Management & Organization
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Item PAY SYSTEM EFFECTIVENESS IN ORGANIZATIONAL CHANGE: UNDERSTANDING HOW AND WHEN PERCEIVED PAY EQUITY AND PAY EQUALITY AFFECT ADAPTIVE TEAM PERFORMANCE(2017) Li, Ning; Liao, Hui; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In today’s fast-paced economy, organizations undergo changes almost constantly in order to survive or maintain competitive. Under such backdrop, it is important to understand how pay system can help teams adapt and perform well when organizational change disrupts existing ways of collective functioning. However, little theoretical effort has been given to this important topic. The main purpose of this dissertation is to develop theory that explains how pay system can be leveraged to facilitate adaptive team performance. I extend the management literature by clarifying 1) what pay system characteristics are important for promoting adaptive team performance, 2) how such pay system characteristics take effects to shape adaptive team performance and, 3) when such pay system characteristics are more or less instrumental for benefiting adaptive team performance. Specifically, I first propose that adaptive team performance is a function of two pay system characteristics: pay equity and pay equality. Next, I argue that pay equity and pay equality contribute to adaptive team performance through distinct mechanisms. That is, the pay equity operates through facilitating planned coordination; while pay equality operates through facilitating emergent coordination. Last, I predict that interdependence uncertainty serves as a boundary condition to weaken the effects of pay equity on team coordination and adaptive team performance, but strengthen the effects of pay equality on team coordination and adaptive team performance. I tested these hypotheses in a manufacturing firm during a period it went through a major organizational change. Using a sample of 207 production teams, I found evidence that largely supported my theoretical model. This dissertation not only offers a more sophisticated understanding of pay system effectiveness in organizational change, but also provides improved prescriptions for organizations and managers.Item HISTORICAL EXPLANATION IN STRATEGY RESEARCH: LEARNING BY SCALING IN THE EARLY AMERICAN AUTOMOBILE INDUSTRY(2019) Devanatha Pillai, Sandeep; Goldfarb, Brent; Kirsch, David; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation uses the historical explanation to engage in an abductive study of the early American automobile industry (1895-1918). The dissertation suggests that historical explanation is a valuable complement to abductive research. Historical explanation increases the number of hypotheses considered through the temporal perspective it offers and through contextualization. Historical explanation also adjudicates between likely hypotheses to determine the loveliest explanation by evaluating explanatory coherence and consilience. Further, the practical use of the historical explanation is demonstrated by analyzing the challenges that firms faced while attempting to scale manufacturing during the early American automobile industry (1895-1918). The analysis identifies metalworking knowledge as a specific pre-entry capability that mattered and demonstrates that process innovation is critical from a very early industry stage. Thus, this dissertation enhances strategy literature's understanding of why and how scholars should engage with historical explanation.Item Essays on the Consequences of Market Democratization for Organizations(2019) Shi, Yuan; Waguespack, David M; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation investigates how organizations’ boundary spanning decisions are impacted by the democratization of market mediation, which is defined as a shift in the balance of power from professional intermediaries to laypeople in the market and is often induced by crowd-based technologies and institutional changes. The first study examines how democratization affects boundary spanning in creative production through a quasi-experiment in the Billboard charts that shifted the power of influence from specialized intermediaries to lay consumers. I find that after genre radio stations’ power to define market hits is diluted by average consumers, producers are more likely to introduce offerings that traverse market boundaries to appeal to a broader audience, as is captured by a measure of crossover appeal based on the objective features of song recordings. Meanwhile, the democratization effect varies by organization and is weaker for specialists and those with moderate experience. These findings suggest that intermediaries who are specialized in a market may be more protective of the market’s boundaries than lay consumers due to their greater knowledge and larger stakes in the clarified boundaries. As such, the major impediment to boundary spanning may be intermediaries, not consumers. The second study investigates how professional intermediaries, such as venture capital (VC) firms, change their boundary decisions following democratization events, such as the legalization of equity crowdfunding. VCs may be attracted to the novel opportunities identified by crowdfunding investors, and thus diversify their investments. VCs may also seek to differentiate from the crowd by positioning as dedicated experts, and thus become more specialized in their investments. I test these ideas by leveraging the legalization of equity-based crowdfunding in more than twenty states in the US during 2009-2017. I find that VCs make more specialized investments after the crowdfunding policy shocks in their home states, but the effect is attenuated when VCs and crowdfunding investors share similar investment focus. Mechanism tests indicate that specialization is driven by a crowd-out effect, whereas diversification is explained by a lead-in effect. Taken together, my dissertation documents the causal effects of the increasing influence of the crowd on organizations’ strategic decisions.Item VALUE IN THE EYE OF THE BEHOLDER: THE MODERATING EFFECTS OF MANAGERS’ SOCIAL NETWORKS ON THEIR IDEA VALUATION AND IMPLEMENTATION DECISION-MAKING(2019) Lu, Shuye; Bartol, Kathryn M; Venkataramani, Vijaya; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Many of employees’ novel ideas often cannot get appreciated or valued by their managers, thus precluding the opportunity for innovation. Drawing on the social-information-processing theory and the situated evaluation perspective, this paper investigates the moderating roles of managers’ social networks in the innovation process of idea evaluation and implementation decision-making. Through a field study with 85 managers in a ceramic company, I found that when managers evaluated product ideas proposed by employees, they manifested a disfavor to novelty. That is, idea novelty had a negative relationship with managers’ perceived value of the focal idea regarding the idea’s potential operational efficiency, likelihood of social support, and strategic fit. However, I also found that both managers’ advice network diversity and friendship network centrality mitigated the negative effect of idea novelty on their perceived value of the proposed product ideas. In addition, I found managers’ perceived value of the idea mediated the relationship between idea novelty and their decisions to implement the idea. Theoretical contributions and empirical strategies are discussed.Item Diversity Sells: Why Mixed-Gender Coalitions Are Most Effective at Advocating Workplace Gender Equity Issues(2019) Hussain, Insiya; Tangirala, Subra; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Employees often come together in coalitions to voice concerns and suggestions. However, such coalitions have achieved limited success thus far in advocating gender equity issues within organizations. I argue that the homophily that women demonstrate when forming coalitions on gender equity can explain their lack of effectiveness. I theorize that successful coalitions, via their composition, signal to endorsers that the issue they are advocating is organizationally relevant. Although female-only, compared to male-only, coalitions are seen as having the legitimacy to speak up about gender equity, they struggle to convince stakeholders that the issue is broadly relevant. I posit that mixed-gender coalitions, via the joint participation of women and men, can both signal sufficient legitimacy to voice about a gender equity issue while also conveying that the issue is not niche and holds relevance for everyone in the organization. As a consequence, such gender-diverse coalitions are uniquely positioned to earn higher support for gender equity issues relative to alternative, gender-heterogeneous configurations. In Study 1, a quasi-field experiment, 714 participants responded to their coworkers putatively advocating a gender equity issue in the workplace. Mixed-gender coalitions outperformed both female-only and male-only coalitions on issue support, as explained by advantages in both perceived legitimacy to speak up and perceived organizational relevance. The same pattern was found in Study 2, a fully randomized experiment involving 891 United States-based workers participating in an immersive managerial simulation. With this dissertation, I demonstrate that coalition diversity holds signaling value to potential endorsers, irrespective of any internal, functional value such diversity may bring to the coalition itself through a pooling of skills and resources. I additionally highlight that advocating for gender equity is a political process and women should enlist men as allies to better sell the issue within organizations.Item Employee Mobility, Employee Entrepreneurship, and Employee Value Capture: Labor Market Frictions and the Impact of Social Comparison Costs on Compensation(2018) Olson, Daniel; Agarwal, Rajshree; Waguespack, David M.; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Strategic human capital research explores heterogeneity in firm performance based on differences in firms’ abilities to leverage human capital. Much of the discussion in this literature focuses on how firms can exploit isolating mechanisms that limit the mobility of employees. This dissertation studies two important facets of strategic human capital research related to the mobility of employees. The first essay explores how a labor market frictions lens can connect the strategic human capital literature to the employee entrepreneurship literature, two complementary but largely disparate literatures. The examination of the impact of various labor market frictions on employee mobility to competitor firms and employee transitions to entrepreneurship suggests that the outcomes of some frictions are divergent across the two literatures, the outcomes of some are aligned, and the outcomes of some are ambiguous. The complex interplay of labor market frictions provides opportunities for future research specifically exploring the intersection of the strategic human capital and employee entrepreneurship literatures. The second essay of explores how multi-location firms facilitate the spread of compensation increases across labor markets. Prior research cites the threat of employee mobility as the primary mechanism for the spread of compensation increases across locations. Multi-location firms that straddle more than one labor market, however, must manage employees across labor markets. I propose that internal firm processes, including social comparison between employees of the firm in different locations, may lead firms to raise compensation for employees in other locations when addressing competitive pressure in a given location. In doing so, these multi-location firms put pressure on local labor market competitors to also raise compensation, leading to compensation increases across distinct labor markets without reference to mobility constraints that dominate the strategic human capital literature.Item ESSAYS ON AWARDS AND ACHIEVEMENT(2018) Frake, Justin; Agarwal, Rajshree; Beckman, Christine; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation comprises three essays on the intended and unintended consequences of achievement. The introductory essay discusses the growing literature on awards in organizational contexts. I summarize the theoretical and empirical work on awards and integrate across these literatures to identify unanswered questions. The next essay explores an unintended organizational consequence of patenting. Building on theories of appropriability and firm-specificity, prior studies support the notion that patents constrain inventors from leaving their employer. I argue, however, that by patenting an inventor's idea, firms unintentionally send signals about the employee inventor's quality to their labor-market competitors, thereby increasing the probability of inventor mobility and entrepreneurship. I match US patent data to linked employee-employer Census microdata at the individual level. This novel dataset allows me to observe the near-complete patent, wage, and employer history of most US inventors between 1995 and 2008. To causally identify the effect of patenting, I use the historical leniency of quasi-randomly assigned patent examiners to instrument for whether a patent is granted. I challenge prior work by finding support for the signaling, rather than constraining, effects of patents. To test whether signaling is the operant mechanism, I show that patenting also increases the inventor's wages and future productivity. My findings reveal an interesting paradox for innovative firms: by patenting an inventor's idea, firms send signals to their labor market competitors and dramatically increase the probability that the inventor will leave to join or start another firm. My final essay explores the effect of prestigious awards on artist's subsequent productivity and performance. There is a large body of literature that finds award-winners have higher status, greater access to resources, and enhanced self-confidence; all of which may lead to increased performance and productivity. However, in this essay, I argue that prestigious awards may decrease ex post productivity for three reasons: (1) winners may become complacent after winning a prestigious award, and (2) winners may be freed to explore alternative career paths, and (3) winners may be more selective in choosing new projects. I investigate these conjectures in the US film industry from 2002-2018. I use prediction market odds to estimate the probability of winning an Academy or Golden Globe Award. I then condition on the probability of winning an award using a propensity score design to estimate the causal effect winning an award on subsequent productivity and performance. My results suggest that winning does lead to a decrease in the actor's future productivity. Further analysis suggests that winning an award also leads the winner to explore other careers (e.g., actors become directors) and to take less important roles. Award winners subsequently join movies that receive higher artistic ratings, but less commercial success. I find no effect on the number of screens the movie is released on or the movie's budget size. The results suggest that the productivity-enhancing effects in the pre-award period may be reversed after an award is granted.Item Essays on macro-level structures and dynamics of inter-organizational networks(2018) Geng, Ying; Ding, Waverly; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In the strategic management literature, researchers have demonstrated that inter-organizational networks can significantly influence firm-level outcomes. However, an understanding of network outcomes is incomplete without an understanding of the underlying network structures. Firstly, the benefits provided by networks to their constituents and their role as sources of value, including competitive advantages of firms, might be dependent on macro-level network structure and its changes over time. Secondly, understanding how macro-level network structure will evolve can help us predict and understand the changes in the distribution of benefits and constraints afforded by egocentric network properties. Nevertheless, very few studies have attempted to establish a link between macro- and micro-level network effects. In two essays, I seek to further our understanding of inter-organizational network macro-structures. In essay one, I re-evaluate the classical centrality-performance relationship in an emerging market context, China, and find a differential in centrality-based benefits for foreign and domestic VC firms. Further exploration of the macro-structure of the underlying syndication networks leads to the discovery of a correlation between network changes and the changes in the centrality effect differential. These findings have the potential to inform further theorizing and testing on the interaction between macro- and micro-level network effects on firm outcomes. In essay two, I compare large-scale topological properties of the Chinese VC syndication network and the American VC syndication network to seek the differences and commonalities in their macro-structures. More importantly, I compare these results with previous studies in the strategic management field that have explicitly examined large-scale topologies of inter-organizational networks. Aggregating evidence from disparate studies could reveal emergent properties of networks and might have the potential to lead in new directions of micro-level inquires that we may previously have not considered.Item Can voice harm team performance?: The role of relationship conflict and trust(2018) Baker, Bradley Edward; Chen, Gilad; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Despite research substantiating the idea that when team members voice ideas and suggestions their team can perform better, some scholars have warned that voice can also harm team performance. Yet, our understanding of when, why, and how voice can undermine team functioning is still limited. Attempting to address these research gaps, I integrate and build on threat rigidity theory and regulatory focus theory to propose that the reason why voice has the potential to undermine team performance is because it can trigger relationship conflict – and that prohibitive voice, as compared to promotive voice, has a greater potential to trigger relationship conflict, especially when team trust is low. I test this theory using a time-lagged, laboratory study with 87 teams, as well as a time-lagged, multi-source field study with 49 teams of U.S. Air Force officers. Across studies, I largely do not find support for my hypotheses. For example, opposite of my predictions, it appears that both promotive and prohibitive voice have either a non-significant or negative effect on relationship conflict; however, I find partial support for the hypothesis that trust moderates the relationship between prohibitive voice and relationship conflict. Despite these mixed findings, this research contributes to the voice, teams, relationship conflict, and trust literatures by empirically investigating whether voice can undermine team performance.Item ESSAYS ON A DEMAND-SIDE DRIVER OF MARKET ENTRY(2018) Byun, Heejung; Agarwal, Rajshree; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this three-essay dissertation, I explore the role of demand-pull in new market entry given repeated transactions with embedded prior transaction partners. I investigate a demand-side driver of entrepreneurial spin-outs and diversifying entrants into a new market through recurring transactions between buyers (clients) and suppliers (firms). In the first chapter, I examine the performance of diversification driven by embedded client ties, "client-led diversifiers." I focus on diversifications intended to cater to an existing client's needs and its adverse effect on firm performance. In doing so, I explore the potential tension embedded client ties create vis-à-vis firm capabilities. I find support for the negative impact of client-led diversifications on firm performance. In the second chapter, I further explore the new market performance of client-led entrants. I focus on the role of clients’ selection in entering a new market and argue that such selection predicts firm and individual performance variations in the new market. The third essay explores how individuals become entrepreneurial entrepreneurs when they experience an increase in the value of relational capital. I examine how a discontinuous increase in the value of an employee’s relational capital influences her mobility and entrepreneurship decisions. Empirically, I exploit the reporting requirements mandated by the Lobbying Disclosure Act of 1995 to construct a unique transaction-level database between lobbyists and clients for lobbying service on lobbying issues in the United States federal lobbying industry between 1999 and 2008. In the first two chapters, I exploit the exogenous creation of the "Homeland Security" issue market after the 9/11 terrorist attack to identify the effect of client-led diversification on firm performance. In chapter three, I use a sample of revolving door lobbyists who are lobbyists-turned-ex-staffers of a politician in the U.S. federal lobbying industry between 1999 and 2008. I leverage plausibly exogenous and large shocks to the value of an employee’s relational capital in testing the hypotheses.