Knowledge that Transforms

ABSTRACTContributing to emerging research on corporate governance and operations management, our study examines the connection between board diversity and workplace safety. We propose that boards with a higher representation of female directors prioritize and thus enhance workplace safety due to women's distinct social‐cognitive perspectives on stakeholders, risk avoidance, and regulatory compliance. We also consider two conditions that may strengthen the relationship between female board representation and workplace safety: (1) the power of the female directors on the board, which may cause them to speak out more, and cause others to heed their perspectives; (2) accountability pressures faced by the board, which may increase board member epistemological motivation (the willingness to invest effort to fully understand the board's tasks and decisions being made). Analyzing a unique dataset that covers 1442 firm‐year observations across 266 firms, we show that female board representation improves workplace safety when women have more power and when boards face greater accountability pressures. In an empirical extension, we examine how the representation of racial/ethnic minority directors impacts workplace safety and the synergistic effect of female and minority board representation. Our findings deepen our understanding of how board diversity interacts with situational factors to influence operational outcomes.

Abstract We investigate how innovation intermediaries address shortfalls in the capabilities that buyers and suppliers must have to access each other's knowledge for innovation purposes, also referred to as indirect capabilities. Prior research on supplier‐enabled innovation has identified various capabilities that buyers need in order to collaborate with innovative suppliers. It recognizes that suppliers also require capabilities to access buyer knowledge. However, we still know little about the role of innovation intermediaries—actors who are neither buyers nor suppliers, but still influence innovation processes and outcomes in supply networks. Our case‐based research shows that intermediaries create workspaces for R&D and experimentation, help to refine definitions of requirements and de‐risk novel solutions, support contracting, and facilitate solution implementation. We contribute to research on supplier innovation by developing a model of intermediaries' activities and underlying capabilities, and their impact on innovation sourcing outcomes. We elaborate the indirect capabilities theoretical perspective by introducing additional types of indirect capabilities for collaborative innovation in supply chains, and showing how these capabilities interrelate. We furthermore extend the literature on innovation intermediaries by elucidating hitherto unexplored capabilities for intermediation and adding insights regarding the contribution of intermediaries to open innovation processes.

ABSTRACT Due to the COVID‐19 pandemic, global supply chains have experienced sustained impacts from unprecedented complex disruptions in different combinations and at different times. From an efficiency perspective, do these complex supply chain disruptions call for more complex risk management strategies? To answer this, we built an empirically grounded discrete event simulation model, the results of which were analyzed using data envelopment analysis. Results show that with unprecedented complex disruption patterns, a multi‐strategy portfolio approach is usually less efficient than a single‐strategy or a do‐nothing approach unless the strategy portfolio has certain characteristics. The most efficient strategy portfolios typically consist of a moderate number of diverse strategies. Too many strategies in a portfolio can be problematic, leading to increased costs that outpace improvement in revenue and service level. Results illustrate that even a strategy that generally performs poorly can be part of a very good strategy portfolio and vice versa. This study provides nuanced and novel findings that contribute to the resolution of the literature debate about the value of multi‐strategy portfolios in addressing complex disruption patterns. Highlighting the value of a strategy portfolio view, these insights help firms better prepare for the next complex and sustained global supply chain disruptions.

Abstract Operating flexibility supports a firm's resilience strategy during challenging times by enabling them to promptly cut down operating costs associated with unproductive resources. We employ a real options model to formalize this insight. Our empirically grounding analytics motivate a firm‐level proxy for downscale operating flexibility (FLEX), which effectively captures the adjustment frictions across different contexts of firms' operations. Using U.S. data between 1961 and 2020, we show that operating flexibility mitigates the risk of stock price crashes, especially during periods of economic recession. Consistent with the loss‐curtailment mechanism, the operating flexibility effect is more pronounced for firms with lower productivity/profitability or higher operating leverage and is further amplified during longer and more severe recessions. Managers may avail themselves of our well‐tested empirical measure of operating flexibility to guide their efforts in building a more resilient operations structure.

AbstractDrawing on real options and resource dependence theories, this study examines how firms adjust their innovation investments to address trade policy effect uncertainty (TPEU), a type of firm‐specific, perceived environmental uncertainty capturing managers' difficulty in predicting the impacts of potential policy changes on business operations. To develop a context‐dependent, time‐varying measure of TPEU, we apply bidirectional encoder representations from transformers, an advanced deep learning technique. We analyze the texts of mandatory management discussion and analysis sections of annual reports from 3181 publicly listed Chinese firms. Our sample comprises 22,669 firm‐year observations spanning the years 2007 to 2019. The econometric analyses show that firms experiencing higher TPEU will reduce innovation investments. This effect is stronger for firms facing lower competition, involving more foreign sales, and not owned by the state. These findings provide clarity on previously inconclusive results by showcasing the significant influence of policy effect uncertainty, as opposed to policy state uncertainty, on firms' decisions regarding innovation investments. Additionally, these findings underscore the importance of resource dependence factors as crucial contextual factors in this decision‐making process.

AbstractWe study the effectiveness of two theoretically and practically relevant interventions designed to increase familiarity with and thereby stimulate the appeal of and willingness to pay (WTP) for remanufactured (refurbished) consumer products that are often found repulsive by consumers: (1) educating consumers about the remanufacturing process, (2) providing physical exposure to remanufactured products. We find that education does not cause an increase in the appeal of and WTP for remanufactured consumer products. Providing physical exposure to remanufactured products, relative to text and text‐plus picture or video modalities, significantly increases both the appeal and WTP as a result of increasing perceived quality and decreasing disgust. Sellers can benefit from marketing remanufactured consumer products through physical channels (i.e., brick‐and‐mortar, outlet, showroom stores) as opposed to solely through online channels, which is the common practice among many sellers.

AbstractAs suppliers' emissions contribute to a significant portion of the global environmental footprint, achieving supply chain wide carbon neutrality largely depends on suppliers' greenhouse gas (GHG) emissions reductions. Although suppliers' customers are increasingly signaling their commitment to tackling climate change through environmental disclosure, whether this signal contributes to supplier emissions reduction remains a question. Using signaling theory, this research proposes an emissions‐reducing effect of customer base environmental disclosure on a supplier's GHG emissions level. Using a 2010–2017 panel dataset from multiple sources, we find empirical evidence supporting the upstream emissions‐reducing effect of customer base environmental disclosure. Further, we identify two customer‐base characteristics that affect this relationship: customer base climate innovation and competition. These findings contribute to the sustainable supply chain management literature by illustrating the effects of the customer base on supplier emissions performance. Specifically, customers could motivate a supplier's engagement in emissions reduction by collectively signaling their environmental commitment through enhanced disclosure. However, the effectiveness of this signaling effect can be contingent on the green innovation and competitive dynamics of the customer base.

AbstractLarge government projects involving public–private collaborations inherently suffer from setbacks such as delays, cost overruns, or failure to meet contracted performance. Such setbacks may effectively be addressed through adjustments to contractual and relational governance; yet to date, the dynamics of governance adjustments and their interplay in addressing setbacks is not well understood. This research presents a dynamic theory of how parties can effectively address project setbacks through adjustments to contractual and relational governance. The dynamic theory was generated using longitudinal case data from two large public–private projects in the Netherlands that faced comparable project setbacks but deployed opposing governance adjustments, leading to drastically different project outcomes (i.e., collapse vs. recovery). This theory was then elaborated through two more cases and evidence from the literature. A system dynamics simulation model was then built that reproduces the different governance adjustments and outcomes observed in the four projects and serves to extend theory building. The refined theory not only shows under what conditions adjustments to contractual or relational governance are most effective, but also that governance adjustment interplay may trigger unintended side effects. As such, the theory explains why the careful balancing of governance adjustments is critical to project outcomes.

AbstractThis research examines the impact of leader disability status on the operational performance of teams that include individuals with disabilities (IWD) using longitudinal micro‐data from an apparel manufacturing company in a competitive integrative employment environment. To aid in developing the research hypotheses and in interpreting the empirical findings, the quantitative analysis is complemented with qualitative data collected through interviews involving managers and workers with and without disabilities at the focal firm and two other large companies that employ IWD. A beneficial moderating effect of leader‐worker disability status similarity on team performance is hypothesized and subsequently tested using Prais‐Winsten regression. The results show that a leader with a disability has a potentially beneficial impact on team performance as the number of workers with disabilities in the team increases, resulting in improved productivity (measured in labor hours per garment) and quality (measured in operator defects per garment). The theoretical, managerial, and policy implications of the study provide actionable insights for the creation of an inclusive labor force.