Transfer learning in ongoing and newly acquired components of multiunit chains: US nursing homes, 1991-1997

Multiunit chains proliferated rapidly during the twentieth century and now dominate much of the service sector landscape, often growing by acquiring components from other owners. Transfer learning plays a central but only partially understood role in chain strategy, in both ongoing and newly acquired components. Multiunit chains gain potential benefits of reliability and accountability when they standardize activities by transferring capabilities among their components. Moreover, with the importance of acquisition in chain growth, transfer learning plays a key role both in bringing the activities of newly acquired components in line with others in the chain, as well as offering the potential to infuse new capabilities into established units of a chain. We develop a model of chain-to-component and component-to-chain transfer learning in which the levels and similarity of a chain and its components' capabilities have direct and interactive effects on transfer learning across the ongoing and newly acquired components. We test the model using data on changes in capabilities at the facilities of all federally registered nursing home chains operating in the United States between 1991 and 1997. In contrast to past research in the learning curve tradition that uses changes in performance to infer how transfer learning influences components' capabilities, we operationalize transfer learning by measuring changes in service characteristics that lie closer to the underlying capabilities themselves. Our findings suggest that transfer learning among a chain's components tends to be localized within its established and newly-acquired components, providing new insights into the dynamics of chain capabilities. In particular, new acquisitions commonly lead to only limited changes at a chain's established components while chains may find it difficult to bring their newly acquired components in line with chain standards. In turn, this shows that acquisitions tend to change a chain's capabilities more by changing its portfolio of components and less through diffusion of new capabilities throughout the chain. Copyright 2006, Oxford University Press.

[1]  O. Williamson.  Markets and hierarchies, analysis and antitrust implications : a study in the economics of internal organization , 1975 .

[2]  Will Mitchell,et al.  Are More Good Things Better, or Will Technical and Market Capabilities Conflict When a Firm Expands? , 1992 .

[3]  P. Ingram,et al.  Organizational form as a solution to the problem of credible commitment: The evolution of naming strategies among U.S. hotel chains, 1896–1980 , 2007 .

[4]  Joel A. C. Baum,et al.  Interorganizational learning and the dynamics of chain relationships , 2001 .

[5]  Joel A. C. Baum,et al.  Making the Next Move: How Experiential and Vicarious Learning Shape the Locations of Chains' Acquisitions , 2000 .

[6]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[7]  Oliver Hart,et al.  Firms, contracts, and financial structure , 1995 .

[8]  W. Mitchell,et al.  Resource redeployment following horizontal acquisitions in Europe and North America, 1988-1992 , 1998 .

[9]  K. Arrow.  Economic Welfare and the Allocation of Resources for Invention , 1962 .

[10]  Jeffrey L. Bradach.  Using the Plural Form in the Management of Restaurant Chains , 1997 .

[11]  D. Teece.  Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy , 1993 .

[12]  Joel A. C. Baum,et al.  Survival-enhancing learning in the Manhattan hotel industry , 1998 .

[13]  Will Mitchell,et al.  Bilateral Resource Redeployment and Capabilities Improvement Following Horizontal Acquisitions , 1998 .

[14]  J S Zinn,et al.  The impact of market and organizational characteristics on nursing care facility service innovation: a resource dependency perspective. , 1996, Health services research.

[15]  野中 郁次郎,et al.  The Knowledge-Creating Company: How , 1995 .

[16]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[17]  D. Jorgenson.  The Rate and Direction of Inventive Activity. , 1963 .

[18]  Mal Schechter,et al.  Improving the Quality of Care in Nursing Homes , 1987 .

[19]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[20]  C. Coulton,et al.  Interaction Effects in Multiple Regression , 1993 .

[21]  John McGee,et al.  A LONGITUDINAL STUDY OF THE COMPETITIVE POSITIONS AND ENTRY PATHS OF EUROPEAN FIRMS IN THE U.S. PHARMACEUTICAL MARKET , 1996 .

[22]  D. Teece.  ECONOMIES OF SCOPE AND THE SCOPE OF THE ENTERPRISE , 1980 .

[23]  Lorne Olfman,et al.  Organizational Memory , 1998, Proceedings of the Thirty-First Hawaii International Conference on System Sciences.

[24]  Joel A. C. Baum,et al.  Chain Affiliation and the Failure of Manhattan Hotels, 1898-1980 , 1997 .

[25]  O. Williamson,et al.  Markets and Hierarchies: Analysis and Antitrust Implications. , 1977 .

[26]  Eric D. Darr,et al.  The Acquisition, Transfer, and Depreciation of Knowledge in Service Organizations: Productivity in Franchises , 1995 .

[27]  L. Argote.  Organizational Learning: Creating, Retaining and Transferring Knowledge , 1999 .

[28]  Eric D. Darr,et al.  An Investigation of Partner Similarity Dimensions on Knowledge Transfer , 2000 .

[29]  W. Mitchell,et al.  Path-dependent and path-breaking change: reconfiguring business resources following acquisitions in the U.S. medical sector, 1978–1995 , 2000 .

[30]  O. Williamson.  Comparative Economic Organization: The Analysis of Discrete Structural Alternatives , 1994 .

[31]  L. Argote,et al.  KNOWLEDGE TRANSFER: A BASIS FOR COMPETITIVE ADVANTAGE IN FIRMS , 2000 .

[32]  S. Winter,et al.  An Evolutionary Theory of Economic Change.by Richard R. Nelson; Sidney G. Winter , 1987 .

[33]  Henrich R. Greve,et al.  Patterns of Competition: The Diffusion of a Market Position in Radio Broadcasting , 1996 .

[34]  Joel A. C. Baum.  The Rise of Chain Nursing Homes in Ontario, 1971–1996 , 1999 .

[35]  J. Oxley.  Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach , 1997 .

[36]  M. Porter.  From Competitive Advantage to Corporate Strategy , 1989 .

[37]  D. Mowery,et al.  Strategic alliances and interfirm knowledge transfer , 1996 .

[38]  Joel A. C. Baum,et al.  It's All in the Name: Failure-Induced Learning by Multiunit Chains , 2003 .

[39]  J. Kimberly.  Organizational size and the structuralist perspective: a review, critique, and proposal , 1976 .

[40]  L. Capron.  The long‐term performance of horizontal acquisitions , 1999 .

[41]  Henrich R. Greve,et al.  Jumping Ship: The Diffusion of Strategy Abandonment , 1995 .

[42]  H. Shore,et al.  Improving the Quality of Care in Nursing Homes , 1987 .