Working with fewer hierarchical layers than has been the case traditionally is often considered critical for firms to become more innovative, speedier, and retain and attract gifted personnel in ...today’s world. The upside appears great, but so do the associated risks of creating a dysfunctional organization. I propose that systematically thinking through a series of classic organization design questions to shape a custom-tailored design is promising when delayering grown hierarchies or growing start-ups to remain flat. More promising than adopting any one fashionable management approach wholesale.
We analyze the determinants of opposition to biotechnology and pharmaceutical patents granted by the European Patent Office (EPO) between 1978 and 1996. Opposition at the EPO is the most important ...mechanism by which the validity of a European patent can be challenged. In our sample, 8.6% of the patents are attacked in opposition proceedings. We show empirically that the likelihood of opposition increases with patent value, and that opposition is particularly frequent in areas with strong patenting activity and with high technical or market uncertainty. We comment on the implications of these results for the design of the patent and litigation system.
We propose that the failure to adopt an idea or innovation can arise from an in-group bias among employees within an organizational subunit that leads the subunit's members to undervalue ...systematically ideas associated with members of the organization outside their subunit. Such biases in internal selection processes can stymie organizational adaptation and therefore depress the performance of the firm. Analyzing data on innovation proposals inside a large, multinational consumer goods firm, we find that evaluators are biased in favor of ideas submitted by individuals that work in the same division and facility as they do, particularly when they belong to small or high-status subunits.
Little is known about how corporate hierarchies influence managers' propensity to pass information upward within the firm. Two streams of literature arrive at seemingly conflicting and untested ...predictions. Information economists maintain that middle managers pass more suggestions up the firm's line of command as the corporate hierarchy increases in order to avoid corporate omission errors. In contrast, scholars of organizational psychology suggest that hierarchies lead to evaluation apprehension and foster a perceived lack of control among mid-level managers, leading to their reduced willingness to, and interest in, passing information up within the organization. Drawing on field data and model-guided experimental studies, we provide original empirical evidence for the relevance of all the mechanisms above, and we delineate the conditions under which either mechanism prevails.
Research summary: We investigate the conditions under which authority can be deployed without reducing subordinate motivation. We show that lateral authority, the legitimacy to resolve task-specific ...problems, is welcomed by members of an organization in the resolution of coordination conflicts, the more so (a) the fiercer the conflict to be resolved, (b) the higher the competence-based status of the authority, (c) the lower the tenure of, and (d) the more focused the organizational members are. Analyzing the discussion behavior of members of Wikipedia between 2002 and 2014, we corroborate our allegations empirically by analyzing 642,916 article-discussion pages. Our findings, obtained for a modern collective production community, provide learning opportunities for how traditional organizations may want to govern activities of their idiosyncratically motivated staff. Managerial summary: When managers use their (legitimate) power to take decisions on behalf of their staff, they risk setting back employees and making them detach from the firm. This danger is particularly salient whenever highly motivated teams of staff autonomously work on corporate problems and are used to governing themselves. Examples range from skunkwork initiatives within traditional firms to entire team-based organizations, such as Valve or Zappos. When and how managers can add value by resolving conflicts within and across these teams once their self-organization fails is what we study in this article. Inspired by data from Wikipedia, we suggest that managers should not intervene prematurely, benefit from visible competence, and are respected most for their actions by specialized peers who recently joined the organization.
We develop and test a theoretical framework that describes the organizational antecedents of value appropriation capabilities in the context of obtaining patent protection. We argue that intermediate ...levels of cross-functional involvement across intellectual property (IP) generation, protection, and utilization activities outperform very high or very low levels of functional specialization in terms of obtaining rapid patent protection; while these activities are distinct enough to generate gains from specialization, there are also significant gains to be generated by coordinating across them, which cross-functional involvement achieves. Using a unique dataset that combines survey and patent (application) data, and multiple estimation techniques, we test and find support for our arguments.
This paper analyzes the validity of so-far untested indicators of patent value to enhance the quality of patent assessments using indicators at the corporate level. The article expands the theory by ...eliciting patent attorneys’ filing rationales to maximize profits from protecting intellectual property, to inspire the computation of new value indicators, including patent full-texts. Then, based on a newly compiled data set consisting of 813 EP patents, the probability of an opposition against a patent is modeled by established and new value indicators. The results show that accelerated examination requests and qualified word counts enhance the quality of existing valuation methods.
Research Summary: Strategic openness—firms voluntary forfeiting of control over resources—seemingly challenges the premise of the resource-based view (RBV), which posits that firms should control ...valuable, rare, and inimitable (VRI) resources. We reconcile this apparent paradox by formalizing whether and when firms—consisting of resource bundles and deriving competitive advantage from exploiting selected VRI resources—may maximize profitability by opening parts of their resource base. As such, our article refines RBV-related thinking while supporting the theory's core tenets. Notably, we illustrate how a common-pool resource can become a source of competitive advantage and how firms may use openness to shape inter-firm competition. Managerial Summary: Conventional wisdom holds that firms must control scarce and valuable resources to obtain competitive advantage. That being said, over the past decade, many firms—among them Computer Associates, IBM, and Nokia—embarked on open strategies and made parts of their valuable resources available for free. These decisions pose an obvious conundrum, which we solve in our article. We use a mathematical model, grounded in principles of the resource-based view, to show why and under what conditions open strategies will succeed. Firms significantly improve their performance when (a) opening resources reduces their cost base while (b) strongly increasing demand for their still-proprietary resource(s). We also explain how openness can reshape markets by weakening competitors, particularly in highly rivalrous environments.
Drawing on patent data for approximately 500 firms over 20 years, we advance recent theory on firm boundaries and test these propositions for the first time. We first provide evidence for the ...existence of knowledge complementarities between vertically related activities in a firm's value chain by showing that firms face increasing (decreasing) performance in conducting downstream activities (i.e., patent litigation) the less (more) they outsource related upstream activities (i.e., patent filing). We then propose and empirically demonstrate that vertical integration benefits through learning differ from vertical outsourcing costs through forgetting. We show that firms can partly offset these hidden outsourcing costs by sourcing similar upstream products from internal and external suppliers.
Building Status in an Online Community Smirnova, Inna; Reitzig, Markus; Sorenson, Olav
Organization science (Providence, R.I.),
11/2022, Volume:
33, Issue:
6
Journal Article
Peer reviewed
We argue that the actions for which actors receive recognition vary as they move up the hierarchy. When actors first enter a community, the community rewards them for their easier-to-evaluate ...contributions to the community. Eventually, however, as these actors rise in status, further increases in stature come increasingly from engaging in actions that are more difficult to evaluate or even impossible to judge. These dynamics produce a positive feedback loop, in which those who have already been accorded some stature garner even greater status through quality-ambiguous actions. We present evidence from Stack Overflow, an online community, and from two online experiments consistent with these expected patterns.
Funding:
All authors would like to acknowledge funding from the Austrian Science Fund Grant P 25768-G16.
Supplemental Material:
The online appendix is available at
https://doi.org/10.1287/orsc.2021.1559
.
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