Samina Karim on Executives as Conduits of Organizational Transformation
“Structural Knowledge” Forthcoming in Strategic Management Journal
A new article by the School of Management’s Samina Karim, Assistant Professor of Strategy and Innovation, and co-author Charles Williams (Bocconi University, Milan), studies executives as vehicles for organizational change, particularly in organizations experiencing acquisitions or restructuring. The paper, “Structural Knowledge: How Executive Experience with Structural Composition Affects Intrafirm Mobility and Unit Reconfiguration,” is forthcoming in Strategic Management Journal (June 2012). It explores how executives’ knowledge, gleaned from their experience with different types of business units (e.g. internally developed, acquired, or recombined), affects both their mobility within the firm and the subsequent structural change of units to which they move.
The authors argue that “structural knowledge” (defined as knowledge of the tasks and challenges within units of different “structural composition”) is significantly associated with executives’ horizontal, intrafirm mobility, and thus an important knowledge form, although one that has been little studied to date. Among their findings are the following:
- Executives from internally developed units may ultimately move to any unit, either via a recombined unit that is a combination of acquisitions or one that is a combination of internal developments.
- The same is not true of executives starting with acquisition experience. Their path is more likely to lead them to acquisitions that are combined together and then perhaps to cases where acquisitions are combined with internally developed units.
- Executives who experience the fewest transitions to units of different structural composition are those who start at units that are combinations of acquisitions and internal development. They are most likely reassigned to similar units.
Applying these findings to executives’ personal career strategies, Karim and Williams advise:
Executives should be conscious of the structural composition of units with which they are gaining experience. Our findings show that it is difficult for executives with experience in one type of unit to necessarily make the transition to another type of unit. If the executive wants to specialize in one form of structural composition, the two that predominantly serve similar units are executives from internally developed units (may be reassigned to other internally developed units) and those from units combining acquisitions and internal units. The latter can be limiting in that it is unlikely for this position to be reassigned to other types of units; it may be enabling for those executives who are integration specialists and can apply their specialization in this context
Executives should try to gain experience at internally developed units, as they seem to be where initiators of change reside within the firm with regards to participating in recombinative opportunities. These executives also exhibit the greatest degree of mobility to, ultimately, units of various structural compositions.
Leveraging Executives’ Mobility To Create Firm Value
In exploring how executive mobility can impact organizational transformation, the authors discover that when comparing units receiving simply more transferred executives, executives with recombination experience, and executives from core internal units, the units with greater influx of the latter are those with a greater likelihood of being recombined, “while units receiving executives from previously acquired units will tend to remain unchanged.”
Ultimately, Karim and Williams show how executives serve as “containers of knowledge and know-how,” and how mobility catalyzes both knowledge transfer and creation of new knowledge within the executive through his or her new experience. The study, they write, also “reveals how firms may be leveraging executives’ expertise with structural composition across business units within the firm to create further value.”
Read more about the study “Structural Knowledge: How Executive Experience with Structural Composition Affects Intrafirm Mobility and Unit Reconfiguration” as well as related research in the working papers “Executive Links and Strategic Change: Is Unit Spanning by Executives Associated with Market Entry and Exit?” and “Acquirers’ Goals’ Influence on Acquirer-Target Bilateral Interactions.”