Knowledge that Transforms

Organizations are often pressured to adopt and maintain institutionally supported practices. Why do some companies remain committed to these practices, despite high operational cost and widespread frustration with them? Although prior theorists have emphasized the importance of institutional pressure at the broader population level, less research attention has been paid to the abandonment of a practice as a result of resource dependence between a firm and market intermediaries. In this paper, we theorize intermediary coverage breadth and depth as two important structural indicators of resource dependence. Firms lacking in coverage breadth (as indicated by the degree of reporting by market intermediaries) and firms with deeper coverage (as evidenced by a prolonged relationship with market intermediaries) are less likely to abandon a practice due to an increase in power imbalance and mutual dependence within the firm-intermediary relationships. We also theorize how a firm’s resource dependence, as determined by coverage structure, moderates the firm’s sensitivity to (1) observed peer support for the practice, (2) the intermediary’s expectation regarding the continued use of the practice, and (3) performance deviations that fail to meet intermediary expectations. Our empirical study of the abandonment of quarterly earnings guidance by U.S. public companies during 2001–2010 provides overall support for our theoretical arguments.

The current paper complements and extends traditional Penrosean theories of firm growth by examining how a (supplier) firm’s relational embeddedness with its portfolio of existing buyers affects its business growth. Our theorizing rests on the foundation that a firm’s business growth stems from its breadth (or volume) of opportunities for creating added value with buyers, which more fully realizes the Penrosean vision that firm growth can be explained by a dynamic interaction between productive resources and demand-side market opportunities. Although relational embeddedness may give a supplier dyadic advantages with focal buyers, which supports business growth, we theorize that it can also lead to narrower added value business opportunities with the supplier’s entire portfolio of buyers. Critically, we hypothesize that the effect of relational embeddedness on business growth is moderated by a set of relational and demand-side attributes. These hypotheses are tested on a panel data set of patent law firms (suppliers) and their relationships with corporate clients (buyers). We find that greater relational embeddedness is associated with slower supplier business growth, and consistent with our hypotheses, this negative effect is alleviated when these firms have greater cross-servicing ability and receive more relational commitment from buyers but exacerbated when suppliers hold more buyer-specific knowledge and when buyers undertake more (internal) concurrent sourcing. In turn, our research demonstrates how the attributes of a supplier’s relationships with its portfolio of buyers can impact access to new business opportunities and thus opens up new directions for research on firm growth, demand-side strategy and buyer-supplier relationships.

This paper focuses on how digital innovation develops in ecologies of distributed heterogeneous actors with contesting logics, diverse technologies, and various forms of orchestrations. Drawing on the insights from emerging theories of digital innovation augmented by an institutional logics perspective, we examine a case study of how residential internet infrastructure was shaped over 20 years by the interplay of self-organized residential communities, corporate internet service providers (ISPs), and a state ISP. Our analysis of this case leads to the identification of four types of interactions that shape the trajectories of digital infrastructure development beyond direct actor interplays and competitive or collaborative relationships. We label these interactions symbiotic generative, symbiotic mutualistic, parasitic complementary, and parasitic competitive and explain the processes and conditions of their development and their innovation outcomes. Drawing on these findings, we develop a model of symbiotic and parasitic interactions shaping digital infrastructure development and identify key characteristics of the ecologies where these emerge. The case study and the model that emerged aim to contribute to the growing field of research on complex and nonlinear paths of digital innovation development constituted by the dynamics of its distributed agency. The article concludes by highlighting avenues for future research.

We connect two distinct streams of research on categories to study the role of within-category typicality in the context of legitimacy shocks. We argue that, following a legitimacy shock, member organizations of the tainted, focal category suffer equally, irrespective of their typicality. However, only the typical members of the newly favored, oppositional category benefit. Therefore, the effects of legitimacy shocks are asymmetrically influenced by typicality. We argue this pattern is the result of a two-stage process of categorization by audiences, whereby audiences prioritize distinctions between organizations in a newly favored category and spend limited efforts considering distinctions in the tainted, focal category. We examine our theory in the context of the U.S. financial services industry, where four different kinds of organizations engage in competition: traditional commercial banks, community banks, single-bond credit unions, and multibond credit unions. Consistent with our theory, we show that both traditional commercial banks and community banks suffer in terms of deposit market share following the legitimacy shock of the 2007 financial crisis, but the relative gains to credit unions are strongest for single-bond credit unions.

Evaluating the attractiveness of startup employment requires an understanding of both what startups pay and the implications of these jobs for earnings trajectories. Analyzing Danish registry data, we find that employees hired by startups earn roughly 17% less over the next 10 years than those hired by large, established firms. About half of this earnings differential stems from sorting—from the fact that startup employees have less human capital. Long-term earnings also vary depending on when individuals are hired. Although the earliest employees of startups suffer an earnings penalty, those hired by already-successful startups earn a small premium. Two factors appear to account for the earnings penalties for the early employees: Startups fail at high rates, creating costly spells of unemployment for their (former) employees. Job-mobility patterns also diverge: After being employed by a small startup, individuals rarely return to the large employers that pay more.

This paper addresses the recognized need for connecting scholarship on materiality and evaluation by conceptualizing how materiality provides grounds for “valuation entrepreneurship.” It extends the scope of materiality scholarship by considering an ignored organizational outcome while offering stronger evidence for the role of supply-side factors in social evaluation. The theoretical model posits that materiality affords opportunities for identity construction and social organization that can lead to the emergence of a new theory of value contesting the evaluative regime. This framework is applied to the reanalysis of a famous case: Impressionism. The analysis shows that new materials and methods of painting served as a “focus” for the social organization of artists with a shared identity of craftsmen. These artists espoused a new theory of value that advocated the “unfinishedness” of artworks and used natural perception as an objective basis for contestation of the “subjective” evaluative regime at the salons. The contestation had political overtones, drawing on cultural resources and scientific tenets to justify the valorization of individuality and decentralization of art appraisal. An endogenous account of culture in action presents materiality as a natural counterpoint to the emphasis on conceptualization.

It is well established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and organization-specific factors. However, less is known about the moderating role of external forces such as market competition. Our theory posits that competition generates two counteracting effects—the residual market and competitor response effects—that vary with competition and jointly generate a curvilinear relationship between PfP effectiveness and competition. Weak competition discourages effort response to PfP because there is little residual market to gain from rivals, whereas strong competition weakens incentives because an offsetting response from competitors becomes more likely. PfP hence has the strongest effect under moderate competition. Field data from a bakery chain and its competitive environment confirm our theory and let us refute several alternative interpretations.

Members of global teams are often dispersed across time zones. This paper introduces the construct of temporal brokerage, which we define as being in a position within a team’s temporal structure that bridges subgroups that have little or no temporal overlap with each other. Although temporal brokerage is not a formal role, we argue that occupying such a position makes an individual more likely to take on more coordination work than other members on the team. We suggest that, while engaging in such coordination work has advantages in the form of enhanced integrative complexity, it also comes with costs in the form of a greater workload relative to other members. We further argue that the increased integrative complexity and workload that result from occupying a position of temporal brokerage have implications that go beyond the boundaries of the focal team, spilling over into other projects the individual is engaged in. Specifically, we predict that being in positions of temporal brokerage on global teams decreases the quantity but increases the quality of an individual’s total productive output. We find support for these predictions across two studies comprising 4,553 individuals participating in global student project teams and 123,586 individuals participating in global academic research teams, respectively. The framework and findings presented in this paper contribute to theories of global teamwork, pivotal roles and leadership emergence in global teams, and social network theory.