Organizational Behavior

Contemporary organizations operate under turbulent business conditions and must adapt their strategies to ongoing changes. Sustainable performance can be achieved when the organization engages in interactive processes that link emerging opportunities to forward-looking analytics. But few organizations are able to practice this consistently. Fast processes performed by managers at the frontline respond to ongoing environmental stimuli and slow processes initiated by managers at the center interpret events and reasons about updated strategic actions. Current experiential insights from the fast processes can be aggregated systematically to inform the slow processes of reasoning. When the fast and slow processes interact they can form a dynamic system that adapts organizational activities to changing conditions.

Business groups are an organizational model in which collections of legally independent firms bounded together with formal and informal ties use collaborative arrangements to enhance their collective welfare. Among the different varieties of business groups, diversified business groups that exhibit unrelated product diversification under central control, and often containing chains of publicly listed firms, are the most-studied type in the management literature. The reason is that they challenge two traditionally held assumptions. First, broad and especially unrelated diversification have a negative impact on performance, and thus business groups should focus on a narrow scope of related businesses. Second, such diversification is only sustainable in emerging economies in which market and institutional underdevelopment are more common and where business groups can provide a solution to such imperfections. However, a historical perspective indicates that diversified business groups are a long-lived organizational model and are present in emerging and advanced economies, illustrating how business groups adapt to different market and institutional settings. This evolutionary approach also highlights the importance of going beyond diversification when studying business groups and redirecting studies toward the evolution of the group structure, their internal administrative mechanisms, and other strategic actions beyond diversification such as internationalization.

In a new era of corporate governance defined by increasing shareholder empowerment, scrutiny from external stakeholders, and governance failures, there has been a movement toward redefining corporate governance models and the roles of boards. As a result, researchers and practitioners are left wondering what it means to be an effective board, and how a board can operate in the best interests of a firm’s stakeholders in this current environment. Exploring the expanded roles and demands of directors grounded in shareholder and director primacy debates, as well as reviewing theories and contingencies that link corporate boards to task, group, firm, and enterprise-level outcomes, a research agenda is identified that might better identify the parameters of board effectiveness.

Scholars have devoted significant attention to understanding the determinants and consequences of executive compensation. Yet, one form of compensation, executive severance agreements, has flown under the radar. Severance agreements specify the expected payments and benefits promised executives, upon voluntary or involuntary termination. Although these agreements are popular among executives, critics continually question their worth. Yet severance agreements potentially offer three important (but less readily recognized) strategic benefits. First, severance agreements are viewed as a means of mitigating the potential risks associated with job changes; thus, they can serve as a recruitment tool to attract top executive talent. Second, because severance agreements guarantee executives previously specified compensation in the event of termination, they can help limit the downside risk naturally risk-averse executives face, facilitating executive-shareholder interest alignment. Third, severance agreements can aid in firm exit, as executives and directors are likely to be more open to termination, in the presence of adequate protection against the downside.

Severance agreements can contain provisions for ten possible termination events. Three events refer to change in control (CIC), which occurs under a change in ownership. These are (1) CIC without termination, (2) CIC with termination without cause, and (3) CIC with termination for cause. Cause is generally defined by events such as felony, fraud, embezzlement, neglect of duties, or violation of noncompete provisions. Additional events include (4) voluntary retirement, (5) resignation without good reason, (6) voluntary termination for good reason, (7) involuntary termination without cause, (8) involuntary termination with cause, (9) death, and (10) disability. Voluntary retirement and resignation without good reason occurs when CEOs either retire or leave under their own volition, and voluntary termination with good reason occurs in response to changes in employment terms (e.g., relocation of headquarters). Involuntary termination refers to termination due to any reason not listed above and is often triggered by unsatisfactory performance.

Although some prior work has addressed the antecedents, consequences, and moderators of severance, the findings from this literature remain unclear, as many of the results are mixed. Future severance scholars have the opportunity to further clarify these relationships by addressing how severance agreements can help firms attract, align the interests of, and facilitate the exit of executives.

Diversity management refers to organizational policies and practices aimed at recruiting, retaining, and managing employees of diverse backgrounds and identities, while creating a culture in which everybody is equally enabled to perform and achieve organizational and personal objectives. In a globalized world, there is a need for contextual and transnational approaches to utilize the benefits that global diversity may bring as well as the challenges that organizations may face in managing a diverse workforce. In particular, it is important to take into account how diversity is theorized and managed in non-Western contexts, for example in BRICS countries (i.e., Brazil, Russia, India, China, and South Africa) and Muslim-majority countries. The literature confirms the need for organizational efforts to be focused on engaging with and managing a heterogeneous workplace in ways that not only yield sustainable competitive advantage but also are contextually and socially responsible. Organizations today are expected to take positive action, beyond legal compliance, to ensure equal access, employment and promotion opportunities, and also to ensure that diversity programs make use of employee differences, and contribute to local as well as global communities.

Research on institutional logics surveys systems of cultural elements (values, beliefs, and normative expectations) by which people, groups, and organizations make sense of and evaluate their everyday activities, and organize those activities in time and space. Although there were scattered mentions of this concept before 1990, this literature really began with the 1991 publication of a theory piece by Roger Friedland and Robert Alford. Since that time, it has become a large and diverse area of organizational research. Several books and thousands of papers and book chapters have been published on this topic, addressing institutional logics in sites as different as climate change proceedings of the United Nations, local banks in the United States, and business groups in Taiwan. Several intellectual precursors to institutional logics provide a detailed explanation of the concept and the theory surrounding it. These literatures developed over time within the broader framework of theory and empirical work in sociology, political science, and anthropology. Papers published in ten major sociology and management journals in the United States and Europe (between 1990 and 2015) provide analysis and help to identify trends in theoretical development and empirical findings. Evaluting these trends suggest three gentle corrections and potentially useful extensions to the literature help to guide future research: (1) limiting the definition of institutional logic to cultural-cognitive phenomena, rather than including material phenomena; (2) recognizing both “cold” (purely rational) cognition and “hot” (emotion-laden) cognition; and (3) developing and testing a theory (or multiple related theories), meaning a logically interconnected set of propositions concerning a delimited set of social phenomena, derived from assumptions about essential facts (axioms), that details causal mechanisms and yields empirically testable (falsifiable) hypotheses, by being more consistent about how we use concepts in theoretical statements; assessing the reliability and validity of our empirical measures; and conducting meta-analyses of the many inductive studies that have been published, to develop deductive theories.

There are trends in the use of teams in the classroom that stimulate both theory development and pedagogical innovation in this important area. In particular, three classroom applications are (1) building group process skills, (2) developing team leaders, and (3) using teams to learn course content. Of particular interest are new possibilities for utilizing leadered rather than leaderless groups, systematizing team coaching interventions, and enriching team-based learning. In this field of study, it is clear that pedagogical innovation and theoretical development interact to enhance student learning. Continued exploration in both aspects is encouraged.

Even though gender and gender analysis are still often equated with women, men and masculinities are equally gendered. This applies throughout society, including within organizations. Following pioneering feminist scholarship on work and organizations, explicitly gendered studies on men and masculinities have increased since the 1980s. The need to include the gendered analysis of men and masculinities as part of gender studies of organizations, leadership, and management, is now widely recognized at least within gender research. Yet, this insight continues to be ignored or downplayed in mainstream work and even in some studies seen as “critical.” Indeed the vast majority of mainstream work on organizations still has either no gender analysis whatsoever or relies on a very simplistic and rather crude understanding of gender dynamics.

Research on men and masculinities has been wide ranging and has raised important new issues about gendered dynamics in organizations, including cultures and countercultures on factory shopfloors; historical transformations of men and management in reproducing patriarchies; the relations of bureaucracy, men, and masculinities; management-labor relations as interrelations of masculinities; managerial and professional identity formation; managerial homosociality; and the interplay of diverse occupational masculinities. Research has revealed how structures, cultures, and practices of men and masculinities continue to persist and to dominate in many contemporary organizations. Having said this, the concepts of gender, of men and masculinities, and of organization have all been subject to complex and contradictory processes that entail both their explicit naming and their simultaneous deconstruction and critique. This is illustrated, respectively, in the intersectional construction of gender; the pressing need to name men as men in analysis of organizational dominance, but also deconstruct the category of men as provisional; and in the multiplication of organizational forms as, for example, interorganizational relations, net-organizations, and cyberorganizations.

These contradictory historical and conceptual namings and deconstructions are especially important in the analysis of transnational organizations operating within the context of globalization, transnationalizations, production, reproduction, and trans(national) patriarchies. Within transnational organizations such as large gendered multinational enterprises, the taken-for-granted nature of transnational gendered hierarchies and cultures persists in management, maintained partly through commonalities across difference, gendered horizontal specializations, and controls. Transnational organizations are key sites for the production of a variety of developing forms of (transnational) business masculinities, some more individualistic, some marriage based, some nation based, some transcending nation. These masculinities have clear implications for gendered practices in private spheres, including the provision of domestic servicing often by Black and minority ethnic women. The growth of the knowledge economy brings further complications to these transnational patterns, through elaboration of techno-masculinities, and interactions of men, masculinities, and information and communication technologies. This is particularly relevant in the international financial sector, where constructions of men and masculinities are impacted by the gendering of capital and financial crisis, and gender regimes of financial institutions, as in men financiers’ risky behavior. Further studies are needed addressing the “gender-neutral” hegemony of organizations, leaderships, and managements, especially in transnational arenas, and organizations subject to changing technologies. Other key research issues concern analysis of neglected intersectionalities, including intersectional privileges, male/masculine/men’s bodies, and the taken-for-granted category of “men” in and around organizations.

Innovation is a complex construct and overlaps with a few other prevalent concepts such as technology, creativity, and change. Research on innovation spans many fields of inquiry including business, economics, engineering, and public administration. Scholars have studied innovation at different levels of analysis such as individual, group, organization, industry, and economy. The term organizational innovation refers to the studies of innovation in business and public organizations.

Studies of innovations in organizations are multidimensional, multilevel, and context-dependent. They investigate what external and internal conditions induce innovation, how organizations manage innovation process, and in what ways innovation changes organizational conduct and outcome. Indiscreet application of findings from one discipline or context to another, lack of distinction between generating (creating) and adopting (using) innovations, and likening organizational innovation with technological innovation have clouded the understanding of this important concept, hampering its advancement. This article organizes studies of organizational innovation to make them more accessible to interested scholars and combines insights from various strands of innovation research to help them design and conduct new studies to advance the field.

The perspectives of organizational competition and performance and organizational adaptation and progression are introduced to serve as platforms to position organizational innovation in the midst of innovation concepts, elaborate differences between innovating and innovativeness, and decipher key typologies, primary sets of antecedents, and performance consequences of generating and adopting innovations. The antecedents of organizational innovation are organized into three dimensions of environmental (external, contextual), organizational (structure, culture), and managerial (leadership, human capital). A five-step heuristic based on innovation type and process is proposed to ease understanding of the existing studies and select suitable dimensions and factors for conducting new studies. The rationale for the innovation–performance relationship in strands of organizational innovation research, and the employment of types of innovation and performance indicators, is articulated by first-mover advantage and performance gap theory, in conjunction with the perspectives of competition and performance and of adaptation and progression. Differences between effects of technological and nontechnological innovation and stand-alone and synchronous innovations are discussed to articulate how and to what extent patterns of the introduction of different types of innovation could contribute to organizational performance or effectiveness. In conclusion, ideas are proposed to demystify organizational innovation to allure new researches, facilitate their learning, and provide opportunities for the development of new studies to advance the state of knowledge on organizational innovation.

Organizational learning theory is motivated by the observation that organizations learn by encoding inferences from experience into their behavior. It seeks to answer the questions of what kinds of experiences influence behaviors, how and under what circumstances behaviors change, and how new behaviors are stabilized and have consequences for organizations’ adaptation to their environment. Organizational learning research has as key mechanisms innovations and other triggering events that lead to major behavioral change, knowledge accumulation and experimentation that encourage incremental change, and interpretations that guide each of these processes. Organizational learning research has gained a central position in organizational theory because it has implications for organizational behaviors that also affect other theoretical perspectives such as institutional theory, organizational ecology, and resource dependence.

Key research topics in organizational learning and adaptation are (a) organizational routines and their stability and change, (b) performance feedback and its consequences for organizational search and change, (c) managerial goal formation and coalition building, (d) managerial attention to goals and organizational activities, and (e) adaptive consequences of learning procedures. Each of these topics has seen significant research, but they are far from completing their empirical agenda. Recently, organizational learning research has been very active, especially on the topics of routines, performance feedback, and attention, resulting in a strong increase in learning and adaptation research in management journals.