Getting Stuff Done
Founder Turnover and Organizational Change
Daniel Kim & Minjae Kim
Organization Science, forthcoming
Abstract:
Why might start-ups not change even when doing so may enhance firm performance? It seems reasonable to point to founder presence as a potential culprit given founders' cognitive myopia and/or commitment to the status quo. However, founder presence may instead be a facilitator of change in response to environmental uncertainty because founders can uniquely coordinate resources needed for organizational change. We empirically address these two opposing views on the impact of founder presence (versus loss) on organizational change by using a comprehensive administrative data set of start-ups in the United States. Correlational analysis shows that start-ups generally become less likely to change following founder turnover. Given the potentially endogenous nature of founder turnover, we exploit premature deaths as a natural experiment that suddenly removes some founders from their start-ups while leaving others intact. We find that start-ups are less likely to change after losing a founder, especially if the founder loss happens during an economic recession. At the same time, the effect is attenuated when losing a founder with more experience in the same industry, suggesting that founder presence can also contribute to reinforcing the status quo under some conditions. Broadly, these results not only show that founders tend to facilitate change in their organizations but also identify when founders are merely subject to organizations' bureaucratic forces that they themselves may have imprinted originally.
Diversity, Equity, and Inclusion
Alex Edmans, Caroline Flammer & Simon Glossner
NBER Working Paper, May 2023
Abstract:
This paper measures diversity, equity, and inclusion (DEI) using proprietary data on survey responses used to compile the Best Companies to Work For list. We identify 13 of the 58 questions as being related to DEI, and aggregate the responses to form our DEI measure. This variable has low correlation with gender and ethnic diversity in the boardroom, in senior management, and within the workforce, suggesting that DEI captures additional dimensions missing from traditional measures of demographic diversity. DEI is also unrelated to general workplace policies and practices, suggesting that DEI cannot be improved by generic initiatives. However, DEI is higher in small growth firms and firms with high financial strength. DEI is associated with higher future accounting performance across a range of measures, higher future earnings surprises, and higher valuation ratios, but demographic diversity is not. DEI perceptions among professional workers, such as R&D employees, are significantly correlated with the number and quality of patents. However, DEI exhibits no link with future stock returns.
The Power of Proximity to Coworkers: Training for Tomorrow or Productivity Today?
Natalia Emanuel, Emma Harrington & Amanda Pallais
Harvard Working Paper, April 2023
Abstract:
In an increasingly digital world, how does sitting near coworkers affect collaboration, on-the-job training, and output? We study software engineers at a Fortune 500 firm, whose main campus has two buildings several blocks apart. When offices were open, engineers working in the same building as all their teammates received 23 percent more online feedback on their computer code than engineers with distant teammates. After offices closed for COVID-19, this advantage shrank by 17 percentage points. Sitting near coworkers increases how much junior engineers learn from their senior colleagues -- not only in-person but also online. Proximity particularly increases feedback to female engineers and young engineers, who are more likely to quit the firm when proximity is lost. However, sitting together reduces senior engineers' programming output, suggesting a trade-off between short-term productivity and long-run human-capital development. Even pre-COVID, gaining one distant teammate reduced online feedback among coworkers sitting together: thus, remote-work policies may impact even workers who choose to go into the office.
Generative AI at Work
Erik Brynjolfsson, Danielle Li & Lindsey Raymond
NBER Working Paper, April 2023
Abstract:
We study the staggered introduction of a generative AI-based conversational assistant using data from 5,179 customer support agents. Access to the tool increases productivity, as measured by issues resolved per hour, by 14 percent on average, with the greatest impact on novice and low-skilled workers, and minimal impact on experienced and highly skilled workers. We provide suggestive evidence that the AI model disseminates the potentially tacit knowledge of more able workers and helps newer workers move down the experience curve. In addition, we show that AI assistance improves customer sentiment, reduces requests for managerial intervention, and improves employee retention.
Blinded by the person? Experimental evidence from idea evaluation
Linus Dahlander et al.
Strategic Management Journal, forthcoming
Abstract:
Seeking causal evidence on biases in idea evaluation, we conducted a field experiment in a large multinational company with two conditions: (a) blind evaluation, in which managers received no proposer information, and (b) non-blind evaluation, in which they received the proposer's name, unit, and location. To our surprise -- and in contrast to the preregistered hypotheses -- we found no biases against women and proposers from different units and locations, which blinding could ameliorate. Addressing challenges that remained intractable in the field experiment, we conducted an online experiment, which replicated the null findings. A final vignette study showed that people overestimated the magnitude of the biases. The studies suggest that idea evaluation can be less prone to biases than previously assumed and that evaluators separate ideas from proposers.
Managers and Productivity in Retail
Robert Metcalfe, Alexandre Sollaci & Chad Syverson
NBER Working Paper, April 2023
Abstract:
Across many sectors, research has established that management explains a notable portion of productivity differences across organizations. A remaining question, however, is whether it is managers themselves or firm-wide management practices that matter. We shed light on this question by analyzing store-level data from two multibillion-dollar retail companies. In this setting, managers move between stores but management practices are set by firm policy and largely fixed, allowing us to hone in on managers' personal roles in determining store performance. We find: (i) managers affect and explain a large share of the variance of store-level productivity; (ii) negative assortative matching between managers and stores, which may reflect both firms' decisions and a selection-driven bias that we characterize and argue might apply in other settings using movers designs; (iii) managers who move do so on average from less productive to more productive stores; (iv) female managers are less likely to move stores than male managers; (v) manager quality is generally hard to explain with the observables in our data, but is correlated with the ratio of full-time to part-time workers; (vi) managers who obtain high labor productivity also tend to obtain high energy productivity, revealing some breadth in managers' skills applicability; (vii) high-performing managers in stable growth times are also high-performing during turbulent times; and (viii) exogenous productivity shocks improve the quality of initially low quality managers, suggesting managers can learn. We explain implications of these findings for productivity research.
Moderation in all things, except when it comes to workplace safety: Accidents are most likely to occur under moderately hazardous work conditions
James Beck et al.
Personnel Psychology, forthcoming
Abstract:
In this article, we argue that the relationship between workplace hazardousness and accidents is best characterized as an inverted-U, such that accidents are most likely to occur within moderately hazardous environments. Specifically, whereas highly hazardous work environments are strong situations in which there is a clear need for a high degree of safety behavior, the amount of safety behavior needed to minimize accidents within moderately hazardous environments is more ambiguous. Drawing on self-regulatory theories of work motivation, we argue that most individuals tend to exhibit a proportional response to hazardousness, such that moderately hazardous environments are met with a moderate degree of safety behavior. However, we demonstrate that proportional responses to hazardousness will ultimately yield an inverted-U relationship between hazardousness and accidents. Instead, a sharp, non-linear increase in safety behavior is needed to keep accidents at a low and constant level as hazardousness increases. We present four studies to test our hypotheses. Studies 1 and 2 used archival data to test our hypothesis of an inverted-U relationship between hazardousness and accidents in natural work settings. Studies 3 and 4 were experiments which replicated this finding, and more importantly, demonstrated that the inverted-U relationship between hazardousness and accidents was driven by a failure to sharply increase safety behavior in response to small increases in hazardousness. We conclude with a discussion of the implications of these results for the safety literature, particularly the need to educate workers regarding the pattern of safety behavior needed to fully offset environmental hazardousness.
Lucy and the Chocolate Factory: Warehouse Robotics and Worker Safety
Gordon Burtch, Brad Greenwood & Kiron Ravindran
George Mason University Working Paper, March 2023
Abstract:
Significant attention has been devoted to the implications of automation for decades, ranging from employment, to productivity, to worker health and safety. This work revisits the question of worker safety in the context of warehousing and logistics, with a specific focus on how the adoption of novel forms of robotics affects the mix and volume of injuries suffered by warehouse workers. The relationship between these inputs and outcomes is unclear. On the one hand, we might expect injuries to fall through the elimination of dangerous or highly repetitive tasks. On the other hand, injuries might rise among residual human workers, whose tasks remain unautomated, if the incorporation of robotics leads to a decline in task variety and a faster pace of work. To explore this tension, we draw on annual warehouse-level records of worker injuries from 141 Amazon Fulfillment Centers, between 2016 and 2020. Results indicate that the relationship between robotic automation and worker health is complex. While robotically automating a warehouse is associated with reduced rates of severe injury (injuries requiring the employee to miss days of work), it is positively associated with the rate of non-severe injury (injuries which do not require missed work). Specifically, estimates indicate robotics are associated with a 40% reduction in severe injuries, but a 77% increase in non-severe injuries. Further, evidence indicates that the rise in non-severe injury is at least partially driven by the increased intensity of work that accompanies robotics, implying that automation of some tasks (via robotics) has spillover consequences for the health of workers performing complementary, non-automated tasks. Using a difference-in-differences-in-differences model, findings further indicate a relative increase in the volume of stress-based injuries, namely sprains and strains (versus cuts, fractures, bruises, etc.) that occurs in Robotic (versus Legacy) Facilities, during periods of particularly high operational load (i.e., Black-Friday, Amazon Prime Day). Implications of our findings for regulators, workers, and adopting firms are discussed within.
Does Meeting Financial Expectations Boost Employee Satisfaction?
Gilles Hilary, Xiaoli (Shaolee) Tian & Miaomiao Yu
Georgetown University Working Paper, April 2023
Abstract:
We investigate the interest shown by rank-and-file employees in seeing their firm meeting Wall Street's expectations. We find that those who currently work for firms that meet or marginally beat analysts' forecasts experience greater job satisfaction, controlling for the underlying financial performance. We find no such effect for former employees or during the pre-announcement period. The effect is significantly stronger for employees who stand to benefit from their employers meeting analysts' expectations (i.e., larger recipients of non-executive stock options, more unionized, or less transient). In contrast, the effect disappears when employees incur higher costs because they overwork or suffer from labor law violations. Lastly, more sophisticated employees, who likely better comprehend the consequences and benefit more from them, react more when their employer meets Wall Street's expectations. These results suggest that rank-and-file employees believe meeting analysts' forecasts improves their welfare, particularly when they are not unduly pressured to achieve the target.
When opportunity meets ability: The moderating effects of prolific inventors on novel drug innovation following product development failure in biotechnology
Daniel Tzabbar et al.
Strategic Management Journal, forthcoming
Abstract:
Through a longitudinal study of the product development portfolios of 457 US-based firms in the biotechnology industry, we investigate how prolific inventors shape a firm's innovative direction following product development failure. Contrary to received wisdom, we argue and demonstrate that an increase in the number of prolific inventors is associated with a decrease in firm propensity to pursue novel product innovation following such failure. We further find that the presence of prolific inventors with greater collaborative strength and longer tenure negatively moderate the positive relationship between failure and the pursuit of novel product development. We discuss the implications of our results for research on learning from failure and strategic human capital.