Resource Reconfiguration: Learning from Performance Feedback

Motivation and Ability? A Behavioral Perspective on the Pursuit of Radical Invention in Multi-Technology Incumbents

“…Organizational research has long used behavioral theory to explore both risk preferences (e.g., March & Shapira, 1987) and the search behavior of organizations (e.g., Levinthal & March, 1981). We therefore build on behavioral theory to argue that firms' motivation to pursue such risky strategies will be problem-driven, with firms undertaking riskier and more exploratory actions when their performance falls below their aspiration level (Bolton, 1993;Cyert & March, 1963;Dothan & Lavie, 2016;Greve, 2003).…”

“…Our rationale is that while the pursuit of radical invention is certainly a form of risk-taking, it is not the only form of risk-taking that a firm can pursue. Recent studies suggest that as performance falls below aspirations firms become less likely to pursue actions that are highly resource-consuming (Audia & Greve, 2006;Kuusela, Keil, & Maula, 2017) or associated with high uncertainty (Dothan & Lavie, 2016). The pursuit of radical invention is precisely such an action, since the outcome of such pursuit is highly uncertain, and likely to require substantial additional investment to realize value.…”

“…We suggest that the argument above applies to a firm's ability to produce successful radical inventions. While it is true that radical inventions draw on fundamentally new knowledge and therefore represent a break from past trajectories (Dewar & Dutton, 1986;Dosi, 1982;Laursen & Salter, 2006), suggesting that path dependence may be a handicap in successfully pursuing such inventions (Henderson, 1993) of recombination (Ahuja & Lampert, 2001;Fleming, 2001;Hargadon & Sutton, 1997;Nelson & Winter, 1982;Schilling & Green, 2011;Schumpeter, 1934;Van de Ven, 1986) suggests that path-breaking and valuable inventions result from the combination of new knowledge with existing knowledge (Jung & Lee, 2016;Nerkar, 2003), and of distant knowledge with proximate knowledge (Capaldo, Lavie, & Petruzzelli, 2017;Dothan & Lavie, 2016). In particular, successful radical inventions may require application-specific knowledge (Sosa, 2009)-i.e., a thorough understanding of the domain in which the invention is to be appliedand this is likely to be strongest when a firm has exhibited strong performance in that domain in the past.…”

Jack of all trades and master of knowledge: The role of diversification in new distant knowledge integration

“…Scholars studying how organizations can successfully engage in such a recombination process have shown that ability is a precursor to successful exploration, both at the individual and the organization level (e.g., Ahuja et al, 2008;Fleming, 2001;Gavetti & Levinthal, 2000;Greve, 2007;Henderson, 1993;King & Tucci, 2002). However, while there is fairly extensive evidence on several mechanisms through which skilled organizations can achieve successful exploration (Dothan & Lavie, 2016;Eggers & Kaul, 2018;Fleming & Sorenson, 2004;Greve, 2003), less is known about mechanisms of successful exploration of skilled individuals.…”

“…Scholars have revealed that ability is a precursor to successful exploration, both at the individual and the organization level (e.g., Ahuja, Lampert, & Tandon, 2008;Fleming, 2001;Gavetti & Levinthal, 2000;Greve, 2007;Henderson, 1993;King & Tucci, 2002). However, while at the organization level various mechanisms through which ability 1 leads to successful exploration have been analyzed (Cyert & March, 1963;Dothan & Lavie, 2016;Eggers & Kaul, 2018;Fleming & Sorenson, 2004;Greve, 2003), less is known about mechanisms through which the successful exploration of skilled individuals 2 manifests. Understanding this is important as knowledge-based organizations are increasingly relying on scientists, engineers, and researchers to drive value creation and competitive advantage (Agrawal, McHale, & Oettl, 2017;Barth, Davis, Freeman, & Wang, 2017) and because combining broadly across the knowledge frontier has been shown to lead to the most significant discoveries (e.g., Boudreau, Lacetera, & Lakhani, 2011;Chai, 2017;Katila & Ahuja, 2002;Lifshitz-Assaf, 2017;Schilling & Green, 2011;Uzzi, Mukherjee, Stringer, & Jones, 2013;Weitzman, 1998).…”