Strategic renewal has become a prominent theme in a variety of organization and management research domains in recent years. It refers to the process that allows organizations to alter their path ...dependence by transforming their strategic intent and capabilities. With contributions from an increasing range of theoretical perspectives and research contexts, the strategic renewal literature has become fragmented and lacks common definitions and conceptual clarity, which prevent cross‐fertilization and harm further development. This study systematically reviews the various literature streams on strategic renewal to provide a more integrative perspective. The authors identify three key theoretical tensions at the heart of strategic renewal research, namely learning vs. resource, induced vs. autonomous, and co‐alignment vs. co‐creation. By exploring these key tensions, the authors define strategic renewal's conceptual core, identify gaps in the past literature, and provide guidance for future research.
As top management teams (TMTs) become progressively more diverse, an important question arises: how does greater TMT diversity affect a company’s ability to innovate its business model? To examine ...this, we draw on the upper‐echelons literature and on research on business models as activity systems to theorize that cognitive and ideological diversity in TMTs will affect teams’ attention to business model innovation (BMI) and companies’ BMI intensity. Analysis of longitudinal data from firms in the US printing and publishing industry provides support for the theory that, over time, TMT cognitive and ideological diversity have a positive influence on BMI. Whereas cognitive diversity expands TMT’s BMI attention‐scope, both cognitive and ideological diversity increase BMI intensity. However, too much ideological diversity has a negative effect. We furthermore find that TMT longevity moderates the effects of TMT diversity positively, suggesting that the benefit of diversity grows as team members work together longer as a team. We discuss the study’s contributions to the literature on diversity, BMI, and the upper echelons.
The purpose of this perspective paper is to advance understanding of absorptive capacity, its underlying dimensions, its multilevel antecedents, its impact on firm performance, and the contextual ...factors that affect absorptive capacity.Twenty years after the Cohen and Levinthal 1990 paper, the field is characterized by a wide array of theoretical perspectives and a wealth of empirical evidence. In this paper, we first review these underlying theories and empirical studies of absorptive capacity. Given the size and diversity of the absorptive capacity literature, we subsequently map the existing terrain of research through a bibliometric analysis. The resulting bibliometric cartography shows the major discrepancies in the organization field, namely that (1) most attention so far has been focused on the tangible outcomes of absorptive capacity; (2) organizational design and individual level antecedents have been relatively neglected in the absorptive capacity literature; and (3) the emergence of absorptive capacity from the actions and interactions of individual, organizational, and interorganizational antecedents remains unclear. Building on the bibliometric analysis, we develop an integrative model that identifies the multilevel antecedents, process dimensions, and outcomes of absorptive capacity as well as the contextual factors that affect absorptive capacity. We argue that realizing the potential of the absorptive capacity concept requires more research that shows how "micro-antecedents" and "macro-antecedents" influence future outcomes such as competitive advantage, innovation, and firm performance. In particular, we identify conceptual gaps that may guide future research to fully exploit the absorptive capacity concept in the organization field and to explore future fruitful extensions of the concept.
Increasingly, organizations have been employing self‐managing teams to circumvent bureaucratic controls and stimulate innovation. However, this goal is not easily achieved; in many situations, ...informal controls replace formal controls. This study develops a multi‐level perspective of control. We explicitly analyze control mechanisms at different levels of the organization and how they affect innovative team output. We theorize and empirically investigate a potential downside of horizontal social control mechanisms at the team level (i.e., peer pressure) affecting self‐managing teams’ innovative outcomes. We also discuss managerial control mechanisms at the organizational level (i.e., interactive and diagnostic management control systems) that may help to mitigate such negative effects. We theorize how they may influence the innovative output of self‐managing teams, both directly and interactively. We chose a multi‐level, multi‐source setting for our study and ran three parallel surveys with employees in a Fortune 500 firm where 248 team members, 126 internal team leaders, and 97 organizational leaders enabled us to create a unique database of 97 self‐managing software development teams. Our findings confirm that peer pressure is common among established agile teams and that it negatively influences the innovative output of the agile teams. Moreover, our findings show that the magnitude of the effect of peer pressure is contingent on control mechanisms at higher levels within the organization. This enables us to provide new theoretical insights regarding the paradoxical effect of managerial control systems when it comes to flat organizations and autonomous teams. Additionally, we provide practical guidelines for managers who increasingly adopt agile practices but at the same time face issues with regard to innovation.
Research on exploration and exploitation is burgeoning, yet our understanding of the antecedents and consequences of both activities remains rather unclear. We advance the growing body of literature ...by focusing on the apparent differences of exploration and exploitation and examining implications for using formal (i.e., centralization and formalization) and informal (i.e., connectedness) coordination mechanisms. This study further examines how environmental aspects (i.e., dynamism and competitiveness) moderate the effectiveness of exploratory and exploitative innovation. Results indicate that centralization negatively affects exploratory innovation, whereas formalization positively influences exploitative innovation. Interestingly, connectedness within units appears to be an important antecedent of both exploratory and exploitative innovation. Furthermore, our findings reveal that pursuing exploratory innovation is more effective in dynamic environments, whereas pursuing exploitative innovation is more beneficial to a unit's financial performance in more competitive environments. Through this richer explanation and empirical assessment, we contribute to a greater clarity and better understanding of how ambidextrous organizations coordinate the development of exploratory and exploitative innovation in organizational units and successfully respond to multiple environmental conditions.
Exploring how organizational antecedents affect potential and realized absorptive capacity, this study identifies differing effects for both components of absorptive capacity. Results indicate that ...organizational mechanisms associated with coordination capabilities (cross-functional interfaces, participation in decision making, and job rotation) primarily enhance a unit's potential absorptive capacity. Organizational mechanisms associated with socialization capabilities (connectedness and socialization tactics) primarily increase a unit's realized absorptive capacity. Our findings reveal why units may have difficulty managing levels of potential and realized absorptive capacity and vary in their ability to create value from their absorptive capacity.
Recent research on management innovation, i.e. new managerial processes, practices, or structures that change the nature of managerial work, suggests it can be an important source of competitive ...advantage. In this study, we focus on management innovation at the organization level and investigate the role of leadership behaviour as a key antecedent. Due to its prominent role within organizations, top management has the ability to greatly influence management innovation. In particular, we focus on leadership behaviour and examine transformational and transactional leadership. Additionally, as contextual variables like organizational size may influence the impact of leadership, we investigate its moderating role. Findings show that both leadership behaviours contribute to management innovation. Interestingly, our study indicates that smaller, less complex, organizations benefit more from transactional leadership in realizing management innovation. On the other hand, larger organizations need to draw on transformational leaders to compensate for their complexity and allow management innovation to flourish.
Several decades of research in the field of international business have advanced various theories and studies on the internationalization of firms. Our assessment of the literature on ...internationalization shows that the focus has been primarily on path-dependency and learning-based aspects of internationalization, while managerial intentionality and the possibility of managers making deliberate strategic choices towards further internationalization have not been very prominent in the IB literature. We argue that internationalization paths and processes should be approached as a joint outcome of management intentionality and experience-based learning. In other words, managers are assumed to have the ability and the intention to influence the evolutionary paths of the firm. We derive a future research agenda that calls for the pursuit of this promising and emergent research stream. Moreover, we develop a model integrating managerial intentionality, knowledge/experience and other factors (institutional and selection forces) to explain heterogeneous outcomes of internationalization positions, paths and processes.
Prior studies have emphasized that structural attributes are crucial to simultaneously pursuing exploration and exploitation, yet our understanding of antecedents of ambidexterity is still limited. ...Structural differentiation can help ambidextrous organizations to maintain multiple inconsistent and conflicting demands; however, differentiated exploratory and exploitative activities need to be mobilized, coordinated, integrated, and applied. Based on this idea, we delineate formal and informal senior team integration mechanisms (e.g., contingency rewards and social integration) and formal and informal organizational integration mechanisms (e.g., cross-functional interfaces and connectedness) and examine how they mediate the relationship between structural differentiation and ambidexterity. Overall, our findings suggest that the previously asserted direct effect of structural differentiation on ambidexterity operates through informal senior team (i.e., senior team social integration) and formal organizational (i.e., cross-functional interfaces) integration mechanisms. Through this richer explanation and empirical assessment, we contribute to a greater clarity and better understanding of how organizations may effectively pursue exploration and exploitation simultaneously to achieve ambidexterity.
In firm decisions to engage in interorganizational collaboration in the context of innovation, conceptions of the organizational environment play an essential role. In this paper, we develop a ...multidimensional model of how managers use interorganizational collaboration as an organizational response to particular environmental conditions and an important instrument to boost firm innovativeness. Based on a literature review on the subject, we investigated the role of environmental turbulence, market heterogeneity and competitive intensity as such conditions. The analysis of firm data from a broad range of industries showed that environmental turbulence and market heterogeneity have an indirect association with firm innovativeness through interorganizational collaboration. The relationship of market heterogeneity was fully mediated suggesting that collaboration is unavoidable for firms in heterogeneous markets. Contrary to arguments in the literature, the findings demonstrated that although competitive intensity is associated with less interorganizational collaboration and lower firm innovativeness, the mediation relationship was not significant.
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