Which boundaries? How mobility networks across countries and status groups affect the creative performance of organizations
| Author | Julien Clement,Andrew Shipilov,Frédéric C. Godart |
| Published date | 01 June 2017 |
| Date | 01 June 2017 |
| DOI | http://doi.org/10.1002/smj.2602 |
Strategic Management Journal
Strat. Mgmt. J.,38: 1232–1252 (2017)
Published online EarlyView 15 December 2016 in WileyOnline Library (wileyonlinelibrary.com) DOI: 10.1002/smj.2602
Received 27 May 2015;Final revision received4 October 2016
WHICH BOUNDARIES? HOW MOBILITY NETWORKS
ACROSS COUNTRIES AND STATUS GROUPS AFFECT
THE CREATIVE PERFORMANCE OF ORGANIZATIONS
ANDREW SHIPILOV,*FRÉDÉRIC C. GODART, and JULIEN CLEMENT
INSEAD, Fontainebleau, France
Research summary: Losing key employees to competitors allows an organization to engage in
external boundary-spanning activities. It may benet the organization through access to external
knowledge, but may also increase the risks of leaking knowledge to competitors. We propose that
the destination of departed employees is a crucial contingency: benets or risks only materialize
when employees leave for competitors that differ from the focal organization along signicant
dimensions, such as country or status group. In the context of the global fashion industry, we
nd that key employees’ moves to foreign competitors may increase(albeit at a diminishing rate)
their former employers’ creative performance. Furthermore, rms may suffer from losing key
employees to higher- or same-status competitors, but may benet from losing them to lower-status
competitors.
Managerial summary: Losing keyemployees to competitors can provide organizations with access
to external knowledge, but increase risks of leaking knowledge to competitors. We nd that an
organization’s access to externalknowledge and its risks of knowledge leakage through employee
mobility may be affected by whether its employees leave for competitors in a foreign country
or in a different status group. In the context of the global fashion industry, we show that key
employees’ moves to foreign competitors increase(up to a point) their former employers’ creative
performance. Furthermore, rms may suffer fromlosing key employees to higher- or same-status
competitors, but benet fromlosing them to lower-status competitors. Hence, executives in creative
industries and possibly beyondcould welcome losing employees to competitors in foreign countries
or to lower-status competitors. Copyright © 2016 John Wiley & Sons, Ltd.
INTRODUCTION
An organization enjoys superior creative perfor-
mance when it consistently generates novel and
useful products or services (Almeida, 1996; Cattani
and Ferriani, 2008; Godart, Shipilov, and Claes,
2014). Creative performance depends on multiple
social determinants (Cattani and Ferriani, 2008;
Keywords: employee mobility; networks; foreign experi-
ence; creative performance; boundary-spanning
*Correspondence to: Andrew Shipilov, Strategy Area, INSEAD,
Boulevard de Constance, Fontainebleau 77300, France. E-mail:
shipilov@insead.edu
Copyright © 2016 John Wiley & Sons, Ltd.
Perry-Smith and Shalley, 2003). One such deter-
minant is the presence of “boundary spanners”,
individuals who build social ties to other organiza-
tions (Barrett et al., 2012; Tushman and Scanlan,
1981). The existing literature provides a good
understanding of the mechanisms through which
organizations can benet from boundary spanners,
who provide access to new ideas from other rms.
As the focal organization recombines this external
knowledge with its own, it can consistently gener-
ate new ideas that result in novel and useful output
(e.g., Rosenkopf and Nerkar, 2001). However, the
benets of boundary spanning may be offset by its
costs: just as boundary spanners can access external
Mobility Networks 1233
knowledge, they can also leak the organization’s
own knowledge to competitors (Aime etal. , 2010;
Somaya, Williamson, and Lorinkova, 2008).
Available research assumes that these costs and
benets materialize whenever employees span the
formal boundary that separates their organization
from any other (e.g., Corredoira and Rosenkopf,
2010; Godart et al., 2014; Rosenkopf et al., 2001;
Uzzi and Spiro, 2005). This may be neglecting an
important contingency: boundary spanners should
generate different benets and costs for their orga-
nizations depending on which boundary they span.
Firms are likely to benet only when bound-
ary spanners connect them to competitors whose
knowledge is signicantly new relative to what
the rm already knows. Similarly, a rm should
experience costs only when its boundary spanners
leak knowledge to competitors that can exploit
this knowledge at the expense of the focal rm.
In this article, we focus on geography and status
differences as two factors that affect these bene-
ts and costs. Specically, we examine the con-
sequences of an organization’s losing employees
to competitors in foreign countries or different
status groups.
Employee mobility is a particular form of bound-
ary spanning that can trigger the two mechanisms
discussed above. As current employees of the focal
rm stay in touch with former colleagues or merely
pay attention to what their former colleagues are
doing, they are likely to incorporate competitors’
knowledge into the focal rm’s ideas and output
(Corredoira and Rosenkopf, 2010; Dokko and
Rosenkopf, 2010). Likewise, by hiring the focal
rm’s employees, competitors can learn what the
rm knows and incorporate this knowledge into
their own output (Phillips, 2002). Hence, both by
losing employees to competition and by hiring them
from competition, the rm becomes embedded
in the industrywide mobility network. Arguing
that the benets of access to knowledge and the
costs of knowledge leakage strengthen at different
rates with the degree of external mobility, prior
research has suggested the existence of a nonlinear
relationship between the number of competitors
to which a focal rm loses its employees and its
creative performance (Godart et al., 2014).
Yet, much like other studies on boundary
spanning, research on employee mobility and orga-
nizational creative performance remains agnostic
to differences among the competitors to which a
rm loses its employees, particularly to differences
driven by the competitors’ geographic location and
status (Corredoira and Rosenkopf, 2010; Dokko
and Rosenkopf, 2010; Godart et al., 2014). We
propose that by crossing country or status bound-
aries in search of new jobs, employees may affect
the balance of benets and costs experienced by
their former employer as a result of their mobility.
This is because rms located in different countries
or status groups have different knowledge from
those located within the same country or status
group. Thus, when an organization’s employees
move to competitors in foreign countries or dif-
ferent status groups, they affect both their former
organization’s ability to use knowledge from
these competitors and also the risks of competi-
tors’ benetting from the knowledge of the focal
organization.
We investigate our claims in a global, indus-
trywide longitudinal dataset (2000– 2010) compris-
ing information on the mobility of designers across
high-end fashion houses and these houses’ ability to
produce creative fashion collections. Our ndings
suggest that losing employees to foreign competi-
tors has a positive (concave) relationship with the
organization’screative performance, yet losing peo-
ple to domestic competitors has no impact. We also
nd that rms tend to benet from losing employees
to lower-status competitors, but suffer from losing
employees to the same or higher-status competitors.
This article contributes to research on how
boundary spanning in social networks— and
especially the networks formed through employee
mobility— affects organizational creativity (Cat-
tani and Ferriani, 2008; Dokko and Rosenkopf,
2010; Godart et al., 2014). Our results also offer
more precise prescriptions for organizations than
have been available to date: instead of merely
“spanning boundaries” to become exposed to
novelty, organizations could strive to span specic
types of boundaries, and avoid spanning others.
GEOGRAPHY, STATUS, AND CREATIVE
PERFORMANCE
The notion of formal organizational bound-
aries is a critical building block of organization
theory. Formal external boundaries separate
organizations from the outside world (McEvily,
Soda, and Tortoriello, 2014). These boundaries
emerge as organizations minimize transaction
costs (Williamson, 1981) or take advantage of
Copyright © 2016 John Wiley & Sons, Ltd. Strat. Mgmt. J.,38: 1232–1252 (2017)
DOI: 10.1002/smj
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