP context, firms are more likely to collaborate with each other through a wider range of activities (Vásquez-Urriago et al., 2016). ...
Article
Full-text available
Technology development is increasingly important for creating efficient and sustainable economies. Policy-makers have encouraged the co-location of technology-based firms that could lead to innovation benefits. One of the innovation policies are science parks, area developments where technology-based firms, universities and research institutes co-locate. Science parks enable firms to focus on their core activities. However, the trade-off that technology-based firms make regarding the science park location choice and the impact of organisational characteristics on these trade-offs is unknown. To collect tenant preference data, an exploratory survey with a stated choice experiment is distributed among technology-based firms both on and off science parks in the Netherlands. This approach allows for the estimation of the utilities that firms assign to design-related attributes and their willingness to pay for these attributes. Results show that science park tenants prefer locations with universities within the same area, shared business support and leisure facilities and near station locations relatively more than off-park counterparts do. Tenant firms are most eager to pay for the proximity of the university followed by provided R&D facilities, accessibility of the location, provided shared facilities, technological focus of the area and lastly events held in the area.
... According to Nelson & Winter (1982), understanding how knowledge-seeking organizations help explain innovative behaviour is a perspective that has since been widely used in innovation discourse (Chiang & Hung, 2010). For example, Rosenkopf & Nerkar (2001) investigated how the local search for solutions, using current knowledge, opposes remote search or what Rosenkopf & Almeida (2003) call exploratory learning. Katila & Ahuja (2002) focused on search depth (how deeply existing knowledge is used) and search scope (how extensively new knowledge is explored), while Greve (2003) investigated complex searches caused by low performance and negligent search caused by excess resources. ...
Chapter
Full-text available
Industry 4.0 has penetrated through production and manufacturing industry into trade and services in the last couple of years. At another dimension it was first introduced in capital-strong large companies and infiltrated down to small- and medium-sized companies throughout the years. By now the use of Industry 4.0 is inevitable while the introduction and deployment is still capital intensive. The present research investigates the barriers and possibilities of Industry 4.0 among SMEs in Hungary and reveals the areas where the familiarity and satisfaction with I4.0 are different. The research uses quantitative analyses and concludes that despite the fact that SMEs needs to acquaint more with Industry 4.0 and be trained more, the different sectors apply I4.0 elements where it is the most applicable, ‘middle-aged’ SMEs (between 6 and 11) need more support while medium-sized ‘aged’ SMEs are the most prepared for Industry 4.0. The research reveals that cloud computing is the most used followed by IoT, and the areas in which these elements are deployed are Business and Administration, Logistics and Customer Relationship Management.
... Our findings confirm that strong intra-cluster ties can be detrimental for ambidexterity and, through which, firm performance. Instead, the results demonstrate, to develop ambidexterity it is important for cluster SMEs to overcome the tendency of over-exploitation and engage in search beyond the boundaries of their cluster (Rosenkopf and Nerkar 2001). Post-analysis interviews revealed that our conclusions resonate with managers' own views about the importance of pursuing exploration. ...
... The objective of this policy instrument is achieved when a SME increases its awareness and becomes able to articulate the knowledge it needs, if any. For example, a SME may become more aware of the internal or external competencies it needs in order to organise an R&D project, or achieve a better understanding of a particular technology and of how it could apply it (Rosenkopf and Nerkar, 2001). A SME may also increase its propensity to network with external organisations and, by learning how to better use its resources and capabilities to innovate, improve its innovation performance (by improving its existing production processes, products or services, or even by producing brand new products and implementing new processes or strategies) (Klerkx and Leuuwis, 2009;Shapira and Youtie, 2016). ...
Article
While innovation policy mixes combining several policy instruments have been advocated as a response to complex problems, there is very little evidence of their effectiveness compared to that of individual instruments. By considering a set of Italian regional policy programmes implemented in 2011–2014, we analysed a policy mix composed of: (i) technology and innovation advisory services, the aim of which is to help small and medium enterprises (SMEs) to gain a better awareness of their innovation needs and of how to address them; and (ii) innovation vouchers, which are used to subsidise SME purchases of knowledge-intensive services. To draw causal inferences on their differential effectiveness, we adopted a propensity-score-matching approach extended to multiple treatment levels. We found that advisory services are more effective than innovation vouchers and as effective as policy mixes in increasing SME propensity to innovate and engage in R&D collaborations. Conversely, policy mixes are more effective than each individual instrument in increasing productivity. Hence, merely providing SMEs with technology and innovation advice is not sufficient to elicit productivity improvements; SMEs also need to act on such advice by working with external providers of knowledge-intensive services in order to implement efficiency-producing changes.
... Team freshness could increase a team's knowledge stock (Kane et al., 2005), enhance team learning, and thus facilitate the generation of new ideas (Farh et al., 2010). Expanding the scope and space of searching and reconfiguration of diverse resources from distant sources is important for team performance and innovation (Rosenkopf & Almeida, 2003;Rosenkopf & Nerkar, 2001;Smith & Todd, 2005). Fresh members who bring new and diverse ideas, skills, and opinions could broaden the "search space" of teams, and stimulate teams to consider new ideas, adopt new practices, and improve innovation (van de Water, Ahaus, & Rozier, 2008). ...
Preprint
Full-text available
Incorporating fresh members in teams is considered a pathway to team creativity. However, whether freshness improves team performance or not remains unclear, as well as the optimal involvement of fresh members for team performance. This study uses a group of authors on the byline of a publication as a proxy for a scientific team. We extend an indicator, i.e., team freshness, to measure the extent to which a scientific team incorporates new members, by calculating the fraction of new collaboration relations established within the team. Based on more than 43 million scientific publications covering more than a half-century of research from Microsoft Academic Graph, this study provides a holistic picture of the current development of team freshness by outlining the temporal evolution of freshness, and its disciplinary distribution. Subsequently, using a multivariable regression approach, we examine the association between team freshness and papers'short-term and long-term citations.The major findings are as follows: (1)team freshness in scientific teams has been increasing in the past half-century; (2)there exists an inverted-U-shaped association between team freshness and papers' citations in all the disciplines and in different periods;(3)the inverted-U-shaped relationship between team freshness and papers' citations is only found in small teams, while, in large teams, team freshness is significantly positively related to papers' citations.
... Some recent studies show an increasingly difficult for firms to create and exploit technological capabilities on their own and becomes increasingly common for firms and organizations to acquire and use external sources of knowledge and technology. Indeed, Rosenkopf and Nerkar (2001) affirm that "to move beyond local search requires that exploration span some boundary". ...
Article
Full-text available
We propose an examination of the current literature on innovation, taking into account, specifically, the concept of knowledge diversity and knowledge recombination. We analyze bibliometric data using the software VOSviewer and we derive indications on the principle analyzed research fields, where they come from and in what directions they are going.
... According to Nelson & Winter (1982), understanding how knowledge-seeking organizations help explain innovative behaviour is a perspective that has since been widely used in innovation discourse (Chiang & Hung, 2010). For example, Rosenkopf & Nerkar (2001) investigated how the local search for solutions, using current knowledge, opposes remote search or what Rosenkopf & Almeida (2003) call exploratory learning. Katila & Ahuja (2002) focused on search depth (how deeply existing knowledge is used) and search scope (how extensively new knowledge is explored), while Greve (2003) investigated complex searches caused by low performance and negligent search caused by excess resources. ...
Chapter
Full-text available
Digitalisation as the megatrend for industrial and business transformation influences SMEs to various extent. Depending on the sector and the size or even the age of SMEs digitalisation becomes beneficial or even means some limitations to further business development. The present research paper as part of the international project on the ‘Possibilities and barriers for Industry 4.0 implementation in SMEs in V4 countries and Serbia’ explores the attitude of Hungarian SMEs towards digitalisation and investigates what SMEs in Hungary consider as benefits and drawbacks of digitalisation. The results show that while Hungarian SMEs do not experience special pressure for digitalisation from the regulatory bodies and find that digitalisation helps them to operate in a cost-effective way, it also reveals that the advantages of social media and possible software usages are not exploited and limited human resource or finance hinder the digitalisation process.
... Incorporating psychological and organizational theories, Audia and Goncalo (2007) interpreted exploration and exploitation as two types of creative idea generation at the individual level. Individuals who follow an exploratory innovation strategy tend to break away from accepted modes of thought (Audia and Goncalo, 2007) and search for knowledge beyond established trajectories to overcome the limitations of internal searching (Fleming, 2001;Rosenkopf and Nerkar, 2001 ...
Article
Purpose Makerspaces, which serve as fertile grounds for makers' innovation activities, are rapidly increasing in emerging markets to help unleash a massive wave of bottom-up innovation and encourage broader participation in entrepreneurial activities. Makers' motivations to innovate are key antecedents of their subsequent innovative behavior. The paper aims to investigate the impact of makers' innovation motivations (both economic and social motivations) on their exploration and exploitation activities in makerspaces and the moderating role of the makerspace climate for innovation. Design/methodology/approach A survey was conducted for 139 individual makers from five makerspaces in China to test the research hypotheses. Findings Economic motivation positively affected the degree of exploitative innovation and was negatively related to the degree of exploratory innovation. In contrast, social motivation negatively affected the degree of exploitative innovation and was positively related to the degree of exploratory innovation. The makerspace climate for innovation strengthened the relationship between social motivation and exploratory innovation and exacerbated the negative effect of economic motivation on exploration. Practical implications The results offer managers a better understanding of how makers' motivation to participate in makerspaces affects their innovative behavior. Such information can guide makerspaces in designing their incentive policies and recruiting makers in line with their values to amplify makers' creative potential. Originality/value The empirical results reveal the impacts of economic and social motivations on makers' exploration and exploitation activities in makerspaces. They thus provide new insights into how different motivations give rise to different innovative behaviors and imply how makers' innovation activities can be managed effectively.
... The accumulation of technological knowledge increases the firm's ability to evaluate and use new technologies and skills in product innovation (Zahra and George, 2002). As a result, the firm can quickly identify new technological trends, experiment with emerging designs, and engage in product innovations beyond the current technological boundaries (Rosenkopf and Nerkar, 2001). Therefore, the accumulation of technological capabilities coincides with the process of explorative innovation (Zhou and Wu, 2010). ...
Article
This article was an attempt to brief a new model of absorptive capacity and develop the concept of absorptive capacity which is a critical factor in applying, accumulating and linking new external knowledge to innovation. Through a comprehensive review of literature on absorptive capacity, authors ended up with the idea that the stream of new external knowledge in the waterfall model continually fosters all abilities of absorptive capacity. In addition, following knowledge spillover in each stage, abilities perform their activities. Knowledge accumulation is also another capability, which in this process, plays the role of linking absorptive capacity and innovation.
... And while outside knowledge might help firms tackle problems that were solved elsewhere (Franke et al., 2014), or might be useful for generating new ideas that lead to innovation (Storz et al., 2015), knowledge does not always transfer across project or firm context (Groysberg et al., 2008) and can present hazards if it is uncritically applied (e.g., Huckman et al., 2006). These hazards are particularly salient when a project is focused on either exploitation-a primary focus on leveraging the firm's own prior experience (e.g., Benner & Tushman, 2003;Rosenkopf & Nerkar, 2001)-or imitation-a primary focus on replicating the successes of industry rivals (e.g., Semadeni & Anderson, 2010). For both exploitation and imitation, one could argue that the aim is to successfully execute an existing "recipe" rather than generate new ideas. ...
Article
Full-text available
According to the knowledge transfer literature, members of a project workgroup who share collaborative history possess a “shared understanding” thought to increase psychological safety and efficiency, thereby improving current project performance. But knowledge misfit can occur depending on where they have previously collaborated (internal or external to the focal firm) and the type of project currently pursued. We contend that misfit engenders “shared misunderstanding” where prior collaborators impose irrelevant knowledge onto a project, undermining performance. We extend research on knowledge transfer and human capital mobility by predicting that internal collaborative history helps exploitative projects but undermines imitative projects, while external collaborative history aids imitative projects but undercuts exploitative projects. We test these predictions in the context of the video game industry, with a sample of 1,000 video games released by 53 game publishers from 1996-2013, spanning 47,437 person-game observations, and find results largely consistent with our hypotheses.
... • Learning organizations [6,[25][26][27][28][29][30][31][32][33] in order to survive in constantly changing environment, modern organizations need to learn all the time. ...
... According to Nelson & Winter (1982), understanding how knowledge-seeking organizations help explain innovative behaviour is a perspective that has since been widely used in innovation discourse (Chiang & Hung, 2010). For example, Rosenkopf & Nerkar (2001) investigated how the local search for solutions, using current knowledge, opposes remote search or what Rosenkopf & Almeida (2003) call exploratory learning. Katila & Ahuja (2002) focused on search depth (how deeply existing knowledge is used) and search scope (how extensively new knowledge is explored), while Greve (2003) investigated complex searches caused by low performance and negligent search caused by excess resources. ...
Chapter
Full-text available
Industry 4.0 encompasses different processes, such as robotics, Internet of Things, big data, artificial intelligence, and others. Therefore, researching implementation of Industry 4.0 remains a difficult task. The study aimed at providing better insights into barriers and benefits of Industry 4.0 implementation in Poland. The results showed that almost 40% of participants are familiar with the term Industry 4.0. In the researched group, senior managers were the most educated (46%), while owners turned out to be the least educated (36%). Among the processes of Industry 4.0, artificial intelligence is the most recognized (86% have heard or use it), while the least recognized is augmented reality (62% have heard or use it). The results showed that companies perceive the Industry 4.0 digitalization processes as an element of resource optimization and reduction (over 60% companies). The benefits of digitalization were measured in financial, operational, and strategic areas. No less than half of participants described the benefits as positive to the organization in all the researched areas. Human, financial, and technology resources were indicated as the most important internal limitations to digitalization, and the internet, lack of experienced service providers, and lack of external funds were referred to as external limitations. The study also enhanced the Industry 4.0 concept by providing the perspective of the use of professional social
Article
The growing tendency of local technological innovation (LTI) of multinational corporations (MNCs), together with the increasing significance of subsidiaries in MNCs' overseas operations, are promoting subsidiaries' engagement in conducting LTI activities in a host country. In this research, a systematic review methodology with the identification of 116 articles is adopted for the purpose of explicating MNCs' holistic and dynamic LTI process from subsidiaries' perspective. Concretely, we propose a thorough framework upon the typical input-process-output model by taking the antecedents, mechanisms, and consequences into consideration about the whole LTI process. It is suggested in this review that the trigger logic of LTI activities can be explained as the interactions between firm-specific advantages and country-specific advantages that took place at subsidiaries. Crucially, the elaborations on LTI mechanisms have been extended by means of evoking a duality lens of the top-down and the bottom-up pattern. Finally, the results show that differential consequences of LTI activities are presented by bringing divergent benefits to different parties. More importantly, the subsidiary takes the unique role in fostering a virtuous loop between dualistic LTI patterns. Overall, these insights reflect what we have obtained from extant literature and the challenges international business landscapes have ahead, which could point to the directions of future research.
Article
Technology search is crucial to establishing competitive advantage and improving firm performance. However, it is still unclear how different technology search strategies affect competitive advantage and performance at the firm level and how to determine technology search strategies in dynamic environments. Therefore, based on resource-based theory, this study explores the relationship between digital technology search, competitive advantage, and new venture performance (NVP) in dynamic environments with a sample of 267 Chinese new ventures. The results show that the breadth and depth of digital technology search positively affect NVP. Environmental dynamism weakens the positive effect of digital technology search breadth on NVP but strengthens the positive relationship between digital technology search depth and NVP. Moreover, digital technology search breadth affects NVP via differentiated competitive advantage, and digital technology search depth affects NVP through differentiated and cost-leadership competitive advantage. Finally, implications and limitations are discussed.
Thesis
Full-text available
The Dutch paper and board industry (PBI) managed to survive four centuries of capitalist development, albeit in more marginal form. Even though this industry carries great importance for the politico-economic development of the Netherlands, it has seldomly been researched. This dissertation builds a trans-disciplinary link by drawing on insights from social network research, critical management studies and critical political economy, in order to answer the central research question as to how the Dutch PBI managed to stand up to politico-economic changes, including competitive pressures, technological changes, shifting industrial policy landscapes and labor-related concerns, since its establishment in the late 16th century. My dissertation aims to examine the role inter-organizational networks played, and will continue to play, for the survival of industries more generally, and the Dutch PBI more specifically. By contributing to a more critical approach towards studying inter-organizational networks in management research, my dissertation acknowledges inter-organizational networks (1) as historically contingent, (2) as always involving multiple agents including the state, and (3) as arenas of power asymmetry. Furthermore, this dissertation traces four crucial dimensions of inter-organizational networks to safeguard industrial survival over time, namely state-industry relations,capital-labor relations, technology, and competition and cooperation. Such a renewed theoretical framework for studying inter-organizational networks necessitates the advancement of current methodological approaches. Consequently, my dissertation incorporates Dialectical Network Analysis (DNA), a critical methodology, which foregrounds the convergence of multiple sources of qualitative and quantitative data sourced from diverse research methods. This research finds that inter-organizational networks, in the case of the Dutch paper and board industry, are neither new nor heterarchic. It can thus be concluded that throughout all phases of capitalism inter-organizational networks existed within and beyond the Dutch PBI in the form of close cooperation between different companies and in the form of state-industry projects. Furthermore, the changing content, form and scope of these inter-organizational networks corresponds with the different spatial-temporal power relations between capitalist class fractions in each phase. Consequently, the inter-organizational networks at hand are not heterarchic, but exhibit different degrees of power asymmetry between the involved agents. In contrast to the wide-spread belief that networks are a heterarchic form of cooperation, outside of markets and hierarchy, my dissertation sheds light on the fact that inter-organizational networks remain organizational models pierced by capitalist principles of profit and growth.
Article
The paper suggests a patent‐based methodology to study the implications of inbound and coupled open innovation adoption at the project level. The input–process–output–outcome model suggested in this work allows the analysis of firms' R&D projects and can be considered as an approach to investigate how companies achieve specific outputs and outcomes starting from certain inputs and employing open innovation practices. The methodology is tested on a sample of 35,857 patents of 214 worldwide companies from three top R&D spending industries. Results show that the model is able to delineate high performing applications of open innovation. Inbound open innovation is associated with exploitation activities and produces incremental or architectural innovation, with high innovation performance in terms of technological and market success. Coupled open innovation is linked to explorative behaviours aiming at getting radical innovation, but with a limited likelihood of the technology developed to be successful, at least in the short term.
Article
Despite two decades of research on non-competes, whether non-competes promote or inhibit innovation remains an open question. The lack of consensus rests on not only the theoretical ambiguity but also the empirical limitations. Marshalling data on introductions of new medical devices as the direct measure of innovations in the medical devices industry and decomposing innovations according to their exploitative or exploratory natures, this work shows that an increase in the enforceability of noncompetes is associated with a higher rate of exploitative innovations and a lower rate of exploratory innovations. Further analysis shows that through such a shift of attention in the innovation process, an increase in the enforceability of non-competes results in a higher rate of total innovations. The implications and caveats of the enforcement of non-competes for stimulating innovation are discussed.
Article
Knowledge recombination, combining knowledge existing (exploitation) or new knowledge capacity (exploration) for creating knowledge collaboration, is one of the important ways of achieving innovation. However, little has known about how the knowledge recombination types affect differently to production efficiency at a regional level. This study explores the relationship between the knowledge recombination types of exploitation and exploration and regional technical efficiency by using the empirical data sets combining EPO PATSTAT, Eurostat, and Cambridge Econometrics regional database. For this purpose, three stages of analysis have been deployed. Firstly, CPC co-occurrence network analysis and relative comparative advantage (RCA) measures are used to construct knowledge space and measure regional capacity. Then, using the stochastic frontier analysis, the production efficiencies of the European NUTS 2 regions are measured. With all estimated measures, the effects of both exploration and exploitation of knowledge recombination on regional production efficiencies are estimated. The results show the positive effect of exploration on regional production efficiency, which highlights the importance of extending the range and variety of knowledge bases.
Article
We advance research on the managerial antecedents of exploration by studying personal, organizational, and environmental conditions under which a CEO’s risk propensity shapes a firm’s tendency to explore in product development. Our panel data analysis of 219 firms in the prepackaged software industry reveals that, when a CEO is risk-prone, the CEO’s ability to drive exploration increases with the CEO’s power in the firm, which manifests in tenure, duality, and insider origin. Counter to expectations, however, the firm’s accumulated exploration experience does not reinforce, but rather attenuates the effect of the CEO’s risk propensity on exploration. We attribute this to firms’ quest for balance between exploration and exploitation and the need to counter the CEO’s risk propensity when exploration becomes excessive. Finally, we find that competitive pressure in the firm’s product market reinforces the ability of a CEO who is more risk-prone to garner support for further exploration. Our study advances a dynamic perspective that relates the heterogeneity in firms’ exploration tendencies to the behavioral inclinations of their CEOs.
Article
Different streams of literature in economics and strategy suggest that several characteristics of a firm's technological base such as diversity, breadth, depth, and R&D portfolio affect its R&D output. Separately, strategy literature on technological mergers and acquisitions (M&As) suggests that the relationship between technological knowledge bases of the acquirer and the target, such as their technological similarities and complementarities, also affects the post-acquisition R&D output. This paper integrates the knowledge from these streams to further our understanding of technological M&As by examining how the pre-acquisition technological scope of an acquirer, encompassing the diversity and breadth of its technological knowledge base, affects its post-acquisition R&D output. Our analysis of a panel of technological acquisitions suggests that the acquirer's technological scope has a U-shaped relationship with post-acquisition R&D output, measured in terms of patent filings. Moreover, technological complementarity between the acquirer's and target's knowledge bases positively moderates this relationship. Results show that acquirers have higher post-acquisition R&D output when their pre-acquisition technological scope is either narrow or broad rather than moderate. Besides, acquirers having a narrow technological scope benefit more from technological complementarities. Our findings have important implications for the effectiveness of corporate R&D strategy and M&A strategy in the hi-tech industries.
Article
The efficiency associated with innovation has been a frequently considered element in the literature. However, the conceptualization of this efficiency and its management is an underexplored factor. We study the way in which the different elements that conform to this efficiency are managed over time. From a dynamic efficiency analysis using data envelope analysis (DEA) and the Malmquist productivity index, we evaluate changes in efficiency and if there are differences according to firm size. Our results confirm the relevance of size in the way that firms manage their innovation efficiency and how small firms differ from larger ones in terms of efficiency management.
Article
Purpose This paper aims to investigate the evolution of the phenomenon of industrial districts and explores the broader regional innovation systems that consist of multiple industrial districts. Design/methodology/approach This paper uses a combination of network analysis and patent analysis techniques to analyze the social structure of Montreal tech agglomeration and its innovation. Findings The findings indicate that the cores of modern regional innovation systems are composed of densely collaborating organizations belonging to different industrial clusters, and these organizations are responsible for the most radical innovations. The analysis also reveals the importance of brokers and international ties in generating radical innovations. Research limitations/implications The findings of our paper extend the initial concept of industrial district and call for the need to no longer focus exclusively on individual clusters, but to take into consideration broader competitive regional innovation systems that are composed of multiple clusters. The current trend of the core of such systems to be composed of organizations from multiple clusters indicates that the traditional understanding of industrial district confined to the borders of specific industry is no longer relevant and there is a need to revise the conceptualization of clusters and further analyze the social fabric of broader regional innovation systems. In future, such intense collaboration within the core of the regional innovation system network may give rise to new industrial and technological configurations. It is important to further investigate these structures, because they have important implications for innovation and are responsible for new innovation patterns. Practical implications To boost innovation in specific localities, policymakers could encourage collaboration between different clusters and support interdisciplinary projects and programs. Those would help the local community generate radical innovations. Social implications Using this research, local policymakers could help local companies understand and explore international markets, as well as focus on attracting multinational firms that are leaders in their respective fields. Finally, local policymakers could further support important cluster intermediaries Originality/value This paper offers original contributions to the studies of industrial districts as it explores a competitive ecosystem composed of multiple industrial districts and analyzes how these industrial districts interact and where the most innovative solutions lie in the social fabric of this big ecosystem.
Article
Purpose Knowledge search is considered a broad concept and semi-intentional behavior. The path and boundary conditions through which search strategies affect intra-organizational knowledge creation remain elusive. Drawing on recombinant search theory and knowledge-based view, the authors seek to identify knowledge complexity as an important intermediate variable between knowledge search and innovation performance, such as research and development (R&D) output and R&D output quality. A second goal of this study is to examine the moderating roles of government support and technological turbulence. Design/methodology/approach The authors employed a longitudinal panel of 609 global pharmaceutical firms and obtained the firms' patent records from 1980 to 2015 for the analysis. The authors used generalized estimating equations (GEE) to evaluate the models and tested the consistency via panel fixed-effects estimations. Findings The authors' findings show that organizational routine-guided search has a negative effect on knowledge complexity, while routine-changing search exerts a positive impact on knowledge complexity. Governmental support and technological turbulence moderate these relationships. Notably, knowledge complexity has an inverted U-shaped relationship with innovation performance. Research limitations/implications The authors' research context, the pharmaceutical industry, may constrain the generalizability of our findings. In addition, potential types of routine-guided and routine-changing search behaviors were not considered. Practical implications Despite these limitations, this study offers important implications. First, knowledge complexity transmits the effects of knowledge search on innovation performance. Practitioners should balance routine-guided and routine-changing search processes to build and manage complex knowledge. Second, a moderate level of knowledge complexity is the key to good R&D output and R&D output quality. Originality/value The study identifies knowledge complexity as one important intermediate variable between knowledge search behaviors and intra-organizational knowledge creation.
Article
Existing literature shows the benefits of firm‐university collaborations. Yet, it has overlooked factors that mitigate concerns with outgoing knowledge spillovers associated with this form of external knowledge sourcing. This study argues that the deterrent effects associated with intrafirm collaborations make a firm more likely to form co‐authorship linkages with a university when its corresponding R&D unit exhibits a higher degree of intrafirm collaboration linkages, especially when that university maintains more linkages with rivals. Analysis at the firm unit‐university‐year level using data on co‐authorship linkages between 157 pharmaceutical firms and the top 400 global universities during a 25‐year period supports these propositions. This study advances research on knowledge sourcing by showing the role of internal collaborations in enabling external knowledge sourcing. A firm whose employees co‐author scientific articles with university‐affiliated researchers gains access to external knowledge it can build on to create innovations. But, these collaborations with academia can also produce knowledge spillovers benefiting rivals, thereby undermining a firm's efforts to protect its knowledge. Using data from the pharmaceutical industry, this study shows that, because collaboration between inventors in a firm's R&D unit with inventors in other units helps protect that firm's knowledge, a firm creates more co‐authorship linkages with a university when its respective R&D unit exhibits higher levels of internal collaboration with other units. This effect underscores the role of internal collaboration in helping a firm boost innovativeness via external collaboration with universities while mitigating concerns with the erosion of knowledge protection. This article is protected by copyright. All rights reserved.
Article
Purpose Business model innovation (BMI) is an important channel of enterprise innovation, and BMI's antecedents have attracted extensive attention. The purpose of this paper is to address a substantial gap in the extant literature by developing a moderate model to explain the effects of boundary-spanning search on BMI as well as whether and how innovative cognitive imprinting (ICI) and environmental dynamics (ED) affect the above relationship. Design/methodology/approach A total of 239 usable questionnaires from different enterprises in China were collected to obtain firm-level data. Then multiple regression analyses were used by SPSS software to test hypotheses. Findings Boundary-spanning search extensity (BSE) and focus have inverted U -shaped impacts on BMI; ICI moderates the relationship between boundary-spanning search and BMI and steepens the curves; ED weakens the moderating role of ICI. Originality/value By identifying two antecedents of BMI, this paper contributes to the literature on the antecedents of BMI. Meanwhile, the joint moderating effect of ICI and ED is introduced into the emergent analysis framework of the relationship between boundary-spanning search and BMI and examined through empirical analysis for the first time.
Article
Full-text available
This study critically reviews the literature that demonstrates the relevance of knowledge management process and business intelligence, as well as the challenges arising when it comes to organising for innovation in today's business organisations. Hence, the to attain desired innovation it is important to integrate business intelligence (BI) and knowledge management (KM) for the diffusion of innovation. Hence, importance of integrating business intelligence (BI) and knowledge management (KM) for the diffusion of innovation. Organisations' innovation dynamics and knowledge processes that lead competitive advantage of organisations are examined. Literature points that many organisations rely on individual employees' knowledge and skills. As a result, information systems that enable knowledge management (KM) as a critical tool for gaining a competitive advantage (Campbell, 2012). The seminal argument in this study is that knowledge diffusion and knowledge externalities are the main drive of increase in economy. As a result, this is expected to be a win-win value proposition for such organisations integrating business intelligence and knowledge management. However, owing to changing business conditions and the rapidity of technological development, as well as the rising expenses involved with carrying out R&D operations in many of these organisations, maintaining competitive advantage through internal R&D alone is becoming increasingly challenging. The importance of innovation processes and network dynamics in the context of Integrated Knowledge Networks is explored, which provide feasible possibilities for utilising innovation as an interactive process as well as knowledge processes for creating business intelligence in organisations. Due to the challenges of organising for innovation, the organisations figured to rely on "Open innovation" approach to intentionally seek out unique knowledge and information outside of their organisational bounds. This study also discusses the challenges that organisations hurdle on in managing inter-organizational cooperation because of external knowledge sourcing techniques (Campbell, 2009). This is due, in part, to the fact that they span a wide range of organisations, people, and resources, as well as the interactions that exist between them. The creative processes and network dynamics are facilitated by an architecture that blends organisational and technical aspects in Integrated Knowledge Networks. Hence, the study focuses on twofold to sourcing external knowledge in particular: learning from international business environments and corporate venturing strategy for corporate incubators.
Article
Purpose Partners' knowledge is an essential source of knowledge for organizations in the collaborative innovation. Exploratory innovation is an innovation strategy that is significant to the organization and is characterized by learning and absorbing new knowledge for new products and technology. The purpose of this study is to investigate the impact of partners' knowledge utilization on exploratory innovation and to analyze further the moderating effect of previous competitive and collaborative relationships between organizations on the above relationships. Design/methodology/approach In this study, the patent data of 1,636 organizations in the nano-biopharmaceutical field collaboratively from 1998 to 2020 are used as a sample. The knowledge networks and collaboration networks are constructed through the patent data. A negative binomial regression method is used to conduct the empirical study. Findings The results indicate that partners' knowledge utilization has an inverted U-shaped effect on exploratory innovation. The competitive relationship steepens the inverted U-shape effect of partners' knowledge utilization on exploratory innovation and makes the turning point to the left. The collaborative relationship steepens the inverted U-shape effect of partners' knowledge utilization on exploratory innovation and makes the turning point to the right. Originality/value This study is the first to examine the impact of partners' knowledge utilization on exploratory innovation and to explore the role of the competitive and collaborative relationships between organizations. It extends current research in organizational innovation and knowledge management by providing insight into partners' knowledge utilization.
Article
We lack an in-depth understanding of how the different roles played by public innovation intermediaries during their engagement in collaborative projects enable them to generate ambidexterity. By adopting a sequential mixed methods research design to gather data from 122 Research and Technology Organizations (RTOs) operating in Europe, the findings suggest that public innovation intermediaries performed two different roles in collaborative projects namely, knowledge integration and network building, and these have a differential impact on the generation of distinct types of in-house innovation. The knowledge integration role is conducive to exploratory innovation, whereas the network building role contributes to exploitative innovation. Importantly, relational, and internal capabilities mediate between these roles and innovation. Yet, this mediation effect varies depending on the nature of the public innovation intermediary’s role and innovation profile. How public innovation intermediaries should utilise their key roles to generate in-house ambidexterity is crucial in leveraging the impact of public funding in this area.
Article
What is the price of not capturing cumulative knowledge based on experience before a transportation software designer retires or leaves? How many hours are wasted trying to find information to support decision-making? How does the transportation software designer community find relevant information when web searches return nothing? In order to answer these questions and enrich the study of knowledge management in transportation, this paper introduces Karl Polanyi’s (1968) account of “embeddedness” of economic activity into the study of knowledge activity to investigate how the complex “real life” working environment affects the implementation of knowledge management practice in transport organisations. An inductive qualitative approach was adopted, comprising 27 semi-structured interviews with software designers who work across a range of organisations in the transport industry. The results show that, first, knowledge management practice is deeply embedded in everyday work activities and influenced by complex issues which affect how work is undertaken. Secondly, the implementation of knowledge management practice is articulated and performed in accordance with complex and constantly changing work-related situations. And, the actual way they are performed and articulated may be very different from what was intended. Finally, the importance of knowledge management practice is reflected in their contribution to the work of the organisation rather than the organisational knowledge itself. Implications for scholars and practitioners are discussed.
Article
Purpose Based on a theoretical framework of ambidexterity in technology sourcing beyond organizational and technological boundaries, this study aims to explore how start-ups balance technology sourcing in organizational ambidexterity (TSOA) to produce high venture performance. Design/methodology/approach A questionnaire survey is distributed among start-ups in the science and technology park of a university in eastern China, producing a total of 45 valid responses. The fuzzy-set approach to qualitative comparative analysis is used in this study. Findings The findings show that start-ups achieve high venture performance through external technology sourcing (external exploration and exploitation) in the initial stage. In the growth stage, start-ups adopt external and internal technology sourcing (internal exploration and exploitation) to produce high venture performance. The technology sourcing strategy in ambidextrous activity for start-ups is punctuated equilibrium and evolving from the external ambidexterity to internally and externally coordinate ambidexterity at entrepreneurial stages. Originality/value This study creatively adopts configuration-based thinking to investigate how to balance TSOA for high venture performance, extending the literature on technology sourcing and contributing to the balance theory of exploration and exploitation.
Article
Business groups provide a setting where affiliated firms, connected with various ties, share knowledge and enhance their innovative capabilities. The relations between knowledge sharing and innovation have been investigated in various contexts; however, whether firms connected with a business group utilize knowledge more than independent firms do in fostering innovations has been addressed to a lesser extent. Therefore, using survey data from 128 Turkish business group affiliated and independent manufacturing firms, this study examines the impact of explorative knowledge and exploitative knowledge sharing strategies on firms’ innovative activities and the moderating effect of business group affiliation in this relation. The findings indicate that while explorative and exploitative knowledge sharing enhance innovation, firms affiliated with business groups benefit less from both types of knowledge sharing than independent firms in terms of innovation. This study contributes to the business groups and knowledge research by examining whether groups create value for affiliated firms when firms operate in an emerging economy. The results of this study have policy and strategy implications in emerging economies and in the context of business groups.
Purpose In order to explore the role of enterprise social network (ESN), this study examines how the different dimensions of ESN use – within teams and across teams – facilitate knowledge acquisition in organizations and how knowledge acquisition, in turn, impacts exploitative and exploratory innovation performance. Design/methodology/approach This study applied the survey approach to collect a valid sample of 150 Chinese companies that had innovation activities and were using ESN. The partial least squares (PLS) technique was used for data analysis to test the research model and hypotheses. Findings ESN use within teams has a positive impact on knowledge depth and knowledge breadth, and ESN use across teams has a positive impact on knowledge depth. Knowledge depth and knowledge breadth are both beneficial for innovation performance. The two types of ESN use have different impacts on knowledge depth and knowledge breadth; moreover, knowledge depth and knowledge breadth have different impacts on innovation performance. Specifically, the impacts of ESN use within teams and across teams on exploitative innovation performance are mediated by knowledge depth; the impact of ESN use within teams on exploratory innovation performance is mediated by knowledge breadth. Originality/value This paper can enhance the understanding of the importance of ESN use and ESN's role in facilitating knowledge acquisition and innovation performance.
Article
Although considerable emphasis has been placed on innovation in megaprojects research, it remains unclear how to obtain valuable outputs in megaproject innovation ecosystems. In view of the key role of knowledge in innovation activities, this study aims to explore the latent mechanism underlying the relationship between knowledge input and output quality, and how this relationship is impacted by ecosystem peers. We argue that there is an inverted U-shaped relationship between the size of knowledge base and the likelihood of high-quality output as a result of both the creation-potential effect and the integration-difficulty effect caused by the increase in knowledge base size. An empirical analysis of the Hong Kong-Zhuhai-Macao Bridge project confirms it and shows that the inverted U-shaped curve will be flattened as the relative search breadth of ecosystem peers increases. Our findings deepen the theoretical understanding of innovation activities in megaprojects, and provide new insights into co-creation in megaprojects innovation ecosystems.
Article
Purpose The purpose of this paper is to build a System Dynamics model to reveal the structure and dynamics of knowledge coupling affecting firms' innovation results in the digital context. Design/methodology/approach Drawing on the recombined view of innovation, this paper divides knowledge coupling into two dimensions: component knowledge coupling and architectural knowledge coupling. Then, the authors build a system dynamics model to identify the interaction of knowledge coupling factors and use the professional Vensim PLE to conduct simulation analysis to capture the dynamic interaction of motivation factors in knowledge coupling system. Findings The results show that both technology resources and digital dynamic capability play positive effects in the mechanism of knowledge coupling influencing firms' innovation results, while organizational inertia negatively affects the process of knowledge coupling to achieve innovation outcomes. Originality/value This study develops a holistic system dynamics model to reveal and elaborate on the complex dynamic mechanism of knowledge coupling impacting firms' innovation results in the context of digitization and provides a theoretical reference for companies to effectively adopt digital technology to carry out knowledge coupling strategy.
Article
Full-text available
We used computer simulations to examine the role and interrelationship between search processes that are forward-looking, based on actors' cognitive map of action-outcome linkages, and those that are backward-looking, or experience based. Cognition was modeled as a simple, low-dimensional representation of a more complex, higher dimensional fitness landscape. Results show that, although crude, these representations still act as a powerful guide to initial search efforts and usefully constrain the direction of subsequent experiential search. Changing a cognitive representation itself can act as an important mode of adaptation, effectively resulting in the sequential allocation of attention to different facets of the environment. This virtue of shifting cognitive representation, however, may be offset by the loss of tacit knowledge associated with the prior cognition.
Article
Full-text available
This paper examines interfirm knowledge transfers within strategic alliances. Using a new measure of changes in alliance partners' technological capabilities, based on the citation patterns of their patent portfolios, we analyze changes in the extent to which partner firms' technological resources ‘overlap’ as a result of alliance participation. This measure allows us to test hypotheses from the literature on interfirm knowledge transfer in alliances, with interesting results: we find support for some elements of this ‘received wisdom’—equity arrangements promote greater knowledge transfer, and ‘absorptive capacity’ helps explain the extent of technological capability transfer, at least in some alliances. But the results also suggest limits to the ‘capabilities acquisition’ view of strategic alliances. Consistent with the argument that alliance activity can promote increased specialization, we find that the capabilities of partner firms become more divergent in a substantial subset of alliances.
Article
Full-text available
In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advan- tage is the relationship between firms and identify four potential sources of interor- ganizational competitive advantage: (1) relation-specific assets, (2) knowledge- sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view. Scholars in the strategy field are concerned fundamentally with explaining differential firm performance (Rumelt, Schendel, & Teece, 1991). As strategy scholars have searched for sources of competitive advantage, two prominent views have emerged regarding the sources of super- normal returns. The first-the industry structure view-associated with Porter (1980), suggests that supernormal returns are primarily a func- tion of a firm's membership in an industry with favorable structural characteristics (e.g., rela- tive bargaining power, barriers to entry, and so on). Consequently, many researchers have fo- cused on the industry as the relevant unit of analysis. The second view-the resource-based view (RBV) of the firm-argues that differential firm performance is fundamentally due to firm heterogeneity rather than industry structure (Barney, 1991; Rumelt, 1984, 1991; Wernerfelt, 1984). Firms that are able to accumulate re- sources and capabilities that are rare, valuable, nonsubstitutable, and difficult to imitate will achieve a competitive advantage over compet-
Article
Full-text available
Organizational learning has many virtues, virtues which recent writings in strategic management have highlighted. Learning processes, however, are subject to some important limitations. As is well-known, learning has to cope with confusing experience and the complicated problem of balancing the competing goals of developing new knowledge (i.e., exploring) and exploiting current competencies in the face of dynamic tendencies to emphasize one or the other. We examine the ways organizations approach these problems through simplification and specialization and how those approaches contribute to three forms of learning myopia, the tendency to overlook distant times, distant places, and failures, and we identify some ways in which organizations sustain exploration in the face of a tendency to overinvest in exploitation. We conclude that the imperfections of learning are not so great as to require abandoning attempts to improve the learning capabilities of organizations, but that those imperfections suggest a certain conservatism in expectations.
Article
Full-text available
This paper examines the nature of the core capabilities of a firm, focusing in particular on their interaction with new product and process development projects. Two new concepts about core capabilities are explored here. First, while core capabilities are traditionally treated as clusters of distinct technical systems, skills, and managerial systems, these dimensions of capabilities are deeply rooted in values, which constitute an often overlooked but critical fourth dimension. Second, traditional core capabilities have a down side that inhibits innovation, here called core rigidities. Managers of new product and process development projects thus face a paradox: how to take advantage of core capabilities without being hampered by their dysfunctional flip side. Such projects play an important role in emerging strategies by highlighting the need for change and leading the way. Twenty case studies of new product and process development projects in five firms provide illustrative data.
Article
Full-text available
Explores the theory of firm knowledge and how firms create new knowledge. Knowledge is considered to be in one of two categories: information or know-how. Firms exist, it is argued, because they are better than markets at sharing and transfer of knowledge. Information, which is often proprietary, includes facts, axiomatic propositions, and symbols. Information is the knowledge to know what something means, while know-how is the knowledge to know how to do something. A further characteristic of knowledge that must be considered is the persisting difference in capabilities, i.e. the difficulty in their transfer and imitation. New learning within a firm results from the combinative capabilities of that firm. Combinative capabilities are a firm's ability to exploit its knowledge and the unknown potential of its technology through both internal and external learning. Firms must consider the tradeoffs between short-term survival and long-term development of capabilities. To illustrate the proposed theory, the make-buy question faced by many firms is analyzed. This decision is dependent on how good the firm is currently doing something, how good it is at learning specific capabilities, and the value of these capabilities as platforms into new markets. As a result, firms will make the product if it requires a production knowledge similar to their current organizing principles and information. Firms will develop internally products that build on existing capabilities and that will push them into new markets. Firms will seek joint ventures when the capabilities are not closely related to those already possessed. The existing capabilities of the firm will likely dictate the direction in which the firm moves. (SRD)
Article
Full-text available
Knowledge, once generated, spills only imperfectly among firms and nations. We posit that since institutions and labor networks vary by region, there should be regional variations in the localization of spillovers. We investigate the relationship between the mobility of major patent holders and the localization of technological knowledge through the analysis of patent citations of important semiconductor innovations. We find that knowledge localization is specific to only certain regions (particularly Silicon Valley) and that the degree of localization varies across regions. By analyzing data on the interfirm mobility of patent holders, we empirically show that the interfirm mobility of engineers influences the local transfer of knowledge. The flow of knowledge is embedded in regional labor networks.
Article
This study links theories concerning methods that firms use to acquire technology with theories concerning types of technological change. We place particular emphasis on interorganizational relationships. We predict that firms will often acquire know‐how needed for encompassing technological change through equity‐based arrangements with other organizations, complementary technological changes through nonequity interorganizational arrangements, and incremental changes through internal R&D. Our theory draws on perspectives that emphasize the need to develop new competencies within a business organization and to protect the value of existing competencies. Our empirical analysis examines methods of technology acquisition that firms have used in the commercialization of medical lithotripters, which are devices that fragment stones in the kidney and gall bladder. The analysis contributes to a better understanding of how technology acquisition methods vary with the manner in which technological change relates to a firm's existing capabilities. The study also helps develop our understanding of the evolutionary processes by which capabilities diffuse through an industry. © 1998 John Wiley & Sons, Ltd.
Article
I find that a firm's innovation output increases with the number of collaborative linkages maintained by it, the number of structural holes it spans, and the number of partners of its partners. However, innovation is negatively related to the interaction between spanning many structural holes and having partners with many partners.
Article
The R&D function of the firm is thought of as a 'black box' process by scholars in both economics and strategic management. This dissertation shows that there is considerable potential in making the R&D function more transparent and that it is possible to model the intertemporal emergence of technological competence where technological competence, defined as the ability of a firm to create new products and processes, is a pioneering empirical investigation of concepts introduced to strategic management literature by Nelson and Winter (1982), Dierickx and Cool (1989) and Teece, Pisano and Shuen (1994). The central theme of this dissertation is to show that firms build technological competence in a path dependent manner and that this path dependence varies across firms. Firms demonstrate persistence in their research efforts which leads to their acquiring competence in the direction of these efforts. Further, this persistence in research efforts or outputs is a result of persistence in research inputs. This dissertation identifies three research inputs: research engines, knowledge domains and geographic location of knowledge. It offers empirical evidence of this persistence at both input and output levels within firms and goes on to suggest that differentials in persistence at input level translate into differentials at output level and consequently to differentials in technological performance of firms. This dissertation primarily uses patent data gathered on more than 100 firms from three industrial sectors viz. chemical, pharmaceutical and engineering and a smaller data set gathered on the optical disc technology industry. The techniques used include simulation, modified correlation analysis, survival analysis, and time series data analysis.
Article
This paper examines the nature of the core capabilities of a firm, focusing in particular on their interaction with new product and process development projects. Two new concepts about core capabilities are explored here. First, while core capabilities are traditionally treated as clusters of distinct technical systems, skills, and managerial systems, these dimensions of capabilities are deeply rooted in values, which constitute an often overlooked but critical fourth dimension. Second, traditional core capabilities have a down side that inhibits innovation, here called core rigidities. Managers of new product and process development projects thus face a paradox: how to take advantage of core capabilities without being hampered by their dysfunctional flip side. Such projects play an important role in emerging strategies by highlighting the need for change and leading the way. Twenty case studies of new product and process development projects in five firms provide illustrative data.
Article
Understanding sources of sustained competitive advantage has become a major area of research in strategic management. Building on the assumptions that strategic resources are heterogeneously distributed across firms and that these differences are stable over time, this article examines the link between firm resources and sustained competitive advantage. Four empirical indicators of the potential of firm resources to generate sustained competitive advantage-value, rareness, imitability, and substitutability are discussed. The model is applied by analyzing the potential of several firm resources for generating sustained competitive advantages. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other business disciplines.
Article
The assumption that 'local search' constrains the direction of corporate R&D is central in evolutionary perspectives on technological change and competition. In this paper, we propose a network-analytic approach for identifying the evolution of firms' technological positions. The approach (I) permits graphical and quantitative assessments of the extent to which firms' search behavior is locally bounded, and (2) enables firms to be positioned and grouped according to the similarities in their innovative capabilities. The utility of the proposed framework is demonstrated by an analysis of strategic partnering and the evolution of the technological positions of the 10 largest Japanese semiconductor producers from 1982 to 1992.
Article
In this research, I proposed and tested a model of how firms learn from their strategic alliances. Based on a survey of 151 firms, the results suggest that experience alone is insufficient for the achievement of the greatest benefits from collaboration. Experience must be internalized first, and collaborative know-how must be developed for this experience to contribute to future collaborative benefits.
Article
As the invention of fundamental new sciences spawns subsequent research, discovery, and commercialization, core technologies branch into new applications and markets. Some of them evolve over time into many derived technologies, whereas others are essentially ''dead ends.'' The pattern of evolution and branching is called a ''technological trajectory.'' An intriguing question is whether some firms can ride the trajectory by developing proprietary experience in a ''platform technology.'' Because the knowledge is proprietary, firms that originate in industrial fields based on a platform technology acquire the technological skills to diversify and to mimic the branching of the underlying technological trajectory. The ability to compete in hypercompetitive markets depends on the acquisition of know-how that is applicable to a wide set of market opportunities. Such capabilities serve as platforms into quickly evolving markets. To respond rapidly to market changes, a firm must have already acquired fundamental competitive knowledge. In a high-technology industry, such knowledge invariably is derived from experience with the underlying science and related technological fields. The authors examine capabilities as platforms by analyzing the temporal sequence of diversification as contingent on market opportunities and previous experience. The pattern of diversification of firms reflects the evolutionary branching of underlying technologies. In that sense, the aggregate decisions of firms are driven by the technological trajectories common across an industrial sector. Certain technologies have wider technological and market opportunities, and consequently experience in those technologies serves as a platform for expansion. The authors propose that a firm's experience in platform technologies increases the likelihood of diversification when environmental opportunities are favorable. The proposition is tested with the sample of 176 semiconductor startup companies founded between 1977 and 1989. Evidence from multidimensional scaling of expert opinion and from an analysis of patent records was gathered to identity relatedness among subfields and the evolutionary direction of the technologies. A discrete hazard model is specified to estimate the effect of technological histories on subsequent diversification. The results confirm the relationship between relatedness and directionality of technologies and the industrial path of diversification. The finding that diversification depends on technological experience and market opportunity has important implications for firms' entry decisions. The authors discuss those implications by describing experience as generating options on future opportunities and distinguishing between the historical path by which the stock of knowledge is accumulated and the path by which new knowledge is generated and commercialized.
Article
Much corporate research and development (R&D) has characteristics that tie it strongly to the firm in which it takes place, and which may make the process of undertaking R&D or the outcome of the R&D difficult for other firms to duplicate perfectly. That is, the R&D is firm-specific. This is particularly true for more highly applied R&D, which tends to involve incremental technological change and often entails alterations and enhancements to existing firm assets, production processes, and products. The often firm-specific nature of corporate R&D tends to receive relatively little attention in the study of technological innovation. This article outlines the primary characteristics of firm-specificity in R&D, and discusses two interrelated consequences of such firm-specificity: (1) heterogeneity in the R&D applications of firms within an industry, and (2) increased ability of firms to earn returns to R&D (often termed ''appropriability''). Both factors have important implications for firm strategy. Empirical evidence from the U.S. petroleum industry is presented that documents differences between firms in their R&D applications. The evidence is consistent with firm-specificity in R&D.
Article
The use of compact disc (CD) technology is gaining widespread acceptance within the computer industry, especially within electronic publishing. The latest version of CD is CD-Interactive (CD-I). Philips and Sony have jointly proposed a standard for this latest development which should be available by next year.
Article
This paper investigates the relationship between organizational aging and innovation processes to illuminate the dynamics of high-technology industries, as well to resolve debates in organizational theory about the effects of aging on organizational functioning. We test hypotheses based on two seemingly contradictory consequences of aging for organizational innovation: that aging is associated with increases in firms' rates of innovation and that the difficulties of keeping pace with incessant external developments causes firms' innovative outputs to become obsolete relative to the most current environmental demands. These seemingly contradictory outcomes are intimately related and reflect inherent tradeoffs in organizational learning and innovation processes. Multiple longitudinal analyses of the relationship between firm age and patenting behavior in the semiconductor and biotechnology industries lend support to these arguments.
Article
The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
Article
This paper elucidates the underlying economics of the resource-based view of competitive advantage and integrates existing perspectives into a parsimonious model of resources and firm performance. The essence of this model is that four conditions underlie sustained competitive advantage, all of which must be met. These include superior resources (heterogeneity within an industry), ex post limits to competition, imperfect resource mobility, and ex ante limits to competition. In the concluding section, applications of the model for both single business strategy and corporate strategy are discussed.
Article
Since firms are knowledge institutions, or well-springs of knowledge, they compete on the basis of creating and using knowledge; managing a firm's knowledge assets is as important as managing its finances. A firm's expertise is acquired by employees and embodied in machines, software, and institutional procedures. Management of its core or strategic capabilities determines a firm's competitiveness and survival. Through decision-making and action, core technological capabilities can be built and changed. The author proposes to (1) help managers think about the knowledge-building consequences of their technology-related decisions and (2) provide academics materials usable in training managers to think about knowledge building. All aspects of product or process development must be viewed in terms of knowledge management and growth. Knowledge cannot be managed the same as tangible assets; to manage knowledge assets, one must understand them. Successful adaptation is an incremental re-direction of skills and knowledge. A set of four core technological competencies bestows competitive advantage on firms; these are the firm's skill and knowledge bases, physical technical systems, managerial systems, and values and norms that create a firm's special advantage. These may reside at any line-of-business level. Core capabilities must be managed to foster, not inhibit flow of critical knowledge. There is a dilemma: core capabilities are also core rigidities when carried to an extreme or when the competitive environment changes. Limited problem solving, inability to innovate, limited experimentation, and screening out new knowledge can undermine the development of competencies. Four key activities create and sustain flows of knowledge and direct them into core capabilities: (1) Integrated, shared creative problem solving across cognitive and functional barriers - shared problem solving achieves new level of creativity when managed for "creative abrasion." (2) Implementation and integration of new internally generated methodologies and technical processes and tools. These can move beyond merely increasing efficiency when managed for learning. (3) Formal and informal experimentation. Experimental activities create new core competencies that move companies purposefully forward and are guards against rigidity. (4) Importing and absorbing technological knowledge expertise from outside the firm. Technology alliances, for example, develop outwise wellsprings of knowledge (identify, access, use, and manage knowledge from external sources). Well managed, these enable companies to tap knowledge wellsprings consistently and continuously. Many dysfunctional attitudes and behaviors within firms inhibit these activities. These activities are oriented to present, internal, future, and external domains, and involve managers at all company levels and all functions. Specific managerial behaviors that build (or undermine) capabilities are identified. Managers must design an environment that encourages enactments of these four activities to create an organization that learns. Thereby, organizations and managers can create an atmosphere for continuous renewal; application to commercial ends is as important as managing it internally. The growth and nurturing of core capabilities (expressed in successful product development) requires learning from the market (understanding user needs), or feeding market information into new-product development. Identifying new product opportunities depends on empathic design, actual observed customer behavior, and technological capabilities. Technology transfer can also be understood as transferring technological capabilities to a new site, which is examined at four levels (assembly or turnkey, adaptation and localization, system, redesign, product design). Transfer of production development capability is illustrated with the cas
Article
This article considers what factors determine whether an innovation becomes a foundation for future technological developments rather than a ''dead end.'' The authors introduce the concept of the technological niche, which includes a focal innovation, the innovations on which the focal innovation builds, the innovations that build upon the focal innovation, and the technological ties among the innovations within the niche. Using patents and patent citations to measure characteristics of innovation niches within tile semiconductor industry, the authors show that the size of the niche and the status of the actors within the niche have a positive effect on the likelihood that subsequent innovations will build upon the focal innovation. Competitive intensity within the niche has a negative effect on this likelihood.
Article
This article is based on Professor Tushman's well-received presentation at the 1997 international trategic leadership conference in Washington, D.C., in April
Article
The ability to transfer best practices intemally is critical to a firm's ability to build competitive advantage through the appropriation of rents from scarce internal knowledge. Just as a firm's distinctive competencies might be difficult for other firms to imitate, its best practices could be difficult to imitate internally. Yet, little systematic attention has been paid to such intemal stickiness. The author analyzes intemal stickiness of knowledge transfer and tests the resulting model using canonical correlation analysis of a data set consisting of 271 observations of 122 best-practice transfers in eight companies. Contrary to conventional wisdom that blames primarily motivational factors, the study findings show the major barriers to internal knowledge transfer to be knowledge-related factors such as the recipient's lack of absorptive capacity, causal ambiguity, and an arduous relationship between the source and the recipient. The identification and transfer of best practices is emerging as one of the most important and widespread practical management issues of the latter half of the 1990s. Armed with meaningful, detailed performance data, firms that use fact- based management methods such as TQM, bench- marking, and process reengineering can regularly compare the perfonnance of their units along operational dimensions. Sparse but unequivocal evidence suggests that such comparisons often reveal surprising perfonnance differences between units, indicating a need to improve knowledge utilization within the firm (e.g., Chew, Bresnahan, and Clark, 1990).' Because intemal transfers typi-
Article
To assess the effects of a firm's network of relations on innovation, this paper elaborates a theoretical framework that relates three aspects of a firm's ego network—direct ties, indirect ties, and structural holes (disconnections between a firm's partners)—to the firm's subsequent innovation output. It posits that direct and indirect ties both have a positive impact on innovation but that the impact of indirect ties is moderated by the number of a firm's direct ties. Structural holes are proposed to have both positive and negative influences on subsequent innovation. Results from a longitudinal study of firms in the international chemicals industry indicate support for the predictions on direct and indirect ties, but in the interfirm collaboration network, increasing structural holes has a negative effect on innovation. Among the implications for interorganizational network theory is that the optimal structure of interfirm networks depends on the objectives of the network members.
Article
This paper reviews the literature on organizational learning. Organizational learning is viewed as routine-based, history-dependent, and target-oriented. Organizations are seen as learning by encoding inferences from history into routines that guide behavior. Within this perspective on organizational learning, topics covered include how organizations learn from direct experience, how organizations learn from the experience of others, and how organizations develop conceptual frameworks or paradigms for interpreting that experience. The section on organizational memory discusses how organizations encode, store, and retrieve the lessons of history despite the turnover of personnel and the passage of time. Organizational learning is further complicated by the ecological structure of the simultaneously adapting behavior of other organizations, and by an endogenously changing environment. The final section discusses the limitations as well as the possibilities of organizational learning as a form of intelligence.
Article
Examines the correlation between the exploration of new possibilities and the exploitation of old certainties in organizational learning. Also discusses the difficulty in balancing resource management between gaining new information about alternatives to improve future returns (i.e., exploration) and using information currently available to improve present returns (i.e., exploitation). Two models which evaluate the formation and use of knowledge in organizations are developed. The first is a model of mutual learning in a closed system having fixed organizational membership and stability. The second is a model which considers the ways in which competitive advantage is affected by knowledge accumulation. The analysis indicates that the choice to rapidly develop exploitation over exploration might be effective in the short term, but is potentially detrimental to the firm in the long term. (SFL)
Article
The paper explores the usefulness of analysing firms from the resource side rather than from the product side. In analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested. These tools are then used to highlight the new strategic options which naturally emerge from the resource perspective.
Article
This paper reviews the progress of the strategy field towards developing a truly dynamic theory of strategy. It separates the theory of strategy into the causes of superior performance at a given period in time (termed the cross-sectional problem) and the dynamic process by which competitive positions are created (termed the longitudinal problem). The cross-sectional problem is logically prior to a consideration of dynamics, and better understood. The paper then reviews three promising streams of research that address the longitudinal problem. These still fall short of exposing the true origins of competitive success. One important category of these origins, the local environment in which a firm is based, is described. Many questions remain unanswered, however, and the paper concludes with challenges for future research.
Article
The article reflects on the diffusion of the ‘resource-based view of the firm’ into academic and practitioner thought. The contributions of many people are noted. In closing, I offer some speculations about the future use of these ideas.
Article
While the course of technological change is widely accepted to be highly uncertain and unpredictable, little work has identified or studied the ultimate sources and causes of that uncertainty. This paper proposes that purely technological uncertainty derives from inventors' search processes with unfamiliar components and component combinations. Experimentation with new components and new combinations leads to less useful inventions on average, but it also implies an increase in the variability that can result in both failure and breakthrough. Negative binomial count and dispersion models with patent citation data demonstrate that new combinations are indeed more variable. In contrast to predictions, however, the reuse of components has a nonmonotonic and eventually positive effect on variability.
Article
Those who solve more of a given type of problem tend to get better at it---which suggests that problems of any given type should be brought to specialists for a solution. However, in this paper we argue that agency-related costs and information transfer costs ("sticky" local information) will tend drive the locus of problem-solving in the opposite direction---away from problem-solving by specialist suppliers, and towards those who directly benefit from a solution and who have difficult-to-transfer local information about a particular application being solved, such as the direct users of a product or service. We examine the actual location of design activities in two fields in which custom products are produced by "mass-customization" methods: application-specific integrated circuits (ASICs) and computer telephony integration (CTI) systems. In both, we find that users rather than suppliers are the actual designers of the application-specific portion of the product types examined. We offer anecdotal evidence that the pattern of user-based customization we have documented in these two fields is in fact quite general, and we discuss implications for research and practice.
Article
In this paper we investigate the relationship between the level of a firm's technological innovativeness and its pattern of partnership agreements (i.e., relative number of partnership agreements of one type versus another). We argue that the protection of tacit technological knowledge from potential opportunism is of importance to technologically innovative firms, and as a result they tend to have a relatively larger number of partnership agreements which generally minimize the transfer of tacit technological knowledge. Specifically, they tend to have a greater number of marketing agreements than joint ventures and a greater number of licensing agreements than joint ventures. This argument is tested using data from manufacturing firms in the electrical and electronics machinery sector who invest in R&D, and our results hold for our focal firm's agreements with both domestic and foreign partners. We discuss the strategic and policy implications from this research. In particular, the empirical results suggest that technologically innovative firms already have relatively more agreements which are likely to preempt transfer of their tacit technological knowledge to their foreign partners. Thus, recent suggestions of more active government regulation in the area of intellectual property may be unwarranted.
Article
Tacit knowledge and cumulative learning underlie an evolutionary theory of business firm development and strategy. As one test case of the theory, this study examines firms' applied research and development activities. Evolutionary theory suggests that firms within an industry will tend both to persist and to differ in the amount of effort they devote to various R&D applications. A test of the hypothesis of presistent differences in R&D, using uniquely detailed data from the petroleum industry, provides support for evolutionary theory.
Article
We use bibliometric (in particular patent-based) methods and techniques to develop a cartography of technology. Two types of maps are presented: co-word maps and co-classification maps. Both types of maps have been constructed for the entire domain of technology (the macro-level), i.e. the ensemble of all fields of technology in their mutual relations. Time series clearly illustrates the changing relations between the major clusters of technology, and in particular the changing role of fields which act as a “bridge” between clusters, or as a (declining or emerging) centre of technological activities within a specific cluster. Maps visualize relations between fields of technology. In order to have measures of the relative strength of these relations, we develop the concept of affinity between fields. A special feature of our macro-maps concerns the role of Japan in technology.
Article
Quantitative indicators of the technological strengths of individual companies would be an important addition to the financial and economic data used in competitor assessments, merger/acquisition analyses, investment decisions, and corporate planning and management. This paper examines the links between corporate patent and patent citation data, and several other indicators of corporate performance: changes in sales and profits, research and development budgets, scientific productivity, and expert opinions of company technological strength. The study covers 17 US pharmaceutical companies for which financial, R&D and expert opinion data were readily available. For these pharmaceutical companies it was found that the patent data are an excellent indicator of overall corporate technological strength with (1) an overall correlation of 0.82 between expert opinion of pharmaceutical company technical strength, and the number of US patents granted to the companies, and (2) correlations, in the general range of 0.6 to 0.9, between increases in company profits and sales, and both patent citation frequency and concentration of company patents within a few patent classes.