Wisconsin School of Business

Hart Posen

Associate Professor

Associate Professor - Management & Human Resources

Dr. Posen is an internationally recognized scholar conducting research on innovation strategy. His research and teaching is informed by a prior engagement as an entrepreneur in the technology and retail sectors. He is regularly invited to lecture on issues of strategy to academic and corporate audiences in North America, Europe, and Asia.

Dr. Posen holds a PhD in Strategy from the Wharton School at the University of Pennsylvania. He is currently an Associate Professor of Management at the University of Wisconsin. He was previously on faculty at the University of Michigan, and has held affiliate appointments at Seoul National University (S. Korea), the Technion (Israel), and the University of Zurich (Switzerland).

In studying innovation strategy, Dr. Posen's research focuses on what he terms the “knowledge generation-erosion cycle." He studies the process of knowledge generation that leads to innovative products, processes, and intellectual property. He also studies the mechanisms by which the value of this knowledge is eroded. Employing computational and empirical methods, Dr. Posen studies technological change, competition by entrants, and the enduring possibility that the innovator does not survive. He currently focuses on knowledge spillovers to rivals resulting from imitation and the consequences of different imitation strategies.

Dr. Posen's research is regularly published in leading strategy journals. He holds influential editorial board positions at journals including: Academy of Management Journal, Administrative Science Quarterly, Organization Science, Strategic Management Journal, and Strategic Organization. His commentary on economic issues has appeared in a variety of media outlets including the New York Times and BBC.
 

Selected Published Journal Articles


Posen, H., & Chen, J. (2013). An Advantage of Newness: Vicarious Learning Despite Limited Absorptive Capacity.
Article AbstractEntrants are often viewed as suffering from a “liability of newness”—at founding they rarely possess the knowledge and capabilities necessary to compete and survive. They can overcome this liability by learning vicariously from the knowledge of incumbent firms. But how can entrants learn from external knowledge when they lack the prior related knowledge that forms the basis of absorptive capacity? We theorize that the process of internal experiential learning facilitates learning from external knowledge, particularly for entrants. To test this theory, we examine learning using a comprehensive set of U.S. commercial banking firms, including a full census of entrants. Our estimates suggest that the share of vicarious learning realized in the process of experiential learning is twice as large for entrants as for incumbents. In this sense, entrants enjoy an “advantage of newness” in learning.
Organization Science (24), 1701-1716.
Ethiraj, S., & Posen, H. (2013). Do Product Architectures Affect Innovation Productivity in Complex Product Ecosystems?.
Article AbstractIn this paper, we seek to understand how changes in product architecture affect the innovation performance of firms in a complex product ecosystem. The canonical view in the literature is that changes in the technological dependencies between components, which define a product’s architecture, undermine the innovation efforts of incumbent firms because their product development efforts are built around existing architectures. We extend this prevailing view in arguing that component dependencies and changes in them affect firm innovation efforts via two principal mechanisms. First, component dependencies expand or constrain the choice set of firm component innovation efforts. From the perspective of any one component in a complex product (which we label the focal component), an increase in the flow of design information to the focal component from other (non-focal) components simultaneously increases the constraint on focal component firms in their choice of profitable R&D projects while decreasing the constraint on non-focal component firms.
Advances in Strategic Management (30), 127-166.
Posen, H., Martignoni, D., & Lang, M. (2013). Rubik's dilemma: Partial knowledge and the efficacy of learning. Academy of Management Proceedings
Posen, H., Lee, J., & Yi, S. (2013). The Power of Imperfect Imitation.
Article AbstractWe examine the power and limitations of imitation. Naive intuition may hold that the efficacy of imitation would be diminished by imperfections in copying high-performing firms. Employing a computational model, we find that imperfect imitation can generate unexpectedly good outcomes for follower firms – indeed, better than the outcomes achieved if they were perfect imitators. Imitation, from time to time, enables follower firms to surpass superior firms. Our model demonstrates this dynamic process increases the average performance of all firms in the industry relative to that achieved if firms were perfect imitators. This finding suggests there is an adaptive role to mechanisms, such as bounded rationality, that make perfect imitation difficult.
Strategic Management Journal (34), 149-164. doi: 10.1002/smj.2007.
Posen, H., & Levinthal, D. (2012). Chasing a Moving Target: Exploitation and Exploration in Dynamic Environments.
Article AbstractA common justification for organizational change is that the circumstances in which the organization finds itself have changed, thereby eroding the value of utilizing existing knowledge. On the surface, the claim that organizations should adapt by generating new knowledge seems obvious and compelling. However, this standard wisdom overlooks the possibility that the reward to generating new knowledge may itself be eroded if change is an ongoing property of the environment. This observation in turn suggests that environmental change is not a self-evident call for strategies of greater exploration. Indeed, under some conditions the appropriate response to environmental change is a renewed focus on exploiting existing knowledge and opportunities. We develop a computational model based on the canonical multiarmed bandit formulation of exploration and exploitation. We endeavor to understand the mechanisms by which environmental change acts to make purposeful efforts at organizational adaptation less (or more) valuable.
Management Science (58), 587-601.
Knott, A., & Posen, H. (2009). Firm R&D Behavior and Evolving Technology in Established Industries.
Article AbstractOne of the key mechanisms of firms’ strategic renewal is R&D, and a key driver of the intensity of R&D is industry context. A number of theories develop propositions linking industry factors to firm R&D behavior, but these theories lack consensus. To date, empirical tests have been unable to resolve the competing predictions because of lack of time- varying measures of technology. We create new measures for technology and then conduct a test of the competing theories. Our results indicate that the data best match a model of innovative behavior in which firms invest in R&D principally to regain eroded advantage rather than to pursue the new frontier.
Organization Science (20), 352-367. doi: 10.1287/orsc.1070.0332.
Knott, A., Posen, H., & Brian, W. (2009). Spillover Asymmetry and Why It Matters.
Article AbstractAlthough spillovers are a crucial factor in determining the optimal environment for innovation, there is no consensus regarding their impact on firm behavior. One reason for this may be that models differ in their assumptions for the functional form of the spillover pool. In industrial organization and economic geography, for example, the predominant convention is that all innovation within an industry/region contributes to a spillover pool that has a common value for all firms. An alternative convention prevalent in endogenous growth and evolutionary economics is that spillovers have directionality—the size of the relevant pool differs across firms. Knowing the correct functional form may facilitate theoretical consensus, either analytically (by modifying models’ assumptions) or empirically (by supporting a critical test of competing theories). We characterize and test the functional form of spillover pools for efficiency-enhancing innovation across 50 markets in the banking industry. Our results in that setting are consistent with expectations for asymmetric spillovers but inconsistent with expectations for pooled spillovers.
Management Science (55), 373–388. doi: 10.1287/mnsc.1080.0950.
Levinthal, D., & Posen, H. (2007). Myopia of Selection: Does Organizational Adaptation Limit the Efficacy of Population Selection?.
Article AbstractThis paper develops and tests a model of the effective- ness of selection processes in eliminating less fit organizations from a population when organizations are under- going adaptive change. Stable organizational traits, such as a search strategy or routine, do not imply that an organization’s performance will remain stable over time or that cross-sectional differences in performance will persist. These properties create the possibility that population-level selection processes will be inefficient in that organizations with potentially superior long-run performance will be selected out. We theorize that organizational-level adaptation often results in fluctuations in current performance across time. These fluctuations may attenuate the degree to which current performance differences among organizations are indicative of future performance. As a consequence, search strategies that generate systematically different performance trajectories, even if they share a common long-run outcome, will generate differing survival rates. These ideas are explored using a formal simulation model employing the framework of NK performance landscapes. Our central finding is that selection may be systematically prone to errors and that these selection errors are endogenous to, and differ markedly across, firms’ search strategies.
Administrative Science Quarterly (55), 586–620. doi: 10.2189/asqu.52.4.586.
Knott, A., & Posen, H. (2005). Is Failure Good?.
Article AbstractApproximately 80-90 percent of new firms ultimately fail. The tendency is to think of this failure as wasteful. We, however, examine whether there are economic benefits to offset the waste. We characterize three potential mechanisms through which excess entry affects market structure, firm behavior, and efficiency, then test them in the banking industry. Results indicate that failed firms generate externalities that significantly and substantially reduce industry cost. On average these benefits exceed the private costs of the entrants. Thus failure appears to be good for the economy.
Strategic Management Journal (26), 617-641.
Knott, A., Bryce, D., & Posen, H. (2003). On the Strategic Accumulation of Intangible Assets.
Article AbstractThe Resource Based View holds that firms can earn supra-normal returns if and only if they have superior resources and those resources are protected by some form of isolating mechanism preventing their diffusion throughout industry. One isolating mechanism that has been proposed for intangible assets is their accumulation process. The hypothesis is that intangible assets are inherently inimitable because would-be imitators need to replicate the entire accumulation path to achieve the same resource position. Thus entrants can never catch up to incumbents. An interesting challenge to this hypothesis is counterfactual evidence that entrants sometimes outperform incumbents. Such counterfactual evidence should not exist if the theory is strictly correct. This paper attempts to reconcile resource accumulation theory with the counterfactual evidence. We do so by building an intermediate good production function for a firm's intangible asset stocks. We test the contribution of the intangible asset stock to the firm's final good production function and examine the extent to which that asset stock deters rival mobility in the pharmaceutical industry. We find that the asset accumulation process itself cannot deter rivals, because asset stocks reach steady-state rather quickly. Entrants can achieve an incumbent's intangible asset stock merely by matching its investment until steady-state. Thus we conclude that the accumulation process per se is not an isolating mechanism. While this is perhaps the most important contribution, another contribution is an empirical methodology for characterizing the accumulation function.
Organization Science (14), 192-207. doi: 10.1287/orsc.14.2.192.14991.

Selected Submitted Journal Articles


Posen, H., Martignoni, D., & Lang, M. How can imitation increase inter-firm heterogeneity?. Organization Science

Submitted Working Papers


Posen, H., & Cook, S. Surprise-Driven Innovation.

Presentations


National University of Singapore ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

Seoul National University ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

Singapore Management University ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

Yonsei University ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

Frankfurt School of Finance and Management ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

University of Lugano (USI) ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

Academy of Management ( 2013 ) Fortune Favors Fools: How Confidence Can Compensate for Competence in Learning

Academy of Management ( 2013 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Atlanta Competitive Advantage Conference ( 2013 ) Rubik's dilemma: Partial knowledge and the efficacy of learning

TOM Symposium - New York University ( 2013 ) Second Order Knowledge and the Efficacy of Learing

University of Minnesota ( 2013 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

George Mason University ( 2013 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning.

Organization Science Winter Conference (Plenary Speaker) ( 2013 ) E Pluribus Unum: Organizational Size and the Efficacy of Learning

Bacconi University ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

INSEAD ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

University of Arizona — Eller College of Management ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Ecole Polytechnique Fédérale De Lausanne (EPFL) ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Strategic Management Society ( 2012 ) Does size matter? Organizational size and the efficacy of experimental learning.

Strategic Management Society ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Swiss Federal Institute of Technology (ETH) ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Freie Universität Berlin ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Universitat Pompeu Fabra — TOM Symposium ( 2012 ) Rubik's Dilemma: Partial Knowledge and the Efficacy of Learning

Atlanta Competitive Advantage Conference ( 2012 ) Does size matter? Organizational size and the efficacy of experimental learning.

University of Wisconsin School of Business ( 2012 ) An advantage of newness: Vicarious learning with limited absoptive capacity.

Georgetown University — McDonough School of Business ( 2012 ) An advantage of newness: Vicarious learning with limited absoptive capacity.

Seoul National University ( 2012 ) An advantage of newness: Vicarious learning with limited absoptive capacity.

Univerisity of Michigan — Psychology Dept. Decision Sciences Seminar ( 2012 ) Does size matter? Organizational size and the efficacy of experimental learning.

DRUID ( 2011 ) The power of imperfect imitation.

LMU — Ludwig Maximilian University of Munich ( 2011 ) Does size matter? Organizational size and the efficacy of experimental learning.

New York University, Stern School of Business ( 2011 ) The power of imperfect imitation.

Seoul National University ( 2011 ) The power of imperfect imitation.

University of Michigan — Strategy Brown Bag Seminar ( 2011 ) Does size matter? Organizational size and the efficacy of experimental learning.

University of Southern Denmark ( 2011 ) The power of imperfect imitation.

Academy of Management ( 2010 ) The power of imperfect imitation.

Atlanta Competitive Advantage Conference ( 2010 ) The power of imperfect imitation.

Midwest Strategy Meeting ( 2010 ) The power of imperfect imitation.

Organization Science Winter Conference ( 2010 ) The power of imperfect imitation.

Strategic Research Forum ( 2010 ) The power of imperfect imitation.

Academy of Management ( 2009 ) Is competition good? Competition, learning, and the performance of new entrants.

Duke University, Fuqua School of Business ( 2009 ) Chasing a moving target: Learning in dynamic environments.

Organization Science Winter Conference ( 2009 ) Bringing context to the exploration-exploitation trade-off: Considering the impact of selection and turbulent environments.

University of Minnesota, Carlson School of Business ( 2009 ) Chasing a moving target: Learning in dynamic environments.

Academy of Management ( 2008 ) Bringing context to the exploration-exploitation trade-off: Considering the impact of selection and turbulent environments.

University of Michigan — Hosmer Seminar Series ( 2008 ) Firm R&D behavior and evolving technology in established industries.

University of Western Ohio, Ivey School of Business ( 2008 ) Bringing context to the exploration-exploitation trade-off: Considering the impact of selection and turbulent environments.

Academy of Management ( 2007 ) Decomposing firm heterogeneity.

First Annual Internal Workshop on Entrepreneurship Research ( 2007 ) Is failure good?

INFORMS ( 2007 ) Dark side of balancing exploration and exploitation.

Organization Science Conference on Strategic Renewal ( 2007 ) Firm R&D behavior and evolving technology in established industries.

Strategic Management Society ( 2007 ) Decomposing firm heterogeneity.

Academy of Management ( 2006 ) Three essays on innovation and impact of capital.

INFORMS Annual Meeting ( 2006 ) Myopia of selection: Does organizational adaptation limit the efficacy of population selection?

Strategy Brown Bag Seminar ( 2006 ) Intermediate selection on a developmental journey.

Utah Winter Strategy Conference ( 2006 ) Intermediate selection on a developmental journey.

Dartmouth University, Tuck School of Business ( 2005 ) Do capital markets value firm capabilities?

Emory University, Goizueta Business School ( 2005 ) Do capital markets value firm capabilities?

Harvard Business School ( 2005 ) Do capital markets value firm capabilities?

INSEAD ( 2005 ) Do capital markets value firm capabilities?

London Business School ( 2005 ) Do capital markets value firm capabilities?

Rice University ( 2005 ) Do capital markets value firm capabilities?

Southern Methodist University ( 2005 ) Do capital markets value firm capabilities?

University of Michigan, Ross School of Business ( 2005 ) Do capital markets value firm capabilities?

University of North Carolina, Kenan-Flagler Business School ( 2005 ) Do capital markets value firm capabilities?

University of Washington ( 2005 ) Do capital markets value firm capabilities?

Washington University, Olin Business School ( 2005 ) Do capital markets value firm capabilities?

Academy of Management ( 2004 ) Do financial markets price firm strategies?

Academy of Management ( 2004 ) Intermediate selection on a developmental journey.

Strategic Management Society ( 2004 ) Do financial markets price firm strategies?

Strategic Management Society ( 2004 ) Spillover symmetry and why it matters.

University of California, Anderson School of Management ( 2004 ) Do capital markets value firm capabilities?

University of Ottawa ( 2004 ) Do capital markets value firm capabilities?

University of Western Ontario, Ivey School of Business ( 2004 ) Do capital markets value firm capabilities?

Academy of Management ( 2003 ) From riches to rags: Munificence and new venture performance.

Academy of Management ( 2003 ) Is architectural change always disruptive to incumbent firms? Some counterfactual evidence.

Harvard Strategy Conference ( 2003 ) Is failure good?

Strategic Management Society ( 2003 ) From riches to rags: Munificence and new venture performance.

Strategic Management Society ( 2003 ) Is architectural change always disruptive to incumbent firms? Some counterfactual evidence.

Academy of Management ( 2002 ) The munificence penalty: How excess resources impact new venture performance.


Professional Organizations


Strategic Management Society

Academy of Management - Business Policy and Strategy

Academy of Management - Business Policy and Strategy


Editorial and Reviewing Activities


Strategic Management Journal - Since September 2013
Editorial Board Member

Strategy Science - Since September 2013
Editorial Board Member

Academy of Management Journal - Since July 2013
Editorial Board Member

Administrative Science Quarterly - Since January 2013
Editorial Board Member

Strategic Organization - Since January 2012
Editorial Board Member

Organization Science - Since September 2011
Editorial Board Member

Strategic Entrepreneurship Journal - Since January 2009
Ad Hoc Reviewer

Academy of Management Journal - Since January 2005
Ad Hoc Reviewer

Administrative Science Quarterly - Since January 2005
Ad Hoc Reviewer

Industrial and Corporate Change - Since January 2005
Ad Hoc Reviewer

Organization Science - Since January 2005
Ad Hoc Reviewer

Management Science - Since January 2004
Ad Hoc Reviewer


Photograph of Hart Posen

Hart Posen

Associate Professor
 
Associate Professor | Management & Human Resources
(608) 262-9449
4263 Grainger Hall