Category Archives: Original Article

Technological Uncertainty, Value Appropriation, and Dense Versus Dispersed Patent Portfolios

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Abstract

Patented inventions play an important role in generating firm value, with conventional wisdom generally suggesting that dense patent portfolios promote greater value. We challenge the universality of this assumption and argue that the relationship between patent portfolio density and firm value depends on factors reflecting other key invention-related conditions and choices. Specifically, we hypothesize that dispersed patent portfolios are positively associated with firm value when technology inputs are young and the technology is far from the locus of inventive activity, and dense portfolios are positively associated with firm value under the opposite conditions. We examine these relationships using a stock return response model, finding support for our hypotheses based on data collected from firms patenting in the chemicals technology area.

Passing the Torch: Exploring how Tradition and Innovation Influence Coopetition among Street Performers

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Abstract

Understanding how and why firms concurrently compete and cooperate with each other represents an important and growing area of study. This research centres on how firms engage in coopetition. However, this does not account for how much of the modern world works – independently. Through an inductive field study of 80 New Orleans street performers, we explore how and why independent creative workers engage in competition and/or cooperation. In so doing, we advance theory on coopetition by extending its explanations to the individual level. We theorize the well-established nature of creative industries encourages the belief in the need for deviating from the status quo by engaging in creativity and innovation, which we refer to as a trailblazing mindset. At the same time, we find that the accumulation of a long history of creative practices also fosters traditions. We theorize that tradition encourages the belief in the need to act as vested actors, or custodians, by passing work traditions from one generation to the next to allow the tradition to endure, which we refer to as the torchbearing mindset. Thus, torchbearing fosters cooperation while trailblazing fosters competition.

Should we be Conservative or Aggressive? SME Managers’ Responses in a Crisis and Long‐Term Firm Survival

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Abstract

Past research shows that during a crisis, managers of publicly-held firms often adopt a ‘conservative’ approach focused on protecting the existing core of their firms by decreasing investments and hoarding precautionary cash. By doing so, managers decrease firms’ short-term failure rates. However, the literature says little about how managers of private, Small and Medium-sized Enterprises (SMEs) (should) act during a crisis. To address this question, we draw on the Conservation of Resources (COR) theory. Empirically, we use longitudinal data from 38,885 Belgian SMEs’ responses to the 2008–09 financial crisis. Consistent with our expectations, we find that an ‘aggressive’ approach focused on resource investment during the crisis decreases SMEs’ failure rates for up to a decade after the crisis. Further, younger SMEs, and especially those in industries with more growth opportunities, adopt aggressive approaches. Overall, the results show that SMEs need to be aggressive during the crisis to ensure their long-term survival. Moreover, contrary to current depictions of younger SMEs as being vulnerable, and especially so in crises, our evidence highlights that they are surprisingly aggressive when being confronted with a crisis, relative to their older peers.

Trust in Difficult People: A Social Network Perspective

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Abstract

We all know people we find difficult to deal with. Some we trust despite major past transgressions, others we do not. What explains the difference? Rather than looking for explanations inside the trustor–trustee dyad, we focus on the embedding social structure. Our argument focuses on two features: network closure around the trustor and the embeddedness of the difficult contact. We test and confirm our argument using data from 384 Chinese managers. Our results show that managers who cite colleagues as difficult following a major transgression report higher trust the more the difficult contact is embedded within the manager's network. The effect is smaller (larger) if the manager is surrounded by a rather closed (open) social network. At a practical level, our study helps distinguish between social situations that facilitate trust and those that impede trust once interpersonal conflicts have tainted a relationship.

Organizational Goals, Outcomes, and the Assessment of Performance: Reconceptualizing Success in Management Studies

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Abstract

We revisit the study of organizational goals, outcomes, and assessment of performance that together define the process leading to ‘success’. We begin by conducting a systematic review of existing research which allows us to develop an integrative framework discussing this large body of work. We then describe contemporary research examples in light of our proposed framework. We close by proposing four new areas to continue to advance the field: reconceptualizing performance (and success) as achievement of goals; diversity of goal systems in research designs, and their relationship with the purpose of an organization; multilevel and temporal dynamics; and governance of goal setting. Overall, our efforts inform future research on organizational success in the context of our new societal challenges and accomplish the intriguing task of re-defining success in management studies.

From Family Director Pathos to Board Ethos: Managing Multiple Role Identity Struggles in the Boardroom of Family Firms

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Abstract

The literature indicates that the board of directors exists to provide resources and strategic direction (service task) and monitor top managers (control task), often tending to overgeneralize board tasks. Using a unique sample of 36 elite family firm directors having served on 615 boards with an aggregate 1447 years’ experience, and integrating interview and secondary data with observations, we capture how the multiple role identity struggles experienced by family directors are managed in the board. Our data indicate that effective boards resolve multiple role identity struggles (i.e., family director ‘pathos’) through the mechanisms that boardroom structural forces trigger and the resulting bridge and buffer tasks enacted (i.e., board ‘ethos’), going beyond the traditional service and control tasks.

LMXSC Elicits Hubristic Pride and Social Undermining in Individuals with High Trait Dominance

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Abstract

A consensus in the literature has converged on the idea that one's perceptions of being treated better by a leader (compared with one's coworkers' treatment by the same leader) motivate prosocial behaviour. Drawing on current theory of hubristic pride and its evolutionary role in status maintenance, we challenge this consensus by proposing that favourable, downward social comparisons of leader-member exchange (i.e., leader-member exchange social comparisons; LMXSC) can also lead to social undermining. Specifically, we argue that, in individuals with high trait dominance, LMXSC triggers hubristic pride, which, in turn, motivates social undermining. Results from two experiments and a longitudinal field study support this idea. In sum, our work shifts the consensus in LMXSC theory by showing when and why high LMXSC can motivate negative coworker-directed behaviour, and it also offers practical help to organizational leaders dealing with the ethical decision of if, and when, to preferentially treat individual team members.

Micro Entry Theory: Understanding the Drivers and Effects of the Entry of Micro Players in the Context of Digital Platforms

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Abstract

Digital platforms have facilitated the entry into the market of micro players, a subcategory of specialists formed by individuals offering products and services on a very small scale. This study builds on previous research on micro players' entry, to formalize, validate, and expand a theory of micro entry that helps to explain the market dynamics when micro players use digital platforms to enter the market. We (1) examine how macro-economic conditions influence the entry of micro players and specialists and (2) investigate the differential effects of the entry of micro players and specialists on the generalists' performance. Our setting is the accommodation industry in Spain, in which generalists are represented by dominant hotels and micro players and specialists by occasional and regular operators who entered the market through Airbnb. We find that the entry of micro players into the market through digital platforms is driven by high unemployment rates and platform legitimacy, factors that do not similarly influence the entry of specialists. Additionally, the results show that the entry of specialists decreases generalists' performance, while micro players' entry is complementary.

Harm, Then Good? How Work Meaningfulness Emerges from Doing Harm

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Abstract

Meaningful work has been identified as an important antecedent of an array of positive outcomes for both workers and their employers. However, many work roles involve harming others, an experience that has previously been linked to negative outcomes such as dissatisfaction and burnout. How does meaningfulness emerge when one's work includes such challenging circumstances? Drawing on interviews and observations in the veterinary industry, we elucidate new theory about the relationship between harm-doing and the experience of meaningful work. Workers' interpretations of the worthiness of the harm, as well as the types of actions they take to remediate it, influence whether their involvement in harm-doing episodes undermines or heightens their sense of meaningfulness. We further detail how dimensions of harm-doing episodes shape opportunities for remediation, as well as whether the episodes ‘stick’ in workers' memories and hence figure into their ongoing, holistic accounts of work meaningfulness. Based on these findings, we introduce a novel ‘work-bounded, worker-centric’ view of meaningfulness that incorporates both the nature of work and workers' interpretations of it. Our research has implications for the work meaningfulness and workplace harm literatures, as well as for the many individuals whose work involves doing harm.

Non‐executive Employee Ownership and Target Selection in High‐Tech Mergers and Acquisitions

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Abstract

The quest to build and expand a firm's human capital is a key driver for mergers and acquisitions (M&As), but acquiring firms often face the threat of losing their targets' key employees in the post-M&A period. This is particularly true for high-tech M&As, as human capital is especially important in high-tech industries. Because non-executive employee ownership can incentivize employees to invest in firm-specific human capital, reducing the likelihood that employees will leave, we argue that when screening for potential M&A targets, acquiring firms are more likely to target companies with higher levels of employee ownership. We also argue that the screening role of employee ownership in M&A target selection will be stronger when targets have higher R&D intensity but weaker when targets treat their employees better. Using a sample of 26,137 firm-year observations, we find support for our arguments. Findings from this study contribute to M&A research by highlighting the importance of non-executive employee ownership as a screen for human capital retention in M&A target selection.