Distributed Work - Book Review

espite the increasing prevalence of organizations staffing important projects with team members from across the nation and around the globe, academic research on the effectiveness of these arrangements has remained relatively sparse. Many of us recall Thomas Allen's (1977) Managing the Flow of Technology, which alerted us to how the spatial layouts of workplaces can influence who interacts with whom, and, as a result, can affect employee and team productivity. His account emphasized the importance of locating together those who need to interact with one another. Following this auspicious beginning, however, interest in extending our understanding of space in the workplace appears to have remained rather flat among organizational researchers in the quarter century following the publication of Allen's book. In the meantime, companies have become more geographically dispersed as they globalize and as distant firms merge. Attempting to make the most of their human capital, these firms increasingly assign projects to teams of employees working in different offices around the world. Given Allen's findings, one might worry that these arrangements needlessly hamper the efficiency of global organizations. But the last two decades have also witnessed dramatic improvements in the technologies available for collaborating across distances. Perhaps video conferencing, electronic mail, and instant messaging adequately substitute for co-location.

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To reinvigorate this topic, Pamela Hinds and Sara Kiesler have assembled 40 contributors across 18 chapters in Distributed Work. Each of these chapters investigates some aspect of managing teams of geographically dispersed workers. Relative to many edited volumes, Hinds and Kiesler's book gathers an unusually cohesive set of writers--virtually every chapter approaches the issue with the lens of a psychologist. What do they conclude? In 25 years, little has changed. Propinquity remains critical to collaboration; trying to coordinate team members across distances can lead to a variety of problems that these authors usefully ground in psychological theory. Furthermore, the various electronic media proposed as solutions all clearly fail to substitute for face-to-face contact.

Several audiences can appreciate different dimensions of this volume. Managers interested in how to organize project teams will likely appreciate the clear writing, lack of technical detail, and plethora of stories, though the scarcity of specific recommendations may frustrate them. Researchers can harvest many fruitful topics for study by reviewing the dozens of untested but theoretically motivated propositions offered across the chapters. Though the editors see the latter as their audience, the volume may prove most useful as a source of teaching material for college courses, a fertile environment for the conceptual pieces that dominate the volume.

Commenting on the specific chapters in any edited volume forces tradeoffs. Instead of briefly mentioning every chapter, I prefer to highlight two pieces that I found particularly enjoyable. In one of the few pieces reporting the results of an experiment, Judith Olson, Stephanie Teasley, Lisa Covi, and Gary Olson investigated the effect of "radical co-location" on team dynamics and performance. By radical co-location, they mean having all team members working in a single room. Though such intimate quarters may strike many of us as too close for comfort, this study found that these configurations doubled the productivity of the product development teams assigned to them. The researchers attributed this effect to improvements in the frequency and depth of communication among members of the team. Moreover, the familiar setting seemed to grow on people; although before taking part in the experiment, participants said they preferred cubicles, afterwards their preference had shifted to working in a common team room. Olson and her colleagues, thus, interestingly raise the question of whether firms should move in the other direction: instead of assembling workers across multiple locations, perhaps they should gather team members in one location and reconfigure their office spaces to allow them to work in a single room.

Another intriguing contribution appears in the second chapter, in which Michael O'Leary, Wanda Orlikowski, and JoAnne Yates remind us that the last century does not hold a monopoly on the coordination of work across distances. O'Leary, Orlikowski, and Yates examine the organizational practices of the Hudson's Bay Company (HBC) from 1670 to 1826. From its headquarters in London, the HBC managed a far-flung network of outposts across what is now Canada. Through a combination of selective recruitment, socialization, and empowerment, the firm conquered distance without the benefit of air travel or e-mail by fostering an organizational culture that mitigated the problems inherent in managing these distant stations. The authors also helpfully suggest how modern managers might learn from HBC's example.

The Paradox of Empowerment: Suspended Power and the Possibility of Resistance - Book Review

If we pause for a moment and consider the recent proliferation of material that takes empowerment as its subject matter, we are confronted with a bewildering choice of approaches. From starry-eyed proselytizers to hard-nosed critics, from devoted disciples to cynical nay-sayers, it seems that everyone has to take a position on empowerment now. Indeed, empowerment is bandied about so promiscuously these days that it is in danger of suffering from what the historian Edward Peters (1996) called "semantic atrophy"--i.e., a word gets used so often and in so many inappropriate situations that it tends to lose its usefulness, even when it could be most helpful. Because empowerment is such a prime candidate for this kind of rhetorical debasement, one might think that the world is crying out for a book that cuts through the mire to come up with a parsimonious definition so that we can all systematically work through its analytical implications. Wendt has taken up this challenge with alacrity, but, in doing so, he has turned it on its head by showing that developing one stable and universal definition of empowerment is probably impossible and certainly undesirable. In fact, there are any number of possible definitions of empowerment that are, to a greater or lesser extent, founded on some kind of paradox, hence the title of his book.

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Wendt has come at his subject matter with one important presupposition: regardless of its specific context or usage, the term "empowerment" is frequently deployed ironically to legitimate management practices that are palpably unempowering to those on the receiving end. In this sense, Wendt is primarily dealing with matters related to the "discourses" of business and management. This interest in the semantics of empowerment is hardly surprising. Wendt is a professor of communications who describes himself on page 2 as a "critical/postmodern ethnographer." For many people, such a term would be sufficient to make them roll their eyes and sigh, "Not another postmodernist." It would be a shame, however, if the reader never got beyond this early confession, for parts of Wendt's book have considerable merit. To be sure, all of it is written in a style that, at times, appears to be willfully dense and obscurantist, but at other times Wendt captures significant points in such a graphic and compelling way that things suddenly click into place and, for a moment, you almost forgive him even his more lurid prose. Unfortunately, most of these "Uh huh" moments are unevenly distributed throughout the book. This really is a book of two distinct halves, for although it is divided into four parts, parts 1 and 2 contain most of the material likely to resonate with an audience that also reads the Administrative Science Quarterly. To be frank, some passages from parts 3 and 4 are likely to try the patience of even the most sympathetic readers, regardless of their disciplinary background. So, be warned: to get something out of this book, be prepared to do some hard work!

The book starts with an introduction that provides the rationale for the main text. The line of argumentation runs as follows: (1) things like "empowerment" and "participation" are making today's organizations better places to work, or so we are told; (2) using postmodern social theory (especially the work of Michel Foucault), we can disabuse ourselves of this myth; and (3) we need to develop innovative strategies--the so-called "possibilities of resistance"--that counter the organizational arrangements associated with this spurious notion of empowerment. In the first half of the book, points (1) and (2) are well made, but Wendt's consideration of point (3) in the second half of the book is less effective.

In part 1, Wendt maps out what he means by an organizational paradox: "... a self-referential and contradictory statement--usually an injunction or imperative--that causes confusion, frustration, silence, and/or a sense of incompetence in the listener, and usually leads to a no-win or double binding situation" (p. 15). His concept of the organizational double bind is particularly important because it goes to the very heart of his critique of empowerment. It is that genuine resistance entails going beyond the feelings of inevitability and powerlessness associated with the paradoxical demands placed on us in today's organizations, stepping outside of existing power relations in some way to bring forth new ones that (one hopes) will be more edifying for the participants. Wendt then goes on to demonstrate how specific organizational practices that invoke empowerment are paradoxical and lead to double binds, in the process taking in such things as participative management, kaizen, total quality management, and teamwork. These chapters should be disconcerting to those who believe that such practices do not have a darker side, though Wendt's use of Zen proverbs or "koans" to introduce each paradox may strike some readers as an unnecessary stylistic conceit.

Headhunters: Matchmaking in the Labor Market - Book Review

Finlay and Coverdill provide an engaging and intriguing glimpse into the relationships among headhunting firms, their client firms, and prospective job candidates. Their study focuses on contingency headhunters--those who receive a fee that is contingent on successfully locating a candidate who is hired--and their client firms within a major metropolitan area in the southeastern United States. The authors make use of a rich, diverse archive of data they gathered through semistructured interviews with headhunters and their clients; fieldwork at various headhunting firms; attending industry seminars and conferences; analyzing industry newsletters and various audio, video, and written training materials; and a mail survey they conducted of recruiting firms belonging to a statewide personnel services association.

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What emerges is a fascinating portrait of how headhunters--despite their vulnerable and highly competitive role as labor market intermediaries--deftly exploit information, contacts, emotion, and various interpersonal stratagems to lubricate transactions between hiring firms and job candidates. A particularly distinctive facet of the headhunter's role is the need to manage impressions and close the sale on both sides of the transaction: because the most attractive candidates for any given position are usually the individuals least likely to be searching aggressively for work (because they are highly valued by their current employer), headhunters must not only secure assignments from hiring firms but persuade reluctant candidates to consider "jumping ship" from their current firm. Finlay and Coverdill describe a menu of tactics that headhunters employ toward that end, encouraging candidates to view their current employer cynically, in purely instrumental terms, and focusing prospective hires on "wounds" or aspects of their current employment situation that are "hot button issues" that the headhunter can exploit. They also describe how headhunters must often circumvent resistance from human resource (HR) professionals and line managers in their client firms, who view headhunters as intruding on their prerogatives in hiring employees.

The authors' fieldwork leads them to conclude that headhunters often perpetuate stereotypes with respect to age and physical appearance. Their findings with respect to gender and race are more ambiguous. They find little evidence of explicit attention by headhunters to gender and race (except in engagements targeted specifically as "diversity searches"), but the authors suggest that the premium placed by their clients on social similarity, combined with the powerful incentives for headhunters not to rock the boat, can perpetuate gender and racial inequalities. Thus, reliance by firms on labor market intermediaries doesn't necessarily reduce discrimination and, in fact, may sometimes have the opposite effect.

Consistent with network perspectives on brokerage, Finlay and Coverdill find that headhunters often seek to minimize direct interactions between clients and potential candidates, monopolizing information and manipulating perceptions on both sides. Interestingly, their analyses suggest that such brokerage opportunities actually increase as the stakes of the parties in the transaction increase. One might surmise that both client firms and prospective candidates would have ample reason to confront one another directly, given the high stakes each party (especially the candidate) has in the outcome. Yet Finlay and Coverdill argue that it is precisely because the stakes are so high that intermediaries can play such a valuable role--preserving confidentiality, managing expectations, and buffering the parties from the social, emotional, reputational, and other risks associated with courtship.

Although headhunters seek to build reputations with client firms and prospective candidates, there seem to be few enduring sources of trust on which to build lasting relationships, at least based on economic considerations. The business is fiercely competitive. Clients often misrepresent matters to headhunters (e.g., claim that a search is exclusive when in fact multiple headhunting firms have been engaged). It is difficult for headhunters to create and sustain enduring partnerships with clients (e.g., due to resistance by HR personnel and frequent departures of managers at hiring firms), and because the contingent-fee headhunter is only paid after successfully placing a candidate, client firms often have an incentive to engage multiple headhunters. Given how infrequently candidates change positions and the existence of multiple headhunters, candidates presumably also may be tempted to embellish the truth when dealing with headhunters. And everyone involved knows all of this.

The authors make sense of this puzzle by emphasizing that (1) hiring is a social activity; (2) headhunters often acquire invaluable information by virtue of their social connections with clients and candidates; and (3) it is precisely the emotion and potential embarrassment involved in the hiring process that creates a role for skilled third parties to mediate interactions between the parties. Hiring managers and job candidates may know their own preferences, intentions, and aptitudes well, and they certainly have high stakes in the outcomes. But headhunters broker transactions between these two constituencies on a daily basis (and hope to continue to do so in the future), which ostensibly gives them greater ability and incentive to be dispassionate than hiring firms and candidates might be on their own. Moreover, by controlling the information that each party receives about the other, headhunters are able to create more psychological "bang for the buck" than might obtain if the parties negotiated all the details directly. A key role for the headhunter is not just filling job openings with competent people in a timely manner, but doing so in a manner that leaves both the employer and candidate content, committed, and copasetic. Finlay and Coverdill also argue that by running interference between parties, headhunters are often able to preserve enduring long-term relationships of value to their clients. For instance, client firms are often tempted to recruit personnel from their customers, suppliers, and business partners; by delegating their searches to a headhunter, a client firm can often minimize the fallout that would occur by directly poaching talent from organizations with whom it has key long-term relationships.

Big Steel: The First Century of the United States Steel Corporation, 1901-2001 - Book Review

We live in an age obsessed with the birth of new industries, new companies, and new business strategies. At the same time, the legacies of past decisions, old companies, and mature industries continue to govern much of our economy, our political discourse, and our future. Nearly 102 years after its formation on April Fool's Day in 1901, the United States Steel Corporation continues to exercise power that belies the fact that during its lifetime it has gone from beginning "the century with two-thirds of the nation's raw steel-making capacity to ending it with scarcely more than 10 percent" (p. 355). Most recently, U.S. Steel's continued leadership position as America's largest producer saw it lead a partially successful tariff fight that culminated in a March 5, 2002 Bush administration announcement of tariffs on many foreign steel products entering the United States. As one of the few corporate bridges between the day of Andrew Carnegie and J.P. Morgan and the days of Bill Gates and Michael Dell, a history of U.S. Steel's turbulent century is an intriguing topic for examination. Kenneth Warren's book represents an attempt to document a remarkable transition in American industrial history and economics.

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Warren's book is not an "easy read." The pages are lathered with voluminous quotations of commodity prices, names of long-dead individuals and companies, and accounts of corporate decisions long buried in internal corporate archives. For a patient reader, however, the history of U.S. Steel raises a host of mysteries of economics and business strategy. Warren's history also represents a case study of a non-monopoly company that, for much of its history, acted as if it were a monopoly. Even the birth of U.S. Steel is laden with more than normal historical significance, even for a company of its size. The formation of U.S. Steel by a group led by J.P. Morgan, Charles M. Schwab, and Elbert H. Gary (after whom Gary, Indiana is named) was in large part a buyout of Carnegie that represented his retirement from the steel business. Carnegie's departure by itself altered the strategic behavior of companies in the industry. Carnegie's spirit of "competition to the death" was replaced by U.S. Steel's desire to avoid "destructive" competition. In addition, the formation of U.S. Steel allowed Carnegie to "monetize" his fortune and to devote his very active retirement to his many charitable endeavors.

U.S. Steel was founded with the hope that its size would lead to economic benefits in the form of market power and operating and network efficiencies. While some cost savings were achieved, and some of the superior management of the Carnegie companies did transfer to the new entity, in the grand scheme of things, size appears to have acted as a drag on the new company rather than as an advantage. Warren hints at some of this tension when he notes that those "who had worked at Carnegie found it difficult to work in reasonable amity with rival companies rather than competing ruthlessly with them as in the past" (p. 27). In the face of attempts to manage prices and exercise leadership, U.S. Steel saw its many small rivals eat away at its markets. Between 1901 and 1927, U.S. Steel's market share in raw steel dropped from 65.7 percent to 41.1 percent (p. 129). This period of U.S. Steel's relative competitive latency allowed for the growth of companies such as Bethlehem Steel, which by 1903 was run by U.S. Steel "defector" Charles M. Schwab. U.S. Steel's price leadership strategies in the early twentieth century may have led to a high return on sales, but the company's dollar sales were essentially stagnant despite significant additions to capacity and production.

By 1936, the stagnation at U.S. Steel was such that Fortune magazine "recalled that the Corporation's policy had once been summarized as 'No inventions: no innovations'" (p. 132) and Charles M. Schwab reported that "the chairman of US Steel admitted to him that the Corporation, in fact, had missed every 'new thing' in steel" (p. 132). Under Carnegie's reign, Pittsburgh-based steel facilities had competed successfully against growing location-based advantages of other regions by relying on innovation, efficiency, and superior management. U.S. Steel under Gary did participate in the geographic dispersion of American steel-making but its "Pittsburgh Plus" pricing (an artificial attempt to exercise industry price discipline by linking prices across America to steel prices in Pittsburgh plus freight from Pittsburgh) led to a hobbling of the corporation's growth into new markets and eventually shrank the region in which Pittsburgh-area steel was competitive. Even in its infancy, U.S. Steel was an illustration of inertia and captivation by sunk-cost investments.

Warren effectively documents U.S. Steel's triumphs and failures over the course of a century. We learn of U.S. Steel's triumphs, such as the fortuitous or prescient refinancing that allowed it later to weather the Depression, and its contributions to the country's war efforts. The impressive gains the company made in the early 1950s led the Economist and Fortune magazine to gush over the company's performance, size (comparable to the production of the Soviet Union or that of Britain and Germany combined), and its transformation from a "laggard" (p. 223). Warren is also forced to describe U.S. Steel's history of tenuous labor relations, its failure to adopt oxygen converters in the 1950s, its falling competitiveness relative to foreign producers in the 1960s, and its growing competitive disadvantages relative to rising "mini-mill" production from the 1960s on.

The ripple effect: emotional contagion and its influence on group behavior

Understanding shared social processes in groups is becoming increasingly important as firms move toward a greater team orientation. These shared social processes can serve as a conduit for a variety of group interactions and dynamics important to getting work done. Interestingly, research on the influence of shared social processes has focused almost exclusively on its cognitive aspects--how ideas and cognition are shared among group members. This can be seen in the social-information processing literature, which focuses on how people are influenced by the cognitions and attitudes of others in their social environment (e.g., Salancik and Pfeifer, 1978; Bateman, Griffin, and Rubinstein, 1987; Shetzer, 1993), as well as in research examining shared social cognitions, which also focuses exclusively on the process through which people construct and share thoughts, ideas, and memories (e.g., Moreland, Argote, and Krishnan, 1996; Cannon-Bowers and Salas, 2001).

While understanding how people share ideas adds to the knowledge of group dynamics, it does not give a complete picture. One also needs to take into account the sharing of emotions, or emotional contagion, that occurs in groups. The importance of emotions in organizational behavior, particularly at the individual level, has been solidly established (see Brief and Weiss, 2002, for a review), and researchers have begun to turn their attention toward understanding the processes and outcomes of collective emotion (see Barsade and Gibson, 1998; Kelly and Barsade, 2001; George, 2002, for reviews). Some theorists have gone so far as to say that "feelings may be the way group entities are known" (Sande-lands and St. Clair, 1993: 445) and that the development of group emotion is what defines a group and distinguishes it from merely a collection of individuals.

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Implicit attention has been paid to collective emotion in the organizational behavior literature, with many organizational processes grounded in such affective relations of group members as morale, cohesion, and rapport (Tickle-Degnen and Rosenthal, 1987). The advancement of the emotions literature in psychology has also allowed for a more focused and explicit examination of collective emotion. George and colleagues showed that not only do group emotions exist, but these emotions, which they call group affective tone, can influence work outcomes (George, 1989, 1990; George and Brief, 1992). In a study of senior management teams, Barsade et al. (2000) found that a group's affective diversity, another way of conceptualizing group emotion, also had an effect on individual attitudes and team dynamics. But the question remains, what is the process by which these effects occur?

While literature on shared cognitions can provide some insight into how collective emotions occur via emotional contagion, there are some important differences between emotional and cognitive contagion. First, the transfer of ideas is qualitatively different from the transfer of feelings. Words are central to understanding ideas yet are least important in understanding emotions, for which nonverbal cues are primary (Mehrabian, 1972). Because of the importance of these nonverbal cues, direct interpersonal contact is important for the transmission of emotions in groups. Conversely, sharing cognitions need not occur face to face (Ilgen and Klein, 1988). There are also some differences in the amount of effortful processing involved in cognitive and emotional contagion. Although emotional contagion can contain elements of purposeful processing found in cognitive contagion--such as the evaluation, interpretation, expectation, and personal goals found in the sharing of ideas (Salancik and Pfeifer, 1978)--emotional contagion research studies show that emotional contagion most often occurs at a significantly less conscious level, based on automatic processes and physiological responses (e.g., Hatfield, Cacioppo, and Rapson, 1994; Neumann and Strack, 2000).

Organizational and psychological researchers have begun to investigate the question of emotional contagion through field studies examining mood convergence in work teams. In a field setting, Totterdell et al. (1998) found evidence that the moods of teams of nurses and accountants were related to each other even after controlling for shared work problems. Totterdell (2000) found the same results in professional cricket teams, controlling for the team's status in the game. In a study of meetings of 70 very diverse work groups, Bartel and Saavedra (2000) also found evidence of mood convergence. Similar to Totterdell and colleagues, Bartel and Saavedra showed that work-group mood is something that can be recognized and reliably measured by members in the work group, as well as by observers external to the group. Barrel and Saavedra also examined antecedents to the mood convergence processes and found positive relationships between mood convergence and stable membership in the group, norms about mood regulation in the group, and task and social interdependence. In Totterdell's studies, being older, along with a complex of factors related to being interdependent and satisfied with the team (i.e., more committed to the team, perceiving a better team climate, being happier and engaging in collective activity) were antecedents to mood congruence.

Learning from complexity: effects of prior accidents and incidents on airlines' learning

For all the scientific pizzazz [involved in airline accident investigations], unraveling the subtle, complex chain of events leading to aviation deaths is proving more elusive than ever.

--"Why more plane-crash probes end in doubt," Wall Street Journal, March 22, 1999

Organizations like airlines try to learn from experience, understanding what went wrong so that it won't go wrong next time. But if, as the quote above suggests, the causes are often left in doubt, such learning is likely to be difficult. Learning is also likely to vary across firms, despite industry regulation that should affect all airlines equally. Investigators of the 2000 Air France Concorde crash discovered that British Airways had recommended changes to the Concorde's water deflector in 1995 but that Air France had not made those changes (Phillips, 2000). As Donoghue (1998: 36) explained, "... any safety initiative has an unequal effect on the carriers and becomes an issue to be promoted or fought ... seeking the path that best suits [the airline] individually." Other heavily regulated industries, such as nuclear power, also show substantial variance in incident rates among firms (Morris and Engelken, 1973), which indicates that firms vary in how effectively they learn from their experience. Despite much discussion and analysis of aviation errors (airline accidents and incidents), there has been little work investigating the role of organizational learning and none examining variation in learning across firms in the industry.

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Learning from experience has been shown to have important effects on such varied outcomes as manufacturing plant productivity (e.g., Argote, Beckman, and Epple, 1990), service timeliness (Argote and Darr, 2000), and hotel survival (Baum and Ingram, 1998). If firms learn from experience, then the attributes of this experience are likely to affect the rate and effectiveness of learning. Some firms have heterogeneous experience in that their accidents and incidents ("errors") are caused by a large number of different factors, which are likely to interact in complex ways. Some firms have more homogeneous experience, with errors caused by a small number of similar factors. It is likely that the complexity of prior experiences, as well as characteristics of the firms themselves, affect how well airlines can learn from that experience. We investigate these issues in the context of airline accidents and incidents to explain variation in learning among firms in the airline industry.

According to the NTSB (2001) Code of Federal Regulations (49CFR830.2, p. 1195), an accident "means an occurrence ... in which any person suffers death or serious injury, or in which the aircraft received substantial damage." An incident is "an occurrence other than an accident, which affects or could affect the safety of operations." Accidents and incidents are the error experiences from which airlines have the potential to learn.

EFFECTS OF PRIOR EXPERIENCE ON LEARNING

In the literature on organizational learning there is a large body of work on the learning curve. The learning curve is an empirical finding showing that, in general, experience produces improvement. Early empirical work on the learning curve showed that the log of unit costs tends to decrease linearly with the log of cumulative production volume. So, for example, cumulative production experience tends to lower costs in shipbuilding and automotive production (Argote and Epple, 1990), nuclear power plant production (Zimmerman, 1982), and coal generation (Joskow and Rose, 1985). More recent work has moved away from a focus on cost reduction and productivity improvement to other outcomes of learning. These studies have shown that experience improves customer service and product quality (Dart, Argote, and Epple, 1995; Lapre, Mukherjee, and Van Wassenhove, 2000) and increases the survival rates of hotels (Ingram and Baum, 1997; Baum and Ingrain, 1998) and banks (Kim and Miner, 2000).

In the context of airlines and their errors, it may be that airlines learn from error experience and are able to improve performance over time, reducing subsequent errors (i.e., accidents and incidents). If we look at the airline industry over long time periods, this seems to be the case. Figure 1 plots the accident rate (accidents per 100,000 hours flown) for all U.S. airlines from 1955 to 1997 and exhibits a characteristic learning curve, i.e., as experience accumulates with the passage of time, the error rate declines.

[FIGURE 1 OMITTED]

When individual airlines' accident rates are broken out, as they are in table 1 for some of the larger U.S. airlines, we see the same general decrease in accidents over time as in figure 1, but there is also a fair amount of variance across airlines. For example, from 1957 to 1986, American Airlines had an average of 10.3 accidents per million departures and US Air had 6.6. Variation in airline error rates could come from many sources. One obvious source is the characteristics of the individual airline, e.g., whether it is large or small, the age of its fleet, characteristics of its corporate culture, its management team, and its training procedures. Another possible source of variation, however, is differences in the characteristics of the accidents and incidents experienced by these different airlines. Because experience affects organizational learning, different types of experiences are likely to produce variation in learning rates. One source of differences in experience is whether that experience has homogeneous or heterogeneous causes.

Learning from complexity: effects of prior accidents and incidents on airlines' learning

For all the scientific pizzazz [involved in airline accident investigations], unraveling the subtle, complex chain of events leading to aviation deaths is proving more elusive than ever.

--"Why more plane-crash probes end in doubt," Wall Street Journal, March 22, 1999

Organizations like airlines try to learn from experience, understanding what went wrong so that it won't go wrong next time. But if, as the quote above suggests, the causes are often left in doubt, such learning is likely to be difficult. Learning is also likely to vary across firms, despite industry regulation that should affect all airlines equally. Investigators of the 2000 Air France Concorde crash discovered that British Airways had recommended changes to the Concorde's water deflector in 1995 but that Air France had not made those changes (Phillips, 2000). As Donoghue (1998: 36) explained, "... any safety initiative has an unequal effect on the carriers and becomes an issue to be promoted or fought ... seeking the path that best suits [the airline] individually." Other heavily regulated industries, such as nuclear power, also show substantial variance in incident rates among firms (Morris and Engelken, 1973), which indicates that firms vary in how effectively they learn from their experience. Despite much discussion and analysis of aviation errors (airline accidents and incidents), there has been little work investigating the role of organizational learning and none examining variation in learning across firms in the industry.

Advertisement

Learning from experience has been shown to have important effects on such varied outcomes as manufacturing plant productivity (e.g., Argote, Beckman, and Epple, 1990), service timeliness (Argote and Darr, 2000), and hotel survival (Baum and Ingram, 1998). If firms learn from experience, then the attributes of this experience are likely to affect the rate and effectiveness of learning. Some firms have heterogeneous experience in that their accidents and incidents ("errors") are caused by a large number of different factors, which are likely to interact in complex ways. Some firms have more homogeneous experience, with errors caused by a small number of similar factors. It is likely that the complexity of prior experiences, as well as characteristics of the firms themselves, affect how well airlines can learn from that experience. We investigate these issues in the context of airline accidents and incidents to explain variation in learning among firms in the airline industry.

According to the NTSB (2001) Code of Federal Regulations (49CFR830.2, p. 1195), an accident "means an occurrence ... in which any person suffers death or serious injury, or in which the aircraft received substantial damage." An incident is "an occurrence other than an accident, which affects or could affect the safety of operations." Accidents and incidents are the error experiences from which airlines have the potential to learn.

EFFECTS OF PRIOR EXPERIENCE ON LEARNING

In the literature on organizational learning there is a large body of work on the learning curve. The learning curve is an empirical finding showing that, in general, experience produces improvement. Early empirical work on the learning curve showed that the log of unit costs tends to decrease linearly with the log of cumulative production volume. So, for example, cumulative production experience tends to lower costs in shipbuilding and automotive production (Argote and Epple, 1990), nuclear power plant production (Zimmerman, 1982), and coal generation (Joskow and Rose, 1985). More recent work has moved away from a focus on cost reduction and productivity improvement to other outcomes of learning. These studies have shown that experience improves customer service and product quality (Dart, Argote, and Epple, 1995; Lapre, Mukherjee, and Van Wassenhove, 2000) and increases the survival rates of hotels (Ingram and Baum, 1997; Baum and Ingrain, 1998) and banks (Kim and Miner, 2000).

In the context of airlines and their errors, it may be that airlines learn from error experience and are able to improve performance over time, reducing subsequent errors (i.e., accidents and incidents). If we look at the airline industry over long time periods, this seems to be the case. Figure 1 plots the accident rate (accidents per 100,000 hours flown) for all U.S. airlines from 1955 to 1997 and exhibits a characteristic learning curve, i.e., as experience accumulates with the passage of time, the error rate declines.

[FIGURE 1 OMITTED]

When individual airlines' accident rates are broken out, as they are in table 1 for some of the larger U.S. airlines, we see the same general decrease in accidents over time as in figure 1, but there is also a fair amount of variance across airlines. For example, from 1957 to 1986, American Airlines had an average of 10.3 accidents per million departures and US Air had 6.6. Variation in airline error rates could come from many sources. One obvious source is the characteristics of the individual airline, e.g., whether it is large or small, the age of its fleet, characteristics of its corporate culture, its management team, and its training procedures. Another possible source of variation, however, is differences in the characteristics of the accidents and incidents experienced by these different airlines. Because experience affects organizational learning, different types of experiences are likely to produce variation in learning rates. One source of differences in experience is whether that experience has homogeneous or heterogeneous causes.

Dignity at Work - Book Review

Everyone loves a good story. What better, then, than a book based on 84 good stories? Randy Hodson has taken 84 book-length ethnographies of organizational life and attempted to distill the insights into a grand model of dignity at work. The advantages of this approach are compelling. Ethnographies enable readers to become immersed in rich settings peopled with intriguing characters who are propelled by both stranger-than-fiction events and grinding ordinariness. On display are ambivalence, passion, generosity, capriciousness, affection, spite, and so on through the gamut of human emotions and behaviors. In short, ethnographies provide a slice of life. The problem, of course, is that ethnographies are highly idiosyncratic, creating doubts about how generalizable the resulting insights are to other organizational settings and individuals. Hodson's brainstorm was to have his cake--his slice of life--and eat it, too: by analyzing multiple ethnographies, he could abstract a one-size-fits-all model. The result is a book laced with wonderful quotes, provocative findings, and bracing insights and speculations. The book is clearly intended for scholars in organizational studies, although it's accessible to anyone interested in workplace dignity as a lived experience.

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Hodson defines dignity as "the ability to establish a sense of self-worth and self-respect and to appreciate the respect of others" (p. 3). Hodson's basic thesis, summarized in chapter 1, is simply stated. He argues that there are four workplace "denials of dignity" (p. 19): mismanagement and abuse, overwork, constraints on autonomy, and contradictions of employee involvement (e.g., pressuring employees under the guise of participation). In response, employees have developed four means of safeguarding dignity: resistance, organizational citizenship, pursuing meaning at work, and social relations at work. This model, and the empirical indicators of each concept, were developed a priori and then refined during the coding of the first eight ethnographies by Hodson and three graduate students. Although the use of an a priori model greatly simplified the analysis of the 84 books, the model necessarily functions like a horse's blinders, constraining what is sought and therefore found. The upshot is that the study seeks to confirm a model rather than discover one.

Chapter 2 expands on the basic model, nesting it in the classic works of The Three Sages: Karl Marx (capitalism alienates workers from their labors, necessitating resistance), Emile Durkheim (the division of labor induces anomie, necessitating that workers band together to forge a moral order), and Max Weber (bureaucratic rationalization depersonalizes the individual, necessitating that charismatic leaders transcend the impersonal). Hodson continues his historical tour of the struggle for workplace dignity with interesting visits to Frederick Taylor, Chester Barnard, and William Ouchi, among others, along the way.

Chapter 3, coupled with Appendix A, outlines the rationale and method for the study. This was a study so prodigious that it might have given Hercules pause. Hodson and his research assistants started with an initial pool of 365 book-length ethnographies and winnowed these down to the final pool of 84: a book had to be based on observations of a single organization over at least six months, with a focus on at least one specific group of workers. Given the author's claim to have captured the population--not merely a sample--of suitable ethnographies, and given that many readers may wonder along with me why their personal favorites were excluded, a list of the excluded books and the criteria by which each fell afoul would have been very helpful. Even more helpful would have been a table documenting how the final pool of books scored on the various measures used in the study. I often found myself wondering how well a book-length description of a living, breathing organization over time could be distilled into, say, a 3-point scale of pride in work. A scorecard would at least let the reader compare his or her recollection of a particular ethnography with the scores assigned by the research team. In the absence of such a scorecard, the reader has to take on faith that the measures are valid. (The author does describe some sensible checks and balances that were used to reduce coder bias and enhance reliability.)

Also, as Hodson notes, because ethnographers do not choose their targets at random, the "population" is by no means representative of all organizations and workgroups. The 84 ethnographies seem skewed toward so-called blue-collar occupations, particularly in factories (41 of the 108 groups in the ethnographies do assembly work), and toward times that are receding faster than my hairline (40 of the 84 ethnographies were published before 1980, and none after 1992). The unfortunate effect is a lopsided emphasis on increasingly dated settings and technologies.

Headhunters: Matchmaking in the Labor Market - Book Review

Finlay and Coverdill provide an engaging and intriguing glimpse into the relationships among headhunting firms, their client firms, and prospective job candidates. Their study focuses on contingency headhunters--those who receive a fee that is contingent on successfully locating a candidate who is hired--and their client firms within a major metropolitan area in the southeastern United States. The authors make use of a rich, diverse archive of data they gathered through semistructured interviews with headhunters and their clients; fieldwork at various headhunting firms; attending industry seminars and conferences; analyzing industry newsletters and various audio, video, and written training materials; and a mail survey they conducted of recruiting firms belonging to a statewide personnel services association.

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What emerges is a fascinating portrait of how headhunters--despite their vulnerable and highly competitive role as labor market intermediaries--deftly exploit information, contacts, emotion, and various interpersonal stratagems to lubricate transactions between hiring firms and job candidates. A particularly distinctive facet of the headhunter's role is the need to manage impressions and close the sale on both sides of the transaction: because the most attractive candidates for any given position are usually the individuals least likely to be searching aggressively for work (because they are highly valued by their current employer), headhunters must not only secure assignments from hiring firms but persuade reluctant candidates to consider "jumping ship" from their current firm. Finlay and Coverdill describe a menu of tactics that headhunters employ toward that end, encouraging candidates to view their current employer cynically, in purely instrumental terms, and focusing prospective hires on "wounds" or aspects of their current employment situation that are "hot button issues" that the headhunter can exploit. They also describe how headhunters must often circumvent resistance from human resource (HR) professionals and line managers in their client firms, who view headhunters as intruding on their prerogatives in hiring employees.

The authors' fieldwork leads them to conclude that headhunters often perpetuate stereotypes with respect to age and physical appearance. Their findings with respect to gender and race are more ambiguous. They find little evidence of explicit attention by headhunters to gender and race (except in engagements targeted specifically as "diversity searches"), but the authors suggest that the premium placed by their clients on social similarity, combined with the powerful incentives for headhunters not to rock the boat, can perpetuate gender and racial inequalities. Thus, reliance by firms on labor market intermediaries doesn't necessarily reduce discrimination and, in fact, may sometimes have the opposite effect.

Consistent with network perspectives on brokerage, Finlay and Coverdill find that headhunters often seek to minimize direct interactions between clients and potential candidates, monopolizing information and manipulating perceptions on both sides. Interestingly, their analyses suggest that such brokerage opportunities actually increase as the stakes of the parties in the transaction increase. One might surmise that both client firms and prospective candidates would have ample reason to confront one another directly, given the high stakes each party (especially the candidate) has in the outcome. Yet Finlay and Coverdill argue that it is precisely because the stakes are so high that intermediaries can play such a valuable role--preserving confidentiality, managing expectations, and buffering the parties from the social, emotional, reputational, and other risks associated with courtship.

Although headhunters seek to build reputations with client firms and prospective candidates, there seem to be few enduring sources of trust on which to build lasting relationships, at least based on economic considerations. The business is fiercely competitive. Clients often misrepresent matters to headhunters (e.g., claim that a search is exclusive when in fact multiple headhunting firms have been engaged). It is difficult for headhunters to create and sustain enduring partnerships with clients (e.g., due to resistance by HR personnel and frequent departures of managers at hiring firms), and because the contingent-fee headhunter is only paid after successfully placing a candidate, client firms often have an incentive to engage multiple headhunters. Given how infrequently candidates change positions and the existence of multiple headhunters, candidates presumably also may be tempted to embellish the truth when dealing with headhunters. And everyone involved knows all of this.

The authors make sense of this puzzle by emphasizing that (1) hiring is a social activity; (2) headhunters often acquire invaluable information by virtue of their social connections with clients and candidates; and (3) it is precisely the emotion and potential embarrassment involved in the hiring process that creates a role for skilled third parties to mediate interactions between the parties. Hiring managers and job candidates may know their own preferences, intentions, and aptitudes well, and they certainly have high stakes in the outcomes. But headhunters broker transactions between these two constituencies on a daily basis (and hope to continue to do so in the future), which ostensibly gives them greater ability and incentive to be dispassionate than hiring firms and candidates might be on their own. Moreover, by controlling the information that each party receives about the other, headhunters are able to create more psychological "bang for the buck" than might obtain if the parties negotiated all the details directly. A key role for the headhunter is not just filling job openings with competent people in a timely manner, but doing so in a manner that leaves both the employer and candidate content, committed, and copasetic. Finlay and Coverdill also argue that by running interference between parties, headhunters are often able to preserve enduring long-term relationships of value to their clients. For instance, client firms are often tempted to recruit personnel from their customers, suppliers, and business partners; by delegating their searches to a headhunter, a client firm can often minimize the fallout that would occur by directly poaching talent from organizations with whom it has key long-term relationships.

Making Sense of the Organization - Book Review

Simon (1991: 275) once proposed that the aim of science is to find "meaningful simplicity in the midst of disorderly complexity." Simon's sentiment finds considerable resonance in Weick's reflections on the primary impulse driving his own research on organizations over the past several decades. The central idea behind his approach to theory building, he noted, has been "to find patterns that edit particulars into a more compact summary that allows people (including theorists) to anticipate and thread their way through the complexities of everyday social life" (Weick, 1992: 172). Weick's sustained success at this ambitious enterprise is amply showcased in this important compilation of his major theoretical and empirical pieces. This impressive volume brings together under one cover a lifetime of spectacularly original work by one of the field's leading organizational theorists. In so doing, the book serves several useful functions. For the organizational scholar already conversant with Weick's work, this collection will be welcomed as a handy reference book that instantly renders his large, eclectic, and heretofore widely scattered body of writings more accessible. For newcomers to Weick's work, this well-organized volume will assist them in more readily appreciating the depth and nuance of his highly original and provocative approach to the study and understanding of organizations.

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Even under the best of circumstances, providing a crisp characterization of a large, complex body of scholarly work can be a daunting task. It is at least doubly so when the author is Weick. A compact summary of his ideas is difficult to pull off. The difficulty begins with the fact that his view of organizations is hardly conventional. He likens the task of making sense of organizational life to figuring out the rules, processes, and outcomes of a rather unordinary soccer game:

Imagine that you're either the referee, coach, player or spectator at an unconventional soccer match: the field for the game is round; there are several goals scattered haphazardly around the circular field; people can enter and leave the game whenever they want; they can say "that's my goal" whenever they want to, as many times as they want to, and for as many goals as they want to; the entire game takes place on a sloped field, and the game is played as it if makes sense. (p. 32)

This is the universe for which Weick attempts to provide a cosmology. It's obviously not your average universe, and the cosmology he conjures up to explain it is far from orthodox fare. First, what counts as data in Weick's world--firefighting crews dropping their tools as they flee from suddenly and unexpectedly out-of-control wildfires, airplanes colliding inexplicably while still taxiing on airport tarmacs, or jazz quartets improvising--is quite different from what we find almost anywhere else in the literature. Moreover, the constructs he provides us with for making sense of these data--bricolage, heedful interaction, collective mind, virtual role systems, the attitude of wisdom, and cosmology episodes--seem to enjoy a different epistemological status than the independent and dependent variables we are so accustomed to coming across in the organizational sciences. They're harder to grasp, lend themselves less readily to compact summary in the standard tables that adorn our journals, and seem to have no p values attached to them, yet, ironically--or perhaps revealingly--there is never a feeling of insignificance surrounding them.

Happily for the dutiful reviewer, even if the content of this remarkable book ranges widely, its organization is easy enough to describe compactly. Part 1 examines organizations as contexts for sensemaking and introduces many of Weick's most important and enduring ideas. Among them is the proposition that thinking about organizing as a dynamic process carries us further than thinking about organizations as static entities and the notion that small structures and processes tend to enlarge to produce large and often unanticipated consequences. Weick also notes that stable segments in organizations tend to be small and less common than we might like. Even hard-won moments of clarity, he adds, are often not stable or enduring: "No sooner do people make sense of the world," he suggests, "than that sense is out of date" (p. 356). Finally, he points out that there is often less rationality in organizing than meets the eye (although Watts and Strogatz's, 1998, work on the organization of small worlds suggests that there may be more organization in what initially seems random or chaotic than meets the eye).

In part 2, Weick systematically explicates the psychological, social, and organizational components of sensemaking. Despite the impressive diversity of contexts represented by these pieces, there are a number of recurring themes. Weick repeatedly draws attention, for example, to the role surprises play in the sensemaking enterprise. Sensemaking is often triggered, he notes, when events violate expectancies. Thus, the occasions that prompt sensemaking tend to be thrust upon us when we least expect them and when our standard tools and maps don't seem to fit. It's not, as he puts it, deja vu but rather vu ja de. In this respect, sensemaking is seldom a leisurely or idle pursuit. It is nothing like putting together a jigsaw puzzle, one piece at a time, with little sense of urgency. Rather, success and even survival hinge on people desperately trying to size up situations hurriedly in the hope of discovering just what they are dealing with, while simultaneously having to act on their hunches in the hope of forestalling further unraveling of the situation. When the unanticipated trumps the expected, Weick shows, sensemaking often unravels quickly as people abandon the maps and tools they normally rely on for getting by in the world. His analyses of what can happen under such circumstances are full of counterintuitive insights and startling propositions, such as the idea that fresh firefighting crews may create more chaos and be in greater danger than the physically exhausted and cognitively numbed crews they are supposed to relieve.

Big Steel: The First Century of the United States Steel Corporation, 1901-2001 - Book Review

We live in an age obsessed with the birth of new industries, new companies, and new business strategies. At the same time, the legacies of past decisions, old companies, and mature industries continue to govern much of our economy, our political discourse, and our future. Nearly 102 years after its formation on April Fool's Day in 1901, the United States Steel Corporation continues to exercise power that belies the fact that during its lifetime it has gone from beginning "the century with two-thirds of the nation's raw steel-making capacity to ending it with scarcely more than 10 percent" (p. 355). Most recently, U.S. Steel's continued leadership position as America's largest producer saw it lead a partially successful tariff fight that culminated in a March 5, 2002 Bush administration announcement of tariffs on many foreign steel products entering the United States. As one of the few corporate bridges between the day of Andrew Carnegie and J.P. Morgan and the days of Bill Gates and Michael Dell, a history of U.S. Steel's turbulent century is an intriguing topic for examination. Kenneth Warren's book represents an attempt to document a remarkable transition in American industrial history and economics.

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Warren's book is not an "easy read." The pages are lathered with voluminous quotations of commodity prices, names of long-dead individuals and companies, and accounts of corporate decisions long buried in internal corporate archives. For a patient reader, however, the history of U.S. Steel raises a host of mysteries of economics and business strategy. Warren's history also represents a case study of a non-monopoly company that, for much of its history, acted as if it were a monopoly. Even the birth of U.S. Steel is laden with more than normal historical significance, even for a company of its size. The formation of U.S. Steel by a group led by J.P. Morgan, Charles M. Schwab, and Elbert H. Gary (after whom Gary, Indiana is named) was in large part a buyout of Carnegie that represented his retirement from the steel business. Carnegie's departure by itself altered the strategic behavior of companies in the industry. Carnegie's spirit of "competition to the death" was replaced by U.S. Steel's desire to avoid "destructive" competition. In addition, the formation of U.S. Steel allowed Carnegie to "monetize" his fortune and to devote his very active retirement to his many charitable endeavors.

U.S. Steel was founded with the hope that its size would lead to economic benefits in the form of market power and operating and network efficiencies. While some cost savings were achieved, and some of the superior management of the Carnegie companies did transfer to the new entity, in the grand scheme of things, size appears to have acted as a drag on the new company rather than as an advantage. Warren hints at some of this tension when he notes that those "who had worked at Carnegie found it difficult to work in reasonable amity with rival companies rather than competing ruthlessly with them as in the past" (p. 27). In the face of attempts to manage prices and exercise leadership, U.S. Steel saw its many small rivals eat away at its markets. Between 1901 and 1927, U.S. Steel's market share in raw steel dropped from 65.7 percent to 41.1 percent (p. 129). This period of U.S. Steel's relative competitive latency allowed for the growth of companies such as Bethlehem Steel, which by 1903 was run by U.S. Steel "defector" Charles M. Schwab. U.S. Steel's price leadership strategies in the early twentieth century may have led to a high return on sales, but the company's dollar sales were essentially stagnant despite significant additions to capacity and production.

By 1936, the stagnation at U.S. Steel was such that Fortune magazine "recalled that the Corporation's policy had once been summarized as 'No inventions: no innovations'" (p. 132) and Charles M. Schwab reported that "the chairman of US Steel admitted to him that the Corporation, in fact, had missed every 'new thing' in steel" (p. 132). Under Carnegie's reign, Pittsburgh-based steel facilities had competed successfully against growing location-based advantages of other regions by relying on innovation, efficiency, and superior management. U.S. Steel under Gary did participate in the geographic dispersion of American steel-making but its "Pittsburgh Plus" pricing (an artificial attempt to exercise industry price discipline by linking prices across America to steel prices in Pittsburgh plus freight from Pittsburgh) led to a hobbling of the corporation's growth into new markets and eventually shrank the region in which Pittsburgh-area steel was competitive. Even in its infancy, U.S. Steel was an illustration of inertia and captivation by sunk-cost investments.

Warren effectively documents U.S. Steel's triumphs and failures over the course of a century. We learn of U.S. Steel's triumphs, such as the fortuitous or prescient refinancing that allowed it later to weather the Depression, and its contributions to the country's war efforts. The impressive gains the company made in the early 1950s led the Economist and Fortune magazine to gush over the company's performance, size (comparable to the production of the Soviet Union or that of Britain and Germany combined), and its transformation from a "laggard" (p. 223). Warren is also forced to describe U.S. Steel's history of tenuous labor relations, its failure to adopt oxygen converters in the 1950s, its falling competitiveness relative to foreign producers in the 1960s, and its growing competitive disadvantages relative to rising "mini-mill" production from the 1960s on.

The ripple effect: emotional contagion and its influence on group behavior

Understanding shared social processes in groups is becoming increasingly important as firms move toward a greater team orientation. These shared social processes can serve as a conduit for a variety of group interactions and dynamics important to getting work done. Interestingly, research on the influence of shared social processes has focused almost exclusively on its cognitive aspects--how ideas and cognition are shared among group members. This can be seen in the social-information processing literature, which focuses on how people are influenced by the cognitions and attitudes of others in their social environment (e.g., Salancik and Pfeifer, 1978; Bateman, Griffin, and Rubinstein, 1987; Shetzer, 1993), as well as in research examining shared social cognitions, which also focuses exclusively on the process through which people construct and share thoughts, ideas, and memories (e.g., Moreland, Argote, and Krishnan, 1996; Cannon-Bowers and Salas, 2001).

While understanding how people share ideas adds to the knowledge of group dynamics, it does not give a complete picture. One also needs to take into account the sharing of emotions, or emotional contagion, that occurs in groups. The importance of emotions in organizational behavior, particularly at the individual level, has been solidly established (see Brief and Weiss, 2002, for a review), and researchers have begun to turn their attention toward understanding the processes and outcomes of collective emotion (see Barsade and Gibson, 1998; Kelly and Barsade, 2001; George, 2002, for reviews). Some theorists have gone so far as to say that "feelings may be the way group entities are known" (Sande-lands and St. Clair, 1993: 445) and that the development of group emotion is what defines a group and distinguishes it from merely a collection of individuals.

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Implicit attention has been paid to collective emotion in the organizational behavior literature, with many organizational processes grounded in such affective relations of group members as morale, cohesion, and rapport (Tickle-Degnen and Rosenthal, 1987). The advancement of the emotions literature in psychology has also allowed for a more focused and explicit examination of collective emotion. George and colleagues showed that not only do group emotions exist, but these emotions, which they call group affective tone, can influence work outcomes (George, 1989, 1990; George and Brief, 1992). In a study of senior management teams, Barsade et al. (2000) found that a group's affective diversity, another way of conceptualizing group emotion, also had an effect on individual attitudes and team dynamics. But the question remains, what is the process by which these effects occur?

While literature on shared cognitions can provide some insight into how collective emotions occur via emotional contagion, there are some important differences between emotional and cognitive contagion. First, the transfer of ideas is qualitatively different from the transfer of feelings. Words are central to understanding ideas yet are least important in understanding emotions, for which nonverbal cues are primary (Mehrabian, 1972). Because of the importance of these nonverbal cues, direct interpersonal contact is important for the transmission of emotions in groups. Conversely, sharing cognitions need not occur face to face (Ilgen and Klein, 1988). There are also some differences in the amount of effortful processing involved in cognitive and emotional contagion. Although emotional contagion can contain elements of purposeful processing found in cognitive contagion--such as the evaluation, interpretation, expectation, and personal goals found in the sharing of ideas (Salancik and Pfeifer, 1978)--emotional contagion research studies show that emotional contagion most often occurs at a significantly less conscious level, based on automatic processes and physiological responses (e.g., Hatfield, Cacioppo, and Rapson, 1994; Neumann and Strack, 2000).

Organizational and psychological researchers have begun to investigate the question of emotional contagion through field studies examining mood convergence in work teams. In a field setting, Totterdell et al. (1998) found evidence that the moods of teams of nurses and accountants were related to each other even after controlling for shared work problems. Totterdell (2000) found the same results in professional cricket teams, controlling for the team's status in the game. In a study of meetings of 70 very diverse work groups, Bartel and Saavedra (2000) also found evidence of mood convergence. Similar to Totterdell and colleagues, Bartel and Saavedra showed that work-group mood is something that can be recognized and reliably measured by members in the work group, as well as by observers external to the group. Barrel and Saavedra also examined antecedents to the mood convergence processes and found positive relationships between mood convergence and stable membership in the group, norms about mood regulation in the group, and task and social interdependence. In Totterdell's studies, being older, along with a complex of factors related to being interdependent and satisfied with the team (i.e., more committed to the team, perceiving a better team climate, being happier and engaging in collective activity) were antecedents to mood congruence.

Learning from complexity: effects of prior accidents and incidents on airlines' learning

For all the scientific pizzazz [involved in airline accident investigations], unraveling the subtle, complex chain of events leading to aviation deaths is proving more elusive than ever.

--"Why more plane-crash probes end in doubt," Wall Street Journal, March 22, 1999

Organizations like airlines try to learn from experience, understanding what went wrong so that it won't go wrong next time. But if, as the quote above suggests, the causes are often left in doubt, such learning is likely to be difficult. Learning is also likely to vary across firms, despite industry regulation that should affect all airlines equally. Investigators of the 2000 Air France Concorde crash discovered that British Airways had recommended changes to the Concorde's water deflector in 1995 but that Air France had not made those changes (Phillips, 2000). As Donoghue (1998: 36) explained, "... any safety initiative has an unequal effect on the carriers and becomes an issue to be promoted or fought ... seeking the path that best suits [the airline] individually." Other heavily regulated industries, such as nuclear power, also show substantial variance in incident rates among firms (Morris and Engelken, 1973), which indicates that firms vary in how effectively they learn from their experience. Despite much discussion and analysis of aviation errors (airline accidents and incidents), there has been little work investigating the role of organizational learning and none examining variation in learning across firms in the industry.

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Learning from experience has been shown to have important effects on such varied outcomes as manufacturing plant productivity (e.g., Argote, Beckman, and Epple, 1990), service timeliness (Argote and Darr, 2000), and hotel survival (Baum and Ingram, 1998). If firms learn from experience, then the attributes of this experience are likely to affect the rate and effectiveness of learning. Some firms have heterogeneous experience in that their accidents and incidents ("errors") are caused by a large number of different factors, which are likely to interact in complex ways. Some firms have more homogeneous experience, with errors caused by a small number of similar factors. It is likely that the complexity of prior experiences, as well as characteristics of the firms themselves, affect how well airlines can learn from that experience. We investigate these issues in the context of airline accidents and incidents to explain variation in learning among firms in the airline industry.

According to the NTSB (2001) Code of Federal Regulations (49CFR830.2, p. 1195), an accident "means an occurrence ... in which any person suffers death or serious injury, or in which the aircraft received substantial damage." An incident is "an occurrence other than an accident, which affects or could affect the safety of operations." Accidents and incidents are the error experiences from which airlines have the potential to learn.

EFFECTS OF PRIOR EXPERIENCE ON LEARNING

In the literature on organizational learning there is a large body of work on the learning curve. The learning curve is an empirical finding showing that, in general, experience produces improvement. Early empirical work on the learning curve showed that the log of unit costs tends to decrease linearly with the log of cumulative production volume. So, for example, cumulative production experience tends to lower costs in shipbuilding and automotive production (Argote and Epple, 1990), nuclear power plant production (Zimmerman, 1982), and coal generation (Joskow and Rose, 1985). More recent work has moved away from a focus on cost reduction and productivity improvement to other outcomes of learning. These studies have shown that experience improves customer service and product quality (Dart, Argote, and Epple, 1995; Lapre, Mukherjee, and Van Wassenhove, 2000) and increases the survival rates of hotels (Ingram and Baum, 1997; Baum and Ingrain, 1998) and banks (Kim and Miner, 2000).

In the context of airlines and their errors, it may be that airlines learn from error experience and are able to improve performance over time, reducing subsequent errors (i.e., accidents and incidents). If we look at the airline industry over long time periods, this seems to be the case. Figure 1 plots the accident rate (accidents per 100,000 hours flown) for all U.S. airlines from 1955 to 1997 and exhibits a characteristic learning curve, i.e., as experience accumulates with the passage of time, the error rate declines.

[FIGURE 1 OMITTED]

When individual airlines' accident rates are broken out, as they are in table 1 for some of the larger U.S. airlines, we see the same general decrease in accidents over time as in figure 1, but there is also a fair amount of variance across airlines. For example, from 1957 to 1986, American Airlines had an average of 10.3 accidents per million departures and US Air had 6.6. Variation in airline error rates could come from many sources. One obvious source is the characteristics of the individual airline, e.g., whether it is large or small, the age of its fleet, characteristics of its corporate culture, its management team, and its training procedures. Another possible source of variation, however, is differences in the characteristics of the accidents and incidents experienced by these different airlines. Because experience affects organizational learning, different types of experiences are likely to produce variation in learning rates. One source of differences in experience is whether that experience has homogeneous or heterogeneous causes.

More troubles

Countrywide Financial Corp. said that its September mortgage lending fell 44 percent from the same period a year earlier as decreased demand, tightened underwriting standards and surging delinquencies pushed activity down. The firm's mortgage loan funding for the month totaled $21 billion and delinquencies rose to 5.9 percent--up from 4 percent.
Funding for adjustable-rate mortgages also slid 76 percent and nonprime loan funding tumbled 92 percent as the lender continues to cut back on riskier loans. Separately, Richard Moore, the North Carolina state treasurer, formally asked the U.S. Securities and Exchange Commission to investigate the timing of stock sales made by Angelo Mozilo, Countrywide's chief executive. Moore, the trustee of a state pension fund that holds more than $10 million in the Calabasas-based lender's stock, said he was "shocked" to learn that Mozilo "apparently manipulated his trading plans to cash in" as the subprime crisis was healing up.

Brokers shrug off peacock's flight: office market in Burbank is L.A. County's hottest

Don't shed many tears for Burbank.

Though NBC Studios may be packing up and leaving its location near "beautiful downtown Burbank" for nearby Universal City, Burbank has the hottest office market in the county and will likely weather the departure of one of its signature tenants.

Far from being the drab run-down locale that became the frequent butt of former "Tonight Show" host Johnny Carson's sarcastic jokes, the downtown and nearby office Media District has been transformed over the last 20 years.

Downtown Burbank is bustling with new stores, restaurants and expensive condominiums, while the Media District near the Ventura (134) Freeway has gleaming office towers filled with tenants. Media and entertainment companies have flocked to the area, anchored by Walt Disney Co., Warner Bros., and--until 2011--NBC.

"That location of NBC in the Media District is ground zero for popularity and proximity," said Bill Boyd, executive vice president at Grubb & Ellis and managing director of the firm's Los Angeles metropolitan region. "It has historically been the most preferred location and only when space is not available (in the general area) have media tenants gone to the adjacent cities to satisfy their office requirements."

[ILLUSTRATION OMITTED]

NBC Universal and its corporate parent, General Electric Co., announced last week that it will sell much of its Burbank studio campus and, starting in 2011, relocate its studio operations to a site just outside Universal City, home of Universal Studios and CityWalk.

The new high-definition studio will house NBC News' West Coast operations and the news staffs of KNBC, KVEA-Channel 52 as well as the syndicated show "Access Hollywood." The new studio will be part of NBC Universal's massive, $3 billion proposed expansion of the Universal Studios campus, which includes residential units, stores and additional office space.

John Tronson, a principal in the Hollywood office of Ramsey-Shilling Commercial Real Estate Services Inc., said that while the move was a shock to the brokerage community, the new gaping hole in the Burbank market will likely be filled easily.

Indeed, the Class A ("prime") office vacancy rate in the city during the third quarter was 3.4 percent, according to Grubb & Ellis Co. That's the lowest in all of L.A. County and less than half the vacancy rates in nearby Glendale or in Los Angeles. Moreover, the vacancy rate in the Media District is estimated at less than 3 percent by local brokers.

But there's an even bigger attraction for the 34-acre NBC property. Thanks to advance planning by NBC and General Electric a decade ago, the property is fully entitled for up to 1.1 million square feet of office development for media and entertainment industry-related uses, double the square-footage in the current studio campus.

A fully entitled site this size is a rarity and makes the property even more attractive to developers.

"It is so much more desirable to have a property with entitlements," said R. Todd Doney, a vice chairman with CB Richard Ellis Group Inc. "You don't have to go through the environmental impact report process and put forward all sorts of mitigations, which could take years and cost millions of dollars up-front."

Spec development

Doney should know: two years ago he brokered the sale of nine acres of the NBC site to Santa Monica-based M. David Paul Development LLC, which is now in construction on a 14-story office tower on the site--a building going up on spec without being pre-leased to tenants.

All Paul Development had to do was to submit a design plan to the city and pull a building permit. Doney added that while he was serving as a broker on the deal, he knew of at least 20 parties that had expressed interest in the nine-acre site.

The fact that the building is going up on spec shows a vote of confidence in the local market. And Burbank officials say that as long as a prospective developer adheres to the site's master plan, the proposal should get quick approval from the city.

"When we reviewed NBC's master plan 10 years ago, we did all the traffic studies and we anticipated the development and what the streets would allow in terms of capacity," said Joy Forbes, a deputy city planner.

However, should a developer decide to do a mixed-use project with a residential component, that could pose challenges, requiring the developer to go through the whole planning process again, including seeking City Council approval, she said.

That can be a tricky, time-consuming process, as the developer of a proposed nearby mixed-use project just down the street from NBC Studios found out several years ago.

The original plans by Platt Cos. for the site between Olive and Alameda avenues were rejected as being too massive after complaints from nearby residents. The developer eventually whittled the project down to 220 residential units and 20,000 square feet of restaurant and retail space and the project was approved in late 2004. But by then, Platt's financing had run out, and now the project's fate rests with its lenders.

IHOP to stop frying its hearty fare in unhealthy fats: healthier oil will be costly; change has been planned for a year

IHOP Corp.'s recent announcement that it would stop using frying oils containing trans-fats by the end of the year came after about 12 months of research and planning, said spokesman Patrick Lenow.

The company has been working with suppliers and testing oils that are free of trans-fats but won't affect the taste of IHOP's food. In some cases, the change will mean that the Glendale-based company--known for its hearty breakfast menu--will have to find new suppliers.

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The change will come at a hefty price tag, Lenow said. He declined to say how much, but it has been estimated by industry experts that an average 35-pound container of trans-fat-free cooking oil costs about $35, or $10 more than a 35-pound container of normal cooking oil.

In 2008, IHOP will eliminate trans-fats from the rest of the menu, including those in bakery items.

"We are a franchise company. We do much of the heavy lifting to find a quality product, so that franchisees don't have to," Lenow said.

A number of factors, beyond the industry's concern over trans-fat's link to heart problems, led to IHOP's elimination of it from the menu. Fast food giants, including McDonalds, have promised to use non-trans-fat oils to cook their foods. And several U.S. cities have chosen to ban trans-fats on restaurant menus provoked IHOP. New York, Philadelphia, and Chicago have all taken steps toward banning trans-fats from menus by next year. The L.A. City Council adopted an incentive program in January, under which restaurants that eliminated trans-fats would be allowed to post a Health Dept. decal noting the move.

We want to stay ahead of what consumers want," Lenow said. "And a lot of suppliers are starting to step up and offer different options."

Life without illegal immigrants - effects on economy - Editorial

Illegal immigrants get a lot of the blame for America's problems, but they don't deserve it. The government's bill for feeding, healing, and clothing them is balanced by the taxes they pay and the money they spend.
While they are heavily concentrated in a few places, they have only a minor effect on national population growth. Politicians who favor extreme measures to get rid of them aren't helping anyone - they are only scaring people in a cynical attempt to get votes.
Between 225,000 and 300,000 illegal aliens are added to the U.S. population of 264 million every year, according to estimates by the Census Bureau and the Immigration and Naturalization Service (INS) respectively. They account for 9 to 12 percent of population growth. But 40 percent of illegals live in California, 15 percent in New York, 11 percent in Florida, and 10 percent in Texas, according to the Urban Institute. Another 10 percent live in Illinois, New Jersey, and Arizona. In these key states and some big cities, the foreign-born are part of a demographic and economic transformation that frightens native-born Americans. Elsewhere, they are insignificant.

Skip-level meetings can ease restructuring - includes suggested skip-level interview questions

Here's a way for managers of reorganized work units to get to know employees one or more levels down and to build trust.
Downsizing, re-engineering, restructuring and many other organizational shifts are causing units, departments and divisions to be combined and changed in dramatic ways. Often, the manager who inherits this new situation needs to quickly and efficiently acquire a working knowledge of the new entity. One of the best sources of information is employees.
No doubt managers will want to speak with their new direct reports to get their viewpoints on the "lay of the land." But there is another source of information available. By skipping a level or two and getting acquainted with the employees who are removed from their direct supervision, managers may gain even more insight into how things work.
WHAT IS A SKIP-LEVEL MEETING?
This meeting is a type of structured interview. The general purpose is to give managers an opportunity to gather employees' thoughts about the organization and to learn of their satisfactions, dissatisfactions and recommendations for the future. The skip-level meeting is also a way for managers to inform employees about their goals, standards, the type of work culture they would like to establish, and--most importantly--show that they care about the employees.

Culture, leadership, and power: the keys to organizational change - includes bibliography

General Motors, IBM, and Sears: three companies facing a need for dramatic change that have already tried, but failed, at major change efforts. Judging from what I've read about these three companies in the business press recently, I'm inclined to believe they are unaware of the current ideas on organizational change--including the successful efforts of many large corporations---that have been appearing in the change literature.
The most important idea of all for companies like GM, IBM, and Sears is that those pushing for organizational improvement--whether they are external members of the board, major investors, or top executives--must deal with cultural and behavioral obstacles to change. Specifically, attempts at organizational change must consider three key features of organizational life: the firm's culture, the leadership of the change effort, and the existing network of power.
In this article, I discuss first the importance of dealing with organizational culture. My key point here is that rather than changing culture directly, management must work with and through the existing culture to transform the organization. Whether the culture itself changes is secondary; the important objective is to improve the company.
The role of leadership in organizational change is my second key topic. Here I build on the discussion of organizational culture to reveal (1) the role of leadership in dealing with culture and (2) the form that leadership needs to take. For example, based on recent research we know that top management--and not some team of consultants--must lead the change effort. We also recognize certain key leadership actions that can help those efforts succeed.

Smart investments for young professionals: whether you have $500 or $5,000, here are great places to stash your cash

You've just pocketed an awesome graduation gift - the kind that folds. Or perhaps you scored a nice sales bonus at work. Maybe you even received a hefty tax refund from Uncle Sam. No matter what the source of the cash - whether it's a modest $500 or a meaty $5,000 - you now have the happy task of figuring out what to do with it. The Caribbean is calling ... you can taste that Pina Colada, smell the salty air, feel the palms swaying ...
Snap out of it. True, this kind of dough is enough to drum up some serious fun, yet not enough (not by a long shot) to allow you to declare financial independence and withdraw from the nine-to-five set. Still, if you cultivate your stash carefully, it can become a powerful tool to help you realize your dreams and financial goals. After all, "It doesn't really matter how much money you have to invest to begin with," says Don Phillips, publisher of Morningstar Mutual Funds, a Chicago-based mutual funds ranking service. "The trick is to get into the game."
Before you consider locking even a cent of your newfound nest egg away, however, make sure you have enough extra cash at the ready. Typically, financial advisers suggest keeping at least three to six months' worth of living expenses on hand to cover any unexpected financial demands. "To really make your money grow, you'll want to invest it someplace for several years," explains Lynn Ballou, a financial planner in Lafayette, Calif. "And because investing can be risky - a market may drop or dry up just when you want to cash out - you shouldn't do it with money that you may need to live on."