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Organizations create their environments by constructing interpretations and then acting on them as if they were true. This study examines the cognitive spatial boundaries that managers of Manhattan hotels impose on their competitive environment. We derive and estimate a model that specifies how the attributes of managers’ own hotels and potential rival hotels influence their categorization of competing and non-competing hotels. We show that similarity in geographic location, price, and size are central to managers’ beliefs about the identity of their competitors, but that the weights they assign to these dimensions when categorizing competitors diverge from their influence on competitive outcomes, and indicate an overemphasis on geographic proximity. Although such categorization is commonly conceived as a rational process based on the assessment of similarities and differences, we suggest that significant distortions can occur in the categorization process and examine empirically how factors including managers’ attribution errors, cognitive limitations, and (in)experience lead them to make type I and type II competitor categorization errors and to frame competitive environments that are incomplete, erroneous, or even superstitious. Our findings suggest that understanding inter-firm competition may require greater attention being given to the cognitive foundations of competition.

At its core, this volume tackles the contradictory views of the performance-enhancing effects of organizational flexibility and inertia head on, and in doing so, contributes to the development of theory and empirical evidence at the interface of strategic management and organizational ecology. In addition to the inertia–flexibility nexus, the volume explores a wide range of additional connections between these two perspectives across nine topical areas that both ecological and strategic management researchers have examined: (1) Entrepreneurship, (2) Top Management Teams, (3) Organizational Change, (4) Organizational Learning, (5) Technology Strategy, (6) Competitive Strategy, (7) Cooperative Strategy, (8) Scale and Scope, and (9) Industry Evolution.

One area in which strategy and organizational ecology converge is organizational change. This essay weaves together salient themes in my (and my co-authors’) various writings on organizational change, and is anchored in the research literature of the last twenty years. Among other ideas developed here, I point out that there is now a convergence of agendas in strategy and ecology, with an important role being played by intraorganizational ecology. I develop the distinction between strong and weak selection approaches to organizational ecology. While the strong selection view does not find empirical support, there is stronger support for the weak selection view. I lay out some key features of an emerging evolutionary synthesis for the study of strategy and organization, and develop an evolutionary approach to organizational change.

In this study, we seek to broaden the research focus in the strategic alliance literature from a firm's “partner strategy” to its “network strategy” by linking a firm's partnering choices to changes in its network position over time. Using data on all underwriting syndicates in Canada over nearly 40 years, we conceptualize and model the interplay between an investment bank's own and its partners’ syndicate participation. Our findings indicate that the lead banks, which have greater discretion in choosing syndicate partners than co-lead banks, are more likely to make partner selections that create bridging positions that provide access to timely and non-redundant information as well as opportunities to play a broker role across unconnected others. We also find, however, that lead banks’ bridging positions deteriorate when they form ties with other lead banks. Network-based competitive advantages are thus influenced by network opportunities and constraints as well as partner-specific concerns, suggesting that new insights into the dynamics of interfirm networks and competitive advantage of firms are possible within this broader view.

To a large extent, the recent interest in the geographic distribution of economic activity marks a return to earlier times. Both of the two primary disciplines – economics and sociology – that inform the study of strategy began with explicit consideration of the importance of geography. On the economics side, one need only look as far as the classical economist Adam Smith, whose seminal work on the Wealth of Nations (1776) sought to explain why some nations had grown more prosperous than others. As most recall, this inquiry led him to develop his theories regarding the importance of the division of labor in improving productivity (though less well known, the third book discusses a variety of legal and social factors, presaging the arguments of institutional economists and sociologists).

We introduce a multi-level model of the dependence of interfirm network topologies on the distribution and commonality of information in a network and the information strategies pursued by its member firms. Network topology, information properties of the network, and firm-level action within the network form dynamic, recursive, cross-level relationships – information properties in the network determine firm-level action, which in turn impacts the network topology and information properties. We derive predictions about the kinds of information strategies that firms are likely to adopt and succeed with in different information regimes, and about the kinds and short- and long-run dynamics of network topologies expected under different information regimes. Our model sheds new light on network topologies as a dependent variable that can be explained by network-level information regimes and firm-level information strategies.

Two core assumptions set network theory apart from other perspectives and direct research into specific strategic and organizational topics.

The central organizing principle for this volume – the industry life cycle model – is so widely accepted and its basic premises so taken for granted that it has become conventional wisdom in business. Executives in a range of industries use the model to guide their thinking about when and how to invest in various industries. Diversification decisions, for example, are often made on the basis of life cycle logic, especially as large, established companies seek high-growth opportunities for investment.