Olav Sorenson, Susan McEvily, Charlotte Rongrong Ren, and Raja Roy<\/strong><\/p>\n Although strategy research typically regards \ufb01rm scope as a positional characteristic associated with performance differences, we propose that broad contemporary scope also provides insight into the routines that govern \ufb01rm behavior. To attain broad scope, \ufb01rms must repeatedly explore outside the boundaries of their current niche. Firms with broad niches therefore operate under a set of routines that repeatedly propel them into new market segments, expanding their niche. These niche expansions, however, involve risky organizational changes, behavior that disadvantages generalists relative to specialists, despite the positional value of broad scope. Empirical analyses of machine tool manufacturers and computer workstation manufacturers support this conjecture: (i) generalists introduce new products at a higher than optimal rate, thereby increasing their exit rates; and (ii) generalists also more frequently launch new models with novel features or targeted at new consumer segments rather than improving only incrementally on existing products, further accelerating their odds of failure. After adjusting for these behavioral\u00a0differences, broad niche widths reduce exit rates, suggesting that they provide positional advantages. The paper discusses how this phenomenon may help to explain the diversi\ufb01cation and multi-nationality discounts.<\/p>\n Strategic Management Journal<\/a><\/em><\/strong>, 27 (2006): 915-936<\/a><\/p>\n