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While research in the behavioral theory of the firm has often shown that organizations intensify their search as their performance falls further below aspirations, some studies unexpectedly found that organizations are highly responsive also when their performance falls only slightly below aspirations. We reconcile these puzzling findings by studying organizations' motivation to address their performance shortfall in the vicinity of aspirations. Our core argument is that organizations perceive closing a small performance-aspiration gap as easily achievable. Following the self-efficacy perspective, this perceived achievability motivates organizations to intensify their search to close such gap. Overall, we predict that organizations' propensity to change decreases when performance falls from slightly to moderately below aspirations, before increasing as performance falls further below aspirations. Further, we suggest the effect of performance slightly below aspirations on change to be stronger when organizations possess a high level of success experience. Using U.S. patent data from 1980 to 2015, we find support for our hypotheses. Our study contributes to the behavioral theory of the firm by showing a more complex functional form of the relationship between performance shortfall and search, thus deviating from the typical linear and inverted-U shaped patterns. [ABSTRACT FROM AUTHOR]

This paper investigates how the division of a firm into multiple legally independent entities--namely, asset partitioning--affects its propensity to downsize in response to negative demand shocks. We propose that asset partitioning increases the extent of employee downsizing since it compartmentalizes firm reputation and disincentivizes cross-subsidization among the firm's partitions. Our analysis of 62,624 European firms between 2012 and 2019 (321,094 firm-year observations) supports our prediction, offering new important insights on why firms differ in their downsizing behavior. [ABSTRACT FROM AUTHOR]

Creativity and innovation are interrelated and mutually reinforcing. Yet, despite their relatedness, micro-level creativity research and organizational-level innovation research have evolved largely independently, resulting in distinct approaches to the understanding of creativity and innovation. Over the years, this has led to the development of parallel streams of research with too little cross- talk. Therefore, the purpose of this panel symposium is to engage a group of panelists in a formal, moderated, interactive discussion about the (1) nature of practical, theoretical, and methodological differences between creativity and innovation as fields of research; (2) the fault-lines these differences have created between creativity and innovation research; (3) the similarities between creativity and innovation research that can bridge existing fault-lines (4) specific practical, theoretical, and methodological ideas for building bridges between creativity and innovation; and (5) new research possibilities opened by more closely connecting creativity and innovation research. [ABSTRACT FROM AUTHOR]

A personal narrative is presented which explores the author's experience of conducting a research to investigate the important role of multinational companies (MNC) subsidiaries in the protection of knowledge.

Prior signaling research has shown that a signal portfolio can communicate multiple underlying attributes of a partner to an organization. However, we know relatively little about how multiple attributes can be effectively signaled to multi-goal organizations. A multi-goal organization often prefers to collaborate with partners who act in accordance with multiple attributes simultaneously, that is, at the same time and in the same context. Although a signal portfolio can show multiple attributes of a partner, a portfolio does not reflect the simultaneity of attributes. We introduce the concept of summary signals, defined as signals that show multiple underlying attributes of a partner simultaneously. We argue that a partner's likelihood of being selected as a collaboration partner increases with its use of summary signals, and the effect of summary signals is stronger than that of an equivalent signal portfolio. Using data on government procurement of innovation from 2010 to 2019, we find that firms possessing highly cited, green, and joint patents, our measure of summary signals, are more likely to be selected by the government, and that this effect is stronger than the effect of signal portfolios. Our study has important implications for research on signaling, partner selection, and government procurement. [ABSTRACT FROM AUTHOR]

We conceptualize the breadth and depth of MNC subsidiaries' knowledge protection strategies. We address this issue empirically with data from Portugal and Germany and find that MNCs prefer broader sets of knowledge protection strategies in host countries with fewer knowledge opportunities. Munificent host country environments require targeted sets of deep knowledge protection strategies. [ABSTRACT FROM AUTHOR]

The benefits of learning by exporting are examined in the light of productivity or technological innovation improvements and the existing evidence is controversial. We suggest that firms can also learn in export markets how to better manage and organize their activities, and therefore introduce organizational innovation (OI). Moreover, we argue that learning-by-exporting would depend on the competition from abroad that firms face domestically and the technological status of the industry in which they operate. We test our prediction using six waves of the German Community Innovation survey (CIS) covering the period from 2006 to 2016. Our finding show that exporting is associated with the introduction of organizational innovation and this effect is less pronounced if firms face strong competition from abroad, especially for those that operate in technologically lagging industries. [ABSTRACT FROM AUTHOR]

Exporting is a common strategy used by firms to enter foreign markets. Existing literature has given attention to the importance of export spillovers in explaining firms' decision to export. However, limited attention has been devoted to the understanding of the learning to export process. By drawing on the literature on export spillovers and strategic human capital we aim to analyze the implications that specific types of hiring patterns have for the export performance of firms. More specifically, we hypothesize that the export performance of firms that hire employees with task-specific export knowledge and skills acquired in exporting firms is higher, and lower if firms hire employees with task-specific export knowledge acquired in non-exporting firms. We use data from an employer-employee database and empirically test our predictions for a sample of approximately 30 000 German establishments. Our findings contribute to a deeper understanding of the micro-foundations of the learning to export process. [ABSTRACT FROM AUTHOR]

Starting to export is a crucial but risky step for the growth strategy of most firms. Hiring managers with international experience can propel export decisions but we know little about where domestic firms find this expertise and whether it can be fruitfully applied in their context. We integrate theoretical mechanisms from the transferability of strategic human capital into models explaining export decisions. We theorize that hiring managers from MNCs increases the odds of domestic firms to start exporting and this effect benefits from similarities in the organizational context of the hiring firm with MNCs. We hypothesize that young firms, without international diversity in the workforce and flat hierarchies will benefit comparatively less from hiring MNC managers because the conditions for transfers of human capital are too dissimilar. We test and support these hypotheses for 159,680 domestic firms in Sweden, their hiring and export decisions between 2010 and 2015. [ABSTRACT FROM AUTHOR]

Whereas prior research has acknowledged that, in dyadic alliances, one partner can acquire the other, it ignored the possibility of one partner being acquired by another company that was not involved in the alliance. We define alliances, which experience the acquisition of one partner by a third company, as inherited alliances. We posit that inherited alliances bring along unique information asymmetry and coordination challenges for the acquiring firm, jeopardizing the stability of inherited alliances. At the same time, we expect that acquired alliance partners can help acquiring firms to navigate these challenges, increasing the resilience of inherited alliances. Using a sample of inherited alliances from the biotech sector, we find that pre-acquisition duration of the inherited alliance and the presence of a post-acquisition preservation strategy increase the resilience of inherited alliances. Jointly, our findings contribute to the post-formation alliance literature, exploring a compositional alliance change that has been largely ignored. In addition, our findings have implications for the acquisition literature, indicating that the choice for a particular integration strategy has implications that go beyond the interface between the acquired and acquiring firm. [ABSTRACT FROM AUTHOR]

To tackle important grand societal challenges, government institutions initiate large-scale programs in which organizations participate in challenge-based R&D projects, aimed at solving extant technological problems within a specific field. Due to knowledge recombination benefits, it is often assumed that organizations should go-together - i.e. formally involving partners in these projects - rather than go-alone - i.e. proceeding independently. In this study, we relax the assumption that going-together is always more productive than going-alone in terms of problem-solving performance. Specifically, we argue that that not every organization is able to translate potential into realized knowledge recombination opportunities. Firstly, we formulate a baseline hypothesis, in which we expect that problem-solving performance is higher, on average, when going-together than going-alone. Secondly, we hypothesize that the ability to translate potential into realized knowledge recombination opportunities when going-together is contingent upon the focal organization's institutional background, internal knowledge pool size, and challenge-based R&D project portfolio size. Analysing a unique sample of 414 challenge-based R&D projects within the Department of Energy's Hydrogen and Fuel Cells Program over a 14-year time period (2003-2016), we generally find support for our theoretical predictions. We contribute to theory and practice by showing that the often-assumed performance edge of going-together over going-alone does not materialize for every organization. [ABSTRACT FROM AUTHOR]

Existing alliance research extensively studied how firms use R&D alliances in order to enrich their knowledge pool with diverse components from partners. However, this research neglects that firms also require architectural knowledge, i.e., knowledge about connecting different components, in order to stimulate knowledge recombination activities. To address this research gap, we rely on insights from knowledge recombination literature and examine how firms may use R&D alliances as vehicles to access architectural knowledge from partners. Moreover, we examine whether these combinatorial opportunities are contingent upon the partner's component knowledge. Analyzing the R&D alliances of 89 companies in the fuel cell technological field, our findings indicate that partner's architectural knowledge has a J-shaped relationship with firms' partner-specific knowledge recombination intensity. We also find that partner's component knowledge negatively moderates this relationship. Pointing to the interplay between architectural and component knowledge in shaping combinatorial opportunities, this study contributes to a richer understanding of the knowledge recombination implications of R&D alliances. [ABSTRACT FROM AUTHOR]

We investigate how human capital decisions made at entry influence the survival of MNC subsidiaries and how they interact with equity entry mode decisions. Our theoretical reasoning claims that some human capital configurations perform better in bundling MNC- specific assets with complementary host country specific assets. We integrate concepts from strategic human capital literature into a model of MNC entry modes. We hypothesize that subsidiaries with a higher share of employees with work experience in other MNC subsidiaries in the host country or with a higher share of expatriates in the subsidiaries management team at entry have a higher probability of survival. Moreover, we reason that these positive effects increase when the subsidiary operates as a joint venture. We test and support these hypotheses with a sample of 5,236 MNC subsidiaries that entered the Portuguese market in the period 1994-2011. Our findings have immediate relevance for both research and practice. [ABSTRACT FROM AUTHOR]

When engaging in a marriage, you are confronted with a set of network ties that you did not voluntarily initiate, but that can have a huge impact of your personal life. In a similar vein, when initiating acquisitions, acquiring firms are confronted with the alliance agreements of the acquired target. In this paper, we deviate from extant alliance portfolio research, making an explicit distinction between original alliances - i.e. alliances that the focal firm initiated itself - and acquired alliances - i.e. alliances that entered the portfolio by means of acquisition. Relying on a panel data set of 43 large pharmaceutical and biotech companies, we find that the share of acquired alliance in a firm's total alliance portfolio negatively influences its financial performance. Our results illuminate the relevance of explicitly considering acquisitions when studying alliance portfolio composition and point to the need for a more network-level approach when studying the performance implications of acquisitions. [ABSTRACT FROM AUTHOR]

Focusing on the temporal dimension of knowledge recombination, studies examine the extent to which the age of components influences the value of inventions. However, this research neglects that components vary substantially in terms of when they were last used. To address this gap, we introduce the concept of recombinant lag, i.e. the time that components in knowledge recombination have remained unused, and test its impact on the technological value of inventions. We predict that components that remain unused for longer periods become less technologically relevant and more difficult to retrieve. However, we also expect that, beyond a certain point, the uniqueness and untapped recombinant potential of components that remain unused for longer periods to outweigh these two disadvantages. Analyzing 20,906 fuel cell patent families, we find that the recombinant lag of components used in knowledge recombination has a U-shaped relationship with the technological value of resulting inventions. Our findings contribute to a richer understanding of the temporal dimension of knowledge recombination and help to uncover the technological potential of shelved components. [ABSTRACT FROM AUTHOR]

Strategic alliances have become a major instrument for companies to create competitive advantage. Hence, the choice of alliance partners becomes an important but little studied part of firm strategy. In this paper we highlight the role of obfuscation, i.e., the degree to which firms conceal information by presenting themselves in an overly complex manner, and link it to the signaling of trustworthiness in strategic alliance formation. We hypothesize that obfuscating firms are less likely to be included in a strategic alliance and contrast these predictions with stronger signals from previous alliances. Based on a sample of pharmaceutical and biotech firms, we create a dyad level panel-dataset of all potential and realized linkages to study firms' partner choices. In line with the literature, we approximate obfuscation with the complexity of the language that potential partner firms use in their Letters to Shareholders. We document that, on average, obfuscation decreases alliance formation probability for those firms that lack previous alliance experience as an alternative signal. We find that this effect is dyadic in nature, i.e., particularly pronounced when experienced firms evaluate un-experienced partners. Our findings suggest important implications for impression management and perception engineering of firms which are new to industries or markets. [ABSTRACT FROM AUTHOR]

We investigate the consequences of MNC subsidiary closures for employees who lose their jobs. We ask to what degree the foreign knowledge that they were exposed to is valued in their new job. We argue theoretically that this foreign knowledge is both valuable and not readily available in the host country but is also distant and therefore difficult to absorb. We predict an inverse u-shaped relationship between the exposure to foreign knowledge and the salary in the new job. We empirically support our predictions for a sample of almost 140,000 affected employees in Portugal from 2002 to 2009. [ABSTRACT FROM AUTHOR]

In many innovation projects firms search for external knowledge sources since they cannot rely solely on their own R&D efforts. This study of technology alliances argues that collaborations with external partners affect the innovation output of firms not only directly but also indirectly by influencing the efficiency of internal R&D. Using a sample of firms in electrical and electronic equipment, empirical evidence identifies heterogeneous interaction between alliances and internal R&D efforts dependent on the type of partner. While collaboration with partners in related industries is more beneficial for a firm's internal R&D to produce innovations in comparison to alliances with partners in the same industry, collaboration with partners in unrelated fields decreases the efficiency of internal R&D efforts. [ABSTRACT FROM AUTHOR]

Recent strategic management literature emphasizes the challenges for firms to capture the returns from their innovations. Large parts of this research stream are devoted to patenting while secrecy is the dominant form of knowledge protection for the vast majority of firms. We focus on secrecy for knowledge protection and especially the effect on innovation performance when firms try to benefit from inflows of external knowledge at the same time. We predict a negative relationship by tracing the innovation performance effects of secrecy and knowledge inflows back to information asymmetry and signaling theory. However, secrecy is not an end in itself. We hypothesize further that firm's past innovation success affects the effectiveness of secrecy in a negative way. We test and support these hypotheses using panel data on more than 1,000 firms from Germany. These findings allow us to extend academic theory and develop recommendations for management practice by identifying boundaries for both knowledge appropriation and knowledge search theory. [ABSTRACT FROM AUTHOR]