Is organizational slack honey or poison? Experimental research based on external investors' perception

Organizational slack is an important topic in the organization literature. The extant research has documented both the positive and the negative attributes of slack. However, regarding the effect of organizational slack on external investors' investment decisions, little is known. Based on insights drawn from the signaling and cognitive bias literature, this study proposed that organizational slack provides a signaling effect for external stakeholders and positively affects their subsequent decision making. We further proposed that external stakeholders are subject to the influence of cognitive bias and that the strength of the positive effect of slack is contingent on the context of the organization being a state-owned or a private firm. An experimental research design was used to test these hypotheses. Consistent with our predictions, we found that organizational slack has a positive signaling effect on external investors' investment decisions and that this positive effect is weaker in state-owned firms than in private firms. The contributions and implications of this study are also discussed.     

Exploring the Role of CSR in the Organizational Identity of Hospitality Companies: A Case from the Spanish Tourism Industry

Recently, organizational identity is being given more attention than ever before in the business world. This notion has grown substantially in importance in the hospitality industry. Facing increased competition, hospitality companies are driven to project a positive image to their stakeholders. Therefore, these organizations have begun to develop new organizational identity programs as part of their strategies to achieve their desired identities. This study analyzes the role of corporate social responsibility in the definition of the Organizational Identity of these organizations, employing a qualitative research methodology based on an illustrative case study. Particularly, the authors analyze the case of Meliá Hotels International, a leading hotel company in Spain with a presence in 27 countries. The findings indicate that the company has formally integrated CSR into its strategy to align its actual identity with its desired and conceived identity in view of the critics in its local community. Moreover, the interest of the firm toward its stakeholders suggests that the company understands its conceived identity as an important link in understanding its organizational identity. This paper demonstrates that firm’s organizational identity is a set of several elements. When analyzing Meliá Hotels International’s identity, we see that the firm defines this concept as that which is most central, enduring, and distinctive about the organization. In this sense, the company appears to follow the vision-driven approach by referring to the organizational mission and vision statements, organizational philosophy, and core values as the basis of organizational identity.     

Outside Board Members in High Tech Start-ups

Board composition in large organizations has been subject to much empirical research, however, little attention has been focused on board composition in start-ups, and more specifically high tech start-ups. This lack of research is surprising given that many high tech start-ups have multiple equity stakeholders such as venture capitalists or public research organizations, such as universities. Given that high tech start-ups are commonly resource-poor these external stakeholders may play an important role in accessing critical external resources. Drawing on agency theory, resource dependence theory and social network theory we examine the tensions that exist between the founding team and external equity stakeholders in determining the presence of outside board members. In particular we focus on whether or not the outside board members have either complementary or substitute human capital to the founding team. We test our model on a sample of 140 high tech start-ups in Flanders. Our results indicate that high tech start-ups with a public research organization as an external equity stakeholder are more likely to develop boards with outside board members with complementary skills to the founding team.      

Superstars as Drivers of Organizational Identification: Empirical Findings from Professional Soccer

This paper examines the effect of superstars on external stakeholders’ organizational identification through the lens of sport. Drawing on social identity theory and the concept of organizational identification, as well as on role model theories and superstar economics, several hypotheses are developed regarding the influence of soccer stars on their fans’ degree of team identification. Using a proprietary data set that combines archival data on professional German soccer players and clubs with survey data on more than 1,400 soccer fans, this study finds evidence for a positive effect of superstar characteristics and role model perception. Moreover, it is found that players who qualify for the definition of a superstar are more important to fans of established teams than to fans of unsuccessful teams. The player's club tenure, however, seems to have no influence on fans’ team identification. It is further argued that the effect of soccer stars on their fans is comparable to that of executives on external stakeholders, and hence, the results are applied to the business domain. The results of this study contribute to existing research by extending the list of personnel‐related determinants of organizational identification.     

Corporate communication, ethics, and operational identity: a case study of Benetton

This article investigates conceptual and strategic relationships between corporate identity, organizational identity and ethics, utilizing the Benetton Corporation as an illustrative case study. Although much attention has been given to visual aspects of Benetton's renowned ethical brand building efforts, few studies have looked at how Benetton's employees, retail environments and trade events express ethical aspects of their well-known corporate identity. A multi-method case study, including interviews at retail outlets and trade events, sheds light on several important yet under-studied components of corporate identity, including stakeholders such as retail managers and contract employees. Analysis of Benetton's operations revealed disconnection and inconsistency, as well as a failure to communicate ethical values and socially responsible attributes throughout organizational identity. Operational identity emerged as a useful complement to models of corporate identity. We demonstrate the way in which organizations may fail to capitalize on positive aspects of their organizational identity by neglecting their operational identity.     

Caught in a communicative catch-22? Translating the notion of CSR as shared value creation in a Danish CSR frontrunner

There is a growing interest in how the notion of corporate social responsibility (CSR) as shared value creation is translated in Scandinavia. However, current research seems to disregard that the specific institutional context is ambiguous, enabling the organization, and its internal stakeholders to translate the institutional logics into contradictory meanings of CSR as shared value creation. Building on the institutional logics perspective and the metaphor of translation, and framed within a case study of a Danish CSR frontrunner, this paper explores how the notion of CSR as shared value creation is translated at both the organizational and individual level through discourse. The study shows that the organization and its internal stakeholders employ different strategies to reconcile the institutional logics of ethics and economy, suggesting that the translation processes are a complex communicative matter of continuously balancing the contradictory institutional logics to maintain legitimacy in the eyes of external stakeholders.     

Reporting Self-Made Errors: The Impact of Organizational Error-Management Climate and Error Type

We study how an organization’s error-management climate affects organizational members’ beliefs about other members’ willingness to report errors that they discover when chance of error detection by superiors and others is extremely low. An error-management climate, as a component of the organizational climate, is said to be “high” when errors are accepted as part of everyday life as long as they are learned from and not repeated. Alternatively, the error-management climate is said to be an “error averse” climate when discovery of errors invokes the laying of blame on those admitting to or found committing errors. We examine the effects of this error-management climate in a professional services environment where uncorrected errors may have severe consequences and discovery of work errors is crucial for organizational success. We find that error-management climate affects organizational members’ beliefs about what other members will report about discovered self-made errors, with a high error-management (versus error averse) climate leading to greater reporting willingness. We also find a significant interaction with a key contextual variable, error type (conceptual or calculation), that suggests the effect is more significant for conceptual errors than calculation errors. Our findings suggest that an organization’s error-management climate is an important factor in promoting ethical behavior of employees, especially junior employees, carrying out routine tasks whose failure to report errors discovered incidental to those tasks may have severe implications for their organizations.     

The effects of mentoring on salesperson commitment

This paper examines the impact of having a mentor on mentoree affective, continuance and normative commitment to the organization and occupation. Hypotheses are developed comparing salespeople with and without mentors, and mentorees with mentors inside and outside of the organization. Data was collected from a national sample of salespeople. The results indicate that having a mentor is positively associated with mentoree affective and normative organizational commitment, and affective, continuance and normative occupational commitment. Results also indicate that organizational mentors, as opposed to external mentors, are more strongly associated with mentoree affective and normative organizational commitment. Finally, organizational mentors do not have a greater impact on the facets of mentoree occupational commitment than mentors outside of the organization.     

Promoting Ethics Through Ethics Officers: A Proposed Profile and an Application

We present an ideal profile of an emerging organizational function: the Ethics Officer. We argue that the main contribution of an EO is to provide management with a broad perspective of the organization's stakeholders – one that emphasizes the interests of all stakeholders, including those not affiliated with the dominant coalitions in the organization. In order to avoid turning the EO into a rubber stamp for management activities, we suggest that certain conditions prevail to enable the person in this position to exercise impartial, independent judgment. These conditions are embodied in our profile, which maintains that an ideal EO should have appropriate organizational status, functional independence, professionalism, knowledge of organizational issues, and knowledge of ethics theory. We suggest that the function of EO may be performed by a professional who is already employed by the organization, and we use the internal auditor as an example.     

Connecting the Two Faces of CSR: Does Employee Volunteerism Improve Compliance?

In 2004, the United States Sentencing Commission amended the Federal Sentencing Guidelines to allow firms that create “effective compliance and ethics programs” to receive better treatment if prosecuted for fraud. Effective compliance and ethics, however, appear to be limited to activities focused on complying with the firms’ internal legal and ethical standards. We explored a potential connection between the firms’ external corporate social responsibility (CSR) behaviors and internal compliance: Is there an organizationally valid relationship between these two firm activities? That is, when organizations demonstrate CSR with behaviors external to the firm, such as employee volunteerism, are their employees more likely to demonstrate uncompromised legal and ethical compliance behavior internally? We collected data from 164 working professionals enrolled in a top-tier MBA program in the southeastern United States regarding their employer-sponsored volunteer activities and their intentions to comply in various organizational compliance vignettes. We found that employer-sponsored volunteerism is associated with uncompromised compliance choices in one of the three vignettes. This finding indicates preliminary support for further inquiry into the relationship within the firm between external CSR behaviors and policies regarding organizational compliance. Post hoc analyses suggest that employer-sponsored volunteerism is strongly associated with a positive organizational identity, but organizational identity is not associated with the significant compliance vignette. This evidence suggests that the underlying mechanism that connects external CSR behaviors and internal compliance intentions is complex and requires future study.     

A Meta-Ethical Perspective on Organizational Identity

Although much of the growing literature on organizational identity implicitly recognizes the normative nature of identity, the ethical implications of organizational identity work and talk have not yet been explored in depth. Working from a meta-ethical perspective, we claim that the dynamic, processual, and temporal activities recently associated with organizational identity always have an ethical dimension, whether “good” or “bad.” In order to describe the ethical dimensions of organizational identity, we introduce the balance theory of practical wisdom as a theoretical framework, and connect this theory to existing organizational identity concepts. We present an empirical case focused on an international paint company to illustrate the relevance of this theory for empirical organizational identity research. Our intention is to expand existing theory by bringing an aspect of organizational identity that has been tangentially acknowledged to the forefront, and by identifying it as a fruitful avenue for future theory development as well as empirical research.     

Inspiration and Cynicism in Values Statements

The adoption of codes of ethics or values statements is intended to guide everyday decisions, as well as to influence the perceptions of external stakeholders. Questions have emerged in the literature about whether the effort to substantively direct decision-making in an organization is marginalized by the more obvious symbolic role of values statements. Here the perceived impact of values statements (defined broadly) on decision-making in organizations is explored, and a number of positive effects observed. Respondents report that values statements create positive externalities providing guidelines for decision-making, increasing accountability, and clarifying expectations. Yet, both cynicism and perceived management hypocrisy emerged in the survey, which together had strong negative effects on the perceived decision-making impact of values statements. Finally, positive external effects (e.g., more symbolic effects) are almost never mentioned by respondents who give their firms high marks on the quality of values statement development, training, and implementation. Yet, such external effects get significantly greater representation in the comments of respondents who report less substance in their firms’ values statement development and implementation processes. In all, the results suggest that the substantive and symbolic roles of values statements are not independent and that external symbolism without internal legitimacy may in the long-run be problematic.     

Diversity Identity Management: An Organizational Perspective

Organizations are faced with the challenge of responding to increasing pressures to promote diversity in various ways. We draw attention to one possible proactive organizational response—the incorporation of diversity in organizational identity. This initial response necessarily evokes subsequent tasks of managing the changed identity. Therefore, this article also addresses the management of diversity identity within organizations, and relevant organizational outcomes. Our theoretical model is grounded in institutional theory, and we propose that the management of diversity identity can impact both perceptions of legitimacy as well as diversity identity. Adequate, inadequate, and optimal management of diversity identity have differential effects on legitimacy and diversity identity. We contribute to the literature by a) unbundling initial and later firm responses to promoting diversity at the organizational level, and b) offering a more nuanced understanding of the complexities of managing diversity identity within organizations.     

Stakeholder theory: A process-ontological perspective

Advocates of stakeholder theory have long known that grasping its key insights requires a specific worldview that is, unfortunately, still not prevalent within the community of strategic management scholars. We argue that this worldview encompasses a process ontology that is radically different from the substance-ontological outlook typical of the mainstream approaches to strategic management. The unquestioned commitment of strategic management scholarship to a substance ontology leads to the viewing of corporations as macro-entities comprising aggregations of discrete autonomous actors each relying on individual choice and instrumental rationality. In contrast, within a process-ontological worldview, corporations and their stakeholders are seen to be sustained and attenuated through social practices and relationships involving interlocking chains of coping actions taken in everyday interactions. We show that adopting a process-ontological worldview presents a much-needed step that may help strategic management scholars reach a better understanding of how stakeholder theory deals with three problems of today's capitalism, those value creation and trade, ethics of capitalism, and managerial mindsets. On this basis, we discuss how to process ontology may lead stakeholder theory to further refine its understanding of business strategy, corporate social responsibility, and the common ground between the firm and stakeholders.     

Person–Organization Fit on Prosocial Identity: Implications on Employee Outcomes

This study examined the relationship between person–organization (PO) fit on prosocial identity (prosocial PO fit) and various employee outcomes. The results of polynomial regression analysis based on a sample of 589 hospital employees, which included medical doctors, nurses, and staff, indicate joint effects of personal and organizational prosocial identity on the development of a sense of organizational identification and on the engagement in prosocial behaviors toward colleagues, organizations, and patients. Specifically, prosocial PO fit had a curvilinear relationship with organizational identification, such that organizational identification increased as organizational prosocial characteristics increased toward personal prosocial identity and then decreased when the organizational prosocial characteristics exceeded the personal prosocial identity. In addition, organizational identification and prosocial behaviors increased as both personal and organizational prosocial identity increased from low to high.     

Engaging with environmental stakeholders: Routes to building environmental capabilities in the context of the low carbon economy

The transition to a low carbon economy demands new strategies to enable organizations to take advantage of the potential for “green” growth. An organization's environmental stakeholders can provide opportunities for growth and support the success of its low carbon strategies, as well as potentially acting as a constraint on new initiatives. Building environmental capabilities through engagement with environmental stakeholders is conceptualized as an important aspect for the success of organizational low carbon strategies. We examine capability building across a range of sectors affected by the sustainability agenda, including construction, rail, water, and health care. We identify a number of emergent environmental stakeholders and explore their engagement with the development of environmental capabilities in the context of the transition toward a low carbon economy. Our conceptual framework offers a categorization of environmental stakeholders based on their position in relation to a focal organization and the potential for the development of environmental capabilities.     

Trust and Stakeholder Theory: Trustworthiness in the Organisation–Stakeholder Relationship

Trust is a fundamental aspect of the moral treatment of stakeholders within the organization–stakeholder relationship. Stakeholders trust the organization to return benefit or protections from harm commensurate with their contributions or stakes. However, in many situations, the firm holds greater power than the stakeholder and therefore cannot necessarily be trusted to return the aforementioned duty to the stakeholder. Stakeholders must therefore rely on the trustworthiness of the organization to fulfill obligations in accordance to Phillips’ principle of fairness (Business Ethics Quarterly 7(1), 1997, 51–66), particularly where low-power stakeholders may not be fully consenting (Van Buren III, Business Ethics Quarterly 11(3), 2001, 481–499). The construct of organizational trustworthiness developed herewith is presented as a possible solution to the problem of unfairness in organization–stakeholder relations. While organizational trustworthiness does not create an ethical obligation where none existed before, stakeholders who lack power will likely be treated fairly when organizational trustworthiness is present.     

Using Video to Build an Organization's Identity and Brand: A Content Analysis of Nonprofit Organizations' YouTube Videos

Organizational scholarship has increasingly focused its attention to how nonprofit, for-profit, and government agencies develop their unique organizational identity through their strategic communication efforts. As social media continues to become more prominent in communication campaigns due to the high levels of public usage and public involvement with organizations on social media sites, it is important to examine these social media messages as they relate to organizational identity. YouTube videos increasingly are being used by organizations to educate and inform just as much as they are to entertain. Through a content analysis of the most viewed videos on the top 100 official nonprofit YouTube channels, this study found that nonprofit organizations primarily use their YouTube videos to inform and educate viewers about their missions, programs, and services. While the videos also occasionally discuss the organizations' advocacy, volunteering, and fundraising efforts, nonprofit organizations were not living up to their potential in terms of engagement through direct appeals for involvement. Additionally, the organizations were more likely to use outsiders' words and stories to build the videos' narratives rather than using internal stakeholders. The benchmark numbers provided by this study reiterate key rules that are stressed in practitioner-oriented work on video production for branding and identity-building efforts.     

The Value of Corporate Philanthropy During Times of Crisis: The Sensegiving Effect of Employee Involvement

Recent research suggests that philanthropy’s value to the firm is largely mediated by contextual factors such as managers’ assumed motives for charity. Our article extends this contingency perspective using a “sensegiving” lens, by which external actors’ interpretations of organizational actions may be influenced by the way in which the organization communicates about those actions. We consider how sensegiving features in philanthropy-related press releases affect whether investors value those donation decisions. For the empirical investigation in this study, we analyze abnormal returns to announcements by U.S. Fortune 500 firms documenting their donations to Hurricane Katrina disaster relief in 2005. We expect that in general, donation decisions would be controversial given the uncertainty surrounding the hurricane’s economic effects at the time. However, we also propose that announcements emphasizing employee involvement in the donation send investors positive signals about the firm’s ability to bounce back from the disaster’s adverse effects. We find empirical support for the proposed hypotheses, and discuss the implications for theory and practice.     

The artisans' dilemma: Artisan entrepreneurship and the challenge of firm growth

An increasing number of entrepreneurial ventures are growing at exponential rates despite their founders' professed intentions not to grow their firms. We refer to these individuals as artisan entrepreneurs. Through an inductive, phenomenon-based research approach, we explore how artisan entrepreneurs subscribe to a counter-institutional identity yet engage in a divergent set of behaviors. We discover that artisans' counter-institutional identity contains two sides—promoting the exclusion of ‘who we are not’ (oppositional identity) or providing support for ‘who we are’ (relational identity). We theorize that artisan entrepreneurs' differing views regarding their independence led to very different approaches to growth. When artisans either do not see forms of external control as impinging on their independence or sense that serving stakeholders is a means to perform relational identity work, they embrace growth. Thus, artisans may find that growth serves stakeholders, but funding growth brings about financial pressures, which may force the artisan down a path of growth.