Dynamics of interpersonal trust: a social network perspective

It is not uncommon for organizations that endure restructuring to experience trust decay amongst the work force. How does responsible restructuring come about? What are the antecedents that drive an organization forward in a responsible manner, also when trust is hampered and uncertainty arises within the boundaries of the firm?

This month, FINDER friend and Member of the Radboud Centre for Organization Restructuring, Jinhan Jiao will defend her dissertation related to this behavioral theme at Radboud University, titled “Dynamics of Interpersonal Trust: A Social Network Perspective”.

 The project supervised by Prof. Dr. Allard van Riel of Hasselt University, Dr. Zuzana Sasovova of VU and Dr. Rick Aalbers of Radboud University, pivots around the interesting behavioral concept of trust repair as a mechanism that may help organizations to stay afloat also as trust get hampered in the course of managerial action. Building on previous research, two issues remain on the research agenda of Jinhan’s dissertation work. One is the dynamics of trust, and the other is the social nature of trust. To address these issues, this thesis investigates interpersonal trust dynamics, including trust formation and trust repair, from a social network perspective. The various projects reported on in this work aim to answer the main research question: How do social networks influence the dynamics of interpersonal trust? Best of luck with the defence Jinhan – great to see this line of social-behavioral work being carried forwards. Details on the defense venue and date can be found here: https://www.ru.nl/nsm/imr/@1324056/dynamics-interpersonal-trust-social-network/

Sign up now! Start-Up Weekend on digital entrepreneurship for entrepreneurs and academics

This Fall, the FINDER Project team, in collaboration with Radboud Centre for Organization Restructuring and Atos will host a Start-Up Weekend on digital entrepreneurship, which will be of interest to both entrepreneurs and academics. Sign up here.

This Start-Up Weekend is a public event to help individuals with creative ideas for digital entrepreneurship start their innovation journey. This event intends to surround entrepreneurs with smart and passionate people, with the best tools and approaches that will help move towards creating their own business and connecting with the right people and resources. A wonderful opportunity for idea-stage start-ups with an eye towards a partnered, invested, or acquired future to workshop their ideas opposite a panel of industry experts and a group of the general public. Equally a great opening to provide for an academic perspective on the theme of collaboration for responsible innovation.

We foresee inspiring sessions and lively discussions with panelists/speakers from amongst others Philips, ING, TechQuartier Frankfurt and Atos.

Scheduled for the Fall, this Start-Up Weekend is especially geared towards those with a keen interest in entrepreneurship in the (fin)tech domain, and is organized with the intent to lower the hurdle to early career entrepreneurial activity. As part of a series of events to further tie in academia and business practice, the Start-Up Weekend will be another exciting opportunity to exchange ideas between practice and academia. Cementing for future collaborations in the domain of responsible innovation. In this series the FINDER Project Team and the Radboud Centre for Organization Restructuring prior hosted the Inclusive Digital Innovation Week in FS&I together with our project partner Atos.

Designed as an event that builds an innovative collaborative arrangement among established tech firms and start up enthusiasts, we highly encourage startups, university faculty members and students to sign on if interested.

We are currently looking into the possibility of hosting the Start-Up Weekend on site. However, pending further developments of the coronavirus pandemic, the workshop might be virtually hosted.

Details for the sign on procedure can be found here.

Additional information for students:

The panel of 5 general public members will have a unique opportunity to peer into the process of business creation, and this may be of scholarly interest for Master’s level students. Especially students who have it in mind to focus on entrepreneurial themes or business innovation as a topic in their thesis, this could be a valuable networking opportunity and a research flashpoint.

Interested applicants will need to stay keyed in to the group dialogues for the duration of the workshop and pitch in when they have ideas or when things don’t make sense to them, as their primary function is to keep the workshop grounded and from getting disconnected from consumer reality. Akin to product testing research, no specific expertise is required, and it’s not in the interest of the workshop for the general public members to emulate being professionals at something: just be your regular self.

Issue selling to different managerial personalities – How MBA cases could benefit from incorporating behavioral factors to prepare students for company politics

Solving an MBA business case requires creating a balanced analysis of the situation and developing suitable strategic recommendations. However, in real life, analysts present their data and conclusions to managers with individual preferences. Having students consider these preferences might make them more successful.

Strategy development: top-down and bottom-up

Strategy can be developed top-down and bottom-up. For instance, a new CEO can set out a vision that implies strategic change (top-down). However, the vision could have also been strongly inspired by employees that achieved to bring their preferred topics to the management’s attention (bottom-up). The latter often involves a phenomenon known as issue selling: the process by which individuals within an organization bring ideas or concerns, solutions, and opportunities together in ways that focus others’ attention and invite action.[1]

Issue selling at different levels within a company

Issue selling can take place at many levels within a company. Employees can try to build compelling cases to change the routines and processes within their team. Presenting these cases to their respective leader can support getting the so-called managerial buy-in and following a mandate for change. Even more so, at higher levels of a company, issue selling plays a crucial role. To convince top management of the importance of strategic considerations needs to be backed up by solid arguments. However, while there are widely shared interpretations of arguments, managers also hold idiosyncratic preferences for specific information.

Different strategic preferences of different managerial personalities

Since the development of the upper echelons theory by Hambrick and Mason, strategic scholars have investigated which role executive characteristics play in processing information and influencing the firm’s strategic actions.[2] Researchers have paid attention to demographic characteristics like age and tenure, but also to more psychologically sound constructs like narcissism, overconfidence, and temporal and regulatory focus.

The example of CEO regulatory focus

Regulatory focus theory describes that decision-making can either occur through a promotion focus (a sensitivity to gains) or through a prevention focus (a sensitivity to losses). Managerial scholars have found that the regulatory foci of CEOs influence their preferences for strategic actions.[3] Knowing whether a CEO is more likely to consider the opportunities or risks of choices that are presented to him or her can help analysts to structure their arguments to make their case more compelling.

How to implement managerial personalities in MBA business cases?

Oftentimes, MBA students implicitly incorporate their audience’s personality in their case solutions by thinking about the professor’s preferences. However, students first need to learn to separate between a solution supported by the case’s data and the audience’s preferences. Hence, the task is not to present the assumed best-liked solution but to present the solution they consider the best in a way that the audience likes. Therefore, adding a hypothetical manager’s personality to an MBA case as the target audience sharpens the students’ view of the need for issue selling and will help them empathically draw on managers’ characteristics when presenting their arguments.


[1] https://sloanreview.mit.edu/article/strategy-issue-selling-in-the-organization/

[2] Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of management review9(2), 193-206.

[3] Gamache, D. L., McNamara, G., Mannor, M. J., & Johnson, R. E. (2015). Motivated to acquire? The impact of CEO regulatory focus on firm acquisitions. Academy of Management Journal58(4), 1261-1282.

Money 20/20 conference – EUROPE’S BIGGEST FINTECH SHOW with Sebastian Schäfer

Sebastian Schäfer – Managing Director TechQuartier Frankfurt – FINDER partner, mentor of amongst others Jonas, as well as co-author on Jonas’s whitepaper, features amongst the 2021 Money 20/20 conference in Amsterdam: “Fintech, let’s get back to business”.

The FINDER team is very proud to have Sebastian amongst our crew.

Want to find out more about the conference? Click here.

Start-Up Weekend on digital entrepreneurship for entrepreneurs and academics

This Fall, the FINDER Project team, in collaboration with Radboud Centre for Organization Restructuring and Atos will host a Start-Up Weekend on digital entrepreneurship, which will be of interest to both entrepreneurs and academics.

This Start-Up Weekend is a public event to help individuals with creative ideas for digital entrepreneurship start their innovation journey. This event intends to surround entrepreneurs with smart and passionate people, with the best tools and approaches that will help move towards creating their own business and connecting with the right people and resources. A wonderful opportunity for idea-stage start-ups with an eye towards a partnered, invested, or acquired future to workshop their ideas opposite a panel of industry experts and a group of the general public. Equally a great opening to provide for an academic perspective on the theme of collaboration for responsible innovation.

We foresee inspiring sessions and lively discussions with panelists/speakers from amongst others Philips, ING, TechQuartier Frankfurt and Atos.

Scheduled for the Fall, this Start-Up Weekend is especially geared towards those with a keen interest in entrepreneurship in the (fin)tech domain, and is organized with the intent to lower the hurdle to early career entrepreneurial activity. As part of a series of events to further tie in academia and business practice, the Start-Up Weekend will be another exciting opportunity to exchange ideas between practice and academia. Cementing for future collaborations in the domain of responsible innovation. In this series the FINDER Project Team and the Radboud Centre for Organization Restructuring prior hosted the Inclusive Digital Innovation Week in FS&I together with our project partner Atos.

Designed as an event that builds an innovative collaborative arrangement among established tech firms and start up enthusiasts, we highly encourage startups, university faculty members and students to sign on if interested.

We are currently looking into the possibility of hosting the Start-Up Weekend on site. However, pending further developments of the coronavirus pandemic, the workshop might be virtually hosted. 

Details for the sign on procedure and further event specifics will be shared shortly.

Additional information for students:

The panel of 5 general public members will have a unique opportunity to peer into the process of business creation, and this may be of scholarly interest for Master’s level students. Especially students who have it in mind to focus on entrepreneurial themes or business innovation as a topic in their thesis, this could be a valuable networking opportunity and a research flashpoint.

Interested applicants will need to stay keyed in to the group dialogues for the duration of the workshop and pitch in when they have ideas or when things don’t make sense to them, as their primary function is to keep the workshop grounded and from getting disconnected from consumer reality. Akin to product testing research, no specific expertise is required, and it’s not in the interest of the workshop for the general public members to emulate being professionals at something: just be your regular self.

WHEN ACADEMIA AND PRACTICE COME TOGETHER

Recently Jonas Röttger was invited by the Atos Scientific Community to present his research on CEO personality trades and how they influence strategic choices of firms. His presentation entitled “Loud moves, bold CEOs: The signal interaction effect of CEO overconfidence and deal-specific confidence in M&A announcements“ received one of the highest appreciating ratings during the Atos Scientific Community meeting.

During his presentation Jonas addressed the CEO personality which influences the strategic choices of firms. He investigated whether investors can see through firm actions as a manifestation of CEO personality by analyzing the firm’s M&A communication. In the case of overconfident CEOs, firms can receive more positive M&A announcement stock returns by releasing press statements with a less positive linguistic tone.

The FINDER output was very well received at upper echelon level, the Atos scientific community (approx. 140 people) and included a general discussion revolving around the topic of CEO personality and firm-level outcomes.

A great example of academia-to-practice transitioning – a gap stone point to this ITN program.

Egos Colloquium 2021 sub-theme 19 “Collaboration and the (Ir)Rationalities of Decision-making in a Digital Landscape”

Plenty of (ir)rational decision making commonalities on offer during an inter-disciplinary EGOS subtheme on Collaboration and Decision-making in a Digital Landscape, that kicked off today #EGOS2021

Thanks to presenters and discussants from across the continent (and England of course) we had a lively discussion.

Thank you Yuliia Yehorova, Erik Hanel, Zahra Kashanizadeh, David Langley, Werner Hoffmann, Alexander Engelmann, Renate Kratochvil, Sotirios Paroutis, Daniel Stedjan Svendsrud, Jin Xu, Linda Buis, Marjukka Klippi, Saeed Khanagha, Uli Meyer, James Ellis, Johan Buchholz,  Jonas Röttger, Maryia Zaitsava, Matthew Knight, Szyman Wiercinski, Henk Volberda, Dimitar Krastev and others.

Looking forwards to day 2: this round starting with a session on digital collaboration and its perils and troubles ….


Dr. Rick Aalbers

COVID-19 recovery in Cities and Regions: lessons from the 4th OECD Roundtable on Cities and Regions for the SDGs

After partaking in the prior OECD Roundtables on Cities and Regions it was a pleasure to be part of the community that comprised the 4th OECD Roundtable on Cities and Regions for the SDGs on the theme of a Framework for COVID-19 recovery in Cities and Regions.

Recovery is high on the agenda after the disrupting forces unleased by the recent COVID pandemic. A challenge that transcends form the individual to the firm level, to the city and regional level and back, introducing a relational complexity that is unprecedented. Hence it is great to see the many initiatives that allow firms, cities and regions veer back from the COVID driven turmoil they went through over the past year. A key takeaway from this roundtable has been the role of digital technologies to facilitate the swift recuperation. Technology allows for the communications and lessons learned and shared during this very OECSD hosted roundtable, but there is more to it.

With digital ecosystems operating beyond organizational and industry boundaries, as facilitator for organizational (firms, cities and regions alike) resilience,  such reorientation comes with advanced interdependencies. The management literature provides for some interesting lessons on this front. Reviewing some of the work that has passed by over the last decade, lessons can be learned. Organizations that find themselves in dire circumstances can improve their situation despite these ecosystem interdependencies, however, for instance by proactively implementing strategic change to stem survival-threatening performance decline. While firms’ propensity to reshape under external and internal pressure has received increasing scholarly attention (e.g. Bowman and Singh, 1993; McKinley and Scherer, 2000; Girod and Whittington, 2015), digital ecosystem dynamics have remained relatively understudied as a mechanism facilitating such organizational transitioning (Pagani, 2013).

Our current understanding of how orgnaizations reshape themselves as part of their digital ecosystems is limited however by the lack of a strong theoretical base to understand the implications of digital technology on extant theories and knowledge of organization restructuring as part of a digitally enabled environment (Adner, 2006; Kane et al., 2015). As firms no longer operate in isolation but operate in digital ecosystems that determine the way and magnitude to which a firm can transform a firm’s core architecture and the way it serves its customers (Tangpong et al. 2021). Though there has been more attention to the dynamic nature of business ecosystems in general terms, several scholars have argued that more work is needed to understand reciprocal relationships, timing and causal effects of these events, calling for further attention for dispositional, behavioral and contextual influences (e.g. Quintane et al., 2014).  Equally, extant research on turnaround management typically focuses on traditional outcomes (e.g., profits), and antecedents, (e.g. time and pace of change) with less emphasis on the technological advancements that may foster or hamper the extent to which organizations manage to individually or collectively reshape. On both fronts surprisingly little is known however about the organizational, temporal, and ambidexterity dimensions in digital ecosystems as they endure exogenous tremor. This challenge has recently infused several members of our Centre to shine new light on the challenges and opportunities posed by digital driven business ecosystem collaboration as firms collaboratively are forced to reinvent themselves. Thank you to the organizers of the 4th OECD Roundtable on Cities and Regions for the SDGs On that note for bringing further inspiration to this initiative.

Dr. Rick (H.L.) Aalbers

Collaboration FINDER and TechQuartier for the project ’Financial Big Data Cluster’

The success of the safeFBDC depends on our understanding of the underlying mechanisms (and technologies) which determine its modes of operation. While the liability study already has shed light on the IT infrastructure the underlying mechanisms of interaction between participants have not been fully outlined yet. Identifying and understanding these would help to leverage and manage relevant partners. Since such a project lives on from its members, the collaboration between TechQuartier and FINDER contributes directly to the long-term success of the safeFBDC.

“If we are to make strategic sense of innovation communities, ecosystems, networks, and their implications for competitive advantage, we propose that a new approach to strategy [called] ’open strategy’ is needed.”Chesbrough and Appleyard, 2007: 58[1]

An important underlying idea of innovation is its reliance on competition and thus the intertwined nature of both innovative and competitive behaviour.[2][3][4][5] While this idea has prevailed for a long time the predominance of competition has been slowly losing ground to the idea of cooperation.[6] In that light the concept of business ecosystems gains in prominence in both research as well as its application in business. Before diving into the underlying mechanisms of ecosystems we first should line out what we can understand under such a concept.

Back in school ecology taught us that ecosystems are systems of living and non-living interacting components within the same environment. So how can we apply that concept to business? An innovative reader (as innovation is also the application of an established idea to a new context[7]) may think about something in the line of the following:

“Business ecosystems are a network of firms with differing interests bound together as a collective whole such that the fate of its members is bound to the structure of that network and the roles played by its members.”Tan, Tan & Oh, 2007: 2[8]

In case of the safeFBDC the set of goals, its mission defined by its value proposition, binds together the consortium. The distinction is an open approach of formulating the mission – in other words their strategizing. That openness allows cooperation, a joint engagement in a strategy process of different organizations instead of their competition.[9] Following the literature, we can therefore define the safeFBDC as an ecosystem-as-structure.[10] For such structural approaches of ecosystems a keynode member with central positioning is of importance.[11] Such keynode members, already generally addressed in a blogpost by my colleague James, have three major tasks.

  1. They consolidate disperse resources & capabilities, as e.g. knowledge, of members.
  2. They engineer processes to initiate and grow the ecosystem.
  3. They oversee the creation and extraction of value for members.[12]

Therefore, the first research project to be conducted will be to identify if and how the TechQuartier is fulfilling the role of an orchestrator for the safeFBDC. A network analysis will be conducted in the first step. The results – the existing ties within the ecosystem – coupled with the second step, a cluster analysis of the activities carried out, should therefore determine the TechQuartiers role as orchestrator.

With that in mind we can have a look on how the mode of operation leads to the realization of the projects objectives, namely the development of AI applications. Instead of competition the project allows the collaboration in the provisioning and usage of shared, aggregated and uniformly formatted, cross-sectoral financial data. Such a concept of open strategy offers advantages for both affiliated producers and consumers.[13] Typically benefits for producers are lowered development and launch costs, quality improvement due to a joined development environment and increased speed to market. This, in turn, translates into the benefits of consumers since the reduced costs are reflected in the price (up to being open source) as well as a direct incorporation of feedback and implementation of specifications in the development cycle.[14] Since for the safeFBDC participants are often both – provider and user of data – an open strategy, triggered by the access to data, is of high functionality.

However, there also loom disadvantages which need to be tackled. In my GAIA-X post I already highlighted the loss of established business models and hence value appropriation. Accordingly, participants engaging in cooperation within an ecosystem have to find new ways to appropriate value within the value chain to generate profit.[15][16] Data monetarisation therefore is a research object of special interest to us. Hence, building on our first research project we will investigate how the TechQuartier, in its role of orchestrator, can determine and govern a value appropriation regime.

Together, Luisa Kruse and me are looking forward to report on our progress on both research projects in the upcoming months.

– Jonas Geisen, ESR


[1] Chesbrough, H. W., & Appleyard, M. M. (2007). Open innovation and strategy. California management review, 50(1), 57-76.

[2] This is based on Schumpeters (1934, 1939, 1950) work who expected that innovative behaviour is based on the profit expectations during the growth of an industry as the major determinants of a firms growth.

[3] Schumpeter, J. A., & Nichol, A. J. (1934). Robinson’s economics of imperfect competition. Journal of political economy, 42(2), 249-259.

[4] Schumpeter, J. A. (1939). Business cycles (Vol. 1, pp. 161-174). New York: McGraw-Hill.

[5] Schumpeter, J. A. (1950). The march into socialism. The American Economic Review, 40(2), 446-456.

[6] McKinsey and Company, 2015, Global Media Report

[7] Martín‐de Castro, G., López‐Sáez, P., Delgado‐Verde, M., Quintane, E., Casselman, R. M., Reiche, B. S., & Nylund, P. A. (2011). Innovation as a knowledge‐based outcome. Journal of knowledge management.

[8] Tan, F. T., Ondrus, J., Tan, B., & Oh, J. (2020). Digital transformation of business ecosystems: Evidence from the Korean pop industry. Information Systems Journal, 30(5), 866-898.

[9] Gooyert, V. D., Rouwette, E. A. J. A., & van Kranenburg, H. L. (2019). Interorganizational strategizing.

[10] Adner, R. (2017). Ecosystem as structure: An actionable construct for strategy. Journal of management, 43(1), 39-58.

[11] Spigel, B. (2017). The relational organization of entrepreneurial ecosystems. Entrepreneurship Theory and Practice, 41(1), 49-72.

[12] Dhanaraj, C., & Parkhe, A. (2006). Orchestrating innovation networks. Academy of management review, 31(3), 659-669.

[13] Chesbrough, H. W., & Appleyard, M. M. (2007). Open innovation and strategy. California management review, 50(1), 57-76.

[14] Appleyard, M. M., & Chesbrough, H. W. (2017). The dynamics of open strategy: from adoption to reversion. Long Range Planning, 50(3), 310-321.

[15] Hautz, J., Seidl, D., & Whittington, R. (2017). Open strategy: Dimensions, dilemmas, dynamics. Long Range Planning, 50(3), 298-309.

[16] Chesbrough, H., Heaton, S., & Mei, L. (2020). Open innovation with Chinese characteristics: a dynamic capabilities perspective. R&D Management.

Market reactions to acquisition announcements: The importance of signaling ‘why’ and ‘where’

Acquisitions are common in industries, but not all acquisitions succeed and those that fail often have a negative effect on the acquirer. A recent publication in the Long Range Planning further explores multiple levels of risks involved in acquisitions and the importance of signaling the ‘why’ and ‘where’ of said acquisitions.

Dr Rick Aalbers (Associate Professor in Strategy and Innovation at Radboud University Nijmegen and coordinating team member of the FINDER Project) teamed up with Dr Killian J. McCarthy (Associate Professor of Innovation at University of Groningen) and Prof. Dr Koen Heimeriks (Professor of Strategy at Warwick Business School) deep dived into the matter, which resulted in the publication of:

“Market Reactions to Acquisition Announcements: The Importance of Signaling ‘Why’ and ‘Where’”
Aalbers R., McCarthy, K. & Heimeriks, K. (2021)
Long Range Planninghttps://www.sciencedirect.com/science/article/pii/S0024630121000364

As acquisitions are risky events but not all acquisitions involve the same levels of risk, the authors suggest that the announced acquisition motive – the ‘why’ of the acquisition – is an important risk signal. In the paper they categorize acquisition motives and distinction is made between acquisitions with ‘pure explore’ and ‘pure exploit’ motives. Recognizing that most acquisitions have multiple motives, acquisitions with ‘ambidextrous’ motives – different combinations of explorative and exploitative motives – are identified too.
Building on recent contributions to signaling theory, it is argued that the ‘why’ will matter more, if the ‘where’ pertains to a high-risk setting. The authors measure this, using target-to-acquirer industry relatedness.

Findings:

  • The market reacts more positively to pure acquisitions, aimed at exploration or exploitation, compared to ambidextrous acquisitions.
  • The market reacts more positively to ambidextrous acquisitions orientated towards exploitation than ambidextrous acquisitions orientated toward exploration.
  • Relatedness moderates this relationship, in that the market is more willing to tolerate exploration in a related industry.

The authors core contribution is to the literatures on acquisition motives and ambidexterity. They provide new insights into the incidence of specific motives, the ways in which they are mixed, and the market’s reaction to their announcement. In addition, they contribute to the emerging literature that takes on behavioral perspective of market reactions by showing that the ‘why’ and ‘where’ of an acquisition matter.