Knowledge that Transforms

AbstractDrawing on real options and resource dependence theories, this study examines how firms adjust their innovation investments to address trade policy effect uncertainty (TPEU), a type of firm‐specific, perceived environmental uncertainty capturing managers' difficulty in predicting the impacts of potential policy changes on business operations. To develop a context‐dependent, time‐varying measure of TPEU, we apply bidirectional encoder representations from transformers, an advanced deep learning technique. We analyze the texts of mandatory management discussion and analysis sections of annual reports from 3181 publicly listed Chinese firms. Our sample comprises 22,669 firm‐year observations spanning the years 2007 to 2019. The econometric analyses show that firms experiencing higher TPEU will reduce innovation investments. This effect is stronger for firms facing lower competition, involving more foreign sales, and not owned by the state. These findings provide clarity on previously inconclusive results by showcasing the significant influence of policy effect uncertainty, as opposed to policy state uncertainty, on firms' decisions regarding innovation investments. Additionally, these findings underscore the importance of resource dependence factors as crucial contextual factors in this decision‐making process.

AbstractWe study the effectiveness of two theoretically and practically relevant interventions designed to increase familiarity with and thereby stimulate the appeal of and willingness to pay (WTP) for remanufactured (refurbished) consumer products that are often found repulsive by consumers: (1) educating consumers about the remanufacturing process, (2) providing physical exposure to remanufactured products. We find that education does not cause an increase in the appeal of and WTP for remanufactured consumer products. Providing physical exposure to remanufactured products, relative to text and text‐plus picture or video modalities, significantly increases both the appeal and WTP as a result of increasing perceived quality and decreasing disgust. Sellers can benefit from marketing remanufactured consumer products through physical channels (i.e., brick‐and‐mortar, outlet, showroom stores) as opposed to solely through online channels, which is the common practice among many sellers.

AbstractAs suppliers' emissions contribute to a significant portion of the global environmental footprint, achieving supply chain wide carbon neutrality largely depends on suppliers' greenhouse gas (GHG) emissions reductions. Although suppliers' customers are increasingly signaling their commitment to tackling climate change through environmental disclosure, whether this signal contributes to supplier emissions reduction remains a question. Using signaling theory, this research proposes an emissions‐reducing effect of customer base environmental disclosure on a supplier's GHG emissions level. Using a 2010–2017 panel dataset from multiple sources, we find empirical evidence supporting the upstream emissions‐reducing effect of customer base environmental disclosure. Further, we identify two customer‐base characteristics that affect this relationship: customer base climate innovation and competition. These findings contribute to the sustainable supply chain management literature by illustrating the effects of the customer base on supplier emissions performance. Specifically, customers could motivate a supplier's engagement in emissions reduction by collectively signaling their environmental commitment through enhanced disclosure. However, the effectiveness of this signaling effect can be contingent on the green innovation and competitive dynamics of the customer base.

AbstractLarge government projects involving public–private collaborations inherently suffer from setbacks such as delays, cost overruns, or failure to meet contracted performance. Such setbacks may effectively be addressed through adjustments to contractual and relational governance; yet to date, the dynamics of governance adjustments and their interplay in addressing setbacks is not well understood. This research presents a dynamic theory of how parties can effectively address project setbacks through adjustments to contractual and relational governance. The dynamic theory was generated using longitudinal case data from two large public–private projects in the Netherlands that faced comparable project setbacks but deployed opposing governance adjustments, leading to drastically different project outcomes (i.e., collapse vs. recovery). This theory was then elaborated through two more cases and evidence from the literature. A system dynamics simulation model was then built that reproduces the different governance adjustments and outcomes observed in the four projects and serves to extend theory building. The refined theory not only shows under what conditions adjustments to contractual or relational governance are most effective, but also that governance adjustment interplay may trigger unintended side effects. As such, the theory explains why the careful balancing of governance adjustments is critical to project outcomes.

AbstractThis research examines the impact of leader disability status on the operational performance of teams that include individuals with disabilities (IWD) using longitudinal micro‐data from an apparel manufacturing company in a competitive integrative employment environment. To aid in developing the research hypotheses and in interpreting the empirical findings, the quantitative analysis is complemented with qualitative data collected through interviews involving managers and workers with and without disabilities at the focal firm and two other large companies that employ IWD. A beneficial moderating effect of leader‐worker disability status similarity on team performance is hypothesized and subsequently tested using Prais‐Winsten regression. The results show that a leader with a disability has a potentially beneficial impact on team performance as the number of workers with disabilities in the team increases, resulting in improved productivity (measured in labor hours per garment) and quality (measured in operator defects per garment). The theoretical, managerial, and policy implications of the study provide actionable insights for the creation of an inclusive labor force.

Abstract Numerous studies on corporate social responsibility (CSR) indicate that firms adopt CSR practices for various reasons related to their supply chain. However, the necessity to conform to a firm's own industry CSR norm is overlooked. Conforming to one's industry CSR norm—a herding behavior known as CSR conformity —ensures firm in‐group legitimacy and preserves internal resources for core business activities. On the other hand, deviating from industry norms sets a firm apart from its peers, making the firm more appealing to supply chain partners. Motivated by this dilemma, this study draws on middle‐status conformity theory and explores how a firm's network prominence determines its CSR conformity. Panel data analyses of 1650 firm‐year observations reveal an inverse U‐shaped relationship between firm network prominence and its CSR conformity, indicating that firms with a mid‐level network prominence engage in higher CSR conformity. However, the inverse U is flattened when a firm's supply chain partners (and their respective industries) share similar CSR standards, suggesting that a firm can only prioritize its own industry CSR norms if its supply chain partners share a compatible CSR standard. These findings highlight the importance of understanding CSR from an organizational conformity perspective, especially in the context of supply chain network.

AbstractGeopolitical conflicts, particularly economic ones, introduce significant uncertainties into the global supply chain. The impact of these conflicts on cross‐border buyer–supplier transactions remains underexplored, as does the capability of global suppliers to mitigate such risks by locking in their foreign buyers. Employing a combined perspective of resource dependence theory and transaction cost economics, we examine a natural experiment to investigate the effects of the 2018 U.S.–China trade war on the transactional relationships between Chinese suppliers and their U.S. buyers. Our study reveals that the trade war generally adversely affected these buyer–supplier transactional relationships, leading to a negative abnormal transaction value in the affected dyads, which amounted to 18.42% of their pre‐event level. However, we find that this adverse impact can be attenuated when Chinese suppliers demonstrate superior innovation capabilities, higher corporate social responsibility performance, or fewer local political ties. These findings yield insights for international suppliers and buyers on strategies to maintain buyer–supplier transactions and minimize the detrimental effects on global supply chain relationships during geopolitical conflicts.

AbstractOne important question in public‐private (PP) projects is how to manage coopetition—simultaneous cooperation and competition among project members. Prior studies on the governance of PP projects showed the importance of governance mechanisms to deal with major events such as technical or organizational disruptions but paid limited attention to the management of coopetition. At the same time, research on the management of coopetition mostly focused on industrial coopetition, whereas PP projects also entail public‐private coopetition. Seeking to better understand how governance mechanisms may help manage coopetition in PP projects, we conducted an in‐depth study of Galileo—a large PP project aimed at delivering Europe's own satellite‐based navigation system. The findings show how three core aspects of project governance—(i) mechanisms (joint vs. separate use of contractual and relational mechanisms), (ii) form (lead organization vs. shared governance), and (iii) goals (to promote cooperation and/or prevent competition)—jointly explained the emergence and (mis)management of knowledge‐ and value‐related coopetitive tensions. In turn, these tensions prompted a series of adaptations in the governance of the project. Our study contributes to a co‐evolutionary understanding of the governance of PP projects and offers implications for practitioners seeking to (re)design PP project governance.

AbstractMany antecedents identified as essential to supply chain resilience (SCR) are often studied independently, without considering their synergistic effects. Based on a case study and resource orchestration theory, this article focuses on configurations of different antecedents regarding supply chain integration and big data analytics capability to develop proactive and reactive SCR. Using survey data from 277 Chinese manufacturing firms, we consider three dimensions of supply chain integration, information integration, operational integration and relational integration, and three dimensions of big data analytics capability, technical skills, managerial skills and data driven‐decision culture, and conduct fuzzy‐set qualitative comparative analysis (fsQCA) to explore antecedent configurations generating high proactive and reactive SCR. We find that multiple antecedent configurations can achieve high SCR and configurations for high proactive and reactive SCR are not identical, which may involve alternative effects across different antecedents. We further implement propensity score matching analysis and reveal that firms following these configurations for high SCR also have better economic and operational performance. Moreover, we check the robustness of findings by using secondary data and attributes analysis with machine learning. This article complements and extends existing SCR literature from the configurational perspective and provides practical insights for managers to build SCR.