Knowledge that Transforms

More than 45% of the S&P 500 have been the target of activist investors. As a major shareholder in the firms they target, activist investors’ campaigns raise concerns over the firm’s poor performance and pose a threat to management’s control over the firm. Prior research has found that activist campaigns have significant consequences, as management curtails long-term investments, divests businesses, and foregoes acquisitions. Strategic decisions at the corporate level, however, do not provide insight as to whether activist investors motivate management to improve the operational competitiveness of the firm. Our study seeks to address whether activist campaigns succeed in motivating management to improve the firm’s operational competitiveness. This represents an important issue since the firm’s operational practices are essential to its competitiveness and performance. Our study proposes and finds that firms targeted by activist investors seek new ways by which to improve the firm’s operational efficiency and effectiveness. In addition, the management of target firms shift their emphasis to tactics that can improve the firm’s operations in the short-term. We use a measure of operational competitiveness that provides detail and granularity at a tactical level, enabling us to compare and contrast how firms respond to activist investors at the operational level of the firm. Thus, our study provides important insights not previously found that activist campaigns motivate management to improve the firm’s operational competitiveness.

As we celebrate our 50th anniversary and look forward to the future, we believe it's important to also reflect on our storied past.Journal of Management (JOM) is an inclusive journal publishing quantitative, qualitative, methodological, theoretical, and review work in all areas of the management field.Its content, authors, and readership are widespread and diverse.JOM's focus on new ideas, unique perspectives, and commitment to quality lead to interesting and impactful published articles that have significant academic and practical relevance.It is difficult for

Drawing from media routines and narrative theory research, we theorize that benefits spill over to competitors who are cognitively linked to a celebrity via media narratives. Specifically, we argue that actors with direct competitive relationships with a celebrity will receive increased media attention and emotive media content, as well as increased performance. Due to the nature of these narratives, we further argue that this effect continues into periods after the direct relationship has ended. We test our hypotheses using a novel, eight-year data set from the Ultimate Fighting Championship. Our findings support our theoretical arguments, providing evidence on how celebrities benefit others in ways that other social evaluation assets—namely, high reputation and high status—do not.

Counterfactual reflection (CFR)—thinking about “what might have been if”—can enhance learning from experience, but only if the CFR is high-quality. Yet, what shapes differences in CFR quality remains largely unknown. Because managers typically reflect on experiences by concomitantly considering relevant factors and their collective interdependencies, we suggest that CFR quality is causally complex. To investigate this possibility, we interviewed 129 managers. In these interviews, they reflected on recently concluded business-to-business negotiations. Using fuzzy-set qualitative comparative analysis, we find three equifinal configurations of negotiation factors associated with high-quality CFR and eight associated with low-quality CFR. Drawing on the interviews, we identify managers’ ability to disentangle causal linkages in their past negotiation and their motivation for high-quality CFR in the present as plausible mechanisms underlying differences in CFR quality. We find high-quality CFR only following experiences where managers possess high levels of both situation-specific ability and motivation. In contrast, experiences that leave managers feeling unable or unmotivated due to high satisfaction, indifference, or defensiveness, are linked to low-quality CFR. Overall, our study advances understanding of why there are differences in CFR quality by linking past experiences with managers’ abilities and motivation. From a managerial perspective, we suggest that organizations avoid “one size fits all” approaches to CFR. Instead, we recommend actionable measures for both reflecting managers and their supervisors to address the specific reasons that prevent managers from engaging in high-quality CFR after their negotiation experiences.

Managerial human capital is a valuable organizational resource comprising individual-level capacities that draw upon and leverage the knowledge, skills, abilities, and other characteristics (KSAOs) gained by employees both before and after promotion to managerial positions. While all organizations need strategically valuable managerial human capital, asymmetrical information in external labor markets creates uncertainty when firms look to hire individuals who can develop and/or provide these capacities. In contrast, internal labor markets, with the unique insights they have on current employees, are better equipped to assess workers’ managerial potential and competencies. As a result, an individual’s career outcomes in their current organization signal important information about their managerial human capital to hiring firms. In this paper we explore how signals sent by an individual’s time to first managerial promotion and time in managerial roles relate to their external mobility. We argue that there are nuanced and sometimes countervailing demand- and supply-side theoretical mechanisms that result in inverted U-shaped associations between these signals of managerial human capital and external mobility. We test our theory using complete career histories from a unique longitudinal and population-level dataset of 2,079 professionals employed in the scouting operations of Major League Baseball franchisees from 1988 to 2010. In addition to contributing to our understanding of signals and external mobility, the results of our logistic discrete-time event history analysis inform broader discussions concerning firm-specific human capital resources and provide new insights on the unique challenges associated with managerial human capital selection.

Our research addresses how organizations manage a shift from a single to a hybrid identity, a question that the identity literature still is grappling with. We address this question by reflecting on how organizations develop hybrid identities in response to institutional decline. Identity hybridization, we predict, takes place in stages via strategies that gradually hybridize the identity. We study how British political parties hybridized their identities in response to the decline of social-class politics over the period 1950–2015. Quantitative and qualitative analyses of the identity projections of three political parties in their election manifestos provide support for our hypotheses.

Does a firm that successfully absorbs knowledge from an alliance partner learn to protect its own knowledge in subsequent alliances? Our analysis of 529 alliances of East Asian firms during 1999–2015 suggests that as firms more skillfully overcome their partners’ knowledge protection, they learn to better protect their own knowledge in subsequent alliances. However, such vicarious learning increases at a diminishing rate and is further weakened by the firm’s relative absorptive capacity and the value chain scope of the previous alliance. Our study extends research on learning in alliances by demonstrating cross-alliance dynamics and by revealing conditions under which absorbing knowledge from previous partners helps a firm protect its own knowledge in subsequent alliances.

Hedge fund activism frequently has severe consequences for target firms and their management and boards. Yet, we know little about target management and boards’ response to activist attacks. To advance our understanding in this respect, we examine how the style of target management and boards’ written communication with activists influences campaign outcomes. Building on the behavioral mimicry perspective, we propose that language style matching (LSM) and emotional tone mimicry (ETM), which constitute two distinct types of verbal mimicry, are important communication style characteristics of target management and boards’ response letters that can induce activist demand withdrawal. Though LSM and ETM are reflective of different modes of conflict behavior, we further reason based on conflict management research that ETM in conjunction with LSM is particularly effective in inducing activist demand withdrawal. The positive effects of ETM in conjunction with LSM, however, are expected to fade with increasing length of target management and boards’ written response. Results of an empirical analysis of the public communication between activists and target management and boards in 150 U.S. activist hedge fund campaigns between 2002 and 2019 support these predictions. Our study extends research on financial activism by offering a novel theoretical explanation as to why and how target management and boards can avert activist demands. Further, we contribute to behavioral mimicry research by examining the individual and joint effectiveness of distinct types of verbal mimicry in the hostile context of activist hedge fund campaigns.

The formation of boundaries between established and emergent categories is a complex social process. Therein, our understanding of how symbolic boundaries translate into regulatory boundaries is underdeveloped. Extant research either treats laws and regulations for categories as given or assumes a seamless translation of a symbolic into a regulatory boundary. This sidelines that market participants actively contest and shape boundaries between categories. To address this lacuna, we open the black box of how symbolic boundaries are translated into regulatory boundaries. We adopt a discursive perspective and conduct a longitudinal study of the contestation around the categories of home sharing and short-term rental in Europe. Our analysis shows how symbolic and regulatory boundaries are formed in a causal sequential process, driven by shifts in the field positioning of market actors and in the discursive accounts they mobilize. We develop a theoretical model of the discursive foundation of category boundary formation. At the heart of our theorization are discursive accounts and how shifting coalitions of market participants mobilize them to shape the evolving symbolic and regulatory boundaries between an emergent and an established category. We contribute to category research by unearthing the interdependent formation of symbolic and regulatory boundaries and the role of discursive accounts in these processes.

Widespread social unrest occurred in the United States in the Summer of 2020. Citizens took to the streets to challenge the prevailing social justice framework. According to event systemstheory, these Black Lives Matter (BLM) protests were high-strength, as they represented novel, critical, and disruptive events. They were also mega-threats as they focused on threats to the social identities of the marginalized communities. Because different approaches were taken in navigating the BLM protests by authorities, it was unclear what constitutes effective leadership during these events. We integrate insights from event-oriented literature with intersectionality of gender and race research to introduce an intersectional leadership advantage (ILA). This framework suggests that Black women, owing in part to the rich tapestry of their social experiences, tend to develop a distinct leadership style characterized by sensitivity to racial injustice, leaning into risk, and commitment to the community. These qualities enable Black women leaders to be effective during events like BLM protests. Utilizing data from six public sources covering 11,540 protests across 3,338 U.S. cities from May to August 2020, we hypothesized an interaction of city police chiefs’ gender and race in relation to protest-related violence (measured in three ways). Results revealed that protests in cities with Black women police chiefs were associated with the lowest levels of violence compared to other groups. This study provides insights into qualities associated with leadership effectiveness in high-strength mega-threat events, and it connects diversity in leadership roles to favorable outcomes.