Firm performance is one of the most prominent concepts in organizational research. Despite its importance, and despite the many developmental critiques that have appeared over the years, performance continues to be a difficult concept to apply in a scientifically rigorous way. After surfacing three potentially viable approaches for conceptualizing performance, we find that most studies are internally inconsistent in their use of these approaches, a situation that creates substantial difficulty in effectively interpreting research. The primary source of inconsistency lies in the use of a generalized abstract conceptualization of performance in theory building (the latent multidimensional approach) coupled with the adoption of one or two narrow aspects of performance in the empirical work (the separate constructs approach). Follow-up analyses designed to determine the best path for resolving these mismatches indicate that our field’s heavy use of abstract performance in theorizing is not scientifically grounded and should be replaced with more specific aspects of performance to match existing practices in empirical work. Although this change would profoundly affect the field and would be resisted by many, it offers a concrete path away from indefensible practices. We offer several explanations for current practices but emphasize forces related to institutional theory. From an institutional perspective, it appears that firm performance is treated in a general fashion in many areas of our academic lives because it has been embraced as an instrument of legitimacy rather than as a scientific tool that facilitates dialogue and the accumulation of knowledge. We recommend and begin a conversation designed to highlight the long-run dangers of focusing our attention on an abstract concept of performance and suggest a set of specific steps that could help to move all of us in a new direction as we attempt to enhance the scientific rigor of our field.

This Perspectives article seeks to redirect research on distributed (also referred to as virtual) groups, a well-established organizational phenomenon in which group members are separated by one or more forms of distance (e.g., geographic or temporal). Such distances directly affect individual behavior and shape other features of the context that alter group processes (e.g., by forcing groups to adopt new communication tools). Prior research has examined isolated effects of various dimensions of virtuality without considering how these effects on individual behavior and group dynamics might have conceptually related underpinnings. To address this gap, we propose an extension of construal-level theory as a way to link the effects of virtuality through a common mediating mechanism. According to construal-level theory, events or objects that are physically or temporally distant are also distant psychologically and thus are likely to be described in terms of their general characteristics. In contrast, views of more proximal events or objects will be more detailed and nuanced. We develop propositions that illustrate how objective dimensions of distance create psychological distance and how that in turn affects how individuals view and interact with their teammates. We also develop propositions that show how the context of the distributed group (e.g., technology usage) affects this process over time. We compare and link this construal-based approach to alternatives based in theories of computer-mediated communication and social identity, and we thereby show that construal-level theory offers both parsimonious explanations and novel predictions about how and why distance alters perceptions of distributed group members (including oneself). Finally, we consider theoretical and practical implications of construal-level theory for future organization science research and the management of virtual teams.

The choice of the firm's market environment is one of the fundamental decisions of firm founders. We study the pre-entry generation of founders' market choice sets by investigating their search for market opportunities in which the firm's technological resources, as embodied in a product or service, can be commercialized. Analyzing data collected through personal interviews with founders of 496 technology ventures, we find that founding teams with more diverse industry experience and more diverse external knowledge sourcing relationships identify not only a larger number of but, in particular, more varied (distant) market opportunities. However, the extent to which strategic variety of such opportunities is identified depends on the founders' technological expertise, whereas technological expertise is less relevant in identification of the number of opportunities. Furthermore, by showing that the extent and nature of the firm's pre-entry opportunity set has a significant effect on the likelihood of subsequent firm diversification, we document how initial constraints in founders' choice sets can have a lasting impact on the growth potential that the new firm exploits over time. We discuss the implications of our findings for the literatures on organizational learning and innovation, entrepreneurship, as well as the strategy literature examining firm growth, diversification, and value creation.

This paper contributes to research on the outcomes of employee prosocial voice to managers by focusing on the relationships between voice and two managerially controlled outcomes: managerial performance ratings and involuntary turnover. Past research has considered voice from either the managerial or subordinate perspective individually and found that it can lead to positive outcomes because of its improvement-oriented nature. However, others have argued that voice can lead to unfavorable outcomes for employees. To begin resolving these competing perspectives, we examine agreement and disagreement between employees and their managers on the extent to which employees provide upward voice, proposing and demonstrating that considering either perspective alone does not fully capture how voice is related to employee outcomes. Findings from a study of 7,578 subordinates and their 335 general managers within a national restaurant chain indicate that agreement between employees and managers that employees display a high level of voice leads to favorable outcomes for employees. Our findings then extend existing research by showing that supervisor–subordinate disagreement around voice also helps explain employee outcomes—namely, how negative outcomes arise as a result of employees overestimating their voice relative to their managers' perspective and how positive outcomes result when employees underestimate their upward voice.

Departing from prior work that demonstrates the stickiness and stability of alliance networks resulting from embeddedness, we extend matching theory to study firms' withdrawal from alliances. Viewing alliance withdrawal as a result of firms' pursuit of more promising alternative partners (outside options) rather than failures in collaboration, we predict that a firm is more likely to withdraw from an alliance when there is a higher density of outside options that have better match quality than the current partners. We also propose that, because matching is two-sided, outside options have a greater impact on a firm's withdrawal when they are more likely to initiate new alliances. Using data on alliances in the global liner shipping industry, we show that, controlling for internal tensions in the alliance, outside options predict alliance withdrawals. Thus, despite the alliance stickiness and stability, firms alter their alliances in response to the availability of promising outside options, even leaving alliances that appear successful.