The Influence of Decision,Environmental and Firm Characteristics on the Rationality of Strategic Decision‐Making*

abstract This paper develops an integrated model of strategic decision‐making rationality. The model is informed by three perspectives that respectively identify decision, environmental and firm characteristics as influences on the rationality of decision processes. The results of a study in Egypt indicate that the rationality of strategic decision‐making processes is shaped by variables identified by all three perspectives, and that such decision processes cannot adequately be modelled in terms of a single perspective only. However, the study also suggests that the three perspectives do not contribute in equal measure to explaining strategic decision making, and that the national setting is relevant for the extent to which strategic decision‐makers take account of environmental characteristics. The location of the investigation in Egypt highlights some deviations from previous research that could be attributed to nation‐specific factors, both cultural and institutional.     

Why a Multinational Firm Chooses Expatriates: Integrating Resource‐Based,Agency and Transaction Costs Perspectives*

abstract This paper develops an integrative organizational economics framework explaining and predicting multinational firms' managerial resource deployments based on resource‐based, agency, and transaction costs theories. Our empirical findings suggest that the governance decision for managerial services of multinational firms is influenced not only by the comparative capabilities of managers, but also by the economic costs to the firm of influencing the behaviours of managers through managerial contracting.     

Co‐Authorship in Management and Organizational Studies: An Empirical and Network Analysis*

In recent decades there has been growing interest in the nature and scale of scientific collaboration. Studies into co‐authorship have taken two different approaches. The first one attempts to analyse the reasons why authors collaborate and the consequences of such decision ( Laband and Tollison, 2000 ). The second approach is based on the idea that co‐authorship creates a social network of researchers ( Barabási et al., 2002 ; Moody, 2004 ; Newman, 2001 ). In this study we have carried out an exploratory analysis of co‐authorships in the field of management from the two aforementioned approaches. The results obtained show a growing tendency of the co‐authored papers in the field of management, similar to what can be observed in other disciplines. Our study analyses some of the underpinning factors, which have been highlighted in the literature, explaining this tendency. Thus, the progressive quantitative character of research and the influence of the collaboration on the articles' impact are enhanced. The network analysis permits the exploration of the peculiarities of the management in comparison with other fields of knowledge, as well as the existing linkages between the most central and prominent authors within this discipline.     

TMT Potency and Strategic Decision‐Making in High Technology Firms

Confidence is necessary for effective top management team (TMT) functioning, however overconfidence or hubris has been associated with poor outcomes. Researchers have struggled to untangle questions of how much confidence is functional and whether there are different forms of confidence. Using data from a field study of 54 public high‐technology firms we provide a richer understanding of the complex influence of one type of confidence, TMT potency on strategic decision‐making. Specifically, using a field study of TMTs of 54 public high technology firms we find potency at least partially mediates the relationship between TMT experience and knowledge, TMT interaction process, and strategic decision speed. Post‐hoc analysis of high potency teams suggests that potency may be either functional – leading to high performance, or dysfunctional – resulting in low performance. Potency appears to be a multi‐faceted construct consisting of both level and domain boundedness. We offer propositions that begin to untangle the origins of functional versus dysfunctional potency or hubris.     

Stakeholders’ Attributes,Behaviors, and Decision‐Making Strategies in Construction Projects: Importance and Correlations in Practice

Project managers need to make decisions on how to balance competing claims between the different stakeholders in projects. Previous studies have suggested that the choice of decision‐making strategies is highly related to stakeholders’ attributes and behaviors in practice; however, limited studies have been conducted in the construction field to analyze the importance of stakeholders’ attributes, behaviors, and decision‐making strategies, and validate the correlations between the factors and decision‐making strategies. To analyze the underlying meanings of stakeholders’ attributes, behaviors, and decision‐making strategies from the practitioners’ perspectives, and indicate the influence of stakeholder‐related factors on decision‐making strategies, an interview, questionnaire survey, and case study were adopted. Empirical studies suggest that three stakeholder attributes (power, urgency, and proximity), and four types of stakeholder behaviors (cooperative potential, competitive threat, opposite position, and neutral attitude) are perceived by the practitioners as important to dealing with stakeholder claims. Depending on stakeholders’ salience levels and behavior types, strategies of defense, compromise, or concession/adaptation are chosen and applied by project managers in practice. The findings can help project managers to proactively understand stakeholder performance, place emphasis on particular attributes and behaviors, and formulate appropriate schemes under different circumstances.     

Socio‐Emotional Wealth Separation and Decision‐Making Quality in Family Firm TMTs: The Moderating Role of Psychological Safety

Socio‐emotional wealth (SEW), defined as the firm's non‐financial aspects meeting the family's affective needs, has become the dominant paradigm in family firm research. Recent debate acknowledges potential SEW heterogeneity within family firms. This study considers the effect of polarizing opinions on SEW preservation among TMT members as a source of separation in the TMT. More concretely, we study the effect of SEW separation on TMT decision‐making quality, while taking into consideration behavioural integration as a team process and psychological safety as a team context. Based on a unique multiple respondent sample of 300 managers from 55 Belgian private family firms, we find that behavioural integration mediates the negative effect of SEW separation on TMT decision‐making quality. In addition, we find that the negative effect of SEW separation on behavioural integration is mitigated by psychological safety and even turns into a positive effect at high levels of psychological safety.     

The Development of Organizational Social Capital: Attributes of Family Firms*

abstract We develop and extend social capital theory by exploring the creation of organizational social capital within a highly pervasive, yet often overlooked organizational form: family firms. We argue that family firms are unique in that, although they work as a single entity, at least two forms of social capital coexist: the family's and the firm's. We investigate mechanisms that link a family's social capital to the creation of the family firm's social capital and examine how factors underlying the family's social capital affect this creation. Moreover, we identify contingency dimensions that affect these relationships and the potential risks associated with family social capital. Finally, we suggest these insights are generalizable to several other types of organizations with similar characteristics.     

Analysing the Influence of Institutional,Organizational and Interpersonal Forces in Shaping Inter‐Organizational Relations*

abstract Much of the literature on inter‐organizational relations assumes that firms operate as relatively autonomous and cohesive units that are (1) unimpeded by wider institutional norms governing the industry as a whole, and (2) allow little or no role for the boundary spanning agents who oversee and monitor ‘contracts’ on a daily basis. This perspective is not surprising given that so many studies rely solely on questionnaires completed by a single respondent within one or more of the organizations. Nor has there been much recognition of the dynamic interplay between forces at the institutional, organizational and interpersonal levels. In order to address these issues, we propose a framework that explicitly focuses on forces at these three levels, as well as the interplay between them, in order to analyse how and why inter‐organizational relations take the forms they do. We argue that trusting, OCR‐type relations are more likely to be produced and reproduced when there are strong institutional forces promoting common obligations on both parties, and there is a relative mutuality of power relations between the organizations. However, because the contract is maintained by boundary spanning agents, agreed norms at the institutional and organizational levels are a necessary but not sufficient factor for OCR to develop. Conversely, in the absence of these forces, there is less incentive for either organization to establish and maintain close interpersonal relations, and indeed ACR‐type, distant relations may be beneficial for organizations and individuals that wish to dispense with existing contracts.     

The Creativity‐Performance Relationship: How Rewarding Creativity Moderates the Expression of Creativity

Researchers have argued that creativity is intrinsically motivated, and that rewarding creativity can stifle creativity. Using a sample of 310 employees reporting to 50 different supervisors, we instead show that rewarding creativity influences the relationship between creativity and performance by changing the nature of expressed creativity. We do this by examining novelty and usefulness as separate dimensions. High perceived reward enhances the relationship between novelty and performance while diminishing the relationship between usefulness and performance. The moderating effect of reward for creativity on the relationship between creativity and performance was not observed when we operationalized creativity as an integrated, unidimensional construct. © 2015 Wiley Periodicals, Inc.     

The Consultant–Client Relationship: Critical Perspectives on the Management of Organizational Change

The management consultancy industry is attracting more and more attention. The critical literature in particular has questioned how a non-codified body of knowledge like 'consultancy' could become so apparently influential. The answering emphasis has been on the symbolic nature of consultant strategies and consultancy as a powerful system of persuasion. However, an emerging structural perspective has developed a rather different view, focusing on the limits of the industry discourse, and the constraints of a consultancy role defined largely by external forces. While it is useful to contrast the two perspectives – strategic and structural – they can also be viewed as complementary, and indeed a number of writers have been well aware both of the importance of consultant strategies and the context of consultancy work. In particular, they have explored the interaction between consultant and client, and called attention to factors like the countervailing power of client organizations and the uncertainty of the management task. The paper aims to contribute to this debate and draws on case studies of consultants' role in the management of organizational change – one of clients with considerable market power, and another of interdependency between consultant and client. The point stressed is that the consultancy process contains no 'necessary' structures (which may be implied by pairings such as the dependent client and indispensable consultant, or alternatively the resistant client and vulnerable consultant). Instead the consultant–client relationship is best regarded as part of an overarching managerial structure and a contingent exchange that assumes a variety of forms.     

Resources,Knowledge and Influence: The Organizational Effects of Interorganizational Collaboration*

ABSTRACT Inter‐organizational collaboration has been linked to a range of important outcomes for collaborating organizations. The strategy literature emphasizes the way in which collaboration between organizations results in the sharing of critical resources and facilitates knowledge transfer. The learning literature argues that collaboration not only transfers existing knowledge among organizations, but also facilitates the creation of new knowledge and produce synergistic solutions. Finally, research on networks and interorganizational politics suggests that collaboration can help organizations achieve a more central and influential position in relation to other organizations. While these effects have been identified and discussed at some length, little attention has been paid to the relationship between them and the nature of the collaborations that produce them. In this paper, we present the results of a qualitative study that examines the relationship between the effects of interorganizational collaboration and the nature of the collaborations that produce them. Based on our study of the collaborative activities of a small, nongovernmental organization (NGO) in Palestine over a four‐year period, we argue that two dimensions of collaboration – embeddedness and involvement – determine the potential of a collaboration to produce one or more of these effects.     

Pharmaceutical Regulation and Innovative Performance: A Decision‐theoretic Model

In this paper, we develop a model of the impact of the drug approval process on the terms of a contract between a pharmaceutical company that requires the services of a contract research organization (CRO) to carry out testing of new drug molecules. Results show that if the equilibrium contract includes a variable payment (royalty), the more effort the CRO gives to create a more accurate result, the more strict the Food and Drug Administration (FDA) approval process. We also find that given the royalty shares in the contract, if the FDA demands more accuracy in results as a condition of approval, then the CRO will generate more accurate results from late‐stage tests. However, greater FDA stringency in the approval process benefits pharmaceutical companies because the greater is FDA stringency, the less is the risk of a drug recall. We also find that in order to employ a CRO in the testing process, the pharmaceutical company's prior probability that the drug is of high quality must be very high. Copyright © 2014 John Wiley & Sons, Ltd.     

The Role of Perceived Organizational Performance in Organizational Identification,Adjustment and Job Performance*

abstract Favourable organizational status and prestige has a substantial role in shaping constituents' attitudes and actions. The status and prestige of an organization is often a reflection of its achievements or performance. In the present study, we investigate the role of organizational performance or achievement (as assessed by organizational members) in evoking employees' identification, adjustment, and job performance. The results of this study indicate that two forms of organizational performance (labelled as perceived social responsibility and development and perceived market and financial performance) are associated with organizational identification. However, when compared to perceived market and financial performance, perceived social responsibility and development had a larger effect on organizational identification, which in turn resulted in enhanced employees' work outcomes – adjustment and job performance.     

Social Structure and Intermediation: Market‐making Strategies in International Exchange*

ABSTRACT Information gaps between markets create opportunities for international trade intermediaries to negotiate cross‐border exchanges. Faced with the prospect of eventually being eliminated from these exchanges, intermediaries must continually search for new opportunities to mediate international exchange. In this paper an original explanation is derived from the core principles of structural hole theory to explain how these market‐making firms operate in the tension found between the inevitable decay of existing exchange relationships and the uncertainty of finding replacement sources of income.     

Overconfidence and Disappointment in Decision‐making under Risk: The Triumph of Hope over Experience

Overconfidence in economic decision‐making is a well‐established phenomenon; however, assessment of its scale and impact are largely absent from the literature. This paper uses Bell's disappointment metric to quantify its impact on individual decision‐makers in a risky investment setting. We are able to quantify the sensitivity of disappointment to overconfidence. We examine disappointment in both deterministic and stochastic models, finding that in the most likely cases, individual investors experience lower disappointment when variance is higher. We are also able to quantify and compare calibration‐based overconfidence and better‐than‐average overconfidence. Contrary to prior research, we find that their magnitudes are the same. Copyright © 2016 John Wiley & Sons, Ltd.     

Social Capital and Organizational Change in High‐Involvement and Traditional Work Organizations

We present new evidence indicating that changing from a traditional human resource management (HRM) environment to an innovative one entails a change not only in formal work practices, but also in the informal networks and patterns of interaction among employees. We focus on differences in the social capital of these workplaces and measure differences in the structure of interactions and information transfer among employees across a sample of manufacturing lines with a common production technology and different HRM systems. We then consider the implications of these differences and show that the change from one form of workplace practices to the other is therefore not just a matter of paying for the direct costs of a new set of HRM practices. Rather, it would involve a disruptive overhaul in the entire network of interactions among all workers at the plant.     

The Effects of Personality Composition and Decision‐making Processes on Change Preferences of Self‐managing Teams

Team decision‐making on organizational and strategic changes is pervasive. Yet, little is known about determinants of teams' change preferences. We analyze how composition with respect to personality traits associated with (pro‐)active behavior (locus of control and type‐A/B behavior) influences self‐managing teams' preferences for the likelihood and magnitude of changes, and whether participative decision‐making and team monitoring as core features of group decision‐making counteract or reinforce change tendencies. Results from a business simulation with 42 teams largely support predictions. Stronger type‐A orientation increases the likelihood of (drastic) changes. Teams dominated by internal locus of control members are highly responsive to performance feedback in their change preferences. Participative decision‐making encourages, whereas team monitoring restricts tendencies towards extreme magnitudes. Copyright © 2011 John Wiley & Sons, Ltd.     

The Failure of the Sport7 TV‐channel: Controversies in a Business Network*

ABSTRACT During 1996, TV viewers in the Netherlands witnessed the rise and fall of Sport7: a dedicated sports TV channel. Apparently, Sport7 did not succeed to become part of the business network of television and sports. This paper describes and explains why the venture failed. It builds on earlier insights from research on the outcomes of joint ventures and the business networks perspective. These insights are combined and utilized within the framework of the theory of social becoming ( Sztompka, 1991 ). As such, for a new venture like Sport7, the outcome depends on the settlement of a number of controversies that arise with the establishment of a new actor in an existing business network. In the case of Sport7, the settlement of these controversies appeared to go against this new venture, ultimately leading to the demise of this new TV channel.     

Social Network Analysis and the Sociology of Economics: Filling a Blind Spot with the Idea of Social Embeddedness

Today, social networks analysis has become a cross‐disciplinary subject with applications in diverse fields of social and economic life. Different network designs provide different opportunities to communicate, to receive information, and to create different structures of cultural capital. Network analysis explores modes and contents of exchanges between different agents when symbols, emotions, or goods and services are exchanged. The message of the article is that social network analysis provides a tool to foster the understanding of social dynamics, which enhances recent debate on a micro‐macro gap and on limitations of the cognitive and explanatory potential of economics.