A Research Agenda

For decades, the literatures on firm capabilities and organizational economics have been at odds with each other, specifically relative to explaining organizational boundaries and heterogeneity. We briefly trace the history of the relationship between the capabilities literature and organizational economics and point to the dominance of a “capabilities first” logic in this relationship. We argue that capabilities considerations are inherently intertwined with questions about organizational boundaries and internal organization, and use this point to respond to the prevalent “capabilities first” logic. We offer an integrative research agenda that focuses, first, on the governance of capabilities and, second, on the capability of governance

Politics, Governance, and Leadership: What Can We Learn From the Academy of Management’s Response to EO13769?

Organization design seeks to balance potentially conflicting objectives while achieving a broader mission. EO13769 created a challenge for the president of the Academy of Management in leading through these conflicts, as President Anita McGahan describes: how to be true to her own moral values while leading an organization with well-established design constraints, and members with diverse opinions. This article shares the perspectives of 12 scholars on the lessons we can learn from Professor McGahan’s leadership of a constraining organization through a challenging time

The Extraction of 3D Shape from Texture and Shading in the Human Brain

We used functional magnetic resonance imaging to investigate the human cortical areas involved in processing 3-dimensional (3D) shape from texture (SfT) and shading. The stimuli included monocular images of randomly shaped 3D surfaces and a wide variety of 2-dimensional (2D) controls. The results of both passive and active experiments reveal that the extraction of 3D SfT involves the bilateral caudal inferior temporal gyrus (caudal ITG), lateral occipital sulcus (LOS) and several bilateral sites along the intraparietal sulcus. These areas are largely consistent with those involved in the processing of 3D shape from motion and stereo. The experiments also demonstrate, however, that the analysis of 3D shape from shading is primarily restricted to the caudal ITG areas. Additional results from psychophysical experiments reveal that this difference in neuronal substrate cannot be explained by a difference in strength between the 2 cues. These results underscore the importance of the posterior part of the lateral occipital complex for the extraction of visual 3D shape information from all depth cues, and they suggest strongly that the importance of shading is diminished relative to other cues for the analysis of 3D shape in parietal regions

Ownership competence

Ownership is fundamental to firm strategy, organization, and governance. Standard ownership concepts—mainly derived from agency and incomplete contracting theories—focus on its incentive effects. However, these concepts and theories neglect ownership's role as an instrument to match judgment about resource use and governance with the firm's evolving environment under uncertainty. We develop the concept of ownership competence—the skill with which ownership is used as an instrument to create value—and decompose it into matching competence (what to own), governance competence (how to own), and timing competence (when to own). We describe how property rights of use, appropriation, and transfer relate to the three ownership competences and show how our theory offers a fresh perspective into the role of ownership for value generation

Crafting Internal Hybrids: Complementarities, Common Change Initiatives, and the Team-Based Organization

Hybrid governance forms that seek to meld the virtues of both market control and traditional hierarchical control are alluring. Comparatively little research, outside of the M-form literature, has examined internal hybrids - hierarchical forms infused with elements of market control. This paper contends that common change initiatives, such as TQM, re-engineering, autonomous work teams, and group-based rewards, are appropriately viewed as attempts to craft internal hybrids by selectively infusing elements of market control within hierarchy. However, these change initiatives are often implemented in isolation and, as a consequence, violate patterns of complementarity that sustain traditional hierarchy or support the stable infusion of market control.The paper argues that these violations of complementarity often spiral hierarchies toward fundamental transformation. The clear trajectory of these transformations is to quite radically disaggregated organizations structured around teams. The paper presents both theory and evidence supporting the existence of complementarities among these common change initiatives.Organizational Forms, Complementarities, Hybrid Structures, Organizational Change,

Valve Corporation: Composing Internal Markets

Discussions of the Valve Corporation are always enlightening. The skeptic wonders how much is rhetoric and recruiting ploy and how much is real. Is there clear evidence that this organizational design actually works – that it is efficient in this setting? While revenues per employee are quite remarkable, cause and effect are unclear. Is “boss-less-ness” the cause of high sales per employee or simply the result of high sales per employee, fueled from earlier success? The same question could be asked of Google’s unusual organizational approach. Is Google’s success the result of its extensive autonomy granted to employees, or is its past success the enabling cause of such autonomy? Such questions, of course, are empirically unanswerable here. I therefore set them aside and assume this organizational specimen is efficient – well-suited to its environment – and proceed with further commentary

Explaining Organizational Diseconomies of Scale in R&D: Agency Problems and the Allocation of Engineering Talent, Ideas, and Effort by Firm Size

The comparative efficiency and success of small firms in R&D remains largely unexplained. This paper empirically examines scale diseconomies in offering employment contracts as an explanation for diseconomies of scale in R&D. The paper argues that small firms more efficiently resolve the severe agency problems of hidden information and hidden behavior in R&D. Small firms more efficiently offer contracts that reward performance than large firms, and consequently, small firms attract and retain engineers with higher ability and skill. Further, small firms through these more performance-contingent contracts induce higher levels of effort than large firms. The study tests and generally confirms these hypotheses using data collected from 912 current and former engineering employees of two large high-technology companies.diseconomies of scale, compensation, job mobility, self-selection, agency theory, firm size and innovation