Tag Archives: Desai

Collaborative Stakeholder Engagement: An Integration between Theories of Organizational Legitimacy and Learning

Vinit Desai
Academy of Management Journal,Pages: 2016.0315.

Organizations often collaborate with stakeholders such as customers, communities, and other groups to pursue shared goals, and these partnerships are known to affect an organization’s legitimacy with those groups as well as its access to information from them. While these concerns could be examined within each of their own independent literatures, existing theories are ill-equipped to handle this process in tandem. Thus, studying these collaborations provides an opportunity to more broadly explore how organizations …
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Third-Party Certifications as an Organizational Performance Liability

Vinit M Desai
Journal of Management,Pages: 0149206316659112.

Third-party accreditations and certifications can provide legitimacy or signal trustworthiness about an organization and its products or services, and with very little exception, the vast majority of research on these labels focuses on their benefits. Yet the value of becoming accredited may change dramatically over time. Little research, if any, has examined the processes through which this occurs. Here, I develop theory about three mechanisms that could each tarnish the value of accreditation and reduce its performance impact. First,” …
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The Behavioral Theory of the (Governed) Firm: Corporate Board Influences on Organizations’ Responses to Performance Shortfalls

Vinit Desai
Academy of Management Journal, Volume 59 Issue 3, pp. 860-879

The Behavioral Theory of the Firm provides a well-evidenced perspective on organizational decision making that has influenced a wide array of literatures, including the substantial body of work on organizational change. This literature suggests that organizations are more likely to undertake major changes when their performance declines below aspirations or targets for acceptable performance, but few studies examine how multiple groups of organizational decision makers, each with potentially conflicting interests, might collectively influence this process. To that end, I incorporate theory regarding corporate boards and their role in organizational decision making. I use this integration to suggest that boards with particular characteristics may have interests that do not align with those of the management team when performance shortfalls occur, using their influence to force compromises or compel managers to reconsider particular changes. I find support for the related predictions that an increase in board size and equity ownership suppresses change when performance drops, although I find no support for similar arguments regarding board turnover. This approach blends the typically distinct but related literatures on performance feedback and corporate governance, and suggests the role that some boards might play in circumventing the momentum for organizational change.

Learning to Learn from Failures: The Impact of Operating Experience on Railroad Accident Responses

Vinit Desai
Industrial and Corporate Change, Volume 25, Issue 2, Pp. 199-226

Failures are difficult to learn from, and organizations unable to learn may continue to fail. This study reconciles conflicting theoretical predictions regarding whether organizations are able to learn from failure, by examining the moderating role of knowledge gained through an organization’s operating experience. The study also forwards the possibility that generalist and specialist organizations systematically differ at this process. Hypotheses are tested on a panel of railroad companies. These tests provide strong support for the role of operating experience, and partial support for differences across generalists and specialists. Contributions to organizational learning theory and related literatures are discussed.

Under the radar: Regulatory collaborations and their selective use to facilitate organizational compliance

Vinit M Desai
Academy of Management Journal,Vol. 59, Issue 2, Pages: 636-657.

Why do organizations vary in complying with regulatory mandates? While some may resist these pressures, what to change or how to change it may be unclear even when managers do intend to fully comply. Though scarce in the literature, theories regarding how organizations search for and learn from information under uncertainty provide an ideal window through which to examine organizational responses to regulatory mandates and other external pressures. In this study, I adapt these theories to posit that organizations …
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Learning through the Distribution of Failures within an Organization: Evidence from Heart Bypass Surgery Performance

Vinit Desai
Academy of Management Journal, Volume 58 Issue 4, p1032-1050

While research has suggested that organizations can improve by investigating and learning from failures, some work has found that they may generate incorrect lessons or fail to learn. This study addresses the debate by turning attention to the processes that underlie learning, using attribution theory to highlight the way in which decision makers interpret information about where failures occurred or who was involved. This approach is notable because it suggests that different organizations with similar experiences may have quite distinct reactions based on where that experience originates. Specifically, I predict that organizations learn less effectively when their failures are relatively concentrated in origin, meaning that failures typically involve a particular unit or even a specific individual, compared to when failures are more broadly dispersed. I also examine factors that intensify or ameliorate this effect, including an organization’s size or its performance relative to aspirations. I test related hypotheses on a panel of hospitals that offered a specific surgical procedure within California from 2003 through 2010.

The Robust Beauty of “Little Ideas” The Past and Future of A Behavioral Theory of the Firm

David Maslach, Chengwei Liu, Peter Madsen, Vinit Desai
Journal of Management Inquiry,Vol. 24, Issue 3, Pages: 318-320.

This introductory and the following nine articles reflect comments made by panelists during a symposium honoring A Behavioral Theory of the Firm by Richard Cyert and James G. March at the 2013 Academy of Management meeting. Not surprisingly, what emerged from these comments is that the Behavioral Theory of the Firm (BTF) was enormously influential to the creation of many “little ideas” that have a big impact on a number of social sciences. More surprising is the potential for many new “little ideas” that build on the BTF. The panelists …
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Learning to Behave Badly: Performance Feedback and Illegal Organizational Action

Vinit Desai
Industrial and Corporate Change, Volume 23, Issue 5, Pp. 1327-1355.

Two perspectives predict how organizational performance influences illegal action. First, poor performance creates tension, leading decision makers to repair the gap through any means necessary. However, strong performance also bolsters risky behavior, possibly leading to violations. To integrate these perspectives, I suggest that performance evaluation provides only the motive to commit illegal action and that decision makers also require an opportunity to do so. I extend organizational learning theory by suggesting that managers in organizations performing far from expectations may evaluate information about the potential success of illegal acts, and I examine whether they use this information to time violations.

Imitate Others? Not if We Have the Chance: Competitive Differentiation in Medical Malpractice Insurers’ Pricing Decisions under Uncertainty

Vinit M. Desai
British Journal of Management, Volume 25, Issue 3, Pp. 589–606

Several perspectives assert that organizations facing uncertainty tend to imitate other organizations’ actions. While one might therefore expect to see great homogeneity across fields characterized by uncertainty, it is surprising that this homogeneity has not been observed more frequently in practice. Research investigating this puzzle has typically focused on the role played by organizational characteristics or the information organizations possess about their environments. Instead, this study turns attention to the information others possess about the organization. To that end, I disaggregate organizational uncertainty into the uncertainty facing decision makers and the uncertainty faced by others about what those decision makers might ultimately do, providing a more fine grained analysis of uncertainty and its impact on competitive action than typically offered in this literature. I suggest that uncertainty in competitors’ evaluations of the organization provides an opportunity for the organization to differentiate itself rather than imitate others. I also suggest that this effect is stronger than the effects of the uncertainty facing the decision makers themselves. Related hypotheses are tested on a panel of medical malpractice insurance providers. The study’s perspective generates unique predictions regarding imitation and differentiation in this industry and across other contexts featuring both uncertainty and competition.

Does disclosure matter? Integrating organizational learning and impression management theories to examine the impact of public disclosure following failures

Vinit M Desai
Strategic Organization, vol. 12 no. 2, May 2014, pp. 85-108

The typically disparate literatures on organizational learning and impression management have both separately sought to examine how organizations respond following failure, with the former asking how organizations learn from these events and the latter investigating how organizations use public disclosures to manage perceptions following these events. This study integrates these perspectives to ask how disclosures might impact learning through failure. The study distinguishes between major and minor failures, asserting that public disclosures exert a distinct influence on learning through either form of experience. Related hypotheses are tested on failures arising within the US air-traffic control system. Although no support is obtained for predictions about major failures, the study finds that facilities can learn through minor failures but the process is impeded by public disclosures, suggesting the notable influence that these disclosures have over audiences’ perceptions of the organization or its role in these events. This approach addresses a longstanding tension regarding why some organizations learn more effectively than others by emphasizing how organizations shape interpretations of their experience.

The Impact of Media Information on Issue Salience Following Other Organizations’ Failures

Vinit M. Desai
Journal of Management, vol. 40 no. 3, March 2014, pp. 893-918

Research on organizational decision making seeks to understand how external events shape how organizational decision makers attend to particular issues and allocate scarce resources across the organization’s activities. The author investigates whether supplemental information available to decision makers about their own and other organizations impacts this process. He finds that media coverage about particular issues following failures throughout the field can influence decisions regarding resource allocation and that coverage about other organizations may in some cases be more influential than coverage about the focal firm. The study and its findings forward our understanding regarding how organizations scan their environments and how multiple, interacting forms of external information may collectively influence internal organizational processes.

The Two Faces of Voluntary Disclosure: Quality Improvement and Organizational Learning from Selfreported Problems

Vinit M. Desai
British Journal of Management, Vol 23, Issue 3, Sept 2012, pages 344–360

Research suggests the promise of voluntary self-reporting, given that organizational quality can be difficult to monitor. However, I explore opposing theoretical arguments regarding its impact. On one hand, self-reported problems may motivate intensive investigation, resulting in subsequent improvement. However, self-reports may instead represent relatively superficial impression management efforts, and their value to organizational performance may be more dubious. Associated hypotheses are tested on a longitudinal panel of nursing homes. Findings suggest that self-reports generally detract from performance except when they are reinforced by other, complementary forms of experience. Contributions to organizational learning theory, institutional theory and regulatory policy are discussed.

Mass media and massive failures: Determining organizational efforts to defend field legitimacy following crises

Vinit M. Desai
Academy of Management Journal, Volume 54, Issue 2, pp. 263-278

Although much is known regarding how individual organizations respond to accidents, scandals, and other disruptions that directly affect their own operations, scrutiny following disruptions can spread to impact other organizations in the same field. Yet existing research provides little guidance regarding how these other organizations respond when an entire field’s legitimacy is threatened. Drawing on institutional theory, I examine how organizations may undertake efforts to minimize disruptions and defend activities within their field. Findings suggest that defensive efforts depend on similarities between stricken firms and potential responders and on how constituents attend to related issues across the field.

Ignorance Isn’t Bliss: Complaint Experience and Organizational Learning in the California Nursing Home Industry, 1997–2004

Vinit M. Desai
British Journal of Management,  Dec. 2010, Vol. 21 Issue 4, pp. 829-842.

Organizational learning theory suggests that complaints about products and services can promote organizational learning and change. However, evidence suggests that potentially valuable forms of experience may be ignored or discounted in organizations, and additional research is needed to determine why this happens. This study contributes to those efforts by examining how multiple forms of complaint experience interactively influence organizational outcomes. An empirical test on a longitudinal panel of Californian nursing homes finds that complaints about other issues may distract attention away from complaints about a focal issue, but only when complaints are provided anonymously. These findings forward organizational learning theories by suggesting that multiple types of experience may detract from rather than supplement each other in some cases. Additional implications and opportunities for further research are also discussed.

Power, legitimacy, and urgency in organizational learning: Learning through stakeholder complaints to improve quality in the California nursing home industry

Vinit M. Desai
Journal of Leadership & Organizational Studies, Volume 17 Issue 3, pp. 264-275

Although research suggests that organizations learn through interactions with stakeholders, little is known regarding how this process occurs. The author addresses this void by examining how the power, legitimacy, or urgency related to stakeholders’ interactions influence organizations’ abilities to learn from these interactions. Hypothesis tests on a panel of nursing homes suggest that organizations learn more effectively through interactions with powerful stakeholders or those whose feedback requires immediate response. Findings contribute to organizational learning theory by identifying how different forms of experience vary substantially in their impacts on organizational activity. Related implications for stakeholder management and managerial practice are also discussed.

Failing to Learn? The Effects of Failure and Success on Organizational Learning in the Global Orbital Launch Vehicle Industry

Peter M. Madsen and Vinit Desai
Academy of Management Journal, Vol. 53, Issue 3, June 2010, pp. 451 – 476

It is unclear whether the common finding of improved organizational performance with increasing organizational experience is driven by learning from success, learning from failure, or some combination of the two. We disaggregate these types of experience and address their relative (and interactive) effects on organizational performance in the orbital launch vehicle industry. We find that organizations learn more effectively from failures than successes, that knowledge from failure depreciates more slowly than knowledge from success, and that prior stocks of experience and the magnitude of failure influence how effectively organizations can learn from various forms of experience.

Rule violations and organizational search: A review and extension

Vinit M. Desai
International Journal of Management Reviews, Jun. 2010, Vol. 12 Issue 2, pp. 184-200

Whether they are formally prescribed or informally agreed upon, rules delineate the types of behavior deemed acceptable or appropriate within organizations. Studies often find that negative outcomes such as decreased group cohesion and higher turnover result when rules are broken. However, research rarely examines the potential positive effects of rule violations. Rules describe expectations about behavior within routines, or patterns of activity in organizations. When rules are violated by individuals, it could be an indication that the associated patterns of activity are no longer appropriate and that changes to the routines are needed. Organizations may learn from these violations if the violations trigger a search for new ways to organize activities, but this connection between violations and the search for new routines is affected by several factors. Drawing from a review and discussion of rules, routines, and research on organizational search and learning, this paper develops propositions regarding how rule violations motivate the search for new routines. This perspective integrates the literatures on rule-breaking and organizational search, and also suggests that managers who attend to patterns of rule-breaking within their organizations may detect drift from their environments and take corrective action earlier than suggested by other organizational learning research.

Do Organizations Have to Change to Learn? Examining the Effects of Technological Change and Learning from Failures in the Natural Gas Distribution Industry

Vinit Desai
Industrial and Corporate Change, Volume 19, Issue 3, Pp. 713-739

Failures contain valuable information. However, organizations vary at learning from them. I ask whether failures prompt organizations to make technological investments, and whether these investments help boost performance beyond improvements gained through direct organizational learning. I test hypotheses on natural gas distributors to determine whether they enhance their performance by learning directly, by recognizing failures as prompts to invest in safer technologies, or through a combination. Results suggest that distributors learn directly, though firms, which also invest in related technologies, are able to gain some additional benefits.

Constrained Growth: How Experience, Legitimacy, and Age Influence Risk Taking in Organizations

Vinit M. Desai
ORGANIZATION SCIENCE Vol. 19: p. 594-608

Poor performance indicates that an organization’s routines are not well suited for its environment and prompts decision makers to search for solutions. However, results conflict regarding how this search process influences risk taking in organizations. Managers in some organizations facing actual or expected performance shortfalls tend to take risks, while managers in other poorly performing organizations avoid risky changes. This conflict is interesting because some level of risk taking appears necessary for organizations to remain competitive, adapt to their environment, and improve performance. This study examines several mechanisms that moderate risk taking following performance shortfalls. First, I draw from organizational learning theories to argue that organizations with limited operating experience are less buffered from failure, and hence that poor performance constrains risk taking at these organizations. Second, I argue that organizations with poor legitimacy are also less buffered, and hence that performance shortfalls also lead to risk aversion at these organizations. Third, I draw from structural inertia theory to suggest that older organizations are less able to support risk taking following performance shortfalls. A test of these hypotheses on the capacity expansion behavior of U.S. railroad companies generally supports these hypotheses, although the effect of age is weaker. The findings contribute to theories of organizational learning and to several perspectives in organization theory more broadly.