Person:

McDonald, Rory

Research has examined firms’ use of rhetoric and symbolic activities in the process of creating new markets. This study analyzes how entrepreneurial firms use these cultural strategies to position themselves in a nascent market category they are creating. Using an inductive multiple case study of five entrepreneurial firms in an emergent online investing market, we construct a theory to explain how a firm becomes a cognitive referent in a nascent market and other firms’ failure to do so. Successful firms conceptualize market creation as problem solving; they pursue a sequence that begins with targeted rhetorical attacks on existing solutions, proceeds to dissemination of founding stories that can shift with a change in logics, and culminates in rejection of the labels that audiences try to apply to their activities and products. By contrast, unsuccessful firms conceptualize market creation as evangelizing for a new cultural model, and undermine their own positions with inappropriate use of symbolic market-creation actions.

Past research has produced contradictory insights into how prior collaboration between organizations—their relational embeddedness—impacts collective collaborative performance. We theorize that the effect of relational embeddedness on collaborative success is contingent on the type of success under consideration, and we develop a typology of two kinds of success. We test our hypotheses using data from Crunchbase on a sample of almost 11,000 U.S. start-ups backed by venture-capital (VC) firms, using the VCs’ previous collaborative experience to predict the type of success that the start-ups will experience. Our findings indicate that, as prior collaborative experience within a group of VCs increases, a jointly funded start-up is more likely to exit by acquisition (which we call a focused success); with less prior experience among the group of VCs, a jointly funded start-up is more likely to exit by IPO (a broadcast success). Our results deepen understanding of the connections between organizational performance and collaboration networks, contributing to entrepreneurship research on the role of investors in technology ventures.

How do leaders with divergent visions for their organization come together to create a novel strategy? This paper employs paradox as a lens to investigate how leader-dyads can integrate opposing strategies to produce a new, generative approach. Drawing on a qualitative historical case study of Switzerland’s largest watch company during the quartz crisis in Swiss watchmaking, we induce a process model from the activities of two leaders whose relationship embodied the tensions and strategic contradictions of preserving the past and modernizing for the future. The model specifies a set of individual, relational, and structural mechanisms by which leaders productively engage with a preservation-modernization paradox to facilitate novel strategy in the wake of a discontinuity. We interpret our findings in terms of the demands of navigating the management and outcomes of strategic paradoxes. While tracing the theoretical and practical implications of our model and our findings, we address leadership conundrums characteristic of organizations confronting paradox.

The concept of disruptive innovation has gained considerable currency among practitioners despite widespread misunderstanding of its core principles. Similarly, foundational research on disruption has elicited frequent citation and vibrant debate in academic circles, but subsequent empirical research has rarely engaged with its key theoretical arguments. This inconsistent reception warrants a thoughtful evaluation of research on disruptive innovation within management and strategy. We trace the theory’s intellectual history, noting how its core principles have been clarified by anomaly-seeking research. We also trace the theory’s evolution from a technology-change framework—essentially descriptive and relatively limited in scope—to a more broadly explanatory causal theory of innovation and competitive response. This assessment reveals that our understanding of the phenomenon of disruption has changed as the theory has developed. To reinvigorate academic interest in disruptive innovation, we propose several underexplored topics—response strategies, performance trajectories, and innovation metrics—to guide future research.

This study investigates the impact of early relationships on innovation at entrepreneurial firms. Prior research has largely focused on the benefits of network ties, documenting the many advantages that accrue to firms embedded in a rich network of interorganizational relationships. In contrast, we build on research emphasizing potential drawbacks to examine how competitive exposure, enabled by powerful intermediaries, can inhibit innovation. We develop the concept of "competitive information leakage," which occurs when firms are indirectly tied to their competitors via shared intermediary organizations. To test our theory, we examine every relationship between entrepreneurial firms and their venture capital investors in the minimally invasive surgical device segment of the medical device industry over a 22-year period. We find that indirect ties to competitors impede innovation, and that this effect is moderated by several factors related to the intermediary's opportunities and motivation to leak important information.