Strategic Organization , Volume 2, Issue 1
February
2004
Contents
Editors’ Introduction: Welcome back to Strategic Organization – SO!
Joel A. C. Baum, Royston Greenwood and P. Devereaux
Jennings
Articles
The Impact of Industry and
Firm Legitimacy on the Flow of Capital into High Technology Ventures
David L. Deeds, Paul Y. Mang and Michael L. Frandsen
Abstract. This paper examines the influences of firm and industry legitimacy
on the flow of resources into new technology ventures in emerging
industries. We first present a model of
the determinants of a new technology venture’s legitimacy, which considers
characteristics of its founders, management team and the media attention it
receives. We then develop a model of
sources of industry legitimacy, developing multiple measures of both
sociopolitical and cognitive forms of legitimacy. We test our ideas on a sample of 106 initial
public offerings (IPOs) from biotechnology ventures
during the emergence of the industry between 1981 and 1993. Our results demonstrate the vital role of
sociopolitical and cognitive legitimacy at both firm and industry levels in
attracting resources for new technology ventures in an emerging industry.
Organizing Practice in
Services to Capture Knowledge for Innovation
Deborah Dougherty
Abstract. Service innovation depends on
synthesizing knowledge about customer needs with design options, as does product innovation.
However, in services, much of this knowledge is embedded in ongoing
practice, and cannot be captured by techniques designed for discrete
products. I build on the “work as
practice” literature to develop empirically grounded theory for how practice in
services can be organized to capture and exploit knowledge for innovation. An analysis of innovation in nine service
firms produced three new insights that comprise the new theory. One defines “practice” to fit the problem
solving activities of services better than “occupation” or “craft,” and
identifies three work relationships that are most relevant to the generation of
practice-based knowledge for innovation.
The second explains how conventional organizing of service work destroys
this knowledge, despite its strategic importance, by precluding these
relationships. The third articulates
organizing principles that implement the first insight by overcoming the
second: strategically articulating the firm’s practices as actual problems of
value creation; embedding the three work relations into everyone’s jobs; and
transforming R&D into a formal process for creating, verifying, and
reflecting on practice-based knowledge.
The paper illustrates the theoretical framework with examples from the
data, develops its implications for the strategic organization of knowledge in
services, and extends the practice literature to fit managerial work.
The Origins of Strategic Practice: Product
Diversification in the American Mutual Fund Industry
Abstract. While research in the field of strategy has
systematically investigated the organizational antecedents and consequences of
diversification behavior, little attention has been paid to the role of broader
institutional forces. Institutional
researchers, on the other hand, have aptly demonstrated how broader cognitive,
normative and regulative structures affect organizational practices, but have
not focused a great deal on how institutional forces shape strategic
action. Building on recent efforts to
develop more sociological perspectives on strategy, we show how institutional
changes driven by the professionalization project of
money managers in the mutual fund industry facilitated the widespread use of
product diversification as a routinely used organizational strategy. Implications for strategic management
research are discussed.
So!apbox: editorial essays
The
Disintegration of Strategic Management: It’s Time to Consolidate Our Gains