Administrative Science Quarterly

This paper theorizes that relatively poor firm performance can prompt chief executive officers (CEOs) to seek more advice from executives of other firms who are their friends or similar to them and less advice from acquaintances or dissimilar others and suggests how and why this pattern of advice seeking could reduce firms' propensity to change corporate strategy in response to poor performance. We test our hypotheses with large-sample survey data on the identities of CEOs' advice contacts and archival data on firm performance and corporate strategy. The results confirm our hypotheses and show that executives' social network ties can influence firms' responses to economic adversity, in particular by inhibiting strategic change in response to relatively poor firm performance. Additional findings indicate that CEOs' advice seeking in response to low performance may ultimately have negative consequences for subsequent performance, suggesting how CEOs' social network ties could play an indirect role in organizational decline and downward spirals in firm performance.

We examine factors leading multiunit chains to adopt a common naming strategy, that is, naming components in a manner that identifies them with each other and the overall chain, rather than a local naming strategy that identifies a chain's components with their locations but not each other. Because chains' naming strategies have been shown to be critical to their success, we examine the effects of component failures on naming strategies. We advance organizational and interorganizational learning processes to explain chains' adoption of local naming strategies, which stress local adaptation, or common naming strategies, which emphasize standardization. In contrast to past research emphasizing learning from success, we focus on learning from the failure of strategy, specifically, the failure of a chain's own and other chains' commonly and locally named components. Two fundamental results emerge from our analysis of Ontario nursing home chains' naming strategies from 1971 to 1996. One is that nursing home chains learned from their own and others' failures, and the second is that the chains learned less from failures when they had a historical investment in the failing strategy.

This article develops and tests theory on when and where a new organizational form will emerge. Recent theory holds that as the number of organizations using a particular external identity code first increases beyond a critical minimal level, the code becomes an organizational form. Going beyond this formulation, we theorize about how an external identity code is established. We argue that when the identities of individual organizations are perceptually focused, they will more readily cohere into a distinct collective identity. We develop ideas about how two observable aspects of organizations might generate perceptually focused identities in a common market: (1) de novo entry and (2) agglomeration in a geographic place with a related identity. Using comprehensive data from the market for disk drive arrays, we test these ideas and an alternative by estimating effects of different specifications of organizational and product densities on rates of entry and exit for array producers. Overall, the analysis supports the notion that firms with perceptually focused identities aid in establishing an organizational form.

In this paper, we challenge the traditional understanding of organizational routines as creating inertia in organizations. We adapt Latour's distinction between ostensive and performative to build a theory that explains why routines are a source of change as well as stability. The ostensive aspect of a routine embodies what we typically think of as the structure. The performative aspect embodies the specific actions, by specific people, at specific times and places, that bring the routine to life. We argue that the ostensive aspect enables people to guide, account for, and refer to specific performances of a routine, and the performative aspect creates, maintains, and modifies the ostensive aspect of the routine. We argue that the relationship between ostensive and performative aspects of routines creates an on-going opportunity for variation, selection, and retention of new practices and patterns of action within routines and allows routines to generate a wide range of outcomes, from apparent stability to considerable change. This revised ontology of organizational routines provides a better explanation of empirical findings than existing theories of routines and has implications for a wide range of organizational theories.