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Summary Maula, M. V. J., Keil, T., & Zahra, S. A. (2012). Top Management’s Attention to Discontinuous Technological Change: Corporate Venture Capital as an Alert Mechanism. Organization Science, 24(3), 926–947. https://doi.org/10.1287/orsc.1120.0775 $5.96   Add to cart
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  5. Strategic Entrepreneurship & Organizational Renewal

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Summary Maula, M. V. J., Keil, T., & Zahra, S. A. (2012). Top Management’s Attention to Discontinuous Technological Change: Corporate Venture Capital as an Alert Mechanism. Organization Science, 24(3), 926–947. https://doi.org/10.1287/orsc.1120.0775
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  • Course
  • Strategic Entrepreneurship & Organizational Renewal
  • Institution
  • Vrije Universiteit Amsterdam (VU)

Full summary of Maula, M. V. J., Keil, T., & Zahra, S. A. (2012). Top Management’s Attention to Discontinuous Technological Change: Corporate Venture Capital as an Alert Mechanism. Organization Science, 24(3), 926–947.

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Document information

  • October 7, 2021
  • 5
  • 2021/2022
  • Summary

Subjects

  • top management attention
  • corporate venture capital
  • alert mechanism
  • discontinuous technological change

Written for

  • Vrije Universiteit Amsterdam (VU)
  • M.Sc. Business Administration - Strategy & Organization
  • Strategic Entrepreneurship & Organizational Renewal
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Maula et al (2013) – Top Management’s Attention to Discontinuous
Technological Change: Corporate Venture Capital as an Alert Mechanism
Summary

 Logic: Interorganizational relationships can draw management attention away or towards
technological discontinuities – this depends on the type of partner and on the status of this
partner

 Finding: Venture capitalists with a high status direct management attention of a focal firm
earlier to tech disruptions than Venture capitalists with a low status

 Why? High status firms have large information networks AND their opinion is regarded as
more credible and thus they have a larger influence on top managements attention
allocation

________________________________________________________________________________



Topic

Managers sometimes do not pay attention to technological discontinuities – why is that?

Under what circumstances is attention (not) directed towards technological change?

What type of relationships facilitate this?

Technological discontinuities

 Normally happens at the fringes of an industry, outside the normal focus of attention
 Often imposed by start ups
 Here operationalized by the internet and wireless technologies

Tech change & incumbents

 Incumbents have difficulties to adapt to tech discontinuities – they often suffer from inertial
sources e.g.:
o Org. identity
o Escalation of commitment / irreversible commitments
o Cognitive barriers
o Existing org. routines
o Embeddedness in certain industry networks

Managerial attention to discontinuities

 Organizational attention = the distinct focus of time & effort by the firm on a particular set of
issues, problems, opportunities, and threats and on a particular set of skills, routines,
programs, projects and procedures

 Managerial action focuses on issues to which managers pay attention

 Attention is situated – the context of the manager affects their attention

,  Attention is structurally distributed – the context of the manager depends on how
organizations structurally distribute and control the allocation of issues and decision makers
(org design)

 Influences on managers attention in times of change:

o The rules of the game = existing routines bias the decisions made
o The players on the field = e.g. top mgt demographics or future orientation of the CEO
o The structural position of players = players that are more importantly positioned in a
network receive more attention

Interorganizational relationships & managerial attention

Allocation of attention not only depends on “players” within the organization but also on
interorganizational relationships

 Relationships bring important information and reduce a firm’s uncertainty about the nature
of business opportunities
 Relationships can also be negative when the nature of networks does not suit the
information needs of the firm
 Organizations tend to establish homophilous relationships (= associate with similar others
who hold similar views and do not possess new information)



H1: The larger the number of homophilous interorganizational ties to industry peers, the later the
time at which top management will pay attention to emerging discontinuous technological change.

Argument:

 Homophilous relationships = relationships to firms/customers/suppliers in the same industry
 Similarity makes it easy to absorb information
 But: similarity may direct top mgt’s attention away from tech change due to several reasons:
o Industry peers hold similar knowledge – nothing can be learned about tech
discontinuities
o Industry peers normally use the same technologies, operating principles and have
the same competitors – their views on emerging discontinuities will likely resemble
those held by the focal firm
o Industry peers may not have an incentive to share information about tech change-
they might even try to manipulate other firms not to pursue tech change
 Finally, upholding homophilous relationships takes time and attention and are normally
focused on routine business development issues – directing attention away from emerging
disruptions

Findings:

 Hypothesis is NOT supported by the data
 This might be due to the fact that an influence of an industry peer can change over time
 The data shows that:
o Before the industry peer notices the change, they have a negative impact on
directing management attention of the focal firm towards technological change
o Once the industry peer starts paying attention to the change, the relationship
becomes positive

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