Knowledge that Transforms

Recent meta-analytic studies imply that groups often find ways of neutralizing turnover’s harmful effects and that important moderators of the turnover–performance relationship must be missing from the literature. Building on theory and findings related to the threat–rigidity effect, we suggest that groups tend to respond maladaptively to turnover when group norms promote the idea that turnover is threatening. Specifically, we suggest that prevention climate—that is, a climate focused on minimizing mistakes and costs—largely determines the degree to which group norms encourage members to view turnover as threatening and, in turn, the degree to which groups become less adaptive and perform worse in response to turnover. Across a sample of 232 groups, we found evidence that turnover is indeed more negatively related to performance for those groups with a strong prevention climate. Further, in a controlled laboratory context where we manipulated turnover and prevention climate, we found causal evidence supporting our full conceptual model. Our work advances research on turnover by identifying an important moderator and an underlying mechanism of the turnover–performance relationship.

The science of organizations increases its credibility when it embraces research with an explicit focus on robustness and reliability. This special issue of curated commentaries recommends and illustrates how to incorporate robust and reliable research practices in organizational research. Together, these commentaries help researchers make contributions to improving every step of the research trajectory—theory development, methodology, and the process of quality control through peer review.

Although innovation can be a critical source of competitive advantage, research has found that debt can erode management’s willingness to invest in R&D. In this article, we employ a stakeholder bargaining power perspective to argue that this effect is most pronounced when the firm’s bonds are concentrated in the hands of bond blockholders. Furthermore, we contend that the temporal orientation of bondholders influences this relationship. Specifically, while it is commonly assumed that bondholders have a limited temporal orientation that induces them to focus on short-term value appropriation, we argue that some bond blockholders adopt a long-term temporal orientation. This orientation, in turn, makes them more inclined to support long-term value creation for the firm in the form of enhanced investments in R&D. Moreover, while agency theory suggests that there is an inherent conflict of interest between shareholders and bondholders, our results suggest that the temporal orientation of investors (i.e., both shareholders and bondholders) matters much more than whether they invested in the firm’s equity or its debt.

The present research sought to examine the impact of narcissism, prediction accuracy, and should counterfactual thinking—which includes thoughts such as “I should have done something different”—on hindsight bias (the tendency to exaggerate in hindsight what one knew in foresight) and perceived learning. To test these effects, we conducted four studies (total n = 727). First, in Study 1 we examined a moderated mediation model, in which should counterfactual thinking mediates the relation between narcissism and hindsight bias, and this mediation is moderated by prediction accuracy such that the relationship is negative when predictions are accurate and positive when predictions are inaccurate after accurate predictions. Second, in Study 2 we examined a moderated sequential mediation model, in which the relation between narcissism and perceived learning is sequentially mediated through should counterfactual thinking and hindsight bias, and importantly, this sequential mediation is moderated by prediction accuracy. In Study 3 we ruled out could counterfactual thinking as an alternative explanation for the relationship between narcissism and hindsight bias. Finally, by manipulating should counterfactual thinking in Study 4, our findings suggest that this type of thinking has a causal effect on hindsight bias. We discuss why exhibiting some hindsight bias can be positive after failure. We also discuss implications for eliciting should counterfactual thinking. Our results help explain why narcissists may fail to learn from their experiences.

Firms can be horizontally diversified, with considerable breadth, or vertically integrated, with great depth. This study explores how breadth and depth affect each other as influenced by capability requirements and coordination demands. Using construction industry data, we assess the interdependence between contractors’ portfolios of building types (horizontal scope) and the extent of integration of the activities needed to complete each project (vertical scope). We find that vertical and horizontal scope have a negative interdependency only when contractors face managerial constraints due to coordination challenges. Further, we show that this effect can be mitigated through organizational structures that centralize key functions. Our findings highlight the importance of coordination in the theory of the firm, as we link firm boundaries to managerial coordination and internal organization.

In proposing two evolutionary trajectories, we demonstrate some paradoxical aspects of strategic resources that contrast with current theorizing. First, we discuss how an abundance of resources can subject an organization to vulnerabilities, taking a firm from competitive strength to potential weakness. Second, we describe an opposite trajectory in which a lack of resources can lead to reactions engendering significant strengths. In both cases, the effects of resource abundance and poverty on executive perceptions and conduct, organizational arrangements, and strategic behavior can play important roles in trajectories of value creation and erosion.

Prior research has focused on the influence of long investors (e.g., institutional investors) on merger-and-acquisition (M&A) decisions. This study investigates the role of short sellers in shaping managerial acquisitiveness and M&A decision quality. Short sellers impose a downward pressure on stock prices by disseminating negative information to the market. Given that managerial wealth and job security hinge on stock prices, top managers respond to increased short selling by refraining from excessive M&A activities because M&As could provide opportunities for short sellers to spread negative information and dampen stock prices. Furthermore, the negative influence of short sellers on managerial acquisitiveness is enhanced by the market for corporate control as an external governance mechanism and by CEO equity ownership as an internal governance mechanism. When firms with increasing short selling do engage in M&As, they gain higher M&A announcement returns and operating performance. We test our hypotheses using firms in the S&P 1500 from 2002 to 2014 and find support for our arguments.

In light of recent heightened attention to equity, justice, and race in society and organizations, in this commentary, we focus on the experiences of Black management faculty from job search to promotion and tenure. In formulating our ideas, we draw from diversity research conducted within and outside of the management field, including research on minority faculty, coupled with experiences of our own and of Black colleagues. We discuss race-based disparities in such areas as mentoring, social networks, job market experiences, classroom management and student evaluations of teaching, and service demands. We offer suggestions for allies to pursue equity, justice, and inclusion in management departments and business schools.

There is growing interest in management and organizational research to study the relocation of knowledge workers, defined as a move by the knowledge worker to a different place of work. Relocation has been well studied as a potential source of losses or gains in human and social capital. However, our understanding of whether and how it disrupts a scientist’s innovation activities is limited. Relocation could disrupt innovation activities in the new workplace by making it difficult for a scientist to coordinate work with prior collaborators with whom the scientist has relational experience and forcing the scientist to work with new collaborators. In this study, we develop a conceptual framework assessing the effectiveness of the scientists’ research and development (R&D) experience to counter these disruptions arising from relocation and develop valuable patented innovations. We hypothesize that both the scientist’s relational experience and working with new collaborators decrease the value of innovations the scientist creates after relocation. Scientist R&D experience, however, is double-edged in nature: It leads to less valuable innovations prior to relocation but facilitates the creation of more valuable innovations after it. Our theory suggests that this is because R&D experience facilitates the scientist’s adaptation to the new context and helps coordinate her or his activities in new collaborations. Nevertheless, R&D experience is less effective in sustaining the efficacy of relational experience with prior collaborators after relocation. Using a longitudinal dataset from the knowledge-intensive genomics industry, we find support for our hypotheses. This study yields important managerial and policy implications.