Knowledge that Transforms

Research Summary How can organizations establish collaboration between their established members and a newly hired member? We address this question by studying firms undergoing scaling using a multiple‐case study. We find that widely involving the new hire into the established managers' activities backfires. Such extensive involvement is intended to build the same kind of strong, personal relationships with the new hire that the established managers share amongst themselves and, in doing so, establish collaboration. But the established managers' relationships turn out to be irreplicable . Being extensively involved without possessing the same kind of relationships, the new hire becomes perceived as an intruder . In contrast, involving the new hire more selectively led to the new hire becoming respected as a relationally distant but professionally appreciated “ stranger ,” which engendered effective collaboration. Managerial Summary Collaboration between a company's newly hired and established managers is necessary for it to scale but difficult to establish. Many firms mistakenly attempt to involve a new hire in the established managers' activities as much as possible, hoping to build strong personal bonds quickly. We show that this strategy often backfires. The kind of relationships that the established managers have is not easy to replicate, and widely involving the new hire in the absence of such relationships can spur the established managers to perceive the new hire as an intruder. Instead, limiting the new hire's involvement to only the activities directly linked to his or her job may result in the new hire becoming respected as a professional “stranger.” Doing so avoids the discomfort of forced closeness and facilitates effective collaboration.

Research Summary I examine the understudied effects of perceived non‐transferable knowledge on labor market choices after firm‐initiated turnover. Using a large, nationally representative dataset, I assess how workers' perceptions of knowledge transferability, expectations to remain at a firm, and type of turnover experienced correlate with the decision to engage in entrepreneurship. I find that the release of workers with perceived non‐transferable knowledge into the external environment through firm‐initiated turnover reliably foreshadows entrepreneurship, especially as workers' prior expectations to continue wage employment at a source firm increases. This finding indicates that beyond necessity, opportunity and financial resources, workers' self‐perceptions of their human capital and unfulfilled career expectations matter to the choice of entrepreneurship. It also suggests that firm‐initiated turnover may be a form of knowledge divestiture with important ex‐post implications when workers' perceptions of transferability align with reality. Managerial Summary Managers often overlook the role of employees' self‐perceptions in shaping post‐turnover career decisions. This study highlights that workers who perceive their knowledge as non‐transferable—skills and expertise they believe cannot easily be applied to other employers—are more likely to pursue entrepreneurship following firm‐initiated turnover. This trend is particularly pronounced among workers who expected to remain in wage employment but were unexpectedly terminated. Firm‐initiated turnover, while serving to shed human capital, can inadvertently encourage the creation of entrepreneurial ventures that may compete with the firm. To mitigate unintended outcomes, firms should (a) recognize the strategic implications of firm‐initiated turnover as a form of knowledge divestiture, with implications for both the firm and the broader market, (b) reevaluate how they manage exits for employees with the firm's specialized knowledge, to reduce the risk of competitive ventures, and (c) engage in open dialogue to align employee expectations with organizational strategies, considering retention or redeployment options for those at risk of a forced exit. By understanding how workers' perceptions and unmet expectations influence their career paths, firms can make more informed decisions about human capital management and turnover strategies, potentially reducing unintended competitive risks while fostering long‐term relationships with former employees.

Research Summary Entrepreneurs operating in a public interactional domain face a unique communicative challenge: they must leverage conversations with a small subset of vocal discursive partners to mobilize support from a broader base of silent audiences observing these exchanges. I propose that entrepreneurs who engage with these vocal discursive partners using what I refer to as discourse broadening are more likely to successfully gain support from the broader silent audience. Using a computational linguistics model to analyze discourses on an online platform featuring entrepreneurial innovations, this study finds an inverted U‐shaped relationship between discourse broadening and support from silent audience members. This relationship is moderated by the similarity between the interpretative lenses of discursive partners and silent audience members, which influences the trade‐off between the benefits and costs of discourse broadening. Managerial Summary Entrepreneurs often face the critical challenge of persuading broader audiences to support their novel ideas despite having limited opportunities to interact with them directly. This article examines how entrepreneurs can strategically engage with their immediate conversational partners on online platforms to gain support from a wider base of silent observers. The findings show that entrepreneurs must carefully balance the extent to which they broaden the discourse with their conversational partners to maximize support from the broader audience. They also need to tailor the level of discourse broadening based on how much their conversational partners represent the views of silent observers. These insights reveal a discursive strategy that entrepreneurs can leverage on online platforms to increase the likelihood of success in commercializing their innovations.

Research Summary This study introduces category interaction codes—knowledge regarding the expected interactions around entities in a given category—as a critical dimension of category strategy. Through historical analysis of Wang Laboratories in the early computer industry, we demonstrate how these codes shape strategic categorization and competitive dynamics. We show that firms can exploit ambiguous interaction codes to access advantageous decision makers and organizational routines, circumventing entrenched competitors. Further, firms can institutionalize preferred interaction codes through product design, reshaping category prototypes and market dynamics. However, overcommitment to specific interaction codes creates competitive vulnerabilities when market conditions shift. By developing an “inhabited” view of categories that emphasizes socially embedded practices, this study reveals how market categories are enacted through interactions and offers new insights into category‐based competition. Managerial Summary This study introduces category interaction codes —expectations about where, when, how and by whom products are evaluated, used, and purchased within a market. Using the case of Wang Laboratories in the early computer industry, we show that companies can gain a competitive advantage by leveraging and reconfiguring category interaction codes . For example, Wang Laboratories sidestepped direct competition with IBM by categorizing its products for engineers and department managers rather than MIS executives, and outperformed IBM in word processing by innovating how actors interact with the new category. For managers, the key insight is that success depends not only on product features but also on how your product fits into the daily decisions, roles, and behaviors that define a category.

Research Summary While the influence of CEO characteristics on M&A decisions has long spurred researchers’ interest, little attention has been devoted to the ramifications of CEO integrity—the adherence to generally accepted norms and standards. We investigate how CEO integrity influences different stages of the M&A decision process. Specifically, we argue that while CEO integrity reduces self‐serving behavior, it may also become a golden cage that constrains CEOs’ latitude of action. Accordingly, we find that CEO integrity decreases the probability of Type I errors (errors of commission) but increases the probability of Type II errors (errors of omission) in M&A decision‐making. We contribute to theory development by putting forward CEO integrity as an important personality construct for upper echelons research to build on and extend further. Managerial Summary This paper examines how CEO integrity influences M&A decision‐making, providing key insights for corporate strategy. Analyzing data from S&P 1500 firms (2006‐2021), we find that CEOs with higher integrity are less likely to engage in frequent or large‐scale M&As, particularly avoiding cross‐border deals due to higher uncertainty and potential risks. High‐integrity CEOs also tend to pay lower acquisition premiums and take longer to complete deals, reflecting a cautious and thorough approach. While CEO integrity helps protect firms from costly mistakes it may also lead to missed growth opportunities, indicating a trade‐off between stakeholder considerations and strategic risk‐taking. Boards may need to tailor governance frameworks to optimize the balance between the benefits and constraints of CEO integrity.

Research Summary When and why do producers change the categorization of their offerings? Prior categorization research assumes that producers engage in ongoing efforts to proactively optimize their categorical positioning, but this assumption may not hold for many producers due to their limited attentional capacity. Our theoretical account instead highlights the role of expectation violation cues—salient pieces of information indicating a violation of audience expectations—as triggers that can lead producers to revise their category choice. Our longitudinal study of 84,667 Airbnb hosts' categorization choices finds that negative customer reviews—an important form of expectation violation cue—significantly increase the likelihood of category‐switching, particularly in categories with heterogeneous expectations. Our study suggests that many producers might be less proactive about their category choices than previous research assumed. Managerial Summary How businesses categorize their products and services influences their commercial success; yet, there exists very limited understanding of when, why, and how businesses revise their category choices. Our study, which tracked the category choices of over 80,000 Airbnb hosts over time, reveals that Airbnb hosts most commonly switch categories after receiving negative customer reviews, particularly when a review indicates that the accommodation did not meet customer expectations and if the previously chosen category lacks a clearly defined set of expected features. When switching categories, hosts tend to choose categories that are relatively similar to their prior choices and that seem to accommodate a wide variety of offerings. These patterns suggest that many businesses might be less proactive about their category choices than previous research assumed.

Research Summary We study how autonomous Emergency Medical Service (EMS) teams prioritize competing financial and social goals during 9‐1‐1 calls. Prior research highlights organization‐level solutions that enable single‐goal pursuit, but it remains unclear how frontline professionals manage competing goals that are interdependent and inseparable during task execution. We argue EMS teams will dynamically prioritize goals across calls depending on contextual factors. Using quasi‐random assignment of 9‐1‐1 patients to EMS crews in 31 US states, we find that crews prioritize the financial goal on private insurance calls but shift toward the social goal when agency financial need is low or call acuity is high. Surprisingly, these patterns are most pronounced in non‐profit EMS agencies. Our study offers new insight into how professionals manage goal trade‐offs in real time. Managerial Summary What happens when professionals must pursue competing goals—like financial performance and equitable service—but organizations cannot separate them across tasks? Using data from 31 US states, we examine how Emergency Medical Service (EMS) teams navigate this tension during 9‐1‐1 calls. We find that crews dynamically prioritize goals based on perceived risk and opportunity—even without managerial intervention or immediate incentives. Teams provide more services to privately insured patients to increase revenue but shift toward equitable care when patient needs are more urgent or agency finances are stable. Surprisingly, these trade‐offs are most pronounced in non‐profit agencies. Our findings suggest that when goals collide within tasks, managers can shape frontline decision‐making by influencing how professionals understand goal risk and opportunity.

Research Summary Scholars have long investigated the possible benefits of corporate social responsibility (CSR). One of the most influential of these studies tests and supports the hypothesis that CSR increases access to finance. Yet, I show here that the finding is unsound because the report's empirical method limits what can be inferred from its analysis. I rectify a key weakness and replicate the study. I observe a cross‐sectional association but find no evidence that CSR increases access to finance. My analysis suggests new directions for research on the effect of CSR. Managerial Summary Numerous articles have explored the possible benefits of CSR. A highly influential study claims that CSR improves a corporation's ability to access capital, and this finding has been widely used by scholars, fund managers, and policymakers. Unfortunately, the finding is unsound because the study's research method used predicted values of access to capital rather than direct measures. A rectification and extension of the original analysis fails to uncover evidence that firm‐level changes in CSR are associated with access to capital.

Research Summary Studies on board interlock networks are divided into two streams, one examining their dynamics; the other, their consequences. We propose that both phenomena—board interlock dynamics and consequences—are interdependent. Applying structuration theory, we explain and empirically demonstrate how firms' corporate strategic actions (specifically, acquisitions and divestitures) influence the creation and dissolution of different types of board interlock network ties and how these interlock ties, in turn, influence firms' corporate strategic actions. Integrating the two research streams, we complement corporate governance literature by demonstrating how corporate strategic actions and certain types of board interlocks coevolve. We contribute to theory on strategic networks by explaining coevolution through a structuration theoretical lens. Lastly, we illustrate methodological advances by using multiplex stochastic actor‐oriented models to analyze coevolution processes. Managerial Summary The dynamics of board interlock networks—networks resulting from executive and non‐executive directors serving on multiple boards—and the consequences of such networks have been treated as disjunct topics in prior research. We argue and show empirically that certain types of a firm's board interlocks and its corporate strategic actions (specifically, acquisitions and divestitures) are mutually dependent. Applying network analysis to a longitudinal sample of large German firms, we find that firms adapt their actions to the actions of those firms they have directed interlocks with. Vice versa, corporate strategic actions influence the creation and dissolution of board interlocks. Our findings suggest that the dynamics of board interlock networks play a more prominent role in firms' corporate strategic decisions than commonly assumed.

Research Summary Through both qualitative and quantitative analyses of large‐rocket providers' support for small‐satellite manufacturers before the emergence of small rockets, we examine how disruptors to an incumbent ecosystem gain support from complementors of the incumbent technology. Our analyses illuminate the incumbent complementors' adjustment costs arising from cospecialization with specific incumbent technology designs and resource dependency on major incumbent technology customers. These adjustment costs disincentivize incumbent complementors from supporting the disruptors. In addition, we demonstrate that strategies adopted by the disruptors, such as technological standardization and forward integration, help mitigate these adjustment costs and incentivize incumbent complementors to support the disruptive innovation. Managerial Summary Small satellites represent a disruptive innovation that significantly reduces the time and cost of satellite production and launch. Despite the large number of small satellites launched today, initially, they were viewed as “second‐class launch citizens,” with incumbent large‐rocket companies resisting launching them. This paper examines how small‐satellite manufacturers overcame this resistance before their dedicated small‐satellite ecosystem was established. We identify the adjustment costs that caused resistance from large‐rocket companies and examine two specific strategies implemented by disruptors—technological standardization and forward integration—to mitigate these costs and gain support from large‐rocket companies.