Leadership & Organizational Behavior

Three high-power studies (N = 3,000 total) demonstrated that asking participants to recall an experience as a manipulation can have unintended consequences. Participants who recalled preoccupying secrets made more extreme judgments of an external environment, supporting the notion that secrecy is burdensome. This influence was found, however, only among a subset of participants (i.e., participants who successfully recalled secrets that corresponded to their condition). We introduce the concept of manipulation correspondence to understand these patterns of results.

Improvisation is informing new models for strategy and organization design and determining how improvisation can create more productive interactions between individuals in an organization. Management research offers something to the study of improvisation in the form of evidence that groups that combine access to diverse ideas with internal cohesion are more creative and better able to develop those ideas into effective products and performances.

We document that contractual disclosures by intermediaries during the sale of mortgages contained false information about the borrower's housing equity in 7–14% of loans. The rate of misrepresented loan default was 70% higher than for similar loans. These misrepresentations likely occurred late in the intermediation and exist among securities sold by all reputable intermediaries. Investors — including large institutions — holding securities with misrepresented collateral suffered severe losses due to loan defaults, price declines, and ratings downgrades.

Sarcasm is ubiquitous in organizations. Despite its prevalence, we know surprisingly little about the cognitive experiences of sarcastic expressers and recipients or their behavioral implications. The current research proposes and tests a novel theoretical model in which both the construction and interpretation of sarcasm leads to greater creativity because they activate abstract thinking.

Empirical evidence reveals that diversity — heterogeneity in race, culture, gender, etc. — has material benefits for organizations, communities, and nations. However, because diversity can also incite detrimental forms of conflict and resentment, its benefits are not always realized. Drawing on research from multiple disciplines, this article offers recommendations for how best to harness the benefits of diversity.

After a multi-decade bond bull market, to what alternative strategies could institutional investors allocate that have a positive expected return, irrespective of interest rates?

The current research used the contexts of U.S. presidential debates and negotiations to examine whether matching the linguistic style of an opponent in a two-party exchange affects the reactions of third-party observers. Building off communication accommodation theory (CAT), interaction alignment theory (IAT), and processing fluency, we propose that language style matching (LSM) will improve subsequent third-party evaluations because matching an opponent's linguistic style reflects greater perspective taking and will make one's arguments easier to process.

This paper studies the long-term effect of hedge fund activism on the productivity of target firms using plant-level information from the U.S. Census Bureau. A typical target firm improves its production efficiency within three years after the intervention, and this improvement is pronounced in industries with low concentration. By following plants that were sold post-intervention we also find that efficient capital redeployment is an important channel via which activists create value.

Measuring the impact of political risk on investment projects is one of the most vexing issues in international business. One popular approach is to assume that the sovereign yield spread captures political risk and to augment the project discount rate by this spread. We show that this approach is flawed. While the sovereign spread is influenced by political risk, it also reflects other risks that are likely included in the valuation analysis — leading to the double counting of risks.