Management and Strategy - HKU Business School

05 November

Scandal as a Catalyst: Evolving Media Framings of Sexual Harassment Accusations and Actions Towards Gender Equity in Venture Capital

SPEAKER

Prof. Elizabeth Pontikes
Professor of Management
Graduate School of Management
University of California, Davis

ABSTRACT

In this study, we investigate when scandal gives rise to industry-wide social change. Empirically, we examine firms’ actions taken in response to media reporting on a series of sexual harassment scandals within the U.S. venture capital (VC) industry, 2012-2017. We first content-analyzed media coverage and found that media framings evolved over time from depicting sexual harassment cases as idiosyncratic acts to focusing on the broader context that enabled them. We then sought to understand how different framings impacted two types of industry actions: an increase in (1) women representing VC firms as lead investors and (2) VC funding of start-ups whose founding teams include women. Our findings suggest a two-phase response: limited actions were taken by individuals directly associated with accused harassers when media framed issues as isolated events. This evolved into a stronger collective industry effort after media narratives shifted to depict sexual harassment as a systemic issue. We conducted exploratory interviews with VCs that contextualize these results. We consider implications of our findings to extend understandings of the conditions under which scandals may lead to organizational and industry-wide change.

15 October

Lighting the Way: Illuminating How New Ventures in Nascent Industries Combat Uncertainty

SPEAKER

Prof. Sonali K. Shah
Professor
Gies College of Business
University of Illinois at Urbana-Champaign

ABSTRACT

This study seeks to inductively illuminate how new ventures operating in nascent industries build and process knowledge. Our data reveal three knowledge related activities that are associated with early success that have received little attention in the literature: collaborative experimentation, obtaining strategic information through informal interactions with industry players, and discovery-centered organizing. These activities allow new ventures to both create and draw in knowledge by working independently as well as collaboratively with other firms in the industry. In some cases, these efforts reinforce the firm’s initial direction, while in other cases, they lead the firm to alter course, or pivot. Our findings are based on primary source data gathered through interviews and observation, and augmented with archival data, on new ventures in the nascent smart lighting industry.

15 October

Riding The Passion Wave Or Fighting To Stay Afloat? A Theory Of Differentiated Passion Contagion

SPEAKER

Prof. Jon M. Jachimowicz
Assistant Professor of Business Administration
Harvard Business School

ABSTRACT

Employees aspire to join high-passion teams, and prior research suggests such teams produce better outcomes because team members effortlessly catch each other’s passion. This view reflects an implicit assumption in the broader emotional contagion literature that emotions are easily caught. We propose that any instance of contagion comprises both effortless (easy and automatic) and effortful (conscious and directed) processes, and the prevalence of each varies with the emotional state being transmitted. Specifically, we argue that the socially valued nature of passion for work coupled with its observability lead high-passion teams to inadvertently set informal display norms. These create social pressures for employees which make effortful processes more prevalent in the contagion mix—thereby detracting from the benefits high-passion teams provide. We provide evidence through an experience sampling study with 829 employees nested in 155 teams who responded to three surveys per day across 20 consecutive workdays (16,574 responses), and a pre-registered experiment with 1,063 full-time employees. Our work reveals the challenges employees experience in high-passion teams. It also deepens our understanding of emotional contagion, highlighting that the process of catching—and the composition of how effortless versus effortful it is—holds distinct implications for outcomes above and beyond the caught emotional state.

30 September

Sticky Consumers and Cloud Welfare

SPEAKER

Dr. Will Peichun Wang
Chief Economist
Unity Technologies

ABSTRACT

We estimate welfare benefits of the public cloud and study the impact of customer inertia on welfare. We develop a novel demand model that allows for both multiple product choices and continuous usage, and estimate the model using proprietary customer-level data. We find the average consumer surplus from cloud usage to be 216% of its cost, and that smaller customers disproportionately benefit from public cloud. We also find significant inertia on the cloud, reducing welfare benefits by 62%. Finally, we show that cloud migration services and introductory discounts can improve both consumer surplus and provider revenue.

30 September

Agreeing to Be Different: Startup Founding Teams, Cultural Legacy, and Atypicality

SPEAKER

Prof. Yeonsin Ahn
Assistant Professor in Strategy and Business Policy
HEC Paris

ABSTRACT

Forming an atypical organizational culture is unusual and may require agreement among founding team members. We propose that startup teams with high diversity in the cultural legacies that co-founders bring from previous employers resolve cultural disagreements by converging to the culture that is already taken for granted, and hence have low atypicality. The convergence is amplified when the co-founders have similar power. However, teams with individual co-founders who are equipped with more diverse cultural elements can cultivate a more atypical culture by recombining elements. Furthermore, these co-founders can attenuate the cultural disagreements in a team and lessen the convergence to typicality, but only when they are the CEOs. These ideas are examined in an analysis of U.S. technology startup teams in CrunchBase and their parent organizations. We use 3.1 million employee reviews of the total technology company population from Glassdoor to identify the key cultural elements of technology companies over the past 12 years. The findings are consistent with the predictions. Implications for the study of startup culture, team diversity, and cultural recombination are discussed.

30 September

Scaling Up Networks: Building New Relationships Within Embedded Networks In Growing Firms

SPEAKER

Prof. Jian Bai Li (Jamber)
Assistant Professor
National University of Singapore Business School

ABSTRACT

Embedded networks in young, growth-oriented firms engender solidarity amongst their original members during the firms’ early years, but they also increase the difficulty of building cooperative relationships with organizational newcomers during scaling. Extant research has under-examined how this difficulty may be overcome. We address this gap via an inductive, multiple-case study. Counterintuitively, we found that closely involving a newcomer in the original members’ interactions and activities derailed cooperation. This is due to the inability of the newcomer to form the same kind of relationships that the original members shared amongst themselves. Given this inability to attain relational equivalence, the newcomer’s close involvement in the original members’ interactions and activities came to be perceived by them as intrusive—even when a third party was present to help broker cooperation. We also found that separating the newcomer from the original members, i.e., reducing the newcomer’s involvement in their interactions and activities, aided relationship-building, since it enabled the newcomer and the original members to develop cooperation at a distance that both sides were comfortable with—without necessitating that the newcomer attain relational equivalence vis-à-vis the original members. Overall, we contribute the insight that, for building new relationships during scaling, separation enables cooperation.

26 September

Intrafirm Services Trade and the Management of Intangible Assets by MNCs

SPEAKER

Prof. Heather Berry
Dean’s Professor of Strategy and International Business
McDonough School of Business
Georgetown University

ABSTRACT

This seminar examines the intrafirm services trade of multinational corporations (MNCs) for their intangible assets, separating intellectual property (IP) and professional services, and analyzing transfers to subsidiaries in different types of tax haven countries (including so-called traditional (ie, Caribbean Island) and modern (ie, the Netherlands or Ireland) tax haven countries). After merging two confidential datasets from the Bureau of Economic Analysis (BEA) on the population of US MNCs, we explore how transfers of the intangible assets of US MNCs shifted after the US Tax Cuts and Jobs Act (TCJA). Difference in difference results show that parent IP imports (parent payments to their foreign subsidiaries for the use of IP) declined significantly from traditional tax havens while there was no similar decline in parent IP imports from modern tax haven countries. At the same time, parent professional service exports increased significantly to subsidiaries in both traditional and modern tax havens. These results suggest that although US MNCs moved their IP out of traditional island tax havens back to the US in the face of decreasing tax differentials, IP flows with subsidiaries in modern tax havens were unaffected by the tax change, likely reflecting the broader set of business activities MNCs perform in these locations. The results further show that MNCs with higher intra-firm product flows were more likely to have increased professional services flows with their subsidiaries in both traditional and modern tax havens.

20 September

Responding to Advances in AI: The Impact of AlphaFold on the Organization of Academic Labs

SPEAKER

Mr. Gabriel Cavalli
Ph.D. Candidate
Rotman School of Management
University of Toronto

ABSTRACT

This study investigates how principal investigators (PIs), acting as managers of their academic laboratories, adapt their organizations in response to an advance in AI that improves solutions to a scientific problem that they previously had committed to address. It hypothesizes that generalist PIs reduce lab size and balance organizational expertise toward generalism, while specialist PIs expand lab size and hire more computer science specialists. These hypotheses are tested within the setting of academic labs participating in the CASP competition, where Google DeepMind’s AI-based entry, AlphaFold, achieved unprecedented success in modeling the “protein-folding” problem in 2018. The findings support the hypotheses and emphasize the crucial role of managerial judgment, informed by expertise, in shaping responses to AI-driven innovations and integrating human and artificial intelligences within organizations.

20 September

Mitigating Disruption: Hiring for Social Skills and Post-Acquisition Performance

SPEAKER

Mr. Piyush Gulati
Ph.D. Candidate in Strategy
INSEAD

ABSTRACT

Managing post-acquisition operating performance can be challenging because synergy extraction entails changes and must be balanced with disruption to the organizational units involved. While prior literature has focused on organization-level factors (such as knowledge similarity and team design), in this paper I shift the focus to individual-level factors–specifically the social skills of employees–that help in achieving this balance. I argue that increased hiring for social skills, such as communication, negotiation, and teamwork, after an acquisition helps manage disruptions by enabling improved inter-unit collaboration between the acquirer and target units. To test the argument, I use a stacked differences-in-differences design to analyze data from approximately 5.3k acquisitions (SDC), 26 million job listings to measure social skills hiring (Lightcast), 22k senior manager profiles (Boardex), and 2,739 US public firms (Compustat), tracked quarterly in the period 2010-2020. I find that a 25 percent increase in average social skills at the acquiring firm is correlated with a 3.1 percentage point mitigation of post-acquisition operating performance drop. For deals with a large increase in distinct organizational units or delayed target integration, both of which imply a higher need for inter-unit collaboration, increased social skills are correlated with higher mitigation of 5.1-11.5 points–providing support for the proposed mechanism. Through these findings, I contribute to research on post-acquisition integration, offering insights into the structure-human capital dynamics in enabling organizational collaboration.

11 September

Creative Collaboration With Artificial Intelligence Negatively Impacts Creator Reputation

SPEAKER

Dr. Jack McGuire
Postdoctoral Research Associate
D’Amore-McKim School of Business
Northeastern University

ABSTRACT

As creators increasingly make use of AI systems to aid with the production of creative work, it is important to understand whether such works and the creators involved are judged differently for doing so. Across three experiments and one multi-wave field survey, we found that while no reliable differences were revealed for evaluations of creative work produced by human-AI dyads (vs. human-human dyads), the creators involved were systematically judged more negatively. Creators that collaborate with AI (vs. another human) were perceived to invest less effort into their work (Study 1). Due to lower perceptions of invested effort, creators were viewed to be less competent and warm, and were, in turn, trusted less and emerged less as leaders (Studies 2-4). Interestingly, we found that evaluators who possess high (vs. low) AI literacy (e.g., AI developers) judge creators that collaborate with AI less negatively (Studies 3 and 4). Widespread support for our predictions was found across diverse creative contexts (e.g., chair design, startup pitches, visual advertisements) and population samples (laypeople, managers, investors, and AI developers).