Strategy SciencePub Date : 2021-07-29DOI: 10.1287/stsc.2021.0132
Alex Coad
{"title":"Econometrics and the Growth of Firms: Perspectives from Evolutionary Economics","authors":"Alex Coad","doi":"10.1287/stsc.2021.0132","DOIUrl":"https://doi.org/10.1287/stsc.2021.0132","url":null,"abstract":"This article discusses recent results and future research possibilities in the areas of econometrics and firm growth, drawing on Dosi and Marengo’s “10 building blocks” of evolutionary theory. These 10 building blocks are: dynamics first!, microfoundations, realism is a virtue, bounded rationality, persistent heterogeneity, novelty in the system, selection mechanisms, emergent properties at the aggregate level, emergence of organizational forms and institutions, and coevolution across levels of analysis and timescales. As it happens, many of our comments relate to the theme of “realism is a virtue.” We also suggest, in some cases, which econometric techniques might be more appropriate for research into firm growth and performance, given these 10 building blocks.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2021-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42155566","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Strategy SciencePub Date : 2021-07-21DOI: 10.1287/STSC.2021.0133
Gianluca Capone, Daitian Li
{"title":"History-Friendly Modeling: An Evolutionary Tool for Strategy Research","authors":"Gianluca Capone, Daitian Li","doi":"10.1287/STSC.2021.0133","DOIUrl":"https://doi.org/10.1287/STSC.2021.0133","url":null,"abstract":"History-friendly models have been increasingly adopted to study innovation and industry evolution, the catch-up of latecomer firms and countries, and public policies. However, they have been used less in the field of strategic management. In this article, we first provide a review of the history-friendly literature, identifying its intellectual roots in evolutionary economics. Then, we discuss three possible motivations that could explain the history-friendly paradox. Finally, we propose history-friendly models as a promising tool to study current research questions in strategy.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2021-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44442383","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Strategy SciencePub Date : 2021-05-14DOI: 10.1287/STSC.2021.0129
Hongyi Li, E. Van den Steen
{"title":"Birds of a Feather … Enforce Social Norms? Interactions among Culture, Norms, and Strategy","authors":"Hongyi Li, E. Van den Steen","doi":"10.1287/STSC.2021.0129","DOIUrl":"https://doi.org/10.1287/STSC.2021.0129","url":null,"abstract":"Does culture eat strategy for breakfast? This paper investigates the interactions among corporate culture, norms, and strategy, in order to better understand this issue and related questions. It first shows, through microfoundations, how the forces that drive toward “culture as shared beliefs and preferences” also cause the emergence of social norms (when these beliefs and preferences are unobservable), with people even endogenously enforcing norms that go against their own beliefs and preferences. The latter effect may cause a disconnect between the organization’s norms and its underlying beliefs and preferences. The paper then makes predictions on the kinds of shared beliefs, preferences, and norms that are likely to emerge, and when they are most likely to emerge. It shows, for example, that social norms are more likely in attractive organizations, for behaviors that have modest personal consequences, and on dimensions along which employees depend on others’ choices to a moderate degree. Building on these insights and on the definition of “strategy as core guidance,” we finally discuss how corporate culture and strategy interact. We show, in particular, how culture is not just an input into strategy but also a direct substitute for strategy and often even a competitor. The results throw light on ways to deal with the “breakfast” issue.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2021-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45256907","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Strategy SciencePub Date : 2021-05-13DOI: 10.1287/STSC.2021.0130
Rory M. McDonald, R. Allen
{"title":"A Spanner in the Works: Category-Spanning Entrants and Audience Valuation of Incumbents","authors":"Rory M. McDonald, R. Allen","doi":"10.1287/STSC.2021.0130","DOIUrl":"https://doi.org/10.1287/STSC.2021.0130","url":null,"abstract":"Previous work has examined how audiences evaluate category-spanning organizations, but little is known about how their entrance affects evaluations of other, proximate organizations. We posit that the emergence of category-spanning entrants signals the advent of an altered future state—and seeds doubt about incumbents’ prospects in a reordered industry-categorization scheme. We test this hypothesis by treating announcements of funding for startups as an information shock to investors evaluating incumbent financial service providers between 2010 and 2017—a period marked by atypical category combinations at FinTech startups. We find that announcements by startups that embodied unusual combinations of categories resulted in lower cumulative average returns for incumbents, both in absolute terms and in comparison with typical startups. Our theory and results contribute to research on categorization in markets and to theories of disruptive innovation and industry evolution.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2021-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46675911","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Strategy SciencePub Date : 2020-08-12DOI: 10.1287/stsc.2020.0110
Elizabeth G. Pontikes, V. Rindova
{"title":"Shaping Markets Through Temporal, Constructive, and Interactive Agency","authors":"Elizabeth G. Pontikes, V. Rindova","doi":"10.1287/stsc.2020.0110","DOIUrl":"https://doi.org/10.1287/stsc.2020.0110","url":null,"abstract":"In this introductory essay, we develop a theoretical framework of agency as a basis for strategic shaping and market transformation. We conceive of agency as both constrained and enabled by structure, and we build on sociological views that treat market structures as pairings of cultural schemas and material resources that are mutually sustaining. Structures contain the seeds for change because contradictions and conflicts that are inherent to structure inspire agents to imagine a new order and provide pathways to enact them. We theorize three connected forms of agency. Constructive agency captures agents’ ability to differently apply schemas to mobilize resources and improve their strategic positions. Temporal agency underlies agents’ autonomy and individuation, and enables agents to envision new possibilities. Interactive agency captures the collective nature of agency, where interactions among heterogeneous actors provide opportunities for agents to persuade others of their changing conceptions and learn new schemas, expanding agents’ repertoires for shaping opportunities.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2020-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1287/stsc.2020.0110","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45486758","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Strategy SciencePub Date : 2020-08-10DOI: 10.1287/stsc.2020.1366
Pinar Ozcan, Douglas P. Hannah
{"title":"Forced Ecosystems and Digital Stepchildren: Reconfiguring Advertising Suppliers to Realize Disruptive Social Media Technology","authors":"Pinar Ozcan, Douglas P. Hannah","doi":"10.1287/stsc.2020.1366","DOIUrl":"https://doi.org/10.1287/stsc.2020.1366","url":null,"abstract":"Research often examines disruption in the context of head-to-head competition between firms and technologies. In contrast, we examine the unique dynamics of disruptive technologies within supplier ecosystems. We do so through an inductive multiple case study set in the global advertising industry from 2008–2013, as the industry grappled with the emergence of social media. Using rich archival and field data, we closely track five global consumer goods manufacturers and their associated advertising suppliers as they attempted to integrate social media into their advertising activities. Our primary contribution is to unpack the process by which firms reconfigure their supplier ecosystems to address disruptive new technologies. Our framework reveals that integrating new technologies may require firms to reconfigure the distributions of both activity and power, and that fundamental trade-offs may leave the value of new technologies unrealized. Broadly, we contribute to research and theory on buyer-supplier relationships, alliances, and technology disruption by bringing a more realistic perspective that considers firms’ network of suppliers and interfirm turf wars in technology adoption.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2020-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1287/stsc.2020.1366","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46714480","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Strategy SciencePub Date : 2020-08-04DOI: 10.1287/stsc.2020.0105
Jeroen Struben, Brandon H. Lee, Christopher B. Bingham
{"title":"Collective Action Problems and Resource Allocation During Market Formation","authors":"Jeroen Struben, Brandon H. Lee, Christopher B. Bingham","doi":"10.1287/stsc.2020.0105","DOIUrl":"https://doi.org/10.1287/stsc.2020.0105","url":null,"abstract":"Collective action is critical for successful market formation. However, relatively little is known about how and under what conditions actors overcome collective action problems to successfully form new markets. Using the benefits of simulation methods, we uncover how collective action problems result from actor resource allocation decisions interacting with each other and how the severity of these problems depends on central market- and actor-related characteristics. Specifically, we show that collective action problems occur when actors undervalue the benefits of market-oriented resource allocation and when actors contribute resources that are imperfectly substitutable. Furthermore, we show that collective action problems occur when actors are embedded in networks with others sharing a similar role in market formation. Collectively, our findings contribute new insights to organization theory regarding collective action and market formation and to strategy on value creation and strategic decision making regarding resource allocation.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":null,"pages":null},"PeriodicalIF":3.9,"publicationDate":"2020-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1287/stsc.2020.0105","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48873732","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}