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Management research has alluded to organizational and environmental conditions that drive firms’ tendencies to explore versus exploit. We complement this research by developing theory on vicarious learning to explain how a firm adjusts its own exploration level based on the exploration levels of its alliance partners and competitors. Using panel data on 180 electronics firms publicly traded in the United States, we reveal an inverted U-shaped association between a firm’s exploration tendency and the exploration levels of its partners and competitors. Convergence is explained by imitation and legitimation, while divergence is associated with risk perception and specialization in the knowledge domain. We further show how the convergence of the exploration tendency becomes stronger under firm-specific uncertainty but weaker when the exploration patterns exhibited by the firm’s partners and competitors are incoherent. Finally, counter to expectations, we show that this convergence is weakened by the technological proximity of the firm’s competitors. Our findings inform research on vicarious learning and the antecedents of exploration by underscoring the role of interdependence in firms’ exploration tendencies.

We revisit March’s seminal 1991 article, “Exploration and exploitation in organizational learning”, and analyze the impact it has had on scholarly thinking, providing a comprehensive and structured review of the extensive and diverse research inspired by this publication. We show that although this influence has changed significantly over the years, there are still unexplored opportunities left by this seminal work. Our approach enables us to identify promising directions for future research that reinforce the themes anchored in March’s article. In particular, we call for reconnecting current research to the behavioral roots of this article and uncovering the microfoundations of exploration and exploitation. Our analysis further identifies opportunities for integrating this framework with resource-based theories and considering how exploration and exploitation can be sourced and integrated within and across organizational boundaries. Finally, our analysis reveals prospects for extending the notions of exploration and exploitation to new domains, but we caution that such domains should be clearly delineated. We conclude with a call for further research on the antecedents of exploration and exploitation and for studying their underexplored dimensions.

Resource reconfiguration enables firms to adapt in dynamic environments by supplementing, removing, recombining, or redeploying resources. Whereas prior research has underscored the merits of resource reconfiguration and the modes for implementing it, little is known about the antecedents of this practice. According to prior research, under given industry conditions, resource reconfiguration is prompted by a firm’s corporate strategy and by characteristics of its knowledge assets. We complement this research by identifying learning from performance feedback as a fundamental driver of resource reconfiguration. We claim that performance decline relative to aspiration motivates the firm’s investment in knowledge reconfiguration, and that this investment is reinforced by the munificence of complementary resources in its industry, although uncertainty about the availability of such resources limits that investment. Testing our conjectures with a sample of 248 electronics firms during the period 1993–2001, we reveal a clear distinction between exploitative reconfiguration, which combines existing knowledge elements, and exploratory reconfiguration, which incorporates new knowledge elements. We demonstrate that performance decline relative to aspiration motivates a shift from exploitative reconfiguration to exploratory reconfiguration. Moreover, munificence of complementary resources mitigates the tradeoff between exploratory and exploitative reconfigurations, whereas uncertainty weakens the motivation to engage in both types of reconfiguration, despite the performance gap. Nevertheless, codeployment, which extends the deployment of knowledge assets to additional domains, is more susceptible to uncertainty than redeployment, which withdraws those assets from their original domain and reallocates them to new domains. Our study contributes to emerging research on resource reconfiguration, extends the literature on learning from performance feedback, and advances research on balancing exploration and exploitation.

The resource-based view (RBV) is a useful framework for studying strategic organization. However, it focuses on rent-generating properties of resources, with less attention paid to the processes by which firms accumulate and deploy resources. I contend that organizational design that supports these processes should be integral to RBV theorizing. Despite recent debates concerning the RBV (Barney, 2001; Lado et al., 2006; Priem and Butler, 2001), its conceptualization of the firm as a bundle of resources has remained immune to criticism. This conceptualization has led scholars to consider everything that is embedded in the firm as a resource: ‘all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc.’ (Barney, 1991: 101). Thus, it has obscured the distinction between resources and other organizational properties that govern resource accumulation and deployment. Related research streams shed little light on these processes. The knowledge-based view underscores some properties of knowledge (Kogut and Zander, 1992). Although several scholars distinguish flows from stocks of knowledge (e.g., Decarolis and Deeds, 1999), this literature disregards organizational constraints that limit knowledge accumulation and deployment. In turn, the absorptive capacity literature studies internalization of external knowledge, referring to the cycle of acquisition, assimilation, transformation, and exploitation (Zahra and George, 2002). It concentrates on abilities rather than on supportive mechanisms. The capabilities literature examines a firm’s abilities to achieve objectives by integrating, combining, and leveraging resources (Hoopes and Madsen, 2008). It sheds more light on the means by which firms acquire and release resources, yet falls short of revealing how firms manage their resource bases. Finally, the dynamic capabilities literature concerns the ability to reconfigure capabilities in view of path dependencies and changing market conditions (Teece et al., 1997). Capabilities can follow predetermined lifecycles (Helfat and Peteraf, 2003) or be transformed and substituted (Lavie, 2006), yet the mechanisms that support their reconfiguration have not been specified. These streams of research contribute little to the understanding of dynamic resource accumulation and deployment. Most approaches do not distinguish resource flows from stocks; some consider only one type of resource, while others underscore either internal or external resources. They neither distinguish resources from capabilities and other organizational properties nor do they explain their interplay. They associate competitive advantage with the properties of resources and 452822 SOQ10310.1177/1476127012452822LavieStrategic Organization 2012

In studying the antecedents of alliance performance, one stream of research has underscored the alignment between partners' characteristics whereas another has concentrated on relational mechanisms such as mutual trust, relational embeddedness, and relational commitment. We integrate these two perspectives by examining how congruence of the partners' cultures and organizational routines facilitates the emergence of relational mechanisms in non-equity alliances. Our analysis of 420 non-equity alliances in the information technology industry demonstrates how differences in partners' internal task routines undermine relational mechanisms that in turn impact alliance performance. Partners who acknowledge their latent differences can overcome some of these negative consequences. We advance alliance research by studying the performance implications of alliance partners' organizational differences and by demonstrating how these effects are mediated by relational mechanisms. Copyright © 2012 John Wiley & Sons, Ltd.

We study how collaboration and internal resources drive knowledge creation and application in university research programs. Academic collaboration with fellow university scientists drives knowledge creation, whereas collaboration with industry partners drives knowledge application. Nevertheless, contrary to prior research that has underscored the merits of collaboration, we identify an optimal level of collaboration beyond which collaboration undermines both processes. Furthermore, the availability of internal resources can either complement or substitute for collaboration depending on the level of collaboration. In particular, we find that availability of internal resources mitigates the effect of academic collaboration on knowledge creation when collaboration is moderate and complements it as collaboration becomes excessive. Thus, our study reveals the contingent value of collaboration and the interplay between internal and network resources. It enhances understanding of collaboration in nascent science-driven industries and advances the resource-based view and knowledge management research.

Organizational research advocates that firms balance exploration and exploitation, yet it acknowledges inherent challenges in reconciling these opposing activities. To overcome these challenges, such research suggests that firms establish organizational separation between exploring and exploiting units or engage in temporal separation whereby they oscillate between exploration and exploitation over time. Nevertheless, these approaches entail resource allocation trade-offs and conflicting organizational routines, which may undermine organizational performance as firms seek to balance exploration and exploitation within a discrete field of organizational activity (i.e., domain). We posit that firms can overcome such impediments and enhance their performance if they explore in one domain while exploiting in another. Studying the alliance portfolios of software firms, we demonstrate that firms do not typically benefit from balancing exploration and exploitation within the function domain (technology versus marketing and production alliances) and structure domain (new versus prior partners). Nevertheless, firms that balance exploration and exploitation across these domains by engaging in research and development alliances while collaborating with their prior partners, or alternatively, by forming marketing and production alliances while seeking new partners, gain in profits and market value. Moreover, we reveal that increases in firm size that exacerbate resource allocation trade-offs and routine rigidity reinforce the benefits of balance across domains and the costs of balance within domains. Our domain separation approach offers new insights into how firms can benefit from balancing exploration and exploitation. What matters is not simply whether firms balance exploration and exploitation in their alliance formation decisions but the means by which they achieve such balance.

A growing body of research suggests that an organization's ties to other organizations furnish resources that bestow various benefits. Scholars have proposed different perspectives on how such networks of ties shape organizational behavior and performance outcomes, but they have paid little attention to the underlying mechanisms driving these effects. We propose reach, richness, and receptivity as three fundamental mechanisms that jointly constitute a parsimonious model for explaining how network resources contribute to organizational performance. Reach is the extent to which an organization's network connects it to diverse and distant partners. Richness represents the potential value of the resources available to the organization through its ties to partners. Receptivity denotes the extent to which the organization can access and channel network resources across interorganizational boundaries. Whereas reach specifies how wide-ranging and heterogeneous the organization's network connections are, richness characterizes the value of the combinations of resources furnished by its partners. Receptivity in turn portrays how organizational capabilities and the quality of ties to partners facilitate flows of network resources. We propose that the interplay of these three mechanisms determines the benefits that the organization obtains from its network: reach and richness jointly determine the potential value of the network, while receptivity is crucial in realizing that potential.

Corporate venture capital (CVC) investments serve as interfirm relationships that enable established firms to tap into emerging technology markets. Nevertheless, firms may also leverage their strategic alliances to this end. Does alliance formation reinforce or attenuate a firm's tendency to invest in entrepreneurial ventures? We introduce a resource-based perspective whereby resource complementarity and network resource visibility prompt a reinforcing association between CVC investment and alliance formation. In turn, external resource redundancy and internal resource allocation constraints yield an attenuating effect of alliance formation on CVC investment. Analyzing the alliances and CVC investments of 372 software firms during the 1990s, we reconcile these opposing arguments by revealing an inverted U-shaped association between CVC investment and alliance formation. Accordingly, the number of CVC investments first increases, but then decreases, with the number of alliances formed. Moreover, the positive association between CVC investment and alliance formation diminishes as firms invest in their internal resource stocks, mature, and accumulate experience with prior CVC investments. We advance strategic entrepreneurship research by elucidating the tendency of established firms to engage in CVC investment and by unpacking the complex association between different types of interfirm relationships that these firms leverage. Copyright © 2010 Strategic Management Society.

We examine the conditions under which the prior partnering experience of firms contributes to value creation in their new alliances. We propose that prior experience with the same partners, that is, ‘partner-specific experience,’ provides greater benefits than ‘general partnering experience’ that encompasses all prior alliances with any partner. We further explore some of the boundary conditions for the effects of partner-specific experience. We suggest that the effect of partner-specific experience on value creation in alliances is moderated by the extent to which the assets of the new partner differ from those of the firm's prior partners. We also propose that the firm's own technological and financial resources increase the benefits of partner-specific experience. Finally, we predict that the value of partner-specific experience will increase under high levels of firm-specific uncertainty. We test these hypotheses with comprehensive longitudinal multi-industry data on joint ventures formed among Fortune 300 firms between 1987 and 1996. Based on stock market returns to joint venture announcements, the results provide support for the contingent value of partnering experience. The implications for managing alliances and advancing organizational learning are discussed. Copyright © 2009 John Wiley & Sons, Ltd.

Scholars have underscored the merits of a dedicated alliance function that promotes standardization, formalization, and centralization of alliance management practices, but some recent research finds no support for the claim that a dedicated alliance function creates value. We contribute to this debate by offering a contingency approach. Specifically, we conjecture that the contribution of the dedicated alliance function to value creation in an alliance increases with general partnering experience that the firm has accumulated with its various partners but declines with partner-specific experience that the firm has accumulated in recurrent alliances with the same partner. Our analysis of more than 15,000 alliances involving U.S.-based software firms supports these conjectures and identifies boundary conditions for this function’s effects. We conclude that instituting an organizational infrastructure that is meant to enhance a firm’s ability to leverage its experience with various partners can restrict its gains from experience with specific partners. Nevertheless, by appropriately leveraging its dedicated alliance function, the firm can manage conflicting routines and overcome the tradeoff between efficient use of alliance management practices and responsiveness to partners in its alliance portfolio.

The article studies corporate evolution by performing a longitudinal analysis of Unisys Corporation and its alliance network, using interviews, questionnaires and archival data sources to identify ...

We have extended the theory of Multinational Corporations (MNCs) by focusing on MNCs' strategic positioning in a foreign market relative to their local counterparts. We propose a new typological framework that focuses on the competitive and marketing strategies of both foreign and local counter firms. Israel's growing attractiveness to foreign MNCs during the mid-1990s has been chosen to explore our propositions. A sample of 406 respondents evaluated the strategic positioning and performance of 104 firms, 56 of which were foreign MNCs and 48 of which were their local counterparts. Our findings suggest that foreign MNCs operating in Israel were perceived as superior to their local counterparts, in terms of their competitive strategy, marketing strategy, and customer satisfaction. In addition, MNCs were identified as “adaptive” organizations relative to local competitors, which were perceived to hold “myopic” strategic positions. Thus, foreign MNCs have been able to capture relatively high positions, in terms of perceived value for money.

How does the scientific value of innovations vary with the maturity of the knowledge that underlies them? We reconcile conflicting views in the innovation literature by introducing a contingency perspective that underscores the role of knowledge distance along technological and geographical domains. We predict an inverted U-shaped effect of knowledge maturity on the scientific value of new innovations. We further suggest that incorporating geographically distant knowledge can enhance the value contribution of knowledge maturity, whereas incorporating technologically distant knowledge or waiting for the adoption of knowledge in the industry mitigates this value. Our analysis of 5,575 biotechnology patented innovations offers support for our conjectures. We thus advance research on knowledge management and innovation by underscoring the temporal aspect of innovation and its interplay with technological and geographical distances.

With the promise of regional peace brought about by political developments in the Middle East in the 1990s, Israeli firms found themselves in a radically changing environment, with multinational corporations (MNCs) making massive inroads into their long-standing domestic monopolies. Firstly, this article demonstrates how foreign MNC positioning has dominated that of their domestic counterparts. Secondly, we describe how this strategic dominance has triggered domestic firms into rethinking their strategies, and turned them into global players. The Israeli experience offers lessons for both foreign and domestic firms in how to develop economies better prepared for a win–win situation.

We examined the distribution of benefits to partners in multipartner alliances by concentrating on dynamics of partner entry and involvement. Testing hypotheses in the Wi-Fi Alliance, we observed heterogeneity of benefits. In particular, the extent of organizational involvement in this alliance enhanced partners' reputation and market success with related product introductions but reduced their productivity. Participation in competing alliances enhanced productivity and market success despite potential efficiency losses. Finally, early alliance entrants gained market success, and both early and late entrants were more productive than intermediate entrants. These findings illuminate multipartner alliance complexity and disparity between common and private benefits.

Social network theories have gained prominence in the strategic management literature. Nevertheless, attempts to extend their application to the domain of competition should be questioned given the...