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Showing papers in "Organization Science in 2003"


Journal ArticleDOI
TL;DR: In this paper, the authors propose that open source software development is an exemplar of a compound "private-collective" model of innovation that contains elements of both the private investment and the collective action models and can offer society the best of both worlds under many conditions.
Abstract: Currently, two models of innovation are prevalent in organization science. The "private investment" model assumes returns to the innovator result from private goods and efficient regimes of intellectual property protection. The "collective action" model assumes that under conditions of market failure, innovators collaborate in order to produce a public good. The phenomenon of open source software development shows that users program to solve their own as well as shared technical problems, and freely reveal their innovations without appropriating private returns from selling the software. In this paper, we propose that open source software development is an exemplar of a compound "private-collective" model of innovation that contains elements of both the private investment and the collective action models and can offer society the "best of both worlds" under many conditions. We describe a new set of research questions this model raises for scholars in organization science. We offer some details regarding the types of data available for open source projects in order to ease access for researchers who are unfamiliar with these, and also offer some advice on conducting empirical studies on open source software development processes.

1,625 citations


Journal ArticleDOI
TL;DR: This paper links the misunderstandings between engineers, technicians, and assemblers on a production floor to their work contexts, and demonstrates how members of these communities overcome such problems by cocreating common ground that transforms their understanding of the product and the production process.
Abstract: This paper suggests that knowledge is shared in organizations through the transformation of occupational communities' situated understandings of their work. In this paper, I link the misunderstandings between engineers, technicians, and assemblers on a production floor to their work contexts, and demonstrate how members of these communities overcome such problems by cocreating common ground that transforms their understanding of the product and the production process. In particular, I find that the communities' knowledge-sharing difficulties are rooted in differences in their language, the locus of their practice, and their conceptualization of the product. When communication problems arise, if members of these communities provide solutions which invoke the differences in the work contexts and create common ground between the communities, they can transform the understandings of others and generate a richer understanding of the product and the problems they face.

1,582 citations


Journal ArticleDOI
TL;DR: The paper concludes by demonstrating how the framework can be applied to yield novel insights into traditional views of organizations and to stimulate original and innovative avenues of organizational research that consider both the benefits and downsides of trust.
Abstract: Although research on trust in an organizational context has advanced considerably in recent years, the literature has yet to produce a set of generalizable propositions that inform our understanding of the organization and coordination of work. We propose that conceptualizing trust as an organizing principle is a powerful way of integrating the diverse trust literature and distilling generalizable implications for how trust affects organizing. We develop the notion of trust as an organizing principle by specifying structuring and mobilizing as two sets of causal pathways through which trust influences several important properties of organizations. We further describe specific mechanisms within structuring and mobilizing that influence interaction patterns and organizational processes. The principal aim of the framework is to advance the literature by connecting the psychological and sociological micro-foundations of trust with the macro-bases of organizing. The paper concludes by demonstrating how the framework can be applied to yield novel insights into traditional views of organizations and to stimulate original and innovative avenues of organizational research that consider both the benefits and downsides of trust.

1,451 citations


Journal ArticleDOI
TL;DR: In this paper, the authors investigate the relationship between supplier trust in the buyer and transaction costs and information sharing in a sample of 344 supplier-automaker exchange relationships in the United States, Japan, and Korea.
Abstract: In this paper we investigate the relationship between supplier trust in the buyer and transaction costs and information sharing in a sample of 344 supplier-automaker exchange relationships in the United States, Japan, and Korea. Our findings indicate that perceived trustworthiness reduces transaction costs and is correlated with greater information sharing in supplier-buyer relationships. Moreover, the findings suggest that the value created for transactors, in terms of lower transaction costs, may be substantial. In particular, we found that the least-trusted automaker spent significantly more of its face-to-face interaction time with suppliers on contracting and haggling when compared to the most trusted automaker. This translated into procurement (transaction) costs that were five times higher for the least trusted automaker. Finally, we argue that trust is unique as a governance mechanism because it not only minimizes transaction costs, but also has a mutually causal relationship with information sharing, which also creates value in the exchange relationship. Other governance mechanisms (e.g., contracts, financial hostages) are necessary costs incurred to prevent opportunistic behavior, but do not create value beyond transaction cost minimization. Our findings provide empirical evidence that trustworthiness lowers transaction costs and may be an important source of competitive advantage.

1,444 citations


Journal ArticleDOI
TL;DR: A theory-based explanation of how geographical distribution provokes team-level conflict is developed by considering the two characteristics that distinguish distributed teams from traditional ones and identifies antecedents to conflict that are unique to distributed teams.
Abstract: The bulk of our understanding of teams is based on traditional teams in which all members are collocated and communicate face to face. However, geographically distributed teams, whose members are not collocated and must often communicate via technology, are growing in prevalence. Studies from the field are beginning to suggest that geographically distributed teams operate differently and experience different outcomes than traditional teams. For example, empirical studies suggest that distributed teams experience high levels of conflict. These empirical studies offer rich and valuable descriptions of this conflict, but they do not systematically identify the mechanisms by which conflict is engendered in distributed teams. In this paper, we develop a theory-based explanation of how geographical distribution provokes team-level conflict. We do so by considering the two characteristics that distinguish distributed teams from traditional ones: Namely, we examine how being distant from one's team members and relying on technology to mediate communication and collaborative work impacts team members. Our analysis identifies antecedents to conflict that are unique to distributed teams. We predict that conflict of all types (task, affective, and process) will be detrimental to the performance of distributed teams, a result that is contrary to much research on traditional teams. We also investigate conflict as a dynamic process to determine how teams might mitigate these negative impacts over time.

939 citations


Journal ArticleDOI
TL;DR: A revitalization of situated learning theory is commend in which learning practices are understood to be enabled and constrained by their embeddedness in relations of power; and, more specifically, by the unstable institutionalization of power relations within capitalist work organizations.
Abstract: This paper critically addresses the coherence, reception, and dissemination of "situated learning theory" (Lave and Wenger 1991). Situated learning theory commends a conceptualization of the process of learning that, in offering an alternative to cognitive theories, departs radically from the received body of knowledge on learning in organizations. The paper shows how elements of situated learning theory have been selectively adopted to fertilize or extend the established terrain of organizational learning. In this process, we argue, Lave and Wenger's embryonic appreciation of power relations as media of learning is displaced by a managerial preoccupation with harnessing (reified) "communities of practice" to the fulfillment of (reified) corporate objectives. We illustrate our argument by reference to Orr's (1990, 1996) study of photocopier technicians, which is very widely cited as an example of the "new," situated conceptualization of learning in communities of practice. We commend a revitalization of situated learning theory in which learning practices are understood to be enabled and constrained by their embeddedness in relations of power; and, more specifically, by the unstable institutionalization of power relations within capitalist work organizations.

822 citations


Journal ArticleDOI
TL;DR: A cognitive model of the trust transfer process is developed, arguing that trust is transfer across hypertext links based on the perceived interaction and similarity of the linked organizations, and that institution-based trust is transferred from the traditional shopping channel to a Web-based organization based on evidence that the Web- based organization has a physical store.
Abstract: The World Wide Web (WWW) has been touted as providing great opportunities for small businesses to compete and thrive. Concerns about trust have been identified as a barrier to such businesses' success. This research explores how consumers' initial trust judgments about organizations they encounter on the Web may be influenced by hypertext links from trusted websites and associations with the more trust-inducing traditional retail channel. This paper develops and tests a cognitive model of the trust transfer process, arguing that trust is transferred across hypertext links based on the perceived interaction and similarity of the linked organizations, and that institution-based trust is transferred from the traditional shopping channel to a Web-based organization based on evidence that the Web-based organization has a physical store. An experimental study shows that a hypertext link from one website to another increased the extent to which the linked organizations were perceived to have a business relationship and be similar, and these perceptions had a positive influence on trusting beliefs regarding the linked site. Associating with the physical shopping channel by showing a picture of a building on a website increased the extent to which subjects reported intention to buy from the site. The study provided empirical evidence that trusting beliefs regarding the website had a significant positive effect on intention to buy from it. This paper discusses further development of the trust transfer model based on the social perception literature and explores implications for future research.

712 citations


Journal ArticleDOI
TL;DR: A model of community-based, evolutionary knowledge creation is built to study how thousands of talented volunteers, dispersed across organizational and geographical boundaries, collaborate via the Internet to produce a knowledge-intensive, innovative product of high quality.
Abstract: We propose a new model of knowledge creation in purposeful, loosely coordinated, distributed systems, as an alternative to a firm-based one. Specifically, using the case of the Linux kernel development project, we build a model of community-based, evolutionary knowledge creation to study how thousands of talented volunteers, dispersed across organizational and geographical boundaries, collaborate via the Internet to produce a knowledge-intensive, innovative product of high quality. By comparing and contrasting the Linux model with the traditional/commercial model of software development and firmbased knowledge creation efforts, we show how the proposed model of knowledge creation expands beyond the boundary of the firm. Our model suggests that the product development process can be effectively organized as an evolutionary process of learning driven by criticism and error correction. We conclude by offering some theoretical implications of our community-based model of knowledge creation for the literature of organizational learning, community life, and the uses of knowledge in society.

711 citations


Journal ArticleDOI
TL;DR: It is found that if interactions among a firm's activities are pervasive, neither the centralized nor the permanently decentralized organizational structure leads to high performance, and temporary decentralizationyields the highest long-term performance.
Abstract: To create a competitive advantage, firms need to find activity configurations that are not only internally consistent, but also appropriate given the firm's current environment. This challenge is particularly acute after firms have experienced an environmental change that has shifted the existing competitive landscape and created new, high-performing sets of activity choices. How should firms organize to explore and search such an altered performance landscape? While it has been noted that adaptive entities need to maintain a balance of exploration and exploitation, little is known about how different organizational structures moderate this balance. With the help of an agentbased simulation model, we study the value of three different organizational structures: a centralized organization, in which decisions are made only at the level of the firm as a whole; a decentralized organization, in which decisions are made independently in two divisions; and a temporarily decentralized firm, which starts out with a decentralized structure and later reintegrates.We find that if interactions among a firm's activities are pervasive, neither the centralized nor the permanently decentralized organizational structure leads to high performance. In this case, temporary decentralization--an organizational structure that has not found much attention in the literature--yields the highest long-term performance. This organizational structure allows the firm both to avoid low-performing activity configurations and to eventually coordinate across its divisions. Thus, even if the decision problem a .rm faces is not fully decomposable, a temporary bifurcation can lead to a higher long-term performance outcome. Initial decentralized exploration is, however, costly in the short run, as compared to centralized exploration. As a result, a tradeoff exists between the short-term costs of decentralized exploration and the longterm benefits of reaching higher performance. As interactions across and within divisions increase, the optimal length of decentralized exploration tends to grow.Paralleling our first result, we further show that even if a decision problem is decomposable, that is, can be perfectly modularized, it can be beneficial to create a temporary decision allocation that creates "unnecessary" interdependencies across the subsystems. This benefit arises in particular when the modules are complex by themselves. In both cases, an initial phase of exploration, enabled by an appropriate organizational structure, followed by refinement and coordination, enabled by a different structure, leads to high performance. To illustrate our general model, we focus on incumbent firms' responses to the Internet and discuss implications for the product design process.

700 citations


Journal ArticleDOI
TL;DR: Systematic differences in the determinants of firm failure between firms that fail early in their life and those that fail after having successfully negotiated the early liabilities of newness and adolescence are identified.
Abstract: Systematic differences in the determinants of firm failure between firms that fail early in their life and those that fail after having successfully negotiated the early liabilities of newness and adolescence are identified. Analysis of data from 339 Canadian corporate bankruptcies suggests that failure among younger firms may be attributable to deficiencies in managerial knowledge and financial management abilities. Failure among older firms, on the other hand, may be attributable to an inability to adapt to environmental change.

674 citations


Journal ArticleDOI
TL;DR: Differences in how individuals from individualist and collectivist societies trust ingroups versus out-groups are studied, which provides an important foundation for hypotheses regarding differences in individual propensities to trust and two measures of organizational trust.
Abstract: Competitiveness in global industries increasingly requires the ability to develop trusting relationships. This requires organizations, and the individuals they are comprised of, to be both trustworthy and trusting. An important question is whether societal culture influences the tendency of individuals and organizations to trust. Based largely on Yamagishi's (1994, 1998a, b) theories explaining trust, commitment, and in-group bias in collectivist cultures, this study examines potential differences in levels of trust between individualist and collectivist cultures. Survey data was collected from 1,282 mid-level managers from large banks in Japan, Korea, Hong Kong, Taiwan, China, Malaysia, and the United States. We first study differences in how individuals from individualist and collectivist societies trust ingroups versus out-groups. This provides an important foundation for hypotheses regarding differences in individual propensities to trust and two measures of organizational trust: internal trust (trust within the organization) and external trust (an organization's trust for suppliers, customers, etc.). Findings show higher levels of propensity to trust and organizational external trust in the United States than in Asia.

Journal ArticleDOI
TL;DR: The author proposes a framework for communication and collaboration between the science and design modes, and argues that scholars in organization studies can guide human beings in the process of designing and developing their organizations toward more humane, participative, and productive futures.
Abstract: Mainstream organizational research is based on science and the humanities. Science helps us to understand organized systems, from an outsider position, as empirical objects. The humanities contribute to understanding, and critically reflecting on, the human experience of actors inside organized practices. This paper argues that, in view of the persistent relevance gap between theory and practice, organization studies should be broadened to include design as one of its primary modes of engaging in research. Design is characterized by its emphasis on solution finding, guided by broader purposes and ideal target systems. Moreover, design develops, and draws on, design propositions that are tested in pragmatic experiments and grounded in organization science. This study first explores the main differences and synergies between science and design, and explores how and why the design discipline has largely moved away from academia to other sites in the economy. The argument then turns to the genealogy of design methodologies in organization and management studies. Subsequently, this paper explores the circular design methodology that serves to illustrate the nature of design research, that is, the pragmatic focus on actionable knowledge as well as the key role of ideal target systems in design processes. Finally, the author proposes a framework for communication and collaboration between the science and design modes, and argues that scholars in organization studies can guide human beings in the process of designing and developing their organizations toward more humane, participative, and productive futures. In this respect, the organization disciplinecan make a difference.

Journal ArticleDOI
TL;DR: In this article, the authors traced the development of natural environmental issues in two organizations in real time over a period of a year and identified the factors that influenced the scope, scale, and speed of organizational response to issues.
Abstract: In this research, we traced the development of natural environmental issues in two organizations in real time over the period of a year. Participant observations, discussions with organizational members, and corporate documents yielded insights used to develop a model describing issue flows in both organizations. With this model, we identified the factors that influenced the scope, scale, and speed of organizational response to issues. Our methods provided insights into why issues generated organizational responses and also why they did not.Two factors appeared to be critical in explaining organizational responses to issues: individual concerns and organizational values. Individual concerns gave rise to an issue champion or seller. An issue consistent with organizational values was perceived as strategic. These werenecessary conditions; without either condition, the issue would not be resolved. It is argued further that individual discretion and excess resource slack will moderate the relationship between these direct effects and the scope, scale, and speed of organizational response. The framework that emerged from the data is conveyed through a set of four propositions.

Journal ArticleDOI
TL;DR: It is shown that for sustained growth, entrepreneurial firms should learn to balance different levels of managerial experience in the top management team, and one way to achieve this balance is to retain valuable founder resources in the team while avoiding high levels of shared team-specific experience and industry-specific managerial experience.
Abstract: This paper develops and tests a model of multilevel experience-based top management team competence and its effects on a firm's capacity of entrepreneurial growth. The model incorporates the individual and additive effects of firm, team, and industry levels of managerial experience and the conflict effects of combining multiple levels of experience. Theoretical arguments are tested in a longitudinal sample of entrepreneurial firms from the medical and surgical instruments industry. The results indicate that founders' participation in the top management team and managers' past experience in the industry contribute to the competence of the team in seizing new growth opportunities. The results also show that, because of conflict effects, the positive effect of founders' participation in the management team on the rate of growth weakens as either the shared team-specific experience or industry-specific managerial experience in the team increases. For practitioners, the most important implication is that for sustained growth, entrepreneurial firms should learn to balance different levels of managerial experience in the top management team. One way to achieve this balance is to retain valuable founder resources in the team while avoiding high levels of shared team-specific experience and industry-specific managerial experience.

Journal ArticleDOI
TL;DR: In this paper, the authors examined the link between organizational culture and effectiveness for foreign-owned firms operating in Russia operating in a transition economy and argued that effectiveness in Russia relies more on adaptability and flexibility than it does in the United States.
Abstract: This paper examines the link between organizational culture and effectiveness for foreign-owned firms operating in Russia. Beginning with a model of organizational culture developed in the United States, the paper presents a multimethod analysis of culture and effectiveness in a transition economy. We argue that effectiveness in Russia relies more on adaptability and flexibility than it does in the United States. Furthermore, the legacy of the Communist era forces firms in Russia to deal with a workforce with a unique time perspective and a unique set of subcultures that often undermine attempts at coordination and integration. We first explore these ideas using survey data on 179 foreign-owned firms operating in Russia and compare the results to those obtained for firms in the United States. We then present four case studies designed to ground the results in the Russian context, and to document cultural dynamics not captured by the model.

Journal ArticleDOI
TL;DR: It is argued that, in a buyer-supplier context, purchasing managers will be trusted to a greater extent by supplier representatives when they are free from constraints that limit their ability to interpret their boundary-spanning roles.
Abstract: We present a view of trust in boundary spanners as explained by the extent of role autonomy, a multidimensional concept that reflects the discretion that agents have in interpreting and enacting their roles. We argue that, in a buyer-supplier context, purchasing managers will be trusted to a greater extent by supplier representatives when they are free from constraints that limit their ability to interpret their boundary-spanning roles. We conceptualize and measure three key components of role autonomy: Functional influence, tenure, and clan culture. Taken together, these components of role autonomy shape and define the purchasing manager's willingness and capacity to make and uphold commitments to supplier representatives. Role autonomy permits purchasing managers to engage in discretionary behaviors that allow supplier representatives to learn about their underlying motives and intentions. We test hypotheses linking the components of role autonomy to trust on a sample of 119 buyer-supplier relationships. We use a dyadic research design that combines data from purchasing managers and supplier representatives. The results suggest that granting purchasing managers greater autonomy enhances supplier representative trust in purchasing managers. By drawing attention to role autonomy as a feature of organizations that influences trust we highlight the importance of organizational context in contributing to a deeper understanding of trust.

Journal ArticleDOI
TL;DR: An organizational economics interpretation of Oticon organizational changes is developed, which suggests that a strong liability of the spaghetti organization was the above incentive problem: Frequent managerial meddling with delegated rights led to a severe loss of motivation, and arguably caused the change to a more structured organization.
Abstract: Infusing hierarchies with elements of market control has become a much-used way of simultaneously increasing entrepreneurialism and motivation in firms. However, this paper argues that such "internal hybrids," particularly in their radical forms, are inherently hard to successfully design and implement because of a fundamental incentive problem of establishing credible managerial commitments to not intervene in delegated decision making. This theme is developed and illustrated, using the case of the world-leading hearing aids producer, Oticon. In the beginning of the 1990s, Oticon became famous for its radical internal hybrid, the "spaghetti organization." Recent work has interpreted the spaghetti organization as a radical attempt to foster dynamic capabilities by organizational means, neglecting, however, that about a decade later the spaghetti organization has given way to a more traditional matrix organization. In contrast, an organizational economics interpretation of Oticon organizational changes is developed. This lens suggests that a strong liability of the spaghetti organization was the above incentive problem: Frequent managerial meddling with delegated rights led to a severe loss of motivation, and arguably caused the change to a more structured organization. Refutable implications are developed, and the discussion is broadened to more general issues of economic organization.

Journal ArticleDOI
TL;DR: The authors show that the available sample of organizations usually undersamples failure, and that this bias frequently implies that the organizational theories of managers and other observers of organizations will be systematically biased, which can contribute to a variety of false beliefs about effective management.
Abstract: Organizations learn from other organizations. However, the observations available to them are typically a biased sample. The organizations that can be observed at any point in time are the survivors of a selective process that has eliminated a large fraction of the underlying population. In addition, there is a strong tendency to focus on successful organizations in books and the business press. As a result, the available sample of organizations usually undersamples failure. This paper shows that such undersampling of failure can contribute to a variety of false beliefs about effective management. Simply by observing existing organizations, laymen may get a misleading picture of the determinants of corporate performance. In particular, risky practices, even if they are unrelated to performance in the full population of organizations, may seem to be positively related to performance in a sample of survivors. I argue that this bias frequently implies that the organizational theories of managers and other observers of organizations will be systematically biased. Observations of existing organizations will show that unreliable, uninformed practices and practices that involve concentrated resource allocation are superior to reliable, informed practices or practices that involve diversified resource allocation. I show that this implies that observations of existing organizations will produce compelling but potentially misleading evidence for the significance several common managerial practices.

Journal ArticleDOI
TL;DR: This study examines the adoption of new products and processes in the Australian retail banking industry over the 1981 to 1995 period and suggests that active and consistent innovative activity that is somewhat differentiated from competitors can also deliver superior financial performance.
Abstract: This study examines the adoption of new products and processes in the Australian retail banking industry over the 1981 to 1995 period. Our analysis demonstrates that the vast majority of observed innovative activity was based on ideas sourced from outside the focal firm, and that innovations diffused very quickly across competing banks. As such, there were no periods during which any bank had proprietary possession of a major product or process innovation. We therefore ask how the banks' innovative activity could affect their relative financial performance positions. We answer this question by developing a set of hypotheses that relate specific features of their histories of innovative activity to their current financial performance. These hypotheses are tested using a detailed data set describing 1,297 modifications made to products and services, distribution technologies, and back-office processes within a sample of Australian retail banks over the sample period. Our results provide support for the general position that establishing an attractive competitive position depends on the specific history of a firm's innovative activity. Banks that undertook more innovative activity, that were more consistent in that activity, and whose composition of activity was somewhat differentiated from the industry norm tended to display superior financial performance. Rather than looking solely for internally generated, inimitable innovations to deliver competitive advantage, these results suggest that active and consistent innovative activity that is somewhat differentiated from competitors can also deliver superior financial performance.

Journal ArticleDOI
TL;DR: Model of trust production is extended to include the effects of purposive action by the truster over and above the contextual prediction of trust emphasized in previous research, and "active trust development" is conceptualized as a strategy to strengthen the basis for trust.
Abstract: This paper contributes to the conceptual and empirical understanding of organizational trust. It confirms the importance of "contextual confidence" in institutions for building trust. Moreover, it extends models of trust production to include the effects of purposive action by the truster over and above the contextual prediction of trust emphasized in previous research. Accordingly, "active trust development" is conceptualized as a strategy to strengthen the basis for trust. Empirical evidence is drawn from a survey of 615 Hong Kong firms that manage operations in mainland China.Confidence in China's institutional context was found to have a strong positive association with trust in the local staff working within that context. Active trust development was validated as a means of enhancing trust, though its effect on trust was not as strong as that of perceived institutional effectiveness.Active trust development initiatives are particularly valuable in an environment such as contemporary China, where the institutional foundations for trust remain underdeveloped. The positive correlation of trust with organizational performance provides an incentive for managers to explore these initiatives. At the same time, government and other bodies in China and elsewhere, which are in a position to create and promote effective institutions, are encouraged to intensify their efforts in that direction.

Journal ArticleDOI
TL;DR: In this article, the authors used field research and grounded theory building to study the factors that should affect Founder-CEO succession in Internet start-ups, and found that there are two central intertemporal events that may affect founder- CEO succession: the completion of product development and the raising of each round of financing from outside investors.
Abstract: In the last few decades, we have developed a substantial body of knowledge about CEO succession. However, except for some studies of family businesses that lack direct applicability to nonfamily CEO succession, the past studies of succession have not examined the very first succession event in a firm, when the Founder-CEO is replaced, on a large-scale basis. The critical differences between later-stage succession and Founder-CEO succession include the higher level of attachment between Founder-CEOs and the firms they create, the much larger equity holdings of Founder-CEOs (which give them much more control of the firm), the fact that many Founder-CEOs remain in the firm (even though it is being run by their successors), and the fact that nearly all early-stage succession events involve outside successors (in contrast to later-stage succession research, which has focused on the insider-outsider distinction). These differences make it hard to extrapolate from later-stage succession findings to Founder-CEO succession. Therefore, in order to examine Founder-CEO succession, I used field research and grounded theory building to study the factors that should affect Founder-CEO succession in Internet start-ups. I find that there are two central intertemporal events that may affect Founder-CEO succession: The completion of product development and the raising of each round of financing from outside investors. I develop testable hypotheses about how each of these events affect the rate of succession, and then test these hypotheses using an event-history analysis of a unique dataset containing the succession histories of 202 Internet firms. My findings point to multiple "paradoxes of success" in which the Founder-CEO's success at achieving critical milestones actually causes the chance of Founder-CEO succession to rise dramatically.

Journal ArticleDOI
TL;DR: In this paper, the authors examined the antecedents to receiving endorsement by a prestigious underwriter and linked this to the experience base of a firm's upper echelon, concluding that the amount and type of upper-echelon experience serve as important symbols of a young firm's legitimacy to critical outsiders.
Abstract: The initial public offering (IPO) is one of the most critical events in the lifetime of a young firm. Prior research has shown that firms tend to have successful IPOs if they go public with the endorsement of a prestigious lead underwriter. This paper examines the antecedents to receiving endorsement by a prestigious underwriter and links this to the experience base of a firm's upper echelon. We theorize that the amount and type of upper echelon experience serve as important symbols of a young firm's legitimacy to critical outsiders. We introduce a typology of upper echelon experience that distinguishes between upper echelon upstream, horizontal, and downstream employment-based affiliations and suggest that these different types of upper echelon affiliations allay different types of endorser concerns regarding firm legitimacy, affecting the endorsement process. Further, we theorize that the relationships between upper echelon experience and investment bank prestige will be moderated by technological uncertainty. We test our assertions on a comprehensive sample of public and private biotechnology firms that were founded between 1961 and 1994 and that went public between 1979 and 1996. Analyses of the five-year career histories of the over 3,200 executives and directors that make up the upper echelons of these firms show that firms with upper echelons with affiliations with prominent downstream organizations (i.e., pharmaceutical and/or healthcare companies) and with prominent horizontal organizations (i.e., biotechnology companies) are more likely to attract the endorsement of a prestigious investment bank. We also find that the greater the range of upper echelon affiliations across the categories of upstream, horizontal, and downstream affiliations, the more prestigious the firm's lead underwriter. We also find that these latter results are moderated by technological uncertainty. The present research has implications for the study of organizational legitimacy, interorganizational endorsements, and entrepreneurship.

Journal ArticleDOI
TL;DR: In this paper, the antecedents of intraorganizational trust and how the frequency of communication between trustor and trustee moderates the impact of these factors on perceived trustworthiness was investigated.
Abstract: This paper investigates the antecedents of intraorganizational trust and, more specifically, how the frequency of communication between trustor and trustee moderates the impact of these factors on perceived trustworthiness. Data on 157 dyadic relationships among 50 senior managers within a multinational corporation confirm that the effect of both trustor, as well as trustee characteristics on the level of perceived trustworthiness, is moderated by the frequency of communication between the two parties. As communication frequency increases, the trustor's general attitudinal predisposition towards peers becomes less important as a determinant of his/her evaluation of trustworthiness of other managers within the organization. In contrast, as communication frequency increases, the trustor's and trustee's contexts within the organization become more important determinants of perceived trustworthiness.

Journal ArticleDOI
TL;DR: Substantial support is found for the prediction that the impact of mixed reward structures on trust is biased by individuals' preexisting expectations about their partner's trustworthiness and for the theory that attribution theory provides a useful framework for understanding the complex, diverse, and multiple routes through which trust may develop.
Abstract: We test hypotheses asserting that reward structures--an omnipresent element of the work context--have a strong influence on interpersonal trust, and we explore the cognitive and behavioral routes through which the effects may occur. Specifically, we use attribution theory to identify several core processes including social perception (causal schemas), self-perception, and attributional biases (correspondence bias, suspicion effects, and preexisting expectations) that may explain trust development. A 3 (cooperative/competitive/mixed rewards) X 2 (high/low initial trust) experimental design in a problem-solving task was used to examine the hypotheses. The results suggest that reward structures have a strong influence on trust, and that the effect is mediated by causal schemas, suspicion effects, and self-perception. We also found some support for the prediction that the impact of mixed reward structures on trust is biased by individuals' preexisting expectations about their partner's trustworthiness. The theory and results suggest that attribution theory provides a useful framework for understanding the complex, diverse, and multiple routes through which trust may develop.

Journal ArticleDOI
TL;DR: The findings suggest that the opinions held by an individual's coworkers influence others' justice perceptions, especially when justice is ambiguous and affect inducing, and that different justice perceptions may be transmitted via different types of social ties.
Abstract: We argue that employees' organizational justice perceptions are, in part, influenced by whom they associate with in the workplace. Consequently, we examine the link between different types of social ties and the interpersonal similarity of employees' perceptions of interactional, procedural, and distributive justice through a social network study in a division of a Fortune 500 firm. We predicted and found that social ties influence perceptions of justice to different extents, depending on the type of justice assessed. Expressive ties were associated with greater similarity in coworkers' perceptions than instrumental ties in the most affect-inducing justice perceptions, perceptions of interactional justice. Our findings suggest that the opinions held by an individual's coworkers influence others' justice perceptions, especially when justice is ambiguous and affect inducing, and that different justice perceptions may be transmitted via different types of social ties.

Journal ArticleDOI
Olivier Boiral1
TL;DR: This research project contributes to a better understanding of how institutional pressures, which create "isomorphic" organizations by leading them to adopt identical management models, are reinterpreted, renegotiated, and modified within organizations.
Abstract: Adopted by an increasing number of organizations around the world, the ISO 9000 standards have become a growing concern for more and more managers who are often compelled to adopt this system without really knowing its requirements and implications for employees. Though the effects of this standard on quality management and on performance improvement have been widely debated, there is little knowledge of how the managers and employees who are asked to implement and maintain it perceive the ISO 9000 standards or resist its use. This study will thus attempt to analyze this perception and resistance with regard to both the standard and the certification process. So as to avoid the traditional and idealised view of this standard, whose commercial stakes often give rise to uncritical statements, almost 50 interviews were conducted outside of the workplace. The results of these interviews revealed highly contrasting attitudes that were frequently critical of the ISO 9000 system, which was often given only superficial support. A qualitative analysis of the data allowed us to identify three types of respondents. They were grouped according to their opinions and attitudes about the implementation of this standard. The three groups were ceremonial integrators, quality enthusiasts and dissidents. Although the "quality enthusiasts" discourse often reflects managers' "rhetoric of success" described by Zbaracki (1998) about the implementation of total quality programs, this rhetoric is not shared by the other respondent categories. Hence, this research project contributes to a better understanding of how institutional pressures, which create "isomorphic" organizations by leading them to adopt identical management models, are reinterpreted, renegotiated, and modified within organizations. The proposed typology casts doubt on the mechanistic, consensual, and monolithic view of the ISO 9000 system that underlies most of the work on this theme. In particular, this study demonstrates the relevance of adopting both the institutionalist and critical approaches in efforts to explain the respondents' opinions. In so doing, the personnel's support for the ISO 9000 system and the certification process can then be analyzed from different angles. This certification process would ultimately appear to be a rite of passage that gives rise to various strategies that depend on the respondents' category and their support for the standard.

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TL;DR: The results show that knowledge travels along established ties from large knowledge bases into unspecialized, codified, locally responsive knowledge bases, consistent with the view that relevance provides pathways through which new knowledge connects to prior knowledge.
Abstract: To understand what determines knowledge flows into organizational subunits, the study reported here examines the relevance of the knowledge to the operations performed at the receiving subunit. This study analyzes inflows of knowledge from peers and supervising units into subunits of multinational corporations. It examines factors that affect the relevance of extra-unit knowledge to receiving subunits and explores empirically how these factors affect knowledge flows. The results show that knowledge travels along established ties from large knowledge bases into unspecialized, codified, locally responsive knowledge bases. The results are consistent with the view that relevance provides pathways through which new knowledge connects to prior knowledge.

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TL;DR: Over the time period studied there was no significant change in homophily among the racial groups' networks, despite the explicit promotion of diversity in recruitment of students, formation of heterogeneous classes and teams, and active support by the MBA program administrators.
Abstract: This study examined the formation and persistence of homophilous, or same-race, friendship ties among racial minorities and whites in a "newcomer" setting. Homophilous ties provide valuable sources of mutual support but may limit racial minorities' access to resources and information in organizations. Study participants were first-year MBA students who entered a program at the same time. We measured network ties at two times: six weeks after the beginning of the students' first semester in the program, and at the beginning of the following semester 3 1/2 months after the second survey. We also administered a separate survey measuring social identity salience prior to the first network survey.Despite the fact that there were fewer same-race ties for racial minorities to choose from, their friendship networks demonstrated greater homophily than those of whites early in the formation of the network and over time. Also, African-Americans were more likely than whites to seek out homophilous friendship ties in other class sections. Race as a salient social identity group membership was positively related to homophily for African-Americans, Hispanics, and whites. Over the time period studied there was no significant change in homophily among the racial groups' networks, despite the explicit promotion of diversity in recruitment of students, formation of heterogeneous classes and teams, and active support by the MBA program administrators. We discuss the practical implications of our findings for organizations that are attempting to increase cultural diversity and promote active interaction among individuals from different racial and ethnic backgrounds.

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TL;DR: In this article, the authors investigate a uniquely complex organizational context, that of the fast-tracked large-scale project management of a significant piece of Sydney 2000 Olympic infrastructure, which they researched in terms of its management through the "future perfect."
Abstract: In this paper we investigate a uniquely complex organizational context--that of the fast-tracked large-scale project management of a significant piece of Sydney 2000 Olympic infrastructure, which we researched in terms of its management through the "future perfect." In a grounded analysis we resolved to track how the future perfect developed in the life of one large, complex project whose uniqueness meant that it was unable to be strategically planned in advance. We tracked the use of what we term "future perfect strategy" through analysis of data collected both in leadership meetings of the directing agency, "PALT"--Project Alliance Leadership Team--as well as in individual interviews that we conducted in and around the project, and through analysis of media coverage. Overall, the project was a success, but some problems arose along the way to completion. Largely, these were focused on issues of social rather than technical construction--something even the most strategic of plans cannot account for. As well as identifying some of the specific mechanisms for encouraging future perfect strategy that were used in the project, including encouraging "strange conversations," "playing end games," "workshopping," and "projecting feelings, concerns and issues," we also suggest some ways that the social construction issues might be handled in the future.

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TL;DR: It is discovered that individuals primarily construe their role models along positive/negative, global/specific, close/distant, and hierarchically superior/peer-subordinate dimensions, and that across the career span, the tendency to observe role models did not change.
Abstract: While previous literature tends to focus on role models as significant other people, particularly in one's early life, this study finds that individuals tend to construe their role models as a selection process of attributes from others throughout their career. I discovered that individuals primarily construe their role models along positive/negative, global/specific, close/distant, and hierarchically superior/peer-subordinate dimensions, and that across the career span, the tendency to observe role models did not change. Rather, theemphasis placed on different dimensions of role models changes. Early-stage respondents who are working on creating a viable self-concept were more likely to construe their role models as positive, close, and sources of a range of attributes. Middle- and late-stage respondents were more likely to see their role models as sources of specific, and often negative, attributes. The study suggests that these observed patterns are related to individuals' increasing confidence in their professional self-concept. In early stages, individuals pay attention to role models to create a viable self-concept; in middle stages, they seek to refine their self-concept, and in late stages, they seek to enhance and affirm their self-concept.