This study explores whether firms benefit from hiring former consultants as managers-a phenomenon that has been frequently observed among top managers across industries but rarely addressed in existing management theory. Despite anecdotal evidence about executives with consulting backgrounds in successful firms, concerns persist regarding the transferability of consultants' skills to specific firm contexts. Leveraging unique population-level data from 99,927 manufacturing and service firms in Sweden, we employ a multistep empirical strategy to better understand the conditions and effects of hiring managers with consulting experience. Applying fixed-effects regressions and a Heckman-type selection model with a dynamic panel estimator, our methodology enables comprehensive evaluation of the value of former consultants as managers. First, we analyze the hiring stage, revealing that former consultants are recruited to counter declining firm growth. Second, we explore whether former consultants drive changes within hiring firms, and find that the number of reorganizations increases after hiring them. Finally, we assess whether such changes are valuable, and find that reorganizations induced by the hiring of former consultants yield superior firm performance. Given that the same is not true for managers with traditional career backgrounds, our findings have important implications for theory linking managerial qualities to performance effects.

Gender wage discrimination is a grand challenge that constrains economic growth worldwide and denies women fair opportunities. Yet, we know surprisingly little about how women’s own experiences of wage discrimination steer their career decisions. We adopt the perspective of job-seeking women and argue that prior exposure to wage discrimination reshapes their employer preferences. Specifically, it can flip the liability of foreignness typically faced by foreign MNCs into a perceived employer advantage because foreign MNCs can deviate from the host country’s gender-biased norms. We study this mechanism for 165,624 female professionals and managers who changed jobs in Denmark between 2002 and 2015, using a pay transparency law from 2006 for identifying the underlying mechanism. We find that women who have suffered larger wage discrimination in domestic employment are more likely to start working for foreign MNC subsidiaries. This effect is weaker in labor markets in which high-performing domestic employers can offer other benefits, such as reputation or job security. The effect is stronger when foreign MNC subsidiaries signal gender fairness through a higher share of women in management. Overall, our findings show how wage discrimination redirects female career paths, transforming a grand challenge into a strategic advantage for foreign MNCs.

Threats from patent litigations are a major roadblock for the internationalization strategies of MNCs from emerging markets (EMNCs). While existing theory focuses on weak patent systems in emerging economies as an obstacle for multinational corporations from developed economies, we conceptualize them as experiential learning contexts that shape the patent litigation routines of local firms. We reason that the depth of organizational learning from patent litigation experiences as defendants in weak, domestic patent systems is counterproductive for EMNCs. Such experiences lead to the development of patent litigation routines that are ill-suited for operating in countries with strong patent systems, thereby exposing EMNCs to costly patent litigations. We find empirical support by analyzing 2,273 Indian firms between 2007 and 2017. Learning from operating in many countries with strong patent systems and experience with international, as opposed to national, patent filings create boundary conditions.

Employees with relevant knowledge and skills for digitalization have become increasingly important for the competitiveness of MNCs. However, the shortage of such digital human capital in many host countries is putting pressure on MNC subsidiaries to prevent these employees from leaving. We theorize that the retention of digital human capital in MNC subsidiaries does not merely depend on salaries but crucially on the learning opportunities that subsidiaries offer. By integrating mechanisms from the literature on subsidiary-specific advantages into theoretical models explaining voluntary mobility constraints of employees, we reason that the opportunities for acquiring new skills in subsidiaries with advanced digital expertise will reduce the odds of losing these valuable employees. We test our theoretical predictions for 11,598 employees with digital human capital working for 866 foreign MNC subsidiaries in Denmark observed between 2002 and 2012. We find that digital expertise helps retaining digital human capital. The effect is stronger if subsidiaries have an internationally diverse workforce and when they possess patented technologies. Both factors provide distinct learning opportunities from digital expertise. The effect is weaker if the subsidiary is located in regional clusters of digital expertise since alternative employers may offer similar learning opportunities.

Access to unique knowledge of a target firm is the strategic rationale for many firm acquisitions with the expectation of improving the acquirer's innovation performance. We argue that the acquisition price reflects opportunities for value creation through innovation and investigate whether acquirers pay not just for the target firm's knowledge but also for the opportunity to access localized knowledge when targets are embedded in the knowledge flows of their region. Accordingly, we integrate embeddedness theory with literature on the expectations for knowledge-based value creation in M&A. We hypothesize that target firms that are highly embedded in local knowledge flows have higher acquisition prices. Using data on 520 technology-oriented firm acquisitions in Europe between 2001 and 2010, we find that the acquisition price increases with the target firm's local embeddedness. The effects are weaker when an acquirer's knowledge base is closely related to the localized knowledge and stronger when the target's knowledge base is closely related to the localized knowledge, suggesting that local embeddedness conditions the ability of acquirer and target to absorb localized knowledge.

Enforcing a firm's patents is crucial for defending its competitive advantage. CEOs are central for making these strategic decisions but we know little about how their individual incentives shape their decision-making. We integrate theory from outcome-based CEO compensation designs into models explaining firms' decisions to become plaintiffs in patent litigation. Based on how compensation shapes time horizons and risk-taking of CEOs, we predict that CEO compensation tied to stock increases the firm's likelihood to enforce patents, while bonuses and stock options reduce it. Further, we reason that the tenacity of patent disputes in an industry creates a boundary condition for the effects of CEO compensation because they curtail the degree of agency that CEOs have for incorporating their personal incentives when making litigation decisions for the firm. We test these hypotheses for 2302 US firms with 4420 different CEOs and 3451 patent litigation cases between 1997 and 2015 and find support for all hypotheses with the exception of the boundary condition for stocks as CEO compensation. These findings advance existing theory on firms' decision-making on patent litigation by explicating how firm and CEO incentives can diverge with direct consequences for the likelihood of litigation to occur.

Artificial intelligence (AI) provides ample opportunities for enabling effective knowledge sharing among organizations seeking to foster open innovation. Past research often investigates the capability of AI to perform ‘human’ tasks in structured application fields. Yet, there is a lack of research that systematically analyzes when and how AI can be used for the more complex and unstructured tasks of open innovation (OI). We present a framework for leveraging AI-enabled applications to foster productive OI collaborations. Specifically, we create a 3x3 matrix by aligning the three OI stages (initiation, development, realization) with the three management functions of AI (mapping, coordinating, controlling). This matrix assists in identifying how various AI applications may augment or automate human intelligence, thereby helping to resolve prevailing OI challenges. It provides guidance on how organizations can use AI to establish, execute and govern exchanges across the OI stages. Finally, we lay out an agenda for future research.

We investigate the effect of R&D subsidies on firms’ innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms. This heterogeneity is robust using various estimators. Domestic firms have a larger response in R&D spending in low-tech and medium-term manufacturing, while the effect in high-tech manufacturing is larger for both domestic and foreign MNCs. In knowledge-intensive services and technological services, the response of domestic firms and in some cases foreign MNCs, is greater than that of domestic MNCs. In terms of patents, foreign MNC subsidiaries tend to have a larger count in high-tech manufacturing.

Prior research on the performance effects of hiring immigrants has mainly considered people who choose to move to other countries. We shift attention to forced migrants (i.e., refugees) and study the relationship between their employment and firm performance. We focus on the specific labor market conditions that refugees face and theorize that performance improves among firms that hire refugees. We explain this relationship using two interconnected mechanisms that revolve around refugees’ limited outside options. First, as refugees have strong incentives to remain employed, they put extensive effort into their jobs, work long hours, and, thereby, reduce the employer’s labor costs related to worker turnover (effort mechanism). Second, as refugees are generally willing to accept low pay, hiring them reduces the employer’s labor costs related to salaries (remuneration mechanism). Moreover, we theorize that greater job insecurity at the hiring firm strengthens both mechanisms because it increases refugees’ perceived risk of being fired and their fear of being unemployed. We find support for our theoretical predictions in a matched sample of 27,782 firms in Denmark covering the period from 2001 to 2016. History: This paper has been accepted for the Organization Science Special Issue on Migration and Organization. Funding: V. Rocha received financial support from the Carlsberg Foundation [Grant CF21-0156]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.15980 .

Wage discrimination against women remains a major obstacle to fair economic opportunities for women and a grand challenge constraining economic growth in many countries. Existing research is ambivalent about whether foreign MNC subsidiaries as employers of women offer a solution to this grand challenge. On the one hand, foreign MNC subsidiaries can pay higher wages to women because they are outsiders to the host country and can deviate from social norms that disadvantage women. On the other hand, they suffer from the liabilities of foreignness that limit their attractiveness as employers for women relative to domestic firms. We theorize that the latter factor becomes less important as the level of wage discrimination against women by domestic employers increases, so that foreign MNC subsidiaries become more attractive employers when women change jobs. We isolate two boundary conditions for this effect based on (a) whether women can observe wage premiums at foreign MNC subsidiaries in local labor markets and (b) when foreign MNC subsidiaries deviate from social norms in the labor market by relying more on female top managers than domestic employers. We test and support these hypotheses for 123,343 female professionals/managers who changed jobs in Denmark between 2000 and 2016.

The delegation of decision-making authority from founders to dedicated managers is an important step in the professionalization of startups. However, such delegation changes the distinct nature of startups as workplaces with frequent interaction between founders and their employees. We build on theory of relational disruption in workplaces and theorize how delegation of decision-making authority affects employee retention. We reason that through delegation, employees lose opportunities to learn from founders and influence startup decisions. As a result, relational advantages of startup employment decrease, leading to employee mobility. Moreover, employees are particularly likely to leave after decision-making has been delegated when they are early in their careers and when founder teams are small. Using a sample of 13,737 employees in 1,797 German startups, we find support for our conjectures.

Exporting provides important learning opportunities for firms. Learning by exporting literature has primarily focused on general performance outcomes of learning such as productivity or technological innovation outcomes such as patents or product innovation. We use learning mechanisms from this literature and develop arguments for marketing innovation outcomes of learning by exporting. We further theorise how learning outcomes vary across firms depending on firms' levels of marketing and technological capabilities. We test these hypotheses using a panel of Spanish manufacturing firms for 2007-2013 and find that exporting is associated with more marketing innovations. This learning effect is stronger for firms with leading marketing capabilities, and this effect is independent from the technological leadership status of the firm.

When foreign MNC subsidiaries commercialize their products and services on foreign markets, they oftentimes rely on new marketing approaches such as a new pricing model adapted to local customers and competitors. Since MNC subsidiaries typically suffer from “liabilities of foreignness”, they depend on skilled marketing professionals who possess a deep understanding of host country markets to implement these marketing innovations. However, the value that these individuals can create for MNC subsidiaries vis-à-vis domestic firms and under which host country market conditions their B2B marketing skills are most valuable is poorly understood. We integrate mechanisms from research on value creation through marketing innovation in MNC subsidiaries into strategic human capital theory and predict higher value creation to translate into salary premiums for these individuals compared to when they would work for domestic firms. Moreover, we argue that these salary premium effects depend on the innovativeness of the host country competition which challenges MNC subsidiaries and makes marketing innovation even more salient. We test and support our hypotheses using employer-employee data for 25,374 marketing professionals from 2010 to 2012 in Denmark. The findings have broad relevance for the management of strategic human capital management in the creation of marketing innovation.

BSOs are large research organizations established purposefully to address fundamental and complex scientific research challenges that cannot be addressed in isolation by individual universities, research institutes, or even government agencies. Unlike universities and other national research institutes, BSOs are unique scientific organizations by virtue of their sheer size, level of complexity, and uncertainty with respect to the outcomes of research and development. BSOs involve large networks of suppliers and collaborators in science, government, and business, constituting a complex system with permeable boundaries that offer opportunities for technology transfer, knowledge accumulation, and business creation. Hence, BSOs are influential players within complex systems of innovation, learning, and business creation. Despite their important role for national and international economies as well as society at large, our current understanding of their management and impact is underdeveloped in both theory and practice. We know less about the challenges and opportunities for innovation and entrepreneurship in a context of changing economic, technological, and societal environments that arise in the broader ecosystem surrounding BSOs.