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Volume 30, Issue 4, Jul/Aug 2019
1. Title: Safe or Profitable? The Pursuit of Conflicting Goals.
Authors: Gaba, Vibha; Greve, Henrich R.
Abstract: In this study, we examine how multiple and sometimes conflicting goals are prioritized and pursued in organizations. Theories of coalitions and political behavior address prioritization among goals and changes in goal emphasis over time but cannot accurately predict the behavior of organizations that pursue conflicting goals. By linking theories of performance feedback theory and variable risk preferences, we show that performance shortfalls relative to aspirations on multiple goals can trigger managerial concerns for organizational failure. In such situations, the goal perceived as more important for survival gets priority and triggers stronger reactions. Empirically, we examine how airlines' dual focus on safety and profitability affects decisions regarding fleet changes. In the airline industry, safety and profitability have clear conflicts (at least in the short term) owing to the costs of replacing aircraft models with poor safety records. We find evidence that airlines pursue fleet safety goals, but the nature and extent of that pursuit depend on whether the firm's profitability goals are being met. As predicted, the responsiveness to safety goals is strengthened by low profitability because safety is associated more closely with survival. The study augments existing research on multiple goals by emphasizing the nature of goal interdependencies and its implications for behavior in organizations.
2. Title: The Dynamics of Learning and Competition in Schumpeterian Environments.
Authors: Giustiziero, Gianluigi; Kaul, Aseem; Wu, Brian.
Abstract: In this study, we examine the nature of Schumpeterian competition between entrants and incumbents. We argue that incumbents may respond to the threat of entry by either attacking the entrant or trying to learn from it, and that entrants, in turn, may react by either reciprocating the incumbent's advances or retreating from it. Putting these competitive choices together, we develop a framework of four distinct potential scenarios of Schumpeterian competition. In particular, we emphasize a scenario we term creative divergence, wherein incumbents try to learn from entrants and build on their technologies, but their investments to do so cause entrants to retreat, resulting in diminishing returns to learning investments by incumbents. Exploratory analyses of the U.S. cardiovascular medical device industry find patterns consistent with the creative divergence scenario, with incumbent knowledge investments helping them to learn from entrants, but these learning benefits being undermined as entrants move away from incumbents. The online appendices are available at https://doi.org/10.1287/orsc.2018.1264.
3. Title: Employee Learning from Failure: A Team-as-Resource Perspective.
Authors: Wilhelm, Hendrik; Richter, Andreas W.; Semrau, Thorsten.
Abstract: Whether, and to what extent, employees learn from their failure experiences remains an unresolved issue for practitioners and scholars alike. On the one hand, failure provides individuals with opportunities for learning, whereas on the other hand, failure can also trigger defensive reactions that stifle learning. The present study expands experiential learning theories by incorporating the social context, thus offering a more comprehensive understanding of employee learning from failure. Specifically, we propose that team contexts that are psychologically safe and exhibit a well-developed transactive memory system provide important socioemotional and informational resources, enabling individual employees to seize the learning opportunities inherent in failure. Analysis of archival data on individual failure and subsequent performance in the domain of workplace creativity from 218 employees working in 42 teams supports our hypotheses. Employees are more likely to learn from their failure experiences if they work in teams with medium-to-high levels of psychological safety. Under these conditions, individual learning from failure is further stimulated by a well-developed transactive memory system. Our results also demonstrate the behavioral pathway linking failure experiences to subsequent outcomes. Interview data from 28 employees further illustrate the processes underlying these findings.
4. Title: Transferring Tacit Know-How: Do Opportunism Safeguards Matter for Firm Boundary Decisions?
Authors: Eapen, Alex; Krishnan, Rekha.
Abstract: In recent years, scholars have demonstrated that capability theories of firm boundaries are fundamentally intertwined with contractual arguments. A productive use of capability arguments, therefore, is when they are joined with contractual ones in an integrated theory of the firm. However, contractual and capability scholars have traditionally held incommensurable views on the relevance of opportunism safeguards for a theory of the firm. Sponsors of the contractual view treat opportunism safeguards as fundamental, whereas several scholars in the knowledge-based strand of the capabilities camp consider it redundant. Moreover, in several recent integrative efforts, opportunism and safeguarding against it feature as linchpin theoretical ideas. To fully integrate contractual and capability theories, therefore, there is a need to resolve this point of incommensurability. We revisit a specific problem in the international strategy literature where the opportunism debate has been significant—the transfer of tacit know-how by multinational firms—and employ moderator-effect hypotheses to test two alternative mechanisms for why tacit know-how is transferred internally. We test whether tacit know-how is transferred internally to safeguard against opportunism or, alternatively, to avail the coordination benefits of common routines within firms. Our results indicate the former and not the latter, and thereby support a cornerstone notion in recent efforts toward an integrated theory of the firm.
5. Title: Leveraging Minority Identities at Work: An Individual-Level Framework of the Identity Mobilization Process.
Authors: Cha, Sandra E.; Roberts, Laura Morgan.
Abstract: Research on the business case for diversity suggests that organizations may gain important advantages by employing individuals from minority identity groups—those that are historically underrepresented and lower status—such as distinctive perspectives and greater access to minority customers and constituents. Organizations' ability to capitalize on the promises of diversity ultimately depends on minority employees' willingness and ability to draw on their distinctive strengths at work. However, little research has explored how employees perceive and act on potential advantages associated with their minority identity at work. Addressing this gap, we draw on in-depth interviews with 47 racial minority (31 Asian American and 16 African American) journalists to develop a conceptual framework of the process of identity mobilization—the steps through which individuals can deliberately draw on or leverage their minority cultural identity as a source of advantage at work and how this process is sustained or disrupted over time. The framework includes four different pathways through which individuals can leverage their minority identity to facilitate progress toward work-related goals and four identity mobilization tensions that can disrupt the identity mobilization process. Our research has significant implications for theory and practice related to diversity, identity, and positive organizational scholarship.
6. Title: One Step Forward, Two Steps Back: How Negative External Evaluations Can Shorten Organizational Time Horizons.
Authors: DesJardine, Mark; Bansal, Pratima.
Abstract: Researchers have endeavored to explain the causes of short organizational time horizons because of the organizational and societal costs of corporate short-termism. These explanations, however, tend to confound cognitive with behavioral explanations, which masks the importance of cognitive biases. We address this oversight by situating our work in prospect theory and organizational search, which underscores the importance of external evaluations on organizational time horizons and the asymmetry of positive and negative evaluations. Specifically, we argue that negative evaluations will shorten organizational time horizons more than positive evaluations will lengthen them. In our research context of financial analysts, this means that "sell" recommendations will shorten time horizons more than "buy" recommendations will lengthen them. Our main thesis can help to explain rising short-termism among some publicly traded companies. We operationalize organizational time horizons by the language managers use during 3,136 quarterly earnings conference calls. We test our main hypothesis and other timing-related moderating effects on 98 extractives firms from 2006 to 2013.
7. Title: To Whom Are You True? Audience Perceptions of Authenticity in Nascent Crowdfunding Ventures.
Authors: Radoynovska, Nevena; King, Brayden G.
Abstract: The growing organizational scholarship on authenticity has drawn attention to both its symbolic and material consequences for—among other things—organizational status, identity, consumer ratings, and brand trust. However, our understanding of authenticity has tended to focus on the what—the attributes and content typically associated with authentic products, organizations, and experiences. We still lack a clear understanding of how audiences think about different aspects of authenticity and the mechanisms through which audiences' perceptions affect outcomes. In this paper we conduct three studies to investigate what people mean when they evaluate an organization as authentic, and what consequences this has for their support for the organization. In study 1 we build on existing theoretical frameworks to empirically derive three dimensions of authenticity: moral, idiosyncratic, and categorical. Using an online survey in the empirical setting of nascent crowdfunding ventures, we test the effects of these dimensions on audience members' funding decisions. We find that each of the authenticity dimensions proves significant for distinct support outcomes, notably by enhancing the likability (warmth) of the project and/or its creators in the minds of evaluators. Study 2 offers experimental support for the mediating role of likability—but not of assessments of competence—in explaining support for nascent organizations. Finally, study 3 provides evidence that regardless of which dimension of authenticity audiences draw on, the latter are positively related in their minds to an overall notion of authenticity. We draw implications for the study of authenticity as a multidimensional concept in organizations, with both perceptual and real consequences for the support of nascent ventures.
8. Title: On the Relationship Between Firms and Their Legal Environment: The Role of Cultural Consonance.
Authors: Giorgi, Simona; Maoret, Massimo; J. Zajac, Edward.
Abstract: In this study we seek to reconcile diverging dominant views on the relationship between firms and their legal environment by offering a cultural contingency perspective. We begin by accepting the notion that a new law will likely exert a powerful influence on targeted firms and that firms' strategic responses include efforts to shape the impact of the new law. However, we suggest that the success of such response will be contingent on the degree of cultural consonance of firms' strategic responses and the dominant cultural context at that time. We elaborate this view in our detailed qualitative and quantitative analyses of the automotive Safety Act of 1966 and the response by targeted firms. We provide evidence showing that the changes in the degree of cultural consonance of firms' strategic response and the predominant cultural beliefs/values explain both the early failure of firms' efforts to shape the impact of the law in the mid-1960s and the later success by the end of the 1970s. We highlight how firms' cultural context provides both a constraint and an opportunity for firms seeking to shape legal environmental pressures, and we conclude by discussing the implications of our dynamic contingency perspective for research on law, culture, and strategy.
9. Title: The Private Scope in Public–Private Collaborations: An Institutional and Capability-Based Perspective.
Authors: Quelin, Bertrand V.; Cabral, Sandro; Lazzarini, Sergio; Kivleniece, Ilze.
Abstract: There has been a growing interest in the organization of business activities at the public interface as illustrated by the emergent phenomenon of public–private partnerships (PPPs). In this study, we analyze the determinants of private scope in partnering with public actors—that is, the extent to which private actors are involved in multiple, consecutive value-creating activities in the partnership. Based on a unique data set of public–private agreements worldwide over two decades, we find that institutional and capability-based determinants jointly affect the extent of private scope in public–private collaborations. Our results highlight the contingent role of the quality of the institutional environment. Institutions not only facilitate greater private scope directly but also, moderate the effect of public and private capabilities on private scope. We find that prior public experience in PPPs enhances private scope in settings with high-quality institutions while having an opposing effect in low-quality environments. Moreover, public governance capabilities accumulated via units designed to deal with PPPs seem to substitute for the lack of high-quality institutions, suggesting that, even under weak institutional settings, countries can foster high private scope with the creation of pockets of specialized public capabilities. In contrast, private capabilities in PPPs, expressed as firm engagement in recurring government cofunded projects, seem to have a complementary effect: they help to increase private scope in PPPs but only when domestic institutions are of high quality. By highlighting the determinants of private actor involvement in public sector activities, our study offers important implications for the theory and practice of hybrid (cross-sector) organizational forms.
10. Title: Coupling Labor Codes of Conduct and Supplier Labor Practices: The Role of Internal Structural Conditions.
Authors: Bird, Yanhua; Short, Jodi L.; Toffel, Michael W.
Abstract: In response to media exposés and activist group pressure to eliminate exploitive working conditions, multinational companies have pushed their suppliers to adopt labor codes of conduct and improve their labor practices to meet the standards set forth in these codes. Yet little is known about the extent to which suppliers are improving their labor practices to conform to codes of conduct, especially in organizations in which legitimacy structures like codes compete with productivity-driving incentive structures. We theorize that the presence of particular internal structures will affect the extent to which suppliers' labor practices will become more tightly aligned—or coupled—with their formal commitments to adhere to labor codes. Specifically, we theorize high-powered productivity incentives to be associated with less coupling, and being certified to management system standards and having workers' unions to be associated with more coupling. We also argue that these efficiency and managerial structures will moderate each other's relationship to coupling, and that certification and unions will each increase the other's positive association with coupling. Using social audit data on 3,276 suppliers in 55 countries, we find evidence that supports our hypotheses. Our focus on the internal structural composition of suppliers extends the decoupling literature by theorizing and demonstrating conditions under which suppliers' core organizational functions are likely to be buffered from change by legitimacy structures. Furthermore, our findings suggest important strategic considerations for managers selecting supplier factories and provide key insights for the design of transnational sustainability governance regimes.
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