Knowledge that Transforms

Many organizations, especially in emerging economies, trace their origins to restructured state enterprises, and this study explores the implications of such origins for organizational adaptation to changing environmental conditions. We compare the activity choices and survival chances of spin-offs from restructured state enterprises with those of de novo organizations. We argue that prior shared experience of spin-offs’ managers and employees facilitates the redeployment of routines developed in parent state enterprises. This should predispose spin-offs to pursue familiar activities, but this choice is not completely predetermined, and its survival implications depend on the environmental conditions. Our empirical findings suggest that spin-offs from restructured state enterprises are less likely to engage in new activities than de novo organizations. However, those restructuring spin-offs that do engage in new activities before the regulatory regime shift significantly improve their survival chances after the shift. Moreover, we find that the detrimental effect of the regulatory regime shift and the beneficial effect of engaging in new activities are stronger for spin-offs from restructured state enterprises than for de novo organizations.

When negotiations are complex and consequential, organizations usually send teams rather than individuals to the negotiation table because teams are expected to provide additional beneficial negotiation processes and, thus, generate superior outcomes. Similarly, theoretical accounts of integrative negotiations assume higher outcomes for teams than for individual negotiators as a consequence of team-related advantages (e.g., increased information processing and problem-solving capabilities). In this study, we challenge this established assumption and across three negotiations and various empirical tests, we show that the advantages of teams are merely the result of individual-level processes (i.e., one person asking interest-related questions). Moreover, Bayesian estimation supported our claim and rejected the extant account: The probability of the teams achieving better outcomes than the best individuals in commensurate nominal groups (i.e., strong synergy) was up to four times smaller than the probability of the teams not achieving better results than the best individuals in commensurate nominal groups. Finally, in the majority of our analyses, individual negotiators generated better relationship outcomes than teams even though the economic outcomes were comparable. On the basis of these results, we revise the assumption of team-related advantages in integrative negotiations. We discuss the implications of our results for future negotiation research and for the practical assignment of teams or individuals to negotiations.

Management scholars have identified a variety of firm characteristics as antecedents to organizational learning. In this study, we conceptualize intraorganizational multiplicity of mental models as a complementary element that facilitates shifting from lower- to higher-level learning. Specifically, we investigate whether multiplicity of mental models—proxied by four measures—helps acquirers to categorically adapt selection rules for legal advisors in mergers and acquisitions (M&As) from domestic toward international settings. In developing our conceptual framework, we integrate resource-based, social network, and organizational learning perspectives. Empirically, we draw on 11,511 acquisition attempts announced from 1998 to 2010 (completion/abandonment assessed as of January 10, 2015, at the latest). The results largely support our theory: First, choosing legal advisors in domestic and international deals calls for different selection rules. While in domestic deals, network-related characteristics are more important drivers of lawyers’ performance relative to their country-specific expertise, the comparative relevance of these attributes is reversed in cross-border deals. Yet, initially, acquirers fail to recognize this. Also, they do not initially adjust their selection criteria appropriately in response to accumulating M&A experience of their own. Only after having attempted a substantial number of cross-border M&As, they reach a turning point at which they rebalance their selection criteria such that they reflect the predominant relevance of country expertise in cross-border settings. Finally, recognition of the need to categorically reassess selection criteria in international deals is significantly facilitated by an acquirer’s multiplicity of mental models.

Complementing and extending prior studies on the value of existing work relationships, this study examines whether we can predict the value of brand-new ties before people ever meet. We examine this question by developing three sets of hypotheses reflecting the three main perspectives in the social networks literature: the resource (actor), dyadic (tie), and structural (network) perspective. To test our hypotheses, we asked executives to reach out for advice from someone they had never met and to complete a survey of their various thoughts about the other person both before and after making a connection. We find support for all three perspectives after a connection has been made; however, before tie formation, we find evidence only for the structural perspective. Our results suggest that the lack of reliable information about strangers obscures which brand-new ties will turn out to be more valuable but that surrounding network structures remain a reliable predictor of value, even for brand-new ties.

Research has shown that hiring R&D scientists from competitors fosters organizational learning. We examine whether hiring scientists who have many collaborative ties with the hiring firm prior to the mobility event produces different learning outcomes than hiring scientists who have few or no such ties. We theorize that prior ties reduce explorative learning and increase exploitative learning. Namely, we posit that prior ties lead the hiring firm to focus on that part of a new hire’s knowledge with which they are already familiar and that they help appropriate the new hire’s newly generated knowledge. At the same time, prior ties induce new hires to search locally within the hiring firm’s knowledge base and to produce more incremental, lower-impact innovations. Using data on R&D scientists’ mobility in the Electronics and Electrical Goods industry, we find broad support for our hypotheses. Our results extend our theoretical understanding of learning-by-hiring processes and bear practical managerial implications.

Work-family practice research has largely been focused on individual outcomes, despite their theorized importance for organizational performance. Additionally, studies of the effectiveness of work-family practices are dominated by cross-sectional designs that are unable to rule out additional causal arguments for observed relationships. Finally, childcare initiatives that help employees better address family demands have received little research attention relative to other work-family practices, and these studies have produced mixed results. Grounded in context-emergent turnover theory, the present study assesses the relationship between establishment childcare initiatives and collective turnover rates of men and women in 24,888 observations of German establishments between 2002 and 2012. Findings indicate childcare initiatives are associated with lower female collective turnover rates in following years and that higher female collective turnover rates are also associated with a higher likelihood of adopting a childcare initiative in subsequent years. These results provide support for the argument that childcare initiatives can improve collective turnover rates of women and are not adopted only by already-high-performing organizations.

In this article, we argue that in addition to facilitating organizational learning and specialization, an industry cluster related to tradition or to the practice of a craft influences audience expectations through the definition of the prototypical features that define an organizational form. Analyzing the population of northern Bavarian (Franconian) breweries, we show that compliance with a prototype involves multiple dimensions and depends on an organization’s location in geographic space with reference to the center of the industry cluster. Using qualitative interviews, archival data, and a survey of consumers, we provide evidence that as distance from the cluster center increases, organizations are more likely to deviate from the prototype and suffer fewer of the negative consequences that result from such deviations.

We advance behavioral agency theory by exploring the influence of mood or “affect” on the behavioral consequences of stock option incentives. Drawing on insights from psychology and behavioral decision theory, we describe how affect influences agent risk behavior. We argue that positive affect amplifies both the extent to which executives reduce strategic risk taking in response to risk bearing and engage in strategic risk taking in response to incentives for further enrichment. Building again on the psychology literature, we describe how CEO accountability attenuates the influence of affect on CEO risk behavior in response to stock option incentives. We test our expectations in a longitudinal data set of CEO stock option incentives, affect, and strategic risk taking by U.S. firms.

Using a novel, mixed-methods research design, we examine how understanding-based redesign of a routine influences its effectiveness. By understanding-based redesign, we refer to an intentional change in routine design such that it aligns more closely with the understandings of participants regarding how to perform their roles in the routine. We argue that this type of redesign improves the effectiveness of a routine by facilitating the actions and interactions of routine participants. Our empirical examination focused on manipulating the procedure and physical artifacts available for performing the towel-changing routine at a hotel. Through a field experiment, we found that understanding-based redesign results in greater effectiveness of the routine, and based on a qualitative, interviews-based inquiry with key participants in the routine, we propose six processes by which understanding-based redesign influences participant actions that support routine effectiveness. Our study offers important implications for strategy and organizations research on routines, as well as useful implications for management practice.

This article examines within-person consistency in personality expression across situations as an individual difference variable that is distinct from the typically studied personality trait level. The focus of the study is the manner in which personality consistency (a conceptualization of personality strength) influences the choice and interpretation of situations and, ultimately, the enactment of organizational citizenship behavior. We conducted an experience sampling study of 167 employees over 10 workdays. At each survey, participants reported their conscientiousness, agreeableness, situation perceptions, and organizational citizenship behavior. Results demonstrated that even after controlling for the linear and quadratic effects of personality trait level (and several other variables): (1) personality consistency increased within-person consistency in organizational citizenship behavior across situations and (2) this relationship was partially mediated by perceived consistency of situational strength and trait-relevant situational content. More broadly, the findings show that individual differences in personality are not restricted solely to the personality trait level. Rather, within-person consistency in personality expression across situations is itself an important individual difference: one that possesses appreciable behavioral consequences in the workplace and one that, consequently, is deserving of considerable future research.