Tohyun Kim

Exploration and exploitation: internal variety and environmental dynamism

This article proposes that specific features of environmental dynamism and the notion of internal variety should be taken into consideration in response to caveats in prior research on choice or balance between exploration and exploitation and its implications for organizational performance. The study extends Marchs exploration—exploitation model by (1) conceptualizing and varying two dimensions — amplitude and frequency — of environmental dynamism and (2) articulating the notion of internal variety in an organization. Results from the simulation models show how a combination of organizational practices shapes internal variety, which in turn influences an organizations level of knowledge over time amid a changing environment.The studys findings suggest that the level of internal variety, along with the mechanisms by which each practice influences internal variety, affect adaptations of organizational knowledge. Managing internal variety through a combination of strong complementary practices, rather than anchoring on moderate levels of those practices, can achieve the balance between exploration and exploitation.

Great Vessels Take a Long Time to Mature: Early Success Traps and Competences in Exploitation and Exploration

This study warns organizations against falling into an “early success trap.” The timing of initial success may lead organizations to divergent evolutionary paths as their experience at early ages has a greater consequence for their evolution than does their experience at later ages. In particular, we propose that early initial success can be more detrimental to an organization’s performance and survivability than later initial success because exploratory competence takes a long time to develop. To investigate the consequences of the timing of success, we developed a model of organizational learning and adaptation that examines what happens after success, when a success trap occurs, and whether and how the timing of initial success matters. The results from the simulation of our model indicate that the phenomenon of (early) success traps is a complex product of interactions among organizational learning of competences in exploitation and exploration and adaptations of historical and social aspiration levels. We discuss how organizations can avoid success traps and sustain their survival and prosperity over the long term.

Structural and Behavioral Antecedents of Change: Status, Distinctiveness, and Relative Performance

This study investigates what determines social actors’ motivations and opportunities to risk changing their current courses of action and the extent to which they are likely to change, by integrating structural and behavioral perspectives on decision making. Behavioral perspectives argue that performance relative to aspirations determines the actors’ risk preference and motivation to change, while structural perspectives suggest that the actors’ choices and actions are enabled and constrained by the opportunities surrounding their structural positions to form exchange relations with the external audiences. We propose a theoretical model of how the actors’ status, distinctiveness, and relative performance interact to influence their motivations and opportunities to change, resulting in differential responsiveness to relative performance in terms of the degree of change. This model is empirically examined and supported in the context of the U.S. feature film industry between 1986 and 2006, where film directors decide the distances of change in the genre repertoires for their next film project. Overall, this study shows the importance of considering the interactions between the structural and behavioral antecedents to understand when and how social actors make decisions to change in an attempt to survive and prosper in dynamic environments.

Complementary or contradictory? The effects of structural holes and status on innovation

Abstract This study focuses on the joint effects of the firms’ access to structural holes within social networks and their status within social hierarchy on their innovation performance. The interactions between the firms’ positions in different dimensions of social structures have been rarely examined in prior research despite the fact that they jointly determine the firms’ opportunities and constraints for acquiring important resources, such as knowledge and information, for their innovation activities. In particular, we argue that the effects of structural holes and status contradict, rather than complement, each other because one tends to interfere with the other. We empirically test our theory and hypotheses by analysing the patterns of patent applications and strategic alliances in the US biotechnology industry between 1981 and 2006. While the results support the positive relationship between status and innovation, it is shown that access to structural holes does not significantly affect the biotech firms’ innovation performance on average. Our findings show that the positive effects of structural holes tend to be relatively stronger among lower-status firms, whereas the negative effects become stronger as the firms’ status increases. Finally, we discuss the implications and contributions of this study.

Identity-based learning and segregation in social networks under different institutional environments

To study the evolution of segregation in social networks across systems embedded in different institutional environments, we develop an identity-based learning model where segregation is stochastically conditioned by the initial distribution of the actor’s attention to identity and the updating of this distribution over time. The updating process, which we call the process of mutual learning multiplier, is based on an actor’s success and failure experiences in tying with the same-subgroup and cross-subgroup actors. Results from a Monte Carlo simulation of the model show that the mutual learning multiplier produces disproportional relationships between the initial distribution of identity attention and the level of segregation in social networks. We also find that those relationships are affected by the actors’ attention to structural holes, rate of learning from experience, system size, and the identity heterogeneity of the system. Overall, the model provides insights into various dynamics of network structuration across time and space.

Which Comes First: Domestic or Foreign Subsidiaries? Analysis of Global Integration and Local Responsiveness among Japanese Service Companies

Multinational corporations (MNCs), by definition, operate across different markets. Unlike portfolio investment, foreign direct investment (FDI) involves exercising substantial control over foreign assets and operations, making the manner in which firms manage their foreign operations very important. The creation of a subsidiary, either domestic or foreign, represents a major commitment. However, as Bethel and Liebeskind (1998) noted, the legal structure of firms — the configuration of their incorporated subsidiaries — has not received much attention in the organizational literature. While many researchers have studied FDI and MNC governance structures, little work has been done on analyzing the makeup of MNCs, in terms of the mix between numbers of domestic and foreign subsidiaries. We still have a great deal to learn about corporate configuration and implications of MNCs’ strategic actions, as they relate to managerial control.