Knowledge that Transforms

How do small firms overcome regulatory constraints despite opposition from entrenched interests? Micro entry strategies enable small firms to compete with larger incumbents in markets, but exploration of such strategies in nonmarket arenas is limited. Existing research suggests that when firms face regulatory constraints, they often venue shift upwards, for example overturning a local ban by lobbying for statewide legislation. This article uses qualitative data on craft breweries to identify and analyze a set of micro entry nonmarket strategies through which firms engage locally, venue shifting downwards from state to local regulators, to successfully ease state-level constraints from the bottom-up. In public hearings with city officials, entrepreneurs aligned local investment tactics and supportive coalitions with an iterative approach that motivated city-based regulators to challenge state-level restrictions on direct-to-consumer (DTC) business models that are favorable to smaller firms. Experimenting locally with the discretionary use of “event” licenses for ongoing DTC beer sales led to an accumulation of bottom-up support across locales. This support included relational infrastructure and policy-relevant information that enabled entrepreneurs to work through city officials to overcome incumbent opposition. By elaborating how small firms and local officials together create punctuations in a state-level policy monopoly and analyzing both the antecedents and consequences, this study builds a theory of micro entry nonmarket strategy and bottom-up policy change. Even in a mature industry with well-institutionalized regulations, powerful incumbents opposing changes, and minimal technological change, small businesses reshaped the policy environment of an entire state from the bottom up.

With entrepreneurial fraud cases on the rise, we investigate how entrepreneurs carry out criminal deception, employing deceptive means to defraud audiences. Analyzing court data from Silicon Valley ventures and their founders prosecuted for fraud between 2000 and 2023, our findings reveal that entrepreneurs carry out criminal deception through a process of façading: Entrepreneurs construct, perform, and protect illusory appearances (façades) that externally project high-growth performance to audiences while masking ventures’ actual underperformance. We identify three forms of façading—surface, reinforced, and deep façading—that are contingent on the severity of the gap that entrepreneurs face between audiences’ performance expectations and ventures’ performance reality. Our theoretical framework captures how entrepreneurs facing minor, wide, and extreme expectation-reality gaps engage in evermore sophisticated efforts to detach the venture’s externally projected appearance from its actual operational reality. Practically, we propose several approaches to deter and detect criminal deception, including the extension of U.S. Securities and Exchange Commission surveillance and whistleblower program, investor due diligence reform, and dedicated entrepreneurship education interventions that clearly demarcate when entrepreneurs transgress into criminal deception. We make contributions to literatures on cultural entrepreneurship, organizational wrongdoing, and the social effects of entrepreneurship.

Organizations often struggle to deploy specialized expertise where it creates the most value. We argue that specialized roles help address this challenge by codifying expertise into formal positions that function as allocative infrastructure, channeling work to appropriate professionals. We test this argument in Brazilian maternity wards that introduced a new specialized nursing role. Using data on more than 15 million births and a difference-in-differences design, we show that the introduction of this role is associated with improved matching between expertise and client needs. These effects are stronger when client demand is higher, workflows are more predictable, and organizational experience is greater. A simulation analysis indicates that these improvements go beyond compositional changes, reflecting the system’s enhanced ability to route patients to appropriate providers. Improved matching is also linked to better maternal and newborn outcomes. Together, our findings extend research on task allocation by theorizing roles as allocative infrastructure and identifying organizational conditions under which specialization improves matching in professional work.

In a world of increasingly numerous and contradictory constraints, this study reveals how individuals can navigate hyper-constrained contexts to rapidly develop new deployable products. We draw on an in-depth field study of seven projects developing affordable, open-source ventilators in just 75 days during the COVID-19 pandemic. Our analysis shows that innovation outcomes are fundamentally shaped by what we call "constraints work"—how individuals actively deal with and manage constraints—and find two types of constraints work that lead to divergent processes and outcomes. Four projects conducted “reductionist constraints work,” as they scanned, prioritized, and sequenced the key constraints. They then followed the well-known lean innovation process to sprint to a functioning minimum viable product (MVP). In contrast, three projects counterintuitively slowed down at the outset to conduct “generative constraints work,” extreme-mapping the full landscape of constraints and loading the design space even with additional hidden constraints. They then followed a “multiplex innovation process,” surfacing interdependencies among constraints and treating the resulting contradictions as design problems to be solved simultaneously. This process resulted in deployable products that went beyond the MVP, surpassing experts’ expectations. Regarding temporal pace, the multiplex innovation process entailed V-shaped acceleration—braking at the start, resisting the time pressure, to confront the full complexity of tensions, then sharply accelerating to resolve them in parallel, while the lean innovation process entailed a linear acceleration. Our findings contribute to theories of innovation and new product development processes and temporality, advancing understanding of how individuals can successfully navigate an excess of multiple, contradictory constraints.

We examine industry and technology (non)emergence by integrating actor-centric and systems perspective literature streams. We use historical methods to analyze rich data tracking investments by actors spanning private, public, and academic sectors in the solar photovoltaics context. The industry took several decades after commercialization to emerge; moreover, silicon and thin film technologies experienced divergent fates despite firm takeoff. By uncovering critical interdependencies across activities by different actors, we show that, whereas attention by all actors to developing various elements of technological systems is necessary for emergence, it may not be sufficient. The industry emerged after activities by technology producers, industry associations, and government agencies ensured stable institutional support that stimulated latent demand (by utilities and end consumers) and created reinforcing loops among activities by technology producers and research institutes for solar technologies to become a viable alternative to fossil fuels. Moreover, silicon experienced additional reinforcing loops in demand-side and supply-side ecosystems, wherein technology producers and equipment manufacturers leveraged adjacent mature supply chains to meet demand-side scale and reliability requirements in fast growing markets. In contrast, thin film experienced balancing loops wherein nascent firm-specific supply side alliances could not address these demand side needs. These findings showcase how dominant designs may emerge even when there is no ex ante competitive dynamics among technology producers: Although silicon may have benefited from first mover advantage at the technology level, our study highlights that ecosystem first mover advantages of silicon relative to thin film were particularly salient in their divergent fates.

We examine how artificial intelligence (AI) impacts three core pillars of collaboration—performance enhancement, expertise integration, and social engagement—through a preregistered field experiment with 791 professionals at Procter & Gamble, a global consumer packaged goods company. Working on real product innovation challenges, professionals were randomly assigned to work either with or without AI, and either individually or with another professional in new product development teams. Our findings show that (1) AI significantly enhances performance: individuals with AI matched the performance of teams without AI, suggesting that AI can effectively replicate certain benefits of human collaboration. Moreover, (2) AI helps bridge functional silos: without AI, research and development professionals tended to suggest more technical solutions, whereas commercial professionals leaned toward commercially oriented proposals. Professionals using AI produced more balanced solutions, regardless of their professional background. (3) AI’s language-based interface prompted more positive self-reported emotional responses among participants, suggesting it can fulfill part of the social and motivational role traditionally offered by human teammates. Finally, decomposing the innovation process suggests that AI primarily enhances the quality of generated ideas, shifting the distribution of creative output upward, whereas human judgment retains value in evaluative selection. This finding highlights the multiple and complementary roles that human and AI partners can play in new product development tasks and creative problem solving. More generally, our results suggest that AI adoption in knowledge work affects not only performance but also how expertise and sociality appear within teams, offering insights into the impact of generative AI on collaborative work within organizations.

Institutional outsiders have become increasingly common in public administrations, coinciding with a growing prevalence of public crises. Yet we know little about whether and under what conditions leaders with limited political experience perform well or poorly during such crises. Drawing on strategic leadership and institutional change research, we develop competing hypotheses and a contingency framework that explains how public leaders’ institutional outsiderness shapes their crisis management performance. We argue that outsiderness can either hinder or facilitate crisis response, depending on conditions that affect leaders’ ability to effectively enact institutional change. Specifically, institutional outsiderness is more likely to hinder crisis management when leaders (i) operate in highly institutionalized environments, (ii) lack relevant crisis management experience, and (iii) hold low precrisis social approval. Using data on U.S. state governors during the COVID-19 pandemic (Study 1), we find that governors’ institutional outsiderness is associated with lower crisis management performance, especially under these conditions. However, when institutionalization is low, outsiderness is associated with higher crisis management performance. We conducted a second study with a different sample and crisis context (U.S. state governors during the 2008 financial crisis) and partially replicate the results from Study 1. Together, our results suggest that whether institutional outsiderness is a liability or an asset for crisis management depends on contextual and leader-level conditions. These findings contribute to research on crisis leadership, strategic leadership, and public administration.

This study focuses on the role of mindfulness in organizational leaders’ responses to paradoxical tensions. We arrive at this focus by interpreting the organizational paradox literature as suggesting two primary ways that leaders mindfully engage paradoxical tensions, which work in tandem. There is an absorbed mode implied in embracing tensions and finding energy in them and a more deliberative mode in weighing tensional poles to formulate more adaptive responses. Although not designed for paradox study per se, Kudesia’s (2019) metacognitive mindfulness practice skillfully captures both absorbed and deliberative aspects, offering a way to understand the role of mindfulness in responding to paradoxical tensions. In this qualitative study, we explore how leaders with and without a regular mindfulness practice deploy these dual approaches in their sensemaking accounts of paradoxical tensions. Findings suggest that leaders who do not practice mindfulness relied heavily on deliberative engagement and pivoted less often between absorbed and deliberative modes. Leaders who practice mindfulness focused on absorbed engagement and pivoted more often between modes. Our analysis suggests that absorbed and deliberative practices together provide mindfulness trained leaders with just enough structure to cope with paradoxical tensions by turning them into focused learners with flexible processing, expanded repertoires, and holistic engagement.

Research documents that firms targeted by financially motivated shareholder activists often reduce spending in areas with uncertain or delayed payoffs. Yet, it is unclear whether this pattern extends to corporate political activity (CPA), particularly lobbying—an investment that is relatively inexpensive and can generate substantial benefits in the short run. We investigate how governance conditions shape the influence of block-holding activism on firm lobbying expenditures. Drawing on an emerging systems perspective on shareholder activism, we theorize how boards (as capability providers) and nonactivist shareholders (as sources of support) shape firms’ lobbying behavior amid shareholder activism. Using panel data on 4,991 U.S. public firms, we find that the influence of block-holding activism on lobbying depends on the governance context; firms with more political directors and greater ownership by lobbying-active shareholders sustain their lobbying following activism, whereas firms without these governance features reduce it. The influence of political directors is amplified when they have greater bandwidth, and the influence of lobbying-active shareholders is strengthened when they have held their positions longer. Our study contributes to CPA research by demonstrating that governance systems determine how activism shapes firms’ political strategies and extends the systems perspective on activism into nonmarket domains of strategy.

Extant research finds that workers often develop negative or ambivalent perceptions of organizational monitoring and thus engage in acts of resistance. However, this work largely assumes that organizational monitoring occurs in isolation, overlooking how the growing presence of external monitoring may fundamentally alter how workers experience organizational monitoring. To investigate this dynamic, we conducted a qualitative study of a U.S. police department where officers faced both organizational monitoring via body cameras and external monitoring via citizens’ cell phones. In the context of external monitoring, we find that officers experienced organizational monitoring as both unreasonable scrutiny and insulating protection that buffered against external scrutiny. To manage their resulting ambivalence toward organizational monitoring, officers disassociated their perceptions of the monitoring technology from policies, which enabled them to repurpose the technology. Officers’ uses of the monitoring technology triggered them to reevaluate the organizational monitoring system as legitimate within the context of external scrutiny. Based on our findings, we develop theory of how control is relationally constituted and legitimated, showing how control mechanisms such as organizational monitoring may shift from coercive to enabling in the context of ubiquitous external scrutiny. We also contribute to extant literature by identifying how workers may manage ambivalence toward organizational monitoring through functional disassociation, separating their perceptions of monitoring policies and technology. Further, we extend existing theory by unpacking how workers’ use of the monitoring technology, combined with external scrutiny as a comparative frame, may facilitate workers’ reevaluation of the organizational monitoring system as a legitimate source of oversight.