Knowledge that Transforms

Information economics and transaction cost economics are two prominent theoretical perspectives used by scholars to understand firms’ corporate development choices. Our study highlights the interplay of these two theories by examining how industry-level learning-by-doing (LBD) rates affect firms’ choices related to acquisitions and alliances. An industry LBD rate reflects the extent to which performance is dependent on own production experience. We argue that this rate also reflects the nature of knowledge in an industry: the higher the LBD rate, the more knowledge is created by own production experience and deeply embedded within routines in the industry. We explain how this suggests that while higher LBD rates might aggravate the overpayment risks emphasized by information economics, they might mitigate the misappropriation risks highlighted by transaction cost economics. We examine how these opposing effects can lead to complementary or opposing predictions about the relationship of LBD rates to several transaction decisions, including the likelihood of any transaction regardless of form, whether transactions that occur are more or less likely to be structured as acquisitions or alliances, and whether alliances that occur are more or less likely to be structured as joint ventures and with limited functional scope.

This conceptual paper presents the analytical theory of agency (ATA), an overlooked philosophical approach to the concept of action, to develop its theoretical basis in routines research in which the constructs of action and agency play crucial roles. It expounds, in the framework of ATA, the ideas of the spectrum of intentionality, kinds of action, and collective agency, which help advance the rigor of action-theoretical concepts in routines research as well as reveal the rationale of the microfoundational approach to routine actions. To uncover the developmental potential of ATA, the article discusses the most crucial conceptual challenges for routines research; it also briefly examines the limitations and future work related to using ATA in the management field.

Organizational actors often look to the past to revive practices of the past. A growing body of research suggests that there is opportunity in the past and highlights how dormant or declining industries have been revitalized. We take this line of research a step further by examining how entrepreneurs (reanimators) revive long-since-failed organizations (revenants), a process we refer to as reanimation. Thus, rather than create a “new” venture, many entrepreneurs are turning to revive defunct or “dead” organizations. On the one hand, the act of reviving a dead organization suggests that reanimators perceive value in the failed organization's past; otherwise, why not start something new ? On the other hand, theory predicts organizational actors might likely avoid such associations with the past since they are rooted in failure. As such, understanding what elements of an organization's past an entrepreneur retains or discards and how organizational leaders successfully reanimate failed firms is critical to our understanding of entrepreneurship and tradition. During this reanimation process, we observe a fundamental tension between imagination and custodianship. We find that the entrepreneur's ability to resist the urge to leverage their imagination through innovation and instead act as a custodian by honoring the past influences the organization's prospects for survival post-reanimation. Our theorizing offers guidance for understanding the inherent tensions between innovation and tradition in firms with rich histories, the potential downsides of unchecked imagination, and the importance of gaining stakeholder acceptance before exercising the authority to innovate.

Workplace sexual harassment remains an insidious yet pervasive component of organizational life. Building on research that has established that leaders play an important role in condoning or revoking sexual harassment, we theorize that a CEO's appearance—specifically, the extent to which their face is prototypically masculine—can influence employee assumptions about the patriarchal nature of organizational hierarchy, which, in turn, influences their perceptions of the degree to which sexual harassment will be tolerated. We test these ideas in three complementary studies. Study 1 observes that employees in large organizations headed by a CEO with a more masculine face report more instances of sexual harassment in online reviews. Study 2 uses an experiment to show that CEO facial masculinity drives followers’ perceptions that sexual harassment is tolerated in an organization by increasing the presumption that the organization is patriarchal. Study 3 affirms these results with a sample of new employees both before and after their first day on the job. Together, these studies provide evidence that a presumption of patriarchy increases the perceived tolerance for sexual harassment, which yields more observations of sexual harassment in the workplace.

Although researchers have suggested that work–life programs (WLPs) help increase the representation of women in management (WIM), stigmatization and gender stereotyping can prevent this beneficial effect. We adopt a contingency approach by taking the roles of time, gender context, and the purposes of different practices into consideration and examine the effects of WLPs on WIM longitudinally. Our analysis of a sample of Japanese public firms spanning 14 years addresses endogeneity concerns and shows that: (1) increases in WLPs are weakly associated with subsequent increases in the proportion of WIM within firms; (2) this positive effect is stronger in organizations where the percentage of female employees is growing; and (3) there is no evidence to suggest an effect in the opposite direction. We further propose different temporal patterns by which the effects of flexibility practices (e.g., remote work) and resource practices (e.g., childcare benefits) emerge due to the varying degree of changes in job structures and work norms involved in their implementation. Our analysis provides supportive evidence that the effects of flexibility practices that require more changes inconveniencing decision-makers, users, and coworkers take longer to emerge compared to resource practices that incur fewer changes and inconveniences. These findings contribute to a more detailed understanding of the WLPs–WIM relationship and offer insights for research on WLPs and women's career advancement.

Supervisors directly influence employees’ perceptions of supervisor justice and subsequent supervisor-supportive behaviors by displaying just treatment through ongoing work interactions. Using a two-study design, we build on this target similarity approach by examining the potential for an indirect actor to be held accountable when a direct offender is acting on the indirect actor's behalf. Integrating fairness and role theory perspectives, Study 1 shows that the relationship between coworker injustice and supervisor-supportive citizenship behavior is mediated by supervisor blame and supervisor justice. Further, these linkages are strengthened when the offending coworker is delegated additional authority by the supervisor. Delegation more clearly connects the supervisor to the coworker's unjust behavior because the coworker is seen as an intermediary for the supervisor (i.e., perceived intermediary delegation-PID). In a constructive replication, Study 2's results support the basic mediation model from Study 1 but also show that the PID effect is influenced by victims’ relative standing with the supervisor compared with their offending coworkers (i.e., relative status). PID's strengthening effect as a result is most pronounced when victims of coworker injustice hold lower relative statuses than offenders. We conclude with implications of our findings and areas for future research.

The voluminous strategy research on the determinants of corporate scope is often premised on a well-established property rights regime, which contrasts with the weak property rights protection that still characterizes most countries today. We address this gap by applying property rights theory to theorize and empirically examine how the strengthening of the property rights regime affects corporate scope. Our analysis exploits the enactment of a property law that enhanced the formal protection of private properties in China as a quasi-experiment. We show that with a strengthened property rights regime, the horizontal relatedness among private firms’ businesses increases, but their vertical relatedness decreases, compared with state-owned firms. Further, these effects are less prominent for politically connected firms that are afforded informal protection of property rights. Our findings shed new light on the property rights regime as a critical determinant of firms’ horizontal and vertical scope.

How private firms can overcome their unique governance challenges remains an important but understudied topic. Using novel data on more than 28,000 private firms in India from 1988 to 2017, we examine whether private firms can improve their survival prospects by having board interlocks with public firms and, specifically, interlocks whereby a public firm director subsequently joins the private firm's board. In our data, we found a U-shaped relationship between the number of incoming board interlocks and the probability of private firm exit. We also found that board interlocks formed by public firm directors of public firms audited by Big Four companies improve private firms’ survival more than other interlocks, consistent with the notion that such interlocks improve monitoring at private firms. Overall, our study points toward the importance of considering the role of incoming board interlocks when explaining private firm survival.

A substantial proportion of the workforce experiences financial precarity, which is defined as persistent concern about one's personal financial welfare. Research suggests that financial precarity often harms performance at work. In this paper, we investigate whether characteristics of the work context disproportionately occupied by people at the lower rungs of the socioeconomic ladder (low autonomy, high routinization, high interdependence, low social support) heighten the detrimental impact of financial precarity on performance. Drawing on role stress theory, we propose that these characteristics alter the degree to which the cognitive resources appropriated by financial precarity interfere with the resource requirements of a person's work role. Our predictions are tested using experience sampling data covering 8 consecutive observation days for 956 individuals in the United States (k = 7,015). Analyzing daily observations allows us to distinguish financial precarity from the day-to-day experience of transient financial events. We observed that financial precarity significantly undermined the quality of one's work during a given day, but this relationship was driven by those working in contexts with low levels of autonomy, routinization, and coworker support. This pattern was only observed for those experiencing financial precarity, not those only exposed to a negative financial event in a given day. The research demonstrates that specific characteristics of the work environment can lead to inequality in who bears the performance costs associated with financial precarity.

Employees with disability-related communication impairment often experience isolation from professional connections that can negatively affect their careers. Management research suggests that having lower quality leader relationships can be an obstacle to the development of professional connections for employees with disabilities. However, in this paper we suggest that lower quality leader–member exchange (LMX) relationships may not be a uniform hurdle for the professional isolation of employees with disability-related communication impairment. Drawing on psychological disengagement theory, we predict that employees with more severe, rather than less severe, communication impairment develop resilience to challenges in lower quality LMX relationships by psychologically disengaging from professional connections and, in turn, bear fewer negative consequences of professional isolation on career outcomes. In two studies of deaf and hard of hearing employees, we find that in lower quality LMX relationships employees with more severe communication impairment perceive being less isolated than employees with less severe communication impairment, and, in turn, report better career outcomes. Overall, our findings suggest that employees with more severe communication impairment may develop effective coping strategies to manage challenges of perceived professional isolation for career outcomes when in lower quality LMX relationships.