Tough day at the office
Takuya Sawaoka & Benoît Monin
Social Psychological and Personality Science, forthcoming
Abstract:
In social hierarchies, moral stigma spreads down more than up. Across four vignette studies, exposure to the immoral behaviors of higher (vs. lower) ranking group members led online participants to report greater moral suspicion toward other group members (moral spillover). A higher ranking organization member’s deceptive practices were perceived as more prototypical, resulting in more negative moral impressions of the organization (Study 1). This more negative moral impression led people to rate ambiguous behavior by another organization member as more suspicious — even when the prior transgression was purely self-serving (Study 2). These effects generalized across several types of moral transgressions (Study 3). Finally, a higher ranking organization member’s unethical behavior led other organization members to receive more negative job-hiring recommendations (Study 4). Thus, a higher ranking group member’s ethical violations result in greater moral spillover, affecting not only other group members’ moral reputations but their career prospects as well.
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Supreet Kaur, Michael Kremer & Sendhil Mullainathan
Journal of Political Economy, forthcoming
Abstract:
Workers with self-control problems do not work as hard as they would like. This changes the logic of agency theory by partly aligning the interests of the firm and worker: both now value contracts that elicit more effort in the future. Three findings from a year-long field experiment with data entry workers suggest the quantitative importance of self control at work. First, workers choose dominated contracts — which penalize low output but provide no greater reward for high output — 36% of the time to motivate their future selves; use of these contracts increases output by the same amount as an 18% increase in the piece-rate. Second, effort increases as the (randomly assigned) payday gets closer: output rises 8% over the pay week; calibrations show that justifying this would require a 4% daily exponential discount rate. Third, for both findings there is significant and correlated heterogeneity: workers with larger payday effects are both more likely to choose dominated contracts and show greater output increases under them. This correlation grows with experience, consistent with the hypothesis that workers learn about their self-control problems over time. Self-control problems among workers could potentially lead firms to either adopt high-powered incentives or impose work rules to allow monitoring of worker effort.
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Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices
Matthew Grennan
Management Science, forthcoming
Abstract:
In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other factors (e.g., negotiating skill), which I call bargaining ability. I use a model of buyer demand and buyer–supplier bargaining, combined with detailed data on prices and quantities at the buyer–supplier relationship level, to estimate firm-bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability.
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András Tilcsik
Administrative Science Quarterly, December 2014, Pages 639-668
Abstract:
Using a longitudinal study of professionals in two information technology services firms, as well as interview data, this paper illuminates how organizational fortunes influence individual performance over time, examining how the economic situation of an organization leaves a lasting imprint on new employees and how that imprint affects subsequent job performance. The core hypothesis, supported by the results, is that the more similar the initially experienced level of organizational munificence is to the level of munificence in a subsequent period, the higher an individual’s job performance. This relationship between what I call “imprint–environment fit” and performance is contingent on the individual’s career stage when entering the organization and the influence of secondhand imprinting resulting from the social transmission of others’ imprints. A possible implication of the core hypothesis may be a “curse of extremes,” whereby both very high and very low levels of initial munificence are associated with lower average performance during a person’s subsequent tenure. One mechanism underlying these patterns is that employees socialized in different resource environments develop distinct approaches to problem solving and client interactions, which then lead to varying levels of imprint–environment fit in subsequent resource environments.
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Expert leaders in a fast-moving environment
Amanda Goodall & Ganna Pogrebna
Leadership Quarterly, forthcoming
Abstract:
This longitudinal study explores the influence of leaders on performance in the iconic, high-technology, turbulent industry of Formula One. The evidence is evaluated through the emerging theory of expert leadership which proposes the existence of a first-order requirement: it is that leaders should have expert knowledge in the core-business of the organizations they are to lead (holding constant management and leadership experience). The study's findings provide strong support for the ‘expert leader’ hypothesis. The most successful F1 principals are disproportionately those who started their careers as drivers. Moreover, within the sub-sample of former drivers, it is those who had the longest driving careers who went on to become the most effective leaders. The study's expert-leader findings are consistent with the hypothesis that longitudinal performance improves when a leader's knowledge and expertise correlate with an organization's core-business activity.
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Do Star Performers Produce More Stars? Peer Effects and Learning in Elite Teams
Casey Ichniowski & Anne Preston
NBER Working Paper, September 2014
Abstract:
This study investigates the professional soccer industry to ask whether the talent of an individual’s co-workers helps explain differences in the rate of human capital accumulation on the job. Data tracking national soccer team performance and the professional leagues their members play for are particularly well suited for developing convincing non-experimental evidence about these kinds of peer effects. The empirical results consistently show that performance improves more after an individual has been a member of an elite team than when he has been a member of lower level teams. The conclusion is borne out by a rich set of complementary data on: national team performance, player-level performance, performance of foreign players who joined elite teams after an exogenous shift in the number of foreign players participating on top club teams, performance of players on national teams in the year just before and the year just after they join an elite club team, and experiences of several national team players obtained through personal interviews.
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Who's In Charge Here? Co-CEOs, Power Gaps, And Firm Performance
Ryan Krause, Richard Priem & Leonard Love
Strategic Management Journal, forthcoming
Abstract:
At the pinnacles of organizations, comparative tests of unity of command and shared command are nearly impossible because only one individual sits atop most organizations. In organizations led by co-CEOs, however, such a test is possible because co-CEOs can truly share power. But do they? Our research pits the unity-of-command principle against the shared-command principle and finds overall support for the former, even within the co-CEO context. Our sample of 71 co-CEO pairs at publicly traded U.S. firms shows that increasing power gaps between co-CEOs are positively associated with firm performance. This positive association wanes and turns negative, however, as power gaps become very large. We conclude that whatever benefits the co-CEO structure might offer likely lie outside the shared command paradigm.
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Selecting the Best? Spillover and Shadows in Elimination Tournaments
Jennifer Brown & Dylan Minor
Management Science, forthcoming
Abstract:
We consider how past, current, and future competition within an elimination tournament affect the probability that the stronger player wins. We present a two-stage model that yields the following main results: (1) a shadow effect wherein the stronger the expected future competitor, the lower the probability that the stronger player wins in the current stage; and (2) an effort spillover effect wherein previous effort reduces the probability that the stronger player wins in the current stage. We test our theory predictions using data from high-stakes tournaments. Empirical results suggest that shadow and spillover effects influence match outcomes and have already been priced into betting markets.
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Travis Schneider, Richard Goffin & Kabir Daljeet
Personality and Individual Differences, January 2015, Pages 78–83
Abstract:
Recently, employers have begun asking applicants for their social networking site (SNS) password to access private information that could be job-relevant. However, the effect that this request can have on an organization’s selection process and its selection of individual applicant traits has not been previously examined. Findings from the current study of 892 employed or previously-employed participants suggested that 57.87% of the sample would refuse the password request, thereby removing themselves from the applicant pool. Such a large reduction in the applicant pool could necessitate a drastic decrease in cutoff scores on subsequent pre-employment tests, which would lower workforce productivity and personnel selection utility. In addition, the SNS password request caused adverse impact for several minority groups, and affected the personality scores of the remaining applicant pool.
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Trust and Financial Reporting Quality
Jace Garrett, Rani Hoitash & Douglas Prawitt
Journal of Accounting Research, forthcoming
Abstract:
Using unique survey data from Great Place to Work® Institute, we investigate the association of intra-organizational trust (i.e., employees’ trust in management) with three aspects of financial reporting: accruals quality, misstatements, and internal control quality. We find that trust is associated with better accrual quality, lower likelihood of financial statement misstatements, and lower likelihood of internal control material weakness disclosures. However, these effects are not uniform across all companies. Consistent with trust improving financial reporting quality through improved information production and information sharing, we find that trust is significantly associated with financial reporting quality in relatively decentralized firms, but not in firms that are relatively centralized. Our results are robust to several analyses that attempt to control for potential alternative explanations.
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Paradoxical Leader Behavior in People Management: Antecedents and Consequences
Yan Zhang et al.
Academy of Management Journal, forthcoming
Abstract:
As organizational environments become increasingly dynamic, complex, and competitive, leaders are likely to face intensified contradictory or seemingly paradoxical demands. We develop the construct of paradoxical leader behavior in people management, which refers to seemingly competing yet interrelated behaviors to simultaneously and over time meet structural and follower demands. In Study 1, we develop a measure of paradoxical leader behavior using five samples from China. Confirmatory factor analyses support a multidimensional measure of paradoxical leader behavior with five dimensions: combining self-centeredness with other-centeredness, maintaining both distance and closeness, treating subordinates uniformly while allowing individualization, enforcing work requirements while allowing flexibility, and maintaining decision control while allowing autonomy. In Study 2, we examine the antecedents and consequences of such leader behavior with a field sample of 76 supervisors and 516 subordinates from six firms. We find that the extent to which supervisors engage in holistic thinking and have integrative complexity is positively related to their paradoxical behavior in managing people, which in turn, is associated with increased proficiency, adaptivity, and proactivity in subordinates. Implications for theory, research, and practice are discussed.
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Brian Mills
University of Florida Working Paper, August 2014
Abstract:
This paper examines the role of changes in monitoring, technological innovation, performance standards, and collective bargaining as they relate to performance improvements among Major League Baseball umpires from 1988 through 2013. I find structural changes in performance concurrent with known bargaining struggles, and substantial improvements in performance after implementation of incentive pay and new technological monitoring and training. Not only do umpires improve performance in expected ways, but the variability in umpire performance has also decreased substantially. These changes have reduced offensive output often attributed to a crackdown on performance enhancing drug use in MLB.
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Superstar Salaries and Soccer Success: The Impact of Designated Players in Major League Soccer
Dennis Coates, Bernd Frick & Todd Jewell
Journal of Sports Economics, forthcoming
Abstract:
This study estimates the relationship between production and salary structure in Major League Soccer (MLS), the highest level of professional soccer (association football) in North America. Soccer production, measured as league points per game, is modeled as a function of a team’s total wage bill, the distribution of the team’s wage bill, and goals per game. Both the Gini coefficient and the coefficient of variation are utilized to measure salary inequality. The results indicate that production in MLS is negatively responsive to increases in the salary inequality; the estimation model with the best fit uses the coefficient of variation to measure dispersion. Furthermore, MLS teams appear to be constrained in their choices of salary inequality by the salary cap and other regulations.
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Talent Recruitment and Firm Performance: The Business of Major League Sports
Daniel Weinberg
Journal of Sports Economics, forthcoming
Abstract:
Firms rely heavily on their investments in human capital to achieve profits. This research takes advantage of detailed information on worker performance and confidential information on firm revenue and operating costs to investigate the relationship between talent migration and firm profitability in major league sports, one of the few industries in which detailed information about the past performance of each individual worker (athlete) is known to all potential employers. I use confidential microdata from the 2007 Economic Censuses, and from the 2007 and 2008 Service Annual Surveys to investigate the link between individual worker performance and team profitability, controlling for many other aspects of the sports business, specifically taking account of the mobility of athletic “stars” and “superstars” from one team to another. The investigations in this article provide limited support for the hypothesis that hiring talented individuals (stars) will increase a firm’s profit. However, there is no convincing support for the incremental benefit of hiring superstars. The peculiar characteristics of major league sports suggest that these results are probably not generalizable.
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Christopher Barnes et al.
Academy of Management Journal, forthcoming
Abstract:
We examine daily leader sleep as an antecedent to daily abusive supervisory behavior and work unit engagement. Drawing from ego depletion theory, our theoretical extension includes a serial mediation model of nightly sleep quantity and quality as predictors of abusive supervision. We argue that poor nightly sleep influences leaders to enact daily abusive behaviors via ego depletion, and these abusive behaviors ultimately result in decreased daily subordinate unit work engagement. We test this model through an experience sampling study spread over ten work days with data from both supervisors and their subordinates. Our study supports the role of the indirect effects of sleep quality (but not sleep quantity) via leader ego depletion and daily abusive supervisor behavior on daily subordinate unit work engagement.
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Organizational Constraints to Adaptation: Intrafirm Asymmetry in the Locus of Coordination
Vikas Aggarwal & Brian Wu
Organization Science, forthcoming
Abstract:
We assemble a panel data set of firms in the U.S. defense industry between 1996 and 2006 to examine the drivers of heterogeneous incumbent firm adaptation following the industry-wide demand shock of September 11, 2001. This shock entailed not only an increase in aggregate demand but, more importantly, a shift in the relative attractiveness of individual product areas, resulting in the need for firms to reshuffle their product portfolios in response to changing demand conditions. The exogenous nature of the shock allows us to empirically identify the effect of preshock interdependence structures on postshock adaptation outcomes. We find that the locus of coordination inside a firm can explain differential postshock adaptation performance: because interdependencies spanning organizational boundaries are more difficult to manage than those contained within such boundaries, coordination across product areas creates greater adaptation challenges compared with coordination within product areas. We further investigate the moderating effects of product complementarity and organizational grouping, finding results consistent with our hypothesized mechanisms. As one of the first studies to empirically link a firm’s locus of coordination with its adaptation performance, this study contributes to our understanding of the role of interdependence and organization design in dynamic environments.
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Brokerage Professions and Implementing Reform in an Age of Experts
Katherine Kellogg
American Sociological Review, October 2014, Pages 912-941
Abstract:
In this comparative ethnographic case study of the implementation of a reform related to the Affordable Care Act in two community health centers, I find that professionals may not compete to claim new tasks (and thereby not implement reform) if these tasks require them to acquire information unrelated to their professional expertise, use work practices that conflict with their professional identity, or do impure or low-value tasks that threaten their professional interests. In such cases, reform may be implemented if lower-status workers fill in the gaps in the division of labor between the professions targeted by the reform, playing a brokerage role by protecting each profession’s information, meanings, and tasks in everyday work. When the new tasks represent professionally ill-defined problems, brokers can be more effective if they use buffering practices rather than connecting practices — managing information rather than transferring it, matching meanings rather than translating them, and maintaining interests rather than transforming them — to accomplish reform. By playing a buffering role in the interstices between existing professional jurisdictions, lower-status workers can carve out their own jurisdiction, becoming a brokerage profession between existing professions that need to collaborate with one another for reform to occur.
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The octopus approach in time management: Polychronicity and creativity
Alper Kayaalp
Military Psychology, March 2014, Pages 67-76
Abstract:
The current study examined the associations among polychronicity, creativity and perceived time pressure in a military context. Polychronicity refers to an individual’s preference for working on many tasks simultaneously as opposed to 1 at a time. As hypothesized, polychronicity was negatively related to creativity. In addition, perceived time pressure moderated this relationship. Specifically, polychronic individuals exhibited less creativity when their perceived time pressure was high. The results underscore that, although today’s work environment encourages polychronic approach, it, when reinforced with perceived high time pressure, runs the risk of reducing creativity, which is a critical driver for the survival of organizations.
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Urban Vibrancy and Corporate Growth
Casey Dougal, Christopher Parsons & Sheridan Titman
Journal of Finance, forthcoming
Abstract:
We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. A firm's investment also responds to fluctuations in the cash flows and stock prices (q) of local firms outside its sector. These patterns do not appear to reflect exogenous area shocks such as local shocks to labor or real estate values, but rather suggest that local agglomeration economies are important determinants of firm investment and growth.
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Money Left on the Table: An Analysis of Participation in Employee Stock Purchase Plans
Ilona Babenko & Rik Sen
Review of Financial Studies, forthcoming
Abstract:
We analyze participation decisions in employee stock purchase plans. These plans allow employees to buy company stock at a discount from the market price and resell it immediately for a sure profit. Although an average employee stands to gain $3,079 annually, only 30% of individuals take advantage of this risk-free opportunity. Participation is more likely among employees who are familiar with stocks, are more educated, are less financially unconstrained, and make fewer errors in valuing financial securities. Our results suggest that compensation plans requiring active decisions by individuals can result in poor financial outcomes for employees of lower socioeconomic status.
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Victor Naroditskiy et al.
Journal of the Royal Society: Interface, October 2014
Abstract:
Crowdsourcing offers unprecedented potential for solving tasks efficiently by tapping into the skills of large groups of people. A salient feature of crowdsourcing — its openness of entry — makes it vulnerable to malicious behaviour. Such behaviour took place in a number of recent popular crowdsourcing competitions. We provide game-theoretic analysis of a fundamental trade-off between the potential for increased productivity and the possibility of being set back by malicious behaviour. Our results show that in crowdsourcing competitions malicious behaviour is the norm, not the anomaly — a result contrary to the conventional wisdom in the area. Counterintuitively, making the attacks more costly does not deter them but leads to a less desirable outcome. These findings have cautionary implications for the design of crowdsourcing competitions.