조직학습과 다각화 : 다각화 의사결정의 동태적 분석, 1988~1997

The current paper examines the question of ‘when’, rather than ‘which’, firms would diversify. Many existing studies raised research questions in a dynamic term by asking ‘when firms diversify’, but eventually ended up statically testing ‘which firms diversify’, either by relying on cross-sectional analysis or by focusing on static variables that do not vary with time. However, recent studies in strategic management have started to explore the dynamic aspects of strategic actions, which may make up for the limits of existing diversification studies in near future. Along this line of inquiry, the current study attempts to propose theoretical and methodological bases for the dynamic analysis of diversification decisions by theoretically making sense of and methodologically testing the question of ‘when firms would diversify’ directly. Since firms make strategic decisions in dynamic ways by constantly adjusting their responses according to signals from changing environments, we argue that diversification studies also must employ not only longitudinal methodologies, but also proper theories that can vividly highlight dynamic aspects of strategic processes. For a dynamic analysis of diversification in terms of theory, the current study draws on organizational learning theory which suggests that organizations dynamically adjust their decisions and behaviors by reflecting feedbacks and signals from environments. The organizational learning literature treats an organization as a dynamic and strategic actor which constantly learns and evolves through interactions with its environments. The organization learning literature maintains that when an organization faces an environment similar with earlier environments which it previously encountered, it tends to respond to it by resorting to the routines and behaviors it learned through the earlier environmental interactions. If its earlier response had received positive feedbacks from the environments, it would respond to the similar environment by reusing the same response. Otherwise, it would explore new types of responses to the environment. That is, in the organizational learning literature, an organization is assumed to be a dynamic actor which constantly responds to signals from changing environments either by exploiting previously learned behaviors or by exploring new behaviors. Since environmental feedbacks change with time, environments are likely to affect organizational choices and behaviors differently by sending varying feedback signals at each time point. In this regard, the current study focuses on effects of feedback signals that the focal firm receives from environments at each time point in explaining its strategic choice of whether or not to diversify. We examines effects of two different types of feedback signals from environments; 1) reinforcement signals that the focal firm receives through performance feedbacks from environments to its own past behaviors, 2) legitimacy signals that the focal firm receives from other firms’ diversification behaviors. The empirical part of the current study examines effects of these two types of environmental signals on the focal firm’s diversification choices at each time point. The first type of environmental signal that the focal firm receives from performance feedbacks to its own past behaviors is theoretically based on the reinforcement argument of Skinnerian behavioral psychology. Reinforcement theory submits that a certain behavior is learned and repeated only when it receives positive feedback–i.e. reinforcement–from environments. Thus, we predict that when an organization produces a high performance which can be regarded as a positive reinforcement signal, it is likely to repeat its existing behaviors and routines. In contrast, when an organization suffers from a low performance which can be regarded as a negative feedback signal, it is likely to explore new behaviors and routines. By applying this line of argument to diversification decisions, we maintain that if the focal firm produces a high performance which is a type of positive reinforcement signal to its existing businesses from environments, it is like to continue to operates within its existing business areas, rather than explore new businesses. On the other hand, if the focal firm has a serious performance problem or crisis which is a negative feedback signals from environments in its existing business areas, it is likely to explore possibilities of diversifications into new business areas through problemistic search. Therefore, in Hypothesis 1 of the current study, we predict that the performance of the focal firm at time point t will negatively affect the likelihood that it diversifies into new business areas at time point t+1.Drawing upon the insights of the Cargnegie school of organization theory, we conceptually and methodologically operationalized performance feedback in terms of the focal firm’s aspiration level. The second type of signal from environment is the signal about the legitimacy of diversification strategy that the focal firm receives from choices of others firms in the organizational field. The legitimacy signal argument is theoretically based on neo-institutional theory and social learning theory. In the neo-institutional theory literature, it is argued that when an organization faces a high level of uncertainty, it tends to imitate those behaviors which other organizations have frequently chosen, and thus which are perceived to be legitimate. Social learning theory also suggests that actors often imitate other actors’ behaviors through vicarious learning under uncertainty. Thus, in the current study, the diversification behaviors of others firms are regarded as a type of environmental signal about the legitimacy of diversification strategy. Following the argument of frequency-based isomorphism, the current study predicts that the frequency of other firms diversifications at time point t will positively affect the likelihood that the focal firm diversifies into new business areas at time point t+1 in Hypothesis 2. Furthermore, since firms often respond differently to similar environmental signals, we also predict that the extent to which performance feedbacks affect diversification decisions will vary with their status and recent diversification behaviors by other firms. In Hypothesis 3, we predict that the status of the focal firm will reduce the effect of performance feedback on the likelihood of its diversifications at time point t+1. In the literature of status signal that is recently under active discussions and inquiries, it is suggested that the status of an organization may play a role of buffer from environmental influences. The status literature maintains that organizations with high status can make strategic decisions mainly through autonomous calculations and choices for themselves, rather than being influenced or constrained by pressures from environmental signals. In this regard, we predict that the status of the focal firm will decrease the effect of performance feedback on the likelihood that the focal firm diversifies into new business areas at time point t+1 in Hypothesis 3. Along similar line of argument, we suggest that the effect of performance feedback on the focal firm’s diversifications may differ according to environmental signals about the legitimacy of diversification at the organizational field level. Neo-institutional theory submits that when a certain form or behavior acquires legitimacy in the organizational field, it is likely to be adopted subsequently by other organizations regardless of its technical efficiency. That is, neo-institutional theory considers legitimacy as the more important driver behind the diffusion of a certain behavior or form, than economic or technical factors. Therefore, it is suggested that a behavior or form legitimated in the organizational field is likely to be adopted by the focal firm regardless of its actual impact on the focal form’s performance. Since a firm’s strategic decision-making is affected by both organizational and environmental factors, performance signal to the focal firm and legitimacy signal of diversification strategy at the field level are likely to interact in determining the focal firm’s choices of diversification strategies. Therefore, we predict that the legitimacy of diversification strategy at the organizational field level will decrease the effect of performance feedback on the likelihood that the focal firm diversifies into new business areas at time point t+1 in Hypothesis 4. The empirical analysis of the current study used an original data-set that contains information about all the diversification events of the thirty largest Korean Chaebol groups, 1988~1997. Since our dependent variable was the annual frequency of diversifications by each firm, we employed an event count analysis by running negative binominal regression. The results of our analyses strongly supported all of our four hypotheses. The findings of our study confirmed our predictions that the focal firm’s diversification strategies are affected by environmental feedback signal to its own past behaviors and the legitimacy signal of diversification strategy at the field level, and also that the effects of performance feedback on subsequent diversifications is moderated by firm status and field-level legitimacy. The findings of the current study are expected to contribute significantly to the diversification literature by systematically illustrating the dynamic process of diversification decisions in terms of both theory and methodology.