Pahnke, Katila, & Eisenhardt (2015). Who Takes You to the Dance? How Partners’ Institutional Logics Influence Innovation in Young Firms

Authors:
Emily Cox Pahnke – University of Washington
Riitta Katila – Stanford University
Kathleen M. Eisenhardt – Stanford University

Interviewers:
Tracey Dodd – University of South Australia
Prajit Deb – University of South Australia

Article link: http://asq.sagepub.com/content/early/2015/06/17/0001839215592913

Question 1. Research Collaborations

a. Could you tell us about the collaborative research process in your ASQ article ‘Who Takes You to the Dance’? How did you decide to work on this project together?

Pahnke: This project came out of my dissertation. I worked extensively with Riitta and Kathy on the theoretical questions and empirical design. The topic of the project played to the core research interests of myself, Riitta and Kathy. I was interested in innovation in resource-poor new firms. Riitta was also interested in questions around innovation and new firms and also resource dependence theory. As the project unfolded, we realized that institutional logics might be the way to help us do that to untangle the theoretical puzzle. That’s when Kathy became heavily engaged, not just in the dissertation but the paper as well.

b. So what roles did each of the authors play in the paper?

Katila: This was really a collaborative project. I think it was interesting that Emily really became the industry expert and the startup expert. It was her dissertation. Coming more from an established-firm lens on innovation, I had just finished a project on corporate venture funding. So I was fresh having done some interviews in another setting, which dovetailed with my background in innovation. So that’s the lens that I brought into the project.

c. What advice would each of you have for an early career researcher who is embarking on a collaborative research project with someone who is an Associate or full Professor?

Pahnke: I was an Assistant Professor, Riitta was an Associate (she’s now a full professor), and Kathy was full professor. So this is a perfect question for our team. My advice would be to go for it! It was such a great learning process to be able to work with both Riitta and Kathy.

All along the way, the research and theoretical gap was improved by Riitta and Kathy’s questions. In terms of the data collection, there were pitfalls that Riitta and Kathy helped me to avoid earlier on by suggesting collecting additional data or modifying my research design or my interview protocols.

Also, as a junior scholar going through the review process, it was a huge learning opportunity for me. It’s not always easy to understand what a reviewer or an editor really means. When I was unsure about how to address a reviewer comment, Riitta and Kathy were able to guide those responses. That back and forth helped to improve the paper based on the reviewer and editor comments.

d. What do you think made it work in this circumstance? We can imagine that sometimes, the relationship of the collaborative process might not work, so what do you think contributed to, or what do you think were the success factors in this project?

Eisenhardt: Well, it was a terrific project to start with. It was a great research question, it was a great data set. It’s a lot easier to collaborate on something that is a really strong paper. It was fundamentally always excellent.

Katila: I would also like to add that the question of studying institutional logics is a very big concept. With my quantitative background, Kathy’s qualitative background, and then Emily’s moving from PhD student to Assistant Professor while we were writing this paper – it all came together. Maybe the research problem was just such a big question that we needed a multidisciplinary team for this project to work out.

Question 2: Publishing in ASQ

a. How did you decide on ASQ as an outlet and did you have any other possible outlets that you considered and then shortlisted to ASQ or it was just a natural choice?

Pahnke: As the paper developed, ASQ became our ideal target. It’s a major accomplishment to get a paper in ASQ, and so I wasn’t sure that that would happen. But we believed that the paper was addressing really intriguing theoretical and empirical puzzles, and that we had a great combination of quantitative and qualitative data. We had the complete quantitative data for the entire population of firms, as well as extensive qualitative work. This provided a uniquely satisfying exploration of our theoretical angle. Based on that, we thought that ASQ would be a great fit for the paper. I was thrilled that it worked out that way.

Katila: I think there were a couple of other things, too. ASQ papers are always interested in phenomena, and in this case, it is venture capitalists (VCs). Are they the engine of innovation in young firms or is it something else? And that’s a puzzle that no one had really solved before. People have asked, and gathered evidence, but no one has actually tackled it. I think as a phenomenon that is really interesting. You have to approach a phenomenon from a theoretical lens, of course, but as a phenomenon per se it’s interesting. There was also the ongoing discussion around institutional logics. I think we arrived with an interesting question and results, and it all came together.

b. Would you have any advice for any junior researchers looking to publish in ASQ in the future?

Pahnke: Reading ASQ and noting the recent conversations was very helpful. The recent caliber of papers is high. So reading those is not only educational, but also helped as we tried to fit the paper with ASQ.

Question 3: Theoretical Perspective

a. Institutional logics draw on social constructionism, that is the belief that our understanding of the world comes from other people, rather than “objective reality” (Burr, 2015, p. 10). What studies do you consider the most successful efforts of theoretical integration between the literature on institutional logics and other social constructionist perspectives, such as sensemaking (e.g., Weick, 1995)?

Eisenhardt: Sensemaking is more of a process and institutional logic is more of a configuration of attributes. So one is a process and the other is a content concept. I think they are different. What I think makes institutional logics interesting, as well as challenging, and why I think it’s a good construct, is that it is a configuration of attributes around goals, practices and rewards. Institutional logics have a variety of underlying dimensions that are tied together in unique configurations which what makes them so interesting.

b. Thornton, Ocasio, & Lounsbury (2012) have similar thoughts around institutional logics in which they suggest, that sensemaking can be a process in which you reveal the institutional logics. I noticed in your paper that you reveal the institutional logics by looking at both the attributes and the way that the different actors you look at view the world, but also your interviews. So perhaps if you could tell us a little bit more about the process that you employed to reveal the institutional logics for your paper?

Katila: What struck me most about the research process was that we had tons of qualitative data. We had very interesting quantitative results, but the reviewers were pushing us to clearly explain what is behind this positive effect on venture innovation. Really we are asking, what is the process, why are VCs so much better than corporate venture capitalists or the government. We had so much interview data and making sense of that data probably would not have been possible without institutional logics as a broad-level categorization concept. To me, the process of shifting through the qualitative data and making sense of them was something that took a long time. It was a massive effort. It’s hard to say how it came together, but at the end you kind of said “hey, it all fits”. Early on, I wasn’t sure we were going to have an institutional logics paper, to tell you the truth.

Pahnke: When you are gathering qualitative data, you don’t know what you’re going to find. So we really focused on process questions, like how they did things and had interviewees give specific examples. After the Thornton, Ocasio, and Lounsbury book came out, with its great ways of thinking about the different aspects of logics, we tried to use their frameworks, and, like Riitta said, all of a sudden we could make sense out of all of these data that before had been really hard to categorize or explain. Before, we could explain small things, but we couldn’t explain the whole picture well without that lens.

Question 4: Research Implications. Your article concludes with the interesting observation that “ties with the U.S. government may even impede technical innovation, meaning that ironically for entrepreneurs, the least expensive funding with the fewest strings may be most limiting for long-term innovation success” (Pahnke, Katila, & Eisenhardt, 2015, p. 32). Could you elaborate on the implications of this finding for industry, public policy, and research and development?

Katila: To go back to our discussion on institutional logics, what is it that VCs do so effectively in helping young firms innovate? They have better ways to motivate, better pacing, they use better milestones, and they have a closer advising relationship. When we look at what government funders did, in our case the National Institutes of Health (NIH), they had a cookie-cutter approach, a totally different kind of approach. So an implication would be to ask whether it is the government’s role to help young ventures and if it is, what can we learn from VCs and their methods of helping these young firms?

Pahnke: At a high level, whenever I talked to any of these funders, they all said they wanted new products that would help people or make money. But that was the only goal the NIH had when I talked to their program officers, whereas when I spoke with VCs and the Corporate Venture Capitalists (CVCs), they had a lot of smaller goals that led up to that end goal. I think it a hopeful message for government funders. It’s not that they have the wrong goal – it’s that the process seems off and breaking it down into lower-level pacing milestones would be more effective in achieving that end goal.

Question 5: Where to from here? What would you consider interesting follow-up projects of this ASQ study? E.g., do you plan further studies that build on the findings of this paper?

Katila: I’m continuing with the institutional logics lens at the individual level. I am looking at the institutionalized roles of different employees of startups such as board members and top management team members and how a mismatch with the institutionalized role influences venture innovation. Another project is comparing high-performing rhythms of innovation in different industry settings.

Pahnke: I am continuing to look at how the resources that new firms acquire can both help and harm innovation. In a new paper (Pahnke et al., 2015) I examine situations where VCs can actually impede innovation, even though they are often quite helpful. In that paper, I show that when VCs invest in direct competitors, which they do a surprising amount of the time, it slows down the young firm’s innovation. I’m also exploring how different configurations of members on innovation teams and of boards of directors influence innovation and exit events of ventures.

Eisenhardt: And I am doing a number of things. One is working with Doug Hannah, now an Assistant Professor at University of Texas – Austin, looking at strategy eco-systems in the solar industry. Part of the analysis is around the different institutional logics that founders bring to the solar industry and their implications for how entrepreneurs strategize.

References

Burr, V. (2015). Social constructionism, 3rd ed. New York: Routledge.

Thornton, P., W. Ocasio, and M. Lounsbury. (2012). The institutional logics perspective: Foundations, research, and theoretical elaboration. Oxford, UK: Oxford University Press.

Weick, K.E. (1995). Sensemaking in organizations. Thousand Oaks, CA: Sage.

Pahnke E.C., R. McDonald, D. Wang, and B. Hallen. 2015. “Exposed: Venture Capital, Competitor Ties, and Entrepreneurial Innovation.” Academy of Management Journal, Forthcoming.

2 comments

  1. Willie Ocasio · · Reply

    Great discussion of the process of generating your great article. Terrific to hear you found our book helped make everything click for you.

  2. […] 1. PAHNKE, KATILA, & EISENHARDT (2015). WHO TAKES YOU TO THE DANCE? HOW PARTNERS’ INSTITUTIONA… […]

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