Knowledge that Transforms

We theorize the role in institutional processes of what we call the “shame nexus,” a set of shame-related constructs: felt shame, systemic shame, sense of shame, and episodic shaming. As a discrete emotion, felt shame signals to a person that a social bond is at risk, and it catalyzes a fundamental motivation to preserve valued bonds. Systemic shame we conceptualize as a form of disciplinary power, animated by persons' sense of shame—a mechanism of ongoing intersubjective surveillance and self-regulation. We theorize how the duo of systemic shame and sense of shame drives the self-regulation that underpins persons' conformity to institutional prescriptions and institutional reproduction. We conceptualize episodic shaming as a form of juridical power used by institutional guardians to elicit renewed conformity and reassert institutional prescriptions, and also explain how episodic shaming may have unintended effects, including institutional disruption and recreation, when it triggers sensemaking among targets and observers that can lead to the reassessment of the appropriateness of institutional prescriptions or the value of social bonds. We link the shame nexus to three broad categories of institutional work.

We consider four scenarios that can unfold when organizations either innovate or respond rigidly to organizational decline. Two of the scenarios are downward spirals that threaten an organization with possible death, and two of the scenarios are turnarounds. These scenarios are important because they can determine the fate of an organization—survival or death. We explore the conditions under which each of these scenarios is likely to emerge, developing original theory and specifying propositions about those conditions. In developing this theoretical framework, we distinguish between flexible and inflexible innovations as factors in turnaround success or failure. Our model extends current theory on organizational decline to highlight the feedback effects of the consequences of decline and to explain the circumstances in which particular feedback effects are likely to occur.

We augment transaction cost economics with a cognitive perspective to expand the conceptualization of uncertainty, an important but underexplored concept, to include interpretive uncertainty, which arises from conflicting cognitive frames. Interpretive uncertainty generates different views of the exchange and can lead to unexpected conflict, additional transaction costs, and potential early termination of the transaction. In contrast to traditional transaction cost economics hazards, which are derived from transaction characteristics, interpretive uncertainty is driven by relational characteristics (the attributes of the parties in relation to each other). Additionally, interpretive uncertainty is mitigated by aligning the frames of the exchange partners rather than by traditional safeguards, such as penalty clauses. As a result, effective governance must support the development of a common dominant frame that facilitates the completion of the transaction. In this article we develop propositions exploring relational characteristics that drive interpretive uncertainty, the moderating influence of asset specificity, and how attributes of traditional governance forms support distinct frame alignment processes to mitigate different levels of interpretive uncertainty.

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