Organizational Behaviour Seminars

Do firms take more or less risk in response to performance shortfalls? Although the behavioral theory of the firm (BTOF) has been a guiding framework in this area, empirical evidence remains inconclusive. Moreover, empirical work has largely failed to distinguish between firms’ motivation to take risks and their ability to do so. In this study, recognizing the distinct roles played by these two components, we specifically focus on risk-taking motivation. Drawing on March and Shapira’s shifting-focus-of-attention model, we highlight that firms’ motivation to take risks is contingent on their chosen reference points and the shifts between them. We propose that, on average, risk-taking motivation exhibits a positive monotonic relationship with performance shortfalls, a sequence involving an initial increase, subsequent leveling off, and then a renewed increase. To advance the theory of risk-taking motivation, we extend our inquiry to consider the moderating effect of concern for firm survival and subsequently explore factors influencing this concern. Furthermore, we investigate a critical implication of differentiating risk-taking motivation and ability. Because of the mismatch between motivation and ability, underperforming firms take the greatest risks when their performance is moderately below aspirations, with motivation and ability being at moderate levels, leading to an inverted U-shaped relationship between performance shortfalls and risk taking. Empirical evidence derived from experiments and archival data supports our theoretical predictions. This study contributes to the BTOF literature by demonstrating that underperforming firms’ risk-taking behavior is jointly determined by their motivation, ability, focus of attention, and concern for survival.

Successfully implementing creative ideas is critical for the establishment of new ventures. While highly creative ideas hold great promise for new ventures’ success, more creative ideas are also harder to implement, and are often met with failure. Drawing on regulatory focus theory, we examine how the regulatory focus of new venture teams impacts collective strategic behaviors that can facilitate or hinder the successful implementation of creative ideas, affecting early new venture performance. Using a field experiment involving entrepreneurial teams in an educational setting and an observational study of entrepreneurial teams from TechCrunch, we consistently find that teams with a promotion focus are better able to capitalize on the creativity of their business ideas, leading to improved venture performance. Conversely, results pertaining to prevention focus in teams yielded less consistent results. This research offers timely insights on the role of creativity in new venture success.

Sharon Arieli, Andrey Elster, Bjørn Z. Ekelund
This research addresses the challenge of managing functional diversity—differences in knowledge, values, and experiences—by applying the Representational Gaps (rGaps) framework. These differences often create barriers to effective collaboration and team performance. To bridge these gaps, we used the Diversity IceBreaker (DI) intervention, chosen for its alignment with the rGaps framework and its ability to operationalize three core strategies: enrichment, expansion, and reconciliation. These strategies foster collaboration by integrating diverse perspectives into cohesive group-level representations. Our investigation specifically examined the intervention’s impact on team climate, trust, and social identity. The DI intervention was tested in six field experiments with business students (N=485) and employees (N=73). The three-phase process includes a personality survey to encourage introspection, activities within homogeneous teams to build baseline understanding, and structured group debates to share perspectives and resolve differences. Findings reveal that as expected the intervention significantly increased positive emotions and trust while reducing negative emotions, highlighting its effectiveness in creating a positive team climate. It also strengthened individual and relational social identities, though broader beliefs about inclusion, such as perspective-taking and willingness to engage with outgroups, showed limited change. This research demonstrates the value of structured interventions in aligning diverse perspectives while maintaining individuality. By emphasizing psychological safety, trust, and cognitive integration, it offers insights for organizations navigating diversity and inclusion challenges.  

Abstract. Despite progress in reducing gender inequality, disparities continue in the academic labor market, particularly regarding vertical gender segregation. To investigate the feasibility of achieving gender equality at the highest academic levels in US universities, we develop and estimate the parameters of a mathematical model representing promotion and hiring. Our findings, using data from 2001 to 2019, show that certain universities tend to have more favorable promotion rates for male professors than for females—for example, for males the rate is 15.95% higher than for females at the assistant professor level. We discuss university-level characteristics that influence inequality. Numerical simulations reveal that, even with favorable treatment, existing gender imbalances impede progress at higher levels, with 34.9 years on average to achieve equal representation at the full professor level. This research provides valuable insights into the challenges associated with achieving gender equality in academia.
 

The impact of leadership on team performance is well-documented, yet less is known about how followers' perspectives contribute to team success and the motivational mechanisms underlying this effect. Adopting a followership perspective, this study examines how followers' co-production beliefs and leaders' empowering behaviors shape collective regulatory focus (CRF) and, in turn, influence team performance. Conducted in a public sector institution, the study includes 928 newcomer interns across 47 certification courses, with data collected through three waves of online surveys. Findings indicate that both followers' co-production beliefs and leaders’ empowering behaviors enhance team performance via promotion-focused CRF. These results highlight the joint role of leaders and followers in shaping team dynamics and outcomes. Practical implications suggest that organizations should invest in both leadership and followership development to foster active engagement and improve team performance.
 

There ia a large literature dealing with the validity of various predictors of performance, but this validity information is often of limited value, for two reasons.  First, the criteria in the vast majority of studies are supervisory ratings of performance.  These ratings do capture some performance-related variation, but they are severely deficient as criteria.  Job performance typically accounts for less than one third of the variance in ratings.  I discuss the way rating biases and rater motivations contribute to the deficiencies of ratings as criteria.  Second, validity studies are almost always univariate, but the criterion domain is multivariate, with task performance reflecting only a part of this domain.  I discuss factors that influence the correlation between a composite of several predictors and a composite of several measures of the performance domain.

 

We examine how firms balance internal and external reference points when determining employee pay. Analyzing nearly 19 million confidential U.S. employee records, our analysis reveals three key findings. First, the relative sensitivity of pay to internal over external benchmarks increases with firm innovation intensity, employee skill level, and the combination of the two. Second, this relationship appears at least partly causal: we document similar patterns using an instrumental variables analysis based on regional inflation shocks and a differences-in-differences analysis of CEO transitions. Third, firms with a stronger internal pay orientation produce more and higher-quality patents, including more breakthrough innovations. Altogether, our findings reveal that, while some firms maintain close market alignment, knowledge-intensive firms appear to decouple pay from market forces. This is particularly the case for their skilled workers, consistent with firms prioritizing internal social dynamics in contexts where cooperation and creativity are important for value creation.
 

This paper examines how organizations navigate multiple stakeholder objectives through different decision-making heuristics.  Drawing on new stakeholder theory and multi-objective optimization literature, we investigate how search strategies affect both financial and social performance outcomes.  Using an NK model simulation, we analyze five distinct heuristics---Maximize, Combine, Alternate, Penalize, and Satisfice---that represent different approaches to balancing stakeholder goals.  Our findings reveal significant variations in performance across these heuristics under different conditions of goal conflict and complementarity.  While strategies like Combine often outperform others in balanced preference scenarios, the Alternate approach shows particular promise in exploring broader solution spaces and potentially exceeding other heuristics' performance along multiple goals.  This research contributes to stakeholder theory and behavioral strategy by providing a systematic analysis of how organizations can effectively manage multiple objectives, offering practical insights for firms pursuing both social and financial goals.