MICRO-Foundations in Strategic Management: Squaring Coleman's Diagram

Abell, Felin and Foss argue that "macro-explanations" in strategic management, explanations in which organizational routines figure prominently and in which both the explanandum and explanans are at the macro-level, are necessarily incomplete. They take a diagram (which has the form of a trapezoid) from Coleman, Foundations of Social Theory, The Belknap Press of Harvard University Press, Cambridge (Mass.)/London, (1990) to task to show that causal chains connecting two macro-phenomena always involve "macro-to-micro" and "micro-to-macro" links, links that macro-explanations allegedly fail to recognize. Their plea for micro-foundations in strategic management is meant to shed light on these "missing links". The paper argues that while there are good reasons for providing micro-foundations, Abell, Felin and Foss's causal incompleteness argument is not one of them. Their argument does not sufficiently distinguish between causal and constitutive relations. Once these relations are carefully distinguished, it follows that Coleman's diagram has to be squared. This in turn allows us to see that macro-explanations need not be incomplete

Mind, rationality, and cognition: an interdisciplinary debate

This article features an interdisciplinary debate and dialogue about the nature of mind, perception, and rationality. Scholars from a range of disciplines—cognitive science, applied and experimental psychology, behavioral economics, and biology—offer critiques and commentaries of a target article by Felin, Koenderink, and Krueger (2017): “Rationality, Perception, and the All-Seeing Eye,” Psychonomic Bulletin & Review. The commentaries raise a number of criticisms and issues concerning rationality and the all-seeing-eye argument, including the nature of judgment and reasoning, biases versus heuristics, organism–environment relations, perception and situational construal, equilibrium analysis in economics, efficient markets, and the nature of empirical observation and the scientific method. The debated topics have far-reaching consequences for the rationality literature specifically, as well as for the cognitive, psychological, and economic sciences more broadly. The commentaries are followed by a response from the authors of the target article. Their response is organized around three central issues: (1) the problem of cues; (2) what is the question?; and (3) equilibria, $500 bills, and the axioms of rationality

Dynamics on expanding spaces: modeling the emergence of novelties

Novelties are part of our daily lives. We constantly adopt new technologies, conceive new ideas, meet new people, experiment with new situations. Occasionally, we as individuals, in a complicated cognitive and sometimes fortuitous process, come up with something that is not only new to us, but to our entire society so that what is a personal novelty can turn into an innovation at a global level. Innovations occur throughout social, biological and technological systems and, though we perceive them as a very natural ingredient of our human experience, little is known about the processes determining their emergence. Still the statistical occurrence of innovations shows striking regularities that represent a starting point to get a deeper insight in the whole phenomenology. This paper represents a small step in that direction, focusing on reviewing the scientific attempts to effectively model the emergence of the new and its regularities, with an emphasis on more recent contributions: from the plain Simon's model tracing back to the 1950s, to the newest model of Polya's urn with triggering of one novelty by another. What seems to be key in the successful modelling schemes proposed so far is the idea of looking at evolution as a path in a complex space, physical, conceptual, biological, technological, whose structure and topology get continuously reshaped and expanded by the occurrence of the new. Mathematically it is very interesting to look at the consequences of the interplay between the "actual" and the "possible" and this is the aim of this short review.Comment: 25 pages, 10 figure

Governance considerations for seeker–solver relationships: a knowledge‐based perspective in crowdsourcing for innovation contests

The need to solve innovation problems and insource knowledge has led to an increasing number of organizations engaging in crowdsourcing activities and subsequently establishing working relationships with winning solution providers. Using a knowledge‐based view and the problem‐solving perspective, we develop a theoretical framework suggesting how specific innovation problem attributes (i.e. the decomposability, formulation and search space of the problem) influence the governance decision (unilateral vs. bilateral) of seekers to manage the relationship with winning solvers. We empirically analyse the framework using 582 challenges broadcast on the NineSigma crowdsourcing platform. Our results indicate that problem attributes – the formulation and search space of the problem – have a positive effect on seekers’ preference towards unilateral governance structures. However, we did not find any empirical confirmation of the effect that the decomposability of the innovation problem has on seekers’ preference towards unilateral governance structures. This study offers several contributions to the crowdsourcing literature, and also has important implications for managers of organizations aiming to insource knowledge through crowdsourcing for innovation contests

Performative Work: Bridging Performativity and Institutional Theory in the Responsible Investment Field

Callon’s performativity thesis has illuminated how economic theories and calculative devices shape markets, but has been challenged for its neglect of the organizational, institutional and political context. Our seven-year qualitative study of a large financial data company found that the company’s initial attempt to change the responsible investment field through a performative approach failed because of the constraints posed by field practices and organizational norms on the design of the calculative device. However, the company was subsequently able to put in place another form of performativity by attending to the normative and regulative associations of the device. We theorize this route to performativity by proposing the concept of performative work, which designates the necessary institutional work to enable translation and the subsequent adoption of the device. We conclude by considering the implications of performative work for the performativity and the institutional work literatures

Institutional distance and foreign subsidiary performance in emerging markets: moderating effects of ownership strategy and host-country experience

Institutional distance has been known to be an important driver of Multinational Enterprises’ strategies and performance in host countries. Based on a large panel dataset of 10562 firms operating in 17 emerging markets and spanning 80 home countries, we re-examine the relationship described by Gaur and Lu (2007) between regulatory institutional distance and subsidiary performance. We extend this research by (1) examining this relationship in the context of emerging markets, (2) examining the moderating effects of ownership strategy and host-country experience within the context of emerging markets and (3) accounting for a greater variety of institutions by including a large number of home and host countries. We find that institutional distance negatively affects subsidiary performance in emerging markets. Our findings also show that the negative effects of institutional distance on subsidiary performance are lesser for subsidiaries with partial ownership (than for subsidiaries with full ownership) and for subsidiaries with greater host-country experience. We discuss our findings with respect to Gaur and Lu’s model, which explores the relationships between these variables in a general context

Decision-making in international business

This paper distinguishes three domains of international business theory: the boundaries of the multinational enterprise, the external environment of the enterprise and its internal structure. The central concern of internalisation theory is the boundaries of the firm. Any general theory of international business must analyse the external environment and internal structure as well. Competition dominates the external environment whilst co-operation dominates internal structure. Different models of decision-making are required for each. Different theories of decision-making must therefore be integrated in order to transform internalisation theory into a general theory of international business. This paper examines how this can be done

How do theories become self-fulfilling? Clarifying the process of Barnesian performativity

To explore when theories become self-fulfilling in our original paper (Marti & Gond, 2018), we first had to develop a process model of how theories become self-fulfilling. We argued that this process involves three steps: (1) new theories lead to experimentation, (2) experimentation produces anomalies, and (3) anomalies convince initially unconvinced actors to shift their practices. Our critics (i.e., D’Adderio, Glaser, & Pollock, 2019; Garud & Gehman, 2019; Shadnam, 2019) raise important issues about our process model, which is why we use this response to clarify our argument about the process of Barnesian performativity. In Section 1, we lay the groundwork for our response by explaining why Barnesian performativity is relevant to organization and management theory. In Section 2, we show that our model is in line with important insights from our critics: we show why self-fulfilling theories can be part of an “ongoing journey” (Garud & Gehman, 2019: 1), how anomalies can lead to new theories (D’Adderio et al., 2019), and why our model matters for folk theories (D’Adderio et al., 2019). In Section 3, we reflect on our process model from a philosophy of science perspective by discussing the role that “reality” plays in each step of our process model. We thereby address concerns that our process model is “positivist” (Shadnam, 2019: 1), “representational” (Garud & Gehman, 2019: 3), and “essentialist” (D’Adderio et al., 2019: 3)

Home country supportiveness/unfavorableness and outward foreign direct investment from China

What drives the outward foreign direct investments (OFDIs) by emerging market firms (EMFs)? Drawing on a strategy tripod framework, this article proposes a theoretical model to predict OFDI by EMFs from China. Specifically, we use institution- and industry-based views to examine two facets of home country environment, namely the supportiveness from home government and unfavorableness from home industry, as important determinants of OFDI, and compare the relative strength of these effects. Further, we use resource-based view to argue that the effect of the home country environment is contingent on the international experience portfolios of EMFs