Daniel Tzabbar

Can Opportunity Emerge From Disarray? An Examination of Exploration and Exploitation Following Star Scientist Turnover

How do the specific characteristics of a departing star influence the effects of the star’s turnover on a firm’s innovation processes? Proposing a contingency model of key employee turnover, we argue and demonstrate that the individual characteristics of a star scientist who exits a firm determine the effects of the star’s turnover for the organization. Based on a longitudinal study of star scientist turnover in the biotechnology industry (1972-2003), we show that while star turnover disrupts existing innovation routines and thus decreases exploitation, this “shock” creates opportunities for the firm to search beyond existing knowledge boundaries, thereby increasing exploration. However, these effects are moderated by the departing star’s innovative and collaborative involvement within the firm. Specifically, the results indicate that a departing star’s innovative involvement strengthens the negative effects and weakens the positive effects of the star’s turnover on exploitation and exploration in the firm, respectively. On the other hand, a departing star’s collaborative involvement within a firm strengthens the negative effect of the star’s exit on exploitation but increases the positive effect of star turnover on exploration, thereby fostering opportunities for technological renewal. We suggest therefore that the prognosis for firms losing stars may vary, and may not always be dire. Our findings indicate that the short-term and long-term value of human capital is contingent on the social mechanisms surrounding its utilization. Thus, we offer a redirection for research and extend the resource-based view and human capital theory by introducing a resource dependence perspective into this theoretical context.

Venture Capital, CEOs’ Sources of Power, and Innovation Novelty at Different Life Stages of a New Venture

We explore how the mutual dependence between venture capitalists (VCs) and venture CEOs affects the innovation novelty of new ventures at different stages of their lives. Based on a sample of 482 U.S. biotech companies, we find that VCs encourage their investees to pursue risky and novel innovations in the early stage of a new venture, but discourage them from doing so in the late stage of the venture. Furthermore, structurally powerful CEOs, who are in a position to take greater risks, intensify the positive effect of VC funding on innovation novelty in the early stage of a venture. However, such CEOs attenuate the negative effect of VC funding on innovation novelty in the late stage of the venture. In contrast, CEOs whose power derives from their innovation-related expertise typically seek a more balanced approach to innovation. Such CEOs attenuate both the positive effect of VC funding on innovation novelty in the early stage of a venture and the negative effect of VC funding on innovation novelty in the late stage of the venture. This study sheds new light on the VC–CEO relationship and provides insights into how the risk preference and the abilities of mutually dependent actors affect the innovation outcomes of new ventures.

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...

Beyond the Startup Stage: The Founding Team’s Human Capital, New Venture’s Stage of Life, Founder–CEO Duality, and Breakthrough Innovation

Using a unique longitudinal study of U.S. biotechnology ventures, we advance extant research by showing that a founding team’s educational heterogeneity and prior founding experience have a positive and significant effect on the likelihood of a firm’s creating breakthrough innovation. However, we demonstrate that these relationships depend on the firm’s stage of life and decision-making structure as reflected in its founder–CEO duality. Specifically, we show that the positive effect of a founding team’s human capital is stronger in the growth stage than the early stages of a startup. While founder–CEO duality increases the positive effect of the founding team’s human capital in the startup stage, during the growth stage, such a structure reduces the impact of the founding team’s human capital. Therefore, to fully appreciate the effect of human capital on a venture’s success in breakthrough innovation, we must consider both the firm’s stage of life and its decision-making structure. As such, our theory pro...

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...

Examining Strategic Human Capital in the Context of Sports

The literature on strategic human capital has largely focused on the ability of firms to garner a resource-based competitive advantage through the management of human capital. A significant portion...

Interdependencies of Formal and Informal Network Structure and the Exploration of New Technological Opportunities Among Geographically Dispersed Firms

Abstract To resolve an inherent dilemma in extant research on geographically dispersed research and development (RD however, this likelihood decreases with an increase in power asymmetries. These results offer insights into the conditions in which the appropriate management of geographically dispersed R&D varies.