Institutional Theory Needs to Rethink its Neglect of Morality

[We’re pleased to welcome authors Geoff Moore of Durham University, UK and Gina Grandy of the University of Regina, Saskatchewan, Canada. They recently published an article in the Journal of Management Inquiry entitled “Bringing Morality Back in: Institutional Theory and MacIntyre.” From Moore and Grandy:]

We have had an interest for many years in the work of the moral philosopher Alasdair MacIntyre and the ways in which, despite his highly critical approach to capitalism and corporate management, his work can be used to explain and explore what a virtue-based understanding of organizations means in both theory and practice. In particular, his distinctions between practices and institutions, and between two types of goods (internal and external) which are pursued by organizationJMI_72ppiRGB_powerpoint.jpgs has led to a series of papers exploring the implications of this approach. In this endeavour, we have been encouraged by a steady stream of articles, both theoretical and practical, which have explored this understanding of practices and organizations in such diverse settings as circuses, jazz, investment advising, banking, health and beauty retailing, and pharmaceuticals.

At the same time, we have noted the potential links with Institutional Theory and in particular its notions of logics and legitimacy and wanted to explore these links in greater depth. We were also concerned that new Institutional Theory lacks a positive account or morality and felt that this could be addressed by integrating it with MacIntyre’s work.

An empirical project involving an ecumenical study of churches in the north east of England led to some findings which we felt could be best explained by just such an integration of Institutional Theory and MacIntyre’s work. In particular, consistent throughout the empirical evidence was practitioners’ concern with the telos (overall purpose) of their organizations and the core practices of their faith, and their concern for the legitimacy of their organizations both to internal and external audiences, and hence of the moral nature of organizational life.

We argue that these findings can be generalized to any practice-based organization and conclude that ignoring or underplaying the moral dimension will give, at best, a diminished account of organizational life. Hence, we argue that Institutional Theory needs to rethink its neglect of morality and we suggest several implications for Institutional Theory as a result. We hope this might lead to further studies which follow up our lead and so to the bringing of morality back in to Institutional Theory. We also hope that a wider recognition of the moral dimension as an essential component in organizational life will impact practitioners and lead to organizations fulfilling their potential for the common good.

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Students as Protégés: Factors That Lead to Success

[We’re pleased to welcome author Stephen Bear of  Fairleigh Dickenson University. Bear recently published an article in the Journal of Management Education entitled “Students as Protégés: Factors That Lead to Success,” co-authored by Gwen Jones. Below, Bear outlines the importance of this study:]

26111521686_8aeaf7a60a_z.jpgWe have established, in our undergraduate curriculum, a practitioner-mentoring program for all business students in our sophomore-level organizational behavior course. The intent of the program is that, early in the students’ business education, they will begin to link and apply the theories of organizational behavior to actual workplace situations through regular interactions with their mentor throughout the semester.  For many students the mentoring program is the highlight of the course, while for others the mentoring program is just another required course assignment.  This range of reactions led us to wonder what factors encourage satisfaction with practitioner-student mentoring relationships?  The level of satisfaction with a mentor is important because dissatisfaction can prompt a protégé to spend less time with a mentor and can reduce the quality of mentoring exchanges and the overall effectiveness of the mentoring relationship (Ortiz-Walters, Eddleston & Simone, 2010).

In our study we examined five independent variables that we believed could affect satisfaction:  networking to find a mentor, trust in the mentor, self-disclosure to the mentor, role modelling by the mentor and mentoring program understanding.  While each variable was positively related to mentoring relationship satisfaction, the most surprising finding of the study was the importance of student networking to find a mentor.  Many students initially have difficulty finding a mentor, and we have debated whether faculty should step in to ensure that each student has a high quality mentor.  Our study showed that when student’s network to find their own mentors this is positively associated with mentoring relationship satisfaction.  Students who found their own mentors were more satisfied with their mentoring relationships than students who relied on the professor to match them with a mentor.  We believe this finding is very relevant to faculty and to staff that establish mentoring programs as it suggests that whenever possible, student protégés not faculty should play the key role in the selection of their mentor.  Finally the relationship between networking and mentoring relationship satisfaction is likely complex and should be explored further in future research. In our study, 77% of students were successful in finding their mentors through networking, and analysis indicated that there were no significant differences in finding a mentor, as based on age, gender, or race/ethnicity. An opportunity for future research is to determine whether socioeconomic class or a student’s first-generation college status would influence the ability to network to find a mentor, as these students might have fewer networking contacts.

Reference
Ortiz-Walters, R., Eddleston, K. A., & Simione, K. (2010). Satisfaction with mentoring

Student photo attributed to the University of the Fraser Valley (CC).

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Measuring Organizational Legitimacy in Social Media

[We’re pleased to welcome author Michael Etter of the City University of London, UK. Etter recently published an article in Business & Society entitled “Measuring Organizational Legitimacy in Social Media: Assessing Citizens’ Judgments With Sentiment Analysis,” co-authored by Elanor Colleoni, Laura Illia, Katia Meggiorin, and Antonino D’Eugenio. From Etter:]

8583949219_f55657573e_z.jpgSocial media have given ordinary citizens the opportunity to freely express their opinions and feelings in any tone or style. The heated discussions around various topics from politics, sports, and corporations often evolve in parallel to news media coverage. Accordingly, we have developed the idea that a measurement of citizens’ judgment in social media can give researchers a new way to assess the legitimacy of organizations. Compared to existing measurements that, for example, assess judgments in news media coverage, a measurement based on social media would directly access the voices of ordinary citizens and therefore account for their heterogeneous norms and expectations.

In this article we describe and test how a measurement based on social media data can give indication for organizational legitimacy. We use the method of sentiment analysis that is based on computational linguistics and apply it to a case from the banking industry over a one year period.

Our findings show that, indeed, an analysis of 14’000 tweets reveals a different judgment than the analysis of 730 news articles. Compared to the news media, citizens judge the bank in a much more negative way. Also we find that the bank is discussed by 6000 citizens and for a broad variety of topics (around 400 hashtags). Clearly, social media data gives researchers access to different judgments than found in news media, which are written by a few journalists that adhere to professional norms and standards and are subject to various selection processes. We therefore encourage researchers to take into account social media, such as Twitter, in order to achieve a richer understanding of legitimation processes in a digital world. For practitioners, sentiment analysis of twitter data is a tool to monitor and identify issues and sentiment in a timely manner.

Cell phone photo attributed to Jason Howie (CC).

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Using Theory Elaboration to Make Theoretical Advancements

[We’re pleased to welcome author Herman Aguinis of George Washington University. He recently published an article in Organizational Research Methods entitled, “Using Theory Elaboration to Make Theoretical Advancements,”co-authored by Greg Fisher of Indiana University. From Aguinis:]

“Our field is rapidly being pulled apart by centrifugal forces. Like a supernova that once packed a wallop, our energy is now dissipating and we are quickly growing cold”
Donald Hambrick (2004, p. 91)

“Like symphony orchestras that play a repertoire of a dozen baroque and classical composers year in and year out, management research can sometimes appear like a living museum of the 1970s.”
Jerry Davis (2010, p. 691)

As highlighted by the above two quotes, theory development in the management field is fragmented and lacks novelty. What then can we do about this?

We propose that one way to address the opposing forces of fragmentation and lack of novelty is to adopt an approach to theory development that has loosely been referred to as theory ORM_72ppiRGB_powerpoint.jpgelaboration. Lee, Mitchell and Sablynski (1999) suggested that “Theory elaboration occurs when preexisting conceptual ideas or a preliminary model drives [a] study’s design” (p. 164) and they contrasted it with theory generation that “occurs when the inquiry’s design produces formal and testable research propositions” and theory testing that “occurs when formal hypotheses or a formal theory determines the study’s design” (Lee et al., 1999, p. 164). We provide a more comprehensive definition of theory elaboration as the process of conceptualizing and executing empirical research using pre-existing conceptual ideas or a preliminary model as a basis for developing new theoretical insights by contrasting, specifying, or structuring theoretical constructs and relations to account for and explain empirical observations.

To better understand theory elaboration we identified published articles that have implicitly or explicitly adopted such an approach, and although the overall number of articles is small we recognized that many such articles are among the most highly cited and impactful in the management field. We therefore set about to codify such an approach. To do so we used a reverse-engineering process to extract fundamental features of impactful theory elaboration studies.

Our goal is adopting such a reverse engineering process was to explain how to conduct a theory elaboration study, to offer illustrations of how to use particular tactics to achieve specific theory advancement goals, and to point out particular contexts and circumstances where theory elaboration is most fruitful. As such our paper serves as a catalyst for “cloning” the important theoretical advancements that have been achieved by the handful of studies that have adopted a theory elaboration perspective.

From this reverse engineering process we describe seven specific tactics for conducting a theory elaboration study:

  • Horizontal contrasting – contrasting observations across different contexts
  • Vertical contrasting – contrasting observations across different levels of analysis
  • New construct specification – identifying and defining new constructs
  • Construct splitting – identifying a need or oppo
    rtunity to break a broad construct into specific constructs
  • Structuring specific relations – defining/redefining a specific relation between two constructs
  • Structuring sequence relations – providing an explanation of a sequence of events or relations
  • Structuring recursive relations – Accounting for a recursive relation between two or more entities over repeated interactions

We link each of these tactics with different types of theory advancements and we provide a sequential decision-making process for deciding whether to adopt a theory elaboration approach. Finally, we identify research domains and specific topics in OBHR, strategic management, and entrepreneurship for which theory elaboration is likely to be highly effective as a means to make theoretical advancements. We believe that theory elaboration holds a great promise as a perspective to empower scholars to overcome some of the current challenges associated with theory advancement in the management field.

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Organizational Demands on Productivity, Innovations, and Safety

[We’re pleased to welcome author Marianne Törner of the University of Gothenburg, Sweden. She recently published an article in the Journal of Applied Behavioral Science entitled “Coping With Paradoxical Demands Through an Organizational Climate of Perceived Organizational Support: An Empirical Study Among Workers in Construction and Mining Industry” co-authored by Anders Pousette, Pernilla Larsman, and Sven Hemlin. From Törner:]

Most organJABS_v50_72ppiRGB_powerpoint.jpgizations must be able to combine efficiency, innovativeness, and safe and healthy working conditions, but these demands may appear paradoxical to the employees, and if not handled well by the organization, such paradoxes may create stressful goal conflicts. A large amount of research, not least organizational climate research, has focused on how organizations may promote each one of these goals, but we believe there is a need for research that may help organizations to effectively and simultaneously attain different goals. This was the starting point for this study where we investigated how organizations may support the employees’ ability to reconcile conflicting goals, and thereby promote organizational success as well as employee well-being and sense of worth.

The abstract to their article is below:

Organizational demands on productivity, innovations, and safety may seem paradoxical. How can the organization support employees to cope with such paradox? Based on organizational climate measures of safety, occupational health, innovativeness, and production effectiveness, we explored if a second-order organizational climate could be identified, that was associated with staff safety, health, innovations and team effectiveness, and if such a climate could be represented by an organizational climate of perceived organizational support (POS). Questionnaire data were collected from 137 workgroups in four Swedish companies in construction and mining. Analyses (structural equation modeling) were done at the workgroup level and a split sample technique used to investigate relations between climates and outcomes. A general second-order organizational climate was identified. Also, an organizational climate constructed by items selected to represent POS, was associated with team effectiveness, innovations, and safety. A POS-climate may facilitate employees’ coping with paradoxes, and provide a heuristic for managers in decision making.

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Experimental Research Designs For Entrepreneurship: Pros and Cons

[We’re pleased to welcome authors Sharon Simmons of the University of Missouri Kansas City, Alice Wieland of  the University of Nevada, and Dan Hsu of Appalachian State University, who recently published an article in Organizational Research Methods entitled “Designing Entrepreneurship Experiments: A Review, Typology, and Research Agenda.” From Simmons, Wieland, and Hsu:]

  • ORM_72ppiRGB_powerpoint.jpgWhat inspired you to be interested in this topic?

Dr. Simmons: Our inspiration for the project came from our individual interests in the experimental research methodology and our growing awareness of the difficulties that emerging entrepreneurship scholars in the field were having getting their experiment papers accepted at elite entrepreneurship journals. Each of the coauthors have different backgrounds that shaped our learning journeys leading up to the conceptualization of the article.  We believe that our diverse backgrounds and different challenges of learning about the appropriate sample and research designs allowed us to write the article in a way that will be understood by a broad audience with different levels of experience and understanding of experimental methods.

Dr. Wieland: My motivation for this paper came from the frustration of sending in experimental papers on entrepreneurship and getting reviews from entrepreneurship researchers who didn’t understand the method – they couldn’t fairly evaluate the manuscripts – both from a design perspective and the related statistical analysis. Much of entrepreneurship research is related to psychological phenomena, therefore, it is essential that using the best methods in psychological research should also be applied, and understood by entrepreneurship researchers.

Dr. Hsu: I shared the similar concerns with Dr. Wieland. Many entrepreneurship scholars were not familiar with the experimental method and rejected a paper using experiments because it lacked external validity – the experimental scenarios/conditions were not real. As we advocated in the paper, the external validity is never the goal of experiments. Instead, the purpose of experiments is to test causality, a critical component of many important relationships in entrepreneurship, including mediation effects. In fact, mediation effects can not be rigorously tested without using the experimental method.

  • Were there findings that were surprising to you?

Dr. Simmons: To prepare the article we conducted a survey of current entrepreneurship experiments.  What we found surprising is that the researchers were able to tap into different stakeholders of the entrepreneurship process to participate in the experiments.  There is a general perception in the field that experienced individuals such as venture capitalists, mentors, angel investors, CEOs are difficult to pull away from their everyday functions to engage in an experiment.  We were happy to see a good representation of these stakeholders participating in entrepreneurship experiments.

Dr. Wieland: Since this is a methodological review, there were not specific “findings” related to the work. However, what was interesting to me were the different techniques used for experimental designs noted in the review of published studies which combined a field sample with random assignment to address the weaknesses of both approaches.

  • How do you see this study influencing future research and/or practice?

Dr. Simmons: We hope that the care that we put into providing practical examples and the typology will ease the uncertainty of scholars that are new to the experimental method.  The entrepreneurship field is at a level of maturity that calls for studies with the scientific rigor to both test and advance theories of the relationships that scholars to date have done a fine job of bringing to the forefront. While we title the article, Designing Experiments for Entrepreneurship Research, we see this study impacting the broader management literature as well.

Dr. Wieland: We hope to provide a guide that will be useful for entrepreneurship researchers who are new to using experimental methods.

 

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Call for Papers: Financial Markets and the Transition to a Low-Carbon Economy

                                                          Call for Papers
OrO&E_Mar_2013_vol26_no1_72ppiRGB_powerpoint.jpgganization & Environment- Special Issue
Financial Markets and the Transition to a Low-Carbon Economy

Submissions Due: April 28, 2017

Guest Editors
Céline Louche, Audencia Business School
Timo Busch, University of Hamburg
Patricia Crifo, University Paris X, Ecole Polytechnique
Alfred Marcus, Carlson School of Management, University of Minnesota

 

This special issue of Organization & Environment seeks to advance an emerging field of research on the financial sector and the transition to a low-carbon economy.

The COP 21 in November 2015 in Paris has intensified the reciprocal influences between the financial world and issues around climate change. Even the 2°C threshold has been discussed, and it is now acknowledged that “efforts [should be pursued] to limit the temperature increase to 1.5°C above pre-industrial levels” (UNFCCC, 2015). One of the main efforts consists in a cumulative investment of $53 trillion in energy supply and energy efficiency over the period from 2014 to 2035 (International Energy Agency, 2014). This consists not only in a shift from fossil fuels to renewable energy investments but also in much more investments in energy efficiency.

If the objectives in terms of carbon emissions and technologies deployment to keep the global average rise in temperature below 2°C are well defined (International Energy Agency, 2014; Meinshausen et al., 2009)—even if some space remains for alternative scenarios regarding specific technologies like Nuclear or Carbon Capture and Storage—the process to get there is not yet clear.

Governments can stimulate these changes notably through regulations. However, governmental actions might represent a long and cumbersome process. One may also question the feasibility to see widespread and significant actions from policy makers, which might not be enough to meet the ambitious climate objectives. If strong climate change–related regulatory actions seems to be emerging, investors already face substantial financial risks to see their assets become stranded in the context of a transition to a low-carbon economy (Ansar, Caldecott, & Tilbury, 2013; Leaton, 2013). This already calls for new ways of integrating climate change–related financial risk for investors.

If immediate and effective action cannot be expected to come from policy makers, financial markets could step in and play a significant role in the transition to a low-carbon economy. Indeed, they have the ability to massively redirect capital toward players that positively contribute to a climate-resilient economy, be it through dedicated financial instruments or the allocation choices investors make. Many indicators show that there is already a strong interaction between financial markets and the issues around climate change. Voluntary initiatives have emerged from the financial sector, like the Montreal Pledge or the Portfolio Decarbonization Coalition. New institutions addressing the need for climate-related data have emerged like CDP (Carbon Disclosure Project) and divestment or divest/invest campaigns such as the Fossil Free Campaign lead by 350.org. Financial services providers are also starting to handle the question by designing so-called “low-carbon” or “carbon-efficient” financial products. The regulatory body is also acknowledging the potential role of the financial market. As an illustration, in May 2015, France passed a new law—the French legislation on climate reporting for investors1—requiring mandatory ESG and climate policy reporting to all asset owners on a “comply or explain” basis. Another example is the Financial Stability Board’s Climate Disclosure Taskforce founded by Michael Bloomberg, whose objective is to give recommendations on what and how information should be disclosed by companies to better inform investors, lenders, and insurers about climate-related financial risk (Task Force on Climate-Related Financial Disclosures, 2016).

With or without regulation, the financial markets will play a crucial role in the transition toward the low-carbon society of the future. In addition to disclosure and portfolio adjustment issues, the financial sector can drive all other sectors’ transitions by discriminating the access to funding in the banking, insurance, and capital markets as a function of firms’ sustainability performance. However, the lack of research in this area is prevalent and many questions remain to be explored. Given the urgency of the climate change problem, further contributions in this area are both timely and needed.

Despite many initiatives to assess the performance of corporates regarding climate change, it appears that it is still extremely difficult to assess the contribution of a financial portfolio or an investment strategy to the energy transition. The indicators available to measure the alignment of the financial sector with those needs are far from clear and harmonized. Some work has already been done on the potential roles the financial sector can play for sustainability (Busch, Bauer, & Orlitzky, 2015) and on the ability of a given investment strategy to “hedge against climate risk” based on lower scopes 1 and 2 carbon intensity (Andersson, Bolton, & Samama, 2014; Schoenmaker & van Tilburg, 2016). Also, there is very little research on the potential contribution of financing streams to climate change mitigation and the transition to a low-carbon economy.

This Special Issue therefore addresses the variety of ways in which financial markets are already paving this way ahead and could or should do in future. Contributions to the Special Issue may cover (but are not limited to) the following research questions:

  • Which are the key stakeholders in the financial industry`s value chain for fostering a low-carbon economy? What are their barriers/motivations for accelerated action?
  • What is the potential leverage of different asset classes for financing of the energy transition?
  • What is the impact of current low-carbon investment practices regarding their contribution to climate change mitigation? Which challenges remain?
  • Which new institutions are required/likely to emerge for fostering the energy transition through financial markets?
  • What is the capacity of nonregularity initiatives like CDP or divesting movement in influencing the financial markets to engage in the transition to a low-carbon economy?
  • What is the financial relevance of climate effective investment strategies? Can current assessment tools fully capture related risks?
  • Are long-term climate goals coherent with short-term and/or long-term financial strategies?
  • What are the main drivers for low-carbon strategies in financial markets: regulatory pressure, underestimated risks, underestimated opportunities, and/or new social movements?
  • What are emerging practices in low-carbon finance, including the suitability and inclusivity of methodologies, tools, and metrics? What theories are emerging from those emerging practices?
  • What are the behavioral impediments of investors, asset managers, investor advisers, and other financial market actors to the development and adoption of low-carbon investment practices?
  • What are the enabling and hindering factors influencing financial institutions’ capacity to change and adapt their portfolio allocations, as well as their internal decision processes leading to pricing and capital access choices related to clients’ environmental performance?
  • Authors should submit their full manuscripts through ScholarOne Manuscripts by April 28, 2017, through http://mc.manuscriptcentral.com/oe
  • Be sure to specify in the cover letter document that the manuscript is for the special issue on “Financial Markets and the Transition to a Low-Carbon Economy.”
  • Manuscripts should be prepared following the Organization & Environment author guidelines, available at http://oae.sagepub.com/
  • After an initial screening by the guest editors, all articles will be subject to double-blind peer reviewing by a minimum of two anonymous referees and editorial process in accordance with the policies of Organization & Environment.
  • Authors who are invited to revise and resubmit their papers will be invited for a manuscript development workshop (expected date and location: Fall 2017, Paris). Acceptance for presentation at the workshop does not guarantee acceptance of the paper for publication in Organization & Environment.

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