Moving Forward: Developing Theoretical Contributions in Management Studies

How do we, as management researchers, develop novel theoretical contributions and, thereby, potentially break new ground in management studies? To address this question, we review previous methodological work on theorizing and advance a typology of the reasoning processes that underlie theoretical contributions and significant advances in management studies. This typology consists of various types of analogical and counterfactual reasoning, ranging from focused thought experiments aimed at prodding existing theory in the direction of alternative assumptions, constructs, and hypotheses to more expansive efforts for inducing new theoretical models and alternative explanations. Applying this typology, we detail the mechanisms behind the formation of novel theoretical contributions and illustrate the currency of our typology through a review of 24 major theoretical breakthroughs in management studies. We conclude the paper by discussing the implications of this typology for our collective efforts in building, elaborating, and expanding theory in management studies.     

Bubbles,crashes and information contagion in large-group asset market experiments

Experimental Economics - We study the emergence of bubbles in a laboratory experiment with large groups of individuals. The realized price is the aggregation of the forecasts of a group of...     

Preserving Theoretical Divergence in Management Research: Why the Explanatory Potential of Qualitative Research Should Be Harnessed Rather than Suppressed

Despite the evident rise in the number of qualitative studies that are published in leading journals, I argue that the rich tradition and hallmark of qualitative research is under pressure. In recent years qualitative papers are increasingly being fashioned in the image of quantitative research, so much so that papers adopt ‘factor‐analytic’ styles of theorizing that have typically been the preserve of quantitative methods. This is a worrying trend as it leads to certain types of explanations dominating our field and at the expense of other viable forms of explanation. It also narrows the remit of qualitative research in general by channelling the theoretical contribution of qualitative studies in the direction of factor‐analytic propositional or variance models. In this article, I discuss the differences between the distinct types of theoretical explanations that are associated with quantitative and qualitative methods, survey the trend towards a quantitative ‘restyling’ of qualitative research, and elaborate its negative implications for our body of knowledge and for the state of management and organization theory.     

Dealing with differences: the impact of perceived diversity outcomes on selection and assessment of minority candidates

Although many strategies have been employed to specifically recruit and select minority employees, the selection rates for designated minority groups are often lower than those for the majority group. Minority candidates with high cultural maintenance (CM) are particularly vulnerable to cultural bias in selection procedures, a process which has proved difficult to change. This paper aims to examine whether these effects may be moderated by recruiters’ perceived diversity outcomes; whether they view diversity as beneficial or threatening to the organization's performance. In an experimental study, participants belonging to a cultural majority group played the role of recruiters (n = 99). Their diversity perceptions were manipulated by asking them to think about, and discuss, either positive or negative outcomes of cultural diversity in the workplace. They were then asked to rate fictional profiles of minority candidates for a job opening. The results confirm that CM of minority candidates has a negative main effect on the ratings they receive in assessment procedures. However, as predicted, this effect is moderated by diversity perceptions. Recruiters who perceive individual differences in the workplace as positive and beneficial, give higher ratings to candidates who maintain their own culture. This provides a promising insight in possible ways to reduce cultural bias in selection procedures.     

Price clustering and natural resistance points in the Dutch stock market: A natural experiment

This paper focuses on the tendency of stock prices to cluster at round numbers (like 10, 20, 30, etc. and to a lesser extent 5, 15, 25, etc.) and the related effect of round number price barriers (prices pass round numbers less frequently than other numbers). Two competing hypotheses are tested, using data from the Dutch stock market of the period 1990–2001. After 1 January 1999 stock prices were listed in euros, while guilders were still the currency of daily life until 2002. The aspiration level hypothesis predicts that round number effects in guilders will only slowly disappear. The odd price hypothesis predicts an abrupt change in round number effects after 1 January 1999. Generally, the results are consistent with the odd price hypothesis.     

Rent-seeking versus productive activities in a multi-task experiment

Incentive instruments like asset ownership and performance pay often have to strike a balance between the productive incentives and the rent-seeking incentives they provide. Standard theory predicts that these instruments become less attractive when the effectiveness of rent-seeking activities increases. In contrast, theories that emphasize the importance of reciprocity suggest that this relationship may go the other way around. In this paper we test these predictions by means of a laboratory experiment. By and large our findings confirm standard theory. Incentive instruments typically become less attractive when the scope for rent-seeking activities increases. However, reciprocity motivations do seem to mitigate the adverse effects of rent-seeking opportunities to a considerable extent.     

How individuals choose health insurance: An experimental analysis

An individual choosing a health insurance policy faces a complex decision environment where a large set of alternatives differ on a variety of dimensions. There is uncertainty and the choice is repeated at least once a year. We study decisions and decision strategies in a laboratory experiment where we create a controlled environment that closely mirrors this setting. We use an electronic information board that allows to carefully monitor the individual's decision strategy. The number of alternatives, switching costs, and the speed at which health deteriorates are varied across treatments. We find that most subjects' search is based more on attributes than on policies. Moreover, we find that an increase in the number of alternatives increases decision-making time; makes subjects consider a lower fraction of the available information; makes it more likely that subjects will switch; and decreases the quality of their decisions. The introduction of positive costs of switching makes people switch less often but improves the quality of their decisions. Finally, if health deteriorates only gradually, individuals tend to stick to their current policy too long.     

Generalizations on consumer innovation adoption: A meta-analysis on drivers of intention and behavior

Previous research has shown that consumer intentions to adopt innovations are often poor predictors of adoption behavior. An important reason for this may be that the evaluative criteria consumers use in both stages of the adoption process weigh differently. Using construal level theory, we develop expectations on the influence of innovation characteristics across the intention and behavior stages of the adoption process. Using meta-analysis, we derive generalizations on drivers of intentions and actual innovation adoption behavior. The results show important differences across both stages. Consumers show higher levels of adoption intention for innovations that are more complex, better match their needs, and involve lower uncertainty. However, consumers are found to actually adopt innovations with less complexity and higher relative advantages. Adopter demographics are found to explain little variance in adoption intention and behavior, whereas adopter psychographics are found to be influential in both stages. These findings have implications for innovation adoption theory, for managers involved in new product and service marketing, and for future research on innovation adoption.     

Coordination of Expectations in Asset Pricing Experiments

We investigate expectation formation in a controlled experimentalenvironment. Subjects are asked to predict the price in a standardasset pricing model. They do not have knowledge of the underlyingmarket equilibrium equations, but they know all past realizedprices and their own predictions. Aggregate demand for the riskyasset depends upon the forecasts of the participants. The realizedprice is then obtained from market equilibrium with feedbackfrom six individual expectations. Realized prices differ significantlyfrom fundamental values and typically exhibit oscillations around,or slow convergence to, this fundamental. In all groups participantscoordinate on a common prediction strategy.