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October 15 – 17, 2010SMO Alumni Conference

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To Celebrate Your Success and Engage in the School’s Future

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A hallmark of the SMO Department is high quality, multi-disciplinary research. We find it in the work of current faculty members, we cultivate it in the work of our current Ph.D. students and we celebrate it in the work of our Ph.D. alumni.

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Welcome Back…

…With Enthusiasm!

From your conference co-chairs:

Aks Zaheer

Paul Vaaler

Darcy Fudge Kamal

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One Weekend in October 27 Alums 18 SMO Faculty 16 PhD students 11 Papers 2 Keynote Speakers 1 Special Session

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Friday

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Friday Night (October 15, 2010) 7:00 pm to 9:30 PM Cocktails and Welcoming Dinner

at McNamara Alumni Center 8:30 pm Dinner Speaker – An alum’s intellectual

journey: Bill McEvily PhD‘97

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SaturdaySaturday Day Session 7:30 am – 8:00 am Continental Breakfast at the

Carlson School of Management 2-260T 8:00 am – 10:00 am Session 1 (Two papers) 10:00 – 10:30 am Coffee Break 10:30 – 12:15 pm Session 2 (Two papers) 12:15 – 1:15 pm Lunch in Carlson School Private

Dining Room 1:15 – 3:45 pm Session 3 (Two papers) 3:45 – 4:15 pm Coffee Break 4:15 – 6:15 pm Session 4 (Two papers)

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SaturdaySaturday Evening 7:15 pm Cocktails and Dinner at Campus Club 8:30 pm Dinner Speaker – An alum’s intellectual

journey: Gerry McNamara PhD ’95

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SundaySunday Morning 7:30 am – 8:00 am Continental Breakfast at the Carlson

School of Management 2-260T 8:00 am – 10:00 am Session 1 (Two papers) 10:00 – 10:30 am Coffee Break 10:30 – 12:15 pm Session 2 (Two papers) 12:15 – 1:15 pm Box Lunch in CSOM 2-260T with

Concluding Remarks by Conference Co-Chairs

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The Format Presentation 25 minutes Commentary by current SMO PhD student discussant

10 minutes Rebuttal 5 minutes 15 minutes audience question and answer

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We Proudly PresentOur Diverse and Comprehensive Tradition of Research

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Session 1Discussant: Hans Rawhauser M. Anderson ‘02

“A Half-Century of the Study of Organizations: Examining the Contribution of March & Simon’s Classic”

Abstract: One of the seminal books in organization studies is March and Simon’s Organizations. Although its overall influence is undeniable, little is known about the nature of that influence. This study examines this influence through a citation context analysis of the citations to Organizations in three top organization studies journals. It categorizes the content citing authors draw on, finding that six categories account for nearly half of the citations. Results also show differences in the content cited over time, and that few citations challenge claims made in Organizations. Finally, it reveals the articles that have drawn on Organizations most heavily.

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Session 1Discussant: Zeke Hernandez D. Souder ’07, S. Johnson ‘05, & M. Willenborg

“Getting burned from striking when the iron is hot: Hidden costs of pursuing inorganic growth in munificent environments”

Abstract: This paper analyzes how external opportunities that appear to provide the firm with an unexpected abundance of resources can cause firms to grow beyond the routine limits of organic growth. Although this scenario for inorganic growth seems favorable, such unexpected munificence does not imply that the administrative infrastructure of the firm is prepared to use such resources productively. We test these arguments on data from 1999-2000, when many Internet-related companies raised substantial equity capital through initial public offerings (IPOs) of their stock. We find that, although the Internet bubble was indeed an extraordinary opportunity to raise equity financing, firms that pursued the opportunity were frequently overwhelmed by the hidden costs of inorganic growth.

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Session 2Discussant: Isil Yavuz M. Hess & J. Harris ’06

“Strategic Retrenchment” Abstract: In this paper, we seek to explore a risk taking as a continuum from

conservative or “prudent” risk taking at one extreme to aggressive risk taking or “gambling” at the other (Kahneman and Lovallo 1993; March and Shapira 1987), and analyze the interrelationship between these types of risks. Control failures and risk propensity may be directly linked at a business unit level, as when risk taking within the supply-chain precipitates a product recall. This study, however, seeks to explore potential connections at a broader, organizational level by asking whether risk propensity in one area of the business can predict control failure in unrelated areas, and likewise, whether the internal control failures of one department may affect the subsequent risk propensity of the organization. Previewing the findings of this study, we find only moderate support that risk taking induces internal control failure, but there is strong support that internal control failure, specifically a material misrepresentation of financial position, negatively impacts the organization’s other risk taking activity, as measured by either investment in research and development or acquisition activity.

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Session 2Discussant: Nachiket Bhawe X. Castañer ’02 & M. Genç ’04

“International Expansion and the Performance of MNEs: Combining and Sequencing Geographic Exploitation and Exploration”

Abstract: In this paper, we put forward rationales about why a firm may want to enter an institutionally different country even though it is costly and fraught with interorganizational and political risks, i.e. the liability of foreignness. We argue that by entering these countries, firms engage in exploration (i.e. force themselves to learn new knowledge) and thus (1) achieve a more diverse base of knowledge which they can subsequently exploit, and (2) are more likely to develop a global mindset among top managers. Further, we argue that in order to be successful in the long run, firms ought to sequentially balance international exploration and exploitation. International exploration has to be followed by exploitation, and vice versa. Our paper contributes to the literature on international expansion, multinational enterprise (MNE) performance, and organizational learning in the international context by bringing the geographical dimension into firms’ learning trajectories.

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Session 3Special Session with Kurt Dirks ’97 and Stuart Bunderson ‘98

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Session 3Discussant: Darcy Fudge Kamal D. VandeWalle ’95

“Will You Trust Me in the Morning? It Depends on Both of Us”

Abstract: When and why are apologies for trust violations effective? We investigate these questions with a laboratory experiment and a scenario study. In the laboratory study, the willingness to trust after a violation depends on the interaction of the type of violation and implicit theory mindset of the violated party. In a follow-up scenario study, we test via path analysis a model of the implicit theory mindset of the violated party predicting the perceived repentance of the violator and these perceptions in turn predicting one's willingness to trust the violator.

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Session 4Discussants: Florence Honore & Ribuga Kang S. James ’06

“Strategic R&D Disclosure and Patenting” Abstract: James and Shaver (2010) argue publicly traded firms that can credibly signal

a technological advantage have strategic motivations to voluntarily and publicly disclose. The findings that financially strong firms and firms that build on existing internal technologies in developing innovations disclose more R&D information are consistent with strategic motivations. This study builds on these findings by examining how disclosure will impact rivals’ patenting efforts. I argue that for firms with a technological advantage that disclose, rivals are less likely to develop and patent innovations in the same technology areas. However, the extent to which rivals interpret disclosures as signaling a technological advantage depends on when firms disclose. While early stage disclosures are more likely to signal an advantage and discourage rivals from entering a technology space, late stage disclosures will likely be misinterpreted and encourage rivals to develop and patent competing innovations. I test these predictions on a sample of 302 public communications equipment and pharmaceutical firms between 1991 and 2003. The results support the predictions and suggest that while disclosing strategically can help firms to create a sustainable competitive advantage, timing influences the effectiveness of such disclosures.

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Session 4Discussant: Youngeun Chu J. Yu ’08 & K. Han

“Ownership Level and Value Creation in FDI: An Incomplete Contracts Theory Perspective”

Abstract: We examine the decision on the distribution of ownership between an MNE and its local partner when MNEs establish equity-involved foreign ventures (e.g., IJVs or WOS). Drawing on the theory of incomplete contracts proposed by Grossman, Hart, and Moore, we argue that when a local partner’s non-contractible investments (e.g., effort and time to enhance the quality of products or to strengthen local market knowledge) are critical for the successful operation of a foreign venture, providing a greater level of ownership shares to the local partner can result in better performance of the venture, insofar as ownership can provide an incentive to make higher levels of non-contractible investments. We test a set of hypotheses on this argument by using a sample of 621 firms in Malaysia and Thailand. Most of the hypotheses are supported, which suggests that the theory of incomplete contracts can be a helpful theoretical lens to examine entry mode decisions in the international business literature.

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Session 5Discussant: Kangyong Sun M. Maloney ’05, P. Shah, & M. Zellmer-Bruhn

“The lasting imprint of teams: Project teams and intra-organizational network formation”

Abstract: In this paper we conduct two studies to theorize and empirically investigate the role of project teams in the formation of ongoing network ties within a firm, utilizing different research settings, longitudinal design and multilevel analyses (using lme4 in the open source platform R). Together the studies illustrate that teams create lasting networks that remain long after the team has disbanded and further delineates how network formation differences are contingent on the properties within a team and a team’s structural characteristics. Specifically, teams with high quality internal relationships (i.e., high relational capital) and those with greater task alignment and lower functional diversity are more apt to form ties that are strong, enduring, and accessible to team members in the future than those with poor internal relationships, lower task alignment or greater functional diversity. These studies contribute to both network and group literature by illustrating how temporary teams have a lasting impact on intra-organizational networks, a perspective that advances our understanding of team performance, beyond the time and task of an intact team.

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Session 5Discussant: John Bechara M. Schomaker ’06 & S. Zaheer

“The Role of Language in Knowledge Transfer to Geographically Dispersed Operations”

Abstract: This study proposes a model of the effects of language on knowledge transfer to geographically dispersed operations. We introduce linguistic relatedness as a way to measure the overlap in the structural features of colloquial languages at play between firms and their overseas operations. We argue that focusing on the structural aspects of language (e.g., grammar, pronunciation, and word formation), rather than the functional aspects that deal with usage and interpretation, allows us to separate out the effects of language from those of culture and provides a simple, yet powerful, complement to measures of culture. We then test this model of knowledge transfer and linguistic relatedness through a survey of international operations managers representing US-owned multinational enterprises with manufacturing plants in 22 countries. While linguistic relatedness shows the expected positive effect on ease of knowledge communication and on normative integration, it is negatively related to knowledge understanding, suggesting that salient linguistic differences may help rather than hurt knowledge transfer.

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Session 6Discussant: Aks Zaheer A. Lamin ’07 & M. Ramos ‘06

“R&D investment dynamics in agglomerations under weak appropriability regimes: Evidence from Indian R&D labs”

Abstract: Spending on research and development (R&D) in emerging economies by both local firms and multinational corporations is increasing. What are the dynamics of R&D investment when firms geographically cluster in such environments? Given that collocation can result in knowledge spillovers, we argue that firms on average can ‘free-ride’ on nearby firms’ R&D investments in their industry. However, as foreign firms often employ mechanisms to protect their innovations in environments with weak appropriability regimes, we posit that this prevents local firms from free-riding off foreign firms’ R&D activities in their industry. Using a unique sample of 368 R&D labs investments in India during 2003-2008, we find support for this prediction. We also examine whether inter-industry knowledge spillovers, which can provide a cross-fertilization effect, stimulate R&D efforts by local firms. Here we find that only clustering with foreign firms’ R&D labs is associated with an increase in R&D lab investment among local firms. Our results suggest that MNC’s R&D labs do effectively prevent their innovations from spilling over to competing local firms, but are also the sources of new ideas and technologies for non-competing local firms.

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Session 6Discussant: Paul Vaaler ‘97 S. Feinberg ’96, C. Magelsson & M. Smith

‘“Early adapters” and radical regulatory reform in India: First in line for trade protection’

Abstract: This research examines firms’ responses to environmental change. We predict and find that firm capabilities and slack will be important drivers of adaptation. We argue that change itself evolves, and from the standpoint of firm adaptation, the most important characteristic of change is the amount of available reliable information at different points in time. Drawing on the literature on first movers, we predict that as information disseminates over the course of the change process, the kinds of resources and capabilities that enable change will also evolve. For example, capabilities that endow firms with superior access to information will become less valuable over time as the parameters of change are better understood. We examine our predictions in the context of radical trade reform in India in the 1990’s. During this time, India’s average tariff on manufactured goods declined approximately 75 percent and India adopted a system of government-administered Antidumping Duties (AD), which required firms to devise entirely new routines in order to obtain trade protection. We find that the information and organizational capabilities firms gain through political experience, importing experience, and business group membership are positively related to the likelihood a firm will adapt to the trade reforms by filing for AD. We find that firms with greater economic need (more limited slack resources) are more likely to file. We also find that business group experience and slack are considerably more valuable to firms that file early in the change process. When information is scarce and key uncertainties about the policy change are unresolved, business group experience and financial resources are valuable capabilities.

These resources and capabilities lose their value when the change process is mature.

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Our Alums Attending Marc Anderson Pat Borchert Kathryn Brewer Stuart Bunderson Xavier Castañer Kurt Dirks Susan Feinberg Karin Fladmoe-Lindquist Mehmet Genc Kunsoo Han Jared Harris Sharon James Mansour Javidan Scott Johnson

Anna Lamin Mary Maloney Bill McEvily Gerry McNamara Carla Pavone Doug Polley Miguel Ramos Maggie Schomaker David Souder Don VandeWalle Linn Van Dyne Bob Wiseman Jisun Yu

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SEE YOU IN OCTOBER!

The SMO PhD Students

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GO MINNESOTA!Minnesota, hats off to thee!

To thy colors true we shall ever be,Firm and strong, united are we.Rah, rah, rah, for Ski-U-Mah,Rah! Rah! Rah! Rah!Rah for the U of M.

[Repeat]M-I-N-N-E-S-O-T-A!

Minnesota, Minnesota!Yay, Gophers! RAH!