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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. Funding: Dovev Lavie acknowledges his fellowship with the Invernizzi Center for Innovation, Organization, Strategy and Entrepreneurship and the ICRIOS Seed [Grant 25435].

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.

How does an acquisition initiated by a firm's alliance partner affect the value that the firm can create and capture from its alliance with that partner? We conjecture that the similarity between the businesses of the firm and its partner's acquisition target restricts the firm's ability to create and capture value from its alliance, whereas the complementarity between their businesses enhances the firm's gain from its alliance. We further expect relational embeddedness between the firm and its partner to mitigate the competitive tension associated with similarity while reinforcing synergies ascribed to complementarity. Our analysis of 361 firms and their 590 alliances with 91 partners that acquired 164 targets during 2000–2016 supports our predictions about business similarity and complementarity but refutes those concerning relational embeddedness.

How does the appointment of an outside CEO affect the hiring firm’s performance? Prior research reports that outside CEOs tend to underperform compared to inside CEOs, with high performance varianc...

This lead chapter defines competitive, cooperative, and coopetitive strategies, and provides an overview that complements the two following chapters which focus on gaining competitive advantage and creating value through alliances. This lead chapter suggests that although cooperation counters competition, in practice, firms simultaneously compete and cooperate in markets and value chain functions. The chapter reviews theories on competitive and cooperative strategies, such as market power, transaction cost economics, and resource-based theories, and highlights game theoretical, relational, and social perspectives. The chapter then considers the changing context of strategy, including the rise of emerging economies, political intervention, technological disruption, and growing social demands on businesses. The text points to new forms of cooperation and competition, including global value chains, cross-sector alliances, technology platforms, and ecosystems, with new models of public-private collaboration. This new business reality has important implications for the future focus of research on cooperation, competition, and coopetition.

Academy of Management Annual Meeting Proceedings includes abstracts of all papers and symposia presented at the annual conference, plus 6-page abridged versions of the “Best Papers” accepted for inclusion in the program (approximately 10%). Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author(s) directly for the full papers. Our study examines how a partner’s acquisition affects the value created and captured by the firm given the nature of its associations with the partner and with the partner’s acquisition target. We conjecture that business similarity between the firm and the acquisition target undermines value creation and capture, whereas business complementarity with that target creates value. We then contend that the relational embeddedness between the firm and its partner mitigates the negative effect of business similarity with the target while reinforcing the positive effect of their complementarity. Using an event study methodology, our analysis offers support to the opposing effects of business similarity and complementarity, but counters the predictions relating to the moderating effects of relational embeddedness. We conclude that if a partner acquires a target that competes with the firm, this indicates the breakdown of trust in their embedded relationship and creates a risk of knowledge spillover, which undermines the firm’s value creation and capture from the alliance. In addition, relation-specific routines can become rigid, which may prevent the firm from leveraging the complementary resources of the partner’s acquisition target.

Research streams on competition and cooperation are central to the field of strategic management but have evolved independently. The emerging literature on coopetition has brought attention to the phenomenon of simultaneous competition and cooperation, yet the interplay between the two has remained under-researched. We offer a roadmap for studying this interplay, which identifies some of its antecedents and consequences, highlights debates concerning the nature of competition and cooperation and the association between the two, and directs attention to the tension between competition and cooperation and the alternative approaches for managing this tension. We discuss the broader implications of the interplay, note some intriguing open questions, offer directions for future research, and present an organizing framework for the interplay of competition and cooperation.

Research on learning in alliances explains how firms simultaneously seek to absorb their partners’ knowledge while protecting their own knowledge from involuntarily leaking to their partners. We co...

Ecosystems are groups of independent firms linked through non-generic complementarities that work together to create a customer value proposition. Given the tentative consensus on the definition of...

Prior research has considered various conceptualizations of internationalization and offered diverse perspectives on its performance implications that, in turn, have generated mixed empirical findings. We advance research on the performance implications of internationalization by uncovering the multifaceted nature of internationalization and developing a generalizable theoretical framework that unbundles internationalization into three main facets: international intensity, international diversity, and international distance. We draw from multiple disciplines to explain the causal mechanisms that underlie the distinctive performance implications of each facet and test our predictions using panel data on Japanese firms. Our findings demonstrate that international intensity and international distance produce sigmoid effects on firm performance, though for different theoretical reasons. In turn, international diversity generates a U-shaped performance effect. Our multidisciplinary perspective contributes to international business research by discerning the distinct facets of internationalization and analyzing the mechanisms that disentangle the complex nature of the internationalization–performance relationship.

How does the appointment of an outside CEO affect the hiring firm’s performance? Prior research reports inferior performance for outsiders, but with high variance that yields mixed findings. We dev...

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.

Supplemental material, Online_Appendices-al for Revisiting James March (1991): Whither exploration and exploitation? by Ralf Wilden, Jan Hohberger, Timothy M Devinney, Dovev Lavie in Strategic Organization

Recent research on corporate misconduct has revealed that a firm’s misconduct can generate negative consequences to blameless firms in its industry. In turn, research on competitive dynamics sugges...

Scholars have studied the antecedents of exploration and exploitation, mostly identifying environmental and organizational conditions that facilitate exploration. We advance research on the manager...

The goal of this symposium is to review some important theoretical perspectives associated with interfirm collaborations (or interfirm ties) to better understand how some of these theories can be b...

Prior research on ambidexterity has limited its concern to balancing exploration and exploitation via particular modes of operation. Acknowledging the interplay of tendencies to explore versus exploit via the internal organization, alliance, and acquisition modes, we claim that balancing these tendencies within each mode undermines firm performance because of conflicting routines, negative transfer, and limited specialization. Nevertheless, by exploring in one mode and exploiting in another, i.e., balancing across modes, a firm can avoid some of these impediments. Thus, we advance ambidexterity research by asserting that balance across modes enhances performance more than balance within modes. Our analysis of 190 U.S.-based software firms further reveals that exploring via externally oriented modes such as acquisitions or alliances, while exploiting via internal organization, enhances these firms' performance.

We study how intra-industry product diversity affects firm performance by analyzing the implications of expanding a firm's product line within its core business. We conjecture that increases in product diversity initially undermine performance because of negative transfer effects but then improve it due to economies of scope. We further theorize that this U-shaped effect of product diversity becomes more pronounced as the firm increases the intensity of its technology investment, yet is likely to be attenuated by the firm's accumulated experience with intra-industry diversification. Data on 156 U.S.-based software firms operating from 1990 to 2001 furnish support for these conjectures. Our study advances emerging research on intra-industry diversification by underscoring some of its contingent performance effects. Copyright © 2013 John Wiley & Sons, Ltd.

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.

How do alliance portfolios evolve? We develop grounded theory based on Unisys' case, which reveals how exogenous technological changes at the industry level and shifts in a firm's strategy shape the composition of partners and the nature of alliance relationships. We identify four evolutionary processes: responding to external stimuli, breaking off inertial pressures, enabling coevolution, and restructuring and realigning the alliance portfolio. We shift attention from alliance formation decisions to changes in the nature of alliances and partner characteristics throughout the duration of the alliance portfolio. We suggest that the evolution of alliance portfolios cannot be fully explained by path dependence, life-cycle patterns, or proactive design. Instead, alliance portfolios are shaped by environmental stimuli and conflicting organizational processes. Copyright 2012 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Acknowledging interdependence in firms’ tendencies to explore versus exploit across governance modes, we claim that balancing these tendencies within each mode undermines performance as a result of...

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.

We extend international strategy research by unbundling distinctive facets of internationalization and explaining the unique causal mechanisms and contingencies underlying their respective performa...

The purpose of this symposium is to bring together scholars that work on new and highly promising areas in competition and rivalry to share their insights how competition research can be advanced through these new avenues. The five emerging areas that we plan to cover are governance, psychology, social networks, international, and communication.

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.

This study uncovers value creation and appropriation mechanisms in alliance portfolios. It reveals how the value created by network resources varies with their complementarity. The relative bargain...

This study reveals the multifaceted contribution of alliance portfolios to firms' market performance. Extending prior research that has stressed the value-creation effect of network resources, it uncovers how prominent partners may undermine a firm's capacity to appropriate value from its alliance portfolio. Analysis of a comprehensive panel dataset of 367 software firms and their 20,779 alliances suggests that the contribution of network resources to value creation varies with the complementarity of those resources. Furthermore, the relative bargaining power of partners in the alliance portfolio constrains the firm's appropriation capacity, especially when many of these partners compete in the focal firm's industry. In turn, the firm's market performance improves with the intensity of competition among partners in its alliance portfolio. These findings advance network research by highlighting the trade-offs that alliance portfolios impose on firms that seek to manage and leverage their alliances. Copyright © 2007 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.

Do firms balance exploration and exploitation in their alliance formation decisions and, if so, why and how? We argue that absorptive capacity and organizational inertia impose conflicting pressure...

I present a model of capability reconfiguration, integrating the Schumpeterian perspective on technological discontinuities with the dynamic capabilities literature to explain the responses of incumbents to technological change. I identify substitution, evolution, and transformation as three mechanisms of capability reconfiguration and then link the choice of reconfiguration mechanism to the nature of technological change and to the attributes of capabilities. I conclude that the extent to which the chosen mechanism enables incumbents to overcome cognitive and operational impediments influences their capacity to bridge capability gaps.