Felipe A. Csaszar

How Much to Copy? Determinants of Effective Imitation Breadth

It is a common and frequently implicit assumption in the literature on knowledge transfer and organizational learning that imitating practices from high-performing firms has a positive impact on the imitating firm. Although a large body of research has identified obstacles to successful imitation, not much is known about what breadth of imitation is most effective. In this paper, we use a simulation model to explore how context and firm similarity, interdependence among practices, context and firm similarity, and time horizon interact in nontrivial ways to determine the payoffs that arise from different breadths of imitation. The results of the model allow us to qualify and refine predictions of the extant literature on imitation. In particular, the results shed light on the conditions under which increases in imitation breadth, and hence investments that facilitate the faithful copying of more practices, are valuable. In addition, the results of the model highlight that imitation can serve two different functions---mimicking high performers, and generating search by dislodging a firm from its current set of practices---each requiring different organizational routines for its successful implementation.

An Efficient Frontier in Organization Design: Organizational Structure as a Determinant of Exploration and Exploitation

This paper develops a parsimonious process-level theory that connects organizational structure to exploration and exploitation. Toward this end, it develops a mathematical model of organizational decision making that combines an information processing approach in the spirit of Sah and Stiglitz [Sah RK, Stiglitz JE 1986 The architecture of economic systems: Hierarchies and polyarchies. Amer. Econom. Rev. 764:716–727] with elements from signal detection theory. The model is first used to explore a “design space” of organizations and identify trade-offs and dominance relationships among alternative organization designs. The paper then studies open questions in the organization design literature, such as the extent to which exploration and exploitation can be produced by one organization and what is the effect of organization size on exploration. More broadly, this research speaks to calls for the introduction of more process-level explanations in the organizations literature. The paper concludes with testable hypotheses and managerially relevant insights.

Organizational Decision Making: An Information Aggregation View

We study four information aggregation structures commonly used by organizations to evaluate opportunities: individual decision making, delegation to experts, majority voting, and averaging of opinions. Using a formal mathematical model, we investigate how the performance of each of these structures is contingent upon the breadth of knowledge within the firm and changes in the environment. Our model builds on work in the Carnegie tradition and in the group and behavioral decision-making literatures. We use the model to explore when delegation is preferable to other structures, such as voting and averaging. Our model shows that delegation is the most effective structure when there is diversity of expertise, when accurate delegation is possible, and when there is a good fit between the firms knowledge and the knowledge required by the environment. Otherwise, depending on the knowledge breadth of the firm, voting or averaging may be the most effective structure. Finally, we use our model to shed light on which structures are more robust to radical environmental change and when crowd-based decision making may outperform delegation. This paper was accepted by Jesper Sorensen, organizations.

Positioning on a Multiattribute Landscape

Competitive positioning is a central, yet understudied, topic in strategy. Understanding positioning requires understanding two distinct mappings: how underlying policies are transformed into positions, and how positions are transformed into market performance. A complete treatment of positioning requires incorporating organizational design in the presence of policy interdependence; consumer choice in the presence of trade-offs among multiple product attributes; and competitive interactions among firms. We develop a model that integrates these elements. We show that in a multiattribute setting, trade-offs have critical, nonmonotonic effects on a range of strategy questions including the relationship between positions that are operationally efficient and those that remain viable in the face of competition as well as the concentration of market share in the industry. Of particular interest are implications for firm heterogeneity. We show that increases in business policy interdependence can decrease positioning heterogeneity among firms in an industry, depending on the nature of trade-offs. We also show that the relationship between strategy heterogeneity and positioning heterogeneity is moderated by the extent of policy interdependence. This paper was accepted by Bruno Cassiman, business strategy.

Governance of the IT Function: Valuing Agility and Quality of Training, Cooperation and Communications

It has long been argued that the organizational structure and reporting relationships of the IT functional area profoundly affects organizational performance. However, since most of the evidence is anecdotal, and even rigorous econometric analysis cannot show causality or substitute for controlled experimentation, normative prescriptions have been impossible to test. Using NK simulation modeling, a tool developed for studying dynamic behavior successfully used in strategy and evolutionary economics research, we are able to conduct controlled parameter-by-parameter experiments of alternative governance structures. Our findings suggest that under most conditions (1) IT does matter to the performance of the firm; (2) the governance of the IT functional area does affect the performance of the firm; and (3) the CIO’s business savvy and ability to communicate with the rest of the senior management team will affect performance, by determining the quality of consensus decisions reached and the speed with which consensus is achieved.

How Much to Copy? The Contingent Value of Imitation Capabilities

It is a common (and frequently implicit) assumption in the literature on knowledge exchange and organizational learning that imitating practices from high-performing firms has a positive impact on the imitating firm. While a large body of research has pointed out obstacles to successful imitation, very little is known about what degree of imitation is most effective. In this paper, we use a simulation model to explore the role that interdependence among practices, firm-similarity, and time horizon play in influencing the value of different degrees of imitation, and show how they interact in non-trivial ways. For instance, we find that in the presence of interactions, the most effective imitation strategy between similar firms with long time horizons is the worst strategy for short time horizons. One implication of our results is that even if a firm has the capability to copy all practices from a high-performing firm, this will only occasionally be the most appropriate imitation strategy. We also show that imitation can serve two different functions - mimicking high performers and dislodging a firm from its current set of practices - each one requiring very different organizational routines for its successful implementation. Lastly, we use the model to shed light on three previous disputes in the literature: the controversy between slow and fast learning, whether imitation is effective only at the start of operations or on a continuing basis, and whether firm similarity increases or decreases learning opportunities.

Government as a Landscape Designer: A Behavioral Perspective on Industrial Policy

While the strategic management literature has built rich, behaviorally plausible models of firm behavior, the industrial policy literature has typically assumed neoclassical firms. By bridging thes...