Regulatory shocks, either by imposing regulations or easing them (deregulation), yield abrupt and fundamental changes to the institutional rules governing competition and, in turn, the opportunity sets available to firms. Formally, a regulatory shock occurs when jurisdictions replace one regulatory system for another. General forms of regulation include economic and social regulation but recent work offers a more fine-grained classification based on the content of regulations: regulation for competition, regulation of cap and trade, regulation by information, and soft law or experimental governance. These categories shed light on the types of rules and policies that change at the moment of a regulatory shock. As a result, they advance our understanding of the nature, scope, magnitude, and consequences of transformative shifts in rules systems governing industries. In addition to differences in the content of reforms, the assorted forms of regulatory change vary in the extent to which they disrupt an industry’s state of equilibrium or semi-equilibrium. These differences contribute to diverse temporal patterns or dynamics, an area ripe for further study. For example, a regulatory shock to an industry may be followed by rapid adjustment and, in turn, a new equilibrium state. Alternatively, the effects of a regulatory shock may be more enduring, contributing to ongoing dynamics and prolonging an industry’s convergence to new equilibrium state. As such, regulatory shocks can both stimulate ongoing heterogeneity or promote coherence within and among industries, sectors, organizational fields, and nation states. It follows that examining the content, scope, and magnitude of regulatory shocks is key to understanding their impact.
Since conforming to industry regulation (deregulation) increases economic returns, firms attempt to align their policies and behaviors with the institutional rules governing an industry. Thus, regulatory shocks stimulate the evaluation of strategic choices and, in turn, impact the competitive positions of firms and the composition of industries. Following a shock, at least two generic cohorts of firms emerge: incumbents, which are firms that operated in the industry before the change, and entrants, which start up after the change. To sustain a position, entrants must build capabilities from scratch whereas incumbents must replace or modify the practices they developed in the prior regulatory era. Not surprisingly, the ensuing competitive dynamics strongly influence the distribution of profits observed in an industry and the duration of firms’ profit advantages.
Our review highlights some of the prominent areas of research inquiry regarding regulatory shocks but many areas remain underexplored. Future work may benefit by considering regulatory shocks as embedded in a self-reinforcing system rather than simply an exogenous inflection in an industry’s evolutionary trajectory. Opportunities also exist for studying how the interplay of industry actors with actors external to an industry (political, social) affects the temporal and competitive consequences of regulatory shocks.
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Article
Regulatory Shocks: Forms, Dynamics, and Consequences
Nydia MacGregor and Tammy L. Madsen
Article
Reinsurance Function and Market
Niels Viggo Haueter
The function of reinsurance is to absorb the risks of the direct insurance industry. This has two main purposes: (i) reinsurance capital allows direct insurers to write more business, and (ii) it protects them against balance sheet fluctuations caused by large and unexpected losses. The reinsurance market is served by a relatively small group of some 200 professional reinsurers. However, throughout history a variety of alternative forms appeared that could be used to distribute risks beyond one insurer. Co-insurance, for example, was one of the main forms of secondary risk spread in the marine community for centuries. It dominated the London market and was, to a large degree, responsible for the late and restricted development of reinsurance companies in Anglo-Saxon markets. The emergence of ever-larger risks in the 20th century forced the industry to focus increasingly on dealing with large losses and capping the maximum exposures of insurers. This made the business more financial, a trend which received a new boost with the advent of insurance-linked securities (ILSs) in the 1990s. Since then, the market for alternative risk transfer (ART) has grown, not least with the advent of new investors such as different investment funds that provide alternative risk capital. However, towards the 2020s, professional reinsurers started gaining ground again after a series of large natural catastrophes and with the continuous rise of Asian economies. Since the 2010s, growth opportunities for reinsurance are sought mostly in emerging markets and by making more risks insurable. Emerging market growth, however, is challenging and the gap between insured and insurable economic losses is still widening. Since the turn of the millennium, the industry has invested in finding solutions to close this so-called protection gap. Professional reinsurers are also seeking to develop new markets by making emerging risks such as cybercrime insurable. Yet such dynamic risks are fundamentally different from older static risks. Solutions are sought in applying methods that already made natural catastrophes insurable, modelling techniques, and ART products.
Article
The Resource-Based View of the Firm
Douglas Miller
The Resource-Based View of the firm (RBV) is a set of related theories sharing the assumptions of resource heterogeneity and resource immobility across firms. In this view, a firm is a bundle of resources, capabilities, or routines which create value and cannot be easily imitated or appropriated by competitors due to isolating mechanisms. Grounded in the economic traditions of the “Chicago School” of economic efficiency, the “Austrian School” of economics, and organizational economics, the RBV comprises theories that explain the existence of (sustained) competitive advantage and of economic rents. Empirical research from this perspective addresses both firm performance and firm behavior at the level of business strategy (e.g., within-industry competition) and corporate strategy (e.g., acquisitions). Initially developed through a series of papers by several authors in the 1980s–1990s, major extensions and refinements of the RBV include the knowledge-based view of the firm (KBV), dynamic capabilities, and the relational view, which recognizes capabilities can be developed and shared through alliances between firms.
Article
Restructuring and Divestitures
Donald D. Bergh
Growth strategies have long been a priority for executive leadership. However, growth can also create problems. Leaders may need to use restructuring and divestiture actions to regain control, improve transparency, and re-establish efficiency. Given that leaders benefit from having insights into the antecedents, processes, outcomes, and decisions associated with unwinding growth most effectively, it is essential to consider the body of knowledge that exists in strategic management on restructuring and divestiture. This review seeks to describe what is currently known and not known about restructuring and divestiture and will give future researchers some suggested directions for further developing knowledge about these expensive and risky actions. The assessment is organized round five key questions that have shaped the field’s literature base: Why do firms divest? How do firms divest? Do divestitures create value? What happens to the divested units? And what are some promising directions for future knowledge development? Afterwards, three challenges for knowledge development are presented: What is value creation and for whom does it matter? What to do about incomplete information? And, is there a need for integrating different levels of strategy? Overall, it is important to identify, develop, and analyze the conceptual models of restructuring and divestiture with the purpose of guiding future research to provide knowledge that decision-makers will find useful as they engage in restructuring and divestitures.
Article
The Rise and Fall of “Shareholder Supremacy”: A Business History Perspective
Steven Toms
With shareholder supremacy, the board is accountable to all shareholders, including minorities, enforced by restrictions on managerial opportunism. The market for corporate control and scrutiny of diversified institutional investors provide the mechanisms for disciplining managers to act in shareholders’ interests. Along with legal protections for minorities, these mechanisms ensure the supremacy of shareholders as a stakeholder group. Shareholder value maximization, as a theory and a set of financial techniques, provides quantitative outputs that drive managerial behavior. From a historical perspective, shareholder supremacy is a late twentieth-century phenomenon according to these definitional characteristics. History also reveals that shareholders have exercised dominance in other ways and that their power as a stakeholder group has waxed and waned over time as the governance role of investors has changed. Shareholder supremacy can be asserted in a number of ways. Shareholder activism and transparent structures of accountability are sufficient conditions in some circumstances. The suitability of this model is dependent on market structure and favored where there are local monopolies or businesses that have a narrow scope of activities. Alternatively, shareholders as active institutional investors can play a dominant role utilizing the market for corporate control. Collaboration with board insiders committed to expansion by takeover and merger is crucial to the success of this model. Finally, and most recently, the complementary presence of the market for corporate control, diversified institutional investors, and minority protection underpins present-day shareholder supremacy. In this model, the use of a common valuation technique is crucial. History reveals differing routes to shareholder supremacy, which have followed from developments in the institutional structure of regulation and changes in shareholding patterns.
Article
Risk in Strategic Management
George M. Puia and Mark D. Potts
Although risk is an essential element of the business landscape and one of the more widely researched topics in business, there is noticeably less scholarship on strategic risk. Business risk literature tends to only delineate characteristics of risk that are operational rather than strategic in nature. The current operational risk paradigm focuses primarily on only two dimensions of risk: the probability of its occurrence and the severity of its outcomes. In contrast, literature in the natural and social sciences exhibits greater dimensionality in the risk lexicon, including temporal risk dimensions absent from academic business discussions. Additionally, descriptions of operational risk included minimal linkage to strategic outcomes that could constrain or enable resources, markets, or competition.
When working with a multidimensional model of risk, one can adjust the process of environmental scanning and risk assessment in ways that were potentially more measurable. Given the temporal dimensions of risk, risk management cannot always function proactively. In risk environments with short risk horizons, rapid risk acceleration, or limited risk reaction time, firms must utilize dynamic capabilities.
The literature proposes multiple approaches to managing risk that are often focused on single challenges or solutions. By combining a strategic management focus with a multidimensional model of strategic risk, one can match risk management protocols to specific strategic challenges. Lastly, one of more powerful dimensions of risky events is their ability to differentially affect competitors, changing the basis of competition. Risk need not solely be viewed as defending against potential losses; many risky occurrences may represent new strategic opportunities.
Article
The Role of Human Agency in Entrepreneurship
Keith M. Hmieleski
Human agency stands as a foundational element of entrepreneurship, embodying individuals’ proactive ability to shape their destinies, innovate, and navigate the complexities of new venture creation and development. Rooted in social cognitive theory, this concept underscores the interactive interplay between personal characteristics, behaviors, and environmental influences in driving entrepreneurial endeavors. Within this framework, agentic personal characteristics, comprising both socially admired attributes (e.g., entrepreneurial self-efficacy, dispositional positive affect, grit, and locus of control) and socially deviant features (e.g., narcissism, Machiavellianism, and psychopathy) provide the motivational force and resilience needed to tackle entrepreneurial endeavors. These personal characteristics are associated with engagement in a range of agentic behaviors (e.g., improvisation, transformational leadership, learning, and personal initiative) that embody entrepreneurial action exhibited by business founders as they work to effectively shape and adapt their ventures. Situational factors (e.g., institutional forces, political barriers, and industry-specific dynamics), in turn, can positively or negatively impact the expression of agentic personal characteristics and behaviors. Thus, understanding human agency in entrepreneurship necessitates a holistic examination of the intertwined dynamics between personal characteristics, behaviors, and contextual factors. Despite significant strides in comprehending human agency in entrepreneurship, numerous avenues for exploration remain. These include investigating gender disparities in agentic versus communal orientations among entrepreneurs, the impacts of artificial intelligence on entrepreneurial agency, trajectories of entrepreneurial agency over time, strategies for fostering collective agency in new venture teams, and exploring the darker (or unproductive) aspects of entrepreneurial agency. Developing a deeper understanding of human agency in the realm of entrepreneurship not only enriches the comprehension of the new venture creation and development process but also lays the groundwork for crafting more impactful strategies, policies, interventions, and educational initiatives to cultivate and leverage the full potential of business founders and their ventures.
Article
The Role of the Media in Corporate Governance
Michael K. Bednar
Corporate governance scholars have long been interested in understanding the mechanisms through which firms and their leaders are held accountable for their actions. Recently, there has been increased interest in viewing the media as a type of corporate governance mechanism. Because the media makes evaluations of firms and leaders, and can broadcast information to a wide audience, it has the potential to influence the reputation of firms and firm leaders in both positive and negative ways and thereby play a role in corporate governance.
The media can play a governance role and even influence firm outcomes by simply reporting about firm actions, giving stakeholders a larger voice with which to exert influence, and through independent investigation. However, despite the potential for the media to play a significant governance role, several barriers limit its effectiveness in this capacity. For example, media outlets have their own set of interests that they must strive to fulfill, and journalists often succumb to several cognitive biases that could limit their ability to successfully hold leaders accountable.
While significant progress has been made in understanding the governance role of the media, future research is needed to better understand the specific conditions in which the media is effective in this role. Understanding how social media is changing the nature of journalism is just one example of the many exciting avenues for future research in this area.
Article
Sampling Strategies for Quantitative and Qualitative Business Research
Vivien Lee and Richard N. Landers
Sampling refers to the process used to identify and select cases for analysis (i.e., a sample) with the goal of drawing meaningful research conclusions. Sampling is integral to the overall research process as it has substantial implications on the quality of research findings. Inappropriate sampling techniques can lead to problems of interpretation, such as drawing invalid conclusions about a population. Whereas sampling in quantitative research focuses on maximizing the statistical representativeness of a population by a chosen sample, sampling in qualitative research generally focuses on the complete representation of a phenomenon of interest. Because of this core difference in purpose, many sampling considerations differ between qualitative and quantitative approaches despite a shared general purpose: careful selection of cases to maximize the validity of conclusions.
Achieving generalizability, the extent to which observed effects from one study can be used to predict the same and similar effects in different contexts, drives most quantitative research. Obtaining a representative sample with characteristics that reflect a targeted population is critical to making accurate statistical inferences, which is core to such research. Such samples can be best acquired through probability sampling, a procedure in which all members of the target population have a known and random chance of being selected. However, probability sampling techniques are uncommon in modern quantitative research because of practical constraints; non-probability sampling, such as by convenience, is now normative. When sampling this way, special attention should be given to statistical implications of issues such as range restriction and omitted variable bias. In either case, careful planning is required to estimate an appropriate sample size before the start of data collection.
In contrast to generalizability, transferability, the degree to which study findings can be applied to other contexts, is the goal of most qualitative research. This approach is more concerned with providing information to readers and less concerned with making generalizable broad claims for readers. Similar to quantitative research, choosing a population and sample are critical for qualitative research, to help readers determine likelihood of transfer, yet representativeness is not as crucial. Sample size determination in qualitative research is drastically different from that of quantitative research, because sample size determination should occur during data collection, in an ongoing process in search of saturation, which focuses on achieving theoretical completeness instead of maximizing the quality of statistical inference.
Theoretically speaking, although quantitative and qualitative research have distinct statistical underpinnings that should drive different sampling requirements, in practice they both heavily rely on non-probability samples, and the implications of non-probability sampling is often not well understood. Although non-probability samples do not automatically generate poor-quality data, incomplete consideration of case selection strategy can harm the validity of research conclusions. The nature and number of cases collected must be determined cautiously to respect research goals and the underlying scientific paradigm employed. Understanding the commonalities and differences in sampling between quantitative and qualitative research can help researchers better identify high-quality research designs across paradigms.
Article
Science and Innovation Policy
Cristina Chaminade and Bengt-Åke Lundvall
This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Business and Management. Please check back later for the full article.
Scientific advance and innovation are major sources of economic growth and are crucial for making social and environmental development sustainable. A critical question is if private enterprises invest sufficiently in research and development and, if not, to what degree and how governments should engage in the support of science and innovation. While neoclassical economists point to market failure as the main rationale for innovation policy, evolutionary economists point to the role of government in building stronger innovation systems and creating wider opportunities for innovation.
Research shows that the transmission mechanisms between scientific advance and innovation are complex and indirect. There are other equally important sources of innovation, including experience-based learning. Innovation is increasingly seen as a systemic process where the feedback from users needs to be taken into account when designing public policy.
Science and innovation policy may aim at accelerating knowledge production along well-established trajectories or at giving new direction to the production and use of knowledge. It may be focused exclusively on economic growth, or it may give attention to the impact on social inclusion and the natural environment. An emerging topic is the extent to which national perspectives continue to be relevant in a globalizing learning economy facing multiple global complex challenges, including the issue of global warming. Scholars point to a movement toward transformative innovation policy and global knowledge sharing as a response to current challenges.
Article
Sexual Harassment in the Workplace
Rose L. Siuta and Mindy E. Bergman
Business and management conceptualizations of sexual harassment have been informed by both legal and psychological definitions. From the psychological perspective, sexual harassment behaviors include harassment based on one’s gender, enacting unwanted sexual attention, and sexual coercion. The most recent psychological theories of sexual harassment acknowledge that it is a gendered experience motivated by the societal stratification of gender and not by sexual gratification.
Harassing behaviors negatively impact individual well-being. Well-documented workplace effects of sexual harassment include reduced job satisfaction, organizational commitment, and productivity, and increased job stress, turnover, withdrawal, and conflict. Sexual harassment negatively affects target’s psychological and physical well-being, including increases in post-traumatic stress disorder (PTSD), depression, and anxiety symptoms, emotional exhaustion, headaches, sleep problems, gastric distress, and upper respiratory problems. All of these individual-level effects can result in financial decrements for the target and the organization.
Both individual and organizational factors predict sexual harassment. Women are more likely to experience sexual harassment, as well as minoritized persons, with women who embody more than one minority identity being the most likely to experience sexual harassment. This finding supports the interpretation of sexual harassment as motivated by reinforcing societal power hierarchies. Other individual factors such as sexual orientation, age, education level, and marital status are also related to experiencing sexual harassment. At the organizational level, organizational climate, job-gender context, and relative power between the harasser and the target predict sexual harassment. Organizational climates that are more tolerant of sexual harassment produce more sexual harassment. In addition, as masculinity of a work context increases, so does sexual harassment for women. Lastly, those with lower organizational power are more likely to experience sexual harassment, particularly by people with higher levels of power; however, contrapower harassment (harassment of individuals with higher organizational power by those with lower organizational power) can also occur.
Reporting harassment to organizational authorities has been theorized to lead to positive outcomes, but reporting rates are low. This may reflect findings that procedures for reporting are often unclear and that reporting often leads to worse outcomes for targets of harassment than their non-reporting peers.
The two most common approaches to measuring sexual harassment are direct query (explicitly ask about sexual harassment) or behavior experiences (ask respondents about how many sexually harassing behaviors they have experienced). A few considerations for the methodology used in these studies include inconsistency in conceptual or operational definitions of sexual harassment, the framing of a study, the retrospective nature of research asking about past experiences, and the sampling methodology used. A number of gaps remain in the documentation and understanding of sexual harassment phenomena, which intersect with some research practices and challenges. These include (a) the need to take into account factors other than incidence rates, such as perceived severity of experiences; (b) further examination of how multiple minority statuses and intersectional oppression affect harassment; (c) the importance of conducting research on harassment perpetrators; and (d) the examination of culturally informed topics related to sexual harassment, particularly outside Western countries.
Article
Social Capital and Founder, Team, and Firm Networks in Entrepreneurship
Ha Hoang
Entrepreneurial activity is facilitated by the ties that connect founders and their venture to a broader network of actors. This insight on the value of social capital has been enriched by a large body of research that builds on core concepts of network content, governance, and structure. Network content refers to the resources, information and social support that is exchanged or flows between actors. Governance encompasses the mechanisms that organize and regulate the exchange. Network structure refers to broader patterns created from the relationships between actors. With these building blocks, key findings that have emerged over 30 years of research can be organized into two domains: how networks influence entrepreneurial outcomes and how networks develop over the entrepreneurial process. Core findings regarding the performance consequences of social capital underscore its benefits while identifying limitations due to decreasing returns to growing and maintaining a large network or to contingencies tied to the stage of the venture’s growth. Our understanding of the sources of network evolution and the resulting patterns have also developed significantly. As a motor of network change, scholars have emphasized the goal-oriented behavior of the entrepreneur, but recognize social relationships also engender mutual concern, obligation, and emotional attachment. From a focus on founder and founding team ties to start-up, small firm networks, the literature now spans multiple levels and accounts for contextual variation between industries and institutional environments. Advances within each of these domains of inquiry have led to rich insights and greater conceptual complexity. Future research opportunities will arise that leverage cross-fertilization of the process and performance research streams.
Article
Social Entrepreneurship
Sophie Bacq and Jill R. Kickul
Social entrepreneurship is an ever-growing and ever-changing field. Known as the process of identifying, evaluating, and exploiting opportunities aiming at social value creation by means of commercial, market-based activities and of the use of a wide range of resources, social entrepreneurship combines market elements with a societal purpose. An overview of the evolution of social entrepreneurship as a field of research from its origins in the 1980s to date, and analysis of the themes presented at The Annual Social Entrepreneurship Conference over more than a decade, show how the core components of social entrepreneurship remained as the field evolved—social value creation, business model, and social entrepreneurial intentions, with the addition of nuances and complexities over time. These trends demonstrate the importance—and unique opportunities—for social entrepreneurship researchers to pursue further research on scaling, impact measurement, and systems change. Social entrepreneurship bears the promise and potential to revisit, and potentially challenge, the theoretical assumptions made in traditional entrepreneurship and management scholarship, embracing a multiplicity of salient stakeholders, other levels of analysis, or the relevance of community.
Article
Social Movements and Their Impact on Business and Management
Sarah A. Soule
Do the activities of social movements (e.g., public protest, shareholder activism, boycotts, and sabotage) impact businesses, and if so, how do they impact businesses? When confronted by activist demands, how do firms respond, and does this response vary depending on who the activists are and what their relationship is to the firm? Answering these questions is critical for businesses and activists alike, as we move into an era of heightened activism directed at firms. A growing area of research that is situated at the intersection of economic and political sociology, social movement studies, history, and organizational theory, tackles these questions, in an increasingly methodologically sophisticated and nuanced manner. As a result, a number of important articles and books have been published, and several high-profile, interdisciplinary conferences have been held. This body of research shows that social movements have both direct and indirect effects on businesses, and that these effects are amplified by media attention to activism. For example, we know that activism impacts the financial performance of firms, as well as their reputation. And, we know that the activities of social movements have consequences on firm policies and practices. In turn, businesses have developed a varied repertoire of ways to respond to activist demands. While some businesses ignore activists, others decide to retaliate against activists. Increasingly, businesses concede to the demands of activists in material ways by changing policies and practices that are criticized, while others devise symbolic ways to respond to activist demands, thereby preserving their reputation without necessarily changing their activities.
Article
Social Network Analysis in Organizations
Jessica R. Methot, Nazifa Zaman, and Hanbo Shim
A social network is a set of actors—that is, any discrete entity in a network, such as a person, team, organization, place, or collective social unit—and the ties connecting them—that is, some type of relationship, exchange, or interaction between actors that serves as a conduit through which resources such as information, trust, goodwill, advice, and support flow. Social network analysis (SNA) is the use of graph-theoretic and matrix algebraic techniques to study the social structure, interactions, and strategic positions of actors in social networks. As a methodological tool, SNA allows scholars to visualize and analyze webs of ties to pinpoint the composition, content, and structure of organizational networks, as well as to identify their origins and dynamics, and then link these features to actors’ attitudes and behaviors. Social network analysis is a valuable and unique lens for management research; there has been a marked shift toward the use of social network analysis to understand a host of organizational phenomena. To this end, organizational network analysis (ONA) is centered on how employees, groups, and organizations are connected and how these connections provide a quantifiable return on human capital investments. Although criticisms have traditionally been leveled against social network analysis, the foundations of network science have a rich history, and ONA has evolved into a well-established paradigm and a modern-day trend in management research and practice.
Article
Social Networks and Employee Creativity
Gamze Koseoglu and Christina E. Shalley
In the field of management, employee creativity, which is defined as the production of novel and useful ideas concerning products, processes, and services, has been found to be necessary for organizational success and survival. An employee’s relationships with others in the organization affect creativity because employees work in the presence of, and with, their coworkers. A social network approach has been taken to understand how employee relationships can affect creativity.
Social networks examine the interaction of individuals with those around them, such as asking them for help or advice. Four components of social networks that have a role in employee creativity have received attention: the nature of the employee’s relationships with coworkers, the structure of the employee’s social network, the position of the employee in the organizational network, and the employee’s network heterogeneity. Regarding the nature of relationships, while some researchers have found that weaker ties are more beneficial for employee creativity, other researchers have found that stronger ties are more advantageous. In order to resolve this conflict, researchers examined the role of strong versus weak ties at different stages of the creativity process and found that, while weak ties might be more useful during idea generation, strong ties come into play during idea elaboration. There are also conflicting findings on the role of the structure of social network. Specifically, a group of researchers found support for a positive relationship between sparse networks and employee creativity, and another group found a positive relationship between dense networks and creativity. Some researchers aimed to resolve this debate, and their findings mirrored the findings on tie strength. They found that density affects different stages of the creative process in unique ways, and while sparse networks are more beneficial during idea generation, dense networks become more important during idea implementation.
Compared to the previous two components, the role of network position and network heterogeneity has received less attention from researchers. Researchers found that both central and peripheral positions have certain benefits and costs for creativity. For example, on the one hand, employees located at the periphery of an organization can collect nonredundant information from outside of the organization that has not been shared by others in the organization and has a positive influence on creativity. On the other hand, employees at a central location gain benefits from fast and easy access to information based on many contracts and receiving recognition from many others, thereby improving creativity. Finally, researchers consistently found that different types of network heterogeneity, such as the diversity of one’s contacts in terms of functional background, organizational function, or nationality, positively affects employee creativity.
There are many opportunities for future research on the relationship between social networks and creativity, such as examining the role of motivational and cognitive processes as mediational mechanisms, focusing on the role of alter characteristics, studying social networks in a team setting, and taking a temporal approach to understand how changes in social networks over time affect employee creativity.
Article
Social Norms in Organizations
Jennifer E. Dannals and Dale T. Miller
Social norms are a powerful force in organizations. While different literatures across fields have developed differing definitions and categories, social norms are commonly defined as and divided into descriptive norms, i.e., the most commonly enacted behavior, and prescriptive norms, i.e., the behavior most commonly viewed as acceptable or appropriate. Different literatures have also led to differing focuses of investigation for social norms research. Economic theorists have tended to examine social norm emergence by studying how social norms evolve to reduce negative or create positive externalities in situations. Organizational theorists and sociologists have instead focused on the social pressures which maintain social norms in groups over time, and eventually can lead group members to internalize the social norm. In contrast, social psychologists have tended to focus on how to use social norms in interventions aimed at reducing negative behaviors. Integrating these divergent streams of research proves important for future research.
Article
Socioemotional Aspects of Entrepreneurship for the Classroom
Alexander Bolinger and Mark Bolinger
There is currently great enthusiasm for entrepreneurship education and the economic benefits that entrepreneurial activity can generate for individuals, organizations, and communities. Beyond economic outcomes, however, there is a variety of social and emotional costs and benefits of engaging in entrepreneurship that may not be evident to students nor emphasized in entrepreneurship courses. The socioemotional costs of entrepreneurship are consequential: on the one hand, entrepreneurs who pour their time and energy into new ventures can incur costs (e.g., ruptured personal and professional relationships, decreased life satisfaction and well-being, or strong negative reactions such as grief) that can often be as or more personally disruptive and enduring than economic costs. On the other hand, the social and emotional benefits of an entrepreneurial lifestyle are often cited as intrinsically satisfying and as primary motivations for initiating and sustaining entrepreneurial activity.
The socioemotional aspects of entrepreneurship are often poorly understood by students, but highlighting these hidden dimensions of entrepreneurial activity can inform their understanding and actions as prospective entrepreneurs. For instance, entrepreneurial passion, the experience of positive emotions as a function of engaging in activities that fulfill one’s entrepreneurial identity, and social capital, whereby entrepreneurs build meaningful relationships with co-owners, customers, suppliers, and other stakeholders, are two specific socioemotional benefits of entrepreneurship. There are also several potential socioemotional costs of entrepreneurial activity. For instance, entrepreneurship can involve negative emotional responses such as grief and lost identity from failure. Even when an entrepreneur does not fail, the stress of entrepreneurial activity can lead to sleep deprivation and disruptions to both personal and professional connections. Then, entrepreneurs can identify so closely and feel so invested that they experience counterproductive forms of obsessive passion that consume their identities and impair their well-being.
Article
Sources of Knowledge in Firms
Hugo Pinto and Manuel Fernández-Esquinas
This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Business and Management. Please check back later for the full article.
In order to obtain competitive advantages, firms have to make use of knowledge as the main element of their capacities for innovation and management. Innovation is a complex and collective process, resulting from different contexts, socioeconomic aspects, and specificities of firms that create nuanced management and policy implications. Sources of knowledge are varied, as each firm interacts with multiple types of actors to pursue its mission: partners and strategic allies, suppliers, customers, competitors, specialized organizations such as knowledge intensive business services, universities, technology centers, public research organizations, innovation intermediaries, and public administration bodies.
Different kinds of knowledge are relevant for the firms, both tacit and codified knowledge. Knowledge needs to be translated into capacity to act. Knowledge generation and absorption can be understood as two sides of the same coin. It is necessary to take into account factors that shape both facets and the relationship between the production, transfer, and valorization of knowledge. Influential factors concerning knowledge characteristics are related to tacitness and to the existing knowledge base. Contextual factors, such as the economic sector, technological intensity, the local buzz, and the insertion in global value chains are essential as environmental enablers for generating and absorbing knowledge. Finally, the internal characteristics of the firm are of crucial relevance, namely the existing innovation culture, leadership, and also the size or internal R&D capacities. These factors reinforce the dynamic capacities of the firm and the decision to engage in open innovation strategies or to give more importance to strategies that protect and codify knowledge, such as industrial property rights.
Article
Stakeholder Engagement in Management Studies: Current and Future Debates
Sybille Sachs and Johanna Kujala
Stakeholder engagement refers to the aims, practices, and impacts of stakeholder relations in businesses and other organizations. According to a general framework, stakeholder engagement has four dimensions: examining stakeholder relations, communicating with stakeholders, learning with (and from) stakeholders, and integrative stakeholder engagement. Stakeholder engagement is increasingly used in areas like strategic management, corporate social responsibility (CSR), and sustainability management, while stakeholder-engagement research in marketing, finance, and human resources (HR) is still less common. Two main camps in the stakeholder-engagement literature exist: the strategic and the normative. To foster an inclusive understanding of stakeholder engagement, future research in both camps is needed. While the strategic camp necessitates a relational view, including both the firm and the stakeholder perspectives, the normative camp requires novel philosophical underpinnings, such as humanism and ecocentrism. Furthermore, there is constant debate about the argument that stakeholder engagement is, and should be, most importantly, practical. Stakeholder-engagement research should focus on solving real-life problems with practical consequences intended to make people’s lives better.
