W e analyze longitudinal data on British fertility clinics to examine the impact of "selection at the gate," i.e., the attempts of organizations to improve the success rate of their output by selecting promising cases as input. In contrast to what might be expected, we argue that more stringent input selection is likely to lead to lower overt performance compared with those firms that admit difficult cases, because the latter develop steeper learning curves. That is, difficult cases enable greater learning from prior experience because they promote experimentation, communication among various actors, and the codification of new knowledge. Our results confirm this prediction and provide clear evidence that organizations with more difficult cases in their portfolios gradually begin to display performance figures that compare favorably with those of firms that do select at the gate.
Research summary (113 words):We investigate how organizational adaptation to interdependence shifts is influenced by "integrators". These are formally mandated managerial roles meant to promote coordination across specialized but interdependent organizational sub-units, yet they do so without relying on formal authority. While much has been learned about how integrators promote steady state coordination within a known pattern of interdependence, less is known about their impact on organizational adaptation when the pattern of interdependence itself is unknown. We discuss mechanisms by which integrators may nonetheless aid organizational adaptation and learning processes in such situations, and test our hypotheses in the context of a regulatory change that affected the IVF clinics sector in the UK using a differences-in-differences design. Managerial summary (115 words):Organizational structure can influence how an organization adapts to change. We investigated how a regulatory change in the provision of fertility treatments in the UK forced clinics to change their workflows, and whether the presence of integrator roles enabled clinics to adapt to these changes. It is well known that integrator roles in general are valuable in coordinating across specialized organizational units, but this research points to the surprising implication that their value may persist even when the workflow being coordinated changes suddenly, in ways that nobody necessarily comprehends. Our research highlights the fact that even in an intensively science-based work context, the "technology of organizing" can have a significant role in shaping organizational performance.
Research Summary That capability development is subject to time compression diseconomies (TCD) is well‐known in the strategy literature. However, so far, there is limited attention paid to its origins, that is, why it exists, and demonstrating it empirically. In the context of fertility clinics in the United Kingdom, we show that faster experience accumulation is associated with lower success rates; that is, time compression in experience accumulation results in shallower learning curves. We also show that TCD is exacerbated for clinics that mainly treat complex cases and is mitigated for clinics that employ an integrator to coordinate across the different specialist functions involved in the treatment process. We propose differential learning rates as the mechanism that underlies TCD, and develop implications for firm capabilities and sources of competitive advantage. Managerial Summary As firms pursue new opportunities, it is intuitive to grow fast. Rapid growth has many advantages, including a quicker payback on investment as well as garner first mover advantages. However, there can also be a dark side to such high paced growth. By analyzing data on in‐vitro fertilization clinics in the United Kingdom, we show that clinics that grew the fastest were slower in improving their treatment success rates, while slower growing clinics improved more with increasing experience. This penalty of rapid growth is more severe for clinics that treat more complex cases, but it can be ameliorated by better coordination between specialist activities. Our research serves as a warning that faster is not always better.
Although management scholars have recognized that organizational learning is an indispensable constituent of strategic management, there are still fundamental questions about the contextual factors that influence the ability of organizations to learn from their experience. More specifically, this study seeks to test if organizational learning is influenced by different types of "integrators"formally mandated managerial roles which cut across departmental structures and link interdependent specialists. These effects are analyzed using longitudinal data from the medical domain of in-vitro fertilization in the United Kingdom. The analyses illustrate how integrators, as elements of formal structure with varying levels of formal authority and relational coordination, influence collective outcomes in terms of organizational learning rates.
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