Tag Archives: innovation

[9]. Alliance Performance and Subsequent Make-or-Ally Choices: Evidence from the Aircraft Manufacturing Industry

Charlotte Ren, Louis Mulotte, Pierre Dussauge and Jay Anand. Strategic Management Journal, 2022, 43(11): 2382-2413. https://doi.org/10.1002/smj.3410.

Research Summary. We examine how the performance of a firm’s prior alliances influences its propensity to persist with the alliance mode or switch to independent operations in the context of new product introductions (NPIs). Drawing on the behavioral theory of the firm (BTOF), we argue that a firm’s alliance performance has a U-shaped effect on its likelihood of undertaking the subsequent NPI independently and that competitive intensity strengthens this U-shaped relationship. We also predict that firms with above-aspiration alliance performance are more likely to achieve breakthrough performance in the subsequent NPI if they switch to independence than if they continue to ally. Data on NPIs in the global aircraft manufacturing industry (1944–2000) support our hypotheses. Our study extends the alliance literature and contributes to research on how firm performance influences subsequent strategic choices.

Managerial Summary. The dilemma of whether to continue or exit an alliance or relationship is a common one for individuals, countries, and firms. Our study examines firms’ strategic decision to switch to independent operations after having partnered with other firms. Using the aircraft product development context, we show that firms that make such a change in their strategy are the ones that performed either much better or much worse than what they expected. Firms with alliance performance close to their expectations tend to persist with their current strategy. Of the firms that change their strategy, the high performers benefit much more from changing their strategy than low performers. We provide insights regarding when it is preferable for managers to continue to ally or to switch to independence, especially in launching new products.

Click here for the paper: Ren.Mulotte.Dussauge.Anand_2022 SMJ.

[6]. Should I stay or should I go now? Integrating the learning and selection views on firms’ successive make-or-ally decisions for product innovation

Louis Mulotte, Charlotte Ren, Pierre Dussauge and Jay Anand. In F. Contractor and J. Reuer (Eds). Frontiers of Strategic Alliance Research. Cambridge University Press. 2019 (pp. 423-436).

Abstract. Previous literature on inter-firm collaborations has documented how firms can learn from their partners with experience and eventually develop adequate capabilities to go it alone. On the other hand, some literature also suggests that firms are less likely to switch from previously successful strategies, so firms with successful collaborative experience may persist with further collaborations. We identify these strands of literature as the “learning” and “selection” views, and develop propositions on the implications of the two alternative views. We conduct preliminary tests of our propositions using data on new product introductions in the aircraft industry. Our theoretical and empirical analyses help in integrating of these seemingly opposing views and allow for the development of theoretical and managerial implications.

[5]. Does experience imply learning?

Jay Anand, Louis Mulotte and Charlotte Ren. Strategic Management Journal. 2016, 37(7): 1395-1412. 

Abstract. Strategic management research traditionally uses experiential learning arguments to explain the existence of a positive relationship between repetition of an activity and superior performance. We propose an alternative interpretation of this relationship in the context of discrete corporate development activities, which are generally self-selected on the basis of superior performance expectations. We argue that firms are likely to choose to repeat successful activities, thereby accumulating high experience with them. To demonstrate this ‘self-selection’ effect, we examine the performance of 437 aircraft projects launched through three introduction modes. We show that the positive performance effect of the firm’s experience with the focal mode vanishes after accounting for experience endogeneity. We suggest that in a general case, experience with corporate development activities may be tinged with both learning as well as selection effects. Therefore, omitting experience endogeneity may lead researchers to draw incorrect conclusions from an “empirically observed” positive experience-performance relationship.

Click here for the paper: Anand-Mulotte-Ren_2016 SMJ

[3]. Middle Managers’ Strategic Role in the Corporate Entrepreneurial Process: Attention-Based Effects

Charlotte Ren and Chao Guo. Journal of Management. 2011, 37(6): 1586-1610

  • An earlier version of this manuscript received the 2008 IDEA Award (Research Promise) from the AOM’s Entrepreneurship Division.

Abstract. This article examines the strategic role of middle managers in the corporate entrepreneurial process from an attention-based perspective. By integrating literature from multiple disciplines, the authors delineate the attention-based effects on how middle managers provide the impetus for different types of entrepreneurial opportunities (i.e., exploratory vs. exploitative initiatives). Specifically, middle managers, constrained by the attention structures of the firm, likely pre-screen entrepreneurial opportunities from lower organizational levels and attend primarily to those that align with the strategic orientation of the firm. This tendency may be moderated by the presence of other players, middle managers’ structural positions, and the availability of slack resources. Moreover, in their efforts to sell initiatives to top management, middle managers may leverage “policy windows”—patterned regularities and irregularities in and around the organization—to exploit existing attention structures to their advantage or perhaps to dismantle those structures.

Click here for the paper: Ren&Guo_2011JOM Online Pub

[1]. Niche Width Revisited: Organizational Scope, Behavior and Performance

Olav Sorenson, Susan McEvily, Charlotte Ren and Raja Roy. Strategic Management Journal. 2006, 27(10): 915-936.

Abstract. Although strategy research typically regards firm scope as a positional characteristic associated with performance differences, we propose that broad contemporary scope also provides insight into the routines that govern firm behavior. To attain broad scope, firms must repeatedly explore outside the boundaries of their current niche. Firms with broad niches therefore operate under a set of routines that repeatedly propel them into new market segments, expanding their niche. These niche expansions, however, involve risky organizational changes, behavior that disadvantages generalists relative to specialists, despite the positional value of broad scope. Empirical analyses of machine tool manufacturers and computer workstation manufacturers support this conjecture: (i) generalists introduce new products at a higher than optimal rate, thereby increasing their exit rates; and (ii) generalists also more frequently launch new models with novel features or targeted at new consumer segments rather than improving only incrementally on existing products, further accelerating their odds of failure. After adjusting for these behavioral differences, broad niche widths reduce exit rates, suggesting that they provide positional advantages. The paper discusses how this phenomenon may help to explain the diversification and multi-nationality discounts.

Click here for the paper: Sorenson-McEvily-Ren-Roy_2006SMJ