Knowledge that Transforms

AbstractWe draw from cognitive science literature on rule‐based thinking to develop and empirically test a theoretical framework of entrepreneurial opportunity evaluation. We argue that entrepreneurs make use of socially constructed rules to discern the attractiveness of an opportunity, for them, specifically. Using conjoint analysis data of 498 decisions made by 62 entrepreneurs, we find that entrepreneurs' use of rules regarding opportunity novelty, resource efficiency, and worst‐case scenario significantly influences entrepreneurs' evaluations of opportunities and that individual differences in opportunity market and technology knowledge augment the effect of the rules on opportunity attractiveness. Additionally, we document that the worst‐case scenario diminishes the positive effect of other rule criteria (e.g. novelty, resource efficiency) on opportunity evaluation and that market and technology knowledge further influence the negative effects of the worst‐case scenario.

AbstractWe propose a conceptual model that links entrepreneurs' passion, network centrality, and financial performance, and test this model with small business managers in formal business networking groups. Drawing on the dualistic model of passion, we explore the relationships that harmonious and obsessive passion have with financial performance, mediated by network centrality. Results indicate that harmoniously passionate entrepreneurs had higher out‐degree centrality in their networking group (i.e., they were more inclined to seek out members to discuss work issues), which increased the income they received from peer referrals and, ultimately, business income. Obsessively passionate entrepreneurs had lower in‐degree centrality (i.e., they were less likely to be approached by peers), and in turn received less income from referrals and less business income. These findings highlight that entrepreneurial passion does not always result in positive financial outcomes – the type of passion makes a difference. Implications for research and practice are discussed.

AbstractUntil recently, the field of strategy has neglected the question of what it means to be a strategist. Based on an analysis of 68 interviews with strategy practitioners, our results highlight four main tensions that emerge from strategists' discourses on strategizing work: the social tension, the cognitive tension, the focus tension, and the time tension. This tension‐based representation of strategy enables us to differentiate between three forms of strategists' subjectivities, i.e. the ways by which strategists discursively cope with tensions as a means of constituting their identity and legitimacy: the mythicizing subjectivity, the concretizing subjectivity, and the dialogizing subjectivity. Such results shed light on what a strategist is, suggesting that strategizing can be conceptualized as the art of balancing tensions and that multiple strategists' subjectivities within a paradox lens on strategy may in fact co‐exist.

Abstract Management scholars have explored how certain actors in meetings – especially leaders – shape social processes of interaction and use different linguistic devices, as methods, to affect how sense is made of strategic issues. Less attention has been paid to interactions between members of the team as a whole and the repertoire of discursive strategies, or goal‐directed behaviours, that they deploy to create shared views around issues. We analyse rare empirical episodes of team discussions of strategic issues in board meetings to inductively conceptualize how this is achieved. To do this we use theDiscourse‐HistoricalApproach (DHA) to critical discourse analysis (CDA). We reveal five discursive strategies teams use to develop shared views around strategic issues (Re/defining,Equalizing,Simplifying,Legitimating, andReconciling) and demonstrate how they are skilfully operationalized through a range of linguistic devices or means.

AbstractIn this Point–Counterpoint article we argue that institutional scholarship has become overly concerned with explaining institutions and institutional processes, notably at the level of the organization field, rather than with using them to explain and understand organizations. Especially missing is an attempt to gain a coherent, holistic account of how organizations are structured and managed. We also argue that when institutional theory does give attention to organizations it inappropriately treats them as though they are the same, or at least as though any differences are irrelevant for purposes of theory. We propose a return to the study of organizations with an emphasis upon comparative analysis, and suggest the institutional logics perspective as an appropriate means for doing so.

AbstractActors within organizations commonly must make choices armed with incomplete and asymmetrically distributed information. Signalling theory seeks to explain how individuals are able to do so. This theory's primary predictive mechanism is ‘separating equilibrium’, which occurs when a signal's expectations are confirmed through experience. A content analysis finds that most strategic management signalling theory studies have not fully leveraged separating equilibrium. This presents two possible paths for future research. First, some researchers may wish to incorporate separating equilibrium. We illustrate how doing so can uncover new relationships, generate novel insights, and fortify the theory's application. Others who want to theorize about signals, but not examine separating equilibrium, could integrate ideas from signalling theory with other information perspectives. Here a signal becomes one stimulus among many that corporate actors interpret and act upon. We provide research agendas so strategy scholars can apply signalling theory most effectively to meet their research objectives.

AbstractIn contrast to models of compassion within existing organizations, this grounded theory study examines how ventures emerge relying on localness and community in direct response to ‘opportunities’ to alleviate suffering in the aftermath of a natural disaster. While a natural disaster is a surprising disruptive event devastating a local community, that local community is nested within a broader community, which can be a source of abundant resources. Ventures created in the aftermath of a natural disaster, given local knowledge and unencumbered by pre‐existing systems, procedures, and capabilities, are highly effective at connecting the broader community with the local community through customizing resources to meet victims' needs and to quickly delivering these resources to alleviate suffering.

AbstractTransnational governance schemes (TGSs) are interorganizational networks of public and/or private actors that jointly regulate global public policy issues, such as the prevention of human rights violations and the protection of ecosystems. Considering that TGSs mainly address issues of public concern, the general public represents a major source of legitimacy in transnational governance. We theorize how members of the general public, whom we conceptualize as intuiters, apply heuristics to bestow legitimacy on TGSs. Given the difficulty of assessing TGSs, we argue that intuiters draw on affect‐based responses towards a TGS's better‐known network affiliates, such as participating business firms, to judge the legitimacy of the TGS as a whole. This substitution produces a ‘vertical’ legitimacy spillover. More specifically, we examine the heuristic process of judgment underlying vertical spillovers in TGSs and derive implications for the legitimacy construct and the analysis of spillover phenomena.

AbstractAlthough prior research generally holds that role clarity is affected by both individual characteristics and organizational contexts, current conceptual or empirical models do not reflect the multilevel nature of these antecedents. A more complete understanding of how role clarity emanates from different organizational levels is necessary to help prevent poor job performance and other harmful consequences of ambiguous role expectations. To address this, I begin this research by investigating the effects of internal work locus of control, general self‐efficacy, and leader–member exchange on role clarity. With respect to the cross‐level effects, I focus on the roles of a manager's control style and the organization's strategy‐making pattern. Analyses of a multi‐industry, multilevel dataset collected from 724 employees and 124 managers in 25 organizations in Finland suggest that all of the individual‐level independent variables and a deliberate strategy‐making pattern improve role clarity. However, a deliberate strategy‐making pattern negatively moderates the relationship between general self‐efficacy and role clarity. Finally, even though an outcome‐based control system causes role ambiguity among employees in most functional areas, it may be an effective driver of role clarity among employees in sales jobs.