We study the evolution of firms' exploration-exploitation allocations and their long-term performance outcomes. Extending current ambidexterity theory, we suggest that not only firms pursuing one-s...
A key insight from research on hybrid organizing is that the joint pursuit of competing goals exposes an enterprise to potentially problematic tensions and trade-offs. Yet while studies have examined the former, the actual trade-offs that these organizations face—and how these might vary among enterprises and contexts—has been largely overlooked. Focusing on social enterprise, we address these gaps by (1) developing a framework that can be used to predict the compatibility of social outreach and financial sustainability for different types of enterprises and (2) arguing that the acuteness of trade-offs will vary based on the cultural roots of the issue an enterprise addresses, the market conditions where it operates, and the quality of its management. We test our arguments by studying 2,037 microfinance organizations in 115 nations between 1995 and 2013. Results support our predictions. Social–financial trade-offs are amplified when a social issue is intertwined with deep-seated cultural problems, such as discrimination, and when an enterprise operates in a weak institutional environment. Intensive social outreach becomes sustainable, however, when cultural barriers to outreach are low, market-supporting institutions are strong, and an enterprise is professionally managed. Our study thus shows that social–financial trade-offs are contingent and that the promise of sustainable social outreach varies widely across contexts. The e-companion is available at https://doi.org/10.1287/orsc.2017.1188 .
This paper advances novel theory and evidence on the emergence of informal leadership networks in groups that feature no formally designated leaders or authority hierarchies. We integrate insights from relational schema and network theory to develop and empirically test a three-step process model. The model’s first hypothesis is that people use a “linear ordering schema” to process information about leadership relations. The second hypothesis argues that when an individual experiences a particular leadership attribution to be inconsistent with the linear ordering schema, that individual will tend to reduce the ensuing cognitive inconsistency by modifying that leadership attribution. Finally, the third hypothesis builds on this inconsistency-reduction mechanism to derive implications about a set of network structural features (asymmetry, acyclicity, transitivity, popularity, and inverse popularity) that are predicted to emerge endogenously as a group’s informal leadership network evolves. We find broad support for our proposed theoretical model using a multi-method, multi-study approach combining experimental and observational data. Our study contributes to the organizational literature by illuminating a socio-cognitive dynamics underpinning the evolution of informal leadership structures in groups where formal authority plays a limited role. The e-companion is available at https://doi.org/10.1287/orsc.2017.1171 .
Past research on how opportunism in buyer-supplier relationships can be mitigated remains incomplete and often contradictory. Applying recent advances in qualitative comparative analysis to a sample of 137 buyer-supplier relationships in the German automotive industry, we show that there are multiple equifinal pathways to high and low opportunism. In general, our study shows that it is easier to avoid high opportunism than to consistently achieve low opportunism. On this basis, we offer new insights into countering opportunism for researchers and managers. Achieving low opportunism requires a combination of governance mechanisms, which are generally not interchangeable. In particular, relational governance mechanisms in isolation seem to be more restricted than prior research has suggested but form a powerful synergistic combination with complex contracts. Although formal governance mechanisms lack enforceability, the coordination and monitoring that they provide are critical in both avoiding high opportunism and achieving low opportunism. Performance ambiguity is especially difficult to manage. Overall, our paper shows the power of configurational approaches and encourages the development of new theory that adopts a situational contingency perspective. The online appendix is available at https://doi.org/10.1287/orsc.2018.1227 .
This study explores whether employees who have access to social media are more likely than employees who do not to develop shared cognition—similar perceptions of what and whom coworkers know. It also uncovers the behaviors associated with social media that allow employees to develop such shared cognition about their coworkers’ knowledge and social structures. I conducted a multimethodological, longitudinal field study of the use of one type of social media—a social networking site—by employees at a large financial services organization. In this paper, I draw on comparative data from two matched-sample groups within the same organization to show that users of the social networking site developed their cognition through three interrelated processes—network expansion, content integration, and triggered recalling. Because all members of the organization enacted this process with data from the same common pool (content on the social networking site), their cognitions became shared. A difference-in-differences estimation showed that shared cognition developed much more strongly over six months in the group that used the social networking site than the group that did not use it.
We theorize that the effect of membership turnover on group processes and performance depends on a group’s communication network. We describe two mechanisms through which communication networks affect group performance: (1) the number of direct communication paths and (2) the clarity of the coordination logic. These mechanisms map onto two network dimensions: density, which affects a group’s behavior through the number of available communication paths, and centralization, which affects a group’s behavior through the clarity of the coordination logic. We empirically analyze the effects of turnover on the performance of fully connected all-channel networks and hub-and-spoke or wheel networks in an experiment of 109 four-person groups performing two collaborative problem-solving tasks. The greater number of direct communication paths enabled fully connected groups with stable membership to develop stronger transactive memory systems (TMSs) and perform better than fully connected groups that experienced turnover. By contrast, the clear coordination logic of perfectly centralized groups that experienced turnover facilitated more frequent dyadic communication, which enabled them to strengthen their TMSs, incorporate the contributions of new members, and improve their performance. Thus, our results indicate that communication networks condition the effect of membership turnover on group processes and performance. The online appendix is available at https://doi.org/10.1287/orsc.2017.1176 .
A large literature addresses the practices and challenges surrounding knowledge reuse within organizations. Yet organizations frequently attempt to reuse knowledge from outside their boundaries, which may be even more challenging. The practice is so prevalent that an entire industry—the consulting industry—has developed to support it. Unfortunately, we understand little about how knowledge embedded in one organization is used to intervene in another and about what challenges follow from the attempt to do so. In this paper, we aim to address these questions. On the basis of an analysis of four months of ethnographic fieldwork and extensive archival data surrounding an engagement between a leading consulting firm and a multihospital healthcare system, we find that partners and senior executives created generalizations based on their experience and encouraged junior consultants and hospital employees to apply these generalizations and reuse old solutions. Yet junior consultants, who had different backgrounds and were embedded in particular contexts, struggled to reuse solutions, and they instead developed novel insights through the engagement. We argue, moreover, that the ultimate success of consulting engagements lies in this division of labor within and across firms. Our work contributes to the literatures on knowledge reuse, organizational learning, and consulting by illuminating how knowledge is (or is not) reused and how differences between junior and senior consultants, and between consultants and clients, shape both the reuse of existing solutions and the development of new ones.
An implicit assumption in institutional theory is that more certifications improve a venture’s likelihood for success. However, under certain conditions, we argue more certifications may be detrimental to the venture’s performance. We advance this notion by examining both who is doing the certification and, in turn, what information is revealed to others through the certification. Our study advances two new constructs based on varying instances of follow-on certification: certification broadening, where the initial and follow-on certifiers are different institutions, and certification redundancy, where the initial and follow-on certifiers are the same institution. By studying sequences of certification in the U.S. Small Business Innovation Research federal and state programs, we find that certification broadening generally increases a firm’s ability to acquire private resources, whereas certification redundancy generally decreases a firm’s ability to acquire private resources. This study advances a more dynamic view of certification within institutional theory—namely, when we disaggregate sequences of certifications, we are able to better ascertain when certification helps a venture and when it does not. The online appendices are available at https://doi.org/10.1287/orsc.2018.1211 .
Although knowledge sharing among competitors is seemingly counterintuitive, scholars have found that competitors share knowledge under certain conditions: among actors who have a preexisting relationship and who expect direct reciprocity. However, there are examples of knowledge sharing among competitors that cannot fully be explained using these relational mechanisms. In this study, I propose that in markets where competitors are a set of key stakeholders, knowledge sharing is a strategic response to high levels of buy-in uncertainty related to a potential opportunity, namely, the likelihood that stakeholders will come to realize the value of a potential opportunity in a timely fashion. Using a unique data set of knowledge sharing among investment professionals on a digital platform, this study leverages variation in the platform’s knowledge-sharing structure to test this theory. I find that knowledge sharing among these competitors is most likely when buy-in uncertainty for a given opportunity is high and that this knowledge sharing does lead to subsequent buy-in.
This study explores the determinants of organizational aspirations, proposing that aspirations play dual roles that create important tension for managers. On one hand, aspirations serve an evaluative role as a benchmark for assessing performance. On the other, they have an allocative role in influencing the acquisition of limited resources. Our theory suggests that managers strategically adapt organizational aspirations to balance the tension between the two concerns. They set more aggressive aspirations when facing increased pressure to acquire resources, but set more conservative targets when the costs of missing performance targets are higher. In the context of annual management forecasts, which allow us to directly observe performance targets and their deviation from traditional aspiration measures, we find that external factors influencing the intensity of resource pressure and the cost of missing performance targets determine the aggressiveness of organizational aspirations. This study highlights a novel antecedent of aspirations that complements existing explanations, linking agency and governance research with behavioral theory.