Existing Partner, but From Somewhere Else:
Market Entry Through Cross-market Repeated Alliances
The extant literature on strategic alliances show that firms often repeat alliances with their existing partners to grow and perform better. However, it has been implicitly assumed in the existing studies that firms look for alliance partners in the same market as before, even though multi-business firms often enter new markets. In this study, I propose that firm’s existing partners from old markets can be valuable resources for product market entry. Firms are more likely to choose existing partners from old markets than new partners when the existing partners have relevant product development experience or technological knowledge in new market. In addition, there can be positive spillovers effect from repeated alliances in new markets to the existing alliances. Thus, I argue that firms are more likely to enter new markets through repeated alliances when the existing alliances are valuable; partners have high levels of technological knowledge in the old markets of alliances. Last, I suggest that these two different benefits of market entry through repeated alliances are substitutive. I test these ideas in the U.S. pharmaceutical industry, using detailed data on the activities of 1,400 firms in 15 therapeutic areas from 1986 to 2019.
Neither Too Close nor Too Far: Cross-regional Collaboration as Drivers of Radical Innovation
(With Aks Zaheer and Assem Kaul)
In this study, we examine the relationship between two distinct forms of boundary-spanning knowledge recombination: across geographies and across knowledge domains. We contend that cross-regional collaborations between inventors within firms enable the successful spanning of technological boundaries to produce new-to-the-world recombinations. They do so, moreover, both by connecting geographically separated bodies of within-industry knowledge to eliminate inventions that are too incremental, and by screening out recombinations of knowledge across industries that might prove too radical. Results from a study of 27,833 medical device patents in the U.S. from 1981 to 2005 show support for these arguments, even after accounting for the endogeneity of crossregional collaboration. Supplementary analyses show that cross-regional collaborations enhance the impact of firm patents, and that effects are stronger for close vs. distant collaborations. Our study offers a nuanced examination of the ways in which firms benefit from internal collaborations across locations, while also contributing to research on knowledge agglomeration and organizational innovation.
The Problem of Fragmentation and the Paradox of Network Intervention:
Evidence from Policy Change in Health Care Delivery
(With Russell Funk)
The work of organizations increasingly requires bringing together participants with diverse knowledge and interests. Yet the differences that accompany such diversity make building robust relationships difficult. The result is a “problem of fragmentation,” according to which collaborative networks exhibit dense, locally connected substructures, but sparse global connectivity. Motivated by these observations, research has begun examining network interventions—deliberate efforts to shape the structure of a network—for addressing fragmentation. To date, however, studies have produced many conflicting findings. We suggest clarity may come from considering how the inducements offered by interventions interact with those afforded by the existing social structure of targeted groups (e.g., for connecting with distant contacts). We evaluate these ideas in a study of accountable care organizations (ACOs), using data on 100 million relationships among 1 million providers in 3,000 communities. Our findings suggest a seemingly paradoxical implication of network interventions. The communities that stand to benefit most from intervention are those with greater fragmentation; yet fragmentation is associated with lower intervention engagement (e.g., participation, adoption) and, conditional on engagement, less effectiveness for reducing fragmentation. The result is increasing network inequality, with the gap between communities with lower and higher fragmentation increasing following intervention introduction.
Do My Errors Matter? Status and Reputation in Experiential Learning from Errors
(With Mooweon Rhee and Bo Kyung Kim)
Although status, as an actor-level and relative concept, and reputation, as an attribute-level and absolute one, can function as different lenses through which internal managers make sense of and respond to errors in their organizations, research has yet to examine how organizational status and reputation are related to attention, interpretations of, and responses to errors, all of which affect learning outcomes. To close this theoretical gap, we explore how status and reputation affect organizations’ learning from their own errors. We argue that high-status organizations learn more from their own errors than low-status organizations due to status anxiety, whereas high-reputation organizations learn less from their own errors than low-reputation organizations due to resilience to negative information. To explore the suggested mechanisms further, we identify the internal and external characteristics of errors as moderating factors (severe versus non-severe errors and single versus multiple actor errors), proposing that they positively moderate the effects of status, but not those of reputation, on experiential learning by only increasing status anxiety. We test our research hypotheses using data on product recalls in the U.S. automobile industry from 2000 to 2015. The findings suggest that status and reputation are indeed associated with different learning patterns among automakers.