Social Information as a Strategic Tool: Evidence from a Randomized Field Experiment

Li, Qiang; Stroube, Bryan; Zhao, Bo 

Abstract: Management research has documented how firm behavior is shaped by social influence, yet has generally overlooked how a firm might attempt to strategically trigger social influence processes for its own benefit. We address this possibility with two randomized experiments—a field experiment with 96,065 users of an online investment platform and a follow-on vignette experiment—where participants were provided different types of information about others’ behavior in the context of a referral program. We find evidence for the efficacy of the traditional “descriptive norm” treatment, but that the effects are moderated in important ways by simultaneously disclosing information about the collective consequences of the focal behavior. The field experiment indicates that disclosing social information can lead to increased resource acquisition for the firm via a change in the frequency and characteristics of incoming referrals.

Manipulating attention predicts problem solving strategies: evidence from think-aloud protocols and a behavioral experiment

Laureiro-Martinez, Daniella; Arrieta, Jose Pablo; Brusoni, Stefano

Abstract: Performance feedback and experience are crucial factors in understanding organizational learning and adaptation. However, in many novel, strategically relevant situations, managers cannot benefit from past experience or feedback—yet they still solve important strategic problems. How do they do it? Despite the importance of this question, the processes they use are unknown to the literature. Few studies have used primary, non-retrospective data to explore the process of problem solving in the absence of feedback—perhaps due to methodological difficulties. To bridge this gap, this paper combines different methods in two studies. First, an exploratory lab study aims at understanding with very fine-grained data how strategic problems are solved in the absence of feedback. We employ think-aloud methods combined with content, sequence, and cluster analyses. We find that two problem-solving strategies emerge. One allocates more attention to the framing of the problem, and the other to the implementation of the solution. This result leads us to the second study, where we use a mixed factorial design experiment to pinpoint the causal mechanism that explains the emergence of the two strategies for solving strategic problems. We find that manipulating attention towards problem framing increases deliberation aimed at restructuring the problem elements (i.e., a problem-focused strategy). In contrast, manipulating attention towards solution implementation increases reflection on the potential contingencies and consequences of the solution (i.e., a solution-focused strategy). We discuss how our findings can serve to extend research on problem solving, the microstructure of organizations, and learning. We conclude deriving managerial implications. 

Striking a balance: revenue drift, incentives, and effort allocation in social enterprises

Vladasel, Theodor; Parker, Simon; Sloof, Randolph; Van Praag, Celine Mirja

Abstract: Social enterprises may exhibit revenue drift, i.e. an excessive focus on purpose at the expense of profits. Despite the threats this poses for organizational performance and survival, social entrepreneurs are reluctant to use performance-based pay. We argue that monetary incentives can elicit a balanced effort allocation by redirecting employee effort to commercial tasks and by attracting workers who are less prone to exerting excessive social effort. We vary incentive strength in an online, real-effort experiment and find that both modest and strong incentives produce a more balanced effort allocation by redirecting worker attention to commercial tasks. While strong incentives lead to a small decrease in workers' social motivation, modest incentives do not affect social enterprise workforce composition. Social enterprises that combine mission and monetary rewards not only attract more workers, but also succeed in directing worker attention to both commercial and social tasks.

Small changes with big impact: experimental evidence of a scientific approach to the decision-making of entrepreneurial firms

Spina, Chiara; Camuffo, Arnaldo; Gambardella, Alfonso    

Abstract: Identifying the most promising business ideas is key to the introduction of novel firms, but predicting their success can be difficult. We argue that if entrepreneurs adopt a scientific approach by formulating problems clearly, developing theories about the implications of their actions, and testing these theories, they make better decisions. In particular, this approach helps entrepreneurs to make more precise predictions of the value of their idea and to spot new ideas with higher expected returns. Using a field experiment with 250 nascent entrepreneurs attending a pre-acceleration program, we provide evidence consistent with these mechanisms. Results show that the narrower spread of the prediction of business value of treated entrepreneurs raises the probability that they close their start-ups. Scientific entrepreneurs are also more likely to see new opportunities with higher odds at the right tail which prompts them to pivot to these new ideas and perform better.

Role ambiguity and endogenous adaptation

Knudsen, Thorbjørn; Christensen, Michael; Warglien, Massimo

Abstract: In a laboratory experiment, we used a screening task in which Sah-Stiglitz-dyads screen if a proposal’s quality justifies its acceptance (or rejection). We find that individual actors reduce supply of effort when they clearly understand how the organizational arrangement can be gamed. In contrast, actors experiencing role ambiguity may not clearly understand the organizational arrangement and how it can be gamed. This insight explains our finding that individuals adapt behavior when their role is fixed while their behavior is unaltered when exposed to role ambiguity. The implication of this finding is that, paradoxically, role ambiguity makes individual behavior predictable. For this reason, it is possible to design organizations that have predictable desired effects, such as canceling individual cognitive biases and higher performance.

Network centralization improves collective intelligence: an experiment in problem-solving requiring exploration

Shore, Jesse; Bernstein, Ethan; Jang, Alice Jayoung 

Abstract: This paper examines how centralization of organizational communication networks impacts problem solving performance on tasks requiring a shift from one inferior solution to a dissimilar, novel one. Drawing on a 1,620-subject experiment, we tested the effect of seven network structures on problem solving success. To simulate a dynamic environment with shifting information, we designed a murder mystery task and manipulated when each piece of information could be found: early information encourages an incorrect consensus, requiring a collective shift of solution when more information emerged later. We find that when the communication network within an organization is more centralized, it achieves the benefits of social influence (learning) without the costs (herding).

When ties bind and when ties divide: the effects of communication networks on shared social identity and group performance

Kush, Jonathan; Aven, Brandy; Argote, Linda 

Social movements, workplace allies, and the labeling of gender equity policy changes

Wang, Cynthia; Whitson, Jennifer; King, Brayden; Ramirez, Rachel 

Abstract: Social movements seek allies as they campaign for social, political and organizational changes. How do activists gain allies in the targeted institutions they hope to change? Despite a recognition of the importance of the support of allies in theories about institutional change and social movements, these theories are largely silent on the micro-dynamics of ally mobilization. We examine how the labeling of organizational policies influences potential workplace allies’ support for an organizational policy that benefits women, and the role of collective identity in these decisions.

Linking thought to action in dynamic capabilities: a micro-level inquiry into firm adaptation

Fernandes Rodrigues Alves, Marlon; Vasconcelos Ribeiro Galina, Simone; Zollo, Maurizio

Abstract: A growing number of studies have connected cognitive capabilities to strategic change. However, the literature lacks an integrative investigation of the traditional triad of human faculties: impulse, intelligence, and habits. To fill this gap, we investigate dynamic capabilities mapping these faculties to intuition, reflection, and routines, respectively. To test our predictions, we conducted a lab experiment with executives where we examine the effect of priming intuitive and reflective cognitive processing on routine adaptation after an exogenous shock. We provide evidence that teams under the intuition condition cope better with environmental changes than the ones under the reflection condition. We also found evidence that environments with more feedback-learning opportunities (i.e. more stable) facilitate routine adaptation. Further, we show that the payoffs for intuition rather than reflection are higher in environments with less feedback opportunities.

Cooperation with strangers: spillover of community norms

Nee, Victor; Molina, Mario; Holm, Hakan

Aspiration adaptation: a test and comparison of the cyert and march model

Sinha, Anshuman; Bromiley, Phil; Joseph, John

Abstract: This study compares the original Cyert and March (1963) aspiration adaptation model with three other frequently-used aspiration adaptation models. Using actual aspirations and performance data gathered from student teams in simulated organizations, our research setting enables direct observation of self and social aspiration comparison reference points that are theorized to impact aspiration adaptation. Our results support the separate and weighted average aspiration models over the original Cyert and March (1963) aspiration adaptation formulation. Though both the Cyert and March (1963) model and the separate model include similar explanatory variables, the separate aspirations model allows for varying influences of performance above and below aspirations, as does the weighted average aspirations model. We conclude with implications for future research concerning both aspiration adaptation and influences of aspirations on firm behavior.

Iterative Coordination and Innovation

Ghosh, Sourobh; Wu, Andy

Abstract: We investigate the widespread Agile management practice of iterative coordination: frequent meetings to coordinate individuals on innovation-oriented organizational goals. While iterative coordination is assumed to generate innovation, there is limited empirical evidence of its effect on innovation. With the leading technology firm Google, we embed a field experiment within a hackathon to identify iterative coordination’s effect on innovation. We find that iterative coordination’s influence is mixed: while iteratively coordinating firms develop more valuable products, these products are simultaneously less novel. Furthermore, by tracking software code, we find that iteratively coordinating firms favor integration at the cost of specialization to create new knowledge. Our study refines theoretical understanding of the relationship between goal coordination and innovation while introducing new methods for studying how organizations innovate.

Freedom to act? strategic peer evaluation, negative relationships and brokerage

Greenberg, Jason; Liu, Christopher

Abstract: From capital and resource allocation to hiring and promotion, organizational actors constantly make evaluations. These evaluations occur within an environment in which these actors jockey for limited resources, often resulting in negative sentiment that may color putatively objective evaluation outcomes. In this paper, we bring to bear social network theory to suggest that an individual’s ability to evaluate critically peers they feel negative sentiment towards is contingent on the focal individual’s network. Specifically, we suggest that only individuals in brokered network positions perceive the freedom to act upon their negative sentiment thereby contravening organizational norms. We use a mix of archival and experimental methods across two different populations to test this proposition. Across both settings, we provide evidence that only network brokers have the freedom to act in opposition to cultural norms by acting on their negative sentiment in peer evaluation. These results suggest that overlooking an evaluator’s negative sentiment, as well as the network positions that constrain or enable an individual’s actions, may lead to distortions in peer evaluation processes and outcomes.

Organizational vs. crowd selection: implications for exploration and exploitation

Deniz, Berk Can; Sorensen, Jesper B.

Abstract: This article considers how the interdependence between the variation and selection stages of the innovation process affects the variety of ideas generated. Most organizations rely on internal selection mechanisms, whereby creators submit their ideas to managers or experts within their firm for approval. Recent years have seen a growth in the uses of crowd-based selection mecha- nisms, whereby external audiences choose among ideas. While prior work has compared crowds and expert in terms of which kinds of ideas they select, we examine how these alternative selec- tion mechanisms might influence the idea-generation process. We argue that internal selection generally lowers exploration by reducing the variation in ideas because creators with a clear conception of selection criteria constrain their search for ideas. We use two separate innovation tournaments to compare the effects of selection mechanisms on the variety of ideas generated.

Getting users involved in idea crowdsourcing: an experimental approach to stimulate intrinsic motivation

Garaus, Christian; Garaus, Marion; Wagner, Udo

Organizing for entrepreneurship: field-experimental evidence on the performance effects of autonomy in choosing project teams and ideas

Dahlander, Linus; Boss, Viktoria; Ihl, Christoph; Jayaraman, Rajshri

Legitimacy judgment formation as deliberation: evidence from experiments on corporate tax avoidance

Schnider, Robin; Haack, Patrick; Scherer, Andreas  

Abstract: We explore the conditions under which deliberation leads to the (de-)legitimation of organizations and their practices. Specifically, we analyze the impact of peers, experts, and social media commentators in the formation of legitimacy judgments by means of two experiments in the context of global tax avoidance and the Big Four. The first experiment featured face-to-face discussions between study participants and real representatives of a Big Four tax advisory firm and its critics, and in the second experiment, participants where shown videos of the discussions via YouTube along with prepared social media comments. According to the results, both direct and indirect deliberation may serve as valid legitimation strategy, but the comments of social media users pose a potential risk as they are able overrule and reverse the intended impact on legitimacy. 

Until lions become lambs: motivational climate, organizational identification, and the disclosure of a firm's proprietary knowledge

Di Stefano, Giada; Micheli, Maria-Rita

Abstract: How can firms prevent the disclosure of proprietary knowledge through their employees? In this paper, we examine the role of organizational climate as a powerful tool firms can act upon. To this end, we engage in an extensive field study of the two largest CERN experiments. Our empirical strategy consists of a mixed-method approach, in which we sequentially engage in inductive theory-development followed by a field experiment aimed at testing our theory. Our findings suggest that employees are less likely to disclose proprietary knowledge when they feel an integral part of the organization, but more likely to disclose when the motivational climate is oriented towards performance, with the organization encouraging them to outperform coworkers. We further argue that, even in the presence of an unfavorable organizational climate, the threat of knowledge disclosure can be mitigated by acting upon the individual employee through job design and socialization regime.

Delays impair learning and can drive convergence to inefficient strategies

Rahmandad, Hazhir; Gary, Michael   

Abstract: With so many possible choices, why do managers adopt the strategies they do? We identify delays between adopting a strategy and observing the full implications of that choice as a critical factor influencing strategic choices. Using a simulation of a service firm, we conduct two behavioral experiments to investigate how delays interact with outcome uncertainty to shape learning, strategy adaptation, and performance outcomes. Two mechanisms emerge from how different subject groups perceive, react to, and learn in the presence of delayed feedback and uncertainty. First, when multiple viable strategies exist, longer delays lead both general participants and experienced managers towards alternatives that have rapid returns. When those alternatives are suboptimal, delays may strengthen convergence to inefficient strategies. Second, delays and uncertainty may also induce learners to persist with their a priori strategies. Managers show larger confidence in their priors, and thus underperform

Leading-by-example, corporate culture, and firm performance: insights from an experiment

Le, Anh; Nguyen, Quang; Kim, Trang 

Abstract: We conducted a field experiment with managers and their employees from 320 Vietnamese small firms to identify the link between managers’ leading by example (LBE) in cooperation, corporate culture, and firm performance. To do so, we proposed a procedure to elicit LBE using an experimental approach. We then combined the experimental data with a panel data, which yielded information on corporate culture and firm performance. We uncovered a positive link between the managers’ LBE in cooperation, cooperative culture, and firm performance. Firms whose managers had a higher tendency to undertake LBE exhibit a higher cooperative culture. Likewise, LBE improves firm performance. Interestingly, we found that concealing the managers’ identity to their employees enhances the impact of LBE in cooperation on organizational outcomes.

Aspiration levels and exploration-exploitation: an adaptive learning approach

Raveendran, Marlo; Zheng, George; Srikanth, Kannan

Abstract: How do high and moderate aspiration levels compare in terms of affecting the trade-off between exploration and exploitation? Recent reviews of empirical work have challenged the widely held belief that high aspiration levels lead to more exploration. Although exploration–exploitation decisions are often viewed as a reinforcement learning process, much prior work explores this question as a choice process, i.e.,deciding betweenrelatively more or less riskyoptions. After developing a simple agent-based model to understand how aspiration levels influence adaptive learning from feedback, we report on behavioral laboratory experiments used to test our model’s predictions. In the canonical multi-armed bandit problem, we show that subjects assigned a high aspiration level exploit more–and that, when they do explore, they do so more narrowly–as compared with subjects assigned a moderate aspiration level. Ahigh (moderate) aspiration level reduces (increases) feedback ambiguity about the relative attractiveness of different options, which affects agents’ subsequent sampling and hence their learning. The low levels of exploration engendered by high aspiration levels are advantageous in stable environments, but they impair performance in unstable environments.

Paying it forward or paying me back? an experimental investigation of mixed generalized and direct reciprocity in organizations

Wang, Long; Song, Fei; Zhong, Chen-Bo

Abstract: Drawing on cross-disciplinary insights from evolutionary biology, economics, sociology, social psychology, and management, we investigated the coexistence of paying it forward and direct reciprocity in employee-organization relationships. Two experimental studies based on behavioral economics games consistently showed that leaders paid forward generous compensation to their employees after the leaders themselves had received generous compensation before. When highly paid leaders paid forward generosity to their employees, they were not necessarily motivated by the expectation of reciprocity of their own employees. In addition, strong reciprocators (leaders who reciprocated generosity with high work effort) played an important role in instigating and sustaining a pay-it-forward system because they did not only reward direct reciprocity, they also paid forward generosity, especially to other strong reciprocators.

Building an Equilibrium: Rules versus Principles in Relational Contracts

Gibbons, Robert; Grieder, Manuel; Herz, Holger; Zehnder, Christian    

Abstract: Effective organizations are able to adapt members' strategies to unforeseen change in an efficient manner. We study when relational contracts enable organizations to achieve this. Specifically, we explore the hypothesis that basing a relational contract on general principles rather than on specific rules is more successful in achieving efficient adaptation. In our Baseline condition, we indeed observe that, compared to pairs who rely on specific rules, those who articulate general principles achieve significantly higher performance after change occurs. Underlying this correlation, we also find that pairs with principle-based agreements are more likely both to expect and to take actions that are consistent with what their relational contract prescribes. To investigate whether there is a causal link between principle-based agreements and performance, we implement a "Nudge" intervention intended to foster principle-based relational contracts.      

When Credibility Undermines Knowledge Transfer: Two Experiments on Heterogeneous Credibility, Attention, and Knowledge Transfer

Teodorovicz, Thomaz

Abstract: In this paper, I study one aspect of knowledge transfer that has often been suggested to facilitate knowledge transfer: the credibility of knowledge sources. Drawing on the knowledge transfer and attention-based literatures, I explore how signaling knowledge source credibility may be detrimental to knowledge transfer. I hypothesize that signaling source credibility in a context of heterogeneous credibility across pieces of knowledge “crowds out” the attention of knowledge receivers from (potentially relevant) knowledge associated with relatively less credible sources. I find empirical support for my hypotheses in two different field experiments, one with 516 managers from a large retail company, and another in an online labor marketplace. The main theoretical contribution is to propose a mechanism through which a characteristic of a knowledge transfer process, source credibility, may become a double-edged sword.

Collateral damage: high-salience events and variation in racial discrimination

Younkin, Peter; Gorbatai, Andreea; Burtch, Gordon

Abstract: Each year a handful of events polarize the country, increasing the salience of the fault lines between groups. Prior research recognized their impact on organizational policy; less attention has been paid to how these polarizing events affect individual economic opportunities. We propose that events that momentarily increase the salience of demographic divisions have unrecognized economic repercussions for members of the focal group linked to polarizing events. Specifically, we propose that African Americans will be less likely to raise funding for new ventures in the aftermath of an event due to increases in bias against out-group members as a result of increased racial salience. We test this using two experiments and data from crowdfunding in the wake of #BLM events. We find evidence that racially salient events lower quality evaluations and success of African American entrepreneurs. Findings suggest that high-salience events have costly economic repercussions for minority founders.

Social exchange and the reciprocity roller coaster: evidence from the life and death of virtual teams

Hergueux, Jerome; Algan, Yann; Benkler, Yochai; Henry, Emeric

Abstract: “Lab-in-the-field” experiments unambiguously point to reciprocity as an important driver of the success of real-world organizations. This empirical result is (partly) at odds with laboratory research on the private provision of public goods, where reciprocal preferences can cause a breakdown in cooperation.We argue that the lab-in-the-field methodology is a powerful tool for organizational research, but that it might also suffer from sampling bias: researchers collect data from existing organizations, i.e., those that did not fail and disappear. Using the context of open source software virtual teams – where the full history of both failed and surviving projects can be recovered – we propose to address this issue by leveraging lab data both directly to predict outcomes and to validate a generalizable measure of field reciprocity, which can be computed for both active and failed projects. Using this alternative approach to lab-in-the-field, we show that even though virtual teams with a larger share of reciprocators are more successful when they survive, they are also more likely to fail. We leverage the panel structure of our data to show that reciprocal preferences work as a catalyst: they reinforce team dynamics and accelerate success during productive times, but also make it harder to recover from periods of inactivity.

From legitimacy judgment to symbolic action: an experimental inquiry into the role of evaluative mode

Van den Broek, Tijs; Langley, David; Ehrenhard, Michel; Groen, Aard

Abstract: The legitimacy-as-perception perspective emphasizes individual cognition as the mechanism through which legitimacy propriety judgments are formed. Current theories on social evaluation offer limited explanations of why evaluators publicly express their legitimacy judgments. Additionally, the increasingly important role of digital media in judgment formation and expression has received little attention. We develop a model based on dual process theories of cognition to understand how two evaluative modes, active and passive, influence individual symbolic action targeting organizations, based on digital media attributes and on individuals’ own legitimacy judgments. We present an experimental inquiry to test this model using the setting of an online petition asking consumers to publicly criticize a hotel booking website. Our results show that the two evaluative modes differ markedly in how media attributes and judgment dimensions influence symbolic action.

Harnessing cognitive diversity to enhance individual decision making in novel complex problems—the dilemma of social interaction

Pittnauer, Sabine; Hohnisch, Martin; Lee, Gwen K.; Ostermaier, Andreas; Pfingsten, Andreas; Selten, Reinhard

Abstract: When a problem leaves decision makers uncertain as how to approach it, observing the decisions of others has the potential to improve individual decisions by promoting more accurate judgments and a better insight into the problem. However, observing the decisions others are taking may also activate motives that are apt to prevent this potential from being realized, for instance ego concerns that prompt excessive risk taking. Zeroing in on this nexus of effects, our study connects two literatures on socially-embedded cognition—problem-solving-in-networks and risk-taking-in-groups. We designed two mechanisms for providing others' interim decisions in an intertemporal financial problem, controlling for and equalizing the amount of information about the problem inferable from these decisions. Our design manipulates the psychological distance to others whose interim decisions could be learned, and thereby the tendency to engage in social comparison. One mechanism involves participants observing the interim decisions of two randomly selected participants who tackled the same problem in the past, the other involves participants observing each others' interim decisions in groups of three participants.  We predicted that participants who observed distant others' decisions would perform better than participants who do not receive peer information; and that participants who observed proximal others' decisions would take more risk and perform worse than those who observed distant others' decisions. The data corroborate our predictions. They also provide direct evidence that the group setting prompts a focus on relative short-term performance which actually harms long-term performance. 

Cognitive microfoundations of search

Bergenholtz, Carsten; Vuculescu, Oana; Amidi, Ali   

Abstract: This paper investigates the cognitive antecedents of individualsearch behavior in a combinatorial, complex landscape. We present results from 3 studies where375individuals solve a gamified problem-solving task. We complement these with measurements of cognitive styles and established neuropsychological tests of the players’ cognitive abilities. The task environment allows us to distinguish between local and global search, and also to identify directed global search that takes departure in an understanding of the underlying problem structure. We document systematic heterogeneity of search, showing that individuals with certain cognitive styles and cognitive abilities engage in more local, systematic search and less undirected, global search. The archetypical assumptions of an NK model thus relies upon a particular conception of individual cognition. Integrating insights from both cognitive psychology and management, we contribute to research on the microfoundations of search, highlighting that cognitive antecedents can be as important a factor for explaining various kinds of search, as the external performance feedback that is the core of theadaptive search mechanism. These insights into the role of cognition have implications for what assumptions simulation models should rely upon and how managers can influencethe search behavior of individuals.

Performance above aspiration: attention to different types of search

Ref, Ohad; Milyavsky, Maxim; Keil, Thomas

Learning from omission errors

Wahle, Thorsten; Eggers, J.P.

Abstract: Within organizations, the ability to learn from errors is central to performance improvement and adaptation. Given that many types of decisions are made repeatedly learning works through a continuous process of making decisions and observing feedback. But different types of errors produce different levels of observable feedback–commission errors generally produce direct feedback, but omission errors often do not. Thus, for managers to learn from omissions they must be able to know the outcomes of choices not pursued. One key source of such information comes from observing competitors, but attending to competitors may in itself affect learning and adaptation. In a series of experiments, we study whether decision makers learn from feedback provided by observing competitors. We argue and find that their ability to learn from decision errors depends on their position relative to the competitor: Leaders learn from their omission errors, but laggards learn only from commission errors.

Microfoundations of exploitation and exploration behavior: an experimental study

Mittone, Luigi; Morreale, Azzurra; Ritala, Paavo    

Abstract: Exploitation in organizations is rooted in improving existing performance, while exploration relates to the search for new alternatives and potentially higher performance. However, microfoundations of this behavior – i.e., how and why individuals exploit and explore during decision-making situations – remains largely a blind spot in the literature. We conduct an experimental laboratory study focusing on sequences of individual decision-making, including a training phase that simulates the establishment of individual-level routines, and an active phase that simulates preceding choices regarding exploitation and exploration. We financially incentivize the participants to abandon a past routine by providing higher payoffs for exploring unknown task environments. Using a sequential choice process, we observe decision-makers’ choices to continue exploiting past routine, to explore (potentially earning a higher reward), or to exploit a newly established routine. 

Converging tides lift all boats: the impact of consensus in evaluation criteria on investments in an emerging technology field

Shen, Xirong (Subrina); Li, Huisi (Jessica); Tolbert, Pamela

Abstract: While previous studies show that the emergence of evaluation criteria for a new technology improves the life chances of well-performing firms, we theorize that consensus in such criteria among technology experts increases investments to all firms in the new sector, and provide supportive evidence from an experiment with 80 Chinese investors (Study 1). We further explore this result in a second experiment with 412 U.S. participants (Study 2), showing that evaluation criteria consensus among technology experts both increases investors’ propensity to view a firm as technologically competent and to expect that other investors will favor investing in the firm. Analyses of archival data on investment in artificial intelligence technology firms by U.S. and Chinese investors (Study 3a and Study 3b, respectively) also lend support to our arguments. By exploring the social-cognitive processes that link evaluation criteria consensus among experts to investors’ assessment of firms in emerging tech

Reflection and risk: an experiment on managerial traits and organizational structure

Hamman, John; Martinez Carrasco, Miguel

Abstract: We study how micro-level characteristics of managers, specifically cognitive ability and risk preferences, affect the structure and function of organizations. To do so, we model a managerial decision environment in which a manager both determines the skill heterogeneity of her workers and determines whether to retain or delegate the ability to allocate tasks. The manager prefers delegating when uncertainty is sufficiently high relative to the incentive conflict with her workers, which is endogenously determined by her chosen team composition. Experimental data supports the direction of the main predictions, though it shows how and why participants deviate from expected behavior. In particular, we find that higher cognitive ability leads to better team selection, while greater risk tolerance allows managers to optimally delegate decision rights. Generally, the results highlight the difficulties in navigating complex managerial environments and illustrate potentially costly ways in which managers seek to simplify their decisions.

Stated-lived value congruence and judgments of organizational authenticity

Pamphile, Vontrese; Ruttan, Rachel

When more can mean less: how drawing increased attention to a social enterprise’s good deeds can backfire

Slade Shantz, Angelique; Kistruck, Geoffrey; Smith, Isaac

Abstract: Social enterprises often use stories about the people who their work touches as a way to bolster support among key stakeholders. In particular, social enterprises may deploy this strategic resource among employees, who often work for low wages given the financial constraints social enterprises are subject to, as they make trade-offs between spending resources on mission versus financial viability. While research suggests that drawing increased attention to the beneficiaries of this positive impact will create feelings of compassion and the motivation to work even harder for these beneficiaries, often implicit in this relationship is that employees are in an advantaged position, relative to those they are helping, and that drawing increased attention to beneficiaries reflects a downward social comparison. Yet this is not always the case, and in this research we question the efficacy of drawing attention to the successes of beneficiaries that may reflect an upward social comparison.

The Gender Gap in Tech & Competitive Work Environments? Field Experimental Evidence from an Internet-of-Things Product Development Platform

Boudreau, Kevin; Kaushik, Nilam   

Abstract: Many technology companies struggle to fill all their positions and to achieve gender parity in their ranks. One explanation for gender disparities is the possibility that men and women differ in their willingness to work under competitive organizational environments of tech firms. To investigate this question, this paper reports on a large platform-based field experiment in which 97,696 U.S. university-educated individuals were given the opportunity to join a tech-related product development activity. Individuals were randomly assigned to treatments emphasizing either competitive or collaborative interactions with other participants. We find that (1) in non-STEM fields, the competition treatment leads to a 27% drop in participation for females in comparison to males. However, in our main finding,(2) in STEM fields, we find no statistical differences in men and women’s responses to competition. The patterns are consistent with (3) men in non-STEM fields exhibiting overconfidence in their likelihood of succeeding under competition. We also find that, while participation in highest in STEM fields, (4)the ratio of female to male participation in a field is better predicted by whether the field is male-or female-dominated, than it  is by whether it is a STEM field or not.We discuss theoretical interpretations and implications for organizations.