Fabrizio Ferraro (FabrizioFerraro)

Fabrizio Ferraro

Fabrizio Ferraro (Ph.D., 2003, Stanford University), is Associate Professor of Strategic Management at IESE Business School. His research has focused on the themes of emergence and performativity. He has explored the emergence of governance structures in open sources software communities, the creation of novel industry practices in the movie industry, and the institutionalization of sustainability reporting. To better understand the mechanisms that explain the emergence of novel industries, he is now exploring the development of the socially responsible investing field, and the role that financial models and tools play in the process. His research has been published in journals such as the Academy of Management Review (2006 Best Paper Award), Academy of Management Journal, and Organization Science. He is Associate Editor of the European Management Review, and a member of the Programme Development Group of the European Institute for Advanced Studies in Management (EIASM). Prior to entering academia, he founded Inter@ctive Market Research, an international market research firm.

Research Projects:

Economics Language, Assumptions and Performativity

I have studied how the categories of economics can shape institutional designs and management practices as well as social norms and expectations about behavior, thereby shaping the behavior they predict. This is the core of two articles published, in collaboration with Jeff Pfeffer and Bob Sutton (Stanford University) in the Academy of Management Review in 2005. In these articles, I suggest three theoretical mechanisms to explain the process through which social science theories can affect the same reality they are studying: institutional design, normative influence, and language framing. I illustrated these ideas by considering how the language and assumptions of economics can shape management practices: theories can “win” in the marketplace for ideas, independent of their empirical validity, to the extent their assumptions and language become taken for granted and normatively valued, therefore creating conditions that make them come “true.” This work contributed to the development of the performativity perspective which is gaining momentum as a theoretical lens to understand modernity, markets and organizations across all social sciences.

Currently, I am working on two projects in this area. The first one is based on a multi-year study of MBA students' attitudes towards the market, state regulation, and their "implicit" theory of the firm. The second project, in collaboration with Daniel Beunza (Columbia University) explores the emergence of the Socially Responsible Investing (SRI) field, and the role of that institutions, models, and tools play in this process. To understand how moral concerns are translated into prices, and how prices are employed in political action over values, we observe the concerns different actors bring to this process, and how controversies over different agendas are shaping the construction of valuation tools, models and their use in practice.

References:

Ferraro, Fabrizio, Jeffrey Pfeffer, and Robert I Sutton. 2005. "Economics Language and Assumptions: How Theories Can Become Self-fulfilling." Academy Of Management Review 30:8-24.
Ferraro, Fabrizio, Jeffrey Pfeffer, and Robert I Sutton. 2005. “Prescriptions are not enough.” Academy of Management Review, 30: 32-35.
Ferraro, Fabrizio, Jeffrey Pfeffer, and Robert I Sutton. 2009. "How and Why Theories Become Self-fulfilling." Organization Science.

See also, for a critique of our perspective:

Felin, T. & Foss, N.J. (2009). Social reality, the boundaries of self-fulfilling prophecy, and economics. Organization Science.

Emergence of Formal Organizations in Open Source Software Communities

Together with Siobhan O'Mahony (UC Davis), I have been studying the Open Source Software community Debian for a number of years and explored how their members developed a shared basis of formal authority but limited it with democratic mechanisms that enabled experimentation with shifting conceptions of authority over time. When members settled on a shared conception of authority, it was more expansive than their original design. By blending bureaucratic and democratic mechanisms, the governance system evolved with the community’s changing conceptions of authority.
We also studied another essential process of the emergence of formal organizational structure: the development of a membership process. We examined the project’s face-to-face social network during a five-year period (1997-2002) to see how changes in the social structure affect the evolution of membership mechanisms and the determination of gatekeepers.

References:

O'Mahony, Siobhan, and Fabrizio Ferraro. 2007. "The emergence of governance in an open source community." Academy of Management Journal 50:1079-1106.
Ferraro, Fabrizio, and Siobhan O´Mahony. Forthcoming. "Managing the boundaries of an 'Open' project." In Padgett, John and Walter Powell, The Emergence of Organizations and Markets.

Emergence and Diffusion of Sustainability Reporting: the Global Reporting Initiative.

Together with Dror Etzion (Mc Gill), we studied the early stages of institutionalization of the Global Reporting Initiative. We found out that the analogy with financial reporting played a key role in the emergence of this novel institution, and studied how the analogy was employed differently overtime, and link its role to the processes of design and diffusion of the novel institution. In a forthcoming article in Organization Science, we show that analogies with more established institutions can be used to bring more legitimacy to the fledgling novel institution in the early stage of the process, and then later on to stress differences between the existing institution and the novel one.

References:

Etzion, Dror, and Fabrizio Ferraro. Forthcoming. "The Role of Analogy in the Institutionalization of Sustainability Reporting." Organization Science.
Ferraro, Fabrizio, and Dror Etzion. "Standard Setting or Stage Setting? The Global Reporting Initiative and the Standardization of Sustainability Reporting" Working Paper.

Industry Evolution in the Motion Picture Industry

The emergence of novel industry architectures is the focus of my study of the evolution of the movie industry in the United States, In the paper “Building Architectural Advantage in the US Motion Picture Industry: Lew Wasserman and the Music Corporation of America,” co-authored with Kerem Gurses, we use an historical case study on Lew Wasserman and the Music Corporation of America, to develop a theory of the emergence of novel industry architecture. We show how the new architecture was the result of the interaction of the Studios´ actions, constrained by the institutional logic of the industry and by the regulatory framework, and Lew Wasserman´s introduction of novel industry practices (profit-sharing and packaging) which both consolidate his grip on talents and facilitate the growth of independent production and TV production.

References:

Ferraro, Fabrizio and Gurses, K. “Building Architectural Advantage in the US Motion Picture Industry: Lew Wasserman and the Music Corporation of America” Working Paper.

Global Corporate Networks

Together with Erica Salvaj, we have studied Board Interlocks in Spain, finding that recently privatized companies play an important role in the Spanish Corporate Networks, and family firms play a marginal role in this network. We are now exploring how changes in Spanish political environment affected corporate governance practices in Chile.
I have also been involved in an International research project, led by Prof. Bruce Kogut (Columbia University), on comparative governance regimes in 45 countries. I have helped organize the data collection and the data analysis. Using a subset of this data, I am currently working on a paper on the evolution of corporate control in Europe, comparing the trajectories of Spain, Italy, France, and Germany during the 1990s.

References:

Salvaj, Erica; Ferraro, Fabrizio; Tapies, Josep. 2008. "Family Firms and the Contingent Value of Board Interlocks: the Spanish Case" In Family Values and Value Creation: How do Family Owned Businesses foster enduring values. Edited by Josep Tapies and John Ward. Palgrave 2008
Salvaj, Erica, and Fabrizio Ferraro, 2005. “Las Redes de Propiedad y de Consejos de Administración del IBEX 35.” in Alvarez, JL, Gifrà, J y Ricart, JE, Los accionistas y el gobierno de la empresa: Análisis de la situación Española, Ediciones Deusto.
Ferraro, Fabrizio, Raffaele Corrado, Gerhard Schnyder, Eelke M. Heemskerk, and Nathalie Del Vecchio. Forthcoming. "Corporate Networks in Europe" In Kogut, Bruce (ed.) The Small World of Corporate Governance.