Adaptation on rugged landscapes
Management Science
The innovator's dilemma: when new technologies cause great firms to fail
The innovator's dilemma: when new technologies cause great firms to fail
Strategies for survival in fast-changing industries
Management Science
Strategy Is Destiny: How Strategy-Making Shapes a Company's Future
Strategy Is Destiny: How Strategy-Making Shapes a Company's Future
Who Says Elephants Can't Dance?: Inside IBM's Historic Turnaround
Who Says Elephants Can't Dance?: Inside IBM's Historic Turnaround
Organization Science
Overpaid CEOs and Underpaid Managers: Fairness and Executive Compensation
Organization Science
Organization Science
Dominance and innovation: a returns-based beliefs approach
Applied Stochastic Models in Business and Industry
Relational Contracts and Organizational Capabilities
Organization Science
Organizing for Innovation in the Digitized World
Organization Science
Complementary effects of clusters and networks on firm innovation: A conceptual model
Journal of Engineering and Technology Management
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Organizational theorists have long acknowledged the importance of the formal and informal incentives facing a firm's employees, stressing that the political economy of a firm plays a major role in shaping organizational life and firm behavior. Yet the detailed study of incentive systems has traditionally been left in the hands of (organizational) economists, with most organizational theorists focusing their attention on critical problems in culture, network structure, framing, and so on-in essence, the social context in which economics and incentive systems are embedded. We argue that this separation of domains is problematic. The economics literature, for example, is unable to explain why organizations should find it difficult to change incentive structures in the face of environmental change, while the organizational literature focuses heavily on the role of inertia as sources of organizational rigidity. Drawing on recent research on incentives in organizational economics and on cognition in organizational theory, we build a framework for the analysis of incentives that highlights the ways in which incentives and cognition-while being analytically distinct concepts-are phenomenologically deeply intertwined. We suggest that incentives and cognition coevolve so that organizational competencies or routines are as much about building knowledge of "what should be rewarded" as they are about "what should be done." We argue that this recognition has important implications for our understanding of organizational inertia in the face of environmental change, and that it opens up important new areas for further research.