Real Management

Kevin Lewis

April 16, 2024

Organizational and Economic Obstacles to Automation: A Cautionary Tale from AT&T in the Twentieth Century
James Feigenbaum & Daniel Gross
Management Science, forthcoming

AT&T was the largest U.S. firm for most of the 20th century. Telephone operators once comprised more than 50% of its workforce, but in the late 1910s, it initiated a decades-long process of automating telephone operation with mechanical call switching -- a technology invented in the 1880s. We study what drove AT&T to do so and why it took nearly a century. Interdependencies between call switching and nearly every other activity in AT&T's business presented obstacles to change: Telephone operators were the fulcrum of a complex production system that had developed around them, and automation only began after the firm and new technology were adapted to work together. Even then, automatic switching was only profitable in larger markets -- hence, diffusion expanded when the technology improved or service areas grew. The example suggests even narrowly defined tasks can be difficult to automate if they interact with many others.

But what if I lose the offer? Negotiators' inflated perception of their likelihood of jeopardizing a deal
Einav Hart, Julia Bear & Zhiying (Bella) Ren
Organizational Behavior and Human Decision Processes, March 2024

When deciding whether to negotiate, individuals typically assess any potential costs of negotiation. We propose that one major cost that individuals are concerned about, particularly in the context of job offers, is an offer being withdrawn from the bargaining table-losing out on a deal entirely. We refer to this heretofore unexamined concern as the perceived likelihood of jeopardizing a deal by negotiating. We investigate job candidates' perceived likelihood of jeopardizing a deal, as compared to hiring managers' reports, across seven studies (total N = 3,338), including surveys of academic job candidates and members of academic hiring committees, managers and hiring professionals, and experimental studies with interactive, incentivized negotiations conducted both in person and online. We consistently document that job candidates' perception of the likelihood of jeopardizing a deal is exaggerated, i.e., discrepant with that of the hiring side. In some cases, this perception is associated with negotiation avoidance. We also theorize and find support for two underlying psychological mechanisms: zero-sum perceptions and psychological power. We further document contextual factors that decrease candidates' zero-sum perceptions or increase their perceived power, which, in turn, diminish (but do not fully eliminate) the discrepancy between candidates' and managers' perceptions of the likelihood of jeopardizing a deal.

The More You Know: The Impact of Personal Knowledge on Interpersonal Treatment at Work
Ashley Hardin
Organization Science, forthcoming

Employees often receive conflicting advice about sharing personal information in the workplace. They are told to "bring your whole self to work" but also to keep it professional and not share too much personal information with colleagues. Research has been equivocal in its overall guidance about sharing personal information at work: it may be either beneficial or harmful for work relationships. These inconsistencies are likely driven by the types of questions posed. Specifically, existing research has studied the impact of a particular piece of personal information and the specific details of what is learned, not what all of these pieces of personal information amount to. Instead, this paper takes a new vantage point to understand how the amount of personal knowledge (the quantity of information that one person knows across many aspects of a colleague's personal life) influences positive interpersonal dynamics at work by humanizing the known colleague. Through a full-cycle research approach, I establish causal support experimentally and then replicate support for my hypotheses in the field, demonstrating a positive, persistent effect: having more personal knowledge -- regardless of whether that knowledge conveys value incongruence or life-to-work interference -- leads to a more humanized perception of the known colleague, resulting in increased responsiveness toward that colleague. These findings resolve an existing puzzle in the literature and also contribute to a more nuanced understanding of work relationships and interpersonal learning at work.

Application Flows
Steven Davis & Brenda Samaniego de la Parra
NBER Working Paper, April 2024

We build and analyze a new U.S. database that links 125 million applications to job vacancies and employer-side clients on, an online platform for jobs and workers in software design, computer systems, engineering, financial analysis, management consulting, and other occupations that require technical skills. We find, first, that posting durations are quite short, often only two or three days, with a median of seven days. Second, labor market tightness has tiny effects on posting durations. Third, job seekers display a striking propensity to target new postings, with almost half of applications flowing to openings posted in the past 48 hours. Fourth, applications per posting are much too uneven to reflect random search, even within narrow market segments and job categories. Moreover, posted offer wages play no role in explaining the deviations from a random-search benchmark. Fifth, intermediaries play a huge role on both sides of the platform: Recruitment and staffing firms account for two-thirds of all postings and attract most of the applications. We relate these and other findings to theories of labor market search.

When do startups scale? Large-scale evidence from job postings
Saerom (Ronnie) Lee & Daniel Kim
Strategic Management Journal, forthcoming

Scaling at the right time is a crucial challenge for startups. Conceptualizing "scaling" as the entrepreneurial process of acquiring and committing resources to implement the core business idea and expand the customer base, this study examines how scaling early may decrease imitation risk at the expense of increasing commitment risk. As startups typically hire managers and sales personnel when they begin to scale, we propose that this timing can be empirically measured by when startups first post these jobs. Leveraging a dataset of job postings, we find that early scalers are more likely to fail, but no evidence of a countervailing benefit in terms of successful exit. Additional analyses suggest that the commitment risk in scaling early outweighs the benefit of reducing imitation risk.

Whoever you want me to be: Personality and incentives
Andrew McGee & Peter McGee
Economic Inquiry, forthcoming

What can employers learn from personality tests when applicants have incentives to misrepresent themselves? Using a within-subject, laboratory experiment, we compare personality measures with and without incentives for misrepresentation. Incentivized personality measures are weakly to moderately correlated with non-incentivized measures in all treatments. When test-takers are given a job ad indicating that an extrovert (introvert) is desired, extroversion measures are positively (negatively) correlated with IQ. Among other characteristics, only locus of control appears related to faking on personality measures. Our findings highlight the identification challenges in measuring personality and the potential for correlations between incentivized personality measures and other traits.

The Humbling Effect of Significant Relationships: A Field Experiment Examining the Effect of Significant-Other Activation on Leaders' Expressed Humility
Lin Wang et al.
Organization Science, forthcoming

Recent research has consistently highlighted the benefits of leader humility within organizations. However, much less is known about how leader humility can be contextually promoted beyond individual predispositions. This paper draws from the social-cognitive model of transference to illuminate how the contextual activation of significant-other schemas can enhance a leader's expressed humility in the workplace. Specifically, we propose that the activation of significant-other schemas can lead to increased interpersonal warmth and psychological safety among leaders, which in turn, promote humility in their interactions with followers. Furthermore, we posit that these effects are amplified in leaders who possess a strong relational identity. To test our hypotheses, we conducted a field experiment with 97 leaders and their 194 followers, where we randomly applied daily significant-other activation interventions to the leaders and surveyed the leaders and their corresponding followers across 10 consecutive workdays. Our findings provide support for the positive impact of significant-other schema activation on leader humility and confirm the moderating role of a leader's relational identity. We discuss the theoretical and practical implications of our findings.

Patent Hunters
Lauren Cohen et al.
Harvard Working Paper, March 2024

Analyzing millions of patents granted by the USPTO between 1970 and 2020, we find a pattern where specific patents only rise to prominence after considerable time has passed. Amongst these late-blooming influential patents, we show that there are key players (patent hunters) who consistently identify and develop them. Although initially overlooked, these late-bloomer patents have significantly more influence on average than early-recognized patents and open significantly broader new markets and innovative spaces. For instance, they are associated with a 15.6% increase in patenting in the late-bloomer's technology space. Patent hunters, as early detectors and adopters of these late-blooming patents, are also associated with significant positive rents. Their adoption of these overlooked patents is associated with a 22% rise in sales growth, a 3% increase in Tobin's Q, and a 4.8% increase in new product offerings. Interestingly, these rents associated with patent hunting on average exceed those of the original patent creators themselves. Patents hunted tend to be closer to the core technology of the hunters, more peripheral to the writers, and to be in less competitive spaces. Lastly, patent hunting appears to be a persistent firm characteristic and to have an inventor-level component as well.

Retail Buyer and Manufacturer Influence
Upender Subramanian & John Zhang
Management Science, forthcoming

Retailers often employ professionals known as retail buyers to determine the right quantities of products to order. However, in many economies and industries, a manufacturer may seek to unduly influence the buyer through various means. One such means is to offer the buyer kickbacks (incl. entertainment, travel, gifts) in return for a large order. Despite prominent examples of retailers taking initiatives against kickbacks, the practice persists in many economies and industries. To aid initiatives combating kickbacks, one needs to do the right diagnosis and identify the root cause. To this end, in this paper, we introduce the retail buyer as a distinct player in the retail channel and study the implications of the tug-of-war between the retailer and the manufacturer to influence the buyer. Interestingly, we find when kickbacks are feasible, the manufacturer need not always benefit, and the retailer need not always be the victim. We show a well-designed buyer compensation plan is key for the retailer to avoid kickbacks from distorting the buyer's demand assessments. Moreover, when the reputational harm from kickbacks is not too high, the retailer may be the one tacitly facilitating kickbacks by undercompensating the buyer and influencing her demand assessments such that it can leverage kickbacks for shifting some of its buyer compensation cost to the manufacturer. This sharing of cost may allow for better channel coordination. Furthermore, this cost-shifting mechanism of kickbacks we have identified in this paper can explain their persistence. No retailer tolerates kickbacks when the reputational harm is high.


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