Corporate Hierarchy and Organizational Learning: Member Turnover, Code Change, and Innovation in the Multiunit Firm

2023 | Organization Science | Citations: 0

Authors: Joseph, John; Rhee, Luke; Wilson, Alex James

Abstract: This study examines how recombinant innovation is affected by member turnover an ... Expand

Abstract: This study examines how recombinant innovation is affected by member turnover and organizational learning within a corporate hierarchy. Prior work has overlooked the role of organizational structure in organizational learning, focusing instead on the knowledge provided by individual new hires or on the disruption caused by individual departures. We address this gap by applying March’s [March JG (1991) Exploration and exploitation in organizational learning. Organ. Sci. 2(1):71–87.] mutual learning model to a corporate hierarchy. In doing so, we theorize how the contributions of corporate staff to socializing new employees and to learning from the organizational code may differ from those of the organization’s subunit members. Empirically, we examine the learning effects of aggregate corporate and subunit arrivals and departures on novel recombinant innovation by subunits. Using 24 years of Motorola company directories, we construct membership turnover measures for corporate and subunit employees and exploit patent data to capture recombinant innovation. Our results suggest that, whereas the influx of new ideas through arrivals may be critical, breaking the pattern of inertial behavior through departures is more important for recombinant innovation. Corporate departures matter most for recombinant innovation, a result that reflects not only corporate staff’s slower individual learning from the organizational code but also its ability to update that code more quickly. In supplementary analyses, we find different effects for technical and nontechnical staff and internal and external arrivals, as well as demonstrate the mutual learning mechanism using internal corporate documents to capture code change. Our study has strong implications for theories of organizational learning, strategic human capital, organization design, and innovation. Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2022.1618. Collapse

Topics: innovation management organization learning IT personell turnover global navigation satellite system communication service infrastructure

Methods: theory development statistical hypothesis test regression analysis method post-hoc analysis longitudinal research

Just Diverse Among Themselves: How Does Negative Performance Feedback Affect Boards’ Expertise vs. Ascriptive Diversity?

2023 | Organization Science | Citations: 0

Authors: Jung, HeeJung; Lee, Yonghoon G.; Park, Sun Hyun

Abstract: We investigate how negative performance feedback affects board diversity, which ... Expand

Abstract: We investigate how negative performance feedback affects board diversity, which is instrumental in shaping a firm’s strategic change. When a firm underperforms compared with its aspiration, its board is motivated to promptly address the underperformance. The board needs to not only help search for strategic alternatives but also quickly build consensus around its strategic reorientation. These two motivations lead the board to value two dimensions of diversity among its members differently. On the one hand, to understand the problem of underperformance and find a solution, the board is motivated to seek new expertise, avoiding redundancy in the pool of expertise already represented in the boardroom. This results in a higher level of diversity in director expertise. On the other hand, the urgent need to build consensus prompts the board to value trust and solidarity and to avoid potential conflict among directors. Because people perceive others with similar ascriptive backgrounds as trustworthy, changes in the board of an underperforming firm are likely to yield a lower level of diversity in its members’ ascriptive backgrounds. These changes in board are affected by the committee chairs of the board whose power and influence are significant in the boardroom. Analyses of the boards of 733 U.S. listed manufacturing firms show that when a firm underperforms compared with its aspirations, it increases the board expertise diversity, but decreases the board ascriptive diversity. When chairs on the board are gender or racial minorities, the negative association between underperformance and the board ascriptive diversity is weakened. Supplemental Material: The e-companion is available at https://doi.org/10.1287/orsc.2022.1595. Collapse

Topics: research and development organizational productivity accounting corporate governance database system

Methods: statistical hypothesis test theory development qualitative interview descriptive statistic ordinary least square

The Impact of Dominant IT Infrastructure in Multi-Establishment Firms: The Moderating Role of Environmental Dynamism

2022 | Journal of the Association for Information Systems | Citations: 0

Authors: Soh, Franck; Setia, Pankaj

Abstract: Multi-establishment firms (MEFs) rely on digitized processes enabled by advance ... Expand

Abstract: Multi-establishment firms (MEFs) rely on digitized processes enabled by advanced IT infrastructure; however, environmental dynamism is a major influence on their operations. Environmental dynamism threatens the efficacy of current operations, requiring firms to evolve their processes. Firms' IT infrastructure may catalyze or hinder their endeavors and performance as they respond to environmental dynamics. Little previous research has examined which IT infrastructure types are high-performing and whether their effects vary across environments. We investigate the impacts of IT infrastructure, examining microlevel implementation-the constitution of technical and human assets-across the establishments of a multi-establishment firm (MEF). Specifically, we use the notion of a dominant IT infrastructure to unravel the heterogeneity of IT infrastructure across establishments. We explore dominant IT infrastructures-technology, human, or both-and assess their impacts across environmental conditions. To test our hypotheses, we used a panel dataset from 2007 to 2009 comprising 355 unique firms. Our findings reveal that the impact of establishmentlevel IT infrastructure types on MEF performance is contingent on environmental dynamism. A technology-dominant IT infrastructure leads to greater MEF performance in less dynamic environments, while a human-dominant IT infrastructure leads to greater MEF performance in more dynamic environments. The MEF performance is enhanced through a combination of technologyand human-dominant IT infrastructures in more dynamic environments. We conclude by discussing the theoretical insights and managerial implications of our findings. , digital innovations, neuroscientific theories, computational models of sentiment analysis and IT Governance, and open source innovations. He has published in top information systems and business journals, such as MIS Quarterly, Information Systems Research, and Journal of Operations Management, among others, in two domains: (1) IT strategy and governance, and (2) open source software. He has been featured among the top 100 researchers in the field of information systems worldwide, based on his publications in the top business journals (e.g., the Financial Times top 50 Journals). Also, he has been invited to give research talks and keynote speeches by universities in different countries, such as India, the US, Chile, and Singapore. He teaches graduate-level courses on strategic management of digital innovations and digital transformation at the Indian Institute of Management, Ahmedabad (IIMA). Collapse

Topics: information technology infrastructure IT investment database system organizational productivity research and development

Methods: longitudinal research autocorrelation analysis Compustat descriptive statistic theoretical contribution

Formal Hierarchy As a Source of Upward Status Disagreement? A Theoretical Perspective

2022 | Organization Science | Citations: 0

Authors: Yap, Andy J.; Madan, Nikhil; Puranam, Phanish

Abstract: Formal hierarchies may be presumed to reduce uncertainty about the status orderi ... Expand

Abstract: Formal hierarchies may be presumed to reduce uncertainty about the status ordering of employees as they imply a consistent global ranking. However, formal hierarchies in organizations are not merely linear, but are characterized by branching and nesting (i.e., they comprise subunits within the organization and subunits within other subunits), which creates a local ranking of individuals within each subunit. This can create tension between global and local formal ranks as status cues. Moreover, individuals may also draw on informal status cues that are inconsistent with formal ranks. Consequently, organizational members may experience upward status disagreement (USD), whereby each assumes they have higher status than the other. We offer a theoretical model that identifies important conditions under which cues arising from the structure of the formal hierarchy—either on their own or in conjunction with informal status cues—can be a source of USD. We also explore when USD can result in status conflict and identify moderators of this relationship. Our research has implications for how the frequency of USD can be mitigated as organizational structures become more complex and the workforce becomes increasingly diverse. Collapse

Topics: organizational productivity organization structure task interdependence team productivity

Methods: data imputation theory development theoretical contribution

An Empirical Assessment of the Impact of Strategy Implementation Actions on Digital Business Strategy

2021 | HICSS | Citations: 0

Authors: De Baat Doelman, Marc; Joshi, Anant; Brüggen, Alexander

Abstract: In this paper we investigate the effect of strategy implementation actions (SIA) ... Expand

Abstract: In this paper we investigate the effect of strategy implementation actions (SIA) on the implementation of a digital business strategy (DBS). The result presented in this paper are based on an online survey with 191 responses from senior vice presidents and vice presidents of a large German manufacturing organization. Using structural equation modeling (SEM), we find a positive significant effect SIA on the implementation of a DBS. This is an important implication for academics and practitioners alike, as the actions can serve as implementation guidelines in the future. Collapse

Topics: human resource management strategic management digital business strategy

Methods: structural equation modeling survey data transformation SEM tool principal component analysis

Constructing information technology (IT) portfolios to achieve enterprise strategic goals in multi-business unit firms

2021 | Information & Management | Citations: 0

Authors: Huang, Yu-Hsiang (John); Larson, Eric C.; Shaw, Michael J.; Subramanyam, Ramanath (Ram)

Abstract: This study aims to develop a new methodology in IT Portfolio Management (ITPM) t ... Expand

Abstract: This study aims to develop a new methodology in IT Portfolio Management (ITPM) to address the impact of portfolio priorities on IT strategies in a multi-business unit firm. The methodology includes a new ITPM model and uses simulated scenarios to overcome limitations due to insufficient real-world organizational IT portfolio data. The weight scores generated by the proposed ITPM model can enable the firm to create a rational viewpoint to improve its IT investment efficiency while establishing IT priorities to achieve enterprise strategic goals. Such an approach would enable firms to reduce their reliance on CIO intuition in guiding firms’ technology portfolios. Collapse

Topics: IT project project management IT investment Chief Information Officer resource allocation

Methods: simulation descriptive statistic optimization model Monte Carlo simulation data envelopment analysis

Practice Implementation Within a Multidivisional Firm: The Role of Institutional Pressures and Value Consistency

2020 | Organization Science | Citations: 0

Authors: Jacqueminet, Anne

Abstract: This paper proposes a model to predict when the subunits of a multidivisional fi ... Expand

Abstract: This paper proposes a model to predict when the subunits of a multidivisional firm implement a practice adopted by the firm more or less extensively, focusing on the intraorganizational environment. Drawing on institutional arguments, I propose that a subunit’s extent of practice implementation is a combined result of coercive pressures from its headquarters, imitation of its peer units, and its own perception of the practice’s legitimacy. More specifically, I argue that a subunit will implement new practices related to corporate social responsibility (CSR) more fully (1) when the corporate mandate from the headquarters is more pressing, (2) when its peer subunits have implemented similar actions, and (3) when the practice is perceived as consistent with the subunit’s own values. Regression results further suggest that peers and headquarters influence a subunit’s extent of implementation of a practice only when the subunit perceives it as highly consistent with its own values—a finding that points to the importance of values for practice legitimacy and the need to rethink practice implementation within complex organizations. Collapse

Topics: logistics management legal context corporate social responsibility business process management accounting

Methods: survey robustness check logistic regression regression analysis method ANOVA

Theories: institutional theory management theory

Pluralist Theory Building: A Methodology for Generalizing from Data to Theory

2020 | Journal of the Association for Information Systems | Citations: 1

Authors: Müller, Sune; Mathiassen, Lars; Saunders, Carol

Abstract: We propose pluralist theory building as a methodology that leverages the power o ... Expand

Abstract: We propose pluralist theory building as a methodology that leverages the power of multiperspective inquiry to develop new theory from data. The paper presents the rationale for the methodology, its combination of generalization and pluralism, and the process involved in its application. When researchers use pluralist theory building, they move between description and theory and between single and multiple perspectives through four iterative steps with specific deliverables: create perspective accounts, synthesize multiperspective account, create theory fragments, and synthesize pluralist theory. Drawing on a study that served as experiential background for developing the methodology, we offer insights into the challenges involved in using the methodology and the activities in which researchers may engage to address these challenges. In conclusion, we argue that pluralist theory building offers a novel and practically useful approach to empirically based theorizing that leverages Mingers’s pragmatic approach to pluralism (2001) and extends Lee and Baskerville’s (2003) generalization framework into a detailed iterative process with steps, deliverables, challenges, and activities. Collapse

Topics: business process innovation innovation management organizational change armed conflict IT development project

Methods: theory development qualitative coding case study triangulation qualitative interview

Theories: contingency theory

Bridging Cultural Holes in Organizations: The Dynamic Structure of Social Networks and Organizational Vocabularies Within and Across Subunits

2020 | Organization Science | Citations: 0

Authors: Tasselli, Stefano; Zappa, Paola; Lomi, Alessandro

Abstract: The mechanisms by which social networks and organizational vocabularies combine ... Expand

Abstract: The mechanisms by which social networks and organizational vocabularies combine jointly to affect communication patterns across organizational boundaries remain largely unexplored. In this paper, we examine the mutually constitutive relation between the network ties through which organizational members communicate with each other and the vocabularies that they use to describe their organization. We suggest that the dynamic structure of social networks and organizational vocabularies is contingent on the formal design of organizational subunits. Within subunit boundaries, members who interact with each other are more likely to develop similar vocabularies over time. Interestingly, between subunits, the more two members share similar organizational vocabularies, the more likely they are to form a tie over time. We find empirical evidence for these arguments in a longitudinal study conducted among the managers of a multiunit organization. Organizational vocabularies, we suggest, may sustain communication patterns across organizational boundaries, thus bridging cultural holes within organizations. Collapse

Topics: social network logistics management decision making boundary spanning database system

Methods: regression analysis method parametric test Student's t-test longitudinal research robustness check

Theories: co-evolution theory social network theory

Pursuing the New While Sustaining the Current: Incumbent Strategies and Firm Value During the Nascent Period of Industry Change

2019 | Organization Science | Citations: 3

Authors: Eklund, John; Kapoor, Rahul

Abstract: This study considers the nascent period of industry change when the prevalent bu ... Expand

Abstract: This study considers the nascent period of industry change when the prevalent business model is being threatened by a new model, but there is significant uncertainty with respect to whether and when the new model will dominate. We focus on the challenge of incumbents pursuing both models simultaneously during the nascent period, and the implications on their firms’ valuations. Our theory is premised on the adjustment costs incurred by incumbents associated with the sharing of resources across business models and the conflict between managers vying for limited resources. While firms’ assets and competitive environments are key drivers of their value, we argue that they also impact adjustment costs. Evidence from the U.S. electric utility industry, which is undergoing a change from a centralized to a decentralized model, offers strong support for our arguments. The greater the level of incumbents’ assets that are specific to the existing model, and the greater the level of competition that they face, the lower are their firms’ valuations when investing in the new model relative to when investing in the existing model. Hence, ironically, those incumbents potentially most threatened by the change seem to be least rewarded for their efforts to renew themselves. However, pursuing the new model via alliances can help mitigate adjustment costs. The study uncovers the challenges that incumbents face as they pursue the new model in tandem with the existing dominant model, and helps explain why some incumbents may successfully navigate the changing industry landscape while others may stumble. Collapse

Topics: business model organizational value database system legal context resource allocation

Methods: theory development regression analysis method descriptive statistic robustness check Compustat