Using a multiple-case study of alleged expropriations reported before the World Bank, we examine how multinational companies (MNC) react to the escalating hostility of host governments. Our study reveals how different choices regarding the interaction with local nonmarket stakeholders - which we refer to as proximal vs. mediated embedding - shape how managers respond to these disputes by affecting their ability to collect, process and interpret information, and to act upon it in a way that effectively mobilizes local and international support. In contrast to the prevailing view that local partners in international joint ventures shelter MNCs from abuse from political authorities, our findings show that primary reliance on local partners to manage the local nonmarket environment can actually reinforce a liability of outsidership and even create a 'liability of insidership', to the extent that relying on local partners prevents the MNC from establishing quality connections with a broad range of nonmarket stakeholders, reducing its alertness and responsiveness to hostile acts from host governments.

For decades, research on strategic human capital emphasizes the importance of attracting, motivating, and retaining human capital for developing the firm’s knowledge-based capabilities. However, the literature largely focuses on human capital strategies that rely on firm’s reputation and resource endowment and under theorizes the strategy that can be used by firms in low-resource contexts. Based on a qualitative, longitudinal study of a machine-repair shop evolving into a prominent firm in defense R&D, we induct theory that explains how low-resource firms develop and evolve knowledge-based capability by using its scarce resource to upskill its employees to gain human-capital mobility to reputable firms in the industry. Our data shows how managerial enactment of an interfirm-career cognition motivates changes to employees’ boundary conceptions (knowledge boundary, time boundary, and valuation boundary). These changes underpin organizational capability in conducting knowledge work in complex, specialized, and distant domains and thereby enable firm-level evolution from low-cost imitator of existing products to creative designer of novel products. Using the perspective of resourcing theory, our theory nuances the resource-based view underlying the strategic human capital literature’s emphasis on isolating human capital within the firm. Our theory also addresses the strategic human capital literature’s call for a multi-level, dynamic empirical examination of how firms develop capability from human capital as well as advances the emerging conversation of why firms should invest in general human capital.

Organizational change research has concentrated on the challenges of implementing isolated changes, paying little attention to the interactions among concurrent change initiatives. Our longitudinal...

Strategy making can be emotional for decision makers, especially when facing a major threat or a disruptive change. Yet, we know little about whether and how strategic decision makers' emotions are regulated and how such regulation influences strategy making. Based on a longitudinal study of Nokia from2007 to 2013, we develop a process model of socially distributed emotion regulation. This model shows how various organizational groups help regulate top managers' emotions. Top managers contain their initial emotional reactions to strategic options thanks to activities performed by groups with power over top managers. This enables top managers to form data-informed reappraisals of strategic options, contributing to gradual changes in their emotions. The reappraisal process is aided by diverse groups performing distinct roles. Top managers' revised emotions, in turn, enable themto formnew, iterative data-informed reappraisals and ultimately enable radical strategic change. Our study contributes to research on emotions and strategy making by showing how socially distributed emotion regulation operates during strategymaking and influences its outcomes. We contribute to the cognitive perspective on strategy by showing how cognition and emotion interact over time during strategy making.

Today, many organizations, especially those tackling societal grand challenges, espouse inclusive prosocial values that ambitiously englobe the welfare of vast communities. However, pragmatic concerns often force such organizations to enact values-dissonant practices, which may cause organizational members’ disengagement. This study explores how organizational members could maintain work engagement and perceive their organization as upholding inclusive prosocial values when performing values-dissonant practices is inevitable. We conducted an inductive study of a charitable hospital in India espousing the values of “serving all people with love.” We found that the organization and its members engaged in a process we call “emotional enticing.” In this process, the organization translates its values into selective, specific, bounded practices, which nudge its members to elicit the emotions of pride, hope, elevation, and bounded sympathy. These emotions entice organizational members to enhance work engagement and perceive that the organization upholds the espoused organizational values. Our research offers fresh insights into reconciling the tensions between espoused and enacted organizational values with emotion-laden processes.

Much empirical research investigating how organizations innovate with limited resources has focused on knowledge work in low-technology settings. These studies have largely overlooked the struggles of financially constrained, knowledge-poor organizations in attracting and incentivizing talents to support their uncertain, costly, and prolonged pursuit of high-technology innovation. Our inductive study examines how a cash-strapped industrial equipment repair shop was able to overcome this struggle to subsequently grow and become a prominent venture in defense R&D. This venture developed its reputation as a breeding ground for R&D careers by recruiting and training low-skilled knowledge workers to prepare them for jobs at more reputable R&D companies. Despite receiving low wages, many recruits worked hard to search for knowledge in distant domains and self-directed their learning when needed. Our inductive model elucidates how an organization commits limited organizational resources to the development of its employee's external careers and creates a schema valuing innovation as personal career building process rather than a fully compensated task. This schema encourages employees in a resource-constrained environment to pursue high-technology innovation through distant-and-prolonged search paths. Our study shows how promoting the turnover of skilled human capital — rather than protecting it — fosters the continuous development of the organization’s innovation capability.

Incorporating emotions into our theorizing on change is important because emotional perspectives explain dynamics that cannot be easily explained with purely cognitive or structural theories. At the individual level, people take various actions, such as eating unhealthy food or shouting at their spouse, due to an emotional impulse, even though they are cognitively aware of their harmful consequences. At the organizational level, communication patterns between different organizational groups can be influenced by how the groups feel toward one another, rather than by rational considerations of what is best for the organization as a whole or even in the best interests of a particular group (e.g., Vuori and Huy 2016a). The goal of the research on emotionality and change is to increase understanding of how change triggers emotions and how those emotions influence change-related behaviors and influence change outcomes. The practical benefit of such a theory is that it helps leaders to manage change in ways that generate change-enabling rather than change-resisting emotions.

Abstract Strategic change and renewal represent central concerns in strategic management. Despite many works on this topic, the body of knowledge remains fragmented. This chapter’s review of the literature suggests that research tends to focus narrowly on particular phases of strategic change, specific change actors in the change process, and specific theoretical lenses. The chapter highlights some important yet underexplored areas for future research. Finally, the chapter argues how a more integrative approach could provide more textured insights and a deeper understanding of strategic change and renewal.

We focus on the concept of emotional intimacy among organizational members and investigate its influence on both their (a) perceptions and (b) behaviors. With regard to employees' perceptions, we test whether it is organizational identification (operationalized as cognitive and affective identification with the organization) that influences emotional intimacy or the reverse. At the behavioral level, we investigate the interplay between employee emotional intimacy and organizational identification and their effects on employee interpersonal helping (OCB-Is; interpersonal organizational citizenship behaviors) and interpersonal conflict (CWB-Is; interpersonal counterproductive workplace behaviors). Based on a three-wave panel study among nurses working in a public hospital, our findings show that emotional intimacy influences organizational identification, and it represents a unique antecedent of OCB-Is and CWB-Is.

We trace a longitudinal process of intraorganizational innovation that comprises the creation, evolution, and shutdown of an innovation unit in a large Western European corporation over three years. We show that while the execution of some innovation activities triggered positive emotions, the execution of others triggered negative ones. Our study reveals how organizational members’ collective effort to regulate the emotions that arise from daily activities influences the co-evolution of formal organizational structures, cognitive frames, and the innovation process. At the micro level, we unpack how and why innovating members alter a particular organizational activity. At the macro, organizational level, we show how over three years, patterns of collective emotion-regulation behavior and cumulative changes to activities shape the innovation process and its outcomes. Our primary contribution is to provide a novel, more holistic understanding of how collective emotions, cognition, and organizational structure co-evolve over time, and how their interplay influences the intraorganizational innovation process and its outcomes.

Managers often have limited available time to make high-quality strategic decisions that are both original and feasible. This joint objective is important but difficult to achieve because under time constraints, managers must combine different cognitive processes that are often influenced by emotional states. However, research investigating how time constraints and emotions interact and impact the quality of strategic decisions is scarce. Building upon the affect infusion model and information processing perspective, our experimental study involving 174 managers shows that the impact of time constraints and emotions varies across the two decision-making tasks of strategic idea generation and strategic choice. In particular, compared to the managers in a neutral emotional state under low time constraints, the happy managers under high time constraints seemed to generate fewer original and fewer feasible strategic ideas and appeared to make worse original strategic choices, while compared to the managers in a neutral emotional state under low time constraints, the sad managers under high time constraints made better original strategic choices. Our study contributes novel insight into behavioral strategy research by showing how time constraints and emotions causally and jointly influence different quality dimensions in various tasks involving strategic decision-making.

Empirical research on compassion organizing has under-examined how resource scarcity influences the ways in which organizations coordinate individual compassion. We conducted an inductive field study of a large hospital in India that provides high quality medical care free of charge to a large number of poor people while relying on a stringent budget. We found that the organization orchestrated various resources and coordinated compassion organizing through two types of routines: compassion assembling and compassion channeling. This study contributes to the literature on compassion organizing by integrating resource constraints as a key contingency factor and by identifying the organization-related mechanisms that enable coordinated individual compassion to create significant social value and tackle societal grand challenges.

We still know insufficiently about the process of organizational growth, especially when entrepreneurial firms aspire to scale up rapidly. In a three-year inductive field study of the growth of an entrepreneurial start-up organization, we identify several under-investigated time- related factors that underlie the challenges of rapid scaling. We found that a collective aspiration for organization growth effectively emerged when stakeholders maintained unarticulated expectations about temporal depth. Unarticulated temporal expectations enabled stakeholder flexibility and facilitated their coordination via mutual adjustment, allowing the organization to scale up rapidly to achieve stakeholders’ aspirations. Yet, the rapid increase in organizational scale subsequently amplified costly maladjustments that became arduous to address when there was increasing temporal decoupling and articulation of stakeholders’ temporal expectations–leading to the dissolution of the collective aspiration and inhibiting subsequent growth. Our study contributes to the behavioral theory of the firm by describing how the shifting and articulating of stakeholders’ temporal expectations could significantly influence the formation and maintenance of collective aspirations for growth among entrepreneurial start-ups.