Knowledge that Transforms

Unlike problems requiring new-to-the-world solutions that combine knowledge from multiple sources, operational problems can often be solved by repurposing existing knowledge from other contexts into new-to-the-firm solutions. Firms that seek new-to-the-firm solutions to operational problems face a cost-benefit tradeoff when deciding how many knowledge sources to use. With less need for knowledge recombination than for new-to-the-world solutions, greater knowledge breadth incurs greater screening and implementation costs without concomitant benefits. We study how U.S. manufacturing facilities, from 1991 to 2005, improve operational performance by reducing their rate of annual output of toxic chemical waste (i.e., improvements to operational effectiveness). Results show that search involving fewer knowledge sources in a given year is associated with greater improvements in operational performance (greater waste reduction). At the same time, though, using multiple knowledge sources over time helps improve operational performance, suggesting that avoiding satiation from a single source and learning across sources play temporal roles in toxic chemical waste reduction. Overall, the results suggest that the greatest improvements in operational performance arise with a focused search for new-to-the-firm solutions within periods, while also exploring multiple sources over time.

When organizations strategically adopt cultural elements—such as a name, a color, or a style—to create their products, they make crucial choices that position them in markets vis-à-vis competitors, audiences, and other stakeholders. However, although it is well understood how one specific cultural element gets adopted by actors and diffuses, it is not yet clear how elements fare when considered within an industry choice-set of elements. Their popularity depends on idiosyncratic features (such as the category they belong to), or on structural factors such as their embeddedness (through connections to producers, audiences, or even other cultural elements). We develop an integrated perspective on the popularity of cultural elements in markets. We use a network perspective to show that the popularity of elements is fostered by being structurally embedded among many unconnected elements, in addition to not being affiliated to actors widely exposed in the media. We develop our study by using a unique data set of fashion stylistic elements in the global high-end fashion industry from 1998 to 2010.

Although it is well known that team performance influences strategic decision making, little is known about its impact on ascriptive inequality. This study proposes a performance effect on racial bias: higher team performance reduces managers’ performance pressure and therefore, leads to more managerial bias in the subsequent decisions. I find strong evidence for this proposition using a fine-grained data set from the National Basketball Association. In this highly competitive industry, team performance is positively associated with coaches’ subsequent exercise of racial bias: players experience more favorable treatment from same-race coaches after their teams win games. This study shows an important relationship between performance feedback and racial bias and suggests that, even in highly competitive industries, managerial bias may persist in high-performing teams and organizations. The online appendices are available at https://doi.org/10.1287/orsc.2018.1232 .

Product categories are more than classification devices that organize markets; when reflecting market actors' purposes, they are also judgment devices. Taking stock of the literature on product categories and drawing on the distinction between the faculties of knowing and judging, we elaborate a framework that accounts for how and why market actors include or exclude normative attributes in a product category definition. Based on a field study of the development of socially responsible investment (SRI) funds in France, we describe the phases and conditions of a judgment framework for category definition for both established and nascent categories. We discuss implications for research on product categories and the workings of markets more broadly.

To understand how recipients respond to radical change over time across cognitive, affective, and behavioral dimensions, we conducted a longitudinal study of a mandated language change at a Chilean subsidiary of a large U.S. multinational organization. The engineering-focused subsidiary aiming to facilitate cross-border interactions embedded language-acquisition experts to transition all employees from Spanish to English full time. We gathered survey data and objective fluency scores from the language change recipients at five points over a period of two years. Using variable- and person-centered exploratory analyses, our results suggest that recipients’ negative affective responses to the language change precede their cognitive responses or self-efficacy, predicting their current language learning. Further, we find that recipients’ cognitive and affective responses over time differentially influence two future behavioral outcomes: intention to leave the organization and willingness to adopt the change. Although cognitive rather than affective responses over time drive recipients’ intentions to leave, affective responses influence recipients’ willingness to adopt English. Finally, we show that change recipients followed three trajectories of cognitive responses and two trajectories of affective responses over time. We discuss theoretical and practical implications to the literature on organizational change, emotions, and language in global organizations.