Knowledge that Transforms

Abstract The climate crisis challenges management scholars to address the system‐level factors that constrain and enable firms’ climate action. We argue that to meet this challenge, we need to study the climate action capacity of alternative systems of political‐economic power. We proceed in three steps. First, we develop a historically grounded map of four main types of power systems: ‘Oligarchy’, ‘Localism’, ‘Authoritarianism’, and ‘Democratization’. These types represent analytical categories – not clichéd labels – to examine alternative responses to the climate crisis. Second, we use this map to compare four cases in the taxi transportation sector, a sector which exemplifies the confluence of the digital and green revolutions in today’s political‐economic landscape. Our analysis of these cases suggests that Oligarchy’s climate action capacity is weak because its climate action is limited to what is profitable for the dominant firms. Oligarchy has been challenged by Authoritarianism, whereas Localism and Democratization have yet to yield stable alternatives. Building on these insights, in the third step we identify three priorities for strengthening our field’s capacity for relevant climate action research: (a) a focus on the systems within which firms are embedded, (b) a focus on political‐economic power, and (c) a programme of international comparative research.

AbstractHow should academic fields take on the existential risks created by the climate crisis? What can business schools do to accelerate the decarbonization of business required to save our species? In their Point, Bansal et al. argue that the field of strategic management is complicit in bringing about our current crisis, and they propose to reformulate the field's very foundations to help get us out. In our Counterpoint, we show why we agree with the diagnosis but argue why we are sceptical of the cure. Strategic management incubated in business schools devoted to creating shareholder value, and its central frameworks commit it to this mission, making it fundamentally impossible to reform. The adjustments suggested by Bansal et al. might nudge what is published in journals but will not solve the bigger challenge. If we are to turn back from the climate disaster and begin the process of mitigation and remediation, we need to equip firms to decarbonize their operations as quickly as possible, and to create new kinds of enterprise to bring about the clean energy transition. Given its history and methods, organization theory may be better equipped to take on this role.

AbstractThe field of Strategy has its origins in Business Policy, which emphasized how firms could pursue important social aims that individuals and governments could not pursue otherwise. This emphasis shifted in the 1970s as the field turned towards economics for insights. Strategy scholars began to address how market‐ and industry‐level considerations, such as performance, price, and competition, were pursued by firms. By applying macro‐level principles and assumptions analogically to a more micro‐level of analysis, strategy scholars inadvertently committed what statisticians call an ecological fallacy. Educators and scholars in the field of Strategy started to accept the constructive consequences of growth, not only for the economy, but for every firm, without considering the implications for society and the natural environment. In so doing, Strategy scholarship inadvertently undermined its very ambition to advance social aims. Our Point advocates for reconsideration of the field's foundations so as to remediate the ecological fallacy and to address the climate and biodiversity crises. The goal is to offer a brighter and more relevant future for our discipline.

AbstractAs predictive artificial intelligence (AI) technologies increasingly steer workplace decisions, debates around fairness have intensified. Existing research often approaches fairness either as a set of universal principles supported or undermined by algorithms, or as a product of social interpretations, thereby providing either technologically deterministic or purely social accounts. Drawing on an ethnographic study of a human resources (HR) department of a large international company that introduced AI in hiring, this study offers an alternative view that shifts focus to how fairness emerges through the ways people define, embed, and perform values with algorithms. Taking a sociomaterial perspective, we find that the introduction and use of AI resulted in crowding out expert practices of performing fairness, favouring instead the version performed by HR. Our process model explains this outcome by the growing symbiosis between HR's professional mandate for fairness and AI procedures, where each legitimizes, shapes, and protects the other over time. This study thus shows that fairness is not pre‐given but constantly redefined and enacted through evolving associations between professional mandates and AI technologies.

AbstractPrior research highlights the disruptive and detrimental effects of chief executive officer (CEO) successions that involve a change of gender, i.e., from a male CEO to a female CEO and vice versa. In contrast, we contend that the effects of CEO successions with gender change depend on the context in which they take place. Drawing on expectation states theory, we identify contexts in which each type of CEO succession with gender change can have positive effects on strategic change and subsequent firm performance, depending on whether the degree of gender parity in the context is sufficient for the new CEO to enact strategic changes. Consistent with our arguments, we report findings from Chinese and US samples showing that in the presence of high environmental dynamism female‐to‐male CEO succession yields greater strategic change. Conversely, when environmental dynamism is low, it is male‐to‐female CEO succession that brings about greater strategic change. Furthermore, in the Chinese context, we found that female‐to‐male CEO succession in state‐owned companies results in greater strategic change, whereas male‐to‐female CEO succession has the same effect in privately‐owned settings. Moderated mediation analysis showed that the significant interaction effects on strategic change affect long‐term downstream performance (i.e., Tobin's Q). We discuss implications for theory and practice related to CEO successions.

AbstractResearch suggests that firms with good reputations will work to protect them, as good reputations are assets that attract resources and facilitate market exchanges. But good reputations do not just attract resources and facilitate exchanges; they can also buffer firms from scrutiny. Therefore, this study asks whether organizations with good reputations will still perform well, even if they are less likely to be watched or held accountable for doing poorly. The study bounds its focus to a form of performance that depends on external oversight, in this case through the regulatory governance process. The theory suggests that higher regulatory reputations, as measured through increases in ratings, will lead to weaker monitoring – which, in turn, allows performance to decline in the regulated domain. An analysis of public health outcomes in the cruise travel industry provides support for these predictions. Tests of moderating hypotheses suggest that the direct effect of ratings on performance is stronger when regulators have more power over the organization, and when the organization is not already under scrutiny for poor performance on other ancillary dimensions.

AbstractNeo‐institutional theory predicts that when adaptations to institutional pressures contradict a firm's efficiency needs, decoupling may arise. This study systematically investigates the drivers of heterogeneous decoupling in the context of international expansion. We propose that specific configurations – awareness of peers’ decoupling, a strong motivation to obtain legitimacy through ceremonial conformity, and a weak capability to couple stated policies with practices – will lead to a high occurrence of decoupling. An empirical analysis of 8918 annual reports of 1974 Chinese‐listed companies from the period 2013–17 suggests that the ‘Go Global’ initiative undertaken by the Chinese government has created high institutional pressure for all Chinese firms to expand globally. However, when the implementation of that move is perceived as too costly or risky for a firm, the firm is likely to choose to decouple its international expansion from its stated commitment to expand under certain configurations of awareness, motivation, and capability conditions. Our theory and empirical findings extend decoupling research and international business research by providing a holistic configurational analysis of firms’ decoupling in an international expansion context.

AbstractDuring the pre‐merger phase of an acquisition, fundamental decisions are made concerning whether to buy, which company to buy, and how much to pay. Further, acquisitions carry significant firm‐wide implications requiring input from multiple different specializations, and hence, they are the product of the judgements, decisions, and social interactions between top managers. We focus our theory development on a pivotal yet under‐researched top management team characteristic, transactive memory system (TMS). TMS is the shared division of cognitive labour with respect to encoding, storing, and retrieving knowledge from individual areas of expertise. We theorize that TMT transactive memory directly influences the strategic decision making process, which in turn determines acquisition performance. We test our hypotheses with a sample of 109 acquisitions, combining survey and archival data. We find that TMT transactive memory increases reliance on expert intuition and procedural rationality, while reducing political behaviour; and each of these three strategic decision processes carries different implications for acquisition performance. Our study advances theory by explaining the team‐level behavioural mechanisms that underlie acquisition performance.

Abstract Recent research has pointed to value congruence between a firm and its stakeholders as a key driver of corporate socio‐political activism. However, this ‘stakeholder alignment’ model of corporate activism does not adequately explain how firms foster value congruence with their stakeholders. Drawing from an inductive study of Patagonia, Inc., we develop a social‐symbolic work perspective of stakeholder alignment for corporate activism by introducing the concept of ‘value congruence work’. Our findings demonstrate how attractional value congruence work aims to draw in stakeholders with similar values to engage with the firm, and co‐evolutionary value congruence work facilitates different forms of learning to sustain alignment between a firm and its stakeholders. Our findings offer new insights for research on corporate socio‐political activism and values work in organizations.

AbstractThe rise of artificial intelligence (AI) has generated extensive debates about the future of work in the professions. However, few studies take account of the potential for AI's disruptive effects to trigger robust defence by professionals of their interests and resources. By examining the adoption of AI in accounting and law professional service firms (PSFs), we show how professionals respond through intertwined boundary work, this being the process by which professionals respond to disruptions and protect interests and resources by engaging in multiple interdependent modes of boundary work. We also examine the way professionals collaborate with other groups as part of intertwined boundary work, and the implications for some key features of PSF organization. Our study reveals that the responses of professionals to AI are leading to new types of professional work and services. This means that rather than spelling the ‘end of the professions’, AI is leading to reconfigured forms of professional activity, jurisdiction, and PSFs.