Knowledge that Transforms

Decentralized autonomous organizations (DAOs) represent a novel organizational form enabling self-governed coordination based on blockchain technology. This study examines the prototypical Bitcoin DAO from an institutional perspective, focusing on how its core features—decentralization and autonomy—interact with the broader institutional framework in which it operates. Specifically, we study how regulative institutional environments (i.e., (il)legalization) shape the growth and development of DAOs while theorizing about the role of both petty and grand corruption (i.e., by higher-level officials) in influencing the effectiveness of these regulative institutions. Our empirical analysis focuses on the global rise of Bitcoin trading and platform establishment across 49 national contexts from 2011 to 2023. Utilizing a unique data set, we find that, although the number of Bitcoin exchange platforms in a country is positively associated with Bitcoin legalization, Bitcoin trading volume is positively associated with Bitcoin illegalization. In countries with higher levels of grand corruption, Bitcoin illegalization becomes even more strongly associated with trading. In contrast, grand corruption dampens the positive association between legalization and the number of Bitcoin exchange platforms. Further, the presence of petty corruption reduces the impact of grand corruption. Our study reveals that it is critical to distinguish between petty and grand corruption as an important factor that influences the interplay between the regulative environment and growth and development of the Bitcoin DAO and the related ecosystem of Bitcoin trading and platform founding.

This paper explores whether and to what extent a scientific approach to decision-making can be a useful tool for helping entrepreneurs overcome limitations in the commercial exploitation of their idea, particularly when these limitations stem from their status as users of the products or services. Using data from a variety of sources, including three randomized control trials and LinkedIn data, and focusing on female entrepreneurs who develop a value proposition targeting female consumers as a case of user entrepreneurs, this paper shows that exposure to a training that encourages entrepreneurs to develop theoretical maps about their business propositions and validate them with evidence prompts more radical pivots on their initial ideas compared with entrepreneurs with a value proposition that does not target women explicitly. In turn, treated female entrepreneurs with a female-targeted value proposition who pivot radically show better performance in launching and sustaining their ventures compared with those who have not pivoted. Funding: This work received funding support from the ICRIOS—Invernizzi Center for Research in Innovation, Organization, Strategy & Entrepreneurship at Bocconi University, the Innovation Growth Laboratory, the Strategy Research Foundation, the Department for Business, Energy and Industrial Strategy of the U.K. Government (project 104754, “A Scientific Approach to SMEs Productivity”), City, University of London, The Italian Ministry of Education, Universities and Research (PRIN project prot. 2017PM7R52, CUP J44I20000220001), and the Polytechnic of Turin. This research was approved by Bocconi Research Ethics Committee with protocol references 2016-III/13.696, 77133-2 and by City Ethics Committee with reference ETH1819-0351. The four studies presented in this article are included in the AEA RCT Registry [AEARCTR-0006578, AEARCTR-0002205, AEARCTR-0006579, AEARCTR-0003875]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.17235 .

Organizations encourage employees to report abusive behavior as such reports are believed to facilitate corrective action against transgressors. However, there are competing perspectives on whether reports made by women (versus men) will facilitate corrective action. On the one hand, a dominant stream of research suggests that reports made by women are often ignored and disregarded because women are not seen as credible. On the other hand, an emerging stream of research suggests that third parties will see reports made by women as serious and important. To reconcile these perspectives, we draw on aversive discrimination theory, which hints that the degree of corroboration about abuse plays a key role. That is, under situations of low corroboration, third parties are unlikely to take corrective action when women (versus men) make reports, but under situations of high corroboration, third parties are equally or even more likely to take corrective action when women (versus men) make reports. We additionally theorize and find that corroboration is particularly influential when the reporter’s general credibility is not established. Our empirical package includes six complementary studies: an archival data set of U.S. Government employees and five preregistered experiments. Funding: For financial assistance, we thank the University of North Carolina at Chapel Hill [Junior Faculty Development Award].

Past research has examined the link between initiatives promoting entrepreneurship and compensation, but scholars have predominantly focused on earnings of individuals directly engaged in the founding process, such as founders, cofounders, and start-up employees. Shifting our focus to incumbent workers, we instead propose that a decline in the cost of entrepreneurship increases the variance in pay among incumbent workers who are not involved in entrepreneurial activities. We posit that, as entrepreneurship becomes a more attractive career option, due to institutional changes, the outside option value of entrepreneurship increases. The resulting increase in mobility threat will disproportionately benefit high earners or those employees who are more difficult to replace: As their bargaining power increases, incumbents will disproportionately reward these workers, especially when they are systematically more inclined to leave for entrepreneurship. We explore these arguments using a difference-in-differences methodology, based on the enactment of an entry reform that reduced the cost of entry in Portugal between 1995 and 2009. We find that an exogenous decrease in the administrative costs of establishing a new venture led to high earners capturing disproportionate rewards relative to low earners. We further show that this relationship was especially pronounced among high earners who (a) exhibited a higher ex ante propensity to transition into entrepreneurship; (b) had fewer credible outside options in paid employment; and (c) operated in industries with decentralized wage bargaining arrangements. By documenting the impact of institutional changes that promote entrepreneurship on incumbent workers’ pay, our study contributes to recent debates about the impact of entrepreneurship on individual earnings. Funding: This work was supported by the CY Initiative, the FCT—Portuguese Foundation of Science and Technology, and the Knowledge, Technology and Organization Research Center at Skema. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.16201 .

Employees from marginalized groups frequently face low performance expectations based on group membership. Although past research shows several different reactions to these types of expectations, such as stereotype threat and stereotype reactance, scholars still know little about when and why low expectations spur individuals to not only try to prove themselves, but to seek to change expectations and opportunities for others like them. Addressing this discrepancy, I introduce trailblazing motivation, which captures the desire to set new precedents that open doors for others. I integrate self-determination theory and regulatory focus theory to identify group-based low expectations, moderated by a sense of belonging with one’s broad marginalized group, and core self-evaluations as key antecedents of trailblazing motivation. I hypothesize that trailblazing motivation will lead to not only greater persistence in one’s work—as with stereotype reactance—but also potentially riskier behaviors aimed at changing expectations for one’s broad group on a larger scale, including advocacy for other marginalized group members and diversity, equity, and inclusion–related issue selling. I test and find support for these hypotheses across a time-lagged survey study and a preregistered experiment. I also establish discriminant validity for trailblazing motivation from other responses to group-based low performance expectations. This research advances our understanding of the behavior of marginalized individuals at work by helping to explain (1) when and why people facing group-based low expectations go beyond seeking to prove their own abilities and also strive to effect change for their marginalized group as a whole and (2) how a closer connection to one’s marginalized group can drive people to increase opportunities for that broad group. Funding: This research was funded by a grant from The Leadership Center at The Wharton School, University of Pennsylvania [Grant 2000-0267] as well as through Post-doctoral Fellowship research funds allocated by The Tuck School, Dartmouth College.

Although prevalent network theories posit that job seekers are motivated to utilize networks for instrumental benefits, we argue that sociopsychological barriers can discourage network use even when access is readily available. We examine this overlooked dynamic by exploring how sociopsychological factors influence network activation among mothers reentering the workforce after child-related career breaks. Analyzing panel data from a representative sample of Korean job seekers, we find that these mothers are markedly less inclined to use network-based search methods than other groups of women. This inclination remains when we account for individual fixed effects, employment gap length, and potential network disturbances. To uncover the reasons behind this distinct job-search behavior, we conducted in-depth interviews with 60 mothers who experienced child-related employment breaks and 38 other individuals, including mothers without such breaks, nonmothers, and fathers. Whereas existing theories attribute limited network use to restricted access, our qualitative evidence reveals deeper sociopsychological hurdles: mothers often anticipate challenges in reciprocating job-related assistance and the potential revelation of their inferior status when seeking help. These multifaceted internal conflicts not only hamper mothers’ swift reintegration into the labor force but also nudge them toward roles for which they are overqualified. As we bridge these findings, we identify novel theoretical avenues for future research, underscoring how sociopsychological hurdles to network activation can produce gender inequalities in the labor market. Funding: Support from the Wharton Dean’s Research Fund and Wharton’s Center for Human Resources.

In searching for the sources of heterogeneity in organizational cultures, one possibility is that new ventures show a cultural spawning of incorporating elements from the culture of the organization that the founder left (the parent) when starting the new venture. Such a genealogical effect would explain why some organizational cultures remain different, despite the opportunities to learn cultural elements from other organizations. This study investigates whether and under what circumstances such cultural spawning occurs. We argue that cultural spawning occurs, but with varying strength, depending on the founder and the culture of the parent organization. Applying the cultural toolkit perspective, we predict that it is stronger when founders have a longer tenure in the parent organization, the parent culture is more internally coherent, and the parent culture is more atypical, compared with other organizations. These ideas were tested with a sample of U.S. technology startups in Crunchbase. Natural language processing of Glassdoor employee reviews was used to identify the cultural elements of the technology companies. The analysis demonstrates that cultural spawning occurs and reveals previously unexplored contingencies of cultural transmission through congruency and atypicality. It contributes to research on new venture formation and organizational culture. Funding: Financial support from the Rudolf and Valeria Maag Endowment is gratefully acknowledged. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2023.17771 .

We investigate the impact that social movements have on firm innovation through private politics. We argue that firms strategically respond to private politics by investing in new technologies that address movement-advocated issues material to firms’ performance. Although both contentious private politics—when activists contentiously target firms—and cooperative private politics—when activists and firms collaborate—catalyze innovation, they do so in different ways. Contentious private politics increases the amount of innovation that firms undertake by drawing managerial attention to movement-advocated issues material to the firm, prompting search for solutions to those issues. Conversely, cooperative private politics provides firms access to new knowledge that encourages firms to search for solutions in areas more distant from their existing knowledge and in so doing, increase innovation involving distant recombination on material issues. We find support for our arguments in a matched sample of firms contentiously targeted and with activist collaborations on climate change issues and firms that were not targets of private politics on those issues but had otherwise similar histories of climate-related innovation and relationships with climate movements and other environmental movements. Supplementary analyses corroborate the mechanisms that undergird our theoretical predictions; contentious private politics is associated with more innovation closer to a firm’s expertise, whereas cooperative private politics is associated with innovations that draw on more distant knowledge. We also find that when collaboration follows contention, their respective impacts on innovation are reduced, which may result from firms seeking collaborations for their legitimacy-granting benefits after contention rather than the learning opportunities they offer. Funding: Funding for this research was provided by the Strategic Management Society Strategy Research Foundation [dissertation grant] and Wharton’s Mack Institute for Innovation Management. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2023.17497 .

CEOs increasingly engage in activism on controversial social and political issues, such as police reform, LGBTQ+ rights, and gun control, to influence the behavior of policymakers. We run an experiment on 514 local elected politicians to examine how revealing information about CEO activism on police reform affects the views of policymakers. Additionally, we examine how CEOs’ controversial positions on social issues affect politicians’ willingness to privately meet with CEOs or publicly advocate for their businesses. We do not find that revealing CEO support for specific police reform policies affects policymakers’ opinions. Policymakers, however, are much less willing to engage—either privately or publicly—with CEOs who take controversial positions on social issues. These results do not vary with local economic conditions or the salience of police reform, but they appear to be driven by policymakers’ personal ideological commitments. Our results suggest that CEO activism may have limited influence on local politicians, at least on the topic of police reform, and they underscore the business costs of CEOs taking political positions. We discuss the implications for CEOs and the activist groups that often pressure them to take public positions on controversial issues. Funding: This work was funded by the UCLA Anderson School of Management and University of Virginia Darden School of Business. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2023.18282 .

Despite the rise of digital platforms that connect rural entrepreneurs to urban customers, rural online businesses are hampered by a lack of talent. Some have pointed to the potentially enabling role of rural returnees. However, although international returnees bring valuable knowledge to businesses in their home countries, it is unclear how domestic returnees affect entrepreneurship in rural, underdeveloped parts of their country. We study this question using a natural experiment involving a regional policy change, which reduced the barriers for rural migrants to return home in one Chinese province but not in others. We find that, after the policy change, rural e-commerce businesses in the province that implemented the policy change enjoyed a 19% performance gain relative to those in other provinces. We theorize and test four mechanisms that may underlie the relationship between return migration and online entrepreneurship: knowledge transfer, demand spillover, de novo businesses, and financial support from returnees. Our results support the knowledge transfer mechanism, but we also find evidence of demand spillover. This study highlights the salience of return mobility and “return barriers” in shaping local entrepreneurship. It also suggests a novel approach toward fostering entrepreneurship in underdeveloped regions: policymakers and digital platforms may work together to pave the country roads that take people home. History: This paper has been accepted for the Organization Science Special Issue on Migration & Organizations. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.16002 .