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Do Prior Experiences of Top Executives Enable or Hinder Product Market Entry?
Author(s) -
Ener Hakan
Publication year - 2019
Publication title -
journal of management studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.398
H-Index - 184
eISSN - 1467-6486
pISSN - 0022-2380
DOI - 10.1111/joms.12401
Subject(s) - dynamism , product (mathematics) , business , new product development , marketing , industrial organization , barriers to entry , action (physics) , empirical evidence , product market , economics , market structure , market economy , philosophy , physics , geometry , mathematics , epistemology , quantum mechanics , incentive
How firms achieve entry into new‐to‐the‐firm product markets is an important but overlooked topic. Some aspiring entrants fail during product development, and they miss the opportunity to enter. In such contexts, firms often take action to de‐risk entry, for example, by drawing upon the experience of top executives with market‐specific expertise obtained in prior jobs. However, the empirical evidence from this study shows that beyond a narrow threshold, greater prior experience in the top executive team was associated with a greater likelihood of failed entry attempts among the firms that I tracked over two decades in the biotechnology industry. This result held across product markets with low and high degrees of dynamism. Based on the literature on dynamic managerial capabilities, where entry into new markets indicates managers’ ability to reconfigure organizational resources and adapt to a changing environment, this study’s main contribution is to illustrate how and why experience matters for entry.