Abstract: Behavioral theory of the firm has been popularly applied to explain innovation and organizational search. We propose that while behavioral theory lays a foundations for the study of firm search, the full extent of theory’s insights are not yet explored and search has been often reduced to specific searches such as R&D without enough theoretical justification. We develop and empirically test a comprehensive model, specifically focusing on the linkage of search activities to different contexts and situations (i.e. industry and firm characteristics). Using prior research, we show why problemistic search can lead to specific investments in R&D, operations, or acquisitions, depending on the context. We contribute to the literature by providing a comprehensive model, and elucidating a more granular linkage between stimulus, search, and action.

Abstract: In this study, we look at forward-oriented behavioral search in the context of the North American oil and gas (O&G) industry. We investigate the effect of futures prices on O&G firms’ R&D search behavior. Consistent with Chen (2008), we show that backward search increases with the distance of past performance below a firm’s aspiration level. Also, firms whose performance exceeds their aspiration level reduce their search, consistent with behavioral theory arguments. We also show that: (a) when the future performance gap is expected to be positive, firms will attend to their past performance gaps and increase R&D search; and (b) when the future performance gap is expected to be negative, firms will reduce their attention to exploratory search as a solution for past performance gaps.

Abstract: Previous research has shown that knowledge sharing within an organization is important to the effects of exploration and exploitation on organizational performance. In this paper, using a computational approach, we examine one of the less studied relationships: the influence of horizontal informal knowledge sharing on the implications of exploration and exploitation on organizational performance. In particular, among various facets of horizontal informal knowledge sharing, we focus on the case where individuals exhibit preferences for homogeneity in gaining knowledge from others. By showing that exploration can hurt organizational performance under individual preferences for homogeneity, we identify a new mechanism by which too much exploration can backfire in addition to those previously suggested.

Abstract: Research in strategy has argued that organizational diversity is determined by the ruggedness of the fitness landscape. The more rugged the landscape is, the larger is the set of dominant forms that emerges due to organizational adaptation and selection. However, we argue that relationship between organizational diversity and structure of the fitness landscape is not universal but depends on the nature of organizational adaptation. By introducing experiential search and imitation, we are able to support our argument. We show that these processes substantially change the dynamics. Imitation diminishes the differences in organizational diversity across landscapes with varying degree of interdependency. Moreover, imitation and experiential search together lead to faster rate of decrease in organizational diversity in more rugged landscapes, a finding contrary to previous research.