Charles W. L. Hill

Tacit Knowledge as a Source of Competitive Advantage in the National Basketball Association

In this study, we investigate a central tenet of the resource-based view of the firm舒that tacit knowledge often lies at the core of sustainable competitive advantage舒and attempt to articulate it wi...

Effects of Ownership Structure and Control on Corporate Productivity

This study developed and tested a model that attempts to describe the influence of ownership structure on productivity differences between firms. We theorized that diversification, investment in R&...

An examination of opportunistic action within research alliances: Evidence from the biotechnology industry

Abstract Like a photographer trying to take a perfect picture, an entrepreneur trying to increase the odds of survival must learn very quickly that focus is everything. And what demands an entrepreneur’s immediate focus is the development of new products. Entrepreneurial ventures depend on the rapid creation of new products to gain access to early cash flows, create legitimacy, grab early market share, and increase their odds of survival (Schoonhoven, Eisenhardt, and Lymman 1990) . However, the increasing costs and complexity of new product development are making it difficult for entrepreneurial ventures to contain the assets needed for successful R&D within their boundaries, forcing them to reach beyond their borders to access resources. Barley et al. (1992) document the use of more than 900 contractual research agreements within the biotechnology industry alone. Recent research has also found a positive relationship between the use of alliances in the R&D process and the rate of new product development Deeds and Hill 1996 , Shan, Walker, and Kogut 1994 . This particular study focuses on the use of relational contracts in the R&D process and extends the prior work on relational contracts to create an explanatory model of the deterrents to opportunism within a relational contract. The article begins with a discussion of the traditional modes of deterring opportunism and of modes of deterring opportunism based on the development of a strong cross-boundary relationship. From this discussion, hypotheses are derived that relate certain characteristics of the alliance (frequency of communication, strength of contractual deterrents, hostage investments, age of the relationship, etc.) to the level of opportunism within the relationship. These hypotheses are then tested on a sample of 109 research alliances in the biotechnology industry. We found significant evidence that a strong relationship between the partners serves as a much more effective deterrent to opportunistic action than the creation of hostage investments or contingent claims contracts. In particular, the results for frequency of communication and the background of the firm highlight the importance of the top management team’s understanding and involvement in the management of research alliances. The strong results for background congruence indicates the importance of shared expectations and understandings between the partners. The strong empirical results for the hypothesized U-shaped relationship between age and opportunism provide support for the existence of both a honeymoon period in the relationship and a liability of adolescence among research alliances. The data also suggest that the honeymoon period for an alliance will last about 4.6 years. We also find that the honeymoon period for alliances that are of little importance to the future of the firm is only 4.1 years, and in our sample of alliances that were important to the future of the firm, the honeymoon period extended from 4.6 years to 6.1 years.

Technological Discontinuities and Complementary Assets: A Longitudinal Study of Industry and Firm Performance

We suggest that the type of complementary assets (generic versus specialized) needed to commercialize a new technology is critical in determining the industry- and firm-level performance implications of a competence-destroying technological discontinuity. At the industry level, we hypothesize that incumbent industry performance declines if the new technology can be commercialized through generic complementary assets, whereas incumbent industry performance improves if the new technology can be commercialized through specialized complementary assets. At the firm level, we posit that an incumbent firms financial strength has a stronger positive impact on firm performance in the postdiscontinuity time period if the new technology can be commercialized through generic complementary assets. We hypothesize, however, that an incumbent firms R&D capability has a stronger positive impact on firm performance in the postdiscontinuity time period if the new technology can be commercialized through specialized complementary assets. Drawing on multi-industry, time series, and panel data over a 26-year period to analyze pre- and postdiscontinuity industry and firm performance, we find broad support for our theoretical model.

Conducting and Integrating Strategy Research at the International, Corporate, and Business Levels: Issues and Directions

This paper identifies important research issues at the international, corporate, and business levels of strategy research. In addition, research questions that require integration across multiple levels of strategy as well as the incorporation of both the content and process dimensions of strategy are addressed.

The Multidivisional Structure: Organizational Fossil or Source of Value?

The multidivisional (M-form) structure has been variously characterized as the most significant organizational innovation in the twentieth century (Williamson, 1985) and as an organizational fossil that is increasingly irrelevant in the modern world (Bettis, 1991). Against this background, the purpose of this paper is threefold. First, to critically evaluate three perspectives, including transaction cost, strategic management and sociological, relating to the M-form firm. Second, to examine what the empirical evidence finds about relationships proposed by these perspectives. Finally, to develop a model that summarizes the relationships proposed among these perspectives and make suggestions about future theory building and areas where further empirical work is needed.

Internal Capital Market Controls and Financial Performance in Multidivisional Firms

It is proposed that, within the population of M-form firms, the control systems necessary to realize economic benefits from interrelationships between subunits o f a firm are incompatible with the systems necessary to realize benef its from an M-form type internal capital market. This hypothesis is t ested on 156 large U.K. firms. Questionnaire data are used to classif y the firms according to their internal control characteristics. The findings provide tentative support for the hypothesis. Copyright 1988 by Blackwell Publishing Ltd.

Organizational Restructuring And Economic Performance In Leveraged Buyouts: An Ex Post Study

This article reports the results of an ex post study of the effects of leveraged buyouts (LBOs) upon the goals, strategy, structure, and performance of firms. Our study was designed to test argumen...

An Empirical Examination of the Causes of Corporate Wrongdoing in the United States

It has been argued that a firms propensity to violate federal laws and regulations is related to firm size, diversity, financial pressures, and organizational structure and processes (Clinard & Yeager, 1980). The current paper tests these propositions using United States data from the Occupational Safety and Health Administration and the Environmental Protection Agency. The findings offer at best weak support for some of these propositions while strongly suggesting that most are invalid. The results have important implications for future research and practice.

Schumpeterian Dynamics Versus Williamsonian Considerations: A Test of Export Intermediary Performance

Using a sample of export intermediaries connecting domestic producers and foreign buyers, the study tests competing hypotheses on firm performance derived from the Austrian and transaction cost perspectives. Specifically, the Austrian perspective suggests that the more distant the export market and the more complex the product that the intermediary specializes in, the better its performance. Transaction cost theory, on the other hand, offers conflicting predictions. Our results indicate that these two theories are complementary to each other, and a contingency framework is proposed and discussed.