Abstract Research Summary Firms seeking competitive advantage need both internal fit and a distinctive market position, yet strategy research says little about how the search for the two is related. We develop a model of strategic search that integrates an NK landscape with differentiated Cournot competition, allowing a firm's position to shape both its internal fit and distinctiveness. We show that, under low complexity, competition constrains search, locking firms into resource configurations and creating a trade‐off between internal fit and distinctiveness. Conversely, under high‐complexity competition drives distant search, so that internal fit and distinctiveness go hand‐in‐hand. We further show that competitive lock‐in constrains search by early leaders, while distant search drives the emergence of new leaders, thus offering a search‐based theory of market disruption. Managerial Summary How does the search for operationally effective configurations of resources and capabilities affect the distinctiveness of a firm's offering, and vice versa? Our work suggests that the need for distinctiveness may constrain search close to rivals but also enable the discovery of effective configurations far away from them. In relatively simple environments, where firms tend to converge on the same relatively obvious configurations, the search for distinctiveness is constraining, but in more complex environments it may enable the discovery of superior configurations. Further, early leaders may be constrained in their search as rivals cluster around them, while early followers may benefit more from distant search, potentially leading to a disruption of the market as early success proves constraining.
Abstract Research Summary Modular systems play a central role in technological innovation. Such systems emerge when interdependencies among modules in a complex system are isolated through interfaces. While early seminal work highlighted the importance of interface design, subsequent research on modularity has largely overlooked it. We develop a model that treats interfaces as a set of design choices, separate from module choices. This model elucidates the mechanisms through which interface design influences system performance and identifies novel strategies for sequencing the search of interface and module designers to improve outcomes. The framework has implications not only for standalone innovations but also for the design of standards in platforms and ecosystems. Ultimately, it demonstrates that interface design is as much a strategic challenge as it is a technical one. Managerial Summary Managers increasingly rely on modular designs to enable innovation, yet often overlook interfaces as a strategic lever. This study shows that actively designed and periodically updated interfaces can coordinate interdependencies without constraining decentralized search, enabling modular systems to approach the performance of integrated designs. Crucially, sequencing matters: allowing modules to evolve before introducing interfaces improves long‐run performance, as early experimentation generates knowledge that interfaces can later build upon. Finally, infrequent interface redesign is sufficient to sustain coordination, reducing the need for continuous adaptations. Overall, interfaces should be treated as evolving strategic choices that shape innovation trajectories in products, platforms, and ecosystems.
Abstract Research Summary Recent technological advancements have enabled more data‐driven decision‐making across firms. While prior literature highlights the value of using more data, there is less insight on the impact of information speed, particularly how quickly decision‐makers can access it. We study how faster information access influences how decision‐makers acquire information and make decisions, using data from healthcare. We examine a technology that visually displayed when test results became available, accelerating information access for 64,152 decisions by 387 physicians. Faster access allowed decision‐makers to gather less but more targeted information, resolving uncertainty earlier and speeding up decisions, while ultimately improving decision outcomes by supporting more effective information processing. Our findings show that investing in data velocity can yield significant benefits through both faster and better decisions. Managerial Summary Our research shows that the speed at which decision‐makers access information can be just as important as the amount of data available. Studying the introduction of a real‐time dashboard in a hospital emergency department, we find that simply reducing delays in seeing lab results‐without changing the information itself‐led physicians to order fewer and more targeted tests (cutting charges by 25%), reduce patient length of stay by 13% (about 75 minutes), and improve outcomes, with lower hospitalization rates and higher patient satisfaction. The biggest gains occurred under high workload and in less common cases, where early signals are especially valuable. The key insight for managers is that faster information access does not just accelerate decisions; it improves how decisions are made by enabling more focused information gathering and better use of early signals. Investing in tools that reduce friction in accessing data can therefore increase efficiency and quality simultaneously, creating advantage not just through speed, but through better decision‐making.
Abstract Research Summary In evaluative contexts, evaluatees typically seek to present themselves in a favorable light, while evaluators ask penetrating questions to assess these claims. Here we develop a framework to identify curveball questions : ones that are on‐topic yet perplexing (i.e., difficult to predict) relative to past discourse. We develop a language‐based measure of curveball questions and apply it to a corpus of quarterly earnings calls. After validating this question‐level measure, we next demonstrate that a call‐level curveball measure predicts absolute returns, absolute abnormal returns, and changes in a firm's average analyst rating. Finally, we identify the types of analysts who are most likely to pose curveball questions, the types of firms that are most likely to receive them, and the conditions under which they tend to arise. Managerial Summary Even a carefully crafted presentation can be derailed by a challenging question. What makes a question challenging in ways that can be disruptive and how can such a question be measured? We propose that such questions, which we label curveballs , are on‐topic, and thus difficult to dismiss or deflect, yet difficult to predict based on prior knowledge. We harness the tools of computational linguistics to develop a measure of curveball questions and apply it to the context of quarterly earnings calls. We show that this measure predicts consequential economic outcomes and highlight the conditions under which curveball questions tend to arise. Our measurement strategy can be readily extended to other evaluative contexts such as job interviews and venture capital pitches.
Abstract Research Summary Can environmental, social, and governance (ESG) investors hold businesses accountable for their environmental impact? Extending institutional theory and analyzing a global sample of firms from 2006 to 2019, we argue that, in response to ESG investors' institutional pressures, firms may intensify pollution outsourcing to suppliers as a sophisticated form of corporate decoupling. We further theorize and find suggestive evidence that this effect is less salient and sometimes reversed when ESG investors can help firms access green technologies and when they have more direct purview of firms' suppliers. We employ investor‐level acquisitions as quasi‐exogenous shocks and additionally analyze a separate firm–supplier sample to support the hypotheses with largely consistent results. Managerial Summary Environmental, social, and governance (ESG) investors are increasingly expected to act as private regulators, using ownership stakes to steer companies toward sustainability. Yet, looking only at whether a focal firm cleans up its own operations can be misleading because it ignores what happens in the broader supply chain. Using global firm data from 2006 to 2019, we find that companies under strong ESG investor pressure generate lower direct emissions but may shift pollution to suppliers, leaving the combined emissions unchanged. We also provide suggestive evidence that this outsourcing is reduced and sometimes can become reduced when investors can help firms adopt green technologies and directly oversee supplier practices.
Abstract Research Summary Many new employees leave their firms before realizing the returns to experience. One reason is that they cannot see how performance evolves with tenure. We study whether making performance trajectories visible improves retention and firm performance. In a randomized controlled trial at a multinational spa chain in China, workers received twice‐weekly information for 28 weeks about the performance path of a high‐performing senior coworker. The intervention reduces new‐worker attrition by 11–12% and increases revenue by 15% in stores with more new workers. These effects are largely driven by reduced stress and improved mental health, as the information lowers their beliefs about how well senior coworkers performed early in their careers. By contrast, showing only the current performance of a similar‐tenure peer has no detectable effect. Managerial Summary In many firms, new employees leave before realizing the returns to experience because they lack information about how performance evolves with tenure. We examine whether making senior workers’ performance trajectories visible improves retention and firm performance. In a randomized controlled trial involving over 7,000 workers at a multinational spa chain in China, employees received twice‐weekly information for 28 weeks about the performance trajectory of a high‐performing senior coworker. The intervention reduces new‐worker attrition by 11–12% and increases revenue by 15% in stores with more new workers. These effects are driven by reduced stress and improved mental health, as the information lowers beliefs about senior coworkers’ early‐career performance. Overall, our findings show that making senior workers’ performance trajectories visible can mitigate social comparison costs within firms.
Research Summary Digital platforms provide arenas for global knowledge diffusion, but their underlying architecture often relies on synchronous exchange, inadvertently siloing users into distinct "time pockets" based on time zones. Using proprietary data from StackOverflow, we implement a regression discontinuity design to causally estimate that a 1-h increase (decrease) in the temporal distance between two regions leads to a 13.6% decrease (9.5% increase) in views and a 20.9% decrease (21.0% increase) in votes between those regions. These temporal frictions disproportionately penalize interactions in niche knowledge communities (e.g., sudo, slack-api) over those in popular ones (e.g., Python, JavaScript). Importantly, we show that a platform can mitigate temporal barriers by shuffling content representation. This paper contributes to our understanding of platform strategy, temporal distance, and global knowledge diffusion.Managerial Summary While digital platforms deliver global connectivity, time zone differences create invisible barriers that stifle user interactions and knowledge exchange. Our research shows that temporal distance between regions on StackOverflow, a global knowledge community for computer programming, significantly reduces cross-region views and votes. These temporal silos disproportionately harm niche communities, where valuable content is less likely to be shared among users who are not online simultaneously. Popular communities, however, remain largely unaffected. For platform designers, relying solely on chronological feeds inadvertently fragments their global user base. To unlock cross-border exchange and support specialized communities, managers could adjust algorithms to "shuffle" content representation based on dynamic triggers rather than just the posting time. Doing so bridges temporal gaps and connects out-of-sync users.
Abstract Research Summary This study examines how legal design shapes contractual governance in public–private partnership (PPP). We argue that PPP‐specific laws do not simply strengthen institutional safeguards; by varying in detail, they also alter the flexibility available for project‐level contracting. Highly specific laws better constrain governmental discretion but raise adaptation costs, making user‐pay contracts, where private partners bear demand risk and rely on market‐responsive adjustment, less attractive. Less specific laws preserve greater contractual discretion and are therefore associated with more user‐pay arrangements. We also show that countries with weaker political constraints adopt more specific PPP laws, suggesting that legal design compensates for weaker institutional checks. Using 3986 PPP projects in 53 countries from 1997 to 2021, we find support for these claims. Managerial Summary Governments often pass public–private partnership (PPP) laws to attract private capital into infrastructure projects. This study shows that what matters is not only whether such laws exist, but how detailed they are. Highly specific laws can make government commitments more credible, especially where political checks and balances are weak, but they can also limit the flexibility private partners need when revenues depend on users, such as tolls or fees. Across 3986 PPP projects in 53 countries, we find that more detailed laws are linked to fewer user‐pay projects, while less detailed laws are linked to greater use of user‐pay arrangements. Our analysis suggests that legal certainty and flexibility must be balanced: specific legal regimes can protect private investment while narrowing the range of viable investment models.
Research Summary Academic spin-off (ASO) performance has been studied in relation to either specific university-level or regional-level characteristics. However, ASOs originate from universities, which are embedded in regional ecosystems. This nested structure can create an attribution problem when either level is studied in isolation. Consequently, the relative importance of these two different levels for ASO performance has remained ambiguous. To address this ambiguity, we rely on multi-level modeling and use a novel, hand-collected dataset of 3164 ASOs founded between 2010 and 2019 from 212 universities nested within 99 European regions. We find that the region effect matters for about 27% for Return on Assets and 16% for Sales, whereas the university effect is negligible. Our study contributes to research at the nexus of academic entrepreneurship and variance decomposition in strategy.Managerial Summary Academic spin-offs (ASOs) bring innovations from the university to the market, thereby potentially generating new sales, employment, and value. However, once formed, their performance prospects vary significantly, and understanding this variance is important for entrepreneurs and policymakers alike. Our findings from a new European dataset reveal that the region effect matters for ASO performance, but the university effect is negligible. This evidence does not imply that universities lack importance; rather, it suggests that universities in a region may have a collective impact that diffuses into regional resources and networks. Our evidence highlights the importance of fostering a supportive regional ecosystem.
Research Summary CEO dismissal is a high-stakes governance decision, yet its implications for corporate reputations remain underexplored. We develop theory explaining how dismissals damage corporate reputation through perceptual processes that arise from features of and reactions to the practice itself, distinct from effects attributable to dismissal's (much studied) economic and strategic consequences. Drawing on expectancy violation theory, we argue that dismissals become salient and generate negative reactions because they deviate from the preferred norm of planned succession and also highlight firm-level problems, and these factors prompt reputational reassessment. The findings support this prediction: dismissals significantly damage corporate reputation even after controlling for financial performance. This damage intensifies when dismissed CEOs have won awards, received extensive media coverage, or led high-performing firms.Managerial Summary Firing a CEO is one of the most consequential decisions that boards make, yet we know little about how this action affects a firm's reputation. We find that CEO dismissals meaningfully damage corporate reputation, even after accounting for the firm's financial situation. This damage appears to occur for two reasons: dismissals deviate from the preferred approach of a planned leadership transition, and they draw attention to underlying problems at the firm. The reputational harm intensifies when the dismissed CEO had won industry awards, received extensive media coverage, or led a firm that was performing well. These findings suggest that boards should consider the potential reputational costs of dismissing a CEO alongside the anticipated strategic benefits.
Research Summary The conventional wisdom both in research and in practice is that entrepreneurs need co-founders, as they bring crucial resources to new ventures. Yet, this same work also suggests that co-founders introduce destructive conflict, potentially creating as many problems as they solve. Surprisingly, little work examines the counterfactual-that is, the conditions under which solo-founding is a viable approach. In this paper, we address this gap. We perform two studies; one using data from Y Combinator's renowned accelerator program, and another using large-scale data from Crunchbase. Across these studies, we find that the solo founder disadvantage is partially attenuated when the founder has either broad or deep experience, or both (i.e., "T-shaped skills"). Overall, our paper contributes to the literatures on founding teams and strategic human capital.Managerial Summary Co-founders are beneficial to startups because they bring needed skillsets, knowledge, connections, and other resources. At the same time, however, co-founders also introduce the potential for interpersonal conflict between the entrepreneur and co-founders. Thus, in some cases, co-founders may create as many or more problems as they solve. Surprisingly, very little research examines solo founders. In this paper, we examine the conditions under which solo founding is a viable approach. We find evidence of multiple ways in which solo founders can begin to overcome their performance disadvantages and achieve performance closer to that of co-founded ventures.
Research Summary We examine variation in high-technology startups' performance based on founders' pre-entry experiences by developing a formal model and using confidential employee-employer linked microdata from the United States to examine the empirical consistency of the model propositions. The model posits that relative to insiders, a lack of industry-specific experience creates greater epistemic uncertainty regarding optimal business models at time of entry for outsiders and thus, higher post-entry adjustment costs associated with necessary pivots. Consequently, outsiders have a higher selection threshold for the value-creation potential of the underlying technical ideas. Together, these mechanisms yield propositions that relative to insiders, outsiders have lower odds of survival on average, but higher growth and probability of being acquired. The empirical results indicate strong and robust support for these propositions.Managerial Summary Our paper showcases that individuals contemplating entrepreneurial opportunities outside their industry of employment face higher uncertainty in configuring their business model at time of entry relative to those with industry-specific experience. This results in higher adjustment costs for implementing pivots resulting from post-entry learning and a higher likelihood that they will terminate operations. To offset these higher risks, individuals venture outside their industry only if their technical ideas have higher value-creation potential. This implies that outsider startups are more likely to exit (including through acquisitions), but if they survive, they will experience higher growth relative to insider startups. We provide empirical evidence in support of these propositions.
Research Summary Do multinational enterprises from developed (DMNEs) and emerging (EMNEs) economies differ in their price discrimination strategies in Sub-Saharan Africa? Using an abductive approach, we analyze novel data from laundry detergent markets in Cameroon, Ghana, and Ivory Coast, where frugal products are widely consumed. We find that, compared to EMNEs, DMNEs charge smaller price premia for frugal relative to non-frugal products by 21%-28%. We examine several plausible explanations and find suggestive evidence that the greater visibility of DMNEs motivates them to exercise caution in setting greater price premia for their frugal relative to non-frugal products. Even within DMNEs, more visible firms charge smaller price premia than less visible firms.Managerial Summary Our investigation reveals an intriguing difference in the pricing strategies of multinational enterprises selling basic consumer goods in Africa. We analyze laundry detergent products sold in Cameroon, Ghana, and Ivory Coast. We find that, compared to multinational enterprises from developed economies (DMNEs), those from emerging economies (EMNEs) charge materially higher price premium on small packs relative to large packs. A key driver appears to be differences in exposure to reputational risk. DMNEs are more cautious about pricing small packs in ways that could be perceived as exploiting resource-constrained consumers. Even within DMNEs, more visible firms charge smaller price premium than less visible ones. These findings highlight that pricing decisions for frugal products entail social considerations, as firms differ in their exposure to stakeholder scrutiny.
Research Summary As organizations increasingly adopt generative AI (GenAI), they face a strategic challenge: not only deciding which tasks AI should perform, but also how to organize the integration of human and AI efforts to produce viable solutions. We propose that a cognitive asymmetry between human's tacit, embodied knowledge and AI's codified knowledge creates a representational gap that complicates human-GenAI collaboration. Through a qualitative study of professional perfume creation, we identify representational integration as an organizing process through which humans and GenAI coordinate to bridge this gap. This process unfolds across three practices: allocating tasks based on cognitive advantages, converting knowledge across tacit and codified forms, and steering GenAI outputs as problem solving evolves. This study advances a novel organizing perspective on human-GenAI collaboration under conditions of cognitive asymmetry.Managerial Summary Organizations increasingly deploy GenAI in knowledge-intensive work, yet many struggle to convert human and AI contributions into strategic value. This study takes a cognitive lens, showing that humans and GenAI rely on different forms of cognition-and that value emerges when organizations can coordinate and combine them. Successful human-GenAI collaboration therefore requires more than adopting powerful models. It depends on organizing practices that help employees translate across representational formats, relate GenAI outputs to embodied expertise, and iteratively steer GenAI as their interpretations evolve. Investing in these practices and skills allows organizations to harness GenAI's generativity while recognizing that human sensemaking, tacit knowledge, and contextual understanding remain indispensable for producing coherent, high-quality outcomes.
Research Summary How should organizations manage learning dynamics? Strategy theories suggest "more-is-better"-fast, frictionless sharing enhances performance-while organizational learning theory warns that "less-is-more," as fast learning causes premature convergence. We reconcile this tension by showing that the "less-is-more" prediction depends critically on a key assumption in classic computational models: that information about agents' performance is not continuously updated. When performance information is timely, fast learning enhances exploration. The mechanism is Target Diversity: fast learning allows many individuals to rapidly reach the performance frontier, increasing the set of imitation targets. Organizations thus learn from a diverse, shifting set of targets. The implication is that organizations achieve superior performance not by restricting information or slowing learning, but by making data on choices and performance available more quickly.Managerial Summary Innovation relies on recombining diverse knowledge, yet facilitating this is challenging. Organizations often encourage copying stars with established track records or reputations, but this can lead to suboptimal results. We demonstrate a superior approach: provide up-to-date performance data and spotlight emergent top performers, regardless of their history. When feedback is timely, rapid learning allows "underdogs"-employees starting from lower positions-to quickly catch up to the frontier via unique knowledge combinations. Spotlighting these emergent successes creates "Target Diversity," providing the organization with a continually renewed and diverse set of imitation targets. Such a design enhances the exploitation of diverse knowledge and improves long-run performance.
Research Summary The trade-off between scale and scope has long posed a strategic dilemma, especially in digital settings, where specialization enables hyperscaling. Drawing on a longitudinal case study of ByteDance, we theorize how digital firms can overcome this constraint through the use of artificial intelligence (AI) combined with an adaptive organizational design. AI evolves and improves through self-learning and cross-fertilization across domains, becoming increasingly valuable as learning accumulates. This, however, is contingent on access to structurally related data that allow learning to transfer across domains. We show how AI reverses the conventional logic of the resource-based view: rather than valuable resources enabling diversification, diversification amplifies the value of resources. AI thus transforms the scale-scope nexus from being a trade-off into a source of strategic advantage.Managerial Summary The growing centrality of AI and digital platforms is reshaping how firms pursue and sustain growth. This study examines how ByteDance leveraged AI and adaptive organizational design not only to scale rapidly but also to diversify across industries and markets. Rather than incurring rising costs or coordination complexity, the firm's AI capabilities improved with each deployment through cross-fertilization across domains, enabling more efficient growth across multiple domains. For managers, the findings highlight how dynamic combinations of AI and organizational structure can help overcome traditional trade-offs between scale and scope, opening new pathways for scalable, cross-market expansion in increasingly competitive environments.
Research Summary We examine whether CEO personality traits influence the likelihood of engaging in behaviors that impose agency costs on the firm. We use an established open-language machine learning program to measure CEO Big Five personality traits based on CEO remarks during earnings conference calls. We theorize and find that higher levels of agreeableness and conscientiousness in CEOs are associated with lower agency costs (operationalized here as unrelated diversification and the decoupling of CEO pay from firm performance), while higher levels of neuroticism are associated with higher agency costs. By revealing how CEO personality traits affect agency costs, our study offers a new perspective on the sources of agency problems and broadens the application of CEO Big Five personality traits to corporate governance.Managerial Summary This study explores how a CEO's personality can shape decisions that affect company performance. Using an advanced language analysis tool, we assessed CEOs' personality traits based on what they say during earnings calls. We find that CEOs who are more agreeable and conscientious are less likely to make decisions that benefit themselves at the expense of the company-such as expanding into unrelated businesses or earning pay that does not reflect company performance. In contrast, CEOs with higher levels of neuroticism are more likely to engage in these costly behaviors. These findings suggest that understanding a CEO's personality can offer valuable insights into their leadership behavior and help boards and investors make better governance and hiring decisions.
Research Summary This paper examines how firms' adoption of artificial intelligence (AI) relates to the demand for managers and managerial skills. Using a skills-based measure of AI adoption derived from Lightcast job postings, we show that firms with greater AI adoption post more managerial vacancies and a higher share of such vacancies than less intensive adopters. These relationships are strongest in manufacturing and among firms with higher research & development intensity. Greater AI adoption is also associated with shifts in managerial skill requirements toward interpersonal and growth-oriented skills, including stakeholder management, creativity, and sales management, and away from routine administrative skills such as budgeting, planning, staff management, and customer service. Overall, the results suggest a reconfiguration of managerial roles toward capabilities facilitating scaling, coordination, and adaptation in AI-enabled environments.Managerial Summary As artificial intelligence (AI) becomes more prevalent within firms, managers and executives face a practical question about how managerial roles may change. Using US job postings data from 2010 to 2022, we find that firms with higher AI adoption exhibit relatively greater demand for managerial roles, especially in manufacturing and among more innovative firms. We also find that more intensive AI adoption is associated with changes in what managers are expected to do. Demand shifts away from routine administrative skills such as budgeting and planning and toward growth-related skills such as sales, creativity, and stakeholder management. Overall, the evidence suggests a growing emphasis on managerial roles that relate to scaling, coordination, and organizational adaptation.
Research Summary Regulatory anticipation is a nonmarket response whereby firms, foreseeing future penalties, adjust their behavior when peers are targeted by regulators. Prior research defines peers using broad jurisdictional boundaries. Instead, I argue that regulatory anticipation may emerge locally, driven by two channels: proximity to peer scrutiny and firms' perceived sanction risks. Examining U.S. facilities' GHG emissions, I exploit variation in local-peer scrutiny arising from a change in the EPA's High-Priority-Violation policy. Difference-in-differences estimates show that heightened scrutiny of county peers is associated with 7% lower emissions among non-targeted firms, driven by those facing higher sanction risks. Distance-decay analyses indicate that these anticipation patterns weaken with geographic separation. The findings encourage managerial attention to local regulatory conditions and suggest that avoiding regulatory deserts could improve policy effectiveness.Managerial Summary This paper examines how stricter regulatory scrutiny of one firm can prompt nearby, non-targeted firms to reduce their emissions. Using U.S. data on facilities' greenhouse gas (GHG) emissions, I find that when a county peer faces heightened oversight, non-targeted firms are associated with about 7% lower GHG emissions on average. These patterns are stronger for firms already at higher risk of environmental penalties, declining as geographic distance from scrutinized peers increases. For managers, the findings highlight the importance of monitoring local regulatory activity and the behavior of nearby peers, as local comparisons can shape stakeholder expectations. For policymakers, the results suggest that avoiding regulatory 'deserts' may enhance the effectiveness of climate-related and environmental regulation.
Research Summary Acquisitions can create synergies by combining an acquirer's and a target's pre-existing relationships with nonmarket stakeholders. We introduce the "reset effect" as a novel mechanism that occurs when a firm with cooperative stakeholder relationships combines with a firm that has conflictual relationships, prompting the affected stakeholders to re-evaluate their pre-acquisition strategies. We argue that post-acquisition conflict with nonmarket stakeholders will decline when the cooperative and conflictual stakeholders brought together by an acquisition are aligned on one or more of the three elements that characterize stakeholder fields: (1) issues stakeholders care about, (2) relationships between stakeholders, and (3) preferences for how issues should be addressed. We find support for these arguments by studying changes in Fortune 500 firms' conflict with environmental movement organizations after acquisitions.Managerial Summary Acquisitions can create synergies by resetting a firm's relationships with external stakeholders. Studying 25 years of Fortune 500 acquisitions and environmental stakeholder interactions, we find that acquisitions can reduce stakeholder conflict when one firm's cooperative stakeholder relationships complement the other firm's conflictual ones. Complementary relationships exist when cooperative and conflictual stakeholders are aligned on issues or have pre-existing relationships with one another. Simply combining conflictual-cooperative stakeholder relationships is not enough, however, and post-acquisition conflict can increase when stakeholder groups are divided over how issues should be addressed. These findings can help managers understand when an acquisition will ease or exacerbate external conflict with stakeholders.
