Managing Stuff
The Effect of Financial Resources on Misconduct: Evidence from Lottery Ticket Sales
Justin Frake, Heejung Byun & Jihyeon Kim
Organization Science, forthcoming
Abstract:
We investigate the influence of financial resources on a firm's propensity for misconduct. Previous studies offer conflicting predictions regarding the relationship, and much of the empirical evidence suffers from issues like selection, measurement error, reverse causality, and omitted variable bias. Leveraging a difference-in-differences design, we first examine quasirandom fluctuations in retailers' financial resources resulting from large windfalls from selling winning lottery tickets. Our results suggest that an increase in financial resources from selling a large winning lottery ticket reduces retailers' tobacco sales to minors. Next, to rule in strain theory and to rule out alternative explanations, we leverage a second natural experiment, heterogeneity analysis, an alternate measure of misconduct, and an online randomized experiment. In doing so, we provide plausibly causal evidence on the relationship between a firm's financial resources and its propensity for misconduct and provide potentially useful findings for policymakers and regulators.
How Do You Find a Good Manager?
Ben Weidmann et al.
NBER Working Paper, July 2024
Abstract:
This paper develops a novel method to identify the causal contribution of managers to team performance. The method requires repeated random assignment of managers to multiple teams and controls for individuals' skills. A good manager is someone who consistently causes their team to produce more than the sum of their parts. Good managers have roughly twice the impact on team performance as good workers. People who nominate themselves to be in charge perform worse than managers appointed by lottery, in part because self-promoted managers are overconfident, especially about their social skills. Managerial performance is positively predicted by economic decision-making skill and fluid intelligence -- but not gender, age, or ethnicity. Selecting managers on skills rather than demographics or preferences for leadership could substantially increase organizational productivity.
Navigating Software Vulnerabilities: Eighteen Years of Evidence from Medium and Large U.S. Organizations
Raviv Murciano-Goroff, Ran Zhuo & Shane Greenstein
NBER Working Paper, July 2024
Abstract:
How prevalent are severe software vulnerabilities, how fast do software users respond to the availability of secure versions, and what determines the variance in the installation distribution? Using the largest dataset ever assembled on user updates, tracking server software updates by over 150,000 medium and large U.S. organizations between 2000 and 2018, this study finds widespread usage of server software with known vulnerabilities, with 57% of organizations using software with severe security vulnerabilities even when secure versions were available. The study estimates several different reduced-form models to examine which organization characteristics correlate with higher vulnerability prevalence and which update characteristics causally explain higher responsiveness to the releases of secure versions. The disclosure of severe vulnerability fixes in software updates does not jolt all organizations into installing them. Factors related to the cost of updating, such as whether the software is hosted on a cloud-based platform and whether the update is an incremental change or a major overhaul, play an important role. Observables cannot easily explain much variation. These findings suggest that there could be high returns to incorporating organizations' relative (in)attentiveness to act on software update releases into the design of cybersecurity policies.
Working Remotely? Selection, Treatment, and the Market for Remote Work
Natalia Emanuel & Emma Harrington
American Economic Journal: Applied Economics, forthcoming
Abstract:
How does remote work affect productivity and how productive are workers who choose remote jobs? We decompose these effects in a Fortune 500 firm. Before Covid-19, remote workers answered 12% fewer calls per hour than on-site workers. After the offices closed, the productivity gap narrowed by 4%, and formerly on-site workers' call quality and promotion rates declined. Even with everyone remote, an 8% productivity gap persisted, indicating negative selection into remote jobs. A cost-benefit analysis indicates that savings in reduced turnover and office rents could outweigh remote work's negative productivity impact but not the costs of attracting less productive workers.
Gossip, power, and advice: Gossipers are conferred less expert power
Alexis Gordon & Maurice Schweitzer
Journal of Experimental Social Psychology, November 2024
Abstract:
Gossip harms power. Across 6 pre-registered primary studies and 7 pre-registered supplemental studies, we demonstrate that a reputation for engaging in negative gossip (sharing negatively-valanced information about an absent target) reduces expert power (power derived from being regarded as a superior source of expertise). A reputation for engaging in negative gossip harms expert power in two ways: (1) it reduces the likelihood that others will ask experts for advice, even when experts are clearly competent, and (2) it harms perceptions of the experts' competence. We also find that reputations for general, neutral, and sometimes even positive gossip reduce the likelihood that experts are asked for advice. Our results advance our understanding of who gains power in organizations and highlight an important cost of gossip for both individuals and their organizations. Our findings also underscore the important relationship between advice and power. Whether or not and from whom individuals seek advice determines who is accorded power.
Talent Poaching and Job Rotation
Diego Battiston, Miguel Espinosa & Shuo Liu
Management Science, forthcoming
Abstract:
The value of a firm's service lies both in its workers and its relationship with clients. In this paper, we study the interaction between the client-specific experience accumulated by workers, poaching behaviour from clients, and strategic rotation of workers by firms. Using detailed personnel data from a security service firm, we show that an increase in client-specific experience increases both the productivity of workers and their probability of being poached. The firm reacts to this risk by rotating workers across multiple clients, and more frequently so for those workers more likely to be poached. Furthermore, we find that after a policy change that prohibited poaching, the firm sharply decreased the frequency of rotation, which in turn increased workers' productivity. We propose a theoretical model that guides the empirical patterns and allows us to argue their external validity beyond our specific empirical setting. Finally, we provide survey evidence from the security service sector, demonstrating the consistency between our findings and industry observations.
Improving Virtual Team Collaboration Paradox Management: A Field Experiment
Margaret Luciano et al.
Organization Science, forthcoming
Abstract:
Virtual teams are ubiquitous in the workplace, yet they experience frequent collaboration challenges. Successfully managing the team collaboration paradox, in terms of maintaining a unified team perspective and diverse individual perspectives, presents a potentially important lever to improve virtual team performance. However, scholars have conflicting opinions regarding whether such improvement is possible. We argue that team collaboration paradox management will positively relate to team performance over time and can be improved via a theory-based intervention. This intervention draws from theory on paradoxes for its content (paradoxical thinking) and team development interventions for its structure (general content knowledge, team-specific feedback, action-focused planning). Given the complexity of paradoxes, it is unclear whether a single training session could substantively improve their management; therefore, one intervention condition was comprised of a single training session and the other condition included a follow-up session. Analyzing two waves of multisource quantitative data from a sample of 76 virtual teams from 37 organizations, we find a positive relationship between team collaboration paradox management and team performance at both time periods. We also find that only the intervention condition with the follow-up session, as compared with untreated control teams, significantly improved how well teams managed the collaboration paradox and thereby facilitated subsequent changes in team performance. Supplementary qualitative insights from the intervention sessions illuminate the actions virtual teams took to improve their collaboration paradox management. These results have important implications for the paradox and teams literatures, as well as the managers and members of virtual teams.
Cultural Spawning: Founders Bringing Organizational Cultures to Their Startup
Yeonsin Ahn & Henrich Greve
Organization Science, forthcoming
Abstract:
In searching for the sources of heterogeneity in organizational cultures, one possibility is that new ventures show a cultural spawning of incorporating elements from the culture of the organization the founder left (the parent) when starting the new venture. Such a genealogical effect would explain why some organizational cultures remain different despite the opportunities to learn cultural elements from other organizations. This study investigates whether and under what circumstances such cultural spawning occurs. We argue that cultural spawning occurs but with varying strength depending on the founder and the culture of the parent organization. Applying the cultural toolkit perspective, we predict that it is stronger when founders have a longer tenure in the parent organization, the parent culture is more internally coherent, and the parent culture is more atypical compared to other organizations. These ideas were tested with a sample of US technology startups in CrunchBase. Natural language processing of Glassdoor employee reviews was used to identify the cultural elements of the technology companies. The analysis demonstrates that cultural spawning occurs and reveals previously unexplored contingencies of cultural transmission through congruency and atypicality. It contributes to research on new venture formation and organizational culture.