From understanding the role of surprise in organisations to finding ways to improve disease tracking and analysis, this month’s selection of recently published research by INSEAD faculty spans a diverse array of topics. Other papers explore how context shapes the effectiveness of fiscal rules; how market-based incentives can drive the energy transition; and how firms with less hierarchical structures manage to get their employees pulling in the same direction.

The role of surprise in organisations

From Aristotle to Charles Darwin, surprise has been a topic of fascination and the source of many questions in philosophy, the social sciences and beyond. However, a history of inconsistent definitions and fragmented perspectives has led to conceptual confusion, limiting our understanding of how surprise affects individuals in organisations.

In a paper published in the Journal of Applied Psychology, Spencer Harrison and his co-authors blend insights from psychology, management and other related fields to provide a comprehensive understanding of surprise in organisational contexts. They explore the cognitive and emotional mechanisms that underlie surprise and identify how key factors – such as organisational memory and emotional capabilities – shape how it is experienced and managed within organisations.

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Improving disease surveillance in Sub-Saharan Africa

Pathogen genomic sequencing is central to disease surveillance, enabling laboratories to track the spread of diseases and inform public health responses. A study by Luk Van Wassenhove and his co-authors evaluates two types of donor interventions aimed at improving underdeveloped pathogen genomic sequencing supply chains in Sub-Saharan Africa: in-kind donations and supply chain management capability-building. 

The study, published in the International Journal of Operations & Production Management, revealed that although in-kind donations can mitigate acute shortages, frequent use risks creating dependency and suppressing learning. In contrast, supply chain management capability-building brings more sustainable improvements, particularly for laboratories that are unlikely to improve without external support.

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Well-designed fiscal rules are no silver bullet

Fiscal rules have been shown to improve government budget balances and restrain debt growth. But while they generally improve a country’s cyclically adjusted primary balance, their impact depends on both the time horizon and the context in which they are adopted, according to research by Antonio Fatás and his co-authors published in the Journal of International Money and Finance.

In advanced economies and countries with strong political institutions, the effects strengthen over time. But in emerging markets and developing economies – especially those with weaker institutions – their impact tends to fade as time passes. This suggests that fiscal rules introduced during periods of economic hardship or under highly concentrated political power are often less effective in the medium term.

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How firms redeploy assets in response to industry shocks

How should firms respond when a core industry experiences a downturn? Research by Aldona Kapačinskaitė, published in the Strategic Management Journal, examines how energy giants reacted to the 2014 oil price crash. Focusing on oil and gas companies that diversified into wind power, she shows that these firms reduced investment in oil and gas – especially in offshore projects – while increasing investment in wind power.

Importantly, firms were more likely to invest in newer, higher-capacity wind technologies when these could be co-located with existing offshore oil and gas assets. This shows how firms facing industry shocks redeploy resources into more promising sectors. However, their willingness to do so may depend on the possibility of leveraging existing assets – meaning that market-based incentives alone may be insufficient to drive the switch to renewable energy sources.

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The ties that bind less hierarchical firms

Instead of depending on traditional forms of managerial hierarchy to align the work of employees, can strong cultures – made up of systems of widely shared beliefs and values – do the job? To investigate this, Phanish Puranam and his co-author analysed 1.5 million Glassdoor employee reviews and 42 million professional social media profiles from 23,000 American firms.

Their research, published in the Strategic Management Journal, found that organisations with stronger cultures do indeed have a lower proportion of managers to total employees. This suggests that attempts to flatten organisational hierarchies by eliminating layers of managers is more likely to succeed if accompanied by efforts to build strong cultures. This can be facilitated in various ways, including the careful selection and socialisation of employees.

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