Melissa A. Schilling

Interfirm Collaboration Networks: The Impact of Large-Scale Network Structure on Firm Innovation

The structure of alliance networks influences their potential for knowledge creation. Dense local clustering provides information transmission capacity in the network by fostering communication and cooperation. Nonredundant connections contract the distance between firms and give the network greater reach by tapping a wider range of knowledge resources. We propose that firms embedded in alliance networks that exhibit both high clustering and high reach (short average path lengths to a wide range of firms) will have greater innovative output than firms in networks that do not exhibit these characteristics. We find support for this proposition in a longitudinal study of the patent performance of 1,106 firms in 11 industry-level alliance networks.

The Use of Modular Organizational Forms: An Industry-Level Analysis

In many industries, integrated hierarchical organizations have been replaced by nonhierarchical entities that are permeable, interconnected, and modular. Other industries, however, maintain relatively high levels of integration. We use the logic of general systems modularity to explain why in some industries there is a greater use of modular organizational forms, including contract manufacturing, alternative work arrangements, and alliances, than in other industries. This model was tested using data from 330 U.S. manufacturing industries.

Technology Success and Failure in Winner-Take-All Markets: The Impact of Learning Orientation, Timing, and Network Externalities

In industries characterized by network externalities, a single technology standard often rises to dominance, locking out competing technologies. This research demonstrates that despite “path depend...

Learning by Doing Something Else: Variation, Relatedness, and the Learning Curve

Many organizational learning studies have an implicit assumption that the learning rate is maximized through specialization: the more an individual or organization focuses on a particular task, the faster it will improve. However, through contrasting the various learning process theories described in the research on organizational, group, and individual learning, we develop a set of competing hypotheses that suggest some degree of variation might improve the learning rate. Furthermore, such comparison yields competing arguments about how related or unrelated such task variation should be to improve the learning rate. This research uses an experimental study to answer the following research questions: Is the learning rate maximized through specialization? Or does variation, related or unrelated, enhance the learning process? We find that the learning rate under conditions of related variation is significantly greater than under conditions of specialization or unrelated variation, indicating the possibility of synergy between related learning efforts consistent with an implicit learning or insight effect. We find no significant differences in the rates of learning under the conditions of specialization and unrelated variation. These results yield important implications for how work should be organized, and for future research into the learning process.

Balancing Exploration and Exploitation Through Structural Design: The Isolation of Subgroups and Organizational Learning

The classic trade-off between exploration and exploitation in organizational learning has attracted vigorous attention by researchers over the last two decades. Despite this attention, however, the question of how firms can better maintain the balance of exploration and exploitation remains unresolved. Drawing on a wide range of research on population and organization structure, we argue that an organization divided into semi-isolated subgroups may help strike this balance. We simulate such an organization, systematically varying the interaction pattern between individuals to explore how the degree of subgroup isolation and intergroup connectivity influences organizational learning. We also test this model with a range of contingency variables highlighted in the management research. We find that moderate levels of cross-group linking lead to the highest equilibrium performance by enabling superior ideas to diffuse across groups without reducing organizational diversity too quickly. This finding is remarkably resilient to a wide range of variance in factors such as problem complexity, environmental dynamism, and personnel turnover.

Disentangling the Theories of Firm Boundaries: A Path Model and Empirical Test

Theories on the motivation underlying firm boundaries have recently sparked renewed debate. What best explains whether a firm relies on market control or hierarchical control to secure required resources? How do the characteristics of the resources come into play? In this study, we consider a comprehensive path model of the governance mode decision for sourcing technological know-how. By integrating different perspectives on firm boundaries, including transaction cost economics, a resource-based view, and an options perspective, we link characteristics of the technology (i.e., uniqueness, barriers to imitation, commercial uncertainty, technological dynamism) to the perceived threat of opportunism, the potential for sustainable advantage, and the pursuit of a licensing agreement vis-A -vis the outright acquisition of the firm that possesses the desired know-how. We use structural equation modeling to analyze 127 sourcing arrangements. Our results show that technological dynamism and barriers to imitation indirectly influence the governance mode decision by increasing the perceived threat of opportunism. Commercial uncertainty directly influences the governance mode and decreases the likelihood of an acquisition vis-A -vis a licensing agreement. Although uniqueness and barriers to imitation are also positively associated with the perceived potential for sustainable advantage, the potential for sustainable advantage had no direct effect on governance mode. Implications and suggestions for further research are offered.

Understanding the Alliance Data

A considerable body of research utilizes large alliance databases (e.g., SDC, MERIT-CATI, CORE, RECAP, and BIOSCAN) to study inter-organizational relationships. Understanding the strengths and limitations of these databases is crucial for informing database selection and research design. I conduct an analysis of five prominent alliance databases, examining their consistency of coverage and completeness, and assessing whether different databases yield the same patterns in sectoral composition, temporal trends, and geographic patterns in alliance activity. I also replicate three previously-published alliance studies to assess the impact of data limitations on research outcomes. The results suggest that the databases only report a fraction of formally announced alliances, which could have detrimental consequences for some types of research. However, the databases exhibit strong symmetries in patterns of sectoral composition, alliance activity over time, and geographic participation. Furthermore, the replications of previous studies yielded results that were highly similar to those obtained in the original studies. This study thus provides some reassurance that even though the databases only capture a sample of alliance activity, they may yield reliable results for many -- if not all -- research purposes. This information should help researchers make better-informed decisions about their choice of database and research design.

The Influence of Information Technology on the Use of Loosely Coupled Organizational Forms: An Industry-Level Analysis

Information technology (IT) enhances coordination both within the firm and between the firm and its external partners. Consequently, IT investment can promote both loosely and tightly coupled organizational forms. Indeed, in some industries, widespread investment in IT is associated with high levels of disaggregation. In other industries, this is not the case. We argue that the specific influence of IT on firm boundaries depends on the broader industrial context. We investigate conditions whereby IT investments enable industries to be more loosely coupled through alliance formation and the use of contingent workers. We use transaction cost and modular systems theory to ground our theoretical development. The extent to which industrywide IT investment is associated with loosely coupled organizational forms depends on (1) limited asset specificity because of industry standards, (2) the level of industry uncertainty resulting from technological change, and (3) the overall complexity of the industry in terms of diverse inputs. Specifically, when industry standards exist, IT investment leads to greater use of both alliances and contingent workers. IT investment has a stronger positive relationship with the use of contingent workers when levels of technological change are low as compared to when levels of technological change are high. When there are high levels of input diversity and industry standards exist, IT investment led to an increased use of contingent workers. Our analyses provides a more refined view of IT influence on firm boundaries.

Structure and Governance in Industrial Districts: Implications for Competitive Advantage

The existing research on industrial districts is fragmented, and yields conflicting advice for managers about the benefits and costs of locating in an industrial district. We resolve much of this ambiguity by synthesizing and integrating the existing research, and developing a typology of districts based on the continuous dimensions of need for coordination and centralization of control. In so doing, we elucidate why different types of industrial districts have different structures, and different competitive implications. We introduce four archetypes of industrial districts (based on extreme values of our two dimensions), and for each we discuss the benefits and costs of locating in the district, the sources of competitive advantage for members of the district vis-a-vis non-members, and the sources of competitive advantage a district firm may gain over other members of the same district.

Interfirm Collaboration Networks: The Impact of Small World Connectivity on Firm Innovation

The structure of alliance networks strongly influences their potential for knowledge creation. Dense local clustering provides transmission capacity in the network by fostering communication and cooperation while non-redundant connections contract the distance between firms and give the network greater reach by tapping a wider range of knowledge resources. However, since firms are constrained in forming alliances, there appears to be a trade-off between creating transmission capacity versus reach. We argue that small world connectivity (i.e., simultaneity of high clustering and short average path lengths in a sparse, decentralized network) helps resolve this tradeoff by enabling transmission capacity and reach to be achieved simultaneously. We propose that firms embedded in alliance networks that exhibit high clustering and short average path lengths to a wide range of firms will experience greater knowledge creation than firms in networks that do not exhibit these characteristics. We find support for this proposition in a longitudinal study of the patent performance of 1106 firms in 11 industry-level alliance networks.