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The diversity of knowledge at the team level is known to be a key driver of team performance on knowledge-intensive problems. However, the extant literature is ambiguous about how team knowledge diversity emerges from the individuals that comprise a team and consequently how such team composition affects performance. In this paper, we address these questions by first algebraically decomposing the standard measure of team diversity, the H-Index, into two components, average individual knowledge diversity and knowledge distance between team members. We then theorize that individual knowledge diversity enables the recombination of unique pieces of knowledge but reduces the deep domain knowledge necessary to create novel problem solutions. In addition, knowledge distance between members ensures that each member provides incremental knowledge, enabling novel knowledge recombination, at the cost of reduced coordination. Consequently, we argue optimal team performance is likely to arise when individuals have intermediate knowledge diversities and an intermediate knowledge distance between them. We find empirical support for our theory using the film industry, viewing the main cast members of each film as a team whose members vary by the diversity of their prior film genre experiences. Ultimately, our study suggests that separate examination of the individual level components of team knowledge diversity is necessary to understand the relationship between team knowledge diversity and performance. [ABSTRACT FROM AUTHOR]

Industry change can come in several forms. In this study, we examine one understudied form involving the interaction between suppliers and incumbent firms and how changes in industry-wide supplier engagement models impact incumbents. We argue that firms working repeatedly with the same suppliers under the existing engagement model develop effective routines and therefore are associated with higher-quality outputs. In contrast, under a new engagement model, the advantage existing suppliers have over new suppliers diminishes, as well-honed routines become constraints and engender complacency, limiting adaptation to the industry-level change associated with the new model. We find support for our theory in the US television programming industry following the entry of Netflix in 2013, coinciding with changes in the industry's predominant supplier engagement model. [ABSTRACT FROM AUTHOR]

We develop and test a theory on why the inequality between novice and veteran workers may exacerbate with "flexible" employment practices--that allow employers to hire and fire workers more freely. Literature suggests that novice workers cannot rely on flexible employers to give them opportunities for building a career or accumulating skills, thus suffering from an exacerbated inequality. But employers using flexible employment practices may initially hire those whose skills have not been demonstrated but seem promising, compared to "committed" employers that hire workers for the long term, because flexibility allows employers to experiment instead of having to commit for a long term. Thus, the inequality of opportunities may decrease with flexible employment. Nevertheless, flexible employers may be less likely to continue hiring novice workers for the long term than veteran workers, insofar as novice workers on average are revealed during the experimentation stage to have lower skills than veteran workers. Consequently, more experimentation in the industry may imply a competition lopsided in favor of veteran workers and eventually reduce the share of novice workers hired long-term, exacerbating the arguably more consequential inequality--inequality of long-term employment. We test and confirm this idea in the TV programming industry where being either the committed, or "straight-to-series," program--that commits to producing an entire season and hiring actors for the entire season--or the flexible, or "pilot," program--that evaluates the first episode before committing to producing an entire season and hiring the cast for that full duration--is deemed viable. [ABSTRACT FROM AUTHOR]

Strategic management scholars are increasingly paying attention to the micro-foundations of firms' capabilities by examining how the attributes of individuals within firms can shape organizational-level capabilities and performance. However, little attention has been paid to how individuals' positions within their firms and their interaction with other individuals can shape how their unique individual attributes impact organizational-level capabilities and performance. In this paper, we examine how the breadth of prior experience of managers and workers reporting to them within a hierarchy can influence organizational performance. Drawing on a cognitive dynamic capabilities theoretical lens, we argue that broader prior experience of managers is positively associated with organizational performance, whereas broader prior experience of workers is negatively associated with organizational performance. Further, workers with narrower experience tend to strengthen the impact of broader managerial experience on organizations' overall performances. We find support for our arguments in the movie industry using a dataset of 101,027 movies released between 1950 and 2017. [ABSTRACT FROM AUTHOR]

Firms often partially fund new projects for initial development rather than fully fund them to completion. This staged development yields early feedback which can improve an individual project through learning and a portfolio of projects by the termination of less promising projects. Although prior empirical studies have found a positive relationship between staged development and outcomes, these studies were limited to settings that only allowed for learning: projects were never terminated. To capture the full effect, this paper exploits a form staged development in the television show industry where a new show's first episode is filmed and evaluated before commissioning the full show. Using Netflix's entry into television show production as a source of randomization, a negative treatment effect of piloting on viewer ratings is measured for shows that are more likely to survive piloting. Mechanism evidence suggests piloting worsens shows by impeding their ability to attract actors and lowering planning of the full season. Hence, staged development can have a downside: the lack of commitment to projects can prevent them from getting the resources and effort necessary for success. [ABSTRACT FROM AUTHOR]

Existing theoretical and empirical work on contracting highlights the efficiency gains possible from optimizing asset ownership when projects span firm boundaries. However, in settings where firms are able to choose among heterogenous projects, asset ownership can also determine which projects are selected for execution. Using a regulatory shock to the US broadcast television industry, this study finds restricting television network ownership over television shows altered the types of shows commissioned by the networks. This result extends prior theoretical and empirical work on contracting by showing asset ownership not only determines the efficiency of outcomes given a project, but also can change the relative attractiveness of different projects. The relationship between asset ownership and project selection is especially important in innovation contexts where project selection has a cumulative effect by changing the marginal returns to future projects; an industry's contracting environment can therefore be a driver of the direction of innovation. [ABSTRACT FROM AUTHOR]