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Journal Article

Chance explanations in the management sciences

Organization Science 26 (3): 633–940
Jerker Denrell, Christina Fang, Chengwei Liu (2015)
Strategy and general management
Randomness, luck, chance, theoretical mechanisms, null models
We 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 systematic patterns at the macro level. Here, we define the concept of a chance explanation; describe the theoretical mechanisms by which random variation generates patterns at the macro level; outline how key empirical regularities in management can be explained by chance models; and discuss the implications of chance models for theoretical integration, empirical testing, and management practice.
© 2015, INFORMS
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