Srikanth Paruchuri

Evolution of R&D Capabilities: The Role of Knowledge Networks Within a Firm

In this paper, we suggest that the characteristics of individual positions in an intraorganizational network of inventors or intrafirm knowledge network predict the likelihood with which knowledge created by an inventor is used in the firms research and development (R&D) activities. Such choices lead to path dependence and subsequent specialization. We provide empirical evidence that a firms R&D is concentrated in those areas where it chooses to recombine knowledge, offering support for the path-dependent evolution of capabilities. We test this theory by analyzing the R&D networks in DuPont, a highly regarded Fortune 500 chemical company. Cox Proportional Regression models of intrafirm citations on network characteristics offer strong empirical support for our theory.

Acquisition Integration and Productivity Losses in the Technical Core: Disruption of Inventors in Acquired Companies

Acquisition integration is a pivotal factor in determining whether the objectives of an acquisition are achieved. In this paper, we hypothesize that the productivity of corporate scientists of acquired companies is generally impaired by integration, but that some scientists experience more disruption than others. In particular, acquisition integration will be most disruptive, leading to the most severe productivity drops, for those inventors who have lost the most social status and centrality in the combined entity. Drawing from prior literatures on the knowledge-based view of the firm, and on mergers and acquisitions, we develop hypotheses about a concise set of conditions that will lead to substantial performance drops for acquired technical personnel. We test our hypotheses, using patent application data, on a sample of 3,933 inventors in pharmaceutical firms whose companies were acquired. Results are strongly in line with our theorized expectations.

The Winds of Change: The Progressive Movement and the Bureaucratization of Thrift

This article examines how the values espoused by social movements become entrenched in political culture and spawn many new kinds of institutions, which in turn shape organizations far from movements original targets. We demonstrate the diffuse and indirect effects of social movements, and also show that the diffusion of social-movement values is often selective—some are retained, while others are discarded. Our empirical site is the Progressive movement and the early thrift industry in California. We draw on social-movement research and organizational theory to argue that a new ideal of thrift, bureaucratized cooperation among strangers, replaced the original idea of thrift, friendly cooperation among neighbors. This shift was possible only after the modernizing temper of Progressivism gave rise to two institutions, the news media and role-model organizations, that made bureaucracy culturally appropriate. The bureaucratization of thrift occurred even though it resulted in a centralization of power, which clashed with the Progressive ideal of equitably distributing power. Our study provides a compelling example of the fundamental revolution in American social organization in the twentieth century: the replacement of community-based groups by bureaucracies.

Microfoundations of Firm R&D Capabilities: A Study of Inventor Networks in a Merger

Taking a cue from a recently evolving stream that calls for exploring the microfoundations of capabilities, we focus on inventor networks to examine how the activities underlying firms R&D change in the aftermath of a merger. We view mergers as events that cause anxiety and impede inventors abilities to process research knowledge. Employing the notion of an intra‐firm inventor collaboration network, we hypothesize that in the aftermath of a merger, the impact of knowledge that is prominent and widely available in the intra‐firm network will increase but that the impact of knowledge that, albeit richer, is less easily accessible, will decrease. Our empirical study of the merger of Bristol‐Myers and Squibb supports our hypotheses. The findings enhance our understanding not only of mergers and acquisitions, but also of the microfoundations of a firms R&D activities.

Business Methods Patents as Real Options: Value and Disclosure as Drivers of Litigation

This paper proposes that patents are real options that allow holders of patents the right but not the obligation to sue others. We suggest that the likelihood of a patent being litigated is positively associated with value of the patent and the extent of disclosure (prior art cited) in the patent. However, under conditions of greater value, increases in disclosure reduce the likelihood of litigation of the focal patent. Similarly, under conditions of greater disclosure, increases in value reduce the likelihood of litigation of the focal patent. Rare events logit analyses of business method patents that were litigated, compared to patents that were not litigated, offer empirical evidence supporting the hypotheses.

External Board Memberships of Surviving CEO Following Financial Restatements

Complementing earlier research that has examined the turnover of CEOs following financial restatements, this paper focuses on surviving CEOs--those CEOs that continue in their positions even after financial restatements. Because CEOs of restating firms are held personally responsible for financial restatements in the wake of Sarbanes Oxley Act of 2002, surviving CEOs face additional pressures from internal and external stakeholders as well as face legitimacy loss. We examine how the surviving CEOs change their external board memberships in reaction to these pressures and potential legitimacy loss. We hypothesized and empirically found that surviving CEOs dropped their membership in corporate boards in the wake of financial restatements at much higher rate than CEOs in non-restatement contexts but added memberships in philanthropic foundations at a significantly higher rate than CEOs in non-restatement contexts. We further explored the moderating effects of CEO incentive pay on these changes following rest...

RELATIVE SIZE, ENTRY AND EXIT OF FIRMS, AND SEARCH BEHAVIOR.

We examine the antecedents of local search behavior by focusing on relational and contextual factors, as opposed to typical focus on internal firm factors. We developed the concept of a firms relative size, defined as the number of rivals in the market that have fewer resources than the focal firm, and found in a panel study that firms with larger relative size in a market search more intensely within the local domain than firms with smaller relative size. We also found that the entry and exit of similar and dissimilar firms moderate this relationship. The implications for innovation, capabilities and evolution literatures are discussed.