Category Stretching: Reorienting Research on Categories in Strategy,Entrepreneurship, and Organization Theory

We advocate for more tolerance in the manner we collectively address categories and categorization in our research. Drawing on the prototype view, organizational scholars have provided a ‘disciplining’ framework to explain how category membership shapes, impacts, and limits organizational success. By stretching the existing straightjacket of scholarship on categories, we point to other useful conceptualizations of categories – i.e. the causal‐model and the goal‐based approaches of categorization – and propose that depending on situational circumstances, and beyond a disciplining exercise, categories involve a cognitive test of congruence and a goal satisfying calculus. Unsettling the current consensus about categorical imperatives and market discipline, we suggest also that audiences may tolerate more often than previously thought organizations that blend, span, and stretch categories. We derive implications for research about multi‐category membership and mediation in markets, and suggest ways in which work on the theme of categories in the strategy, entrepreneurship, and managerial cognition literatures can be enriched.     

Categories,Identities, and Cultural Classification: Moving Beyond a Model of Categorical Constraint

Categorization processes have gained currency in organizational theory. Categories are endemic to organizations and markets, serving as touchstones for organizational identity claims and for audience attention, legitimation, and valuation. Durand and Paolella argue for an expansion of current perspectives on categories, particularly that of prototype theory. Although we agree in spirit, we advocate an expansion of their perspective, which seems to focus primarily on the cognitive aspects of categorization and the force of their constraint, particularly at the individual level of analysis. We suggest three revisions to Durand and Paolella's arguments in order to extend the conversation. First, we advocate that categorization processes might usefully be understood by socio‐cultural perspectives that explicitly consider the role of audiences and the embeddedness of categories in wider classification systems. Second, we connect categorization processes to identity formation and maintenance at the levels of both the organization and the market. Third, we move beyond the constraining power of categories to consider their generative capabilities in processes of emergence and change. Overall, we discuss these in the context of organizational identities and cultural classification systems.     

An empirical investigation of environmental performance and the market value of the firm

This paper analyzes the shareholder value effects of environmental performance by measuring the stock market reaction associated with announcements of environmental performance. We examine the market reaction to two categories of environmental performance. The first category includes 417 announcements of Corporate Environmental Initiatives (CEIs) that provide information about self-reported corporate efforts to avoid, mitigate, or offset the environmental impacts of the firm's products, services, or processes. The second category includes 363 announcements of Environmental Awards and Certifications (EACs) that provide information about recognition granted by third-parties specifically for environmental performance. Although the market does not react significantly to the aggregated CEI and EAC announcements, we find statistically significant market reactions for certain CEI and EAC subcategories. Specifically, announcements of philanthropic gifts for environmental causes are associated with significant positive market reaction, voluntary emission reductions are associated with significant negative market reaction, and ISO 14001 certifications are associated with significant positive market reaction. The difference between the market reactions to the CEI and EAC categories is statistically insignificant. Overall, the market is selective in reacting to announcements of environmental performance with certain types of announcements even valued negatively.     

Connecting strategic orientation,innovation strategy,and corporate sustainability: A model for sustainable development through stakeholder engagement

This paper aims to enhance our understanding of the relationship between organizations' strategic orientation (i.e., instrumental, equidistant, and stewardship) and their innovational strategy (i.e., organizational ambidexterity and open innovation), and this relationship's influence on their sustainability performance. We expected organizations' strategic orientation to influence their innovational strategy and exhibit better corporate sustainability. We focused on 12 different multinational organizations in the Eurozone and found that inbound open innovation acts as a driver for corporate sustainability while simultaneously positively enabling organizations to pursue both financial and social initiatives. After suggesting open innovation as a new corporate sustainability antecedent, we only found empirical evidence of inbound open innovation. However, we would suggest that if organizations incorporated outbound open innovation in their strategy, they could likely improve their corporate sustainability. Also, we found that achieving an equidistant or stewardship orientation paves the way for sustainability to become an integral part of an organization's innovational culture and actualizes the organization's strategic behavior. Our findings further contribute to a deeper understanding of organizations' characteristics as their sustainability commitment grows and as they move from an instrumental to a stewardship orientation and implement an open innovational strategy.     

Examining the relations between open innovation climate and job satisfaction with a PLS path model

The paper studies the relations between open innovation climate and job satisfaction, in particular the causal effects of the various dimensions of open innovation climate on different facets of job satisfaction. We assume firms which pursuing open innovation climate will result in higher level of employee job satisfaction. Both open innovation climate and job satisfaction are assumed to be multidimensional constructs (second-order model). Meanwhile the difference caused by employees’ organizational level was also investigated. A partial least squares path model was developed, in which significant effects were discovered. This study provides valuable materials for hoteliers who want to promote open innovation climate in their organizations.     

Beyond Prototypes: Drivers of Market Categorization in Functional Foods and Nanotechnology

We develop a nuanced understanding of what drives producers’ and audiences’ categorization activities throughout market category development. Prior research on market categories assumes prototypical similarity to be the main or even only driver of categorization. Drawing on a comparative, longitudinal case study of the market categories ‘functional foods’ and ‘nanotechnology’ in Finland, we find that evolving perceptions, knowledge, and goals also impact categorization. Furthermore, our analysis uncovers that goal‐based categorization is characteristic for vital market categories, and the lack thereof may mark a waning interest and category decline. Overall, while previous research stresses the role of clear boundaries and knowledge bases for a viable category, we find that overly strict boundaries may constrain category vitality and renewal.     

Combinative Effects of Innovation Types and Organizational Performance: A Longitudinal Study of Service Organizations

Innovation research suggests that innovation types have different attributes, determinants, and effects. This study focuses on consequences of adoption of three types of innovation (service, technological process, and administrative process) in service organizations. Its main thesis is that the impact of innovation on organizational performance depends on compositions of innovation types over time. We examine this proposition by analysing innovative activity in a panel of 428 public service organizations in the UK over four years. Our findings suggest that focus on adopting a specific type of innovation every year is detrimental, consistency in adopting the same composition of innovation types over the years has no effect, and divergence from the industry norm in adopting innovation types could possibly be beneficial to organizational performance. We discuss the implications of these findings for theory and research on innovation types.     

CONSTRUING ORGANIZATIONAL TEXTURE IN YOUNG ENTREPRENEURIAL FIRMS

In a young entrepreneurial firm, two developmental processes are identified. One reflects the emergence of a social network whilst the other reflects the emergence of a task domain. The concept of ‘organizational dialogue’ is introduced to describe the action strategies through which these two processes are connected. The resulting textures may critically be examined to produce ‘process’ knowledge. It is argued that organizational theory can benefit from more work of this kind.     

Policy modes,firms and the natural environment

This paper examines how different environmental policy types differentially impact firms and why firms vary in their responses to such policies. Based on the mechanisms embedded in policy instruments to create incentives for firms to comply, the characteristics of benefits/costs that policies impose on firms and the institutional context in which policy instruments were created and are sustained, the paper identifies five policy categories. These are category I (command and control), category II (market based), category III (mandatory information disclosures), category IV (business–government partnerships) and category V (private voluntary codes). Different policy types often bestow asymmetrical benefits/costs on firms. Some benefits/costs may constitute ‘private/club goods’ while others may constitute ‘public goods’. Drawing insights from public policy literature, the paper argues that firms can be expected to favor policies whose benefits have the characteristics of private/club goods but the costs of public goods. Thus, understanding the nature of benefits/costs (private/club versus public) and the magnitude of their excludability is critical in explaining the variations in firms' responses. To understand how managers perceive the nature of benefits/costs (monetary as well as non‐monetary), the paper draws on theories and perspectives in the business and public policy field. In doing so, the paper examines the ‘demand’ and the ‘supply’ sides as well as the market and non‐market environments of a given policy. Thus, the paper makes a case for a multi‐theoretic approach to understand variations in managerial assessments of benefits/costs, and consequently variations in their responses to various policy types. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.     

Placing Knowledge Management in Context

ABSTRACT We welcome the increased emphasis on practice‐based theories of knowing as an alternative to the more representational, knowledge‐as‐object approaches which have characterised many organizational attempts at ‘knowledge management’ to date. Building on the findings of a short empirical study into the ‘knowledge management’ initiatives of a global software organization, which highlighted the value of rich context in the generation of meaning, we seek to shed some light on a perceived confusion about the nature of organizational context. We show such context to be an inseparable part of knowing, which it creates and by which it is defined, and re‐use Blackler's (1995 ) taxonomy of ‘knowledge types’ to illustrate the relational interaction between shared and deeply personal components of context. Finally, we use these insights to suggest a way in which organizations may be able to derive more value from their investments in internal initiatives by increasing their ability to support knowing – and hence the generation of meaning – amongst their employees.     

CLASSIFYING MANAGERIAL PROBLEMS: AN EMPIRICAL STUDY OF DEFINITIONAL CONTENT*

Problem categories play an important role in the thinking activities of many professionals. Organizational researchers have proposed that managers employ such categories as ‘threat’, ‘opportunity’ and ‘marketing problem’ in their thinking. This paper reports the results of a study of managerial problem categories, based on an analysis of managers’ verbal definitions of a variety of organizational problems. Problem categories previously proposed in the literature were rarely evidenced in these data. However, an iterative, inductive analysis led to the identification of a rich set of managerial problem categories satisfying appropriate criteria.     

Partner Characteristics,Information Asymmetry,and the Signaling Effects of Joint Ventures

We provide theory and evidence regarding the signaling effects of joint venture (JV) announcements. We argue that when a firm characterized by information asymmetry with respect to the stock market announces a JV, the growth opportunities and the quality of resources of the partner provides a signal to investors about the true value of the firm. Our study shows that (i) apart from synergies, JV announcements impact firm value also because of the information they convey about future growth opportunities; and (ii) JVs may not only validate but also ‘invalidate’ the quality of a firm by revealing that it is unable to attract strong partners. Copyright © 2011 John Wiley & Sons, Ltd.     

Agile office work as embodied spatial practice: A spatial perspective on ‘open’ New Work environments

An increasing number of companies transform their traditional office spaces into open work environments, often as part of an effort for working relations to evolve away from rigid and hierarchical structures. Contrary to intentions, recent studies show how open office projects tend to re-produce social hierarchy and norms but say only little about how these socio-spatial structures come into being. In this study, we demonstrate how a workspace designed as ‘open’ is being (re-)produced and negotiated in everyday spatial practices. We investigate this question in an ethnographic research design using the example of office redesign at a German financial service company and from the perspective of social theories of space. First, we develop a critical perspective on the ‘new office’ by demonstrating that office work redesign is a political process. Through a focus on spatial practices of office work, we disclose movement and sound as crucial dimensions in the socio-political construction of ‘agile’ office work and of a social hierarchy in the open office. Second, based on our findings we propose that openness in organizational space, rather than being a design feature of a specific work environment, needs to be understood as a generative social process.     

The antecedents of direct management communication to employees in Mauritius

We measure whether, in a developing country, existence of a ‘hard’ strategic human resource management (SHRM) strategy developed at high organizational levels or one designed to enhance employee knowledge inputs and thereby promote employer–employee interdependence (EEIN) is a stronger antecedent of direct communication to employees. We use data from a comprehensive survey of HR practices in Mauritius, one of Africa's most open and successful economies. We find that both SHRM and EEIN are antecedents, but that the latter is stronger in public organizations and in smaller and older companies. We conclude that EEIN is a significant analytic category for explaining management practices especially in a historic sense in this and possibly other developing country contexts.     

The bounds of entrepreneurship: Inter-organizational relationships in the process of industrial innovation

This paper examines the links between entrepreneurship and innovation in modern business corporations. It extends Alford's idea of ‘diffused entrepreneurship’ to the interrelationships between firms. By drawing upon the literatures of business policy and marketing, it draws attention to the ‘porous’ boundaries of industrial organizations as open systems, and to the need to examine the balance between the part played by individuals within such organizations and that played by innovative organizational processes themselves.     

An Ontological Turn in Categories Research: From Standards of Legitimacy to Evidence of Actuality

In this Counterpoint to Durand and Paolella, we argue that prior work on categories has neglected processes of category emergence and dissolution. In response, we call for studies of categories that focus on how they emerge and fall out of use and on what they come to mean. We call this an ontological turn in categories research because systems of categorization and their associated meanings capture and reflect what societies view as social realities, or ontologies. As a guide to this broad topic, we develop a framework that relates the effects of categories to the familiarity of (1) occasions and motivations for their usage and (2) meanings and ontologies they carry, and we use this framework to elaborate two paths by which previously unfamiliar categories become accepted as elements of common knowledge. These paths jointly inform the recognition front of the emergence question, an understudied problem in organization studies. Finally, we outline two methodologies – set theoretic analysis and network‐based analysis – that offer particular promise for analysing processes of category emergence and dissolution.     

Conformist innovation: an institutional logics perspective on how HR executives construct business school reputations

In this paper, we explore whether Legge’s classic 1970s criticism of human resource (HR) executives as ‘conformist innovators’ is still relevant. Drawing on institutional logics, we analyse HR managers’ rationales for choosing particular university business schools to provide senior executive development. Our mixed-methods study demonstrates that senior HR managers socially construct and enact business school reputations by drawing on strategic rationales. These rationales are embedded in societal, field and organizational logics, especially the extant reputational rankings of international business schools and an ‘ideal’ template of elite business schools. We find that these rationales, and the decisions they evince, tend to confirm the traditional picture of conformist innovation among HR executives. We discuss the implications for the reputation of HR as a profession, their employers and business schools.     

Riding off into the Sunset: Organizational Sensegiving,Shareholder Sensemaking,and Reactions to CEO Retirement

We test hypotheses derived from resource dependence and sensemaking/sensegiving theoretical lenses in the context of CEO succession, focusing on an under‐researched yet prevalent type of executive turnover – CEO retirement. Using event study methodology and a sample of CEO retirements from S&P 1500 firms during the 2003–12 period, we find that, all else equal, shareholders’ perceptions of organizations’ capacity to serve their interests are adversely affected when a retirement related change occurs in the leadership structure. Specifically, in line with resource dependence theory, we find that CEO retirement disclosures typically generate negative abnormal returns. Furthermore, in line with the sensemaking perspective, we find that the magnitude of shareholders’ reactions is contingent on the lexical sensegiving cues contained in the organizational narratives that are released to capital markets via executive retirement announcements. Overall, our theory and results point to CEO retirement events as consequential in the eyes of shareholders, challenging an important assumption of extant succession research. Moreover, they suggest that shareholders’ interpretation of these events is influenced by organizational sensegiving, highlighting the important role of organizational communication around succession events.     

The impact of business innovation modes on SME innovation performance in post-Soviet transition economies: The case of Belarus

This study analyzes the most effective innovation modes (‘science and technology-based innovation’, STI, and ‘doing, using and interacting-based innovation’, DUI) for business innovation performance in the context of post-Soviet Transition Economies (PSTE). Their specificities are expected to influence both their business innovation modes and their impact on innovation output. In particular, we aim at identifying the specificities of PSTE in that the DUI mode alone (and its specific drivers) is more relevant than the STI mode alone (and its drivers). In our hypothesis, this outcome should be even stronger in the context of non-technological types of innovation (e.g. organizational innovation).