David L. Deephouse

Does Isomorphism Legitimate

This study tests a central proposition of institutional theory, that organizational isomorphism increases organizational legitimacy. Results show that isomorphism in the strategies of commercial banks is related to legitimacy conferred by bank regulators and the media, even in the presence of organizational age, size, and performance.

Media Reputation as a Strategic Resource: An Integration of Mass Communication and Resource-Based Theories

The resource-based view proposes that reputation is a resource leading to competitive advantage. Past research tested this by using Fortune ratings to measure reputation, but these ratings are theoretically weak. This paper integrates mass communication theory into past research to develop a concept called media reputation, defined as the overall evaluation of a firm presented in the media. Theoretical and empirical analyses indicate that media reputation is a resource that increases the performance of commercial banks.

To be different, or to be the same? It’s a question (and theory) of strategic balance

This paper addresses the performance consequences of firm-level strategic similarity. Past research observed that firms face pressures to be different and to be the same. By differentiating, firms reduce competition. By conforming, firms demonstrate their legitimacy. Both reduced competition and legitimacy improve performance. This paper begins building a theory of strategic balance by synthesizing the differentiation and conformity perspectives. The theory directs attention to intermediate levels of strategic similarity where firms balance the pressures of competition and legitimation. Empirical support for the theory is found in a longitudinal study of commercial banks. Several suggestions for developing a theory of strategic balance conclude the paper. The theory’s major implication is that firms should be as different as legitimately possible.

Do Family Firms Have Better Reputations than Non‐Family Firms? An Integration of Socioemotional Wealth and Social Identity Theories

We draw from socioemotional wealth and social identity research to develop a theory on reputational differences among family and non-family firms. We propose that family members identify more strongly with their family firm than non-family members do with either a family or non-family firm. Heightened identification motivates family members to pursue a favourable reputation because it allows them to feel good about themselves, thus contributing to their socioemotional wealth. We hypothesize that when the familys name is part of the firms name, the firms reputation is higher because family members are particularly motivated for their firm to have a better reputation. Family members also need organizational power to pursue a favourable reputation; thus, we hypothesize that the level of family ownership and family board presence should be associated with more favourable reputations. We find support for our theory in a sample of large firms from eight countries with disparate governance systems and cultures.

Do strategic groups differ in reputation

While most strategic group research has focused on performance implications, we consider the relationship between strategic group membership and reputation. Using strategic group identity and domain consensus concepts, we propose strategic groups have different reputations. We find significant differences exist in reputation across three identified strategic groups of U.S. property/casualty insurers, supporting our contention that reputation is a multilevel concept. Post hoc analyses suggest strategic groups with higher reputation also have higher performance on some critical measures, indicating reputation may be a mobility barrier beneficial to members of certain groups. Practitioner implications include challenges of within-group differentiation in firm reputation. Copyright

Ownership and Performance of Professional Service Firms

Understanding the effects of ownership upon organizational performance is a well-established theme in organization theory, but comparison across ownership forms has been neglected. We develop hypotheses comparing public corporations, private corporations and partnerships and test them in a sample of large management consultancies. We find that private corporations and partnerships outperform public corporations. We attribute this difference to increased monitoring by owners and greater motivation by professional workers seeking ownership stakes. Contrary to Durand and Vargas (2003), we find that organizational complexity has neither a direct nor a moderating effect.

Comparing Alternative Explanations for Accounting Risk-Return Relations

Research into accounting risk-return relations largely relied on reference-based models of managerial choice. This focus ignores other explanations that may contribute to our understanding. Our study extends prior research by incorporating agency theory and implicit contracts theory into models based on the behavioral theory of the firm. We test our hypotheses in a large sample of US manufacturing firms in two different economic environments. Our results show some support for each theory, suggesting that multiple frameworks may better explain risk-return relations. Further, differences in results between the two economic environments imply that macroeconomic conditions may be important.

Organizational Ingenuity and the Paradox of Embedded Agency: The Case of the Embryonic Ontario Solar Energy Industry

We examine organizational ingenuity within the paradox of embedded agency where organizational stakeholders are constrained in their behaviors by institutions, yet also influence and change these institutions. In this study organizational ingenuity represents the agency component and institutional constraints the embedded component. We build theory about ingenuity from a four-year case study of the embryonic Ontario solar industry. There were two major institutional constraints, limited grid access and political uncertainty. These led to four ingenuity strategies that emerged at different times and levels of analysis that challenged, complied with, or escaped the constraints. We combine these findings to develop a process model of the emergence of ingenuity in this embryonic industry. Lastly, we find that extending legitimacy to an ingenuity strategy is necessary for its success.

Academic and Practitioner Antecedents of Scholarly Outcomes: Examining the Role of Industry Engagement of Business School Faculty.

Scholars, policymakers, accreditation bodies and industry leaders have called for an increased focus on scholarship that is both relevant and actionable for industry. In pursuance of this goal, many institutional solutions have been proposed. These solutions, however, have largely failed because they do not fully consider the individual and his or her background as significant factors in the choices an academic makes. To address the lack of research on individual academics, the authors conducted a two-part study that identified key issues and tested various hypotheses as to why some scholars choose to pursue actionable scholarship. Their findings show that five scholar-level factors (career stage, tenure, professional qualifications, active industry engagement and alumni affiliation) and one institutional-level factor (business school mission) influence whether or not they are likely to pursue research that is both relevant and actionable for industry.

The green company: A case of labor management and employee empowerment in a small business

The basis of this teaching case is a small nursery and landscape business in the Northeast United States. The case describes how the company attempted to implement a decentralization and employee empowerment program to move relevant decision-making closer to the work site. It illustrates that shifting from a centralized top-down style of management to a decentralized incentive driven style can create many challenges for a small business. Moreover, top management should be cautious about delegating responsibilities to line managers. Not all employees will be successful in this new environment, and without procedures for monitoring and control, significant learning may be necessary as employees move into this environment.