Knowledge that Transforms

The authors test whether acquisitions and divestitures are related to environmental uncertainty and diversification strategy. Drawing from transaction cost economics, they predicted that increases in environmental uncertainty would reduce a company's ability to manage its subsidiaries efficiently and would lead to divestiture. Conversely, they predicted that decreases in environmental uncertainty would enable a company to manage its subsidiaries more efficiently and would lead to acquisition. Those predictions were expected to be strongest for firms with intermediate levels of diversification, as such firms are believed to be the most difficult to manage efficiently. Repeated measures analyses of a panel of 164 Fortune 500 companies supported the predictions for highly diversified firms (e.g., unrelated businesses) only. Less diversified firms reacted to increases in uncertainty by acquiring and to decreases in uncertainty by divesting. The results suggest that the relationship between diversification strategy and portfolio restructuring depends on environmental uncertainty. In addition, the study findings imply that there may be limits in the hierarchy's governance efficiency in relation to market modes and that those limits may be affected by environmental uncertainty and diversification strategy.

This natural experiment investigates the introduction and use of a pair of competing video telephone systems in a company over a period of 18 months. Both quantitative, time-series analyses and in-depth interviews demonstrate that employees adopted and used the video systems for both utility and normative reasons. Consistent with utility explanations, people in the most communication-intensive jobs were the most likely to use video telephony. Consistent with social influence explanations, people used a particular system more when more people in general were using it and when more people in their work group were using it. There were two conceptually distinct, but empirically entangled, types of social influence. First, use by other people changed the objective benefits and costs associated with using the systems, and thus their utility. Second, use by others changed the normative environment surrounding the new technology. Both utility and normative influences were stronger in one's primary work group. Implementers, users, and researchers should consider both utility and normative factors influencing both the success and failure of new organizational communication systems.

Recent innovations in organizational forms, such as delayered management, empowered workers, telework, and ad hoc work groups, have created a need to ensure that communication between dispersed knowledge workers can be supported. The movement toward a less cohesive workplace suggests a need to deploy computer-based media, but it is not clear which media should be deployed and under what circumstances. Addressing such significant issues must begin with insights into why knowledge workers choose particular media for particular tasks in the first place. Prior research theorizing about media choice has focused on: (1) task, (2) medium, (3) the fit between task and medium, and (4) social environment. It has not sufficiently considered the role of the availability of the intended recipient or the interaction between recipient availability and task social presence variables which could have a significant impact on media choice. To examine the effects of these two factors, the authors conducted an initial exploratory study and a subsequent controlled factor study. In the initial study, an analysis of 1,669 hypothetical scenarios from 100 knowledge workers at a worldwide transportation company indicated that social presence (SP) theory proves to be a good predictor of media choice, as does the recipient availability construct. The analysis also suggested that the interaction between recipient availability and task social presence might be a good predictor. With a partial replication, randomized treatment design, including 1,883 scenarios from 257 workers, the controlled factor study at a large financial institution generally confirmed the study hypotheses. The authors examine rival explanations simultaneously along the dimensions of task, medium, fit between task and medium, and social environment. They propose and test a new model of media choice and suggest directions for future testing of a new “task closure” model of media choice. They conclude by offering guidelines for managers deploying electronic communications in the workplace.

This paper argues that a key component in a firm's strategic response to unfamiliar environmental events is the interpretations managers develop about the event itself and about key dimensions of their strategy. Using historical data from the pharmaceutical industry, the revealed interpretations of top management from six firms over a ten-year period are analyzed and are compared to the timing and content of the changes in strategy each firm undertook following a significant change in regulation. The results reveal two distinct patterns of interpretation development that appear to be linked to whether or not the target of interpretation is familiar. Further, interpretations appear to be linked both temporally and in terms of content to the strategic change undertaken by each firm. Both sets of results suggest that the interpretations of managers are linked to organizational actions.

Conversation between Ken Peplowski, who received the most prestigious European award for a jazz recording (Preis der Deutschen Schallplattenkritik, February 1993), and Frank Barrett about the structure of jazz. Jazz improvisation involves creating music on the spot without a prescripted score or plan. However, jazz is guided by a non-negotiable framework that constrains what the soloist can play. This structure provides the necessary backdrop to coordinate action and organize choice of notes.

This paper examines the link between a firm's resources and its efficient organization form with a focus on entrepreneurial resources. Entrepreneurial resources are defined as the propensity of an individual to behave creatively, act with foresight, use intuition, and be alert to new opportunities. This paper assumes that these entrepreneurial resources can be distributed in two ways throughout the firm: they can be held by one or a few individuals—“individual entrepreneurial resources”—or they can be dispersed among a team of individuals—“team entrepreneurial resources.” Agency theory is used to consider how various organizational characteristics—such as the assignment of decision responsibilities, incentives and risk bearing, the number of hierarchical levels, horizontal linking structures, mutual monitoring and bonding devices, and information systems—will differ in the individual and team entrepreneurial forms. Generally, the individual entrepreneurial form resembles the “classic entrepreneurial firm” (Fama and Jensen 1983) in which various decision making roles and risk bearing are performed by a single entrepreneur. The team entrepreneurial form is similar to what Bartlett and Ghoshal (1993) call “beyond the m-form.” Responsibility for steps in the decision process is dispersed in the team form, and monitoring the decision process will occur at the organization's apex. The CEO will not make operational or strategic decisions; instead, he manages the internal market for managers and develops an organization's cultural context and information systems. Below the CEO level, team entrepreneurs are responsible for ratifying innovative decisions, and below this team entrepreneurs are responsible for initiating innovative decisions. After presenting these two entrepreneurial forms, this paper relates them to extant research on corporate entrepreneurship and organizational forms.