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Charting the Territory: Recombination as a Source of Uncertainty for Potential Entrants

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  • Martina Montauti

    (Department of Strategy, IE Business School, 28006 Madrid, Spain)

  • Filippo Carlo Wezel

    (Università della Svizzera italiana, CH-6904 Lugano, Switzerland; and Strategy and Organization Department, EMLYON Business School, 69130 Ecully, France)

Abstract

In this paper, we conceptualize categories as regions of a cognitive map that structure the market and guide the investment decisions of potential entrants—i.e., of new and established organizations. We advance that, as a category appears altered via incumbents’ acts of recombination, potential entrants face market-specific uncertainty and are discouraged to invest in that category. These negative effects of recombination on market entries are, however, mitigated at increasing values of category status. We test our arguments in the market for electronic music. The analyses of product and organizational entries in music styles between 1978 and 2011 lend support to our arguments.

Suggested Citation

  • Martina Montauti & Filippo Carlo Wezel, 2016. "Charting the Territory: Recombination as a Source of Uncertainty for Potential Entrants," Organization Science, INFORMS, vol. 27(4), pages 954-971, August.
    • Handle: RePEc:inm:ororsc:v:27:y:2016:i:4:p:954-971
    DOI: 10.1287/orsc.2016.1064
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