Lori Rosenkopf

Overcoming Local Search Through Alliances and Mobility

Recent research suggests that, due to organizational and relational constraints, firms are limited contextually--both geographically and technologically--in their search for new knowledge. But distant contexts may offer ideas and insights that can be extremely useful to innovation through knowledge recombination. So how can firms reach beyond their existing contexts in their search for new knowledge? In this paper, we suggest that two mechanisms--alliances and the mobility of inventors--can serve as bridges to distant contexts and, thus, enable firms to overcome the constraints of contextually localized search.Through the analysis of patent citation patterns in the semiconductor industry, we first demonstrate both the geographic and technological localization of knowledge. We then explore if the formation of alliances and mobility of active inventors facilitate interfirm knowledge flows across contexts. We find that mobility is associated with interfirm knowledge flows regardless of geographic proximity and, in fact, the usefulness of alliances and mobility increases with technological distance. These findings suggest that firms can employ knowledge acquisition mechanisms to fill in the holes of their existing technological and geographic context.

Startup size and the mechanisms of external learning: increasing opportunity and decreasing ability?

Abstract An important area of investigation in the field of entrepreneurship examines how people and organizations exploit technological opportunities. Prior research suggests that alliances, the mobility of experts, and the informal mechanisms associated with geographic co-location can present firms with useful opportunities to source technological knowledge. This paper uses insights from strategic management and organizational theory to suggest that organizational size may have an important impact on the extent of external learning, since it differentially affects the likelihood of learning via formal and informal mechanisms. Examining a cross-section of semiconductor startups, we find that external learning increases with startup size. With regard to the specific mechanisms of learning, we find that firms learn from alliances regardless of their size. For the informal mechanisms of mobility and geographic co-location, however, learning decreases with firm size. These results suggest that as startups grow, they may have increasing opportunities to access and exploit external knowledge, but their motivation (and hence ability) to learn from more informal sources may decrease.

From the Bottom Up? Technical Committee Activity and Alliance Formation

We examine how interaction between mid-level managers in technical committees facilitates subsequent alliance formation in a longitudinal study of 87 cellular service providers and equipment manufacturers. Joint participation by firms in technical committees helps them identify potential alliance partners and particular opportunities for technical collaboration. This effect is magnified by sustained participation by individuals on behalf of their firms, demonstrating that interfirm relationships are enhanced by the interpersonal bonds that are forged in technical committees. In contrast, we find that the effect of joint technical committee participation on alliance formation decreases as firms have more prior alliances, suggesting that technical committees provide a more critical avenue for knowledge exchange when firms do not have the luxury of exchanging information through contractual linkages. Taken together, these findings suggest one venue where managerial action can transform existing social structure, because technical committee activity facilitates the entry of less-established firms into alliance networks.

Balance Within and Across Domains: The Performance Implications of Exploration and Exploitation in Alliances

Organizational research advocates that firms balance exploration and exploitation, yet it acknowledges inherent challenges in reconciling these opposing activities. To overcome these challenges, such research suggests that firms establish organizational separation between exploring and exploiting units or engage in temporal separation whereby they oscillate between exploration and exploitation over time. Nevertheless, these approaches entail resource allocation trade-offs and conflicting organizational routines, which may undermine organizational performance as firms seek to balance exploration and exploitation within a discrete field of organizational activity (i.e., domain). We posit that firms can overcome such impediments and enhance their performance if they explore in one domain while exploiting in another. Studying the alliance portfolios of software firms, we demonstrate that firms do not typically benefit from balancing exploration and exploitation within the function domain (technology versus marketing and production alliances) and structure domain (new versus prior partners). Nevertheless, firms that balance exploration and exploitation across these domains by engaging in research and development alliances while collaborating with their prior partners, or alternatively, by forming marketing and production alliances while seeking new partners, gain in profits and market value. Moreover, we reveal that increases in firm size that exacerbate resource allocation trade-offs and routine rigidity reinforce the benefits of balance across domains and the costs of balance within domains. Our domain separation approach offers new insights into how firms can benefit from balancing exploration and exploitation. What matters is not simply whether firms balance exploration and exploitation in their alliance formation decisions but the means by which they achieve such balance.

Investigating the Microstructure of Network Evolution: Alliance Formation in the Mobile Communications Industry

Theories of network evolution frequently focus on “network endogeneity,” which stresses predictable, path-dependent evolution rooted in previous network structure. However, theories of technological evolution and innovation remind us that networks may undergo significant change as technological discontinuities exert pressures on existing relationships and firms engage in exploratory search. How can we incorporate sources of change into our theories of network evolution instead of focusing so squarely on sources of inertia? By using recent advances in graph theory, we develop a more flexible theory of network evolution by examining two patterns of partner selection that have the potential to change networks: “shortcut” formation between relatively unconnected partner clusters, and the entry of new firms into the “main component” of incumbent partners. Our findings suggest an important contingency for the endogeneity perspective: structural homophily predicts shortcut formation but not alliance formation within clusters. Furthermore, we demonstrate that the pattern of alliance formation between incumbents and new entrants to the alliance network is driven by a combination of endogenous and exogenous mechanisms. New entrants attach to more prominent incumbents, but they are more likely to attach with an alliance deal that comprises multiple partners. We demonstrate these findings in an industry where systemic technology encourages cooperation and where network entry is prevalent---the mobile communications industry from 1993--2002.

Social Capital for Hire? Mobility of Technical Professionals and Firm Influence in Wireless Standards Committees

The movement of personnel between firms has been shown to have important implications for firms, yet there has been little direct investigation of the underlying mechanisms. We propose that in addition to their human capital, mobile individuals carry social capital, affecting the outcomes of the firms they join and leave by altering the patterns of interaction between firms. In this study, we examine how job mobility affects firm influence in a technical standards setting committee for U.S. wireless telecommunications. We hypothesize and find that hiring individuals who are richer in social capital increases firm influence in technical standards setting committees by increasing the hiring firms social capital. We also find the benefits of hiring social capital are attenuated when an interfirm relationship is maintained by multiple individuals. In contrast, we find that the loss of personnel does not affect a firms social capital or influence over standards directly but that it does have an effect on firm social capital and influence contingent on changes in the firms business strategy. In advancing these arguments, we address the broader question of individuals as carriers of social capital and the conditions under which interpersonal connections are appropriable by firms.

Modeling Reputational and Informational Influences in Threshold Models of Bandwagon Innovation Diffusion

Bandwagon innovation diffusion is characterized by a positive feedback loop where adoptions by some actors increase the pressure to adopt for other actors. In particular, when gains from an innovation are difficult to quantify, such as implementing quality circles or downsizing practices, diffusion is likely to occur through a bandwagon process. In this paper we extend Abrahamson and Rosenkopf&2018;s (1993) model of bandwagon diffusion to examine both reputational and informational influences on this process. We find that the distribution of reputations among the set of potential adopters affects the extent of bandwagon diffusion under conditions of moderate ambiguity, and we find that bandwagons occur even when potential adopters receive information about others&2018; unprofitable experiences with the innovation.

Advancing the Conceptualization and Operationalization of Novelty in Organizational Research

The construct of novelty is an important primitive for theories of organization learning, strategic change, and innovation. The organizational pursuit of novelty is generally theorized as necessary for long-term organizational adaptation and survival yet variance increasing in the short term. We argue that the recent explosion of studies of exploration and exploitation tend to conceptualize and operationalize novelty quite narrowly. In contrast, we treat novelty as a multidimensional construct and discuss implications of this approach for future research.

Keeping Steady as She Goes: A Negotiated Order Perspective on Technological Evolution

A central idea in the theory of technology cycles is that social and political mechanisms are most important during the selection of a dominant design, and that eras of incremental change are socially uninteresting periods in which innovation is driven by technological momentum and elaboration of the dominant design. In this essay, we overturn the ontological assumption that social order is inherently stable, drawing on Anselm Strauss’s concept of negotiated order to analyze the persistence of a dominant design as a social accomplishment: an outcome of ongoing processes that reinforce or challenge a socially negotiated order. Thus, we shift focus from battles over standards to periods of normal innovation. We extend the technology cycles model to explain social dynamics in periods of incremental change, and to make predictions specifying how contextual conditions in standards-setting organizations affect social interaction, leading to reinforcement or challenge to a socio-technical order.

PERSPECTIVE-Shrouded in Structure: Challenges and Opportunities for a Friction-Based View of Network Research

Whereas network ideas and approaches have become prominent in both the managerial and sociological literatures, we contend that the increasing emphasis on network structures and their evolution has distracted us from the important issue of whether and when networks actually work in the ways that our theories assume. In particular, we explore the well-established assumption that knowledge flows over network paths, with special attention to the role of friction when the supposed information transfer spans multiple dyads. Our analysis shows that friction is omnipresent and has implications at both the system and subsystem levels. More specifically, we present a rich set of research opportunities that addresses implications of friction for the variation of knowledge flows for different network structures and also for the distribution of knowledge among the actors within a particular network.