The interplay of legitimacy gains and technical gains in the adoption of social media

Includes vita.The benefits of adopting new practices vary: some provide technical efficiency and some are institutions and bestow legitimacy to adopting firms. These distinct benefits have been treated in isolation in the literature, but I argue that they are not isolated at all and in fact, might interact in how they impact firm performance. I develop theory that builds upon recent findings that firms are indeed motivated to achieve both legitimacy and technical gains, whether they are early or late adopters. By utilizing strategic alignment and adoption timing as proxies for adoption motivation, I empirically separate the two adoption logics and enable the investigation of whether they are both achievable, and if so whether they are additive or interactive. I test these ideas in the context of social media and the adoption of Facebook, Twitter, and YouTube. I find that some firms achieve both technical and legitimacy gains through adoption and that the two positively interact to enhance one another.Includes bibliographical references (pages 97-108)

On Mitigability of Uncertainty and the Choice Between Predictive and Nonpredictive Strategy

Managers face a critical issue in deciding when to employ a predictive planning approach versus a more adaptive and flexible strategic approach.We suggest that determiningwhich approach is ideal for a given context hangs on the extent to which uncertainty is, or might be, mitigable within that context. To date, however, the mitigability of uncertainty has not been adequately distilled. Here, we take on this issue, distinguishing mitigable ignorance of pertinent but knowable information (i.e., “epistemic uncertainty”) from immitigable indeterminacy (i.e., “aleatory uncertainty”). We review the current state of the debate on the existence of free will, because the acceptance or rejection of conscious agents as a true first cause has fundamental implications. A critical examination of the arguments for and against the free will hypothesis land us on the side of voluntarism, which implies immitigable indeterminacy (but not complete unpredictability) wherever conscious actors are involved. Accepting the existence of immitigable or aleatory uncertainty, then, we revisit the determination of strategic logics and produce important theoretical nuance and key boundary conditions in the normative choice between predictive and nonpredictive strategies

Mitigating versus Managing Epistemic and Aleatory Uncertainty

We are grateful for Holmes and Westgren’s (2020) thoughtful response to our recent article (Packard & 872 Academy of Management Review October Clark, 2020a). In it, they argued that “a mitigability– immitigability axis does not map well onto the aleatory–epistemic uncertainty axis” (p. 7). This challenge to our delineation casts doubt to its usefulness in strategic theorizing, as we have supposed. They thus proposed a revision to our definitions that encapsulates epistemic uncertainty within the confines of the present state of knowledge and the costs of acquiring such knowledge, allowing strategic analysis of the value of mitigation efforts to be more clearly assessed. While we are open minded toward such a revision to our framework, we do not see the proposed revision as a clear advancement over our original model, for reasons that we shall here expound

Probability Logic Fails in Immitigable Uncertainty, but Strategic Logic Does Not

We are grateful to Professor Arend (2020) for his engagement with our work on uncertainty and the choice of strategic logics (Packard & Clark, in press). We easily acknowledge that there are reasons to disagree with our conclusions as they imply a minimization, if not outright rejection, of much of modern behavioral research. It was not surprising, then, to receive Professor Arend’s (2020) criticisms, which appear to be based in what we might call the “epistemic camp” (contra our own “aleatory camp”) of behavioral research.1 The epistemic camp holds all uncertainty to be what we, in our article, describe as “epistemicuncertainty”andhas elsewhere beencalled “ambiguity” (Packard, Clark, & Klein, 2017)—that is, there is always a probability distribution that can be applied to a decision, even if it is unknown and/or subjectively generated in the mind of the decisionmaker. This assumption is quite seductive, as it allows probabilistic models to be applied to literally any choice situation and lends the appearance of scientific rigor. Professor Arend elaborated this position to conclude that any uncertainty that falls outside of it is essentially chaotic and cannot be managed by anything beyond luck. Our contrary position in the aleatory camp is that this epistemic uncertainty or ambiguity should not be confused with aleatory uncertainty—they are different in nature. Thus, there is no valid way to “convert” aleatory uncertainty into ambiguity by imposing a probability distribution onto something that cannot have one. Most business uncertainty involves such aleatory uncertainty due, in Knight’s (1921: 311) words, to “the inherent, absolute unpredictability of things, out of the sheer brute fact that the results of human activity cannot be anticipated and then only in so far as even a probability calculation in regard to them is impossible and meaningless.” Thus, while the probabilistic approach to decision-making preferred by the epistemic camp has a place, we, like most managers (Harrison, 1977), reject it as unrealistic for the majority of real-world choice scenarios. In the language of set theory, we hold the typical set of options available to an actor to be “open” or, more precisely, “infinite” (Packard et al., 2017), and not “closed,” as is required by probability theory. This renders the probability-based logic employed in the epistemic camp’s behavioral research, and in Professor Arend’s critique, “impossible and meaningless.

The Technology Effect: How Perceptions of Technology Drive Excessive Optimism

Purpose: We propose that constant exposure to advances in technology has resulted in an implicit association between technology and success that has conditioned decision makers to be overly optimistic about the potential for technology to drive successful outcomes. Three studies examine this phenomenon and explore the boundaries of this “technology effect.” Design/Methodology/Approach: In Study 1, participants (N = 147) made simulated investment decisions where the information about technology was systematically varied. In Study 2 (N = 143), participants made decisions in a resource dilemma where technology was implicated in determining the amount of a resource available for harvest. Study 3 (N = 53 and N = 60) used two implicit association tests to examine the assumption that people associate technology with success. Findings: Results supported our assumption about an implicit association between technology and success, as well as a “technology effect” bias in decision making. Signals of high performance trigger the effect, and the effect is more likely when the technology invoked is unfamiliar. Implications: Excessive optimism that technology will result in success can have negative consequences. Individual investment decisions, organizational decisions to invest in R&D, and societal decisions to explore energy and climate change solutions might all be impacted by biased beliefs about the promise of technology. Originality/Value: We are the first to systematically examine the optimistic bias in the technology effect, its scope, and boundaries. This research raises decision makers’ awareness and initiates research examining how the abstract notion of technology can influence perceptions of technological advances

The Ethical Implications of Using Genetic Information in Personnel Selection

Biology, during the last decade in particular, is making substantial headway into our social theories of business and behavior. While the social sciences rush to keep up with the advancement of knowledge, we highlight the need for an ethics discussion to also keep pace. Although the implications to theory are important, our focus is on how new knowledge has the capacity to alter the formulation and practice of business policy, which we believe is potentially profound. Furthermore, the ethicality of a set of issues can depend heavily on one’s perspective, and differing views may not always be compatible. With this in mind, we discuss the ways in which one area of emerging biological knowledge—behavioral genetics—invites a rethinking of the nuances of four long-standing topic areas of business ethics surrounding personnel selection; and we do so from two perspectives—that of the employer and of the job seeker. The four ethical topics are (a) the static (mostly) nature of genetic information that is out of an individual’s control, (b) faking and lying during selection processes, (c) privacy, and (d) stigmatization of minority groups

Uncertainty Types and Transitions in the Entrepreneurial Process

While judgment has hitherto typically been viewed as a discrete decision process, we propose that it be conceptualized instead as a continuous and dynamic process of reassessment and revision. Adopting this approach, we revisit the nature of entrepreneurial decision making under uncertainty. We begin with a novel typology of uncertainty that defines and delineates different types of uncertain contexts. We then examine the nature of decision making within these distinct contexts, highlighting differences in how entrepreneurs make decisions within different types of uncertainty. We build these insights into a theory of the entrepreneurial process that highlights the transitory nature of uncertainty as entrepreneurs make certain judgments and revise those judgments over time. We discuss how uncertainty transitions throughout the judgment process, how the judgment process continues dynamically even after a judgment is made, and how the nature of uncertainty shifts over time due to endogenous and exogenous change

The Technology Bias in Entrepreneur-Investor Negotiations

Entrepreneur-investor negotiations are pivotal for ventures in need of funding. Yet, to date, little is known about the dynamics of these negotiations. We investigate a critical feature of this phenomenon by examining the role of technology, via cognitive heuristics, in shaping entrepreneur and investor perceptions as well as subsequent negotiation outcomes. In a controlled laboratory setting, we simulated 103 negotiations between entrepreneurs and investors. We hypothesize and find that there is a pervasive technology bias that influences the perceptions of both parties of the negotiation, and consequently negotiation outcomes. Our findings offer unique insights into the relationships of technology, cognitive heuristics, and negotiations. We discuss the implications for both practitioners and theoreticians in the areas of technology, decision making, negotiations, and entrepreneurial financing

Regulatory and Governance Impacts on Bank Risk-Taking

Risk in financial institutions is vitally important to regulators, policy makers, investors, and the stability of the financial system, yet some critical aspects of that risk remain poorly understood. In the case of U.S. startup banks, a critical choice that can influence risk-taking behavior is which of three regulators—with varying levels of stringency—to choose. The board of directors of the new bank makes this important decision, which may result in different risk implications, depending on board’s structure. Here, we examine banks’ risk behavior associated with the degree of board independence and the choice of regulator. We find that the regulatory environment and board independence jointly influence new bank risk. Our evidence suggests that the intensity of regulatory scrutiny is a partial substitute for board independence in achieving an optimal level of risk. We discuss the implications of our findings for theory and policy

Influence of Job-Dedicated Social Media on Employer Reputation

The popularity and value of social media sites has stretched beyond its initial social connection purposes; today, they represent critical tools for individual and firm visibility. This paper compares and contrasts institutional theory and signaling theory to investigate (1) whether having a job-dedicated page on social media sites (i.e. Facebook, LinkedIn, and Twitter) is related to an organization’s employer reputation, and (2) whether it is merely the fact of having a job-dedicated social media page, or actually communicating (i.e. posting, tweeting, etc.) on that page that is related to an organization’s employer reputation. We used data collected from three major social media sites and found that having a job-dedicated LinkedIn page was positively related to employer reputation, whereas having a job-dedicated Facebook or Twitter page was not related to employer reputation. Furthermore, we did not find social media activity to be related to employer reputation