2015
DOI: 10.1287/orsc.2014.0946
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Perspective—Chance Explanations in the Management Sciences

Abstract: W e propose that random variation should be considered one of the most important explanatory mechanisms in the management sciences. There are good theoretical reasons to expect that chance events strongly impact organizational behavior and outcomes. We argue that models built on random variation can provide parsimonious explanations of several important empirical regularities in strategic management and organizational behavior. The reason is that random variation in a structured system can give rise to systema… Show more

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Cited by 75 publications
(59 citation statements)
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References 129 publications
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“…Whereas Rumelt highlighted the predominance of random variations at the macro level, Mintzberg makes the point that luck had to be an important part of the explanation at the micro level (for Honda). Both accounts join a steady line of scholarly contributions in the management literature that explicitly referencing luck as an explanation for performance differences (Alchian, 1950;Aldrich, 1979;Arthur, 1989;Barney, 1986;Cyert & March, 1963;Denrell, 2004;Denrell, Fang, & Liu, 2015;Hannan & Freeman, 1989;Levinthal, 1991;Lippman & Rumelt, 1982;Nelson & Winter, 1982;Porter, 1991;Starbuck, 1994). Yet such references remain the exception rather than the rule: a review of the use of luck in six leading management journals (Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly, Management Science, Organization Science, and Strategic Management Journal) suggests that only 2 percent of articles included the word 'luck' in the main text, abstract or title (see Table 1).…”
Section: Introductionmentioning
confidence: 90%
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“…Whereas Rumelt highlighted the predominance of random variations at the macro level, Mintzberg makes the point that luck had to be an important part of the explanation at the micro level (for Honda). Both accounts join a steady line of scholarly contributions in the management literature that explicitly referencing luck as an explanation for performance differences (Alchian, 1950;Aldrich, 1979;Arthur, 1989;Barney, 1986;Cyert & March, 1963;Denrell, 2004;Denrell, Fang, & Liu, 2015;Hannan & Freeman, 1989;Levinthal, 1991;Lippman & Rumelt, 1982;Nelson & Winter, 1982;Porter, 1991;Starbuck, 1994). Yet such references remain the exception rather than the rule: a review of the use of luck in six leading management journals (Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly, Management Science, Organization Science, and Strategic Management Journal) suggests that only 2 percent of articles included the word 'luck' in the main text, abstract or title (see Table 1).…”
Section: Introductionmentioning
confidence: 90%
“…As Barney (1997: 17) writes: what prescriptive advice can we give to managers given that the role of luck is important, 'that they should "be lucky"?' For others, luck is essential for explaining performance differences because randomness in structured environments can produce systematic patterns (Denrell, 2004;Denrell et al, 2015;Henderson, Raynor, & Ahmed, 2012;Levinthal, 1991). Still others argue that while good and bad luck can happen to anyone, some are more prepared than others (de Rond, 2014;Dew, 2009), for example, by being mindful enough to rebound from bad luck (Weick & Sutcliffe, 2006), or by securing a higher 'return on luck' (Collins & Hansen, 2011).…”
Section: About Herementioning
confidence: 99%
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“…Conceptualising firm performance as a random walk has a long history in economics (Gibrat 1931;Ijiri and Simon 1964;Levinthal 1991;Denrell et al 2015). Random processes produce results that closely match the outcomes of many top performing companies, to the extent that investigating whether or not performance is purely random remains a valid research question (Henderson et al 2012;Denrell et al 2015;Storey 2011).…”
Section: Theory Developmentmentioning
confidence: 99%