Wednesday, October 11, 2023

Failing Once, Failing Twice: What Makes Firms Search for Radical Improvements?

Cynics would say that firms don’t look for opportunities as much as they should. Instead, it is problems that generate search for improvements. The cynics would be right – what we call problemistic search, triggered by disappointing profits, is a real thing and it is more frequent than search for opportunities. That is bad enough, but actually things are worse.

Research by Thomas Keil, Evangelos Syrigos, Konstantinos Kostopoulos, Felix Meissner, and PinoAudia published in Journal of Management shows that multiple goals complicate things even further. This is because problemistic search can be replaced by self-enhancement. Executives and organizations engaged in self-enhancement do not solve problems, but instead they look for reasons to claim that there is no problem to solve. Chief among these reasons, I mean excuses, is finding a secondary goal that shows higher performance.

Does this happen? There is ample experimental evidence that individuals self-enhance when given the opportunity. This research is novel in showing that organizations can self-enhance in response to very important goals, and self-enhancement has important consequences.

Pharmaceutical companies rely on drug approvals for their profits, so having drugs pass the late stages of the approval process is a primary goal. They also need a good research pipeline, so drugs moving through early-stage approval is a secondary goal. How to get many drugs and novel drugs? A key decision is whether to search in the proximity of their current expertise, or whether to move into new disease areas and acquiring candidate drugs from other firms. Proximate search is safe but is a questionable strategy for a firm with low performance. Distant search is riskier but is the way to renew a firm with low performance.

What the firms should do in response to low performance is trivially simple. If the internal research is good, stay with it and do a proximate search. Otherwise do distant search. The good news from the research by Keil and coauthors is that the pharma firms behave exactly like that. They turn to distant search when the performance from the current search is low.

There is also bad news. They do this only when seeing disappointing performance on both the primary goal and secondary goal. Disappointing performance on the primary goal – the most essential one – is not enough to trigger distant search. Even worse, doing poorly on the primary goal and well on the secondary goal produces less distant search than doing well on both goals. For the sake of firm profitability, and for society getting necessary medicines, this is very problematic.

Self-enhancement is something we can understand and accept when we see it in individuals. It is a slightly childish thing to do, but people want to preserve their self esteem and want to look good in their own view, and that of others. Better than they deserve, even.

It is much harder to understand and accept self-enhancement by firms. Firms exist for practical reasons. They produce products and services, they develop improvements in products and services, and being good in actuality is much more important than being adept at self-enhancement. Unfortunately, this research is a reminder that there is self-enhancement in firms too. No doubt this is because the managers and executives of firms are people too, and the firms are lacking processes that control their individual self-enhancement.

Keil, T., E. Syrigos, K.C. Kostopoulos, F. D. Meissner, P. G. Audia. 2023. (In)Consistent Performance Feedback and the Locus of Search. Journal of Management forthcoming.

Wednesday, August 30, 2023

Talk is Expensive: When a Competitor Has Financial Ties to Media

We understand that media ownership can be translated into power, especially when a media outlet has a dominant owner and the context is politics. Rupert Murdoch, Fox, and Donald J. Trump are keywords that come to mind. That’s just a rich guy playing around with the governance of a nation, with no connection to the world of business competition, right? Wrong. Media ownership also affects competition among firms, and the effects are seen also when the ownership structure is more dispersed.

This is the main discovery made in a paper published in Administrative Science Quarterly byMark R. DesJardine, Wei Shi, and, Xin Cheng. Their starting point is the remarkable concentration in firm ownership that has happened following the growth in institutional investments in the form of fund management firms. These investors want to (in fact, are obliged to) maximize the returns of their holdings, so they will do whatever it takes to increase the value of the firms they own.

What does “whatever it takes” mean? This is where media ownership comes into play. An interesting feature of owning media firms is that media firms are involved in news gathering and reporting, which can influence the competitive balance of an industry. Hurt one firm, and the other gains. Report selectively, and the value of firms owned by the fund that also owns media outlets will increase. As a result, media talk is expensive for the competitors of firms that have a media connection in their ownership.

Such media effects are a very big deal because they show an illicit use of media ownership that tilts valuations of firms, and corresponding access to resources and success in markets, away from the products and services they provide. They can only happen as a result of unethical actions by media executives and editors.

The research they present has plenty of evidence. Media coverage turns negative when a competitor firm has financial links with the media. This effect is stronger for competitors with more similar product lines, so relevance increases negativity. The effect is stronger for competitors nearby, so proximity increases negativity. And, most perniciously, if the media company CEO has equity-based compensation, so the CEO gets paid more when the media company value increases, the effect is also stronger. In sum, negative media coverage is a result of financial links, and it is particularly negative when the competitive relations between firms are close and when the media company CEO is for sale.

Should we worry about this? People arguing that “talk is cheap” would not be too concerned about these findings. But media coverage has significant consequences for firms, especially for their access to financial resources, so seeing it can be tilted so easily means that there is one more area of competition that requires regulatory attention. We cannot have an economy and society in which consequential, expensive talk is for sale.

DesJardine, Mark R. , Wei Shi, and, Xin Cheng. 2023. The New Invisible Hand: How Common Owners Use the Media as a Strategic Tool. Administrative Science Quarterly, forthcoming.

Monday, August 28, 2023

When Your Calling Goes Silent: Journalists React to the Decline of Journalism

Occupations differ in so many ways, and often we don’t recognize these differences. I recently discussed the emphasis on precision and process in the Singapore educational system and made the point that the job market for nuclear plant operators is limited. Nuclear plant operation is an occupation that demands precision because mistakes are exceedingly costly, but there is no benefit in that occupation from other kinds of excellence. Other occupations require attention and stamina – think of truck drivers. Yet other occupations require investments in energy and devotion that go far beyond what most people will provide – think of orchestra musicians, and of journalists. People in such occupations often refer to their work as a calling.

When an occupation that requires a calling goes into dramatic change and even decline, what happens to the people in it? Journalism is currently in such a period, and research by Winnie Yun Jiang and Amy Wrzesniewski published in Administrative Science Quarterly has documented the effects on individual journalists. It is sad reading but provides important understanding.

Journalism is threatened from all sides by digitalization. A good journalist is now someone who generates a lot of clicks on their online article. A good journalist is someone who can compete effectively with the social media types, who specialize in attracting clicks to media with very little content. A good journalist is someone who can accept low pay. After all, why should newspapers pay well when their business is to generate clicks to content pages that drop preference cookies and show advertising content?

Journalists confront these changes at every turn. Many lose their jobs, and some quit. Some try to find work that matches their skills, and others try to find work that matches their values (not necessarily the same thing). The problem is that when an occupation is a calling, it can be difficult to reinterpret work. When someone is forced to leave such an occupation, it can be painful – perhaps impossible – to reorient oneself as a worker. Some people find ways to move forward by specializing in some of the skills they have developed in that occupation. Others find that being asked to give up their focus on other skills, and to abandon the values that propelled them to seek that career, is simply too difficult, both in the thinking and the emotion.

Facing such threats, journalists are divided: some reinvent their careers by searching for meaning in new occupations, and others cannot find that meaning outside of journalism and thus face a truly unsolvable dilemma. What unites them is the sadness of realizing that their future will be different from their past and, in important ways, will be worse. For all of us who love meaningful careers in general, and journalism specifically, this is a painful story of coping and adaptation.

Jiang, Winnie Yun and Amy Wrzesniewski. 2023. Perceiving Fixed or Flexible Meaning: Toward a Model of Meaning Fixedness and Navigating Occupational Destabilization. Administrative Science Quarterly, forthcoming.

Tuesday, August 15, 2023

Language in Organizations: When and Why are Men Given Higher Performance Evaluations than Women?

Researchers are familiar with the gender gaps in performance evaluations of employees, and the promotion gaps that follow. Firms are aware of this too, and many of them take serious steps to become fair in their evaluations. Imagine looking inside one such firm - a Fortune 500 technology company committed to fairness - and seeing that they also differ in how men and women’s work is evaluated. How could that happen?

Research by Shelley J. Correll, Katherine R. Weisshaar, Alison Wynn, and JoAnne DelfinoWehner published in American Sociological Review shed light on how unfair evaluations happen. They looked at the scores given to men and women, and also examined the text of the performance assessments. They asked two questions: (1) Were workplace behaviors viewed similarly when done by women and men? (2) Were workplace behaviors valued similarly when done by women and men?

What is viewed and how it is valued are central components of performance assessment. And, in this firm, the answer to the two questions were “yes” to both questions for most of the nearly 90 workplace behaviors they studied. The interesting part is in the exceptions to this rule, because that is where gender bias is found.

Let’s start with what behaviors were viewed more often in men and women evaluations. For men, managing people was mentioned much more often, and nearly always positively. For women, communication style was mentioned much more often, and nearly always negatively. In fact, the (common) negative views of women’s communication style were the exact opposite of the (rare) negative views of men’s communication style. Women were too aggressive and outspoken, said the performance valuations, and men were too modest.

Does that match our everyday experience of how women and men communicate? Perhaps not, and maybe it suggests that they were held to different standards. Women are supposed to be modest and soft spoken; men are supposed to be assertive. This is so conventional that it is remarkable to find such a double standard in a firm committed to fair evaluation.

Now let’s see what behaviors were valued differently in men and women evaluations. This is also very conventional. Being a helpful person was viewed similarly often in men and women and typically produced the second-highest rating. A four out of five, so promotion possible but not a sure thing. Being a person who takes charge was much viewed more often in men and was strongly linked to a top rating in men but to a second-highest rating in women.

Again, we see the same convention play itself out. Men should communicate assertively, they should take charge, and they should be promoted for this. Women being helpful and taking charge is OK, but not great.

Language matters because it shapes thinking, which in turn affects how people are evaluated by others and given responsibilities at work. It is doubtful that a technology firm benefits from having evaluation and promotion practices that correspond to old-fashioned gender roles, and it is certain that such practices are not fair. To change them, it is necessary to change how managers view, value, and talk about behaviors at work.

Correll, S.J., K.R. Weisshaar, A.T. Wynn, J.D. Wehner. 2020. Inside the Black Box of Organizational Life: The Gendered Language of Performance Assessment. American Sociological Review 85(6) 1022-1050.

Thursday, July 27, 2023

Conceal or Reveal? How Catholic Clergy Sex Abuse Went Unreported

Let us talk about sexual abuse of minors for a moment. It is an uncomfortable topic, made even more uncomfortable by the fact that the sex abuse scandal in the U.S. Catholic church broke after two decades of sex abuse being known in communities and by the church. What happened? Knowing the answer is useful for protecting the vulnerable in society and for understanding how societies and communities interact.

Recent research published by Alessandro Piazza and Julien Jourdan in Academy of Management Journal provides important answers. Their approach was intuitive and important. If members of the same large organization (the Church) are responsible for the same kind of abuse in many communities, but this is kept quiet in some communities but not in others, maybe it is valuable to find out what kind of communities protects the organization and lets its employees victimize its vulnerable members?

What they found is depressingly familiar to anyone who studies organizations and communities. Communities who identify with the organization protect it – so although a majority Catholic community would have many more potential victims and families reporting abuse, a greater proportion of Catholics in the community actually protected the church against having misconduct made public.

Well-organized communities also protected the Church. Many voluntary associations and informal meeting places indicate a community capable of much joint social action and self-improvement. In the case of abuse by local clergy, this positive community characteristic instead turned negative. Rather than acting to reveal the abuse, the communities showed inaction.

Finally, community homogeneity also predicted communities that protected the abusers and the Church. Specifically, ethnic homogeneity (for example, nearly all White) was an indicator of communities that would be unlikely to making public cases of sex abuse.

Why did this happen? Homogeneity, organization, and identification are characteristics of communities that are capable of a great deal of organized action, but in the abuse case, they instead seemed to display organized inaction. But let us not make a theory of grand conspiracies of communities against vulnerable members: a simpler explanation is probably correct.

Speaking out is costly. It is especially costly when the complaints are sensitive, as in sex abuse. It is even more costly when the accusation is directed at a highly respected pillar of the community, as when the abuser is clergy. The costs increase when community homogeneity and organization create the suspicion (and often, reality) that others will organize against the whistle-blower, and when community identification with the organization makes such counter-organization a near certainty.

So, parents would be quiet, journalists would not write stories, editors would not allocate space in newspapers, and the Church would quietly reassign and sometimes defrock the perpetrators. For decades. We need to understand this because the processes are general, and they can happen for similar or different kinds of abuse, and for similar or different organizations.

Piazza, A., J. Jourdan. 2023. The Publicization of Organizational Misconduct: A Social Structural Approach. Academy of Management Journal forthcoming.


Thursday, July 13, 2023

The Old Invading the New: Competition Across Generations

If you have visited France and are like me, you have been completely impressed by the amazing French bakeries. Truly artisanal artistry with a great lineup of baked goods. You likely have also failed to notice that there are two kinds of them. One is the original kind where the baker handles every step of the process. The other is a modern kind using pre-mixed flours and fixed recipes from one of a few major brands—in other words, French artisanal franchise breads and pastries.

What makes this a case of competition across generations? That’s the topic of research by Laura Dupin and Filippo Carlo Wezel published in Administrative Science Quarterly. The idea is that both kinds of bakeries make the same kinds of goods, but the modern kind is standardized across locations rather than unique. Why should customers – and bakers – care about the difference? Well, the customers may be better at tasting the difference than I am. And the bakers may care more, because the modern kind know that they are giving up uniqueness and “personality” for an easier way of doing business.

What does that mean for competition? Bakeries are the kinds of businesses that care deeply about location, because the business (at least in France) involves the baker getting up crazy early to make breakfast-style goods, which nearby customers buy and carry home or to work. I have certainly walked past bakeries in France to get to a better one farther away, but there are limits to how far I will walk, and there are also limits to how far a local customer will walk. So, bakers want to be near to customers, and they may also want to be away from each other.

Bakers also think of how distinctive they are, and that’s where things get interesting. The modern style think they are less distinctive because, well, they are less distinctive. The traditional ones think they are more distinctive. That introduces an interesting dynamic. The modern kind wants to be located away from all others and, if possible, in the same place as an earlier (failed) modern kind. The traditional baker is more likely to be fine with locating near a modern one because they know they are distinctive and think that gives them an advantage.

Does this matter for other kinds of businesses? It should. Customization gives distinctiveness, and so do brand names. As goods move around more and more easily, industries become “nearer” all the time. In the modern age of easy comparison of products on platforms and in online reviews, the branded good may become more powerful than ever.

Dupin, Laura and Filippo Carlo Wezel. 2023. Artisanal or Half-Baked? Competing Collective Identities and Location Choice among French Bakeries. Administrative Science Quarterly, forthcoming.

Wednesday, May 31, 2023

Why Women Managers Have Difficulties Fixing Gender Inequality

Consider this combination of factors: a woman employee works in an organization with a gender equality initiative, and she even has a woman manager. Is this the best possible situation? No, it is not. And the explanation has nothing to do with queen bees. Instead, the problem is that women managers are, well, women, and their experience with discrimination has left a trace in how they work and interact with others.

This is, in brief, the finding of research by Vanessa M. Conzon recently published in Administrative Science Quarterly. She studied an organization with a science, technology, engineering, and mathematics (STEM) business and staffing, which is one more reason why a gender equality initiative should go well, given the high education and liberal values of many employees in STEM organizations. Yet, this organization displayed a paradoxical divide: women managers spoke more clearly in support of a flexible work policy that made space for maternity leave and onsite childcare, but it was the men managers who more often let the women employees use this policy. Why?

Conzon discovered that the underlying reason was that men and women managers differed in the work they had been allowed and expected to do, and the resulting work habits. For men, there were two paths: dive into technological expertise, or dive into client relations. The two could be sequenced, with technology first, or they could be combined. Promotions followed their success in handling these assignments. For women, the most open path was one of handling administration and coordination, often done despite their technical skills and overlooking their potential client-handling skills. Promotions followed their success in supporting coworkers and subordinates.

These gendered career paths shaped how they interacted with subordinates and what they allowed subordinates to do. Men thrived in their technical and client-facing roles regardless of the work schedules of their employees, and they coordinated their employees from afar with email as the main tool. Women required employees’ presence to coordinate and support them, and to some degree even to make sure employees did what they were told to do. Although a manager was still a manager, man or woman, an undercurrent in the firm was that subordinates followed men managers’ instructions more faithfully than women managers’ instructions.

The result was a flexible work policy that had very different consequences for men and women managers. For the men managers, the policy mattered little because employees would still do as they were told roughly when they were supposed to, and it mattered little how they scheduled their work hours or whether they worked at home or in the office. For women managers, employees’ use of the flexible work policy meant that the valuable face time would be reduced and become unpredictable, making the managers’ job harder.

So yes, support for such a policy is good – but to see who will actually make it happen, we should also consider who benefits from the policy, and who is damaged by it.

Conzon, Vanessa M. 2023. The Equality Policy Paradox: Gender Differences in How Managers Implement Gender Equality-Related Policies. Administrative Science Quarterly, forthcoming. 

Monday, April 10, 2023

Are We in a Groove? Music Theory and Innovative Team Learning

Do you know music theory? Most people studying organizations or managing organizations do not, but maybe that should change. Organizations improve by learning, and a large part of this learning is done by teams. For example, teams are used to drive innovation efforts or more incremental problem-solving or improvement efforts.

That is why Administrative Science Quarterly has published an article by Jean-Fran├žois Harvey, Johnathan Cromwell, Kevin Johnson, and Amy Edmondson using music theory to understand the innovativeness of teams. They followed central principles of music theory, connecting the various ways teams can learn with the principles of tonality, harmony, and rhythm. If this sounds unusual, maybe a look at the details helps?

Tonality is the overall arrangement of a musical piece, and the main component is the tonal note, which repeats and supports the rest. For team learning to have tonality, it needs to use a repeatable form of learning with predictable results. Among the different learning approaches, learning from own experience provides tonality, which makes it necessary, but it needs to be combined with other approaches to produce innovation.

That is where harmony comes into play. Some learning approaches may have harmony with learning from own experience and can be done simultaneously with it. Specifically, learning from the experience of others is harmonious because it has a similar goal of relatively incremental innovations; it just has different and less predictable results because it is harder to tell what information others can provide.

But what happens when teams employ other types of learning that may not be in harmony with learning from one’s own experience? This is when rhythm is crucial. In music, tension can be built by changing between harmony and disharmony over time. The crucial phrase here is “over time.” When teams move from sequences of harmonious learning to disharmonious learning events – such as explorations through making experiments or seeking information from the context – doing so can be very productive if these experiences are spread across teamwork episodes. A team cannot innovate if there is too much harmony all the time, but it also struggles if there is too much conflict or dissonance within the same teamwork episode. Finding a learning rhythm by creating harmony and disharmony across teamwork episodes is key to improving performance.

Does this sound overly elaborate and potentially speculative? Well, here is the really good news. All the theory described above was shown to hold both for innovative teams in a field study of an organization and during an experiment involving innovative teams.

We all enjoy music, and most of us enjoy it without knowing much music theory. We also benefit from innovations, and some of us try to lead innovative teams. This new research may give all of us good reason to learn some music theory, to explore harmony and rhythm in teamwork, and to see how these lessons can improve organizational life.

Harvey, Jean-Fran├žois, Johnathan Cromwell, Kevin Johnson, and Amy Edmondson. 2023. The Dynamics of Team Learning: Harmony and Rhythm in  Teamwork Arrangements for Innovation. Administrative Science Quarterly, forthcoming. 

Friday, March 31, 2023

The Artistry Gives Meaning: How Occupations Can Reclaim Old Technologies

We are in the middle of a major technological revolution, with large-scale language models such as GPT (and its app ChatGPT) making collecting information and reporting in the form of text immensely easier than it has ever been. If the early problems (like imprecision and untruths) can be worked out quickly, which seems likely, is that what the future will look like? Maybe so, but there are reasons to suggest that the needle can turn back to older technologies, such as persons typing on their computers.

Let us not try to speculate about ChatGPT now, because it is in the future, but instead look at a lesson from a technological revolution in the past. Conveniently, Andrew Nelson, CallenAnthony, and Mary Tripsas just published research on a modern technologybecoming replaced by an older one in Administrative Science Quarterly. This is a technology that you are familiar with because you have heard it and possibly owned it too – the digital music synthesizer. It was the replacement of another technology that you have heard, but probably not owned because it was so hard to use – the analog music synthesizer.

What is the difference? Technically the progress made by the digital synthesizer was that music is produced by translating a digital stream into sound (which is always analog), which in turn requires a digital processing device and allows the same processing device to use pre-programmed and stored sounds. Push a button to get a piano, or another analog instrument, or a sound not produced by any instrument. Analog synthesizers are analog all the way, which requires turning various knobs to produce the desired sound. The digital option is much, much easier to use and produces a great variety of sounds.

Digital synthesizers still dominate the living rooms (or whatever other rooms) in people’s houses where children learn to play keyboards and aspire to become pianists. They are so flexible in use that they dominated the stages of bands too. But then, something happened. The great ease of using them meant that they leveled the field too much, made keyboardists sound too similar to each other, and made it harder to produce unique and personal sounds.

This might not have been a problem for a digital technology doing surgery – we want reliable and reproducible surgery, not personally expressive surgery. But musicians are artists looking for unique expressions, stirring a demand for a return of the older, harder to use, but more expressive technology. What next? Digital technology is very advanced – it can skillfully pretend to be analog technology, and indeed digital synthesizers emulating analog ones soon appeared in the market and became popular.

But in a world inhabited by members of a powerful occupation who require a technology to display their personal ability and expression, that could never be enough. So, the technology moved again to meet their requirements, concluding a cycle that ended up where it started. Or more accurately, these technologies coexist now, and what each musician chooses says a lot about who they are and what they are trying to accomplish. For the very elite, personal expression through adjusting all the knobs to produce just the right sound is the way to go. For the other layers, all the way down to the 4-year-olds discovering that they can play music, the ease of the digital synthesizer is still the convenient option.

So if you are telling people that ChatGPT can never become a writer, keep in mind that there are many different kinds of writers with different needs. Maybe you will also become fascinated, find ChatGPT convenient for a while, and then go back. That just means that you are similar to the most ambitious musicians. Many others will be fine using the digital writing synthesizer.

Nelson, Andrew, Callen Anthony, and MaryTripsas. 2023. “If I Could Turn Back Time”: Occupational Dynamics,Technological Trajectories, and the Reemergence of the Analog Music Synthesizer. Administrative Science Quarterly, forthcoming.

Tuesday, February 21, 2023

Can Creativity Be Stored? Yes, and It Should Be

For those of us who are not creative, it is difficult to imagine how creative people work. Perhaps we get some ideas from learning techniques such as brainstorming, when a team gets together and talk about ideas, with a ban on critique and an emphasis on letting each idea feed subsequent ideas. That’s a nice image, but it is not at all how creative industries and individuals work. Have you ever thought how unfair it is that the person with the messiest office is often the most creative at your workplace? Actually it is not unfair, and it is not just your workplace.

The explanation for the messy creative person and the uncreative brainstorming session can be found in research by Poornika Ananth and Sarah Harvey published in Administrative Science Quarterly. They had a big study of creative individuals in theatre and architecture, and among their many findings two stood out. Creativity can be drawn from storage. Creativity can be stored.

A key insight is that people who have creativity as their main work do not work on a single project, but many, both in sequence and concurrently. They get ideas and inspiration, which fuel creative outputs, but often these do not fit their current project well enough. What to do with ideas and inspiration that do not fit? Think about them creatively, create symbols that make them concrete and memorable, and store them for later. Try to make the storage systematic enough that they are easy to retrieve later.

What to do with creative projects when no ideas and inspiration are coming? Go to the creativity storage and see what fits. Probably nothing fits exactly, but there will be pieces there that look almost right and can be cobbled together. Creative people, especially when working in creative industries, are good at their work exactly because they have a portfolio of stored creative inputs that they can use in their portfolio of creative projects.

It is interesting how this description of creativity fits a theory of culture known as “culture as a toolkit.” When people have and use culture as a toolkit, culture is partly in their memory and partly picked up from others. They can have many cultural elements, which are not necessarily consistent with each other, and they will draw from those cultural elements to solve problems they encounter. The individual with a large and diverse cultural toolkit is a lot like the creative individual – a large storage of ideas and inspiration, and great ability to solve problems.

Perhaps we should not be surprised? A lot of creativity is culturally judged, and some of it even creates culture. We learn from theatrical plays and from watching buildings, if they are creative. The creative individual who stores and retrieves ideas and inspiration also creates ideas and inspiration for us, and is doing society a great service.

As I finish writing this, I am looking at my office, which is disturbingly tidy for a professor. I still like to think of myself as creative, and maybe it helps that my brain is messier than my office. I do have good memory, though, and I maintain a portfolio of projects that I work for. There is hope for everyone once we understand the processes that lead to creativity.

Ananth, Poornika and Sarah Harvey. 2023. Ideas in the Space Between: Stockpiling and Processes for Managing Ideas in Developing a Creative Portfolio. Administrative Science Quarterly, forthcoming.

Monday, January 16, 2023

Wait, Our Employees Can Also Use Us Politically? Political Activism in Firms

We already know about CEOs making political statements using their firm as a tool – such as leaving California while protesting taxes and regulation, or publicly announcing that they will cover travel expenses for abortions for their employees in abortion-banning states. There is debate over how much CEOs should engage in political debates and use their firms to make statements. But what about employees? Of course, anyone is free to act politically outside work, but it is also possible to use the firm as a tool for public protest.

Research by Alexandra Rheinhardt, Forrest Briscoe, and Aparna Joshi published in Administrative Science Quarterly asks when employees are more likely to use their organization as a tool for making political statements. It focuses on a public protest – the “Take a Knee” movement of players in the NFL (National Football League) kneeling or showing other kinds of protest during the pre-game play of the national anthem. It is a remarkably visible protest because of the TV broadcast of the event, the symbolism of the national anthem, and the clearly visible team uniforms.

Some politicians, some team owners, and some audience members were aghast when this movement began – and many others were delighted. As any real form of protest should be, it was controversial, and it was also a powerful ingredient of the Black Lives Matter movement to protest racism and police violence. But what made some players in some teams join the movement, while others did not? The research found two factors that made the players more likely to use their team as a tool for public protest.

The first was fairness – teams treating their players equally, as expressed through similar pay levels, were more likely to see players emboldened and making protests. Keep in mind that these were protests not against the team, but using the team colors, and they were protests for fairness in society. This makes sense.

The second was openness – teams that were open to the message of the movement, as expressed through having a greater proportion of black players, were more likely to see their players protest. Again, this action is part of the Black Lives Matter movement, so it matters that a team does not specifically favor white players through its recruitment. This makes sense too.

Both fairness and openness made individual players more likely to protest before a game, and it added up to making at least one player in the team, usually multiple, more likely to protest too. This brings us back to what happens when employees use the firm as a tool for public protest. Of course, it is a worthy effort for the employees, who feel strongly about the issue and want to express their views as publicly as possible. But should managers and owners be worried?

That brings us to the last part of the story. Another item predicting protests was that the teams were in more liberal communities – communities that generally agreed with the Black Lives Movement and would likely react positively to players protesting on its behalf. At least in this context, one could argue that the player, by taking an overall controversial stance, brought the team closer to its community. For a move that received so much public attention – even with the president at the time (who has no particular authority on football team hiring decisions) telling teams to fire the protesters – this is an unusually happy ending.

Rheinhardt, A., F. Briscoe, and A. Joshi. 2023 "Organization-as-Platform Activism: Theory and Evidence from the National Football League “Take a Knee” Movement." Administrative Science Quarterly, forthcoming.