Knowledge that Transforms

Increasing demographic diversity is undoubtedly important and can aid in debiasing decision makers. Yet, the promises of demographic diversity are not always realized due to social integration problems. We consider why and for whom differences combined with homogeneity make a difference for groups in terms of integratively complex thinking and ideological decision making. Although research has shown that decision makers often rely on political biases, that work has not addressed when and why decision-making groups are able to overcome these biases—a pervasive concern in today’s politically polarized social milieu. Drawing on the common in-group identity model and research on integrative complexity, we theorize that demographic diversity ultimately yields less ideological decision making because it prompts integrative complexity; however, demographic diversity only accrues this benefit in the presence of ideological homogeneity. We also reason that the relationship between integrative complexity and reduced ideological decision making emerges for more conservative (versus more liberal) groups. We find support for our expectations using a natural experiment of judges on the U.S. Courts of Appeals. Supplemental analyses indicate that working within a demographically diverse and ideologically homogeneous group also positively predicts integrative complexity in future decision-making groups. Finally, we find that demographic and ideological diversity can substitute for one another, but no additional integrative complexity benefits accrue when both are present. We discuss implications of this research in light of the ongoing conversation about the value of diversity and today’s polarized political climate.

When venturing into unfamiliar areas of technology, inventors face ex ante technological uncertainty, that is many possible alternative technological paths going forward and limited guidance from existing technological knowledge for predicting the likelihood that a given path will successfully result in an invention. I theorize, however, that this ex ante technological uncertainty becomes less apparent when evaluating inventions in hindsight. When one knows that a given technological path turned out to be successful ex post, it may be difficult to appreciate the ex ante plausibility of reasons to prefer alternative paths. As a result, inventions may seem more obvious to those evaluating inventions with the benefit of hindsight. My theory yields a counterintuitive implication; when inventors venture into less familiar areas of technology, there is a greater risk of evaluators overestimating obviousness due to hindsight bias. Empirical evidence comes from novel data on accepted and rejected patent applications, including hand-collected data from the text of applicant objections to obviousness rejections and examiners’ subsequent reversals of rejections in response to applicant objections.

Discrimination is a pervasive aspect of modern society and human relations. Statistical discrimination theory suggests that profit-maximizing employers should use all the information about job candidates, including information about group membership (e.g., race or gender), to make accurate predictions. In contrast, research on heuristics in psychology suggests that using less information can be better. Drawing on research on heuristics, we show that even small amounts of inconsistency can make predictions using group membership less accurate than predictions that do not use this information. That is, whereas statistical discrimination theory implies that better predictions can be achieved by using all available information about an individual (including group characteristics that may be correlated with but do not cause performance), our model shows that using all available information only improves predictive accuracy under a very specific set of conditions, thus suggesting that statistical discrimination often results in worse predictions. By understanding when statistical discrimination improves or worsens predictions, our work cautions decision makers and uncovers paths toward reducing the occurrence of situations in which statistical discrimination benefits predictive accuracy, thus reducing its pervasiveness in society.

Although previous studies show that the emergence of evaluation criteria for a new technology improves the life chances of well-performing firms, we theorize that consensus in such criteria among technology experts increases investments to all firms in the new sector. We provide a variety of supportive evidence for this claim. First, in an experiment with 80 Chinese investors (Study 1), we provide evidence of a causal relation between evaluation consensus and investments. We follow this with a second experiment with 412 U.S. participants (Study 2), showing that evaluation criteria consensus increases participants’ propensity to view a firm as technologically competent and to expect others to favor investing in the firm. Analyses of longitudinal archival data on investment in artificial intelligence technology firms in the United States (Study 3a) and China (Study 3b) support the generalizability of our findings. By exploring the social-cognitive processes that link evaluation criteria consensus to investors’ decisions to invest in firms in nascent technology fields, this paper advances the scholarly understanding of the microfoundations of the institutionalization processes in new market sectors. History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.

Although studies show that organizations engaged in controversial actions often aim to minimize the release of threatening information, scholars know relatively little about what may prompt organizations to increase transparency in these situations. In this study, we focus on support from public opinion as a condition that may influence the disclosure of sensitive performance information to the public. Using the second Iraq War as an empirical context, we focus on the extent to which public officials—Pentagon spokespersons—release and frame information about war performance. This outcome is critical because the way in which organizations communicate their performance to outsiders has often been regarded as a key defensive impression management tactic. We hypothesize that high public support for the war will increase the likelihood that Pentagon officials release information about sensitive combat performance indicators in their press briefings and identify contingencies, such as adversity and organizational spokespersons’ power, that moderate this relationship. We also explore whether high public support decreases the strategic use of alternate performance frames that emphasize metrics that signal progress toward a desirable end state. Using a unique data set based on the coding of press briefings, public opinion data, and other public sources, we find support for several of our hypotheses. We discuss implications for understanding the relationship between public opinion and impression management and highlight the importance of extending this research to nongovernmental organizations.

Research to date offers inconclusive and even conflicting evidence regarding whether organizations learn from failure. The present study sheds new light on this debate by highlighting a previously overlooked factor: whether the failure was caused by human error. In attempts to learn from failure, organizational members tend to focus on simplified representations of experiences and, in doing so, distinguish between failures attributed to human errors versus other causes. Our core thesis is that failures resulting from human error attract significant amounts of attentional resources, thereby depleting the limited stock of organizational attention otherwise directed at managing the risk of failures resulting from other causes. We hypothesize that this disproportionate allocation of attention simultaneously is associated with both positive learning outcomes and negative side effects, specifically, a subsequent decrease in failures resulting from human error and also an increase in failures resulting from other causes. We also hypothesize that failures resulting from causes other than human error attract less organizational attention and, thus, lead to weaker learning outcomes. The proposed hypotheses were tested and supported using data from accident reports filed by natural gas pipeline operators with the U.S. Pipeline Hazardous Materials Safety Administration from 2002 to 2012. Additional analyses, including text analysis of accident reports, a series of simulations, and a supplementary study, point to organizational attention as the mechanism at play. Taken together, these findings suggest that organizational learning from failure caused by human error produces not only benefits, but also unintended consequences.

Adequately addressing the grand challenge of poverty requires addressing resource scarcity. However, efforts to provide resources as a means of poverty alleviation have met with mixed success. We explore what makes resource provision effective as a means of poverty alleviation. We adopt a resourcing perspective, which focuses on the relationship between potential resources and schemas, or shared understandings, that shape how resources are used. Consistent with prior research, we find that schemas shape how resources are used in practice. However, we also find that who can access the resources is as consequential as how they are used. In exploring this issue, we identify a new category of schemas related not to use but to access, which we refer to as access schemas. We define access schemas as shared understandings regarding who can appropriately access potential resources. We find that different social groups have distinct schemas regarding access, and we identify three mechanisms—precedence, complementarity, and scaffolding—that shape the way that access schemas are enacted in resource-scarce settings. Our study contributes to the literature on grand challenges by clarifying the link between resource provision and resource use. We also contribute to the literature on resourcing by uncovering mechanisms that shape schema enactment in the presence of conflicting access schemas held by different social groups.

Collective intelligence (CI) captures a team’s ability to work together across a wide range of tasks and can vary significantly between teams. Extant work demonstrates that the level of collective attention a team develops has an important influence on its level of CI. An important question, then, is what enhances collective attention? Prior work demonstrates an association with team composition; here, we additionally examine the influence of team hierarchy and its interaction with team gender composition. To do so, we conduct an experiment with 584 individuals working in 146 teams in which we randomly assign each team to work in a stable, unstable, or unspecified hierarchical team structure and vary team gender composition. We examine how team structure leads to different behavioral manifestations of collective attention as evidenced in team speaking patterns. We find that a stable hierarchical structure increases more cooperative, synchronous speaking patterns but that unstable hierarchical structure and a lack of specified hierarchical structure both increase competitive, interruptive speaking patterns. Moreover, the effect of cooperative versus competitive speaking patterns on collective intelligence is moderated by the teams’ gender composition; majority female teams exhibit higher CI when their speaking patterns are more cooperative and synchronous, whereas all male teams exhibit higher CI when their speaking involves more competitive interruptions. We discuss the theoretical and practical implications of our findings for enhancing collective intelligence in organizational teams.

Firms are increasingly responding to social and environmental issues in highly complex and heterogeneous organizational fields that transcend national boundaries. Yet, we still have a limited understanding of how these fields are structured and the implications of structural variation on how issues are addressed over time. We advance theory in this area by arguing that issue fields are characterized by varying settlement constellations that structure these fields. We develop a typology of three settlement constellations—unified, fragmented, and bifurcated—and describe their impact on field structure and the challenges they raise for addressing field-defining issues. We then theorize the evolution of fields with different settlement constellations and explain how and why constellations are sustained over time as well as when they may change. Our paper helps advance theory on organizational fields, private regulation, and firm responses to social and environmental issues. More broadly, our paper highlights the unique position of organizational and institutional scholars to examine complex social and environmental issues, or “grand challenges.”

Research in the “theory of the firm” tradition has often characterized firms as subeconomies, in which economic exchange is shaped by a central authority. We propose an expanded view of firms as subsocieties, in which authority is also responsible for establishing principles that shape cooperation among members. We draw on insights from political theory, sociology, and, to a lesser degree, legal theory to discuss how employees become members of subsocieties by exchanging rights, such as formal control over their work, for the benefits of membership. With this rights exchange, subsociety members develop expectations that those in positions of authority will use their control to define and sustain principles of justice and common purpose consistent with members’ moral sentiments. This view suggests expanded roles for authority and firm boundaries from what are incorporated into standard theories of the firm. These expanded roles have implications both for internal governance and for the boundary itself: When considering boundary changes, leaders must weigh both the economic and the social consequences of their decision.