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ABSTRACTManuscript Type: Empirical.Research Question/Issue: This paper describes the logic that guides the implementation of corporate governance reforms and investigates the extent to which the logic leads to an increase in investor protection. We use the example of Italy, where major governance reforms were passed in 1998 to protect minority shareholders from the risk of expropriation.Research Findings/Insights: Our two‐stage mixed‐methods longitudinal study (1995–2005) reveals that the reforms were only modestly effective in improving governance practices. On the one hand, we document a greater alignment of cash flow rights and voting rights of ultimate owners after 1998, suggesting that minority shareholders face lower risk of expropriation. Yet, on the other hand, we find that the percentage of firms where control is fully contestable continues to remain low. Our qualitative analysis reveals both facilitators such as institutional investor activism and mandatory provisions, and impediments such as discretionary provisions, weak enforcement, and an ingrained culture of high control.Theoretical/Academic Implications: This study elaborates extant theory on the effectiveness of reforms by adopting a longitudinal design that describes both their underlying logic and their actual effects on business practices. It also offers conceptual clarity to this literature by bringing attention to factors that act as facilitators and impediments to reform efforts.Practitioner/Policy Implications: This study prompts lawmakers in countries endeavoring reforms to encourage participation of institutional investors, as also urges them to consider mandatory provisions, especially those which enhance disclosure and representation.

We resolve the longstanding debate between Normal Accident Theory (NAT) and High-Reliability Theory (HRT) by introducing a temporal dimension. Specifically, we explain that the two theories appear to diverge because they look at the accident phenomenon at different points of time. We, however, note that the debate's resolution does not address the non-falsifiability problem that both NAT and HRT suffer from. Applying insights from the open systems perspective, we reframe NAT in a manner that helps the theory to address its non-falsifiability problem and factor in the role of humans in accidents. Finally, arguing that open systems theory can account for the conclusions reached by NAT and HRT, we proceed to offer pointers for future research to theoretically and empirically develop an open systems view of accidents.

In his brief commentary, Perrow raises four issues. First, he alludes to how the misuse of bureaucratic power could explain some accidents. Second, he reiterates that normal accidents occur owing to the characteristics inherent in a system, and such accidents, irrespective of whether high reliability practices are followed or not, are inevitable. Third, Perrow asserts that complexity and coupling are independent of time of operation. The time dimension's irrelevance, he claims, ought to be apparent from his analysis of normal accidents in systems such as the air transport and chemical industry (see Perrow, 1984). Fourth, Perrow implies that High Reliability Theory (HRT) cannot explain the sub-class of accidents that Normal Accident Theory (NAT) concerns itself with. He thus makes a case for retaining NAT alongside other theories and finds little value in our reconciliation. In fact, he finds the reconciliation inappropriate because we supposedly err in implicating time. We respond to the four issues in turn.

Prestige has traditionally been viewed as a primary explanation for individuals' identification with organizations. Yet there are clues in the literature that some individuals identify with organizations that have lost their prestige owing to failure. We use data from a survey of former employees of a defunct technology firm to test a proposed model of identification with failed organizations. We find that the extent to which the perceived identity of a failed organization fulfills former members' self-enhancement and belongingness motives has a positive relationship with their identification with it. Identification, in turn, inclines former members to socially interact with each other and participate in alumni associations. Further qualitative analysis reveals the organizational identity work practices by which former members recast a failed organization's identity in positive terms. These findings suggest the merit of relaxing assumptions about prestige as a necessary precursor to organizational identification, and augment scholarly understanding of the cognitive and relational mechanisms that facilitate individuals' identification with organizations in the wake of events that injure their reputations.

How do individuals who engage in high-risk work deal with the existential threats that are part and parcel of their daily activities? Based on a qualitative study of fighter pilots, we find that experiences and responses to existential threats are shaped by three intersubjective processes, that is, socially constructed and accepted patterns of interactions by which individuals come to view existential threats as one of several challenges of their work, something that is common yet unremarkable. These processes draw from and impinge upon cherished social identities to inculcate in individuals: (1) a preoccupation with performance as a precondition for continued membership, thereby crowding out death anxiety; (2) a willingness to withstand no-holds barred collective scrutiny, thereby keeping their egos under check, and enhancing learning and safety; and (3) a view of death as a commonplace and therefore unremarkable facet of their activities. The contribution of our study is to illuminate the intersubjective processes implicated in the development of social identities that enable individuals in high-risk work to function effectively despite the existential threats they face.

PurposeThere is a growing consensus about the role of communication in facilitating employees' acceptance of and support for organizational change initiatives. However, little is known about why communication breakdowns occur during change or how change recipients' cultural values can influence the effectiveness of communication in this context. The study addresses this gap.Design/methodology/approachThe authors develop a theoretical framework that links four purposes of communication during change—disrupting, envisioning, legitimizing, and co-creating—to change recipients' cultural orientations. The authors also develop propositions that highlight how change agents' cultural sensitivity influences the relationship between communication purpose and the change readiness of change recipients.FindingsThe study implies that greater awareness and consideration of cultural values can reduce the likelihood of communication breakdowns and promote greater acceptance of and support for change initiatives. The authors conclude by discussing the implications of their theoretical framework for micro-level perspectives on change.Practical implicationsAlthough failures to change have in the past been linked to poor communication efforts by change agents, less is known about how or why communication breakdowns occur from the perspective of change recipients. The framework teases out issues related to the "what", 'how", and "why" aspects of communication and offers prescriptions on the best approaches to communicate change.Social implicationsDespite the rise of multicultural workforces and a recognition of the role played by cultural values in influencing leadership practices across cultures, theories of change have neglected these elements. Effective change efforts not only help enable economic and social renewal, they also enable the well-being of employees. Additionally, many change initiatives in the modern era have social implications (e.g. enhancing sustainability, inclusion and diversity).Originality/valueA key contribution is a synthesis of different bodies of literature that have developed separately from each other. The authors offer some nuanced and counter-intuitive insights into what makes communication effective during change and identify culturally sensitive communication as an antecedent of change readiness.

AbstractEnvironmental uncertainty can render managerial decision‐making about resource deployment particularly difficult. Integrating the knowledge‐based view of the firm and the organizational learning literature, we make a case for deploying specific knowledge‐based resources to cope with specific types of environmental uncertainty. We unbundle knowledge‐based resources into technology‐based and social‐network‐based resources and, using Milliken's (1987) typology of environmental uncertainty, we hypothesize that (a) technological exploration will be more effective during state uncertainty and (b) while being generally beneficial, social exploration will prove more effective during response uncertainty. An analysis of the financial performance of information technology (IT) firms in the United States over the period 1995–2004 generally supports our hypotheses. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.

How do professionals attempt to restore their credibility when it has been tarnished by crises or scandals? To address this issue, we examined how banking professionals who testified during a government inquiry into the 2008 banking crisis in Ireland responded when confronted with negative social evaluations (NSEs) evidenced by personal criticism of their judgment, competence, or morality. We find that professional credibility is renegotiated through two processes: depersonalization and personalization. Testifiers distanced themselves from criticism through a depersonalization process by which they reoriented the unfolding narrative toward broader collectives such as their own profession, adjacent professions, and the macroeconomic environment. They also engaged in a personalization process by which they showcased individual efforts to improve their work processes and outcomes to bolster their professional credibility. Our work theoretically elaborates the view of NSEs as being socially constructed and brings the role of professional credibility of individuals to the fore of the NSE literature. In doing so, it offers a broader perspective on the repertoire of criticisms and responses associated with NSEs than that documented by prior studies, and it emphasizes how professionals seek to reassert their credibility. We also present a less deterministic view of public inquiries.

Drawing on a qualitative study of the banking crisis in Ireland, we examine how a cognitive frame of environmental conditions that is shared among industry rivals constrains their ability to act on the cues of slowly incubating threats. We find that shared frames are reinforced through social comparisons that prompt imitation and through their enactment that prompts a reconfiguration of internal control structures and power relationships. The reinforcement of a shared frame dulls the emerging cues of changing market conditions and weakens perception of the risks of staying the course. A core contribution of this study is to highlight the cognitive and political processes by which a shared frame solidifies within an industry, trapping organizations in their enacted environment and resulting in their collective failure.