Category Archives: Original Article

Investors’ Reactions to Alliance‐Engendered Acquisition Ambiguity: Evidence from U.S. Technology Deals

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Abstract

We study how, when target firms are engaged in strategic alliances, the ambiguity surrounding an acquisition's anticipated synergies influences investors’ reactions to announcements of acquisitions. Drawing on behavioural finance research and the resource redeployment literature, we predict that investors’ limited access to the information encoded in the target firms’ alliances and the uncertainty around the re-deployability of their embedded resources generate a negative relationship between the number of target alliances and investors’ reactions. We also hypothesize that this negative effect is exacerbated when the alliances involve foreign alliance partners but is attenuated when acquirers are experienced in acquiring targets with alliances. Analysis of a large sample of US technology acquisitions supports all our hypotheses. We contribute to management research by offering a viable explanation of investors’ reactions to the announcement of major corporate events, such as acquisitions, whose structural characteristics deny investors material information about these events’ potential to create value.

Corporate Social Performance, Legitimacy, and the Choice of Foreign Partners by State‐Controlled Entities in the Global Extractive Industries

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Abstract

We study the outcome of the decision of a state-controlled entity (SCE) to form an international joint venture (IJV) with a foreign partner in the SCE's country. Focusing on the perspective of the host SCE, we propose that in its search for a partner, the SCE will evaluate the sociopolitical legitimacy effect of a candidate partner's corporate social performance (CSP). Thereby, the SCE will consider CSP an important selection criterion because of its legitimacy effect on the selection decision, the SCE, the IJV, and the host state in the eyes of salient local and international stakeholders. Moreover, the legitimacy effect of a candidate partner's CSP will further influence the decision outcome through its interaction with the level of corruption in the candidate partner's home country, the extant sociopolitical legitimacy of the host state, and the number of neighbouring countries of the host country participating in international multi-stakeholder initiatives. We find support for our hypotheses using a novel sample of extractive industries IJVs between SCEs from 48 countries and 203 foreign partners from 22 countries for the period 2000–15.

The Dent in the Floor: Ecological Knowing in the Skilful Performance of Work

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Abstract

This paper draws on a phenomenological perspective to explore how people develop and enact skill in work at through ecological knowing – a sensuous form of knowing in one's being embedded in and across place and time. In doing so, we abductively interweave the work of Finnish architect Juhani Pallasmaa and British anthropologist Tim Ingold with an empirical study of two industrial museums and two contemporary illustrations of choral conducting and motion capture performance. Our contribution is threefold: first, we expand theories of knowledge and corporeality by theorizing ecological knowing as encompassing emplaced wisdom and embodied skill – thus elevating embedded and embodied human agency in contrast to studies that focus on the body, skill, and knowledge as objects. Secondly, we present an alternative way of understanding how expertise develops and is enacted in work activities. Finally, we offer methodological resources, currently underutilized in management studies, for studying this sensorial form of knowing in a way that is consistent with its underlying phenomenological commitments.

Emergence of Hybrid CSR Models as a Conflict‐Driven Communicative Process in a Nordic Welfare State

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Abstract

This paper offers an understanding of how hybrid models of corporate social responsibility (CSR) – models combining society-centric mandatory (implicit) and business-centric voluntary (explicit) approaches to CSR – are communicatively constructed through institutional struggles over the roles and responsibilities of business in society, in the context of a Nordic welfare state. We develop a model of hybridization as a dialectical process of communicative activity, framing and counter-framing, in which conflict and contestation over normative understandings about CSR drive the process. The model explains the emergence of hybrid models of CSR in terms of gradually evolving issue development and frame changes that are driven by discursive struggles over moral obligations of business in society, appropriate configuration of legitimacy relationships, and appropriate institutional arrangements for CSR governance. In contrast to prevailing accounts, which tend to theorize hybridization as resulting from isomorphic, mimetic, and normative pressures, our account explicitly attends to the politics of hybridization.

Overconfident CEOs in Dire Straits: How Incumbent and Successor CEOs’ Overconfidence Affects Firm Turnaround Performance

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Abstract

As a well-studied executive bias, CEO overconfidence usually has negative connotations – although empirical evidence of its performance effects remains inconclusive. By theorizing on CEO overconfidence in a turnaround situation, we propose that CEO overconfidence can either help or hinder turnaround performance, depending on whether the overconfident CEO is the incumbent who steered the firm into dire straits, or a successor hired during decline. Our empirical findings suggest that overconfidence in an incumbent CEO damages turnaround performance; replacing overconfident incumbents improves turnaround performance and overconfident successors hired during decline enhance turnaround performance. Exploratory post-hoc analyses further suggest that these effects are driven by the divergent ways in which overconfidence biases incumbent and successor CEOs’ assessment of organizational decline. Comprehensive implications for research and practice on CEO overconfidence are discussed.

Coordinated Interdependence: How Patterning Governs Flexibility in a Routine Cluster

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Abstract

Adopting a routine dynamics perspective, we use an ethnography of agile project work to explore how emergent and effortful performances of single routines influence dynamics within a cluster of interdependent routines. We find that emergent accomplishments in single routines constrain cluster-level dynamics, thereby inhibiting flexibility. However, effortful accomplishments in single routines facilitate cluster-level dynamics, thereby enhancing flexibility. We make three contributions to the literature on routine dynamics and process studies. First, we show how coordinated interdependence based on chaining, orchestrating, and reflecting creates and maintains clusters of routines, and uncoordinated interdependence based on stumbling, irritating, and detaining endangers clusters of routines. Second, we analyse how cluster-level flexibility results from maintaining a stable pattern across routines, despite pressures to vary routines. Finally, our findings contribute to practice and process studies by analysing interdependence and coordination together as ‘(un)coordinated interdependence’.

Do Hybrid Goals Pay off? Social and Economic Goals in Academic Spin‐Offs

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Abstract

New ventures often pursue both economic and social goals, known as goal hybridity. Yet, we know less about how organizational goal hybridity influences the performance and governance of new ventures. Goal hybridity is common among academic spin-offs (ASOs) seeking to commercialize scientific research from universities. We hypothesize that ASOs’ goal hybridity influences their subsequent performance and their governance structure. We also hypothesize that ASOs who enrol multiple stakeholders with investment goals aligned with their hybrid goals outperform the ASOs who do not. By combining several data sources, we follow Norwegian ASOs longitudinally and find that goal hybridity explains their subsequent performance differences, such that ASOs relying on both economic and social aspects of their business when formulating their goals outperform those who rely purely on economic or social goals. We also find that ASOs with hybrid goals outperform when they enrol multiple stakeholders who are aligned with their hybrid goals. Our findings have implications for theorizing in hybridity, stakeholder enrolment, and the organizational goals literatures. We also provide a fuller understanding on performance heterogeneity of ASOs, and we offer a set of practice and policy implications to academic entrepreneurship and public-private partnership literatures.

Competitive Actions under Analyst Pressure: The Role of CEO Time Horizons

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Abstract

Leveraging upper echelons theory and the Awareness-Motivation-Capability (AMC) framework of competitive dynamics, we investigate the moderating influence of CEO time horizons on the relationship between negative analyst recommendations and the temporal patterning of competitive actions. We argue that negative recommendations are associated with less intensity but greater irregularity in competitive actions. Moreover, CEO time horizons weaken these effects, such that CEOs with longer time horizons are less influenced by such recommendations. Results from a longitudinal study of 296 CEOs from 2004 to 2015 support these arguments. Our study contributes by underscoring CEO time horizon as a critical contingency in studying the impact of analyst pressures.

Smart Tech is all Around us – Bridging Employee Vulnerability with Organizational Active Trust‐Building

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Abstract

Public and academic opinion remains divided regarding the benefits and pitfalls of datafication technology in organizations, particularly regarding their impact on employees. Taking a dual-process perspective on trust, we propose that datafication technology can create small, erratic surprises in the workplace that highlight employee vulnerability and increase employees’ reliance on the systematic processing of trust. We argue that these surprises precipitate a phase in the employment relationship in which employees more actively weigh trust-related cues, and the employer should therefore engage in active trust management to protect and strengthen the relationship. Our paper develops a framework of symbolic and substantive strategies to guide organizations’ active trust management efforts to (re-)create situational normality, root goodwill intentions, and enable a more balanced interdependence between the organization and its employees. We discuss the implications of our paper for reconciling competing narratives about the future of work and for developing an understanding of trust processes.

How do Status Differentials Affect the Unplanned Dissolution of Alliances?

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Abstract

Previous research suggests that firms tend to form alliances with counterparts of similar status. However, it remains unclear whether the principle of status homophily helps or hinders the alliance process. In this study, we contend that status differentials, rather than status similarity, can reduce the likelihood of the unplanned dissolution of an alliance, as a clearer order of status helps to resolve interfirm discrepancies and conflicts during collaborative processes. The results based on a sample of joint ventures in the US computer and telecommunications industries support our arguments. Further, we find that the effect of status differentials on the unplanned dissolution of alliances is strengthened when the high-status firm performs better than the low-status firm and when the two firms are from more related industries. Our findings call into question the emphasis on status homophily in the management of alliances following their formation.