Article Abstracts

Articles

Learning from Complexity: Effects of Prior Accidents and Incidents on Airlines' Learning
Pamela R. Haunschild - University of Texas at Austin
Bilian Ni Sullivan - Stanford University

Using data on accidents and incidents experienced by U.S. commercial airlines from 1983 to 1997, we investigated variation in firm learning by examining whether firms learn more from errors with heterogeneous or homogeneous causes. We measured learning by a reduction in airline accident and incident rates, while controlling for other factors related to accidents and incidents. Our results show that heterogeneity is generally better for learning, as prior heterogeneity in the causes of errors decreases subsequent accident rates, producing a deeper, broader search for causality than simple explanations like “blame the pilot.” The benefits of heterogeneity, however, apply mainly to specialist airlines. Generalist airlines learn, instead, from outside factors such as the experience of others and general improvements in technology. These results suggest a theory of learning across organizational forms: complex forms benefit from simple information, and simple forms benefit from complex information. The implications of our study for learning theories and work on organizational errors are discussed.

The Ripple Effect: Emotional Contagion and Its Influence on Group Behavior
Sigal G. Barsade - Yale University

Group emotional contagion, the transfer of moods among people in a group, and its influence on work group dynamics was examined in a laboratory study of managerial decision making using multiple, convergent measures of mood, individual attitudes, behavior, and group-level dynamics. Using a 2 x 2 experimental design, with a trained confederate enacting mood conditions, the predicted effect of emotional contagion was found among group members, using both outside coders' ratings of participants' mood and participants' self-reported mood. No hypothesized differences in contagion effects due to the degree of pleasantness of the mood expressed and the energy level with which it was conveyed were found. There was a significant influence of emotional contagion on individual-level attitudes and group processes. As predicted, the positive emotional contagion group members experienced improved cooperation, decreased conflict, and increased perceived task performance. Theoretical implications and practical ramifications of emotional contagion in groups and organizations are discussed.

Process Management and Technological Innovation: A Longitudinal Study of the Photography and Paint Industries
Mary J. Benner - University of Pennsylvania
Michael Tushman - Harvard University

This research explores the impact of process management activities on technological innovation. Drawing on research in organizational evolution and learning, we suggest that as these practices reduce variance in organizational routines and influence the selection of innovations, they enhance incremental innovation at the expense of exploratory innovation. We tested our hypotheses in a 20-year longitudinal study of patenting activity and ISO 9000 quality program certifications in the paint and photography industries. In both industries, the extent of process management activities in a firm was associated with an increase in both exploitative innovations that built on existing firm knowledge and an increase in exploitation’s share of total innovations. Our results suggest that exploitation crowds out exploration. We extend existing empirical research by capturing how process management activities influence the extent to which innovations build on existing firm knowledge. We suggest that these widely adopted organizational practices shift the balance of exploitation and exploration by focusing on efficiency, possibly at the expense of long-term adaptation.

New CEOs and Corporate Strategic Refocusing: How Experience as Heir Apparent Influences the Use of Power
Gregory A. Bigley - University of Washington
Margarethe F. Wiersema- University of California, Irvine

This paper integrates corporate governance research on the consequences of executive power and the upper echelons literature on top managers’ cognitive orientation to develop a framework in which the characteristics of the chief executive officer (CEO) predict corporate strategic refocusing. With data from a sample of large and diversified firms, we examine the extent to which newly appointed CEOs’ strategic orientation determines whether they use their power to maintain the status quo or refocus their firms’ business portfolios. We assess CEOs’ power with seven widely used indicators and use experience as heir apparent to the prior CEO as a measure of new CEOs’ strategic orientation. Overall, results show that CEOs’ power use is influenced by heir apparent experience in predicting the level of corporate strategic refocusing. Heir apparent experience interacts with four power indicators--compensation, functional expertise, elite education, and number of outside boards on which the new CEO is seated--but the interaction between heir apparent experience and number of outside boards is contrary to what was hypothesized.