Vinit M. Desai

Constrained Growth: How Experience, Legitimacy, and Age Influence Risk Taking in Organizations

Poor performance indicates that an organizations routines are not well suited for its environment and prompts decision makers to search for solutions. However, results conflict regarding how this search process influences risk taking in organizations. Managers in some organizations facing actual or expected performance shortfalls tend to take risks, while managers in other poorly performing organizations avoid risky changes. This conflict is interesting because some level of risk taking appears necessary for organizations to remain competitive, adapt to their environment, and improve performance. This study examines several mechanisms that moderate risk taking following performance shortfalls. First, I draw from organizational learning theories to argue that organizations with limited operating experience are less buffered from failure, and hence that poor performance constrains risk taking at these organizations. Second, I argue that organizations with poor legitimacy are also less buffered, and hence that performance shortfalls also lead to risk aversion at these organizations. Third, I draw from structural inertia theory to suggest that older organizations are less able to support risk taking following performance shortfalls. A test of these hypotheses on the capacity expansion behavior of U.S. railroad companies generally supports these hypotheses, although the effect of age is weaker. The findings contribute to theories of organizational learning and to several perspectives in organization theory more broadly.

Mitigating Hazards Through Continuing Design: The Birth and Evolution of a Pediatric Intensive Care Unit

Often, researchers study organizations in which design is largely in place and the design process is shrouded in the distant past. However, the design process can have dramatic implications for how organizations function. This paper reports a specific attempt to design one organizational subunit, a pediatric intensive care unit (PICU), to function under difficult circumstances. The founders aimed to create a highly reliable and safe unit, but implementing their vision required continuous effort. The unit needed constant buffering from external pressures and a dissimilar parent organization, and these forces shaped the units ultimate design. Through the presentation of this case, we discuss the impact of design on the organization, its members, and the larger hospital organization to which the unit belonged. The study reveals that the PICUs design was an ongoing effort and its most stable component was a vision of distributed knowledge and decentralized intensive care. We conclude by discussing implications of the case for organizational design theory and practice.

Rule Violations and Organizational Search: A Review and Extension

Whether they are formally prescribed or informally agreed upon, rules delineate the types of behavior deemed acceptable or appropriate within organizations. Studies often find that negative outcomes such as decreased group cohesion and higher turnover result when rules are broken. However, research rarely examines the potential positive effects of rule violations. Rules describe expectations about behavior within routines, or patterns of activity in organizations. When rules are violated by individuals, it could be an indication that the associated patterns of activity are no longer appropriate and that changes to the routines are needed. Organizations may learn from these violations if the violations trigger a search for new ways to organize activities, but this connection between violations and the search for new routines is affected by several factors. Drawing from a review and discussion of rules, routines, and research on organizational search and learning, this paper develops propositions regarding how rule violations motivate the search for new routines. This perspective integrates the literatures on rule-breaking and organizational search, and also suggests that managers who attend to patterns of rule-breaking within their organizations may detect drift from their environments and take corrective action earlier than suggested by other organizational learning research.

The Impact of Media Information on Issue Salience Following Other Organizations’ Failures

Research on organizational decision making seeks to understand how external events shape how organizational decision makers attend to particular issues and allocate scarce resources across the organization’s activities. The author investigates whether supplemental information available to decision makers about their own and other organizations impacts this process. He finds that media coverage about particular issues following failures throughout the field can influence decisions regarding resource allocation and that coverage about other organizations may in some cases be more influential than coverage about the focal firm. The study and its findings forward our understanding regarding how organizations scan their environments and how multiple, interacting forms of external information may collectively influence internal organizational processes.

Does disclosure matter? Integrating organizational learning and impression management theories to examine the impact of public disclosure following failures

The typically disparate literatures on organizational learning and impression management have both separately sought to examine how organizations respond following failure, with the former asking how organizations learn from these events and the latter investigating how organizations use public disclosures to manage perceptions following these events. This study integrates these perspectives to ask how disclosures might impact learning through failure. The study distinguishes between major and minor failures, asserting that public disclosures exert a distinct influence on learning through either form of experience. Related hypotheses are tested on failures arising within the US air-traffic control system. Although no support is obtained for predictions about major failures, the study finds that facilities can learn through minor failures but the process is impeded by public disclosures, suggesting the notable influence that these disclosures have over audiences’ perceptions of the organization or its role in these events. This approach addresses a longstanding tension regarding why some organizations learn more effectively than others by emphasizing how organizations shape interpretations of their experience.

The first 50 years and the next 50 years of A Behavioral Theory of the Firm : an interview with James G. March

To celebrate the 50th anniversary of the 1963 publication of A Behavioral Theory of the Firm (BTF) by Richard Cyert and James G. March, we interviewed Professor James G. March. The purpose of this article is to disseminate the full text of that interview.

The Two Faces of Voluntary Disclosure: Quality Improvement and Organizational Learning from Self‐Reported Problems

Research suggests the promise of voluntary self‐reporting, given that organizational quality can be difficult to monitor. However, I explore opposing theoretical arguments regarding its impact. On one hand, self‐reported problems may motivate intensive investigation, resulting in subsequent improvement. However, self‐reports may instead represent relatively superficial impression management efforts, and their value to organizational performance may be more dubious. Associated hypotheses are tested on a longitudinal panel of nursing homes. Findings suggest that self‐reports generally detract from performance except when they are reinforced by other, complementary forms of experience. Contributions to organizational learning theory, institutional theory and regulatory policy are discussed.

Power, Legitimacy, and Urgency in Organizational Learning: Learning Through Stakeholder Complaints to Improve Quality in the California Nursing Home Industry

Although research suggests that organizations learn through interactions with stakeholders, little is known regarding how this process occurs. The author addresses this void by examining how the power, legitimacy, or urgency related to stakeholders’ interactions influence organizations’ abilities to learn from these interactions. Hypothesis tests on a panel of nursing homes suggest that organizations learn more effectively through interactions with powerful stakeholders or those whose feedback requires immediate response. Findings contribute to organizational learning theory by identifying how different forms of experience vary substantially in their impacts on organizational activity. Related implications for stakeholder management and managerial practice are also discussed.

Ignorance Isn't Bliss: Complaint Experience and Organizational Learning in the California Nursing Home Industry, 1997–2004

Organizational learning theory suggests that complaints about products and services can promote organizational learning and change. However, evidence suggests that potentially valuable forms of experience may be ignored or discounted in organizations, and additional research is needed to determine why this happens. This study contributes to those efforts by examining how multiple forms of complaint experience interactively influence organizational outcomes. An empirical test on a longitudinal panel of Californian nursing homes finds that complaints about other issues may distract attention away from complaints about a focal issue, but only when complaints are provided anonymously. These findings forward organizational learning theories by suggesting that multiple types of experience may detract from rather than supplement each other in some cases. Additional implications and opportunities for further research are also discussed.

BRIDGING LEVELS, VARIABLES, AND METHODOLOGIES

The McComb, Barringer and Bourne article provides an insightful review of recent developments in the part-time full-time research literature and suggests a cross-level model and research approach. Building and enriching on this model, this paper first offers suggestions about variables that might be included in research on part and full-time workers, with a focus on individual-level constructs. Second, suggestions are presented about ways to add methodological richness to this area of research.