Abstract
Drawing on corporate entrepreneurship (CE) and social network research, this study focuses on strategic renewal as a form of CE and examines the impact of boundary-spanning at top and middle management levels on business units’ exploratory innovation. Analyses of multi-source and multi-level data, collected from 72 top managers (TMs) and 397 middle managers (MMs) operating in 34 units of a multi-national organization, indicate that TMs’ boundary-spanning is positively related to units’ exploratory innovation, but also has a cascading effect on MMs by increasing their perceived role conflict. MMs’ role conflict is negatively related to units’ exploratory innovation and thus offsets some of the benefits gained through TMs’ boundary-spanning activities. Taking a configurational perspective on social exchanges at multiple levels, we show that role conflict is reduced by overlapping boundary-spanning ties among TMs and MMs. Surprisingly, MMs’ boundary-spanning does not relate to exploratory innovation. Our study shows that with regard to boundary-spanning, a top-down approach to CE as strategic renewal may be most effective because TMs play a key role in driving exploratory innovation. However, TMs need to be aware of the cascading social liabilities of their boundary-spanning behavior and ensure MMs develop similar networks. We advance ongoing debates in studies about CE and social networks by providing empirically validated insights into who drives strategic renewal and by uncovering the benefits and costs of social exchanges for strategic renewal. Furthermore, we uncover potential causes of mixed findings in network theory research and highlight a remedy to social liabilities.