Article Abstracts

Articles

Disaster Dynamics: Understanding the Role of Quantity in Organizational Collapse
Jenny W. Rudolph - Boston College
Nelson P. Repenning - Massachusetts Institute of Technology

This article examines the role that the quantity of non-novel events plays in precipitating disaster through the development of a formal (mathematical) system-dynamics model. Building on existing case studies of disaster, we develop a general theory of how an organizational system responds to an on-going stream of non-novel interruptions to existing plans and procedures. We show how an overaccumulation of interruptions can shift an organizational system from a resilient, self-regulating regime, which offsets the effects of this accumulation, to a fragile, self-escalating regime that amplifies them. We offer a new characterization of the conditions under which organizations may be prone to major disasters caused by an accumulation of minor interruptions. Our analysis provides both theoretical insights into the causes of organizational crises and practical suggestions for those charged with preventing them.

Emotional Balancing Organizational Continuity and Radical Change: The Contribution of Middle Managers
Quy Nguyen Huy - INSEAD

Based on a three-year inductive field study of an attempt at radical change in a large firm, I show how middle managers displayed two seemingly opposing emotion-management patterns that facilitated beneficial adaptation for their work groups: (1) emotionally committing to personally championed change projects and (2) attending to recipients' emotions. Low emotional commitment to change led to organizational inertia, whereas high commitment to change with little attending to recipients' emotions led to chaos. The enactment of both patterns constituted emotional balancing and facilitated organizational adaptation: change, continuity in providing quality in customer service, and developing new knowledge and skills.

The Strength of Corporate Culture and the Reliability of Firm Performance
Jesper B. Sørensen - Massachusetts Institute of Technology

Prevailing research claims that strong corporate cultures improve firm performance by facilitating internal behavioral consistency. This paper addresses an unexamined implication of this argument by analyzing the effect of strong corporate cultures on the variability of firm performance. This relationship depends on how strong cultures affect organizational learning in response to internal and external change. I hypothesize that strong-culture firms excel at incremental change but encounter difficulties in more volatile environments. Results of analyses of a sample of firms from a broad variety of industries show that in relatively stable environments, strong-culture firms have more reliable (less variable) performance. In volatile environments, however, the reliability benefits of strong cultures disappear.

Network Learning: The Effects of Partners' Heterogeneity of Experience on Corporate Acquisitions
Christine M. Beckman - University of California, Irvine
Pamela R. Haunschild - Stanford University

To examine the effects of interorganizational network structures on acquisition decisions, we propose a model whereby firms learn by sampling the diverse experiences of their network partners. We tested this model by examining the effect of diversity of network partners' experience on firms' acquisition decisions, using data on acquisition premiums and acquirers' stock market performance from 1986 to 1997. Results show that firms tied to others with heterogeneous prior premium experience tend to pay less for their acquisitions and have better-performing acquisitions than those tied to others with homogeneous experience. Firms also pay lower premiums when their network partners (1) have completed deals of diverse sizes, (2) have unique information, and (3) are themselves of diverse sizes. Firms that have multiplex relationships with their partners receive even more benefit. The results extend prior research on networks and learning by showing that collective network experience affects firms' decision quality.

Evolution toward Fit
Nicolaj Siggelkow - University of Pennsylvania

This paper uses a longitudinal case study of the mutual fund provider, The Vanguard Group, to understand the developmental processes that lead to organizational configurations and fit. A new method for determining an organization's core elements is developed, and four processes are identified that describe the creation and subsequent elaboration of these core elements: thickening (reinforcement of an existing core element by new elaborating elements), patching (creation of a new core element and its reinforcement by new elaborating elements), coasting (no further elaboration of a new core element in a given period), and trimming (deletion of a core element and its elaborating elements). The four processes are used to describe organizations' development paths toward configurations and their transitions between configurations, including two new ideal types, termed thin-to-thick and patch-by-patch, as well as two known paths between configurations, the punctuated equilibrium path and reorientation through linear progression.