Jaeho Choi, Daniel Levinthal (Forthcoming), Wisdom in the wild: Generalization and adaptive dynamics, Organization Science. [PDF]
Abstract: Learning from experience is a central mechanism underlying organizational capabilities. However, in examining how organizations learn from past experiences, much of the literature has focused on situations in which actors are facing a repeated event. We direct attention to a relatively under-examined question: when an organization experiences a largely idiosyncratic series of events, at what level of granularity should these events, and the associated actions and outcomes, be encoded? How does generalizing from experience impact the wisdom of future choices and what are the boundary conditions, or factors that might mitigate the degree of desired generalization? To address these questions, we develop a computational model that incorporates how characteristics of opportunities (cf., acquisition candidates, new investments, product development) might be encoded so that experiential learning is possible even when the organization’s experience is a series of unique events. Our results highlight the power of learning through generalization in a world of novelty, as well as the features of the problem environment that reduce this “power.”
Jaeho Choi, Anoop Menon, Haris Tabakovic (2021), Using machine learning to revisit the diversification–performance relationship, Strategic Management Journal. 42(9): 1632-1661. [PDF]
Abstract: In this article, we examine the relationship between corporate diversification and firm performance using a machine learning technique called natural language processing (NLP). By applying a widely used NLP technique called topic modeling to unstructured text from annual reports, we create a new, multidimensional measure that captures the degree of diversification of both multisegment and single-segment firms. Additionally, we introduce a novel method to incorporate human judgments into the interpretation of machine-learned patterns, which allows us to measure diversification across multiple dimensions, such as products and geographies. Finally, we illustrate how these new measures can generate novel insights into the relationship between the degree and type of diversification and firm performance, furthering our understanding of the diversification–performance relationship.
Media coverage: Knowledge@Wharton
Jaeho Choi, Mooweon Rhee, Young-Choon Kim (2019), Performance feedback and problemistic search: The moderating effects of managerial and board outsiderness, Journal of Business Research, 102: 21-33. [PDF]
Abstract: Extending the research on performance feedback and problemistic search, which theorizes that firm performance below the aspiration level triggers organizational search behaviors, this study examines how the inside-outside distinction of the firm management team and board members can influence the allocation of organizational attention to the performance feedback process. A longitudinal study of Korean manufacturing firms demonstrates that while a firm management team's outside experience intensifies the firm's R&D investment in response to underperformance, this effect is substituted by the presence of outside directors on the board. Our results indicate that both managers and board members can have a notable influence on performance feedback and suggest that performance feedback research should examine the factors that affect the attention processing of key decision makers.
Work In Progress
Jaeho Choi. "Generalization and Exploration in Novel Environments" [Job market paper]
Jaeho Choi, Ji-Hyun Kim, Mooweon Rhee. Decision rules and risk-taking dynamics. [Preparing for submission]
Jaeho Choi. "Strategic change, differentiation, and performance: A text-based analysis." [Data analysis stage]
Jaeho Choi, Jason Lee. "Learning from user feedback." [Data analysis stage]