Henrich R. Greve

A Behavioral Theory of R&D Expenditures and Innovations: Evidence from Shipbuilding

I base an integrated model of innovation development and launch on the behavioral theory of the firm. This model specifies that research and development expenses are increased when low performance causes “problemistic search” and when excess resources cause “slack search.” Innovations generated by search are launched if low performance gives managers high risk tolerance. Using data from shipbuilding firms, I show that high performance reduces R&D intensity and innovation launches, and high slack increases R&D intensity, as predicted.

Fool's Gold: Social Proof in the Initiation and Abandonment of Coverage by Wall Street Analysts

This paper examines the dynamics of social influence in the choices of securities analysts to initiate and abandon coverage of firms listed on the NASDAQ national market. We show that social proof—using the actions of others to infer the value of a course of action—creates information cascades in which decision makers initiate coverage of a firm when peers have recently begun coverage. Analysts that initiate coverage of a firm in the wake of a cascade are particularly prone to overestimating the firms future profitability, however, and they are subsequently more likely than other analysts to abandon coverage of the firm. We thus find evidence for a cycle of imitation-driven choice followed by disappointment and abandonment. Our account suggests that institutionalization rooted in imitation is likely to be fragile.

Strategic entrepreneurship : creating a new mindset

List of Figures. List of Tables. List of Contributors. . Strategic Entrepreneurship: Integrating Entrepreneurial and Strategic Management Perspectives: Michael A. Hitt (Arizona State University, USA), R. Duane Ireland (University of Richmond, USA), S. Michael Camp (Kauffman Center for Entrepreneurship, USA), Donald L. Sexton (Nova Southeastern University & Kauffman Center for Entrepreneurial Leadership, USA). Part I: Entrepreneurship and Strategic Management:. 2. The Entrepreneurship: Strategic Management Interface: G. Dale Meyer (University of Colorado at Boulder, USA), Heidi M. Neck (University of Colorado at Boulder, USA), Michael D. Meeks (University of Colorado at Boulder, USA). 3. Discovery and Coordination in Strategic Management and Entrepreneurship: Steven Michael (University of Illinois, USA), David Storey (Open University, UK), Howard Thomas (University of Illinois, USA). 4. A Framework for Entrepreneurial Strategy: Scott Johnson (University of Minnesota, USA), Andrew H. Van de Ven (University of Minnesota, USA). Part II: Entrepreneurial Resources:. 5. Resource--Based Theory and the Entrepreneurial Firm: Sharon A. Alvarez (Ohio State University, USA). 6. Overcoming Resource Disadvantages in Entrepreneurial Firms: When Less is More: Elaine Mosakowski (Purdue University, USA). Part III: Innovation:. 7. Bisociation, Discovery, and the Role of Entrepreneurial Action: Ken G. Smith (University of Maryland, USA), Dante Di Gregorio (University of Maryland, USA), Robert O. Anderson. 8. Market Uncertainty and Learning Distance in Corporate Entrepreneurship Entry Mode Choice: Robert E. Hoskisson (University of Oklahoma, USA), Lowell W. Busenitz (Ohio State University, USA). 9. Implementing Strategies for Corporate Entrepreneurship: A Knowledge--Based Perspective: Robert K. Kazanjian (Emory University, USA), Robert Drazin (Emory University, USA), Mary Ann Glynn (Emory University, USA). Part IV: Alliances and Networks:. 10. Networks, Alliances and Entrepreneurship: Arnold C. Cooper (Purdue University, USA). 11. Small Entrepreneurial Firms and Large Companies in Inter--firm R&D Networks: The International Biotechnology Industry: John Hagedoorn (University of Maastricht, The Netherlands), Nadine Roijakkers (University of Maastricht, The Netherlands). Part V: International Entrepreneurship:. 12. International Entrepreneurship: The Current Status of the Field and Future Research Agenda: Shaker A. Zahra (Georgia State University, USA), Gerard George (University of Wisconsin--Madison, USA). 13. What Sort of Top Management Team is Needed at the Helm of Internationally Diversified Firms? Harry Barkema (Tilburg University, The Netherlands), Oleg Chvyrkov (Tilburg University, The Netherlands). Part VI: Strategic Leadership and Growth:. 14. The Entrepreneurial Imperatives of Strategic Leadership: Jeffrey G. Covin (Indiana University, USA), Dennis P. Slevin (University of Pittsburgh, USA). 15. Entrepreneurship as Growth Growth as Entrepreneurship: Per Davidsson (Jonkoping International Business School, Sweden), Frederic Delmar (Entrepreneurship and Small Business Research Institute, Sweden), Johan Wiklund (Jonkoping International Business School, Sweden). Author Index. Subject Index.

Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry

The behavioral theory of the firm and prospect theory predict that performance below an aspiration level increases risk taking, but researchers also propose that performance below an aspiration level decreases risk taking. These conflicting predictions primarily hinge on whether decision makers perceive negative performance as a repairable gap or as a threat to firm survival. This study examines a boundary condition of these conflicting predictions. We argue that a firms resource endowment affects decision makers risk tolerance: Managers in firms with large stocks of resources are buffered from the threat of failure and conform to the prediction of greater risk taking in response to performance decreases; managers in firms with limited resources view low performance as a step closer to failure and decrease risk taking in response to performance decreases. Using data on the risky decision of factory expansion in shipbuilding firms and firm size as an indicator of the stock of tangible resources, we find that performance below the aspiration level reduces risk taking in small firms, but either does not affect risk taking or increases risk taking in large firms. These findings are largely consistent with our predictions and also suggest that large firms are more inert than small firms.

Managerial cognition and the mimetic adoption of market positions: what you see is what you do

Managers planning to abandon a market position need to find a promising alternative, and face a choice of inventing a new market position or entering an existing one. The great uncertainty on the consequences of different actions leads them to rely on other organizations for information on how to compete, making adoption of existing market positions likely. Their wish to avoid direct rivalry and maximize growth leads them to seek out information on new market positions with few incumbents. As a result, recently innovated market positions are mimetically adopted by organizations that can easily observe previous adoptions and see them as relevant to their market situations, increasing the market differentiation. This theory is tested and supported by analysis of the spread of new radio formats in the United States.

A Behavioral Theory of the Firm---40 Years and Counting: Introduction and Impact

In this introductory piece, we take stock of the impact of Cyert and Marchs A Behavioral Theory of the Firm, describe current research trends in the behavioral tradition, and introduce the special issues papers. A Behavioral Theory of the Firm is one of the most influential management books of all time. In the book, Cyert and March developed theoretical building blocks that became the foundations for current research in organizational studies in management, economics, political science, and sociology. Cyert and March also made theoretical propositions that are investigated and extended in current work on organizational learning theory and evolutionary economics.

Innovations as Catalysts for Organizational Change: Shifts in Organizational Cognition and Search

This paper uses data on radio format changes to test hypotheses on innovations as catalysts for nonmimetic change in organizations. Innovations are difficult to interpret using existing schemata, causing organizations to search for information on the opportunities and threats implicit in observed innovations. Such search may lead to mimetic adoption of the innovation or, more likely, to more varied nonmimetic change. Results show an effect of innovations on the rate of nonmimetic change in radio markets, with innovations in large or nearby markets having greater effect and innovations by large organizations having less effect. The social and competitive relations of the innovator to a given organization are thus modifiers of the catalytic effect. These findings have implications for theories of innovation, competition, and organizational isomorphism.

The Behavioral Theory of the Firm: Assessment and Prospects

The Behavioral Theory of the Firm has had an enormous influence on organizational theory, strategic management, and neighboring fields of socio-scientific inquiry. Its central concepts have become ...

Organizations Gone Wild: The Causes, Processes, and Consequences of Organizational Misconduct

AbstractAlthough research on organizational misconduct has a long history and a recent increase in popularity, important questions are still unexplored. We review and critique research on misconduct with an emphasis on organizational causes. In addition to reviewing some active areas of research, we also examine less‐trodden areas and make suggestions for their development. We find that the definition of misconduct is often implicit and the role of social‐control agents in identifying misconduct has been neglected, suggesting a need for more rigor in how researchers define the boundary of misconduct and measure the labeling of misconduct. The spread of misconduct within and among organizations has also seen relatively little attention, as has the spread of the consequences of misconduct, suggesting a need to examine diffusion of misconduct. Finally, organizational misconduct has been an effective context for testing theories on themes such as motivation, control, power, labeling, and status, and will cont...

The Effect of Core Change on Performance: Inertia and Regression toward the Mean:

This paper examines the consequences of changes in the organizations market position on its market share, testing arguments of inertia and regression toward the mean and taking into account recent methodological critiques of studies on the consequences of organizational change. A study of format change in the U.S. radio industry, 1984—1992, shows that changes cause performance to decline, as inertia theory predicts, but this is moderated by organizational size and performance before the change, so change can be beneficial for low-performing organizations but may be harmful for large and successful organizations.