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Theories of innovation and technical change posit that inventions that combine knowledge across technology domains have greater impact than inventions drawn from a single domain. The evidence for this claim comes mostly from research on patented inventions and ignores failed patent applications. We draw on insights from research into institutional gatekeeping to theorize that, to be granted, patent applications that span technological domains must have higher quality than otherwise comparable, narrower applications. Using data on failed and successful patent applications, we estimate an integrated, two-stage model that accounts for this differential selection. We find that more domain-spanning patent applications are less likely to be approved, and that controlling for this differential selection reduces the estimated effect of knowledge recombination on innovative impact by about one-third. By conceptualizing the patent-approval process as a form of institutional gatekeeping, this paper highlights the institutional underpinnings of and constraints on the innovation process. The online appendix is available at https://doi.org/10.1287/orsc.2016.1106 .

Research Summary In this study, we contribute to strategy and organizational theories of organizational adaptation by developing theory about the kinds of customers that facilitate an organization's ability to adapt to changing demand‐side conditions. We propose that customers who have previously interacted with diverse types of organizations in the market convey informationally rich feedback that better enables organizations to understand and adapt to change—particularly in more rapidly changing contexts. We further expect that organizations that position themselves congruently with market preferences will be stronger market competitors. We test and find support for our arguments using a unique dataset of over 8,000 cannabis dispensaries operating in seven states that were listed on Weedmaps.com between July 2014 and June 2016. Managerial Summary Performance of organizations in changing markets depends on their ability to adapt to evolving customer preferences. Such adaptation requires understanding how preferences evolve—not only among existing customers, but also in the broader market in which the organization competes. We propose that feedback from customers who have previously interacted with diverse types of organizations in the market enables organizations to understand customer expectations and adapt to changing demand landscapes by positioning themselves accordingly. We find support for these arguments in legalized cannabis markets within seven U.S. states. Dispensaries that get more feedback from experientially diverse customers position themselves in ways that are more congruent with the preferences of customers in their market. Furthermore, dispensaries who are more congruent with market preferences survive longer, bring in a greater number of new consumers, and are generally more appealing to those consumers.

Why do some regions produce more entrepreneurs than others? An ecological lens provides insight into this question: The demography of organizations in a region—particularly the proportion of small and young employers—shapes many aspects of the environment for would-be entrepreneurs: (i) beliefs about the desirability of founding a firm, (ii) opportunities to learn about entrepreneurship and to build the abilities needed to succeed and (iii) the ease of acquiring critical resources. Births of new industries and the demise of mature ones can therefore catalyze rapid changes in the rates of entrepreneurship that become self-reinforcing.

For many sectors like health care, financial services, or renewable energy, new products and services are generated by an ecology of business firms, nonprofit foundations, public institutions, and other agents. Knowledge to innovate is dispersed across ecologies, so no single firm or small group of firms can innovate alone. Moreover, many new products and services in ecologies such as health care or energy are complex or comprise many parts with unknown interactions. New products, knowledge, business models, and applications all emerge unpredictably over considerable time periods, as various agents in the ecologies of innovation interact with and react to the actions of others. However, the existing organizing structure in these ecologies stifles emergence and precludes much innovation, simply because theory and practice do not adequately address how to organize for complex innovation. We develop a preliminary model for organizing ecologies of complex innovation. We suggest that innovations can continually emerge productively if people work locally in ecologies to set and solve problems of orchestrating knowledge capabilities across the ecology, strategizing across the ecology to create new businesses and applications, and developing public policies to embrace ambiguity. Using examples from biopharmaceuticals and alternative energy, we develop specific organizing ideas that can be examined and elaborated upon. This new direction for organization science integrates existing ideas around a new kind of organizing and shows how organization science can add real value in addressing major challenges of public welfare and safety in the 21st century.

When two groups of market actors differ in how to interpret a common label, each can make claims over the label. One categorical interpretation and the group that supports it risk disappearance if the rival interpretation gains ground. We argue that when members of the endangered category become partial defectors that span categories, their history presents challenges to the identity of nondefectors that will inhibit further change. Our empirical analysis of \"traditionalism\" and \"modernism\" in the making of Barolo and Barbaresco wines supports this argument.

As the rate of innovation increases, organizational environments are becoming faster and more complex, posing greater challenges for organizations to adapt. This study argues that the concept of coevolution offers a bridge between the prescient adaptationist and ex post selectionist perspectives of organizational change to account for the increasing rates of change. The mutual causal influences in a coevolutionary relationship help explain why competing sets of firms or individual firms can capture dominant shares in product markets. Using a comparative historical method and drawing on evidence from five countries over a 60-year period, this paper inquires how precisely coevolutionary processes work in shaping the evolution of industries and important features of their environments. It identifies—in the context of the synthetic dye industry—three causal mechanisms (exchange of personnel, commercial ties, and lobbying) and suggests how they acted as levers on the fundamental mechanisms of evolution. Understanding the levers is important for managing change in a world that is increasingly becoming coevolutionary, requiring managers to focus more on the emergent, system-level properties of their environments.

We analyze the microfoundations of the routine in a study of price-adjustment processes at a manufacturing firm. Existing theory says that truces balance cognitive and motivational differences across functions, but there is scant evidence on how truces work. We show both stability and change in routines. For minor price adjustments, routines incorporate truces in stable but separate market interpretations by the sales and marketing groups. Major price changes put truces at risk, as latent conflict over information and interests becomes overt. The ensuing battle shows how interests, information, and truces are intertwined in performing the routine. Routines are not just stable entities, but adaptive performances that include conflict. We illustrate how our approach addresses fundamental problems such as how firms perform economics, how routines incorporate economic theory, and how routines shape macroeconomic dynamics. We argue that our approach can be extended to any routine-based organizational work.

PurposeOrganization theory seeks to explain how people coordinate their behaviors to achieve common objectives, but it has offered little insight into how organizations emerge from such coordination. Fully understanding entities requires knowing their origins. The purpose of this paper is to draw attention to and to suggest an approach for fortifying a foundational weakness in organization theory: pre-organization theory.Design/methodology/approachTo develop pre-organization theory, this paper employs an evolutionary approach that integrates three theories. This paper first employs memetics to articulate a unit of selection, the i-memeplex, and next introduces inducement-contribution theory to tailor the i-memeplex to pre-organization, yielding a founder’s mental map for exchanges of inducements and contributions. It then applies generalized Darwinism to complete its evolutionary theory of pre-organization.FindingsMemetics, inducement-contribution theory, and generalized Darwinism can be integrated to create a promising theoretical solution, but further investigation is needed to assess the empirical and practical value of pre-organization theory.Originality/valueThis paper contributes to organization theory by (1) explicating a foundational weakness in organization theory – its lack of pre-organization theory – and (2) integrating a novel set of theories to develop an evolutionary theory of pre-organization.

Science, technology, and innovation (STI) systems are fundamental to the economic development of any nation. However, their high hierarchy and centralization create inequities for the more dispersed regions to access their benefits. Traditional approaches to STI system decentralization have been through public control and investment policies, posing a challenge for emerging economies. Given these conditions, it is necessary to explore alternative approaches such as open innovation (OI), which can facilitate bringing the STI system to the regions by breaking its hierarchical structure; and organizational ecology (OE), which can contribute to the construction of ecosystemic appropriation of STI in the regions. The objective of this research is to propose a conceptual model that addresses the need to decentralize Colombia's STI system through an alternative approach to public policy governance, utilizing OI and OE. The methodology used for this research is Design Science Research (DSR), which allows for the creation of an artifact-type model, validated through the representational validation technique, supported by a cross-impact analysis matrix completed by 67% members of the subregional STI committees in the department of Caldas. The result is a conceptual model that integrates the components of Colombia's STI system, decentralizes them through OI factors, and ensures the ecosystemic appropriation of STI in the regions through OE factors. Model criteria, such as organizational readiness, collaborative capacity, absorptive capacities, intellectual capital, technological capital, and local niche, are presented as key elements in the decentralization of the STI system and the ecosystemic appropriation in the co-creation of a mutualistic STI system in Colombia's regions. The findings of the model represent an integrated model that unfolds sequentially; the first phase develops the decentralization through OI factors, and the second phase develops the ecosystemic appropriation from OE factors. This research contributes an integrated OI and OE model as an alternative to the traditional STI system decentralization approach from public policy governance and nation-region control, overcoming the hierarchical barrier of the system and granting ecosystemic appropriation of science, technology, and innovation in the regions.