PhD, Business Administration, 2016
Duke University, Fuqua School of Business
Dissertation: “Internal Capital, External Knowledge, and Random Draws: Three Drivers of Organizational Structure”
Committee: Ashish Arora/Sharon Belenzon (co-chairs), Aaron Chatterji, Wesley M. Cohen, Daniel A. Levinthal
University of North Carolina, Kenan-Flagler Business School
English and American Literature and Language
Professor Rios’ primary research focuses on the co-evolution of firm structure and strategy, with an emphasis on firm “adolescence”: The often rapid metamorphosis from start-up firm to established firm. A secondary and complementary stream of research looks more broadly at the way in which structure (once in place) moderates subsequent performance, especially for innovative firms. His work has been published in top-ranked journals, including Strategic Management Journal and Management Science. Prior to academia, Professor Rios held a number of positions which inform his research, such as Managing Director for a diversified investment group, entrepreneur, and literary agent.
Luis A. Rios, D. Rachinskii, R. Cross (2017), A model of hysteresis arising from social interaction within a firm, Journal of Physics, Conference Series 811 (1).
Abstract: This paper subscribes to the view that a key distinguishing feature of a firm is its social nature. We present a model in which hysteresis arises from the social interactions between employees. Employees have a simple response to incentives in the form of the pay available outside the firm relative to that available within the firm. Allowing for social interaction, whereby employees are influenced by the effort levels of fellow employees, leads to the distinctive effects, such as lazy relay responses to incentives, associated with hysteresis.
Luis A. Rios, D. Rachinskii, R. Cross (2017), On the rationale for hysteresis in economic decisions, Journal of Physics, Conference Series 811 (1).
Abstract: In the social sciences there are plausible reasons to postulate that hysteresis effects are important. The available evidence, however, is predominantly at the macro level. In this paper we review the evidence regarding hysteresis in the neural processes underlying human behavior. We argue that there is a need for experimental and neuroimaging studies to fill the gap in knowledge about hysteresis processes at the micro level in the social sciences.
A. Arora, S. Belenzon, Luis A. Rios (2014), Make, buy, organize: The interplay between research, external knowledge, and firm structure, Strategic Management Journal, 35 (3).
Abstract: We bridge current streams of innovation research to explore the interplay between R&D, external knowledge, and organizational structure—three elements of a firm's innovation strategy, which we argue should logically be studied together. Using within-firm patent assignment patterns, we develop a novel measure of structure for a large sample of American firms. We find that centralized firms invest more in research, and patent more per R&D dollar, than decentralized firms. Both types access technology via mergers and acquisitions, but their acquisitions differ in terms of frequency, size, and integration. Consistent with our framework, their sources of value creation differ: while centralized firms derive more value from internal R&D, decentralized firms rely more on external knowledge. We discuss how these findings should stimulate more integrative work on theories of innovation. Copyright © 2013 John Wiley & Sons, Ltd.
S. Belenzon, T. Berkowitz, Luis A. Rios (2013), Capital markets and firm organization: How financial development shapes European corporate groups, Management Science, 59 (6).
Abstract: We investigate the effect of financial development on the formation of European corporate groups. Because cross-country regressions are hard to interpret in a causal sense, we exploit exogenous industry measures to investigate a specific channel through which financial development may affect group affiliation: internal capital markets. Using a comprehensive firm-level data set on European corporate groups in 15 countries, we find that countries with less developed financial markets have a higher percentage of group affiliates in more capital-intensive industries. This relationship is more pronounced for young and small firms and for affiliates of large and diversified groups. Our findings are consistent with the view that internal capital markets may, under some conditions, be more efficient than prevailing external markets, and that this may drive group affiliation even in developed economies.
Luis A. Rios (Under Review), A date with destiny: The impact of early environment on persistent innovation strategy.
Abstract: Using novel data on 1,211 public firms, I show that innovative organizations exposed to environments with lower M&A activity just after their initial public offering (IPO) respond by engaging in fewer technological acquisitions and more internal research. Interestingly, this adaptive reaction becomes inertial shortly after IPO and persists well into maturity. The study advances our understanding of how the environment shapes heterogeneity and capabilities through its impact on firm structure and accumulation of resources. I discuss how these results can help bridge inertial versus adaptive perspectives in the study of organizations, by documenting an instance when the two sequentially interact.
Argyres, N. Luis A. Rios, B. Silverman (Work In Progress), How do changes in organizational structure reshape innovator networks?.
Abstract: We use confidential information on changes to the formal R&D organizational structure of several firms to examine the effects of this managerial lever on traditional patent-based measures of innovative search and impact. After documenting the shift in innovation that follows changes to formal organization structure, we explore the mechanisms underlying this shift by examining the impact of changes in formal organization structure on the informal inventor network of relationships within these firms. This allows us to tease out the extent to which changes in organizational structure can affect innovation either directly or indirectly, by influencing the collaboration patterns of inventors within the firm.
This course encourages students to analyze the problems of managing the total enterprise in the domestic and international setting. The focus is on the competitive strategy of the firm, examining issues central to its long- and short-term competitive position. Students act in the roles of key decision-makers or their advisors and solve problems related to the development or maintenance of the competitive advantage of the firm in a given market. The first module of the course develops an understanding of key strategic frameworks using theoretical readings and case-based discussions. Students will learn concepts and tools for analyzing the competitive environment, strategic position and firm-specific capabilities in order to understand the sources of a firm's competitive advantage. In addition, students will address corporate strategy issues such as the economic logic and administrative challenges associated with diversification choices about horizontal and vertical integration. The second module will be conducted as a multi-session, computer-based simulation in which students will have the opportunity to apply the concepts and tools from module 1 to make strategic decisions. The goal of the course is for students to develop an analytical tool kit for understanding strategic issues and to enrich their appreciation for the thought processes essential to incisive strategic analysis. This course offers students the opportunity to develop a general management perspective by combining their knowledge of specific functional areas with an appreciation for the requirements posed by the need to integrate all functions into a coherent whole. Students will develop skills in structuring and solving complex business problems.
Emerging enterprises, the focus in this course, are small, new, fast-growing organizations. Their founders and managers face multifaceted challenges: how to assess the competitive position of their business model and develop a strategy; how to develop the internal organizational structure, culture, and policies for selecting and managing employees; and how to pursue global opportunities. We cover these challenges in separate modules on strategy, human and social capital, and global issues. The human and social capital module covers classic management challenges of aligning interests of the individual and the organization; managing individual psychological needs and social influences; and developing employee capabilities that provide competitive advantage. Also covered are unique challenges that yound organizations face, i.e. building an effective culture; recruiting, selecting, and retaining talent; building systematic approaches to motivating employees; coping with the stresses of rapid growth; and leveraging the benefits (and avoiding the liabilities) of the founder's powerful imprint. The strategy module covers fundamental issues central to the competitiveness of the enterprise. Because the strategy field is broad, MGMT 612 emphasizes topics and frameworks that are most relevant for younger firms, such as innovation, disruption, managing resource constraints, and building capabilities. However, a key insight of the module is the importance of seeing the playing field from the perspective of the competition. Thus, by the end of this section, students will have a robust grounding in strategy that will allow them to succeed, whether their career path leads to a Fortune 100 firm or a garage start up. The global module covers the emerging firm's decision about when (and whether) to internationalize. This decision must address which foreign markets to enter; the mode of entry; the sequence of moves to develop capabilities; what organizational form to choose; where to establish HQ; and how to adapt to the unique economic and institutional features of different markets. In all these issues, the emphasis is on how young, resource-constrained firms can position themselves profitably in globally competitive markets. For the final project, student teams provide integrated analysis across the modules for an emerging enterprise of their choice.