Corey Phelps

Research summary: How do external venturing units effectively achieve external knowledge search and integration of their initiatives with mainstream organizational units? We investigate this largely unexplored question through an inductive study of 17 corporate venture capital units. We document a set of five novel practices that influence the efficacy of a unit's external search and internal integration and identify how these practices complement a broader set of practices used by all units. We highlight the entrepreneurial nature of managing an external venturing unit, often to overcome unfavorable corporate contexts, a perspective that prior research has largely overlooked. Our findings provide unique insights into why some corporate investors are better at learning from external start‐ups than others. Managerial summary: External venturing involves strategic partnerships by established firms with entrepreneurial ventures. Top management usually tasks autonomous units with searching for willing and potentially valuable partners. These units must integrate their activities with the operations of parent firms to elicit cooperation from important business units. To understand how external venturing units implement search and integration in combination, we study corporate venture capital ( CVC ) units, which form external partnerships through minority investments in start‐ups. While all units adopted fundamental processes that are well established in the venture capital community, certain processes that are idiosyncratic to corporate investing helped units demonstrate superior performance in their strategic missions. These processes often required CVC unit managers to be entrepreneurial and politically savvy in building connections with relevant personnel in parent firms. Copyright © 2015 Strategic Management Society

Received wisdom suggests that multipartner alliances are relatively unstable because of their complexity and the increased potential for free riding. Nonetheless, multipartner alliances do benefit from built-in stabilizing third-party ties that mitigate opportunism and conflict between partner pairs. Previous empirical research on multipartner alliance stability has been inconclusive. We shed some light on these inconsistencies by recognizing that within multipartner alliances, schisms can occur not only between a pair of partners but also between subgroups of partners that are divided by faultlines. We suggest that divisive faultlines can form between subgroups of partners within a multipartner alliance as a function of their prior experience with one another. When a subgroup of alliance partners has relatively strong ties to each other and weak ties to other partners, destabilizing factions can develop that hamper reciprocity among the partners. Using a longitudinal analysis of 59 multipartner alliances, we found that, in general, faultlines (as modeled by the dispersion of tie strength within multipartner alliances) increase the hazard of unplanned dissolutions. We also found that multipartner alliances comprising a mix of centrally and peripherally positioned partners within the industry network were less apt to suffer the effects of divisive faultlines. We suggest that this is due to the greater opportunity costs of dissolution and the presence of relatively high-status partners who can act as peacekeepers and coordinators of their lower-status partners.

Existing research provides little insight into how social influence affects the adoption and diffusion of competing innovative artifacts and how the experiences of organizational members who have worked with particular innovations in their previous employers affect their current organizations' adoption decision. We adapt and extend the heterogeneous diffusion model from sociology and examine the conditions under which prior adopters of competing open source software (OSS) licenses socially influence how a new OSS project chooses among such licenses and how the experiences of the project manager of a new OSS project with particular licenses affects its susceptibility to this social influence. We test our predictions using a sample of 5,307 open source projects hosted at SourceForge. Our results suggest the most important factor determining a new project's license choice is the type of license chosen by existing projects that are socially closer to it in its inter-project social network. Moreover, we find that prior adopters of a particular license are more infectious in their influence on the license choice of a new project as their size and performance rankings increase. We also find that managers of new projects who have been members of more successful prior OSS projects and who have greater depth and diversity of experience in the OSS community are less susceptible to social influence. Finally, we find a project manager is more likely to adopt a particular license type when his or her project occupies a similar social role as other projects that have adopted the same license. These results have implications for research on innovation adoption and diffusion, open source software licensing, and the governance of economic exchange.

A large and growing body of empirical research shows that social relationships and the networks these relationships constitute are influential in explaining the processes of knowledge creation, diffusion, absorption, and use. The authors refer to such networks as “knowledge networks.” They advance an understanding of knowledge networks at multiple levels by conducting a systematic review and analysis of empirical research published on this topic in leading management, psychology, sociology, and economics journals. The authors develop a comprehensive framework that organizes the knowledge networks literature, which they use to review extant empirical research within and across multiple disciplines and levels of analysis. They identify points of coherence and conflict in theoretical arguments and empirical results within and across levels and identify emerging themes and promising areas for future research.

This study examines the influence of the structure and composition of a firm's alliance network on its exploratory innovation—innovation embodying knowledge that is novel relative to the firm's extant knowledge. A longitudinal investigation of 77 telecommunications equipment manufacturers indicated that the technological diversity of a firm's alliance partners increases its exploratory innovation. Further, network density among a firm's alliance partners strengthens the influence of diversity. These results suggest the benefits of network “closure” (wherein a firm's partners are also partners) and access to diverse information can coexist in an alliance network and that these combined benefits increase exploratory innovation.

Although research suggests knowledge spillovers often benefit imitators at the expense of originators, we investigate how originating firms may also benefit from their own spillovers. When an originating firm's spillovers are recombined with complementary knowledge by recipient firms, a spillover knowledge pool is formed, containing opportunities for the originator to learn vicariously from recipients. In a longitudinal study of 87 telecommunications manufacturers, we found that a firm's rate of innovation and the extent to which these innovations integrate knowledge from the spillover knowledge pool is greater when this pool is larger in size and similar to the firm's knowledge base.

The structure of alliance networks influences their potential for knowledge creation. Dense local clustering provides information transmission capacity in the network by fostering communication and cooperation. Nonredundant connections contract the distance between firms and give the network greater reach by tapping a wider range of knowledge resources. We propose that firms embedded in alliance networks that exhibit both high clustering and high reach (short average path lengths to a wide range of firms) will have greater innovative output than firms in networks that do not exhibit these characteristics. We find support for this proposition in a longitudinal study of the patent performance of 1,106 firms in 11 industry-level alliance networks.