The impact of stocks and flows of organizational knowledge on firm performance: an empirical investigation of the biotechnology industry

The knowledge‐based view of the firm is a recent approach to understanding the relationship between firm capabilities and firm performance. Specifically, this approach suggests that knowledge generation, accumulation and application may be the source of superior performance. Other research has conceptualized organizational knowledge in terms of stocks of accumulated knowledge in the firm and flows of knowledge into the firm. This paper tests the relationship between stocks and flows of organizational knowledge and firm performance in the biotechnology industry. We suggest that a firm’s geographic location, alliances with other institutions and organizations and R&D expenditures are representative of knowledge flows, while products in the pipeline, firm citations and patents are indicative of knowledge stocks. Through factor analysis, we develop an aggregated measure of location from several variables. A regression model suggests that location is a significant predictor of firm performance as are products in the pipeline and firm citations. A major contribution of this investigation is the operationalization of geographic location and its statistically significant link to firm performance. Copyright © 1999 John Wiley & Sons, Ltd.     

Increase in takeover protection and firm knowledge accumulation strategy

Research summary : We argue that the extent to which a firm faces takeover threats affects its knowledge structure. In particular, takeover threats may lead to managers' reluctance to adopt a strategy toward firm‐specific knowledge accumulation because implementing this strategy requires them to acquire specialized skills, which are at risk under takeover threats. Conversely, takeover protection leads to an increase in firm‐specific knowledge. Further, the relationship between takeover protection and firm‐specific knowledge is positively moderated by managerial ownership, which helps align managerial interests with those of shareholders. But the relationship is negatively moderated by managerial tenure, as long‐tenured managers have already committed to their firms. Using a differences‐in‐differences method with Delaware antitakeover rulings in the mid‐1990s as an exogenous shock, we found results supporting these arguments. Managerial summary : We examined how changes in the Delaware antitakeover rulings in mid‐1990s affected the knowledge structure of firms incorporated in Delaware. We reasoned that with a greater level of takeover protection, top managers of those firms incorporated in Delaware felt higher job security, thus providing them stronger incentives to make strategic decisions toward the development of firm‐specific knowledge and to make corresponding human capital investments in specialized skills. Empirically, firms incorporated in Delaware were found to have an increase in the level of firm‐specific knowledge in their knowledge structure after the mid‐1990s. Furthermore, our analysis suggests that the role of takeover protection on top manager incentives is particularly salient when the managers are awarded with more company shares and when the managers have shorter organizational tenure. Copyright © 2015 John Wiley & Sons, Ltd.     

股权结构与公司绩效的U型关系研究——1997～2000年上市公司的实证研究

本文通过对上市公司 1 997～ 2 0 0 0年的数据的实证分析 ,结果表明 :股权集中度、内部持股比例与公司绩效均呈显著性倒U型相关 ;第一大股东持股比例与公司绩效正相关 ;国家股比例、境内法人股与公司绩效呈显著性U型相关 ,这说明当国家或法人持股比例较低时 ,与公司绩效负相关 ,而在持股比例较高时 ,与公司绩效正相关 ;流通股比例与公司绩效呈U型关系 ,即在流通股比例高低的两端 ,公司绩效均表现出较高水平。     

Determinants of transnational new product development capability: testing the influence of transferring and deploying tacit overseas knowledge

Based on a survey of 90 transnational product introductions, we find that the transnational product development capabilities of organizations significantly depend upon their ability to transfer and deploy tacit knowledge concerning overseas markets. Specifically, we find that organizations which use cross-national teams, teams with members who have prior overseas experience, or teams whose members communicate frequently with overseas managers in order to acquire information about tacit differences among countries have greater transnational product development capabilities. This study contributes to our understanding of how organizations transfer and deploy knowledge across borders for competitive advantage and makes an important contribution to the literature on global strategy. Copyright © 2001 John Wiley & Sons, Ltd.     

The dynamics of product innovation and firm competences

This study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high‐tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path‐dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation. Copyright © 2002 John Wiley & Sons, Ltd.     

Examining the effect of complexity in strategic group knowledge structures on firm performance

A developing stream of research in the strategy field explores the competitive structure of industries from the perspective of industry participants. This work has demonstrated that managers develop strategic group knowledge structures in order to make sense of their competitive environment. This study extends this line of research by examining the complexity evident in the strategic group knowledge structures developed by firms' top management teams and assessing the relationship between complexity in these knowledge structures and subsequent firm performance. Specifically, we examine the complexity of top managers' knowledge structures regarding their competition using a sample of 76 top management teams from banks in three U.S. cities. Using hierarchical regression, we find a significant relationship between the complexity of cognitive strategic groups and subsequent firm performance. These results suggest that the structure of the cognitive templates that top managers use to understand their environment and the actions of their competitor influence the degree of strategic success of their firm. Copyright © 2002 John Wiley & Sons, Ltd.     

RETRACTED: Integrated knowledge exploitation: The complementarity of product development and technology licensing

In light of increasing licensing, we challenge the common assumption that product development and technology licensing are substitutes. We develop a resource‐based framework, which distinguishes a firm's technological resource base and technology exploitation processes. We further combine survey, patent, and financial data of 228 medium‐sized and large industrial companies to examine the interactions of firms' product development processes and technology licensing processes in order to explain heterogeneity in new product revenues, licensing performance, and firm performance. The results underscore that product development, which indicates innovative capacity, and technology licensing, which indicates desorptive capacity, are complements rather than substitutes in integrated knowledge exploitation in medium‐sized and large firms. This complementarity is particularly pronounced in firms with an emphasis on cross‐licensing and with a strong patent portfolio. Copyright © 2012 John Wiley & Sons, Ltd.     

Resource recombinations in the firm: knowledge structures and the potential for schumpeterian innovation

Building on the resource-based view of the firm, this paper explores the notion of ‘resource recombinations’ within the firm. We suggest such recombinations can occur when competencies within the firm (which are interpreted as organized clusters of firm resources) either combine to synthesize novel competencies (synthesis-based recombinations) or experience a reconfiguration or relinking with other competencies (reconfiguration-based recombinations). Central to this paper is an examination of the antecedents necessary for such innovation to occur, and in particular the nature of knowledge in the firm. We argue that several characteristics of knowledge (tacitness, context specificity, dispersion) and its social organization (the way competencies come to be formed and institutionalized) will have important consequences on the likelihoods of resource recombinations. Our paper develops a model of resource recombination likelihoods and propositions. © 1998 John Wiley & Sons, Ltd.     

The persistence of knowledge‐based advantage: an empirical test for product performance and technological knowledge

Resource‐based theory maintains that intrinsic characteristics of resources and capabilities, such as their tacitness, complexity, and specificity, prevent imitation and thereby prolong exceptional performance. There is little direct evidence to verify these claims, yet a substantial literature encourages firms to formulate competitive strategies around resources with these attributes. Further, work outside the resource‐based tradition suggests that these attributes can slow innovation, and it is not clear when this effect outweighs the benefits of inimitability. This paper seeks to clarify whether and how the complexity, tacitness, and specificity of a firm's knowledge affect the persistence of its performance advantages. We find that the complexity and tacitness of technological knowledge are useful for defending a firm's major product improvements from imitation, but not for protecting its minor improvements. The design specificity of technological knowledge delayed imitation of minor improvements in this study. Copyright © 2002 John Wiley & Sons, Ltd.     

Innovation in a global consulting firm: when the problem is too much diversity

This paper explores how individual managers in multinational firms utilize their informal relations to create new knowledge. Specifically, how does the density of informal networks affect an actor's ability to access and integrate diverse information and consequently that actor's innovation performance? The arguments are developed using the setting of 79 senior partners in a global management consulting firm and tested on a dataset of 1,449 informal relationships. I distinguish between internal, external, local, and global relations and find that this separation permits a more nuanced understanding of the effect of network structure on innovation performance. Specifically, I argue that the most effective network strategy is contingent upon the context in which the partners operate. The findings show that partners operating in homogeneous contexts, where the primary challenge is to access diverse information, benefit from low‐density networks. In contrast, when crossing both firm and geographic boundaries, partners with dense networks have higher innovation performance. I argue that in such heterogeneous contexts, dense network interactions facilitate partners' ability to integrate the diverse information to which they are exposed. Copyright © 2010 John Wiley & Sons, Ltd.     

Product variety and firm survival in the microcomputer software industry

This article provides an analysis of product variety and scope economies in the microcomputer software industry by using detailed firm‐level and product‐level information on firms' bundling of functionalities over application categories and computing platforms. We find that the management of product variety through the way different application categories are integrated in products and the platforms on which these products are offered can be as important as the significance of scope economies at the more aggregated firm level. Specifically, we find that there is little evidence of firm benefits from economies of scope in production, but there is substantial evidence that products benefit from economies of scope in consumption. In addition, we find that firms with products that encapsulate more application categories perform better, and those with products that cover more computing platforms perform worse. Finally, changes in product variety through new product introductions improve firm performance, but extensions to existing products hinder the performance of the firm and the product. We conclude that research in scope economies can benefit from a more detailed model of the evolution of product variety that includes data and analysis at the firm level and at the product level. Copyright © 2004 John Wiley & Sons, Ltd.     

The relationship between knowledge sourcing and fear of imitation

When firms tap external knowledge sources, they risk spillovers of their own internal knowledge. If the value of this potential loss and the imitation capabilities of neighboring organizations are high, fear of imitation might overshadow the benefits of openness. In such situations, firms might voluntarily reduce their use of external sources, relative to knowledge available internally. Data pertaining to 4,623 European inventions and direct information about the use of knowledge sources confirm that firms reduce their use of external, relative to internal, knowledge when they conduct costly research projects in locations characterized by high levels of absorptive capacity in a specific technology. This study also reveals fear of imitation as a mediating factor of this behavior. Copyright © 2013 John Wiley & Sons, Ltd.     

Product location choice and firm capabilities: evidence from the U.S. automobile industry

We test theories of product differentiation and firm capabilities using data from the U.S. automobile industry. We find managers introduce new models close to their existing ones but far from rival models. We also find entrants and foreign manufacturers locate models closer to rival models. These results are consistent with both economic models of product differentiation and theories of firm capabilities Copyright © 2000 John Wiley & Sons, Ltd.     

People and process,suits and innovators: the role of individuals in firm performance

Performance differences between firms are generally attributed to organizational factors rather than to differences among the individuals who make up firms. As a result, little is known about the part that individual firm members play in explaining the variance in performance among firms. This paper employs a multiple membership cross‐classified multilevel model to test the degree to which organizational or individual factors explain firm performance. The analysis also examines whether individual differences among middle managers or innovators best explain firm performance variation. The results indicate that variation among individuals matter far more in organizational performance than is generally assumed. Further, variation among middle managers has a particularly large impact on firm performance, much larger than that of those individuals who are assigned innovative roles. Copyright © 2012 John Wiley & Sons, Ltd.     

Product proliferation strategies and firm performance: The moderating role of product space complexity

In the Spanish automobile market between 1990 and 2000, significant reductions in tariff and nontariff protections increased the complexity of the product space, through the penetration of new car brands and models. Acknowledging these environmental dynamics, this study details conditions in which across‐niche (product breadth or intraindustry diversification) and within‐niche (product depth or versioning) product proliferation exerts a positive relationship on firm performance, as well as how key relationships change according to the complexity of the product space in the industry. Copyright © 2013 John Wiley & Sons, Ltd.     

企业的异质性假设和企业竞争优势的内生性分析

与完全竞争模型的描述根本不同，现实企业之间普遍存在着利润差距在企业内质性假设条件下，无论是新古典经济、传统产业组织理论的SCP分析范式，还是企业竞争战略的产业分析方法，都把企业的利润归结为外在的市场结构因素，而动态地看，现实企业是异质的，它表现为企业长期发展过程中积累的核心知识和能力的差异。作为企业实施竞争战略的关键性要素，核心知识和能力是非竞争性的，难以模仿和替代。它构成了企业长期利润或竞争优势真正基础。在企业异质性假设条件下，企业的竞争行为及其竞争优势是内生性的。     

Complementarity,capabilities, and the boundaries of the firm: the impact of within‐firm and interfirm expertise on concurrent sourcing of complementary components

Theories of the firm raise conflicting arguments about how complementarities between two or more components affect firms' knowledge and production boundaries. Traditional arguments in the boundaries of the firm literature suggest that firms will tend to produce sets of complementary components internally, while more recent modularity studies argue that firms can outsource to gain flexibility. We resolve these views by examining concurrent sourcing, which arises when firms both make and buy the same components. We argue that concurrent sourcing of complementary components becomes more common in two cases: when firms have relevant knowledge about the components in conjunction with suppliers (interfirm expertise) and, perhaps more surprisingly, within the firm (within‐firm shared expertise). The results suggest that firms often need to make in order to know, but can partially outsource if they possess sufficient expertise. Copyright © 2009 John Wiley & Sons, Ltd.     

Comparing the resource‐based and market‐based views of the firm: empirical evidence from Czech privatization

The recent privatization of state‐owned enterprises in the Czech Republic forms a natural experiment to test and compare the predictive ability of the resource‐based view (RBV) against the market‐based view (MBV) under conditions of great change. It has been recognized in the literature that, under normal stable circumstances, a firm's internal resources and its external market power are fundamentally intertwined. Consequently, it is difficult to identify the relative roles of these two theories in explaining expected firm performance and firm value. However, when market conditions are in a state of flux, as in the case of the Czech Republic in 1992, we expect the firm's resources to be the primary determinants of firm value. In order to test this notion, an RBV model was developed, based on a set of firm features reflecting the rare and valuable ability to compete in the emerging capitalistic economy (as opposed to the currently prevailing bureaucratically planned economy). A contrasting MBV model was also developed, highlighting the role of market power in this regard. These models were assessed in a cross‐sectional sample of 988 Czech firms undergoing privatization. The empirical findings show that the RBV‐driven variables are remarkably better at explaining share values of Czech firms in the period of privatization than MBV‐driven variables. These results underscore the role of firm resources as a primary determinant of firm value in rapidly changing environments. Copyright © 2003 John Wiley & Sons, Ltd.     

The moderating influence of firm market power on the transaction cost economics model: An empirical test in a forward channel integration context

Transaction cost economics (TCE) has guided a variety of research on governance in the strategic management literature. An important question arises, however, as to whether the TCE framework is equally appropriate for all types of firms in all business settings. In this paper, we argue that TCE is not and suggest that firms with high market power may be able to lower transaction costs under high asset specificity and uncertainty in nonintegrated distribution channels, avoiding the need to utilize highly integrated channels as a result. We test our hypotheses with data collected from 40 manufacturers of electronic and telecommunications products in 109 product‐markets in the United States. The results support our hypothesis that transaction cost factors are better at explaining forward channel integration for firms with low market power than for firms with high market power. Our results indicate that the basic TCE framework must be supplemented by the market power construct to adequately explain forward channel integration decisions. Copyright © 2007 John Wiley & Sons, Ltd.