Showing papers in "Organization Science in 1993"

The Motivational Effects of Charismatic Leadership: A Self-Concept Based Theory

Abstract: The empirical literature on charismatic or transformational leadership demonstrates that such leadership has profound effects on followers. However, while several versions of charismatic leadership theory predict such effects, none of them explains the process by which these effects are achieved. In this paper we seek to advance leadership theory by addressing this fundamental problem. We offer a self-concept based motivational theory to explain the process by which charismatic leader behaviors cause profound transformational effects on followers. The theory presents the argument that charismatic leadership has its effects by strongly engaging followers' self-concepts in the interest of the mission articulated by the leader. We derive from this theory testable propositions about a the behavior of charismatic leaders and their effects on followers, b the role of followers' values and orientations in the charismatic relationship, and c some of the organizational conditions that favor the emergence and effectiveness of charismatic leaders.

Explaining the Limited Effectiveness of Legalistic “Remedies” for Trust/Distrust

Abstract: Organizations frequently adopt formal rules, contracts, or other legalistic mechanisms when interpersonal trust is lacking. But recent research has shown such legalistic “remedies” for trust-related problems to be ineffective in restoring trust. To explain this apparent ineffectiveness, this paper outlines a theory that distinguishes two dimensions of trust—task-specific reliability and value congruence—and shows how legalistic mechanisms respond only to reliability concerns, while ignoring value-related concerns. Organizational responses to employees with HIV/AIDS are used as a case illustration that supports the theory's major propositions. The paper concludes with an agenda for future research.

Appealing Work: An Investigation of How Ethnographic Texts Convince

Abstract: This paper examines how written research accounts based on ethnography appeal to readers to find them convincing. In particular, it highlights the role of rhetoric in the readers' interaction with and interpretation of the accounts. Extending relevant work in the literatures of organization studies, anthropology and literary criticism, the paper develops three dimensions-authenticity, plausibility and criticality-central to the process of convincing. Further, through the analysis of a sample of ethnographic articles, it discloses the particular writing practices and more general strategies that make claims on readers to engage the texts and to accept that these three dimensions have been achieved. Through authenticity, ethnographic texts appeal to readers to accept that the researcher was indeed present in the field and grasped how the members understood their world. Strategies to achieve authenticity include: particularizing everyday life, delineating the relationship between the researcher and organization members, depicting the disciplined pursuit and analysis of data, and qualifying personal biases. Through plausibility, ethnographic texts make claims on readers to accept that the findings make a distinctive contribution to issues of common concern. Plausibility is accomplished by strategies that normalize unorthodox methodologies, recruit the reader, legitimate atypical situations, smooth contestable assertions, build dramatic anticipation, and differentiate the findings. Finally, through criticality, ethnographic texts endeavor to probe readers to re-examine the taken-for-granted assumptions that underly their work. Strategies to achieve criticality include: carving out room to reflect, provoking the recognition and examination of differences, and enabling readers to imagine new possibilities. The empirical analyses, which highlight both the rhetorical and substantive aspects of convincing, suggest that at a minimum ethnographic texts must achieve both authenticity and plausibility-that is, they must convey the vitality and uniqueness of the field situation and also build their case for the particular contribution of the findings to a disciplinary area of common interest. These analyses also suggest that the most provocative task and promising potential of ethnography is the use of richly-grounded data to not only reflect on the members' world, but more importantly to provoke an examination of the readers' prevailing assumptions and beliefs.

Explaining the Swollen Middle: Why Most Transactions Are a Mix of Market and Hierarchy

Abstract: Why are firms sometimes more efficient than markets at organizing transactions? Why are most transactions arrayed neither at the pure "market" nor at the pure "hierarchy" end of the continuum, but rather in the "swollen middle," incorporating features of both "market" and "hierarchy"? Why don't firms make greater use of price incentives? This paper addresses these three questions by developing a model of the choice of institution. One key building block is the distinction between organizing methods hierarchy and the price system and institutions firms and markets. Hierarchy and the price system are two distinct methods for organizing transactions, each with particular costs and benefits. Markets and firms are institutions which use one or both of these methods. Although markets predominantly use prices and firms rely principally on hierarchy, there is not a one-to-one correspondence between prices and markets or between hierarchy and firms. Indeed, the paper argues that it is generally more efficient to use a mix of both methods than to specialize in either. The paper focuses on the enforcement properties of prices and hierarchy. Hierarchy controls individuals directly by constraining their behavior by imposing behavior constraints while prices do it indirectly by measuring their outputs through price constraints. Under hierarchy, individuals receive a salary to do as told, while self-employed individuals governed by the price system are rewarded on the basis of their output. Each system has its own biases: using prices maximizes effort minimizes shirking but incites individuals to inflate the price and/or reduce the quality of their output. It encourages cheating. Relying on hierarchy results in the opposite bias: under hierarchy individuals are not paid in function of their output, but instead are rewarded for following directives. They have, thus, strong incentives to minimize effort to shirk unless properly supervised, but, being paid a fixed sum to follow orders, they have few incentives to cheat. Hence the price system experiences low shirking, but potentially high cheating costs, while hierarchy faces low cheating but high shirking costs. Organizing costs are the sum of shirking and cheating costs. Any given transaction will be organized by the mix of price and hierarchy i.e., by the mix of price and behavior constraints that minimizes organizing costs. A transaction will be organized within a firm if the reduction in cheating costs achieved by replacing price constraints by behavior constraints exceeds the resulting increase in shirking costs and by the market in the opposite case. The paper shows that cheating and shirking costs increase more than proportionately as one concentrates in either pure price or behavior constraints. Hence using a mix of both methods generally minimizes the sum of cheating and shirking costs. This explains why most transactions exhibit features of both markets and hierarchy. The paper shows clearly the tradeoff involved between price and behavior constraints. It explains the costs and benefits of using two types of price incentives in firms, piecework and profit centers, and predicts when they will be used.

Organizational Culture and Performance: Proposing and Testing a Model

Abstract: The purpose of this article is twofold: first, to propose and test a model concerning how an organization's culture affects organizational performance; and second, to demonstrate the application of LISREL modeling methodology to estimate and test this model. Organizational culture is hypothesized to consist of three interrelated dimensions: a sociocultural system of the perceived functioning of the organization's strategies and practices, an organizational value system, and the collective beliefs of the individuals working within the organization. Organizational culture is operationalized by several latent variables: organizational structure and purpose, organizational values, task organization, climate, and individual values and beliefs. These variables, in turn, are hypothesized to affect organizational performance. Analysis of data from 392 respondents who participated in the study confirms the fit of the proposed model to the data. The model presented in the study represents an initial attempt to desc...

Organizational Downsizing: A Convergence and Reorientation Framework

Abstract: Organizational downsizing is becoming pervasive as a characteristic of modern organizations, yet little scholarly literature has addressed the processes and outcomes associated with this phenomenon at the organizational level. Downsizing has often mistakenly been confused operationally with concepts such as decline, layoffs, or nonadaptability, indicating that the definition of the concept remains imprecise. This paper offers a straightforward, operational definition of downsizing. Then the literature on organizational downsizing is used to build a theoretical framework of the process of effective downsizing and the organizational changes that may accompany it. Important organizational processes, characteristics, and outcomes associated with downsizing are identified.

Managerial Incentives and Investment in R&D in Large Multiproduct Firms

Abstract: Incentives for division managers in large firms affect their risk orientation and thus their decisions to invest in R&D. This paper reviews theory and hypothesizes that division managers' incentive compensation that is based on financial performance is negatively related to risk taking as measured by R&D intensity. Results of a study of 184 major U.S. firms suggest that incentives based on short-term (annual) division financial performance are negatively related to total firm R&D intensity after controlling for industry R&D intensity, firm diversification, size and group structure. Furthermore, the results suggest that an emphasis on long-term financial incentives may mitigate the negative relationship between these incentives and R&D intensity, but does not promote risk taking. The results suggest the importance of emphasizing strategic controls [evaluating division managers based on operational understanding of strategies proposed (strategic criteria)] as opposed to the use of financial controls [evalua...

Organizational Decline and Adaptation: Theoretical Controversies

Abstract: In 1980, David Whetten published a seminal paper that urged organization scientists to revise their underlying assumptions of continuous organizational growth, and develop an agenda of research and teaching on organizational decline (Whetten 1980a). Since then, the organization science literature on decline has mushroomed. Some of this work has attempted to define the construct of organizational decline, using such definitions as maladaptation to the environment (Greenhalgh 1983), a downturn in organization size or performance (McKinley 1987), reductions in force (Ford 1980a), decrease in an organization's resource base (Cameron, Kim and Whetten 1987), and failure to anticipate and neutralize external threat (Weitzel and Jonsson 1989). Cameron, Sutton and Whetten (1988), Weitzel and Jonsson (1989), and Whetten (1980b, 1987) attempted to review and integrate the diverse literature on decline. Harrigan (1980), Sutton (1990), Sutton and D'Aunno (1989) and Zammuto and Cameron (1985) have developed theoretical models of decline in organizations, and still other research has reported on large-scale empirical studies of decline and its consequences (Cameron, Whetten and Kim 1987; D'Aveni 1989; Hambrick and D'Aveni 1988). Research on resource scarcity and its effects on organizations and their members is also closely related to organization decline (see discussion on "Necessity: The Mother of Rigidity or Invention?" later in this introduction). Brockner (1988), Brockner, Davy and Carter (1985), Brockner, Grover, Reed and DeWitt (1992), Brockner, Grover, Reed, DeWitt and O'Malley (1987), Cornfield (1983), Feldman and Leana (1989), Perry (1986) and Worrell, Davidson and Sharma (1991) have studied the many effects of layoffs, and the social and psychological processes that characterize organizational death have been investigated by Harris and Sutton (1986), and Sutton (1983, 1987). Since organizational death is not inevitable, and practitioners and scholars are both interested in how organizations can avoid it, a large literature on organizational turnaround has also developed (Bibeault 1982; Castrogiovanni, Baliga and Kidwell 1992; Grinyer, Mayes and McKiernan 1988; Hambrick and Schecter 1983; Hofer 1980; Hoffman 1989; Robbins and Pearce 1992; Schendel, Patton and Riggs 1976; Slatter 1984; Stopford and Baden-Fuller 1990). A common theme that threads through much of the related research on decline summarized above is how, and whether, organizations adapt to conditions of organizational decline. The literature relevant to the theme of organizational decline and adaptation has now matured to the point that several important theoretical controversies are becoming apparent. One controversy concerns a particular type of adaptation to organizational decline: organizational downsizing (Cameron, Freeman and Mishra 1991; Tomasko 1987). A second controversy involves the issue of whether organizational decline is usually an inhibitor or stimulus for adaptation. These two controversies form the framework for this focused issue, and for the introduction to the six papers that make up the issue.

Partner Nationality and the Structure-Performance Relationship in Strategic Alliances

Abstract: The dramatic growth of global strategic alliances between firms is fundamentally reshaping the nature of international business, Indeed, interfirm cooperation has become a crucial component of the pursuit of global competitive advantage. Yet such alliances are enormously complex to manage successfully, in part because of the opportunity and incentive to cheat, and profit at the partner's expense, that is an inescapable part of these relationships. Consequently, strategic alliances are frequently subject to high instability, poor performance, and premature dissolution. Thus, an important question arises: Is it possible to promote more stable cooperation and higher alliance performance through a realignment of companies' incentives? This question is addressed empirically in the present paper using recent work in game theory, which suggests that high performance is linked to specific elements of the alliance structure. Further, this study applies insights from international business literature, suggesting th...

Organizational Innovation and Substandard Performance: When is Necessity the Mother of Innovation?

Abstract: This study extends earlier empirical research into organizational decline which has found that substandard performance stimulates innovation in a wide range of manufacturing industries. Using data from 74 U.S. high technology firms, this research investigates the relationship between organizational performance and adoption of an organizational innovation, the decision to join an R&D consortium. The central premise of the study is that a firm's propensity to innovate fluctuates with organizational performance, rather than stemming solely from a firm's inherent characteristics such as size, structure, leadership, etc.. The study found that substandard performance stimulated early joiners of R&D consortia. More risk-averse, high performing firms were found to be late adopters of R&D consortia. However, the relationship between performance and innovation was somewhat more complex than traditionally envisioned. First, a distinct institutionalization effect occurred as R&D consortia became a commonly accepted method of conducting certain types of R&D projects. While substandard performance was necessary to stimulate the early adopters, over time, institutionalization of R&D consortia occurred, risks associated with adoption were lowered, and later adopters were no longer stimulated solely by substandard performance. Second, an adoption decision was observed to involve more than a single, dichotomous organizational choice, but included both an initial adopt/nonadopt component and a related decision involving the timing of adoption early/late. The relationship between organizational performance and innovation emerged only when the effects of the initial adoption decision adopt/nonadopt were separated from the effects of adoption timing early/late. The results here point rather strongly to the need to expand inquiry into the decision-making processes of late adopting firms, which are essentially "imitators," to complement the existing prodigious literature on early adopting, firms, perceived in the traditional literature as "innovators."

Top Managerial Prestige, Power and Tender Offer Response: A Study of Elite Social Networks and Target Firm Cooperation during Takeovers

Abstract: In this paper we explore the following research question: When faced with a tender offer, why do some firms resist and others cooperate? In the past, researchers have suggested that the manner in which firms respond to takeover attempts may be, in part, a function of managers' personal motivations. We contribute to this line of research by questioning whether other factors might be involved. Specifically, we examine whether cooperation may be a function of the friendliness of the bidding company and the social networks shared by executives in the two firms (i.e., bidder and target). We examine how the power and connections of managers affect their responses to tender offers. Our results suggest that these factors do indeed play a role. We found, for example, that target managers are more likely to cooperate under two conditions: (1) if they have less prestigious connections than managers in the bidding firm, and (2) if the target and bidding firms' share numerous ties to the same prestigious networks. In ...

An Empirical Taxonomy of Implementation Processes Based on Sequences of Events in Information System Development

Abstract: A widely accepted and usable taxonomy is a fundamental element in the development of a scientific body of knowledge. However, the creation of good empirical taxonomies of implementation processes is complicated by the need to consider the dynamics of the implementation process. This paper addresses this difficulty by using an optimal matching procedure to measure the pairwise distances among event sequences occurring in 53 computer-based information system IS implementation projects. Cluster analysis based on these inter-sequence distances is used to generate the empirical taxonomy of implementation processes. The resulting taxonomy includes six distinct archetypical processes. One of the process types is labeled textbook life cycle type 4 due to its close resemblance to the detailed, rational approach commonly prescribed in IS textbooks. The logical minimalist process type 1 follows some of the basic steps of the textbook approach, but is characterized by little project definition and infrequent assignment of personnel. Whereas both textbook life cycle and logical minimalist approaches use external vendors and consultants to some extent, external dependence is much greater in traditional off-the-shelf type 2 and outsourced cooperative type 5 processes. The traditional off-the-shelf process simply involves purchasing the system from an external vendor, with little system construction or assignment of personnel. In contrast, the outsourced cooperative process consists of joint system development by internally assigned personnel and external vendors. The remaining two process types-problem-driven minimalist type 3 and in-house trial and error type 6-are both considerably influenced by performance problems. The problem-driven minimalist process is initiated by such problems, with little project definition, and results in a reassignment of organizational roles. The in-house trial-and-error process begins like textbook life cycle, with a clear project definition, but involves frequent system modifications to respond to the performance problems encountered during the project. The paper demonstrates how an empirical taxonomy that incorporates the dynamics of event sequences may be developed. The archetypes comprising the taxonomy are related to other implementation process models available in the literature. Some limitations of the study are acknowledged and its implications for future research and practice are discussed.

Organization Studies as a Scientific and Humanistic Enterprise: Toward a Reconceptualization of the Foundations of the Field

Abstract: Recent critiques of social science have emphasized their ties to the concerns of academic disciplines usually labelled as humanities. Building on this literature, this paper argues that organizational studies must be reconfigured as science and humanities. Substantive examples are drawn from the links of organizational theory to history, the use of semiotics, rhetorical analysis and narrative approaches to policy choices. Reconfiguring the field also has implications for applied work leading to an enlightenment model.

Lying, Deceit, and Subterfuge: A Model of Dishonesty in the Workplace

Abstract: Honesty is a key element of ethical behavior in organizations, yet has received little theoretical or empirical attention. This article derives a model of the antecedents of deception in organizations. Self-interest theories, such as agency theory, and prosocial behavior theories of behavior are reviewed and an argument developed that intrapersonal conflict may meld the divergent theories and explain lying in organizations. Role theory identifies potential sources of intrapersonal conflict in organizations that may serve as antecedents to lying. Different types of role conflict are examined, each of which may lead to distress, and, in turn, may be resolved through deception: People may behave according to one role demand, and then state, or create the impression of, having behaved according to another role demand.

The Formulation Processes and Tactics Used in Organizational Decision Making

Abstract: One hundred and sixty-three decision cases were explored to determine how managers carry out formulation during organizational decision making. Four types of formulation processes were identified (called idea, issue, objective-directed, and reframing) as well as the tactics decision makers apply to carry out each process type. Decision adoption, merit, and duration were used to determine the success of each process and tactic. The implications of these findings for decision makers and researchers are discussed.

Control System and Task Environment Effects on Ethical Judgment: An Exploratory Study of Industrial Salespeople

Abstract: The objective of this research was to determine the effects of a firm's control system and dimensions of the work task environment upon ethical judgments made by salespeople. Industrial field salespeople are likely to encounter ethical conflicts on a daily basis in their dealings with customers, competitors, and their own management. How they resolve such conflicts is believed to be a function of both individual characteristics and factors in the situation. This study focuses on situational factors in the form of organization design variables, particularly control system and task environment. The firm's control system includes its method of monitoring, supervising and compensating salespeople. The study develops fourteen ethics-related selling scenarios and assesses, via projective questioning, how 446 salespeople would react to them. Findings indicate that organization design does influence the behavior a salesperson considers appropriate to cope with ethical conflicts. In particular, salespeople operating under a more bureaucratic, input-based control system advocate more ethical behavior than do salespeople operating under a more output-based, laissez-faire control system. Also, salespeople who perceive the market to be competitive recommend less ethical behavior. However, the proportion of salary versus commission in the salesperson's compensation system does not have an effect on response. Differences are also discovered with respect to the salesperson's seniority, rank, and certain features of the task environment.

Explaining the Whistle-Blowing Process: Suggestions from Power Theory and Justice Theory

Abstract: Review of research concerning whistle-blowing suggests that legal sanctions have been singularly unsuccessful in encouraging whistle-blowing but that legalistic responses by organizations seem to have been somewhat more successful. Below, we review three sets of studies that illustrate this point. The first set includes federal employees, both before and after a legal change intended to encourage whistle-blowing. The second study examines the effects of state laws, by comparing states with whistle-blowing statutes to those without such statutes. The third study focuses on whistle-blowers who are role prescribed and therefore have legalistic protections but not legal protections. Results from these three sets of studies suggest that legal procedures seem not to be effective in encouraging positive organizational responses to whistle-blowing, but legalistic responses designed by the organizations themselves have more positive effects both for the whistle-blowers and for the organizations themselves. We atte...

Death of the Lethargic: Effects of Expansion into New Technical Subfields on Performance in a Firm's Base Business

Abstract: This paper finds that industry incumbents that do not expand into new technical subfields tend to fare poorly in their established businesses, even if the market for the established products continues to exist. Firms that expand from their established businesses survive longer and achieve greater subsequent market share than competitors that do not expand. By some measures, however, a failed attempt to expand into a new subfield may be even more harmful to a base business than nonexpansion. The study employs conventional and accelerated event-time regression models to analyze market share and survival. The sample, which includes 371 incumbents in four base subfields of the medical diagnostic imaging industry between 1953 and 1989, examines performance following the emergence of five new technical subfields of the industry.

Managerial Autonomy of State-Owned Enterprises: Determining Factors

Abstract: The present paper reports on managerial autonomy of state-owned enterprises SOEs, or its reverse: the control which is exerted by government and supervising public authorities on SOEs. First, it examines the types of control applied. Using evidence from a sample of 110 Greek SOEs, the paper identifies certain distinct dimensions of control related to: strategic business-boundary issues, pricing decisions, resource acquisition and mobilisation issues. Second, environmental and organisational "determinants" of the control intensity are identified. Results broadly suggest that the intensity of control, as perceived by enterprise managers, is i positively related to dependence on the state for resources, to enterprise size, and to "political visibility," i.e., social orientation of product market strategy, and ii negatively related to market competition and demand unpredictability. An interpretation of the results is attempted drawing on wider organisational, social and economic theories. Policy implications are discussed.

The “Litigation Mentality” in Organizations: A Test of Alternative Psychological Explanations

Abstract: A “litigation mentality” increasingly pervades today's workplace, as an ever wider variety of managerial decisions are the target of employee-initiated lawsuits. In this paper we identify different psychological factors that could explain why employees consider suing their employers. One group of factors suggests that employee consideration of litigation is motivated primarily by self-interest, as employers perceive they have more to gain than lose by going to court. A second group of factors suggests that employees' decision to go to court is influenced largely by the perceived fairness of their dealings with the organization. In a survey of 141 currently employed workers, we found that the perceived fairness of organizational rules and procedures was the primary factor influencing whether employees consider a litigious response. In particular, employees were concerned about how the rules and procedures were implemented and the quality of interpersonal treatment received from managers. Job satisfaction a...

Organizational Design, Inertia and the Dynamics of Competitive Response

Abstract: Organizational design research has largely ignored the effects of inertia on competitive response, despite the centrality of the concept in theories of organizational evolution. In evolutionary research, inertia is frequently invoked as an explanation for why organizations delay or completely fail to respond to changes in competitive pressure. Inertia is thus seen as a primary antecedent of strategic consequences such as impaired performance and organizational mortality. Such explanations, however, cannot be tested empirically without a satisfactory method for measuring levels of inertia. This paper draws on techniques from catastrophe theory to explore a means of assessing organizational inertia by modelling organizational response to competitive pressure. Specifically, this paper looks at competitive response in terms of the aggressiveness of an organization's strategy, and models this as a function of environmental pressure and the inhibiting or enabling effects of organizational design. This paper als...

The Structural Consequences of Downsizing

Abstract: This paper examines the impact of downsizing strategy on dimensions and types of organizational structure. Four downsizing strategies are developed to address organization and environment decline. Understanding where and how these strategies modify an organization's activities helps clarity how downsizing impacts organization structure. Propositions are offered that show how downsizing can result in both mechanistic and organic shifts in organization structure. Mechanistic shifts are caused by downsizing strategies that increase the domain of an organization and the structural processes used to support that domain. Organic shifts are caused by downsizing strategies that decrease the domain of an organization and the structural processes used to support that domain. The rationale provided for these shifts offers a strategic explanation for decreases in administrative intensity that lag decreases in organization size. Propositions about the impact of downsizing on organizational structure are offered as a stimulus to further thought and research.

The Legalistic Organization: Definitions, Dimensions, and Dilemmas

Abstract: The worse the society, the more law there will be. In Hell, there will be nothing but law, and due process will be meticulously observed. Grant Gilmore (The Ages of American Law 1977, p. 111)

Analysis of Complex Negotiations in International Business: The RBC Perspective

Abstract: International negotiations between organizations project a complexity that makes them a challenge to describe, explain and improve. Their many elements and dynamics challenge especially those researchers and practitioners who seek a comprehensive yet essential understanding of these negotiations. Toward that end, this article develops a new analytic perspective that focuses on three key facets of negotiation—parties' Relationships, parties' Behaviors, and influencing Conditions (RBC)—and their basic B → R → C → B interaction. The first section defines international business negotiation, targets the subset of complex, interorganizational negotiations, presents as an example the 1985–86 CGE-ITT telecommunications merger, and considers the partial views of the merger talks provided by existing frameworks. Several reasons then enumerated underscore the need for and potential value of an inclusive, generally applicable perspective for complex negotiations. The RBC Framework, coupled with the Basic Model, are p...

A Social Information Processing Model of Employee Participation

Abstract: This paper explores employee participation from a social information processing perspective. The model draws upon social exchange theory, which depicts social interactions in terms of the relative influence of actors, and upon categorization theory, which considers how information relating to social interaction is cognitively organized and processed. While the social arena can be categorized along any number of dimensions, the core proposal of the model is that, in the interest of reducing the complexity of the organizational world, people employ a schema (i.e., cognitive map) in which social interactions are categorized according to the relative influence of actors. The schema for participation is posited to be an individual-level knowledge structure with a strong shared component. The consensual aspect of the participation schema varies across cultures and subcultures, accounting for the wide cross-cultural variation in attitudes, norms, and values about participation. The model further proposes that th...

Transaction Cost Theory: Inferences from Clinical Field Research on Downstream Vertical Integration

Abstract: A bulk of the marketing research on distribution channel design attempts to resolve the question of when a direct company-owned sales operation would be preferred to an indirect independent distributor operation. The widely accepted theoretical rationale is provided by transaction-cost theory which indicates that the total costs of going-to-market, inclusive of distribution as well as its administration, is likely to be lower for the direct option when the sales transactions require investments in unique assets for effectively serving the end customer. Examples of unique assets are account-specific sales teams and account dedicated repair and maintenance facilities. Conversely, transaction-cost theory indicates that an indirect option would be the more efficient one for sales transactions that require investments only in nonunique assets, such as an inventory of standard parts. Since its formulation in 1975, the transaction-cost framework has been empirically confirmed in a variety of marketing channel se...

Toward a Political Framework for Flexible Management of Decline

Abstract: Research on organizational decline suggests that some organizations cope with decline by becoming more rigid, while others become more flexible and risk taking. Few studies have examined the specific managerial activities that lead to the more flexible course. This study reanalyzes a case of organizational decline in a small midwestern school district that coped successfully by implementing a carefully structured participation process. Administrative leaders in the district, in particular the superintendent, "opened a conversation" through a carefully arranged and supported task force with a broad group of citizens, staff, teachers and students about the goals and priorities of the district. The citizens' committee efforts continued for six months and resulted in a strong consensus for action a tax levy, closing a school, restatement of program priorities and staff rollbacks. The case points to managerial actions that other organizations could follow to remain flexible and vitalized during decline. Critical steps included: shaping the perceptual fields of participants through information and disclosure in order to help participants recognize a serious and urgent problem without introducing crisis; careful management and operational support of task formats for broadened participation, with minimal influence on the substance of their recommendations; leadership through coaching of submanagers who facilitated the process indirectly; anticipating and dealing directly with conflicts by balancing views and channeling different interests into shared governance opportunities where heterogeneity was valued and institutional knowledge could be gained. The authors advance a political model, based on management as a process of governance, to explain how the leadership in this organization conceptualized its role. Management acted as a steward for decisions about organizational goals and legitimacy that others would make. By surrendering the power to shape reality for others and instead allowing them through discourse to establish a coherent policy out of heterogeneity, the superintendent created commitment to the organization during a time of stress and eventually a robust consensus which became the basis for action. A model of shared governance that was in harmony with the community's history and values and that reflected the superintendent's personal philosophy was implemented through specific activities. The shared governance model provides a unified conceptual explanation for why the superintendent acted as he did, and it highlights the specific functions managers might perform if the organization is to respond flexibly during decline. The political interpretation extends and refines current theoretical models of organizational decline processes and suggests approaches that are potentially applicable to other organizations.

The Fragmented State and Due Process Protections in Organizations: The Case of Comparable Worth

Abstract: This analysis starts with models of the diffusion of due process protections in organizations that emphasize the role of the state, especially those from the institutional perspective. The case of equal pay for work of comparable value is used to develop propositions concerning important additions to current models of the expansion of due process protections in the workplace. First, we suggest that models of the nation-state should include an explicit recognition that the progressiveness of public policy varies over time. Second, we suggest that models of the nation-state should include explicit recognition of the fact that state authority is fragmented by the separation of powers and the partition of federal and local authority. Implications for future theory and empirical study that follow from these additions to current models are discussed.

Defusing the Director Liability Crisis: The Strategic Management of Legal Threats

Abstract: Boards of directors have been substantially affected by recent changes in their legal environment. The most profound change has been in the area of director liability. New legislation and regulations and a series of court decisions increased the extent to which directors are held accountable for their actions and those of their organizations. These changes resulted in increased liability exposure for directors and a crisis in director liability insurance. Corporations have successfully developed strategies to manage the adverse consequences of these changes in the legal environment. This paper develops an extension of resource dependence theory to enable us to analyze events surrounding the director liability crisis from the perspective of the corporation. It then reviews the legal forces which have affected boards of directors. The concept of director liability is discussed, including the business judgment rule, which has historically protected the decision making discretion of boards. Indemnification an...

From Quicksand to Crossroads: An Agnostic Perspective on Conversation

Abstract: This paper attempts to facilitate conversation among organization scientists by advancing a philosophical perspective agnosticism that has been ignored in the recent subjective-objective debate. As agnostics, we suggest that the controversy may not be resolvable and that organization science can carry on in the absence of such resolution. We propose a series of concepts to guide the "post-debate" field, emphasizing that mutual striving for a "sense of accurate reception" SOAR can provide a crossroads for conversation among students of organizations. Suggestions for achieving SOAR are proposed.