Beyond Gaussian averages: redirecting international business and management research toward extreme events and power laws
@article{Andriani2007BeyondGA, title={Beyond Gaussian averages: redirecting international business and management research toward extreme events and power laws}, author={Pierpaolo Andriani and Bill McKelvey}, journal={Journal of International Business Studies}, year={2007}, volume={38}, pages={1212-1230} }
Practicing managers live in a world of ‘extremes’, but international business and management research is based on Gaussian statistics that rule out such extremes. On occasion, positive feedback processes among interactive data points cause extreme events characterized by power laws. They seem ubiquitous; we list 80 kinds of them – half each among natural and social phenomena. We use imposed tension and Per Bak's ‘self-organized criticality’ to argue that Pareto-based science and statistics…
126 Citations
Perspective - From Gaussian to Paretian Thinking: Causes and Implications of Power Laws in Organizations
- BusinessOrgan. Sci.
- 2009
It is shown that power laws are pervasive in the organizational world and 15 scale-free theories that apply to organizations are presented and research implications embedded in Pareto rank/frequency distributions are discussed.
Connectivity, Extremes, and Adaptation: A Power-Law Perspective of Organizational Effectiveness
- Business
- 2011
Managers are often required to respond in adaptive ways to the threats and opportunities presented by rare, extreme outcomes. Given these, management scholars frequently face a stark choice: say…
Managing in a pareto world calls for new thinking
- Business
- 2011
Research findings showing the ubiquity of Pareto and ‘power-law’ distributions in the social and organisational worlds underlie increasing calls for complexity-driven ideas to be applied more…
The importance of rare events and other outliers in global strategy research
- BusinessGlobal Strategy Journal
- 2022
Research Summary Rare events and other nonerror outliers (such as the COVID-19 pandemic) are important phenomena in global strategy contexts. Despite their salience, however, they have hardly been…
Connectivity, Extreme Outcomes, and Power Laws: Towards an Econophysics of Organization
- Physics
- 2008
Managers are often required to respond in adaptive ways to the threats and opportunities presented by rare, extreme outcomes. Here, organization scholars often face a stark choice: Say something…
Rare, outlier and extreme: beyond the Gaussian model and measures
- Economics
- 2012
Probability models for rare, outlier and extreme outcomes are different than the Gaussian (normal) distribution commonly used in management research. This paper illustrates the theoretical basis and…
Skew and heavy‐tail effects on firm performance
- Business
- 2017
Research summary: Most strategic management studies adopt an average-centered view that uses the central tendency to explain between-group variation in performance (i.e., performance differences…
Scale-free power-laws as interaction between progress and diffusion
- EngineeringComplex.
- 2014
A newly found rank-frequency power-law is presented that suggests that the supply and demand of technology "technology push" and "demand pull" align in exponential synchronicity, providing predictive insights into the evolution of highly uncertain technology markets.
Avoiding extreme risk before it occurs: A complexity science approach to incubation
- Business
- 2010
Crises appearing in many kinds of organizations are found to be mostly caused by management and workers. The acquisition of the Southern Pacific railroad by the Union Pacific in 1996 provides a…
References
SHOWING 1-10 OF 225 REFERENCES
Beyond Gaussian Averages: Redirecting Management Research Toward Extreme Events and Power Laws
- Business
- 2006
Practicing managers live in a world of ‘extremes’ but management research is based on Gaussian statistics that rule out those extremes. On occasion, deviation amplifying mutual causal processes among…
Scaling behaviour in the growth of companies
- Economics, BusinessNature
- 1996
A SUCCESSFUL theory of corporate growth should include both the external and internal factors that affect the growth of a company1–18. Whereas traditional models emphasize production-related…
Organizing Far from Equilibrium: Nonlinear Change in Organizational Fields
- EconomicsOrgan. Sci.
- 2005
It is argued that ingrained assumptions and habituated methodologies dissuade organizational scientists from grappling with problems to which these ideas and tools do not apply, and suggests new intellectual perspectives and methodological heuristics that may facilitate investigation of fields that are far from equilibrium.
On the Edge: Heeding the Warnings of Unusual Events
- Business
- 1999
When organizations pay inadequate attention to unusual events, the possibility of breaching a safety barrier increases. With hindsight it often appears that full advantage is not taken of what is…
Policy analysis from first principles
- EconomicsProceedings of the National Academy of Sciences of the United States of America
- 2002
The argument of this paper is predicated on the view that social science should start with observation and the specification of a problem to be solved, and that adaptive agent modeling is an effective substitute when embedded in a wider policy analysis procedure.
WHY STOCK MARKETS CRASH
- Computer Science
- 2003
This essay attempts to capture and extend the essence of the book with the same title, which explains large-scale collective behavior, and predicts that financial crashes and depressions are intrinsic properties resulting from the repeated nonlinear interactions between investors.
Postmodernism vs . Truth in Management Theory
- Art
- 2002
Those of us who study organizations and are professors of management work on the front lines, so to speak, where the beliefs we have about how to improve managerial performance get passed directly on…
The practitioner‐researcher divide in Industrial, Work and Organizational (IWO) psychology: Where are we now, and where do we go from here?
- Education
- 2001
There is current concern that the researcher, or academic, and the practitioner wings of our discipline are moving further apart. This divergence is likely to result in irrelevant theory and in…
Learning from Complexity: Effects of Prior Accidents and Incidents on Airlines' Learning
- Business
- 2002
Using data on accidents and incidents experienced by U.S. commercial airlines from 1983 to 1997, we investigated variation in firm learning by examining whether firms learn more from errors with…