Knowledge that Transforms

More than 45% of the S&P 500 have been the target of activist investors. As a major shareholder in the firms they target, activist investors’ campaigns raise concerns over the firm’s poor performance and pose a threat to management’s control over the firm. Prior research has found that activist campaigns have significant consequences, as management curtails long-term investments, divests businesses, and foregoes acquisitions. Strategic decisions at the corporate level, however, do not provide insight as to whether activist investors motivate management to improve the operational competitiveness of the firm. Our study seeks to address whether activist campaigns succeed in motivating management to improve the firm’s operational competitiveness. This represents an important issue since the firm’s operational practices are essential to its competitiveness and performance. Our study proposes and finds that firms targeted by activist investors seek new ways by which to improve the firm’s operational efficiency and effectiveness. In addition, the management of target firms shift their emphasis to tactics that can improve the firm’s operations in the short-term. We use a measure of operational competitiveness that provides detail and granularity at a tactical level, enabling us to compare and contrast how firms respond to activist investors at the operational level of the firm. Thus, our study provides important insights not previously found that activist campaigns motivate management to improve the firm’s operational competitiveness.

Relying on the work on creative prototype and role theory, we demonstrate that having a creative identity can lead to moral objection depending on the implication of the act for one’s identity as a creative individual. In a pilot study using a survey of working adults, we find that employees’ creative identities and their intention to object in moral situations are positively and significantly correlated. Utilizing measurement-of-mediation (Study 1) and experimental mediation (Studies 2–4) approaches, we test and find support for the mediating role of norm-breaking motives predicting moral objection. In Studies 2–4, we find that creative identities lead to moral objection when moral objection is counter-normative and not when it is an expected, normative behavior. Across five studies ( N = 1,327), utilizing both experimental and correlational methods, this paper shows that creative identities can prompt moral objection when such objection is counter-normative, aligning with the creative prototype and reinforcing a creative identity through norm-breaking motives. We extend prior theories on the consequences of creativity, the creative prototype, creative identities, and their link with moral acts.

While learning is key for pioneers—firms introducing new products without existing competitors—a lack of competitors limits learning opportunities. To compensate, pioneers in safety-critical industries frequently resort to failure repositories—databases that track failure reports in an industry. However, the sheer volume, inconsistency, and unstructured nature of such failure reports make them difficult to use without clear referents that provide a benchmark and context for interpretation. We investigate how the entry of a competitor enhances pioneers’ learning effectiveness by offering such a stable basis for comparison and analysis. Specifically, we observe changes in failure reports that support our theory that pioneers adjust their learning processes in response to the altered availability and nature of failure information in a repository after competitor entry. Consumer failure reports, which provide unfiltered and unique information, are crucial for understanding and addressing problems that may result in failure. Our analysis of the medical device industry shows that pioneers learn more effectively after a competitor enters the market. Pioneers learn more effectively from consumer reports, especially when not interspersed with less valuable sources, such as expert and internal firm reports. Notably, pioneer learning after competitor entry leads to lower reported alleged future injuries and product malfunctions. These findings contribute to repository-based learning by showing how competition can improve effectiveness and suggesting that distinct consumer feedback is particularly valuable for pioneering firms. Besides adding to the literature on organizational learning, this study also highlights the role of competition in fostering innovation and improving safety.

Companies strive to gain a competitive advantage by recruiting highly qualified employees. One way to achieve this goal is by recruiting foreign workers, frequently through the H-1B visa program. However, immigration has become a contentious political issue in the United States, making it more difficult to recruit foreign workers. We examine how politicians on the board influence recruitment strategies aimed at attracting foreign workers. Studying the aftermath of the 2016 U.S. presidential election and President Donald Trump’s “Buy American, Hire American” policy, we estimate the impact of political directors on recruiting strategies. By analyzing the near-universe of job advertisements in the United States, we develop novel firm-level measures of employment barriers for foreign workers. We find that the presence of political directors increased the employment barriers for foreign workers after Trump’s inauguration. We also argue that the information processing capabilities of the board moderate this effect: diverse boards and boards with Human Resources committees decrease the employment barriers for foreign workers, whereas shareholder meetings during periods of heightened political risk increase these employment barriers.

As we celebrate our 50th anniversary and look forward to the future, we believe it's important to also reflect on our storied past.Journal of Management (JOM) is an inclusive journal publishing quantitative, qualitative, methodological, theoretical, and review work in all areas of the management field.Its content, authors, and readership are widespread and diverse.JOM's focus on new ideas, unique perspectives, and commitment to quality lead to interesting and impactful published articles that have significant academic and practical relevance.It is difficult for

Drawing from media routines and narrative theory research, we theorize that benefits spill over to competitors who are cognitively linked to a celebrity via media narratives. Specifically, we argue that actors with direct competitive relationships with a celebrity will receive increased media attention and emotive media content, as well as increased performance. Due to the nature of these narratives, we further argue that this effect continues into periods after the direct relationship has ended. We test our hypotheses using a novel, eight-year data set from the Ultimate Fighting Championship. Our findings support our theoretical arguments, providing evidence on how celebrities benefit others in ways that other social evaluation assets—namely, high reputation and high status—do not.

While workload has been traditionally studied as a type of challenge stressor with motivational benefits for employees, recent research suggests that the nature of workload is more complex and nuanced than merely eliciting positive reactions. Although this perspective has emerged in the study of workload at the individual level, research on collective workload in teams and the associated team-based mechanisms remains underexplored. Particularly, team-based work arrangements come with both enhanced capabilities to meet task goals and heightened expectations for team members; encountering and handling collective workload can motivate team members’ engagement in collective actions (i.e., team processes) and at the same time drive their appraisals of teamwork experience as depleting. To examine this dual account, we draw from job demands–resources theory to elucidate how and when team workload impacts team effectiveness via both positive and negative pathways. Using daily diary and objective record data collected from 610 employees working in 99 bank branches (i.e., teams) for five workdays, we found daily team workload enhanced daily team processes, which in turn benefited team member satisfaction at the end of each workday and team performance during the study period. We also found daily team workload elevated daily team member depletion, which hindered end-of-work team member satisfaction. Further, we found team members’ perceived task significance and positive affect at the beginning of each workday strengthened and buffered, respectively, the positive association between daily team workload and daily team processes or daily team member depletion. Theoretical and practical implications are discussed.

This study examines the influence of firms’ internal control weakness (ICW) reported under the Sarbanes-Oxley Act (SOX) on their subsequent divestiture decisions and the performance of these decisions. We argue that following ICW disclosure, firms are inclined to pursue corporate divestitures because such divestitures can reduce organizational complexity and help remedy firms’ ICW. We also propose that the positive influence of ICW disclosure on divestitures is stronger when a firm has recently appointed a CEO but weaker when there is a higher prevalence of ICW within the industry. Furthermore, we investigate the dual performance implications of divestitures following ICW disclosure. Although these divestitures, compared to divestitures not following ICW disclosure, are associated with higher stock market performance, they are also associated with slower sales growth for firms’ core businesses. We present empirical evidence that supports our arguments using a sample of S&P 1500 firms from 2003 to 2020. This study advances corporate strategy research by highlighting the role of ICW in shaping corporate divestiture decisions and documenting the multifaceted performance implications of such divestitures.

How do individual independent directors make sense of their director role? We examine this question in the context of competing expectations among key corporate governance actors during the onboarding process of independent directors. This study explores how independent directors navigate these expectations, which stem from both external change agents, such as government agencies and the media, and internal actors, especially management. Given the inherent ambiguity of their roles, which involve multiple board tasks and lack explicit definition, independent directors often face role conflicts. Our findings reveal that independent directors resolve these conflicts by adopting one of three role orientations: external adaptive, organizational alignment, or provisional balancing. Through this process, they construct their director role by coping with the expectations of key governance actors. This study contributes to the micro-foundations of corporate governance research by shedding light on the individual-level dynamics that shape how independent directors interpret and enact their roles.

Counterfactual reflection (CFR)—thinking about “what might have been if”—can enhance learning from experience, but only if the CFR is high-quality. Yet, what shapes differences in CFR quality remains largely unknown. Because managers typically reflect on experiences by concomitantly considering relevant factors and their collective interdependencies, we suggest that CFR quality is causally complex. To investigate this possibility, we interviewed 129 managers. In these interviews, they reflected on recently concluded business-to-business negotiations. Using fuzzy-set qualitative comparative analysis, we find three equifinal configurations of negotiation factors associated with high-quality CFR and eight associated with low-quality CFR. Drawing on the interviews, we identify managers’ ability to disentangle causal linkages in their past negotiation and their motivation for high-quality CFR in the present as plausible mechanisms underlying differences in CFR quality. We find high-quality CFR only following experiences where managers possess high levels of both situation-specific ability and motivation. In contrast, experiences that leave managers feeling unable or unmotivated due to high satisfaction, indifference, or defensiveness, are linked to low-quality CFR. Overall, our study advances understanding of why there are differences in CFR quality by linking past experiences with managers’ abilities and motivation. From a managerial perspective, we suggest that organizations avoid “one size fits all” approaches to CFR. Instead, we recommend actionable measures for both reflecting managers and their supervisors to address the specific reasons that prevent managers from engaging in high-quality CFR after their negotiation experiences.