Abstract: Much current work on organizational knowledge, intellectual capital, knowledge-creating organizations, knowledge work, and the like rests on a single, traditional understanding of the nature of knowledge. We call this understanding the "episte-mology of possession," since it treats knowledge as something people possess. Yet, this epistemology cannot account for the knowing found in individual and group practice. Knowing as action calls for an "epistemology of practice." Moreover, the epistemology of possession tends to privilege explicit over tacit knowledge, and knowledge possessed by individuals over that possessed by groups. Current work on organizations is limited by this privileging and by the scant attention given to knowing in its own right. Organizations are better understood if explicit, tacit, individual and group knowledge are treated as four distinct and coequal forms of knowledge (each doing work the others cannot), and if knowledge and knowing are seen as mutually enabling (not competing). We hold that knowledge is a tool of knowing, that knowing is an aspect of our interaction with the social and physical world, and that the interplay of knowledge and knowing can generate new knowledge and new ways of knowing. We believe this generative dance between knowledge and knowing is a powerful source of organizational innovation. Harnessing this innovation calls for organizational and technological infrastructures that support the interplay of knowledge and knowing. Ultimately, these concepts make possible a more robust framing of such epistemologically-centered concerns as core competencies, the management of intellectual capital, etc. We explore these views through three brief case studies drawn from recent research.

Abstract: Complex organizations exhibit surprising, nonlinear behavior. Although organization scientists have studied complex organizations for many years, a developing set of conceptual and computational tools makes possible new approaches to modeling nonlinear interactions within and between organizations. Complex adaptive system models represent a genuinely new way of simplifying the complex. They are characterized by four key elements: agents with schemata, self-organizing networks sustained by importing energy, coevolution to the edge of chaos, and system evolution based on recombination. New types of models that incorporate these elements will push organization science forward by merging empirical observation with computational agent-based simulation. Applying complex adaptive systems models to strategic management leads to an emphasis on building systems that can rapidly evolve effective adaptive solutions. Strategic direction of complex organizations consists of establishing and modifying environments within which effective, improvised, self-organized solutions can evolve. Managers influence strategic behavior by altering the fitness landscape for local agents and reconfiguring the organizational architecture within which agents adapt.

Abstract: This paper advances the understanding of absorptive capacity for assimilating new knowledge as a mediating variable of organization adaptation. Many scholars suggest a firm's absorptive capacity plays a key role in the process of coevolution (Lewin et al., this issue). So far, most publications, in following Cohen and Levinthal (1990), have considered the level of prior related knowledge as the determinant of absorptive capacity. We suggest, however, that two specific organizational determinants of absorptive capacity should also be considered: organization forms and combinative capabilities. We will show how these organizational determinants influence the level of absorptive capacity, ceteris paribus the level of prior related knowledge. Subsequently, we will develop a framework in which absorptive capacity is related to both micro- and macrocoevolutionary effects. This framework offers an explanation of how knowledge environments coevolve with the emergence of organization forms and combinative capabilities that are suitable for absorbing knowledge. We will illustrate the framework by discussing two longitudinal case studies of traditional publishing firms moving into the turbulent knowledge environment of an emerging multimedia industrial complex.

Abstract: This research addresses the tensions that arise between the collection and use of personal information that people provide in the course of most consumer transactions, and privacy. In today's electronic world, the competitive strategies of successful firms increasingly depend on vast amounts of customer data. Ironically, the same information practices that provide value to organizations also raise privacy concerns for individuals. This study hypothesized that organizations can address these privacy concerns and gain business advantage through customer retention by observing procedural fairness: customers will be willing to disclose personal information and have that information subsequently used to create consumer profiles for business use when there are fair procedures in place to protect individual privacy. Because customer relationships are characterized by social distance, customers must depend on strangers to act on their behalf. Procedural fairness serves as an intermediary to build trust when interchang eable organizational agents exercise considerable delegated power on behalf of customers who cannot specify or constrain their behavior. Our hypothesis was supported as we found that when customers are explicitly told that fair information practices are employed, privacy concerns do not distinguish consumers who are willing to be profiled from those who are unwilling to have their personal information used in this way.

Abstract: This article seeks to reconceptualize the relationship between flexibility and efficiency. Much organization theory argues that efficiency requires bureaucracy, that bureaucracy impedes flexibility, and that organizations therefore confront a tradeoff between efficiency and flexibility. Some researchers have challenged this line of reasoning, arguing that organizations can shift the efficiency/flexibility tradeoff to attain both superior efficiency and superior flexibility. Others have pointed out numerous obstacles to successfully shifting the tradeoff. Seeking to advance our understanding of these obstacles and how they might be overcome, we analyze an auto assembly plant that appears to be far above average industry performance in both efficiency and flexibility. NUMMI, a Toyota subsidiary located in Fremont, California, relied on a highly bureaucratic organization to achieve its high efficiency. Analyzing two recent major model changes, we find that NUMMI used four mechanisms to support its exceptional flexibility/efficiency combination. First, metaroutines (routines for changing other routines) facilitated the efficient performance of nonroutine tasks. Second, both workers and suppliers contributed to nonroutine tasks while they worked in routine production. Third, routine and nonroutine tasks were separated temporally, and workers switched sequentially between them. Finally, novel forms of organizational partitioning enabled differentiated subunits to work in parallel on routine and nonroutine tasks. NUMMI's success with these four mechanisms depended on several features of the broader organizational context, most notably training, trust, and leadership.

Abstract: Mergers and acquisitions are complex events in organizational life for which we have incomplete understanding, in part because researchers have tended to consider only partial explanations of them. The authors addressed that problem by developing a conceptual framework that integrates theoretical perspectives from economics, finance, and especially strategy, organization theory, and human resource management to offer a broader process-oriented integrative model. The integrative model explicitly describes how synergy realization is a function of the similarity and complemen tarity of the two merging businesses (combination potential), the extent of interaction and coordination during the organizational integration process, and the lack of employee resistance to the combined entity. The approach differs from traditional methods of studying mergers and acquisitions in three ways: (1) the success of a merger or acquisition is gauged by the degree of synergy realization rather than more removed and potentially ambiguous criteria such as accounting or market returns; (2) the key attribute of combination potential is conceptualized not only in terms of the similarities present across businesses, as in most studies of mergers and acquisitions, but also in terms of the production and marketing complementarities between the two businesses; and (3) the data are derived from a case survey method that combines the richness of in-depth case studies with the breadth and generalizability of large-sample empirical investigations. The framework was tested empirically across a sample of 61 mergers and acquisitions. The extent to which a merger or acquisition resulted in synergistic benefits was related to the strategic potential of the combination, the degree of organizational integration after the deal was completed, and the lack of employee resistance to the integration of the joining firms. Furthermore, the analysis revealed that (1) independent of any similarities across joining firms, the presence of complementary operations increased the probability of acquisition success by boosting synergy realization, (2) organizational integration was the single most important factor in explaining synergy realization, even to the extent that M&As with high combination potential were significantly more successful when coupled with high organizational integration than when integration efforts were less forceful, and (3) mergers and acquisitions that were dependent on gains from combining similar production and marketing operations tended to elicit more resistance from employees than M&As focused on realizing complementary benefits. Overall, the findings provide strong support for an integrative theory of mergers and acquisitions.

Abstract: What if rent from a competitive advantage is appropriated so it cannot be observed in performance measures? The resourcebased view was not formulated to examine who will get the rent. Yet, this essay argues that the factors leading to a resource based advantage also predict who will appropriate rent. Knowledge-based assets are promising because firm-specificity, social complexity, and causal ambiguity make them hard to imit ate. However, the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors. This essay integrates the resource-based view with the bargaining power literature by defining the firm as a nexus of contracts. This new lens can help to explain when rent will be generated and, simultaneously, who will appropriate it. In doing so, it provides a more robust theory of firm performance than the resource-based view alone. It is also suggested that this lens might be useful for examining other theories of firm performance.

Abstract: We advance arguments for why and how a coevolutionary perspective and framework of analysis can provide a new lens and new directions for research in strategic management and organization studies. We identify the distinguishing properties of coevolution in an attempt to define coevolutionary research from other evolutionary research in social sciences. We also outline and discuss the empirical challenges and requirements for undertaking research within coevolutionary inquiry systems. In particular we stress the relevance of specifying coevolutionary models for reframing the selection adaptation standoff when applied to research on organization change over time, in general, and specifically to the mutation and emergence of new organizational forms. Furthermore, a coevolutionary framework has the potential to bridge and reintegrate strategy and organization theory teaching and research within a holistic framework. In our view such a reintegration is the sine qua non for studying organizational change over t...

Abstract: This paper outlines an alternative theory of organization-environment coevolution that generalizes a model of organization adaptation first proposed by March (1991), linking firm-level exploration and exploitation adaptations to changes in the population of organizations. The theory considers organizations, their populations, and their environments as the interdependent outcome of managerial actions, institutional influences, and extra-institutional changes (technological, sociopolitical, and other environmental phenomena). In particular, the theory incorporates potential differences and equifinal outcomes related to country-specific variation. The basic theses of this paper are that firm strategic and organization adaptations coevolve with changes in the environment (competitive dynamics, technological, and institutional) and organization population and forms, and that new organizational forms can mutate and emerge from the existing population of organizations. The theory has guided a multicountry research collaboration on strategic and organization adaptations and the mutation and emergence of new organizational forms from within the existing population of organizations.

Abstract: Utilizing a model drawn from both transaction cost economics and social exchange theory, we analyze determinants of strategic flexibility in a sample of strategic alliances involved in joint development agreements or joint research pacts. Findings indicate that, in general, determinants suggested by transaction cost economics provided flexibility in modification and inflexibility in exit. From social exchange theory, trust was found to be positively related to both types of flexibility while another component of social exchange theory, dependence, was found to be negatively related to the strategic flexibility of the alliance. Results also found that factors suggested by both transaction cost economic theory and social exchange theory were related to the concept of trust. Economic constraints as suggested by transaction cost economics were positively related to trust between the alliance partners while dependence was negatively related to trust. Additionally, the quality of communication and the existence of shared values were positively related to trust between the exchange partners. Results provide support for the role of determinants from both transaction cost economics and social exchange theory in the flexibility of strategic alliances.

Abstract: This paper treats organizations as adaptive systems that have to match the complexity of their environments. The nature of this complexity is analyzed by linking an institutional InformationSpace (I-Space) framework to the work of complexity theorists. The I-Space framework identifies the codification, abstraction, and diffusion of information as cultural attributes. Codification involves the assignment of data to categories, thus giving them form. Abstraction involves a reduction in the number of categories to which data needs to be assigned for a phenomenon to be apprehended. Information is diffused through populations of data-processing agents, thus constituting the diffusion dimension. Complexity theorists have identified the stability and structure of algorithmic information complexity in a way that corresponds to levels of codification and abstraction. Their identification of system parts and the richness of cross-coupling draws attention to the fabric of information diffusion. We discuss two modes of adaptation to complex environments: complexity reduction and complexity absorption. Complexity reduction entails getting to understand the complexity and acting on it directly, including attempts at environmental enactment. Complexity absorption entails creating options and risk hedging strategies, often through alliances. The analysis, and its practical utility, is illustrated with reference to China, the world's largest social system. Historical factors have shaped the nature of complexity in China, giving it very different characteristics than those typical of Western industrial countries. Its organizations and other social units have correspondingly handled this complexity through a strategy of absorption rather than the reduction strategy characteristic of Western societies. Western firms operating in China therefore face a choice between maintaining their norms of complexity reduction or adopting a strategy of complexity absorption that is more consistent with Chinese culture. The specifics of these policy alternatives are explored, together with their advantages and disadvantages. The paper concludes with the outlines of a possible agenda for future research, focusing on the investigation of complexity handling modes and the contingencies which may bear upon the choice between them.

Abstract: The rise and fall of organizational effectiveness, an "umbrella construct" once at the forefront of organizational theory, is traced through four life-cycle stages: emerging excitement, the validity challenge, "tidying up with typologies," and construct collapse. Although the study of effectiveness has declined, research on its component elements continues to thrive. Using the effectiveness story as an exemplar, we develop a more general model of this process for all umbrella constructs, defined hereas broad concepts used to encompass and account for a diverse set of phenomena. This life-cycle model-driven largely by a dialectic between researchers with a broad perspective ("umbrella advocates") and those with a narrower one ("validity po-lice")-leaves open the possibility that some umbrella constructs may ultimately be made coherent or remain permanently controversial rather than collapse, as effectiveness has done. We propose that umbrella constructs will arise most frequently in academic fields without a theoretical consensus, will inevitably have their validity seriously challenged, will have a shorter life than their constituent elements, and will be more vulnerable to validity challenges when they lack support from practitioners.This model's implications for the future direction of such current umbrella constructs as organizational learning, culture, strategy, and performance are also explored and elaborated. Ironically, some evidence suggests that studies around the construct of organizational "performance" have arisen to replace the nearly identical, but fallen umbrella construct of organizational effectiveness.

Abstract: Virtual organizations that use e-mail to communicate and coordinate their work toward a common goal are becoming ubiquitous. However, little is known about how these organizations work. Much prior research suggests that virtual organizations, for the most part because they use information technology to communicate, will be decentralized and nonhierarchical. This paper examines the behavior of one such organization. The analysis is based on a case study of the communication structure and content of communications among members of a virtual organization during a four-month period. We empirically measure the structure of a virtual organization and find evidence of hierarchy. The findings imply that the communication structure of a virtual organization may exhibit different properties on different dimensions of structure. We also examine the relationship among task routineness, organizational structure, and performance. Results indicate that the fit between structure and task routineness affects the perception of performance, but may not affect the actual performance of the organization. Thus, this virtual organization is similar to traditional organizations in some ways and dissimilar in other ways. It was similar to traditional organizations in so far as task-structure fit predicted perceived performance. However, it was dissimilar to traditional organizations in so far as fit did not predict objective performance. To the extent that the virtual organizations may be similar to traditional organizations, existing theories can be expanded to study the structure and perceived performance of virtual organizations. New theories may need to be developed to explain objective performance in virtual organizations.

Abstract: This paper addresses three weaknesses in the literature on new organizational forms: the limited mapping of the extent of contemporary organizational change; confusion about how contemporary changes link together; and the lack of systematic testing of the performance consequences of this kind of change. Drawing on a large-scale survey of organizational innovation in European firms, the paper finds widespread but not revolutionary change in terms of organization structure, processes, and boundaries. Using the economics notion of complementarities, the paper develops contingency and configurational approaches to suggest that organizational innovations will tend to cluster in particular ways and that the performance benefits of these innovations depend on their clustering. Complementarities in performance are explored from both inductive and deductive perspectives. Consistent with the expectations of complementarity theory, high-performing firms appeared to be innovating more and differently than low-performing firms. Again consistent with complementarities, piecemeal changes-with the exception of IT-were found to deliver little performance benefit, while exploitation of the full set of innovations was associated with high performance. Though few European firms were found to exploit the complementarities of new organizational practices, those that did enjoyed high-performance premia.

Abstract: Recent advances in information technologies provide employees the freedom to work from any place and at any time. Such temporal and spatial dispersion, however, weakens the ties that bind organizations and their members. We suggest that organizational identification may be the critical glue linking virtual workers and their organizations. We explore the role that information technologies play in the creation and maintenance of a common identity among decoupled organization members.

Abstract: In recent years, the management literature has increasingly emphasized the importance of self-organization and "local action" in contrast to prior traditions of engineering control and design. While processes of self-organization are quite powerful, they do not negate the possibility of design influences. They do, however, suggest that a new set of design tools or concepts may be useful. We address this issue by considering the problem of landscape design-the tuning of fitness landscapes on which actors adapt. We examine how alternative organizational designs influence actors' fitness landscapes and, in turn, the behavior that these alternative designs engender. Reducing interdependencies leads to robust designs that result in relatively stable and predictable behaviors. Designs that highlight interdependencies, such as cross-functional teams, lead to greater exploration of possible configurations of actions, though at the possible cost of coordination difficulties. Actors adapt not only on fixed landscapes, but also on surfaces that are deformed by others' actions. Such couupled landscapes have important implications for the emergence of cooperation in the face of social dilemmas. Finally, actors' perceptions of landscapes are influenced by the manner in which they are framed by devices such as strategy frameworks and managerial accounting systems.

Abstract: Can firms and coevolutionary groups suffer from too much interdependent complexity? Is complexity theory an alternative explanation to competitive selection for the emergent order apparent in coevolutionary industry groups? The biologist Stewart Kauffman suggests a theory of complexity catastrophe offering universal principles explaining phenomena normally attributed to Darwinian natural selection theory. Kauffman's complexity theory seems to apply equally well to firms in coevolutionary pockets. Based on complexity theory, four kinds of complexity are identified. Kauffman's "NK[C] model" is positioned "at the edge of chaos" between complexity driven by "Newtonian" simple rules and rule-driven deterministic chaos. Kauffman's insight, which is the basis of the findings in this paper, is that complexity is both a consequence and a cause. Multicoevolutionary complexity in firms is defined by moving natural selection processes inside firms and down to a "parts" level of analysis, in this instance Porter's value chain level, to focus on microstate activities by agents. The assumptions of stochastically idiosyncratic microstates and coevolution in firms are analyzed. Competitive advantage, as a dependent variable, is defined in terms of Nash equilibrium fitness levels. This allows a translation of Kauffman's theory to firms, paying particular attention to (1) how value chain landscapes might be modeled, (2) assumptions underlying Kauffman's models making them amenable to firms, and (3) a delineation of seven of Kauffman's computational experiments. As part of the translation, possible parallels between the application of complexity catastrophe theory to coevolutionary pockets and studies by institutional theorists and social network analysts are discussed. The models derive from spin-glass microstate models resulting in Boolean games. Kauffman's Boolean statistical mechanics is introduced in developing the logic underlying the somewhat simplified NKM[C] model. The model allows the use of computational experiments to better understand how the dependent variable-value chain fitness-is affected by changes in the number of internal interdependencies K, the number of coevolutionary links with opponents C, the size of the coevolutionary pocket S, and the number of simultaneous adaptive changes, among other things. Various computational experiments are presented that suggest strategic organizing approaches most likely to foster competitive advantage. High or low Nash equilibrium fitness levels are shown to result from internal and external coevolutionary densities as a function of links among value chain competencies within a firm and between a firm and an opponent. Complexity phenomena appear to suggest a number of expected (and thus validating) and surprising strategies with respect to complex organizational interdependencies. For example, moderate complexity fares best and external coevolutionary complexity sets an upper bound to advantages likely to be gained from internal complexity. Various complexity "lessons" are discussed. Models such as the NK[C] could offer insights into strategic organizing.

Abstract: The current study is a first step in investigating how virtual organizations can manage remote employees effectively. The research used self-efficacy theory to build a model that predicts relationships between antecedents to employees' remote work self-efficacy assessments and their behavioral and attitudinal consequences. The model was tested using responses from 376 remote managed employees in 18 diverse organizations. Overall, the results indicated that remote employees' self-efficacy assessments play a critical role in influencing their remote work effectiveness, perceived productivity, job satisfaction, and ability to cope. Furthermore, strong relationships were observed between employees' remote work self-efficacy judgments and several antecedents, including remote work experience and training, best practices modeling by management, computer anxiety, and IT capabilities. Because many of these antecedents can be controlled managerially, these findings suggest important ways in which a remote employee's work performance can be enhanced, through the intermediary effect of improved remote work self-efficacy. The current study also provides a basis for future research in the remote work area through its development and testing of a remote management framework.

Abstract: This paper examines how organization theory can benefit from advances made in the interdisciplinary field of complex systems theory (CST). Complex systems theory is not so much a single theory as a perspective for conceptualizing and modeling dynamic systems. The field of complexity is described in terms of the characteristics of systems that are typically the subject of its study, the type of analytical tools used by researchers in this field, and the recurring paradigms that characterize this research perspective. The concepts of self-organized criticality and self-organization and their relevance to organizational studies are examined. The potential usefulness of these concepts is illustrated in the context of organizational evolution and social network analysis. An alternative model of organizational evolution, based on biological evolution, is proposed and propositions are developed. Unlike traditional models for organization, this model does not rely on an algorithm of optimization of a fitness function. The problem of self-organization is approached from the viewpoint of random graph theory and is applied to the analysis of social networks. Finally, important issues in using concepts from the field of CST are discussed. It is suggested that the immediate benefits of CST may be as a framework that facilitates conceptual elaborations and encourages formal modeling; both activities may provide fresh and deep insights into organizational phenomena.

Abstract: Studies of organizational processes can yield observations in the form of event time series that can be analyzed to determine whether they reflect periodic, chaotic, white noise, or pink noise dynamic patterns. These different patterns each imply different underlying generative mechanisms and hence, different process theories. In this paper we present a model that describes how these four dynamical patterns are different from one another. Specifically, a causal system can be characterized by its dimensionality, and by the nature of interaction between causal factors. Low dimensional causal systems yield periodic and chaotic dynamics, while high dimensional causal systems yield white and pink noise dynamics. Periodic and white noise dynamics stem from systems where causal factors act independently, or in a linear fashion, while chaotic and pink noise systems stem from systems where causal factors act interdependently, in a nonlinear fashion. Thus, given a diagnosis of an observed event time series, we can hypothesize a particular story, or causal process theory, that might explain in organization-specific terms why such dynamics came about. In doing so, we also propose that the observation of chaotic organizational dynamics may often signify the presence of control and/or cooperation, rather than a lack of it, as implied by the vernacular use of the term. We conclude by challenging organizational researchers to define new models that capture such observed behavior.

Abstract: The authors analyze the coercive and mimetic conditions leading to the establishment of investor relations departments among Fortune 500 industrial firms during the 1984-1994 period. The results show that antimanagement resolutions brought to a vote by social movement activists significantly contributed to the establishment of investor relations departments. Intense scrutiny by financial analysts also impelled firms to create such departments. Whereas social movement activists framed shareholder rights as a problem and compelled organizations to uphold them, professional analysts subtly coerced organizations to signal their commitment to investor rights by creating boundary-spanning structures. That solution was transmitted through board interlocks to other organizations.

Abstract: This paper explores the economic processes through which information technology can facilitate coordination within and between firms. The paper presents and analyzes a case study of the B-2 "Stealth" bomber, an aircraft that was designed by four firms almost entirely by computer. The key information systems used in the project were (1) a common-access database to manage part designs and (2) an advanced system to perform structural analysis. These systems played a crucial role in enabling the four firms to coordinate their design and development activities precisely enough to meet the demanding engineering requirements imposed by the aircraft's unique mission. The paper analyses the case study using transaction cost, agency, and information processing theories. The analysis leads to several conclusions about the mechanisms through which the variables emphasized in these theories operated to improve coordination. First, the information systems aided coordination directly by making information processing less costly. Second, this enhanced information processing made the governance of the project more efficient. In particular, by establishing a "technical grammar" for communication, the systems helped to create social conventions around which firms could coordinate their activities, thus limiting the need for a hierarchical authority to promote coordination. This technical grammar also reduced governance costs by reducing asset-specificity, thereby reducing risks associated with contractual holdup. These interactions between communication and governance effects have not been elucidated in the IT/coordination literature. They are important in part because they help explain why the vertically disintegrated organization of the project proved viable. Finally, the systems facilitated decentralized decision-making by reducing agency (measurement) costs. This combination of effects may generalize to other settings in which information technology is used to promote coordination, especially in "virtual" or "disaggregated" corporations.

Abstract: In a study of how an RD and the use of local genres tacitly shaped by members within their own research teams. We suggest that these patterns reflect the more general processes of explicit and implicit structuring, resulting in both the reinforcement and change of social interaction within communities. Explicit st ructuring included the planned replication, planned modification, and opportunistic modification of existing genres, while implicit structuring included the migration and variation of existing genres. We believe that these two processes provide suggestive models for understanding the initial and ongoing use of new electronic media within a community.

Abstract: Knowledge is frequently the focus of corporate acquisitions. It often cannot be acquired in efficient factor markets due to asymmetric information and because it may be bundled in teams or networks. However, variations in quality are harder to observe for knowledge-based assets than for tangible assets. This creates information dilemmas for buyers and, accordingly, a risk of overbidding, whenever a target is in a knowledge-intensive industry. This study found that most buyers took steps to mitigate the information dilemmas associated with knowledge-based assets. Specifically, buyers coped by (1) offering lower bid premia; (2) using contingent payment (e.g., stock or earnouts); and (3) increasing information both through lengthy negotiations and by a voiding tender offers. However, when the two firms drew on unrelated forms of expertise, buyers did not apply these strategies. It may be that a buyer's information needs are lower if little postacquisition integration is anticipated. An alternative explanation is that unrelated buyers may not be fully aware of the information dilemmas that they face. If so, they may be especially at risk of overbidding. The contingency relationship identified here with respect to related expertise warrants further study. Both the resource based and diversification literatures presume that relatedness is universally important. This study suggests that it may be particularly relevant when there are knowledge-based assets.

Abstract: This paper examines a single longitudinal case study of a professional service network in the public accounting industry, a network intentionally created and formally organized to pursue residual referral revenue for the member firms. Applying and extending a coevolutionary perspective (Koza and Lewin 1998), the paper explores the antecedents and stimuli for the formation of the network, the network's morphology, the motivation of the network members, and the ways in which the network coevolves with its environment and with the adaptation practices of its members. We find that the network was initially created with the strategic intent of producing incremental income in exchange for cross-border referrals. However, we also find that this strategy reveals asymmetric positive returns, which produce serendipitous opportunities for individual member firms to bypass the original intent of network by entering each other's market. We propose that such tensions may be endemic to alliance networks, and we explore their sources and consequences on a variety of characteristics, including network stability, member opportunism, and control. The paper concludes with a model of the coevolutionary process.

Abstract: One view holds that organizations are virtual to the extent that they outsource key components of their production processes, and that electronic networks make it easier to do this. The goal of the present paper is to examine explicitly the effects that use of electronic networks for transactions with suppliers has on firms' degree of virtualization. In so doing, we also highlight factors that influence the use of networks for coordination with suppliers, and the impact such use has on coordination success. Contrary to much recent speculation, the use of electronic networks for transactions was not associated with increased outsourcing, but rather with greater dependence on internal production. Moreover, the use of interpersonal relationships for coordination, which many think of as an alternative to electronic network use, was positively associated with greater network use. Surprisingly, use of electronic networks was negatively associated with such outcomes as order quality and efficiency, and satisfaction with suppliers, while more reliance on personal linkages was associated with better outcomes and mitigated the negative consequences of using electronic networks.

Abstract: This paper examines the problem of risk mitigation in virtual organizations (VOs). We begin by discussing risk propensity in virtual organizations, and draw on a variety of research to suggest processes important in obtaining high levels of reliable performance in VOs. From this research we identify four processes we think are important: organizational structuring and design, communication, culture, and trust. Based on existing research done in conventional and high reliability organizations (HROs), we suggest how these processes may enhance reliability in VOs. We discuss how thoughtful management of these attributes can mitigate risk, and conclude with a theoretical and research agenda for future work.

Abstract: In crafting the call for papers for this special issue of Organization Science, the appointed editors wrote: Organizational scholars seldom come to grips with nonlinear phenomena. Instead, we tend to model phenomena as if they were linear in order to make them tractable, and we tend to model aggregate behavior as if it is produced by individual entities which all exhibit average behavior... a different view of complexity is emerging that may have important implications for organizational scholarship. Within the past decade, interest in the "sciences of complexity" has increased dramatically. The study of complex system dynamics has perhaps progressed furthest in the natural sciences, but it is also beginning to penetrate the social sciences. This interdisciplinary field of study is still pre-paradigmatic, and it embraces a wide variety of approaches. Although it is not yet clear whether a genuine science of complexity will emerge, it does seem clear that scholars in a variety of fields are viewing complexity in a different way than organizational scholars traditionally have. At this juncture, organizational researchers have few templates that suggest to them how to hypothesize about or model such behavior. It is difficult to know how to draw a conceptual model and how to report the results of empirical inquiries into complex organizational phenomena. The special issue aims to provide scholars with useful templates to follow when analyzing complex processes that involve organizations.

Abstract: This paper begins to answer the call to broaden current theories of individual decision-making by including in them the effects of human mood. Grounding our arguments in psychological literature on the effects of mood on information processing, motivation, and decision heuristics, we develop hypotheses about how mood can significantly affect individuals' use of structured decision protocols. In support of our hypotheses, results from an experimental study of complex decision-making suggest that, in situations where a structured decision protocol is the usual method of decision-making, individuals in moderately negative moods are significantly more likely than those in moderately positive moods to: (1) carefully execute all the steps of a structured decision protocol, (2) execute the steps of a structured decision protocol in the correct order, and (3) rely on the outcome of the structured decision protocol as the primary basis for the decision. We discuss these findings in terms of their implications for both organizational decision models and psychological models of mood and decision-making. In general, our findings help establish mood as an important variable in models of organizational decision-making and help shed light on often conflicting findings about the benefits of positive vs. negative mood for individual decision-making.