ALBERT

Description: In this paper, we develop an account of the failure of private market-governance institutions to maintain market order by highlighting how control of their distributional function by powerful elites limits their regulatory capacity. We examine the New York Clearing House Association (NYCHA), a private market-governance institution among commercial banks in Manhattan that operated from 1853 to 1913. We find that the NYCHA, founded to achieve coordinating benefits among banks and to limit the effect of financial panics, evolved at the turn of the twentieth century into a device for large, elite market players to promote their own interests to the disadvantage of rival groups that were not members. Elites prevented the rest of the market from having equal opportunities to participate in emergency loan programs during bank panics. The elites’ control not only worsened the condition of the rest of the market by allowing non-member banks to fail; it also diminished the influence of the NYCHA and escalated market crises as bank failures spread to member banks. As a result, crises developed to an extent that exceeded the control of the NYCHA and ended up hurting even elites’ own interests. This paper suggests that institutional stability rests on a deliberate balance of interests between different market sectors and that, without such a balance, the distributional function of market-governance institutions plants the seeds of institutional destruction.

Description: Socialization theory has focused on enculturating new employees such that they develop pride in their new organization and internalize its values. We draw on authenticity research to theorize that the initial stage of socialization leads to more effective employment relationships when it instead primarily encourages newcomers to express their personal identities. In a field experiment carried out in a large business process outsourcing company in India, we found that initial socialization focused on personal identity (emphasizing newcomers’ authentic best selves) led to greater customer satisfaction and employee retention after six months than socialization that focused on organizational identity (emphasizing the pride to be gained from organizational affiliation) or the organization’s traditional approach, which focused primarily on skills training. To confirm causation and explore the mechanisms underlying the effects, we replicated the results in a laboratory experiment in a U.S. university. We found that individuals working temporarily as part of a research team were more engaged and satisfied with their work, performed their tasks more effectively, and were less likely to quit when initial socialization focused on personal identity rather than on organizational identity or a control condition. In addition, authentic self-expression mediated these relationships. We call for a new direction in socialization theory that examines how both organizations and employees can benefit by emphasizing newcomers’ authentic best selves.

Description: Using a longitudinal dataset of research collaborations over 15 years at Stanford University, we build a theory of intraorganizational task relationships that distinguishes the different factors associated with the formation and persistence of network ties. We highlight six factors: shared organizational foci, shared traits and interests, tie advantages from popularity, tie reinforcement from third parties, tie strength and multiplexity, and the instrumental returns from the products of ties. Findings suggest that ties form when unfamiliar people identify desirable and matching traits in potential partners. By contrast, ties persist when familiar people reflect on the quality of their relationship and shared experiences. The former calls for shallow, short-term strategies for assessing a broad array of potential ties; the latter calls for long-term strategies and substantive assessments of a relationship’s worth so as to draw extended rewards from the association. This suggests that organizational activities geared toward sustaining persistent intraorganizational task relationships need to be different from activities aimed at forging new ones.

Description: This article focuses on geographic communities as fields in which human-made and natural events occasionally disrupt the lives of organizations. We develop an institutional perspective to unpack how and why major events within communities affect organizations in the context of corporate philanthropy. To test this framework, we examine how different types of mega-events (the Olympics, the Super Bowl, political conventions) and natural disasters (such as floods and hurricanes) affected the philanthropic spending of locally headquartered Fortune 1000 firms between 1980 and 2006. Results show that philanthropic spending fluctuated dramatically as mega-events generally led to a punctuated increase in otherwise relatively stable patterns of giving by local corporations. The impact of natural disasters depended on the severity of damage: while major disasters had a negative effect, smaller-scale disasters had a positive impact. Firms’ philanthropic history and communities’ intercorporate network cohesion moderated some of these effects. This study extends the institutional and community literatures by illuminating the geographic distribution of punctuating events as a central mechanism for community influences on organizations, shedding new light on the temporal dynamics of both endogenous and exogenous punctuating events and providing a more nuanced understanding of corporate-community relations.

Description: In this article, we attempt to resolve the tension between two conflicting views on the role of specialization in workers’ careers. Some scholars argue that specialization is a net benefit that allows workers to get ahead, while others argue that broad experience across several domains is the only way to be truly exceptional. We use rich longitudinal data from 1974 to 2008 on the careers of Indian Administrative Service officers, members of the Republic of India’s elite bureaucratic service, to test both these hypotheses. We find that specialization benefits officers throughout their career. We distinguish between skill-based and signal-based mechanisms that relate specialization to promotion, by exploring the match (or lack thereof) between the skills officers acquire and the jobs to which they are promoted, and we find that both mechanisms operate, but at different points in the career. Specialization is rewarded later in officers’ careers because of the skills they acquire by specializing. Earlier in their careers, skills are less important; it appears that specialization benefits officers because it is a signal of general ability. These results contradict studies that find that specialization helps early in careers but fades with experience, but they also call into question the idea that specialization always reflects accumulated skill. Our results support both types of theories but suggest important scope conditions for when one mechanism or the other is likely to dominate.

Description: Drawing on a 15-month ethnographic study of a drug court, we investigate how actors from different institutional and professional backgrounds employ logical frameworks in their micro-level interactions and thus how logics affect day-to-day organizational activity. While institutional theory presumes that professionals closely adhere to the logics of their professional groups, we find that actors exercise a great deal of agency in their everyday use of logics, both in terms of which logics they adopt and for what purpose. Available logics closely resemble tools that can be creatively employed by actors to achieve individual and organizational goals. A close analysis of court negotiations allowed us to identify the logics that are available to these actors, show how they are employed, and demonstrate how their use affects the severity of the court’s decisions. We examine the ways in which professionals with four distinct logical orientations—the logics of criminal punishment, rehabilitation, community accountability, and efficiency—use logics to negotiate decisions in a drug court. We provide evidence of the discretionary use of these logics, specifying the procedural, definitional, and dispositional constraints that limit actors’ discretion and propose an explanation for why professionals stray from their "home" logics and "hijack" the logics of other court actors. Examining these micro-level processes improves our understanding of how local actors use logics to manage institutional complexity, reach consensus, and get the work of the court done.

Description: We examine the responses of major pharmaceutical firms to the advent of biotechnology over the period 1980 to 2008 to explain why established firms vary in their adoption of technological discontinuities. Combining insights from upper echelons theory, personality theory, and research on organizational responses to new technologies, we posit that narcissistic chief executive officers (CEOs) of established firms will be relatively aggressive in their adoption of technological discontinuities. We propose, however, that the effect of a CEO’s narcissism on organizational outcomes will be moderated by audience engagement—the degree to which observers view a phenomenon as noteworthy and provocative—which varies over time. When audience engagement is high, narcissistic CEOs will anticipate widespread admiration for their bold actions and thus will invest especially aggressively in a discontinuous technology. Drawing from work on managerial cognition, we further hypothesize that CEOs’ narcissism will influence their top managers’ attention to a discontinuous technology, an association that will also be moderated by audience engagement. Finally, we suggest that managerial attention to the discontinuous technology will subsequently be reflected in company investments in the new technological domain. Results provide considerable support for our hypotheses and highlight the role of narcissism in the context of radical organizational change, the influence of audience engagement on executive behavior, and the effect of executive personality on managerial attention.

Description: This article examines the influence on organizational outcomes of CEOs’ political ideology, specifically political conservatism vs. liberalism. We propose that CEOs’ political ideologies will influence their firms’ corporate social responsibility (CSR) practices, hypothesizing that (1) liberal CEOs will emphasize CSR more than will conservative CEOs; (2) the association between a CEO’s political ideology and CSR will be amplified by a CEO’s relative power; and (3) liberal CEOs will emphasize CSR even when recent financial performance is low, whereas conservative CEOs will pursue CSR initiatives only as performance allows. We test our ideas with a sample of 249 CEOs, measuring their ideologies by coding their political donations over the ten years prior to their becoming CEOs. Results indicate that the political ideologies of CEOs are manifested in their firms’ CSR profiles. Compared with conservative CEOs, liberal CEOs exhibit greater advances in CSR; the influence of CEOs’ political liberalism on CSR is amplified when they have more power; and liberal CEOs’ CSR initiatives are less contingent on recent performance than are those of conservative CEOs. In a corroborative exploration, we find that CEOs’ political ideologies are significantly related to their corporate political action committee (PAC) allocations, indicating that this largely unexplored executive attribute might be more widely consequential.

Description: In this paper, we examine the relationship between an organization’s proportion of female managers and the number of new management jobs initially filled by women versus men. We draw on theories of job differentiation, job change, and organizational demography to develop theory and predictions about this relationship and whether the relationship differs for jobs filled by female and male managers. Using data on a sample of New York City advertising agencies over a 13-year period, we find that the number of newly created jobs first filled by women increases with an agency’s proportion of female managers. In contrast, the effect of the proportion of female managers on the number of new management jobs filled by men is positive initially but plateaus and turns negative. In showing these influences on job creation, we highlight the dynamic and socially influenced nature of jobs themselves: new jobs are created regularly in firms and not merely as a response to technical and administrative imperatives. The results also point to another job-related process that differs between women and men and that could potentially aggravate, mitigate, or alleviate inequality: the creation of jobs. Thus this research contributes to literatures on demography, the organization of work, and inequality.

Description: This paper examines whether earning a college or graduate degree in a recession or an economic boom has lasting effects on job satisfaction. Across three studies, well-educated graduates who entered the workforce during economic downturns were more satisfied with their current jobs than those who entered during more prosperous economic times. Study 1 showed that economic conditions at college graduation predicted later job satisfaction even after accounting for different industry and occupational choices. Study 2 replicated these results and found that recession-era graduates were more satisfied with their jobs both early and later in their careers and even when they earned less money. A third cross-sectional study showed that people who entered the workforce in bad economies were less likely to entertain upward counterfactuals, or thoughts about how they might have done better, and more likely to feel grateful for their jobs, both of which mediated the relationship between economic conditions at workforce entry and job satisfaction. While past research on job satisfaction has focused largely on situational and dispositional antecedents, these results suggest that early workforce conditions also can have lasting implications for how people affectively evaluate their jobs.

Description: This study examines social discrimination in the attributions that top executives make about the performance of other firms with minority CEOs in their communications with journalists. Drawing from the literatures on intergroup relations and status competition, our theory suggests how out-group biases and negative forms of envy toward higher-status minority CEOs may increase the propensity for white male CEOs to make negative or internal attributions for the low performance of the minority CEOs’ firms. We also examine how CEOs’ internal attributions in conversations with journalists increase the tendency for those journalists to attribute performance to internal causes in reporting on the minority CEOs’ firms. We consider how the gender and race of journalists could moderate the influence of CEOs’ performance attributions on journalists’ reports, such that female or racial minority journalists would be less easily persuaded by white male CEOs’ internal attributions for the low performance of firms with female or racial minority CEOs, and thus less prone to issuing negative statements about the CEOs’ leadership. Empirical analyses based on original survey data from a large sample of CEOs and journalists provided strong support for our hypotheses. We discuss implications of the findings for theory and research on social discrimination in the corporate elite and social psychological determinants of corporate leader reputation.

Description: In two studies, we develop and test theory about the relationship between speaking up, one type of organizational citizenship behavior, and unit performance by accounting for where employee voice is flowing. Results from a qualitative study of managers and professionals across a variety of industries suggest that voice to targets at different formal power levels (peers or superiors) and locations in the organization (inside or outside a focal unit) differs systematically in terms of its usefulness in generating actions to a unit’s benefit on the issues raised and in the likely information value of the ideas expressed. We then theorize how distinct voice flows should be differentially related to unit performance based on these core characteristics and test our hypotheses using time-lagged field data from 801 employees and their managers in 93 units across nine North American credit unions. Results demonstrate that voice flows are positively related to a unit’s effectiveness when they are targeted at the focal leader of that unit—who should be able to take action—whether from that leader’s own subordinates or those in other units, and negatively related to a unit’s effectiveness when they are targeted at coworkers who have little power to effect change. Together, these studies provide a structural framework for studying the nature and impact of multiple voice flows, some along formal reporting lines and others that reflect the informal communication structure within organizations. This research demonstrates that understanding the potential performance benefits and costs of voice for leaders and their units requires attention to the structure and complexity of multiple voice flows rather than to an undifferentiated amount of voice.

Description: In this study of the impact of protests against Walmart (a first entrant) on Target (a second entrant) from 1998 to 2008 in U.S. geographic markets, we develop and test a theory of information spillovers from protests against corporations proposing to enter a new market. We argue that the number of protests directed against a first entrant is a noisy signal for the second entrant because such protests are likely to be dominated by protest-prone activists and so do not reflect the sentiments of the community. The second entrant is likely to discount protests against the first entrant that are led by protest-prone activists and rely instead on protests led by local, decentralized activists as indicative of a community’s preferences. We argue that the second entrant differentiates between protests against the first-entrant firm and the organizational form, and discounts protests against a specific firm but not those against the form (e.g., big-box stores). Further, the second entrant is likely to rely on the reaction of the first entrant as an indication of the meaning of the protest. Finally, all of these signaling effects will be stronger in markets in which the second entrant has no experience and so lacks local knowledge. The study provides broad support for our arguments.

Description: Research on group creativity has concentrated on explaining how the group context influences idea generation and has conceptualized the evaluation of creative ideas as a process of convergent decision making that takes place after ideas are generated to improve the quality of the group’s creative output. We challenge this view by exploring the situated nature of evaluations that occur throughout the creative process. We present an inductive qualitative process analysis of four U.S. healthcare policy groups tasked with producing creative output in the form of policy recommendations to a federal agency. Results show four modes of group interaction, each with a distinct form of evaluation: brainstorming without evaluation, sequential interactions in which one idea was generated and evaluated, parallel interactions in which several ideas were generated and evaluated, and iterative interactions in which the group evaluated several ideas in reference to the group’s goals. Two of the groups in our study followed an evaluation-centered sequence that began with evaluating a small set of ideas. Surprisingly, doing so did not impede the groups’ creativity. To explain this, we develop an alternative conceptualization of evaluation as a generative process that shapes and guides collective creativity.

Description: This paper explores the extent to which firms targeted by consumer boycotts strategically react to defend their public image by using prosocial claims: expressions of the organization’s commitment to socially acceptable norms, beliefs, and activities. We argue that prosocial claims operate as an impression management tactic meant to protect targeted firms by diluting the negative media attention attracted by the boycott. We test our hypotheses using a sample of 221 boycotts announced between 1990 and 2005. Results suggest that boycotted firms do significantly increase their prosocial claims activity after a boycott is announced. Firms are likely to react with a larger increase in prosocial claims when the boycott is more threatening (it receives more media attention), when the firm has a higher reputation, or when the firm engaged in more prosocial claims before the boycott. We demonstrate that firms fall back on their established impression management strategies when they face a reputational threat and will increase these previously perfected performances as the threat increases. In this way, the severity of a threat positively moderates the relationship between a firm’s prior performance repertoire and future performance repertoire, a mechanism we refer to as "threat amplification." When an organization with high reputational standing has bolstered its position by using prosocial claims in its past performance repertoire, however, it will perceive itself to be shielded from movement attacks, decreasing the likelihood of any defensive response, a mechanism we call "buffering." Our findings contribute to impression management by exploring the use of impression management in response to a movement attack and highlighting the important role that a firm’s pre-threat positioning plays in its response to an image threat.

Description: We examine the influence of competitive spillovers among subsidiaries on the design of headquarters-subsidiary relationships. We focus on multi-industry firms and competitive spillovers across markets, hypothesizing that these firms delegate most business-level decisions to subsidiaries but adapt to multimarket competition by limiting their subsidiaries’ incentive and ability to make resource commitments by constraining the scope of decision rights and the available resources, a phenomenon that we refer to as "constrained delegation." Accordingly, the extent of multimarket contact in a given market (1) is associated with lower subsidiary discretion in decisions pertaining to resource commitments and (2) counteracts the tendency of internal capital markets to provide financial resources to subsidiaries that have a low market share or operate in high-growth industries. Results of analyses, based on the population of majority-owned subsidiaries of groups operating in France between 1997 and 2004, support the predictions. We also found that multimarket contact is associated with a subsidiary’s being even less competitively aggressive when the organization’s design imposes more constraints on the subsidiary’s resource allocations. This study, one of the first to explore empirically the impact of negative spillovers within the firm on organization design in multiunit firms, suggests that organizational choices are endogenous to the competitive context.

Description: Although the benefits of high status are well documented, in this research we explore the potential hazards associated with high status that have increasingly been implicated in recent studies. Organizational research suggests two such hazards: (1) opportunistic behaviors by elites that eventually lead to sanctions and (2) the targeting of elites by various audiences such that they are held more accountable than their lower-status counterparts for similar offenses. Our objective was to disentangle these two explanations in the context of an organizational scandal involving the Members of the British Parliament (MPs) whose annual expense claims were unexpectedly exposed in a well-known 2009 scandal. We find that high-status MPs were not more likely to abuse the expense system than were lower-status MPs, but they were more likely to be targeted by the press and voters for their inappropriate expense claims. As a consequence, high-status MPs were significantly more likely than non-elite MPs to exit Parliament when they had high levels of inappropriate expense claims. Elite MPs who were not implicated in the scandal, however, were far more likely to remain in Parliament than their lower-status counterparts. Our results also suggest that media coverage of the expense incident by British newspapers played a significant role in shaping social reactions to the scandal.