Search

Firms use aspirations to regulate innovative search activities, but peer and historical referents may contain different signals regarding performance feedback. Integrating insights from the literature on profit persistence with the behavioral theory of the firm, we propose a persistence-based framework of organizational innovative search that connects the persistence characteristics of feedback from peer and historical referents with innovative search. We first predict that feedback from peer referents is more persistent than feedback from historical referents. Further, we theorize that peer performance feedback produces more pronounced effects: Performance above (below) peer aspiration leads to less (more) innovative search compared with performance above (below) the historical aspiration level. In addition, because industries impose heterogeneous levels of profit persistence, the differential effect between peer and historical performance feedback on innovative search is likely to be more evident in highly persistent industries. Examining the research-and-development intensity of a comprehensive panel of Compustat manufacturing firms over the past 45 years, our results from quasi–maximum likelihood analysis and fixed-effect panel regression largely support our theoretical development. Our study extends a nascent understanding of aspiration heterogeneity by revealing and empirically confirming the critical role of persistence.

In this essay, we critique the usage of the term ‘institutional void’ to characterize non-Western contexts in organizational studies. We explore how ‘conceptual stretching’ of institutional voids – specifically, the theoretical and geographic expansion of the concept – has led not only to poor construct clarity, but also pejorative labelling of non-Western countries. We argue that research using this term perpetuates an ethnocentric bias by deifying market development and overlooking the richness and power of informal and non-market institutions in shaping local economic activity. We call for an ‘epistemological rupture’ to decolonize organizational scholarship in non-Western settings and facilitate contextually grounded research approaches that allow for more indigenous theorization.

Growing concern about economic inequality has generated a polarized narrative regarding the causes and consequences of extreme wealth. We contend that divided ideological positions obscure a more mundane reality about the typical wealthiest 1% households. Using data from the triennial survey of consumer finance, we demonstrate that there is substantial heterogeneity within the 1%. Contrary to public discourse, the typical 1% household does not have wealth reflective of popular rich lists, but derives a significant share of its wealth from ownership and active management of small- to medium-sized private enterprise. We use these findings to shed new insights on business families’ relationship to economic inequality and open promising new areas of inquiry regarding the role of the family business in society.

Together, Penrosean and Barnean resource-based logic make up the dominant theoretical approach to understanding firm growth. While extant literature focuses on a common lineage between Penrosean theory and the resource-based view (RBV), we explicate divergence at these origins of resource-based theorizing and subject the growth implications of each to meta-analytic testing. RBV’s central tenets concern resources that meet valuable, rare, inimitable, and nonsubstitutable (VRIN) criteria, while Penrose’s theory discusses the versatility of resources. Theoretically, VRIN resources allow firms to exploit unique opportunities, while versatile resources allow firms to recombine resources in novel ways to create growth. Using meta-analytic techniques, we find that versatile resources are associated with higher levels of growth, whereas VRIN resources are not. We offer novel insights into alternative characteristics of resources derived from the same conceptualization of the firm, add greater specificity to the performance construct, and open up avenues for new theorizing on firm growth that is more closely aligned with Penrose’s theory.

Through the lens of stakeholder theory, this article deepens our understanding of financial and nonfinancial performance outcomes in family firms across multiple stakeholder categories, including the family level of analysis. Based on this foundation, we develop a typology of performance relationships between performance outcomes: overlapping, causal, synergistic, and substitutional. We argue that these relationships, when used between constructive (positive) performance outcomes, are able to increase stakeholder satisfaction, which in turn increases organizational effectiveness. Through this analysis, we extend the common one-dimensional and cause-effect understanding of performance in family firms and move toward a comprehensive stakeholder performance perspective, which provides insights for increasing organizational effectiveness of family firms.