Search

Research Summary: We revisit Zuckerman's (1999) "The Categorical Imperative: Securities Analysts and the Illegitimacy Discount," which theorizes that when organizations are recognized as legitimate players in a category, they perform better. A replication exercise fails to reproduce two of three sets of results. Assisted by data shared by the original author, we find evidence that the inconsistency is due to a coding error in the original and differences between analyst data sets. We illustrate the use of epistemic maps and evaluate the theory's predictive power across a broad set of plausible empirical assumptions and also for a subsequent time period. The results are not robust. We conclude that these data provide little evidence to support strategic recommendations. Challenges and remedies for replication are discussed. Managerial Summary: This paper replicates a 1999 study "The Categorical Imperative: Securities Analysts and the Illegitimacy Discount" (Zuckerman, 1999). A key implication of the 1999 study is that firms should actively seek to be covered by analysts who specialize in their industries, and that a failure to be covered by analysts who are industry specialists will lead to lower capital market valuations. Our replication exercise indicates that there is insufficient evidence to recommend actively managing coverage along this dimension. [ABSTRACT FROM AUTHOR]

Research Summary: We inductively examine how the careers of employee entrepreneurs unfold, uncovering the role of motives and attribution for failure. Founders expressing organizational misalignment motives for leaving established organizations engaged in "venture crafting" whereby they actively sought to build well‐functioning organizations. They built successful initial ventures and careers. Founders lacking organizational misalignment motives generally founded initial ventures that failed: however, those making internal attributions altered their behaviors and built successful careers; in contrast, founders making external attributions continued founding unsuccessful ventures. These findings suggest that building organizational capabilities—and not merely inheriting capabilities from existing organizations—is a cornerstone of building successful entrepreneurial careers. Our findings are based on detailed career history and archival data on employee entrepreneurs in the disk‐drive industry. Managerial Summary: Our study follows careers of individuals leaving employment to create ventures, providing insights for entrepreneurs and managers. Though entrepreneurs often choose to focus solely on building a stellar product, our study underscores the importance of crafting well‐functioning organizations for career and venture success. Moreover, in case where initial ventures fail, founders who make internal attribution generate a "second chance" at success, whether as serial entrepreneurs or by returning to paid employment. Those who attribute failure to external factors, however, repeat their mistakes. For managers, our study reveals that the genesis of successful entrepreneurial careers is rooted in organizational deficiencies that prevent talented employees from thriving as intrapreneurs. The venture crafters typically left their jobs only after attempts to amend these issues were unsuccessful. [ABSTRACT FROM AUTHOR]

Research Summary: Through a longitudinal study of the product development portfolios of 457 US‐based firms in the biotechnology industry, we investigate how prolific inventors shape a firm's innovative direction following product development failure. Contrary to received wisdom, we argue and demonstrate that an increase in the number of prolific inventors is associated with a decrease in firm propensity to pursue novel product innovation following such failure. We further find that the presence of prolific inventors with greater collaborative strength and longer tenure negatively moderate the positive relationship between failure and the pursuit of novel product development. We discuss the implications of our results for research on learning from failure and strategic human capital. Managerial Summary: In case of adverse events such as product development failure, managers often rely on the firm's prolific inventors to help the firm learn from failure. Our study shows that there are limits to this approach. While prolific inventors increase firm propensity for novel product development, such propensity is significantly decreased following product failure. We further establish that the presence of prolific inventors with greater collaborative strength and long tenures is especially likely to reduce firms' pursuit of novel products, while the presence of those with low collaborative strength and tenure tend to increase this propensity. [ABSTRACT FROM AUTHOR]