Knowledge that Transforms

We use an event-study analysis to understand how alliance activity affects firm risk. The risk measure is the implied volatility of a firm’s stock price and the events are alliance announcements to the market. We build on the previous event-studies in the alliance literature that focus on the change in shareholder value by taking the first step in delineating what part of that value arises from the changes in the firm’s risk. The analysis reveals that a number of factors within a firm’s control can be used to manipulate risk exposure in an alliance, including the similarity of the firm’s and the alliance’s core activities, the governance form of the alliance, and the function of the alliance.

The Internet and other communication and information technologies have not only increased the efficiency and effectiveness of existing forms of interorganizational connection, but have also made possible the emergence of a new form – “virtually embedded ties”. Such ties have two essential features: first, they utilize electronic communication and information technologies; second, the use of those technologies allows them to overcome the exchange-related problems previously addressed through the formation of socially embedded ties. We argue that virtually embedded ties offer an important alternative to socially embedded ties in industries that are characterized by high levels of dynamism.

This study examined the relationship between race and interview ratings in a structured selection panel interview. Data from 1,334 police officer applicants who were interviewed by three-person panels were examined to explore how applicant race, rater race, and panel racial composition related to interview ratings and change from initial to final ratings. Results revealed the largest effect was for panel racial composition, such that predominately White panels provided significantly more favorable ratings to applicants of all races compared to panels composed of predominately Black raters. However, a significant three-way interaction between rater race, applicant race, and panel composition was also found. Specifically, Black raters evaluated Black applicants more favorably than White applicants only when they were on a predominately Black panel. These results may help explain past inconsistencies in the literature regarding the effects of rater race and applicant race on ratings.

Both laboratory and field experiments have limitations that likely account for the recent decline in their usage among organizational researchers. In this article, we introduce situated experiments as an experimental approach that optimizes the strengths of both laboratory and field experiments in organizational research while mitigating the weaknesses of each. We highlight four recently published studies using situated experiments. Drawing on these examples, we illustrate how the proper use of situated experiments can minimize threats to internal validity and ensure the ethical treatment of research participants.

This study tests the view that competitive advantage lies in organizational processes and capabilities to secure patents. Since, by definition, patents are valuable and rare, here we test the extent to which patent citations and claims capture, respectively, inimitability and non-substitutability. Focusing on 85 publicly traded pharmaceutical firms (SIC 2834), we find that once the effects of firm size, past performance, and investment in innovation are held constant, inimitability is significantly related to firm profitability and new product introductions. Non-substitutability is significantly related to new product introductions only.

While the increasing sophistication of information technology has led to the spread of virtual organizations, there has been very little research on what factors contribute to individuals’ effectiveness in such organizations. This paper argues that organizations possess different degrees of virtuality based on four dimensions of temporal, spatial, cultural, and organizational dispersion. Using a person-environment fit framework, a theoretical model that identifies individual qualities required to fit into virtual organizations, virtual teams, and virtual jobs is developed, taking into account dimensions and degrees of virtuality. Mechanisms for enhancing fit in virtual organizations as well as theoretical and practical implications of the model are addressed.