Product innovation in heterogeneous R&D networks: Pathways to exploration and exploitation

The questions of whether the effective internalization of external variance can help firms (re)balance exploration and exploitation by initiating and interlacing cycles of possibility and action, create superior value, attain a competitive advantage, and/or better cope with market or technological requirements present critical interest for organizational studies scholars. However, they have so far generated comparatively little systematic theoretical inquiry or empirical investigation.; This thesis focuses on the effects of ego-centric R&D networks and examines how and under what contingencies diverse external alliances help focal firms grasp and convert varied external information into desirable firm-level outcomes. It answers three related questions: (1) can more heterogeneous R&D networks stimulate innovation, (2) can different types of external R&D ties provide a source of competitive advantage, and (3) can diverse R&D alliance sets improve performance under specific environmental conditions? The three complementary studies included in this dissertation suggest that relational ties spanning different pools of expertise channel a mosaic of naive insights, pseudocapabilities, and fresh opportunities into the focal firm. Together, they show that heterogeneous R&D alliances can offer a source of superior exploration and exploitation revenues, a source of above-average innovativeness and competitive advantage, and a source of improved fit to different environments.; The first study argues that participation in heterogeneous R&D networks contributes to both exploration and exploitation up to a certain threshold and that several intraorganizational capabilities operate as intervening mechanisms, mediating between external heterogeneity and innovation outcomes. The second study suggests that interorganizational strategies provide an important but under-studied origin of competitive advantage. It proposes that distinct types of R&D networks---generative, horizontal, vertical, and cross-border ties---help firms initiate an exploration path and achieve above-average growth, although small firms may benefit less from interoganizational strategies than their larger peers. The third manuscript treats external R&D networks as levers or buffers for idiosyncratic in-house capabilities under specific environmental conditions. It argues that organizationally- and geographically-diverse R&D alliances sets can temporarily support higher levels of performance than internal capabilities may allow, either by strengthening the performance effects of environmentally-fit capabilities or by weakening the effects of unsuitable ones. (Abstract shortened by UMI.)...