AbstractThis paper empirically examines whether operational slack, business diversification, geographic diversification, and vertical relatedness influence the stock market reaction to supply chain disruptions. The results are based on a sample of 307 supply chain disruptions announced by publicly traded firms during 1987–1998. Our analysis shows that firms with more slack in their supply chain experience less negative stock market reaction. The extent of business diversification has no significant effect on the stock market reaction. Firms that are more geographically diversified experience a more negative stock market reaction. We find that firms with a high degree of vertical relatedness experience a less negative stock market reaction. These results have important implications on how firms design and operate their supply chains to mitigate the negative effect of supply chain disruptions.

AbstractOrganizational scholars have treated emotions mostly as an individual‐level phenomenon, with limited theorisation of emotions as an important component in social embeddedness. In this review essay, we argue for the need for a toolkit to study emotions as an inherently social phenomenon. To do so, we apply insights from sociology that have been under‐utilized in management and organization research. We focus on three sociological concepts: collective emotions and social bonds, emotional energy and moral batteries, and emotional capital. We then develop an integrative model of emotional embeddedness to emphasize that emotions are socially constructed and socially authorized. We end the paper by setting out a research agenda for more research in management and organization that is informed by these three concepts.