Joel A. C. Baum

Don't go it alone: alliance network composition and startups' performance in Canadian biotechnology

We combine theory and research on alliance networks and on new firms to investigate the impact of variation in startups’ alliance network composition on their early performance. We hypothesize that startups can enhance their early performance by 1) establishing alliances, 2) configuring them into an efficient network that provides access to diverse information and capabilities with minimum costs of redundancy, conflict, and complexity, and 3) judiciously allying with potential rivals that provide more opportunity for learning and less risk of intra-alliance rivalry. An analysis of Canadian biotech startups’ performance provides broad support for our hypotheses, especially as they relate to innovative performance. Overall, our findings show how variation in the alliance networks startups configure at the time of their founding produces significant differences in their early performance, contributing directly to an explanation of how and why firm age and size affect firm performance. We discuss some clear, but challenging, implications for managers of startups. Copyright

Picking winners or building them? Alliance, intellectual, and human capital as selection criteria in venture financing and performance of biotechnology startups

In the entrepreneurial setting, financial intermediaries such as venture capital firms (VCs) are perhaps the dominant source of selection shaping the environment within which new ventures evolve. VCs affect selection both by acting as a ‘‘scout’’ able to identify future potential and as a ‘‘coach’’ that can help realize it. Despite the large literature on the role of VCs in encouraging startups, it is generally taken for granted that VCs are expert scouts and coaches, and so the ways in which VCs actually enhance startup performance are not well understood. In this study, we examine whether VCs’ emphasize picking winners or building them by comparing the effects of startups’ alliance, intellectual, and human capital characteristics on VCs decisions to finance them with the effects of the same characteristics on future startup performance. Our findings point to a joint logic that combines the roles: VCs finance startups that have strong technology, but are at risk of failure in the short run, and so in need of management expertise. Our findings thus support the belief in VC expertise, but only to a point. VCs also appear to make a common attribution error overemphasizing startups’ human capital

Evolutionary dynamics of organizations

The book presents the latest research and theory about evolutionary change in organizations. It brings together the work of organizational theorists who have challenged the orthodox adaptation views that prevailed until the beginning of the 1980s. It emphasizes multiple levels of change - distinguishing change at the intraorganizational level, the organizational level, the population level, and the community level. The book is organized in a way that gives order and coherence to what has been a diverse and multidisciplinary field. (The book had its inception at a conference held at the Stern School of Business, New York University, January 1992.)

Organizational Niches and the Dynamics of Organizational Mortality

Departing from the population-level emphasis of density dependence research in organizational ecology, the authors examine how organizational niches within populations influence patterns of competition and mutualism. Organizational niches characterize intrapopulation variation in productive capacities and resource requirements and are operationalized for a population of day care centers (DCCs) based on the ages of children they are licensed to enroll. The authors find competitive effects of overlap density, the aggregate overlap of a DCCs organizational niche with those of all others, and mutualistic effects of nonoverlap density, the aggregate nonoverlap, which are strongest among neighboring DCCs. The authors discuss the implications of their findings for studying organizational population dynamics.

Dynamics of dyadic competitive interaction

In this study of firms’ entries into and exits from each other’s markets, we link research on multipoint competition to the emerging action-oriented, dyadic approach to interfirm rivalry by specifying market interdependencies between pairs of firms that condition their potential for rivalry over time. Our dynamic analysis of competitive interactions between pairs of commuter airlines in California reveals the idiosyncratic and asymmetric market microstructures that characterize dyadic competitive relationships and helps explain why firms grapple vigorously with some of their competitors while being passive toward others. We show that there is an inverted U-shaped relationship between firms’ rates of entry into and exit from each other’s markets and the level of multimarket contact in competitor dyads. We also show how this basic curvilinear effect varies from dyad to dyad as a function of relative levels of multimarket contact with competitors in other dyads and the relative sizes of competitors in a focal dyad. Copyright

Management Challenges in A New Time

As the year 2000 approached, so too did the years 5760, 2544, and 1420, according to the Jewish, Buddhist, and Moslem dating systems, respectively. Still, the coming of the year 2000 held meaning for most Western societies, serving as an opportunity for broader speculation about the new millennium and the 21st century. In the field of management, cycles of boom and bust in Asia had called into question new ways of organizing hailed in the 1980s, and questions and concerns mounted about inadequacies of 20th century views of business firms. Opinions were astonishingly diverse and often contradictory, but the central theme was change--dramatic change--and the idea that, to cope with it, managers ought to strategize anew and shape and reshape their firms.

Toward An Institutional Ecology of Organizational Founding

In this study, we demonstrate how the ecological and institutional characteristics of organizational niches affect the likelihood of organizational foundings. We describe and measure key ecological...

Institutions and Organizations

Introduction Early Institutionalists Institutional Theory and Organizations Constructing an Analytic Framework I Three Pillars of Institutions Constructing an Analytic Framework II Content, Agency, Carriers and Levels Institutional Construction, Maintenance and Diffusion Institutional Processes Affecting Societal Systems, Organizational Fields, and Organizational Populations Institutional Processes Affecting Organizational Structure and Performance Institutional Change Looking Back, Looking Forward

Chance, Imitative, and Strategic Antecedents to Multimarket Contact

We redirect research attention on multimarket contact from its consequences to its antecedents. Our empirical examination of the evolution of dyadic multimarket contacts among California commuter a...

Free-Riding on Power Laws: Questioning the Validity of the Impact Factor as a Measure of Research Quality in Organization Studies

The simplicity and apparent objectivity of the Institute for Scientific Information’s Impact Factor has resulted in its widespread use to assess the quality of organization studies journals and by extension the impact of the articles they publish and the achievements of their authors. After describing how such uses of the Impact Factor can distort both researcher and editorial behavior to the detriment of the field, I show how extreme variability in article citedness permits the vast majority of articles—and journals themselves—to free-ride on a small number of highly-cited articles. I conclude that the Impact Factor has little credibility as a proxy for the quality of either organization studies journals or the articles they publish, resulting in attributions of journal or article quality that are incorrect as much or more than half the time. The clear implication is that we need to cease our reliance on such a non-scientific, quantitative characterization to evaluate the quality of our work.