The objectives of this Special Issue were to: establish a foundation for the exchange of ideas between East and West; look at similarities and differences between them; clarify how the East may form boundary conditions to the established theories/practices in the West; help lay the foundation for indigenous theory building from the East (where the West can learn from), and determine whether the business models in the East and West will/should converge. In contrast to the other papers in the special issue, this Essay focuses on business education models.
Organizational members frequently evaluate how their abilities and standing compare with those of their colleagues. Although these comparisons can have a negative impact on organizations, little attention has been paid to the role of leaders in these processes. Drawing on interviews with individuals in leadership positions in business schools, we develop a framework to explain what triggers leaders’ attention to social comparisons among faculty and how they become involved in them. Central to this framework are leaders’ self‐schemas, which encompass their preferences about the criteria members should use in making comparisons. Leaders’ self‐schemas are activated by discrepancies between their own comparative judgements and those they perceive members to be making and impel them to act in ways consistent with their preferred bases of comparison. Our framework repositions social comparisons as a multi‐perspectival, political phenomenon in which leaders see themselves as playing a role in shaping members’ evaluations and workplace interactions.
The fluidity of regional headquarters (RHQ) mandates is a core aspect of disaggregating HQ activities in MNCs. While ‘slicing’ of global value chains has received attention in previous research, the parallel disaggregation of management activities has not. Our longitudinal study of 374 RHQ between 1998 and 2010 redresses this omission by asking why RHQ lose their mandates. We apply the concept of absorptive capacity and find two different explanatory mechanisms for full and partial mandate loss driven by RHQ‐specific capabilities and location‐specific capabilities. Full mandate loss is associated with deficient RHQ‐specific capabilities and realised absorptive capacity. By contrast, partial mandate loss is driven by an RHQ's lack of the location‐specific capabilities to respond to local changes, leading to removal of mandates for some subunits only. The distinction between full and partial loss offers a more nuanced and granular explanation of how geographic regions of MNCs are composed.
Based on linked employer‐employee panel data on all Swedish inventors, this paper analyses how wages affect inventors’ job mobility. It is commonly assumed that higher wages reduce mobility because they reduce the value of outside opportunities. We argue that higher wages also send performance signals to potential employers, who raise their wage offers in response. By disentangling the effects of higher wages, we show evidence of a utility and an opportunity cost effect, which reduce mobility, and a performance‐signalling effect, which increases mobility. In our data, the effects cancel each other out, with no effects of wages on mobility rates on average. We find, however, that for star inventors, who have sufficiently strong alternative performance signals (e.g., strong patent records), the performance signal sent by wages is crowded out by the alternative signals. Accordingly, for star inventors we find that higher wages decrease mobility.
Internationally disaggregated headquarters arise from cross‐border relocations of headquarters components. To shed more light on the business consequences of such component relocations, we analyse stock market reactions to inversion initiatives, which are plans by US firms to offshore their registered seat. Combining business economics and institutional theory, we develop an explanatory framework centred on repatriation taxes on foreign income. Since inversions enable US firms to free themselves from such taxes in the US, we hypothesize that inversions by firms that face higher US tax costs in repatriating income will be received more positively by investors, and especially so if the inversion's destination country has no repatriation tax. Yet by freeing themselves from US repatriation taxes, inverting firms deprive the US government of tax revenues and will therefore likely lose legitimacy among US officials. The risks associated with losing such legitimacy, we argue, are higher for firms that are more dependent on the US government, causing the relationship between the US tax costs of repatriating income and investor reactions to inversions to be less positive for such firms. We find substantial support for our framework in an event study of up to 117 inversions announced over the period 1990–2016. Our findings argue for a nuanced, contingency view of the business consequences of inverting and suggest that legitimacy losses are not always as hazardous as previously thought.
In their book titled ‘Organizations’. March and Simon (1958) aspired to ‘replace fancy with fact in understanding the human mind and human behaviour in an organizational setting’ (p. 210). The question of the continuing influence of that book 60 years later becomes more interesting when we ponder two contrasting viewpoints. Thoenig (1998) suggested that ‘Science as an institutionalized activity usually helps the past to survive and hinders the potential for the future to become visible and legitimate’ (p. 311). Does the recognition of a book that is 60 years old somehow hinder equivalent development of understanding in the next 60 years? Probably not. This holds true if we follow Davis's (2010) suggestion that progress in organizational theory means ‘making comprehensible the developmental pathways of organizations and organizing ex post… (In other words) rendering the ecosystem comprehensible’. The goal is not so much precision in predictions as it is ‘insights into particular processes at particular times’ (p. 707). M&S consolidated insights and predictions that continue to help rather than hinder the ongoing development of understanding. This becomes evident as we move from the book's modest early reception in the late 50s to the ways in which it ‘became’ more insightful as fancies flourished and then folded over the last 60 years. M&S remained a durable set of foundations. My experience with ‘Organizations’ started when I first studied it as a Psychology graduate student, 6 months after the book was published (February 1959). I restudied the book in the context of its deserved recognition 60 years later (June 2017). I liked the book more in 2017 than I did in 1959. I briefly describe both sets of reactions. The context in which ‘Organizations’ first appeared was one of diffuse social science that was being consolidated and gaining momentum (e.g., Koch, 1959). For example, four years earlier the monumental two volume ‘Handbook of Social Psychology’ (Lindzey, 1954) first appeared with significant discussions of field theory, cognitive theory, group problem solving, and industrial social psychology. All of these topics were now available to be edited into organizational studies. The closest discussion to March and Simon (hereafter M&S) in the Handbook was Mason Haire's chapter on ‘Industrial Social Psychology’. M&S found that the chapter made only ‘passing references to organizations’ (p. 2). Books were the primary form of consolidation in the 50s and 60s (Colquitt and Zapata-Phelan, 2007). This gave authors space to discuss relevant issues and puzzles and to speculate. Outlets for journal-length articles were limited. ASQ was only 2 years old. AMR, AMJ, Organizational Science, and Organization Studies did not yet exist. Social Psychology was lumped with abnormal psychology in the Journal of Abnormal and Social Psychology. In the late 50's there was considerable popular discussion of the ways in which employers shaped mature adult employees toward less mature dependency, conformity, and compliance (e.g., The Organization Man, Whyte, 1956). Chris Argyris brought a scholarly mindset to these issues as represented by his well-known 1957 book, ‘Personality and organization; the conflict between system and the individual’. Argyris earned his PhD in 1951 under his advisor William F. Whyte and began publishing research on bank organizations and how their control systems affected employees. Although the topic of individual ‘vs.’ organization was timely, it was not central for M&S. In their words, employees ‘come to an organization with a prior structure of preferences, a personality if you like’ (p. 65). The approach used by M&S gained momentum a year after the book's publication when both the Ford Foundation and the Carnegie Foundation took an interest in business education. The reports they commissioned called for more research and less consulting work by faculty, improved regulation, fewer case studies, more theory and analysis, and more teaching of ethics (Hutchins, 1960). These appeals for change and more rigour were realized and exemplified in the propositions, formalization, and grounding displayed a year earlier in ‘Organizations’. Networks, a topic that seems to have been with us forever, was no less prominent in 1958. The difference was that networks in the 50s were concrete rather than abstract, were situated in laboratories rather than in the field, and consisted of partitions that separated actors who could communicate with one another by passing notes through slots in their partitions. Active researchers such as Harold Guetzkow, Herbert Simon, Marvin Shaw, Harold Kelley, Alex Bavelas, and Harold Leavitt all studied these simulacra of the real world. Most of these researchers made conservative interpretations of their findings. This meant that structural explanations were more prominent than processual ones. And the structures that were attributed to organizations tended to be elementary (e.g., star, circle, wheel). Finally, decision-making also seems to have been with us forever. In the late 50s there was a stimulating contrast between a focus on pre-decision and post-decision behaviour. M&S articulated a prospective view of decision-making in which pre-decision activities were influential. Festinger (1957) and his associates articulated a very different retrospective view of decision-making in which post-decision behaviour was what mattered. The point is simply that decision-making was a centre of attention in the 50s. M&S demonstrated that there were strong alternatives to the rationalist perspective imported from economics. Given this Zeitgeist, I want to recount several first impressions formed in February 1959, 6 months after the book was published. The book was assigned in a graduate psychology seminar taught by a professor who was excited about the book's aspirations to carve out a new field. As I mentioned above, M&S stated that their goal was to ‘replace fancy with fact in understanding the human mind and human behavior in an organizational setting’ (p. 210). The book did that, although not immediately for a subset of us in the seminar. We had several reactions that were less enthusiastic than those of the professor. Remember, these reactions emerged in a psychology seminar, taught in a behaviourist-inclined Psychology department (Ohio State University), a department that had only one social psychologist (Lauren Wispe; not the ‘excited professor’). The first reaction among our subset was, ‘This is basically stimulus-response psychology’. That was not altogether inaccurate since the authors described their work this way: ‘We will speak of the “stimuli” that impinge on the individual, of the psychological “set” or “frame of reference”, that is evoked by these stimuli, and of the “response” or “action” that results’ (p. 35). However, with a closer look years later, it is clear that M&S deepened this starting point when they identified ‘pathologies’ associated with the stimuli such as their evocation of unanticipated associations, their unanticipated provision of additional stimuli, and their failure to evoke the anticipated set (p. 35). Clearly, this was not just warmed over SR theory. The second reaction was one of anxiety: ‘Apparently, we're not as smart as we think we are’. M&S rendered the human organism as a ‘choosing, decision-making, problem-solving organism that can do only one or a few things at a time, and that can attend to only a small part of the information recorded in its memory and presented by the environment’ (p. 11). The emphasis on simplification, satisfactory performance, and cognitive limits, while sobering, was in fact closer to the experienced real world of the overloaded grad student than were rational man and optimizing. Satisficing felt like a more meaningful shortcut through classical rationality. A third reaction was, ‘Many of these propositions seem obvious’. For example, ‘increases in the balance of inducement utilities over contribution utilities (4.1) decreases the propensity of the individual participant to leave (4.2) the organization’ (p. 93). People whose inducements greatly exceed their contributions are likely to stay put. However, obviousness was not the liability that we thought it was. Propositions that appear obvious may be easily forgotten (M&S, p. 58) and contribute undetected variance to outcomes. What looked ‘obvious’ to us misread the fact that M&S were focused on the development of recurrent behaviours, routines, and habits. While early stages of routinization look non-routine, later stages look more patterned and automatic, thus, more obvious. Furthermore to call something obvious may confuse common-sense obviousness with unimportance (p. 143). As M&S put it, when there is no ‘surprise’ in a scientific prediction, that is not much different from predicting ‘the lines that will be uttered by a Hamlet on stage. It is no less important for its common – sense obviousness’ (p. 143). I confess to often conflating unimportance with obviousness but, 60 years of immersion in organizational studies has convinced me that very little is obvious or obviously unimportant. A fourth reaction was, ‘some of the cited works sounded just as interesting as M&S’. This redirected some readers to those works and away from M&S. For example, a short but rich quotation from Chester Barnard on approximation (p. 190), led to the swift formation of a reading group to study Barnard's (1938) ‘Functions of the Executive’. That diversion was not as ‘disloyal’ as it may sound since a central citation in M&S is the Barnard-Simon equilibrium theory of organizational survival (pp. 83–89). A different example of reading elsewhere was M&S's brief discussion of Robert Merton's theory of unanticipated consequences (pp. 37–40). Most of us in the seminar were fascinated by the idea that there were orderly but unintentional progressions by which people got into trouble, progressions that arose from situational complexity and selective perception. These progressions looked a lot like what Merton (1948) had earlier called self-fulfilling prophecies. A fifth reaction was one of being overwhelmed by the book itself. That was partly because we were accustomed to narratives about organizations (e.g., Whyte, 1948) rather than to lists of variables. And the list in M&S was very long. They presented their argument in the form of 206 variables (these 206 are indexed on pp. 249–53). The largest number of variables, 88, is found in Chapter 3 on ‘Motivational constraints: intraorganizational decisions’. The fewest number of variables are in chapter 5 (26 variables in ‘Conflict in organizations’) and chapter 7 (28 variables in ‘Planning and innovation’). The authors imposed order on these variables in two ways. First, they tried to separate them by means of 3 sets of assumptions: employees are passive; employees bring attitudes, values and goals into the organization; and employees rely on thought and perception processes embedded in decision-making and problem solving (p. 6). Second, they tried to link these variables using 3 types of propositions: those with an independent and dependent variable; those that involve a qualitative generalization (e.g., Organizations try to routinize new activities); and those that propose that a specific structure or process performs a specific function (e.g., rigid behaviour makes action defensible) (pp. 7–8). A sixth reaction was that, unlike Festinger's (1957) recently published ‘Theory of Cognitive Dissonance’, it was hard to see where or how to enter M&S's ideas. Festinger was focused on two cognitions held simultaneously with one being the obverse of the other. M&S, by contrast, were more eclectic, more multidisciplinary, more likely to move among multiple levels of analysis. This difference between the two sets of scholars recapitulates the classic differences between breadth and depth or foxes and hedgehogs (Berlin, 2013). The value of M&S's fox-like breadth and avoidance of a single idea makes it harder to envision a next meaningful step in working with their ideas. That difficulty, however, seems mitigated in work since 1958. For example, current work on the flexibility with which routines are enacted (e.g., Feldman, 2000) is anticipated when M&S observed that routine performance programmes are often better understood as ‘performance strategies’ (p. 142). A 7th reaction involved what would now be called the ‘optics’ of M&S. Their model was composed of short links in long sequences. The problem was, some sequences had feedback loops and mutual causality but others didn't. Sequences without feedback (e.g., Figure 3.7, p. 64) suggest a more passive individual who is subject to multiple influences with little control (see Kilduff, 1993). Relationships of mutual causality (e.g., Figure 3.8, p. 68) make it easier to conceptualize agents and structure as mutually constitutive. The problem was that the two halves of the ‘Organizations’ book differed in the prominence of these causal structures. In the first 66 pages, seven of the eight figures with variables feedback These are focused on organizational studies to then on (pp. M&S's model is the focus and of the eight figures feedback was no for control or on to reactions that are more I if our seven reactions to M&S in a seminar in when graduate in 2017 into organizational they that some of what they is in new sobering, better and by Probably not since current explanations to be more more more more more or and less (e.g., and to of I a used that had only one in the That the of little can be about these propositions that they to our experience and (p. That have greatly the because or it, for in the of the on this a of the reaction to the book, in the of the A of a model to be in the into what the field of organizations would continue to for a move in to the of from the organization’ (pp. We all in what In M&S there are that seem to all I briefly point out of and of the more from is the of (e.g., However, if you look for the in the book, you What you will is the of (p. That more that are not to as M&S of of the that be or are in fact as and that do not enter into rational as potential there were not to or if the in a and there could be no organization (pp. These ‘the of human as of and but to only of (p. of a set of As it, and through time, and organizations’ (p. 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This study examines how professionals engage with the increased surveillance of their daily work. We develop an understanding of professional surveillance at the micro‐level of interaction by drawing on dramaturgical literature. Based on qualitative interviews and observational data of healthcare professionals using a new technology to communicate simultaneously with each other and individual patients, we analyse how professionals use different elements of the theatre (e.g., stages and scripts) to enact surveillance. The significance of our contribution lies especially in the dramaturgical reconceptualization of surveillance as enacted, making it an integral part of displaying one's professionalism.
As multinational enterprises (MNEs) increasingly disaggregate and disperse corporate headquarters (CHQ) activities, the allocation of regional management mandates (RMMs) to local operating subsidiaries is becoming more common. RMMs explicitly break with the traditional assumption of a clear separation between centralised and local decision‐making. Yet we know little of how RMMs are enacted by the units involved, or how they evolve over time. Based on a case study of Unilever, we find that RMMs are inherently ambiguous , and identify circumstances under which ambiguity manifests and triggers cycles of sensemaking and sensegiving about the meaning of the mandate. These cycles result in the co‐construction of the mandate by multiple units, with changes in RMM scope and governance over time. We also find that sensemaking and sensegiving are most intense among boundary‐spanning middle managers. Our work challenges prevailing assumptions that mandates are largely unambiguous when assigned and are unilateral or dyadic accomplishments; demonstrates the importance of sub‐unit level analysis in MNEs; and highlights the potential of structuration theory to enrich our understanding of sensemaking and sensegiving in organisations.
We test hypotheses derived from resource dependence and sensemaking/sensegiving theoretical lenses in the context of CEO succession, focusing on an under‐researched yet prevalent type of executive turnover – CEO retirement. Using event study methodology and a sample of CEO retirements from S&P 1500 firms during the 2003–12 period, we find that, all else equal, shareholders’ perceptions of organizations’ capacity to serve their interests are adversely affected when a retirement related change occurs in the leadership structure. Specifically, in line with resource dependence theory, we find that CEO retirement disclosures typically generate negative abnormal returns. Furthermore, in line with the sensemaking perspective, we find that the magnitude of shareholders’ reactions is contingent on the lexical sensegiving cues contained in the organizational narratives that are released to capital markets via executive retirement announcements. Overall, our theory and results point to CEO retirement events as consequential in the eyes of shareholders, challenging an important assumption of extant succession research. Moreover, they suggest that shareholders’ interpretation of these events is influenced by organizational sensegiving, highlighting the important role of organizational communication around succession events.
We use survey data for 4336 scientific teams, located in 16 countries, where all members were working within a single lab, to test three context factors that potentially affect the capability of internationally mobile individuals to enhance the innovation performance of their research units. We formulate hypotheses on context factors rooted in the knowledge recombination and learning‐by hiring theories. The results show that three context factors are positively associated with international mobility and the performance of the research units: the degree to which knowledge in the relevant subfield of science is geographically concentrated, the creative intent of the activities performed and the decision power of the mobile individual.