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Caitlin Ray, Anthony J. Nyberg, Mark Andrew Maltarich
Academy of Management Review; https://doi.org/10.5465/amr.2020.0186

Abstract:
The value of human capital resources (HCR) is widely recognized, but relatively little is known about their creation. Research conceptualizes HCR emergence as enabled through shared states which form in response to environmental conditions. Although this view implies that social interactions play a role in creating HCR, theory currently fails to clarify how social interactions act as key facilitators of the emergence process. This limitation persists partly because the structure and content of the social interactions are unaccounted for, making it impossible to fully understand and predict when HCR will be generated through the HCR emergence process. To address this deficiency, we draw from social capital literature, which provides a rich view of the structure and content of social interactions, to develop HCR emergence theory. This theory brings needed precision to theoretical perspectives on HCR emergence by proposing how unique features of social interactions influence the creation of HCR through the emergence process.
Richard J. Arend
Academy of Management Review; https://doi.org/10.5465/amr.2021.0251

Abstract:
**there is no abstract for Dialogues** If one is required, please let me know, and I will provide one.
Keith Leavitt, Kira Schabram, Prashanth Hariharan, Christopher Montgomery Barnes
Academy of Management Review, Volume 46, pp 750-777; https://doi.org/10.5465/amr.2019.0247

Abstract:
With rapid advancements in machine learning, we consider the epistemological opportunities presented by this novel tool for promoting organizational theory. Our paper unfolds in three sections. We begin with an overview of the three forms of machine learning (supervised, reinforcement, and unsupervised), translating these onto our common modes of research (deductive, abductive, inductive, respectively). Next, we present frank critiques of machine learning applications for science as well as of the state of organizational scholarship writ large, highlighting contemporary challenges in both domains. We do so to make the case that machine learning and theory are not in competition but have the potential to play complementary roles in moving our field beyond siloed domains and incremental theory. Our final section speaks to this synergy. We propose that machine learning can act as a tool to test and prune mid-range theory and as a catalyst to expand the explanatory spectrum that theory can inhabit. Specifically, we outline how machine learning can support local but perishable theory targeting pragmatic problems in the here and now, and grand theory that is sufficiently bold and generalizable across contexts and time to serve the social-functional purposes of inspiring and facilitating long-term epistemological progress across domains.
John C. Dencker, Sophie Bacq, Marc Gruber
Academy of Management Review, Volume 46, pp 825-827; https://doi.org/10.5465/amr.2021.0231

Greg Fisher, Kyle Mayer, Shad Morris
Academy of Management Review, Volume 46, pp 631-639; https://doi.org/10.5465/amr.2021.0320

Paolo V. Leone, Saku Mantere, Samer Faraj
Academy of Management Review, Volume 46, pp 725-749; https://doi.org/10.5465/amr.2019.0279

Abstract:
We explore how open theorizing contributes to theory development within and across scholarly communities in management and organization studies. Open science precepts such as open data and open research material can foster open theorizing, enabling loosely coordinated researchers to develop theoretical explanations by drawing on each other's datasets, code scripts, notes, methodological protocols, auxiliary findings, and supplemental documentation. In social scientific, theory-intensive fields, such as management and organization studies, open theorizing processes can also occur through sharing concepts, framings, theoretical relations, and case examples, as well as through research policies and debates about values. By enacting the social epistemological principles of free criticism and diversity, these processes significantly affect theoretical vocabularies: promoting their concentration, extension, reinvigoration, and procreation. We examine how open theorizing can benefit or hinder theory development, and we discuss the collective-action problems that may hamper its adoption.
Violina P. Rindova, Luis L. Martins
Academy of Management Review, Volume 46, pp 800-822; https://doi.org/10.5465/amr.2019.0289

Abstract:
The goal of strategy is not only to address a given environment, but also to change it to a firm’s advantage. In this article, we maintain that design science provides a useful theoretical foundation for understanding the development of novel strategies by shifting strategists’ perspective from what is to what could be, from the past and present to the future, and from choosing among existing alternatives to discovering problems and solutions. We propose a structured process based on design mechanisms, which enables strategists to overcome the impediments to generating novel strategies that have been identified in prior research. The process we theorize integrates (i) strategists’ shaping intentions to transform an existing situation into a preferred one, (ii) a discovery-oriented exploration of problems and solutions based on designing without final goals, and (iii) stakeholder dialogue to validate and extend novelty and value. We discuss how it extends the micro-foundations of strategy with respect to the generation of strategic foresight and shaping intentions, as well as the work at the intersection of stakeholder strategies and complex societal problems.
Philip O’Donnell, Colm O’Gorman, Eric Clinton
Academy of Management Review, Volume 46, pp 827-830; https://doi.org/10.5465/amr.2020.0143

Abstract:
Original paper: John C. Dencker, Sophie Bacq, Marc Gruber, and Melvin Haas, Reconceptualizing necessity entrepreneurship: A contextualized framework of entrepreneurial processes under the condition of basic needs, https://doi.org/10.5465/amr.2017.0471
Chad David Coffman, Sanwar A. Sunny
Academy of Management Review, Volume 46, pp 823-825; https://doi.org/10.5465/amr.2019.0361

Abstract:
In their recent paper, Dencker, Bacq, Gruber and Haas (2019) reconceptualize necessity entrepreneurship—sometimes referred to as necessity-motivated entrepreneurship (McMullen, Bagby & Palich, 2008)—through the lens of motivational theory, utilizing Maslow’s (1954) hierarchy of needs framework. Prior research often conceptualized necessity entrepreneurship within a push-pull framework (Storey, 2016), with necessity entrepreneurship occurring when individuals are pushed into entrepreneurship by negative forces such as job loss or even the need for food and clothing, and opportunity-motivated entrepreneurs pulled into entrepreneurship by its attractiveness (Uhlaner & Thurik, 2007). This push-pull framework resulted in a dichotomous view of necessity entrepreneurship that Dencker et al (2019) correctly describe as over-simplified, and unable to account for the wide array of antecedents, processes and outcomes that occur in developing and developed contexts.
Matthew A. Cronin, Jeroen Stouten, Daan van Knippenberg
Academy of Management Review, Volume 46, pp 667-683; https://doi.org/10.5465/amr.2019.0294

Abstract:
Lewin’s famous dictum is that “there’s nothing so practical as a good theory,” yet there is growing concern that management theory is not very useful or usable. Many scholars seek to fix the growing disconnect between theory and managerial realities, as well as the overabundance of weak and untested theory. Our concern is that all this discussion focuses on improving unit theory, which frames empirical work on specific aspects of a phenomenon, rather than programmatic theory, which orients scholars and practitioners toward what the unit theories collectively support as settled science. While programmatic theory must be comprised of solid unit theories, the processes that improve programmatic theory are different from and can be undermined by those that improve unit theory. Our contribution, therefore, is a model for how unit theory becomes programmatic theory that demonstrates how and why programmatic theory needs to drive that process. We conclude by using our model to show why the current suggestions for fixing the crisis of theory are not only insufficient but even draw away from the development of programmatic theory.
Heather A. Haveman, Joseph T. Mahoney, Elizabeth Mannix
Academy of Management Review, Volume 46, pp 660-666; https://doi.org/10.5465/amr.2021.0315

Santi Furnari, Donal Crilly, Vilmos F. Misangyi, Thomas Greckhamer, Peer C. Fiss, Ruth V. Aguilera
Academy of Management Review, Volume 46, pp 778-799; https://doi.org/10.5465/amr.2019.0298

Abstract:
Management scholars study phenomena marked by complex interdependencies where multiple explanatory factors combine to bring about an outcome of interest. Yet, theorizing about causal complexity can prove challenging for the correlational theorizing that is predominant in the field of management, given its “net effects thinking” that emphasizes the unique contribution of individual explanatory factors. In contrast, configurational theories and thinking are well-suited to explaining causally complex phenomena. In this article, we seek to advance configurational theorizing by providing a model of the configurational theorizing process which consists of three iterative stages—scoping, linking and naming. In each stage, we develop and offer several heuristics aimed at stimulating configurational theorizing. That is, these theorizing heuristics are intended to help scholars discover configurations of explanatory factors, probe the connections among these factors, and articulate the orchestrating themes that underpin their coherence. We conclude with a discussion of how configurational theorizing advances theory development in the field of management and organizations, and beyond.
Piotr Tomasz Makowski
Academy of Management Review, Volume 46, pp 702-724; https://doi.org/10.5465/amr.2019.0252

Abstract:
The paper outlines a novel perspective for theory building by showing how methods of conceptual engineering enable systematic development of conceptual competences. Conceptual engineering is a hot topic in philosophy (Cappelen, Plunkett, & Burgess, 2019), with many interesting achievements and applications. Using it in organization and management theory may shed a new light on the most typical conceptual strategies in theory building, so-called conceptualizations and reconceptualizations, and help systematically improve them. Focusing on organization and management theory, the paper introduces conceptual engineering as a tool to optimize concepts in the management field and builds a proof of concept on two selected examples from routines research. Besides paving a new way in theory development, conceptual engineering gives an interesting solution to the rigor/relevance problem as it shows that the scientific perspective on the practical relevance of a theory requires rigor on the level of concepts.
Anne-Claire Pache, Filipe M. Santos
Academy of Management Review, Volume 46, pp 640-659; https://doi.org/10.5465/amr.2021.0197

Abstract:
In this paper, we share the behind the scenes story of the production of our paper “When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands”, which received the 2020 AMR Decade Award. Ten years into its publication, we assess the degree to which the phenomenon of conflicting institutional demands is still prevalent today. We further push our theorizing by extending our initial model of the determinants of organizational responses to institutional complexity by discussing the potential consequences of these responses. We also outline the organizational factors that may enable their successful enactment.
Alf Steiner Sætre, Andrew H. Van de Ven
Academy of Management Review, Volume 46, pp 684-701; https://doi.org/10.5465/amr.2019.0233

Abstract:
The need for understanding how new ideas and hunches are created that may subsequently lead to new theories or models has never been greater for academics and practitioners. Abduction provides a mode of reasoning for achieving this. It is a form of generative reasoning that begins with observing and confirming an anomaly, generating and evaluating hunches that may explain the anomaly, for subsequent deductive constructing and inductive testing. Although abductive reasoning is being recognized in the management literature, it requires more systematic development to be useful for theory creation. We argue that abduction can inform management scholars in creating theories in three important ways: First, we propose four key steps in abductive reasoning of observing and confirming anomalies and generating and evaluating hunches. Second, we go beyond individual reasoning to examine collective social-psychological processes of generating new theories. Third, we propose specific ways for disciplined imagination in abductive reasoning.
Marco Berti, Christos Pitelis
Academy of Management Review; https://doi.org/10.5465/amr.2019.0416

Abstract:
We critically assess the comparative efficiency advantages and disadvantages of capitalist and cooperative firms using team production as a frame of reference. We revisit the debate about such (dis)advantages in the context of open team production (OTP), a situation where team members are both internal and external to the firm. In contrast to the case of traditional (closed) team production, which focuses on the problem of monitoring team members within the firm, open team production, requires incentivizing both internal and external team members to commit to firm-specific cospecialized investments, as well as orchestrating and monitoring these continued investments. We identify some comparative efficiency (dis)advantages of traditional cooperative and capitalist firms in dealing with the novel challenges posed by OTP and we conclude that, in its context, a new type of a hybrid firm can possess comparative efficiency advantages vis-à-vis both types of traditional firms.
Nan Jia, Stanislav Markus, Timothy Werner
Academy of Management Review; https://doi.org/10.5465/amr.2019.0292

Abstract:
Law-abiding firms often attempt to conceal their corporate political activity (CPA), yet the concealment of CPA has not been matched by our understanding of the phenomenon. We develop a theoretical framework consisting of three components to analyze firms’ strategy of CPA concealment. First, we provide a detailed conceptual background on CPA concealment, including what concealment of CPA is and how it can occur. Second, we develop an in-depth analysis of the key benefits and costs of concealing CPA for firms. Finally, we integrate this analysis with positive political theory to place our firm-level calculus in the context of policymaking by identifying the public policymakers whom firms are most likely to influence via CPA concealment. Based on this framework, we generate additional empirically testable propositions on how CPA concealment changes with factors at the country, institution, issue, and firm levels. This study is the first to generate systematic theory on firms’ CPA concealment strategies. Moreover, this research context highlights the particular importance of theory for investigating consequential phenomena that yield scarce data – it is theory which guides data discovery ex ante, helps assess bias ex post, and uncovers key insights that empirical analysis alone cannot generate.
John Amis, Shelly Brickson, Patrick Haack, Morela Hernandez
Academy of Management Review, Volume 46, pp 431-439; https://doi.org/10.5465/amr.2021.0222

Andrew Paul Lynn
Academy of Management Review, Volume 46, pp 512-533; https://doi.org/10.5465/amr.2018.0250

Abstract:
In recent decades a number of voices in managerial scholarship and business ethics have championed conciliatory business strategies capable of achieving both economic and social ends. While these "good ethics pays" or "win-win" approaches have garnered massive attention in both academic and practitioner-oriented arenas, empirical vetting of such strategies has lagged far behind their widespread diffusion. Even more problematic, careful examination of the scholarly work in this area reveals fundamentally different presuppositions about what it means to claim "good ethics pays" and how this claim relates to managerial activity. This article maps out the various "good ethics pays" arguments across the managerial discipline to uncover three competing, divergent, and at times incommensurable frameworks of how such a knowledge claim is constructed. This mapping is followed by examining how disciplinary commitments to parsimonious explanations and stable behavioral patterns utilize “good ethics pays” frameworks to effectively minimize moral agency of actors. This article concludes by laying out a new research approach that foregrounds the varied contingency of how ethics and economics intersect. This approach moves beyond ungrounded confidence in a grand theory of “win-win” convergences to instead investigate the provisional and contextual social mechanisms that reward or sanction ethical action.
William Schulze, Thomas Markus Zellweger
Academy of Management Review, Volume 46, pp 489-511; https://doi.org/10.5465/amr.2018.0377

Abstract:
Building on property rights theory, we explore the relationship among property rights, owner-management, and value creation in private firms. We suggest that property rights in the hands of owner-managers create strategic, incentive, and commitment benefits that facilitate value creation. However, the self-incentivizing nature of property rights engenders three control hazards —those related to reliability, egocentrism, and succession—that threaten stakeholder welfare. In order to mitigate these hazards, owner-managers must establish credible governance. We discuss four governance mechanisms often found in owner-managed firms: commitment to social control, delegation of authority to managers, submission to the hierarchy of a board, and partial transfer of ownership. Although these mechanisms help mitigate control hazards, they also constrain the value-generating benefits of owner-management. Owner-managers thus face control dilemmas when determining how to best govern their firms. Our theory sheds new light on the relationship between property rights and value creation, and lays a foundation for exploring the benefits and liabilities of owner-management.
Robert Wayne Gregory, Ola Henfridsson, Evgeny Kaganer, Skolkovo Harris Kyriakou
Academy of Management Review, Volume 46, pp 534-551; https://doi.org/10.5465/amr.2019.0178

Abstract:
Some of the world’s most profitable firms own platforms that exhibit network effects. A platform exhibits network effects if the more people that use it, the more valuable that it becomes to each user. Theorizing about the value perceived by users of a platform that exhibits network effects has traditionally focused on direct and indirect network effects. In this paper, we theorize about a third type of network effects—data network effects—that has emerged from advances in artificial intelligence (AI) and the growing availability of data. A platform exhibits data network effects if the more that the platform learns from the data it collects on users, the more valuable the platform becomes to each user. We argue that there is a positive direct relationship between the AI capability of a platform and the value perceived in the platform by its users—a relationship that is moderated by platform legitimation, data stewardship and user-centric design.
Alex Murray, Jennifer Rhymer, David G. Sirmon
Academy of Management Review, Volume 46, pp 552-571; https://doi.org/10.5465/amr.2019.0186

Abstract:
Organizations are increasingly deploying technologies that have the ability to parse through large amounts of data, acquire skills and knowledge, and operate autonomously. These technologies diverge from prior technologies in their capacity to exercise intentionality over protocol development and/or action selection in the practice of organizational routines, thereby affecting organizations in new and distinct ways. In this article, we categorize four forms of conjoined agency between humans and technologies: conjoined agency with assisting technologies, conjoined agency with arresting technologies, conjoined agency with augmenting technologies, and conjoined agency with automating technologies. We then theorize on the different ways in which these forms of conjoined agency impact a routine’s change at a particular moment in time as well as a routine’s responsiveness to feedback over time. In doing so, we elaborate on how organizations may evolve in varied and diverse ways based on the form(s) of conjoined agency they deploy in their organizational design choices.
Matthew L. Call, Robert E. Ployhart
Academy of Management Review, Volume 46, pp 572-590; https://doi.org/10.5465/amr.2018.0103

Abstract:
Understanding the impact that employee job performance has on firm value creation and capture has been an enduring challenge. Micro management scholarship focuses on employee job performance behavior and rarely considers the extent to which value created by employees is actually appropriable by the employing firm. Simultaneously, macro management scholarship focuses on firm value creation and capture without explicit attention to the nature and types of individual job performance or collective performance processes within firms. Thus, we conceptually integrate strategic management theory on value creation/capture with psychological theory on employee job performance and collective performance, to propose a theory explaining how and when firms will capture value from employee job performance. Heterogeneity in value created and captured by employee job performance is affected by two broad factors: individual (e.g., the type of job performance) and market (e.g., labor market constraints). These insights lead to theoretical and practical advances for both micro and macro fields, suggesting that the relationship between employee job performance and firm value capture is more conditional and context-specific than previously recognized.
Patrick Haack, Dirk Martignoni, Dennis Schoeneborn
Academy of Management Review, Volume 46, pp 440-464; https://doi.org/10.5465/amr.2018.0139

Abstract:
The notion that transparency forces organizations to eschew decoupling and embrace substantive adoption represents an important assumption in the corporate social responsibility (CSR) literature. Conversely, research on learning and social control has considered opacity—understood as a lack of transparency—to be conducive to substantive CSR adoption. These opposing viewpoints highlight a fundamental tension: Is transparency good or bad for substantive adoption? This paper resolves this tension by asking an alternative question: When is transparency good or bad, and why? We advance a dynamic perspective, which conceives transparency and opacity as transitory phenomena, and we specify the boundary conditions for which either enduring or transitory forms of transparency and opacity further the substantive adoption of CSR. Our analyses reveal that, for circumstances under which the motivation of ceremonial adoption is hypocritical (rather than opportunistic) and where both substantive adoption and practice abandonment are difficult, the former can be maximized by first allowing organizations to adopt a CSR practice ceremonially under opacity (“bait”), and then prompting ceremonial adopters to become substantive adopters through a shift to transparency (“switch”). Specifying this bait-and-switch mechanism and its underlying contingencies reveals a hitherto unexplored, and potentially more effective, pathway towards the institutionalization of CSR.
Andrew A. King, Brent Goldfarb, Timothy Simcoe
Academy of Management Review, Volume 46, pp 465-488; https://doi.org/10.5465/amr.2018.0421

Abstract:
Published testimony in management, as in other sciences, includes cases where authors overstate the inferential value of their analysis. Where some scholars have diagnosed a current crisis, we detect an ongoing and universal difficulty: the epistemic problem of learning from testimony. Overcoming this difficulty will require responses suitable to the conditions of management research. To that end, we review the philosophical literature on the epistemology of testimony, which describes the conditions under which common empirical claims provide a basis for knowledge, and we evaluate ways these conditions can be verified. We conclude that in many areas of management research, popular proposals such as pre-registration and replication are unlikely to be effective. We propose revised modes of testimony which could help researchers and readers avoid some barriers to learning from testimony. Finally, we imagine the implications of our analysis for management scholarship and propose how new standards could come about.
Kevin Rockmann, Stuart J. Bunderson, Carrie R. Leana, Paul Hibbert, Laszlo Tihanyi, Phillip H. Phan, Sherry M. B. Thatcher
Academy of Management Review, Volume 46, pp 421-430; https://doi.org/10.5465/amr.2021.0180

Sergio G. Lazzarini
Academy of Management Review, Volume 46, pp 613-622; https://doi.org/10.5465/amr.2020.0263

Abstract:
This review article proposes an examination of recent management research contributions to the debate of the role of corporations in capitalist economies, focusing on (but not limited to) the recent books by Adler (2019), Henderson (2020), Kaplan (2019) and Rangan (2018). These works identify common criticisms of capitalist systems related to an excessive corporate emphasis on economic value (that is, shareholder primacy), their neglect of societal externalities and their tendency of increasing market concentration. They also eschew simplistic arguments based on the notion that companies can “do well by doing good,” which fail to recognize important tradeoffs in decisions involving multiple stakeholder interests. The books, however, diverge in their solutions, ranging from suggestions to tackle these tradeoffs with the incorporation of stakeholder interests to more profound changes in the structure of economic exchange. Building on the insights of these books and identifying some missing issues, I then suggest four avenues for future research: the analysis of pro-social shareholder preferences, a thorough analysis of comparative organizational forms; the detailed assessment of the costs of organization; and the reconceptualization of the notion of value creation towards a higher emphasis on social justice.
Barry M. Mitnick, Duane Windsor, Donna J. Wood
Academy of Management Review, Volume 46, pp 623-629; https://doi.org/10.5465/amr.2020.0239

Abstract:
In the January 2020 Academy of Management Review, associate editors Wang, Gibson, and Zander (hereafter WGZ, 2020) pose this question: “Is research on corporate social responsibility undertheorized?” They answer affirmatively, pointing to the field's initial practice orientation and arguing a subsequent lack of "theoretical foundation and coherence" sufficient “to inform practice.” We disagree with WGZ on key points concerning the corporate social responsibility (CSR) field. We argue the field is "essentially contested," not undertheorized. We suggest that the case of CSR raises the larger question of how contesting conceptual interpretations of the literature are created, sustained, and, potentially, reconciled. We characterize and discuss the essentially contesting views of CSR as “instrumental/economic CSR” and “injunctive/social CSR.” We believe this characterization and discussion clarifies what exactly is contesting between these views. We note how these contesting views of CSR are generated from differing assumptions and world views. We discuss the factors operating in academic fields that tend to support the persistence and defense of such differences in conceptual interpretation. Finally, we offer our approach as a model for scholars to think about other concepts in management science that are also “essentially contested.”
Stine Grodal, Michel Anteby, Audrey L. Holm
Academy of Management Review, Volume 46, pp 591-612; https://doi.org/10.5465/amr.2018.0482

Abstract:
Scholars have long debated how rigor can be achieved in qualitative analysis. To answer this question, we need to better understand how theory is generated from data. Qualitative analysis is, at its core, a categorization process. Nevertheless, despite a surge of interest in categorization within the social sciences, insights from categorization theory have not yet been applied to our understanding of qualitative analysis. Drawing from categorization theory, we argue that the movement from data to theory is an active process in which researchers choose between multiple moves that help them to make sense of their data. In addition, we develop a framework of the main moves that people use when they categorize data and demonstrate that evidence of these moves can also be found in past qualitative scholarship. Our framework emphasizes that if we are not sufficiently reflexive and explicit about the active analytical processes that generate theoretical insights, we cannot be transparent and, thus, rigorous about how we analyze data. We discuss the implications of our framework for increasing rigor in qualitative analysis, for actively constructing categories from data, and for spurring more methodological plurality within qualitative theory building.
Aseem Kaul, Martin Ganco, Joseph Raffiee
Academy of Management Review; https://doi.org/10.5465/amr.2020.0113

Abstract:
We advance a theoretical framework of how entrepreneurial ideas of employees are commercialized as a function of their uncertainty, firm-specificity, and appropriability. We argue that as uncertainty increases, the choice of commercialization mode will increasingly be driven by differences in subjective judgments of the idea’s value, with firms having an advantage in assessing the true value of their employee’s ideas relative to market because of their firm-specific nature. Building on this insight, we develop a formal model of commercialization choice that maps idea characteristics to commercialization outcomes—spinouts, internal commercialization, market mobility, or abandonment—while also predicting how these relationships will be moderated by the cost of startups, the value of the idea, and the institutional context, as well as how value will be created and appropriated within each mode. In particular, the model distinguishes between four different types of employee spinouts, including the previously neglected case where the employer sees value in an idea and wants to commercialize it, but the employee still prefers to start their own firm. We thus offer a more nuanced view of employee entrepreneurship, based on differences in subjective judgment under uncertainty, the firm-specific nature of employee knowledge, and appropriability regimes.
Roy Suddaby, Trevor Israelsen, J. Robert Mitchell, Dominic S.K. Lim
Academy of Management Review; https://doi.org/10.5465/amr.2020.0010

Abstract:
Research suggests that entrepreneurs persuade stakeholders to engage in risky projects in an uncertain future through visions, compelling narratives of the future. A unique challenge for entrepreneurs, however, is how entrepreneurs can construct a narrative that unites stakeholders with different perceptions of the degree of risk or uncertainty posed by the future. We address this question with a diegetic narrative model of stakeholder enrollment. Our primary argument is that to reduce variation in how potential stakeholders view the future, a story must embed a vision of the future in a coherent and collectively held narrative of the past. We introduce rhetorical history as the primary construct through which this occurs. We demonstrate how successful visions employ historical tropes at the intradiegetic level to appeal to individual perceptions of risk or uncertainty and how those historical tropes are combined into meta-narratives or myths drawn from the collective memory of a community to create broad, extradiegetic appeal to all stakeholders regardless of their temporal orientation. Finally we describe three categories of historical reasoning – teleological, presentism, and retro-futurism – that act as bridging mechanisms between past, present and future that provides stakeholders with an enhance sense of agency in the future.
Libby Weber, Nicolai Juul Foss Foss, Siegwart Lindenberg
Academy of Management Review; https://doi.org/10.5465/amr.2019.0035

Abstract:
Transaction cost economics (TCE) carefully analyzes market failure while remaining largely silent about hierarchical failure. We argue this omission occurs because TCE’s opportunism assumption does not consider organizational member motivations under different hierarchical forms. Thus, TCE does not fully examine opportunistic behavior under hierarchy, resulting in an incomplete governance analysis. To fill this gap, we build a discriminating alignment theory of hierarchical choice that incorporates explicit motivations under each hierarchical form. We make three contributions to TCE with this theory. First, using the counterproductive work behavior and goal framing literatures, we predict specific motivations (effort, visceral, financial or status opportunism, or collaboration) across hierarchical forms. Second, we predict when “efficient” hierarchical forms (mapped from Williamson’s internal governance analysis) do not effectively mitigate opportunistic behavior, creating hierarchical failure. In these cases, we augment the hierarchical forms with supplemental governance mechanisms necessary to efficiently govern the exchange. Finally, we investigate how different motivations across hierarchical forms lead to excess misalignment costs to enhance our understanding of hierarchical failures. Examining how both transaction hazards and specific motivations drive particular behaviors allows for a more nuanced understanding of specific “costs and competencies” of hierarchy and in turn hierarchical failure in TCE.
Paul Nary, Aseem Kaul
Academy of Management Review; https://doi.org/10.5465/amr.2020.0168

Abstract:
We examine the role of non-venture private equity (PE) firms as intermediaries in the market for corporate assets. We argue that in order to create and capture value by acquiring established businesses and selling them to corporate buyers, PE firms must possess at least one of three potential advantages: they must be able to identify businesses that are currently undervalued (valuation advantage), they must be able to enhance the intrinsic value of the business (governance advantage), or they must be able to match the business to a more synergistic corporate owner than is immediately available (timing advantage). We discuss why, and under what conditions, PE firms may thus have an advantage in buying, owning, and selling businesses, and derive a set of propositions predicting which targets PE firms are most likely to pursue. Our study thus offers a comprehensive yet contingent theory of non-venture private equity, developing an integrated value-based framework to explain this important and growing phenomenon. In doing so, we also offer new insights into the role of intermediaries in strategic factor markets, especially the market for the buying and selling of businesses.
Michael J Leiblein, John S Chen, Hart E. Posen
Academy of Management Review; https://doi.org/10.5465/amr.2019.0388

Abstract:
The existence of a learning curve in which a firm’s costs decline with cumulative experience suggests that early entry provides learning opportunities that create advantage by reducing future costs relative to later entrants. While prior strategy research often assumes that learning curves are deterministic and known ex ante to firms, a substantial body of evidence suggests that learning curves are inherently uncertain. If there is uncertainty in the learning curve, then the taken-for-granted wisdom regarding the strategic implications of learning curves may over- or under-emphasize the value of early entry. We consider two forms of uncertainty — prospective (future costs) and contemporaneous (current costs). We demonstrate computationally that while prospective uncertainty in the learning curve enhances the benefits of early entry, contemporaneous uncertainty reduces these benefits. Further, we examine the implications of these findings for competition and learning curve spillovers between leader and laggard firms. Recognizing learning curve uncertainty highlights a novel form of spillovers that don’t affect expected cost, but rather affect uncertainty about cost. Our core insight is that when learning curve uncertainty is large relative to the expected learning rate, it is uncertainty, rather than expectations about this rate, that determines the extent of early mover advantage.
Leon Yang Chu, Brian Wu
Academy of Management Review; https://doi.org/10.5465/amr.2020.0247

Abstract:
Through digitalization, online platforms facilitate suppliers to meet market demand with customized offerings, but this business model’s value-creation potential is often hampered by market frictions. Consequently, suppliers may avoid exerting efforts and so customers may be unwilling to pay a premium. This paper develops an analytical model to address market frictions. We identify circumstances where the classic reputation mechanism is insufficient, and then propose a new strategy, whereby the platform accepts only a subset of suppliers. We demonstrate that this supplier-restriction strategy can support a welfare-enhancing equilibrium and accelerate the evolution even if all the suppliers are homogeneous and the customers can costlessly transact with suppliers outside the platform. At equilibrium, suppliers on the platform enjoy a higher market share than those outside and are motivated to exert effort; customers prefer to pay suppliers on the platform a premium, and seek outside suppliers only if the former are unavailable. We evaluate platform profitability and social welfare, compare different payment structures, and extend the model to accommodate issues regarding verifiability, imperfect signals, and matching costs. Our work enriches the market-frictions based perspective by showing how it can guide platform design in governing economic exchanges.
Robert Wayne Gregory, Ola Henfridsson, Evgeny Kaganer, Harris Kyriakou
Academy of Management Review; https://doi.org/10.5465/amr.2021.0111

Abstract:
Clough and Wu (2020) provide an interesting and thought-provoking response to our article (Gregory, Henfridsson, Kaganer, & Kyriakou, 2020) on the role of Artificial Intelligence (AI) and data network effects for the creation of user value. We welcome the debate around data network effects as a new category of network effects. In this response note, we build upon the points raised by Clough and Wu (2020) to outline three clarifications to our theory of data network effects concerning: (1) conditions when data network effects accrue, (2) the importance of theorizing shared data, and (3) the model’s ability to explain the cumulative effect of data-driven learning on value creation and value capture.
Cliff Oswick, Claudio Biscaro, Elena Bruni, Joep Cornelissen
Academy of Management Review; https://doi.org/10.5465/amr.2021.0031

Sharon Alvarez, Sybille Sachs
Academy of Management Review; https://doi.org/10.5465/amr.2019.0077

Abstract:
Stakeholders self-identify with a firm when they believe they affect and are themselves affected by the actions of a firm. When a firm is already operating, is already implementing a business model, and is already engaging in actions that are more or less consistent with that business model, stakeholders can evaluate whether they are affected or they affect the firm. However, how do stakeholders self-identify in the earliest stages of an entrepreneurial endeavor when a firm has yet to exist and the outcomes of product and service ideas and their effects on stakeholders are unknown? The purpose of this paper is to develop a process model that explains how individuals come to self-identify as stakeholders using the theory of common ground as a foundation (Clark, 1996). Common ground, a theory from the field of linguistics explains how human cooperation emerges and sheds light on how stakeholder self-identification can lead to the emergence of new language, an entrepreneurial endeavor, and product and service ideas. Finally, the paper proposes that how this endeavor is organized is a manifestation of the unique process the stakeholders have gone through.
Dean A. Shepherd, Stella Seyb, Gerard George
Academy of Management Review; https://doi.org/10.5465/amr.2020.0173

Abstract:
Business-model research has largely focused on business models as real entities, as cognitive and linguistic schema, and as formal representations. Although research within these themes has made important contributions to the management literature, it has largely ignored the inter-relationship between business models as schemas and business models as formal representations in explaining business-model change. We build on grounded-cognition theories and the notion of boundary objects to offer a grounded-cognition framework of business-model change. By developing this framework, we (1) advance understanding of the micro-foundations of strategy by explaining how business-model schemas can drive boundary-object-based interactions that reveal the extent of business-model coherence and affect the decision to change a business model; (2) offer a new pathway by which stakeholders inform value creation and value capture by providing new insights into how physical instantiations of business models and schemas work together (via grounded cognition) to increase business-model coherence; and (3) explain nuances in the relationship between boundary objects, business-model coherence, and the decision to change a business model, and illustrate how the mechanisms that help create a viable new business model can also help overcome an actor’s psychological obstruction to making a pivot.
Leandro Nardi
Academy of Management Review; https://doi.org/10.5465/amr.2019.0425

Abstract:
Research on corporate social responsibility (CSR) has investigated the determinants of firms’ choices to engage in substantive, as opposed to merely symbolic, CSR. However, scholars have yet to examine the economic incentives governing these choices. In particular, the literature offers little insight into how consumers’ willingness to pay a CSR-price premium affects the choice between symbolic and substantive CSR. To address this question, this paper proposes a formal model where substantive CSR reduces the negative socio-environmental externalities associated with firms’ products, while consumers vary in their ability to monitor these externalities, and in their preferences for CSR. The paper establishes conditions under which the CSR-price premium functions as an enabler of substantive CSR. It also examines how monitoring intensity, product differentiation, and competitors’ CSR engagement choices moderate this enabling effect. For example, when competitors engage in symbolic CSR, higher monitoring increases the enabling effect of the CSR-price premium if substantive CSR sufficiently reduces negative externalities, but decreases it otherwise. Product differentiation and competitors’ decisions to engage in substantive CSR have similarly nuanced roles. A further application of the model suggests that CSR communication costs may be instrumental in discouraging all forms of symbolic CSR, including greenwashing and social washing.
Victor P. Lau, Professor Margaret A. Shaffer
Academy of Management Review; https://doi.org/10.5465/amr.2019.0408

Abstract:
Integrating Hobfoll's (1989) conservation of resources theory with Berry's (1997) acculturation taxonomies, we develop a typological theory to explain the acculturation stress and adaptation processes of domestic employees in the context of globalization. From a resource-based perspective, we first identify four resources – social dominance, ethnocentric orientation, social capital, and absorptive capacity – that represent Hobfoll's four kinds of resources (i.e., object, personal, condition, and energy) and differentiate them in terms of their goal (i.e., maintaining the original culture or seeking intercultural interactions) and orientation (i.e., individual or social). We postulate that domestic employees' loss and gain of these resources set boundary conditions for acculturation stress in response to the influence of globalization. Then, drawing on Berry's taxonomies, we configure different combinations of the loss and gain of these resources to form individual and collective ideal types of resources that set boundary conditions for the influence of acculturation stress on adaptation approaches (i.e., integration, assimilation, separation, and marginalization) at the individual level and the influence of globalization on adaptation cultures (i.e., multiculturalism, melting pot, segregation, and exclusion) at the organizational level. Finally, we propose that adaptation cultures exert influences on domestic employees' normative freedom of choice of adaptation approaches.
Professor Logan M. Steele, Professor Jeffrey B. Lovelace
Academy of Management Review; https://doi.org/10.5465/amr.2019.0336

Abstract:
Underdog stories are ubiquitous––the disadvantaged and outmatched protagonist overcoming the odds. Leaders across industries, from telecom to sports, employ these narratives to inspire members of their organizations. However, little is understood about how underdog narratives influence the actions and attitudes of members of organizations. To address this gap, we explain how a leader’s communication of an underdog narrative may instill confidence in members of the organization that together they can overcome their shared disadvantage and achieve a clear set of organizational aspirations. In doing so, we introduce a conceptual model that draws on the sensemaking and social identity literatures to explain how a leader’s underdog narrative fosters the adoption of a collective underdog identity by members of an organization. Further, we explain that the specific attributes of the leader’s underdog narrative influence how this unique type of collective identity leads to varied outcomes for members of an organization. As such, this paper aims to contribute to the understanding and utilization of a prevalent but under-examined organizational phenomenon.
Professor Jason A. Colquitt, Tyler Burns Sabey, Mike Pfarrer, Jessica Rodell, Miss Edwyna Hill
Academy of Management Review; https://doi.org/10.5465/amr.2019.0084

Abstract:
Existing work on legacy in management has focused on the upper echelons and on the legator— the person leaving the legacy. Drawing on the meaning maintenance model and concepts surrounding psychological ownership and identity, we build a model that focuses on legatees— the beneficiaries of the legacy—in the lower echelons. The departure of a manager, informal leader, or star serves as a disruption to legatees’ mental representations of their working world. That disruption causes them to attend to issues of ownership (either psychological ownership or disownership of the legacy) and identity (either identification or rivalry with the legator) in order to fulfill salient needs. Fulfilling continuity and belonging needs results in two behaviors that enhance the durability of the legator’s contributions: maintaining and evangelizing. Fulfilling distinctiveness and efficacy needs results in two behaviors that reduce the durability of the legator’s contributions: neglecting and erasing. We theorize that these relationships are moderated by two aspects of the legacy: its magnitude and content (in terms of whether the contributions are tangible or intangible). We describe the implications of our model for the legacy literature in management and lay out an agenda for future research.
Kubilay Cirik, Professor Richard Makadok
Academy of Management Review; https://doi.org/10.5465/amr.2017.0499

Abstract:
We present a theoretical framework to address the inherent endogeneity problem in entry-timing research by distinguishing the concept of first-mover benefits (FMB) from first-mover advantages (FMA), the former being a counterfactual and (usually) unobserved pure treatment effect, and the latter being an actual observed combination of treatment and selection effects. They differ in the baseline to which the first mover’s performance is compared – either to the follower’s actual performance (for FMA) or to the first mover’s hypothetical performance if it had been a follower (for FMB). We consider the implications of this distinction for entry-order choices, and our formal economic model analyzes this distinction to make predictions about biases arising from using FMA as a proxy to estimate FMB, and also about how FMA, FMB, and their difference are affected by inter-firm asymmetries in resources and information.
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