Knowledge that Transforms

Past research suggests that when organizations communicate the benefits of their work for human welfare—that is, use a social impact framing for work—job candidates are willing to accept lower wages because they expect the work to be personally meaningful. We argue that this explanation overlooks a less socially desirable mechanism by which social impact framing leads to lower compensation demands: the perception among job candidates that requesting higher pay will breach organizational expectations to value work for its intrinsic (rather than extrinsic) rewards, or constitute a motivational norm violation. We find evidence for our theory across five studies: a qualitative study (Study 1), a hiring experiment with undergraduate students (Study 2), an online labor market field experiment (Study 3), a vignette-based simulation (Study 4), and a stimulus sampling study using multiple occupations (Study 5). Exploratory analyses find that the negative effects are unique to monetary (versus nonmonetary) job rewards. Together, results uncover a novel mechanism by which emphasizing work for the greater good leads job candidates to accept lower wages—one that reflects candidates self-censoring on pay from concerns about violating organizational norms rather than solely from a willingness to trade higher pay for potentially meaningful work. Our research contributes to understandings of how social responsibility messaging impacts workers’ perceptions of organizations and negotiation behavior. It also holds implications for emerging scholarship on managers’ implicit theories of employee work motivation.

We provide evidence that in certain contexts, firms set upward-striving goals and that this upward striving yields significant performance and visibility benefits. We develop a model of variable attention in which, as firms’ performance levels approach cognitively salient round numbers, managers strategically shift their focus from easier-to-reach goals based on historical and social reference points to more challenging goals that provide external visibility and capital market benefits. As one specific yet important instance of an upward shift in attention, we document a significant increase in revenue growth rates as firms’ annual revenue approaches $100 million. Firms achieving this goal obtain discontinuous increases in analyst and media coverage, investment by new institutional investors, and executive compensation. We find no evidence of decreased investment efficiency or profitability, suggesting that managers typically build slack into their goal levels. Our theory extends to goals based on other salient round numbers, such as revenue of $10 million, $500 million, and $1 billion. This study recasts behavioral theory of firm research in an open systems perspective, highlighting the externally directed aspects of firm goal setting.

Social evaluations proceed in stages. First, judges filter a broad pool of candidates and pick a subset for detailed assessment. Then, the chosen group undergoes a closer examination, during which winners are selected. At both stages of the process, judges are susceptible to bias. Bias is especially commonplace when contenders work in teams because each team member’s merit can be hard to distinguish from that of others. Our paper investigates evaluation bias originating in intrateam status asymmetries. Using the National Basketball Association’s data, we explore how high-status teammates are associated with their colleagues’ chances of winning awards. We find that bias stemming from high-status teammates’ presence is beneficial to their colleagues in the first stage of evaluations because high-status actors increase their team members ‘visibility to judges. However, our results also show that in the second stage of evaluations, the presence of high-status teammates could decrease their colleagues’ chances of winning awards because lower-status actors might seem less worthy of awards when evaluated alongside high-status individuals.

Research across a wide array of fields has established the organizational importance of fair treatment and why it should be a primary consideration of supervisors. As such, scholars have begun to unpack characteristics of organizations, supervisors, and employees that may promote fair treatment. Although this literature has been informative and is growing, we know little about how the dyadic interplay between leaders and followers—and, in particular, how both parties’ perceptions of that joint interplay—may facilitate or hinder views of fairness. The lack of clarity on this phenomenon is particularly problematic when one considers that there are several features of dyadic relationships within work units that—by their nature—work against the facilitation of fair treatment (e.g., supervisors inevitably provide some employees more/less information, support, and attention than others because they cannot establish high-quality exchange relationships with every employee). Drawing from common threads found in theories of fairness and role theory surrounding expectation alignment, we posit that the key to facilitating views of fair treatment at any level of relationship quality is for supervisors and employees to “see eye to eye” on LMX quality-LMX agreement. We further theorize that each party’s views of fair treatment flowing from LMX agreement (within the dyad) will ultimately result in leaders being more efficacious about their fairness-related abilities and employees performing at higher levels (beyond the dyad). Results of three field studies (and two supplemental preregistered experiments) largely support our theorizing and further show that fair treatment can result in a self-reinforcing positive fairness-efficacy spiral for supervisors.

Although prior research attributes news media coverage of firms to the alignment of firm behavior with societal expectations of appropriateness, the appropriateness of firm behavior is judged through an ideological lens. Therefore, the influence of a firm’s behavior on its news media coverage is likely to be contingent on news organizations’ ideology. Focusing on corporate social responsibility (CSR) as the focal firm behavior, we argue that conservative news organizations are less likely to consider CSR an appropriate firm behavior because conservatives view CSR as privileging progressive ideals and as undermining shareholder interests. As such, we hypothesize that compared with other news organizations, conservative news organizations are less likely to cover socially responsible firms positively. This relationship is likely to be strengthened for firms led by conservative chief executive officers and for firms with poor stock market performance. We examined the coverage of the S&P 1500 firms from 2002 through 2011 in U.S. newspapers and found support for our hypotheses that compared with other newspapers, conservative newspapers report less positively about socially responsible firms and that this effect is strengthened for conservative-led firms. In contrast to what we expected, however, we found some evidence that socially responsible firms with a strong stock market performance are, in fact, covered less positively in conservative newspapers. Taken together, our theory and findings contribute to an understanding of how the news media’s ideological heterogeneity shapes the relationship between firm behavior (in our case, CSR) and news media coverage of firms.

Hierarchy conflict, a dispute among members over the rank order of influence in the team, often impairs team processes and outcomes. The current literature often operates from the assumption that self-interest must be high when team members engage in hierarchy conflict. Building on interdependence theory, we propose that hierarchy conflict may also occur when members have a more prosocial motivation, leading to a more constructive expression of the hierarchy conflict and more positive effects on team performance than hierarchy conflict instigated by members with a more proself motivation. Specifically, we argue that the extent to which a team member is more driven by prosocial (versus proself) motivation heightens the threshold and lowers the frequency for engaging in a hierarchy conflict and that more prosocially motivated team members express their challenge of the hierarchy more directly and with less intensity than more proself-motivated members. This sets in motion a hierarchy conflict exchange that is more constructive and helps teams perform better compared with hierarchy conflict instigated by proself motivation. Our theory complements and extends the current study of the causes, expressions, and consequences of hierarchy conflict in teams across multiple levels of analysis and helps redirect the focus of how hierarchy conflict is viewed in the literature.

Nonmonetary reward systems that recognize high-quality contributions are a common feature of online communities. A growing body of work demonstrates positive links between nonmonetary rewards and increases in voluntary contributions, but negative externalities that may arise with these systems have received little attention. Concomitant performance pressures could incite counterproductive behaviors, and whether counterproductive behavior would be at the expense of productive contributions is unclear. Using proprietary data of members’ suspensions for counterproductive behavior in the online community, Stack Overflow, which enlists a nonmonetary reward system to sustain voluntary contributions, this study examines site members’ weekly movements through the system and their corresponding behaviors. I find being near a milestone reward threshold is associated with an increased likelihood of suspension for counterproductive behavior. However, members also increase productive contributions near the time of their suspensions, which may help offset their counterproductive behaviors. By contrast, formal suspensions for counterproductive behavior are associated with a reduction in post-suspension contributions. Jointly, these findings support the use of nonmonetary rewards systems to sustain voluntary contributions in online communities but offer a note of caution regarding the unintended consequences of enforcement.

Despite the popularity of strategy courses and the fact that managers make consequential decisions using ideas they learn in such courses, few studies examine the learning outcomes of taking a strategy course—a research gap most likely the result of the methodological challenges of measuring these outcomes in realistic ways. This paper provides a large-sample study of what individuals learn from taking a strategy course and how those learning outcomes depend on individual characteristics. We examine how 2,269 master of business administration (MBA) students evaluate real-world video cases before and after taking the MBA core strategy course at a large U.S. business school. We document several changes in their performance, mental representations, and self-perceptions. Among other findings, we show that taking a strategy course improves strategic decision making, increases the depth of mental representations and the attention paid to broader industry and competitive concerns, and boosts students’ confidence, while making them more aware of the uncertainty pervading strategic decisions. We also find that the magnitude and significance of these changes are associated with individual characteristics, such as cognitive ability, prior knowledge, and gender.

Why do first movers into a new industry sometimes gain an advantage simply because of the fact that they are perceived by audiences to be more authentic than second movers, whereas in other contexts such second movers are perceived as no less authentic than first movers? We theorize that this difference hinges on the amount of costly, risky “legitimation work” that entrants are perceived to have conducted in their efforts to establish that the new organizational form is reliable and acceptable. Whereas a first mover must expend great effort to reassure skeptical audiences that the new form coheres with their norms and that it can meet and even exceed their standards, later arrivals are often able to appropriate such legitimacy once it has been established. But such appropriation by the second mover makes its (often implicit) claim of original insight or vision seem less authentic than that of the first mover. In three complementary online experiments on audience reactions to online healthcare startups, we find support for our prediction that followers suffer from a lower consumer preference because they are perceived to have done less work in establishing the new form’s legitimacy. Our results show that when follower firms show evidence of participation in legitimation work, it may overturn the default interpretation and reduce the authenticity discount.

Forming entrepreneurial strategy is difficult, as the future value of strategy alternatives is uncertain. To create and capture value, firms are advised to consider and test multiple alternative strategy elements. Yet, how firms generate and test alternatives remains understudied. As entrepreneurial firms lack resources for broad search, they often draw upon advisory resources from outside the firm. However, advice can be difficult to extract, absorb, and apply. Although scholars have examined static attributes of the entrepreneur or advisor to explain whether advice is used, a dynamic explanation of how advice is produced and informs strategy testing and formation is missing. In an 11-month field study, we observed 25 founders of 12 food and agriculture firms interacting with a common pool of 34 advisors in an entrepreneurship training program. Leveraging the program’s structured design, we observed 165 advice interactions over three phases. No firm took advice and applied it directly to firm strategy. When entrepreneurs engaged literally with advice, they later discounted it—distancing advice from strategy. In contrast, entrepreneurs that coproduced advice challenged advisors to craft novel advice relevant to their strategy, translated it to make it actionable, and tested it—integrating advice into strategy. Firms that distanced advice from strategy did not test strategy alternatives, whereas firms that integrated advice into strategy tested multiple alternatives, explored broader markets, and adapted their strategies. We contribute a grounded process model that explains how coproducing advice opens firms’ apertures to consider strategy alternatives, whereas testing informs the strategy elements chosen.