Barak S. Aharonson

The structural evolution of multiplex organizational networks: Research and commerce in biotechnology

Inter-organizational alliances and the networks they generate have been a central topic in organization theory over the last decade. However, network analyses per se have been static. Even when information over time has been available, the temporal component has been set aside or aggregated to the end point of the study. Substantially more research has been conducted on organizations initiating inter-organizational relationships. The organization-level research has been decidedly dynamic in nature. However, organization-level research has largely examined the structural characteristics of the networks generated by organizational actions. Work combining network-level and organization-level phenomena has been rare and, to our knowledge, no research including the effects of organization-level actions on the evolution of network-level phenomena has occurred. In this chapter we use more than 6000 R&D alliances and more than 6500 M&D alliances initiated by more than 1000 biotech firms in the U.S. over a 30 year period to construct quarterly networks. We test 13 hypotheses linking the actions of the firms to changes in network structure. Utilizing hazard-rate models we test the effects of institutional status, positional status (centrality), and structural status (coreness) of firms on their propensity to form ties with different structural consequences. Our research indicates that both R&D and M&D networks in U.S. biotechnology are developing a distinct core/periphery structure over time. Furthermore, we find support for a process of preferential attachment wherein organizations are more likely to form ties with organizations of similar institutional and structural status. Furthermore, we find evidence for cross effects, for example attachment processes that enfold across the two networks.

Learning by hiring or hiring to avoid learning

Purpose – The purpose of this paper is to advance the understanding of the mechanisms associated with learning-by-hiring. Design/methodology/approach – The authors built a yearly dyad data structure of all of the hiring and sourcing firms in the US biotechnology sector between 1973 and 1999. Findings – The authors found that hiring firm’s learning from a prior employer’s knowledge is limited in scope to the knowledge developed by the newly hired inventor, and could be attributed to new hire direct involvement. Learning from new recruit occurred only when incumbent inventors collaborate intensively with the hired inventor. Accordingly, what might seem like learning-by-hiring may result in hiring to avoid learning, unless the organization creates the social structures that facilitate the exchange of knowledge within and throughout the organization. Practical implications – The results, thus, highlight the importance of aligning a firm’s social environment with its strategic goal to learn from its external c...

Institutional pressure and an organization’s strategic response in Corporate Social Action engagement: : The role of ownership and media attention

This study investigates the relationship between institutional pressure and a firm’s strategic behavior in the context of Corporate Social Action. We posit that as an organization’s susceptibility to institutional pressure increases, its proclivity to conform to and alleviate environmental concerns and pressures to establish or maintain its legitimacy increases. To explain variation in a firm’s strategic response to institutional pressures and its engagement in Corporate Social Action, we focus on two factors: public ownership and media attention. Analysis of the largest publicly traded German firms indicates that greater public ownership reduces a firm’s propensity to engage in Corporate Social Action, while firms with less public ownership are more proactive in social engagement. However, when confronting greater media attention, firms with greater public ownership are more reactive in pursuing conforming strategies and increasing Corporate Social Action engagement.

National culture and national savings: is there a link?

We study the effect of national culture on economic decisions, focusing on GLOBE cultural dimensions of uncertainty avoidance and future orientation. Specifically, we study the effect of divergence between cultural values and practices (societal aspirations), on the aggregate savings decision. Using the life-cycle model of savings as our basic model, we find that societal aspirations are important in explaining national savings behavior. In particular, we show that societal aspirations relating to future orientation and uncertainty avoidance have a positive effect on the rate of savings. We interpret our findings to indicate that such societal aspirations lead to mistrust in the societal arrangements and institutions, and induce savings as a means of securing the future and reducing uncertainty. To substantiate this interpretation, we utilize the microfinance industry; showing that high societal aspirations are associated with preference for savings through member-owned microfinance institutions (MFIs) over savings through non-member-owned MFIs.

The Interplay Between Exploration and Exploitation in SMEs

Abstract Despite a growing body of research on exploration and exploitation, scholars have tended to study the phenomena from a narrow perspective mostly within larger, well-established organizations. However, it is still far from obvious how top management within small-to-medium sized enterprises (SMEs) are to address the liability of newness and seek access to resources and capabilities relevant for the pursuit of exploration and exploitation. Resource sourcing and allocation decisions are particularly critical in SMEs and must be aligned with the firm’s fundamental strategic intent and growth model. For example, organizations following a stage model by first developing a domestic market and then expanding globally will require different bundles of resources and capabilities than organizations that are designed to conquer the global arena. Indeed, management systems will likely need to adapt across the firm life cycle such that it can fulfill an explorative function in the earlier stages and an exploitative function in later ones. Hence, early-stage ventures have to master the resource reallocation process which is contingent on their access to capital. Across the firm life cycle, venture capitalists can tap into the growth potential of early-stage ventures is a key factor behind their successful short-term innovative performance as well as long-term survival.

THE EFFECTS OF BUNDLED KNOWLEDGE STOCKS ON INNOVATIVE SUCCESS.

As firms engage in building different R&D capabilities, they confront a crucial question: What configuration of knowledge stocks is most likely to increase innovative success? Examining knowledge c...

What Drives CSA Reporting Engagement among Large Firms

This study investigates the relationship among institutional pressure, institutional ownership, financial performance, and corporate social action (CSA). We argue that institutional pressure induces firms to increase their engagement in CSA, as CSA can be used as a mechanism to increase a firm’s reputation and legitimacy and to alleviate institutional pressure. However, firms strategically differentiate the extent of their organizational response in terms of CSA engagement. We highlight two attributes that can explain variations in CSA engagement among firms: financial performance and ownership control. Using data on the largest publicly traded German firms, we find that organizations with greater financial performance are more likely to reactively engage in CSA and that firms with a high ownership concentration (held by a major shareholder or group of shareholders) are more likely to proactively engage in CSA.

Exploration and Exploitation in Early Stage Ventures and SMEs

This volume of Technology, Innovation, Entrepreneurship and Competitive Strategy is devoted to research aimed at understanding the implications of Exploration and Exploitation activities in early-stage ventures and small-and-medium enterprises (SMEs).

Industrial Clustering and Innovative Output

The chapter examines the ways firms benefit from knowledge spillovers in industrial clusters. Clustered firms are eight times more innovative when located in clusters with strong specialization in their own technology. While the literature on organization agglomeration has highlighted a potential trade-off between the benefit and cost of co-location in terms of knowledge spillovers, our findings are that agglomerations are important to new innovative-driven ventures. However, our research also indicates that although on average new ventures benefit from agglomeration, more work is needed to explore the mechanisms by which some organizations benefit from co-location and knowledge spillovers while others may not.