Good Night, and Good Luck: Perspectives on Luck in Management Scholarship

Abstract

It is not insignificant that seminal contributions to management scholarship have highlighted luck as an alternative explanation for performance differences between individuals and organizations. Yet it has rarely taken center-stage in scholarship. The principal purpose of this paper is to provide a systematic review of the application of luck in the management literature and in such foundation disciplines as economics, sociology, and psychology. Our analysis finds five common perspectives on luck: (a) luck as Attribution; (b) luck as Randomness; (c) luck as Counterfactual; (d) luck as Undeserved; and (e) luck as Serendipity. We outline various ways in which research on luck may be advanced along each of these perspectives, and develop an underexplored, sixth, perspective on (f) luck as Leveler to provide a possible solution to such issues as social inequality and (unwarranted) executive compensation.

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Erratum

Acknowledgments

We are grateful for comments from Jerker Denrell, Christina Fang, Thomas Powell, Jim March, Tobias Gerstenberg, Keith Glaister, Gerard Hodgkinson, Geoffrey Wood and Bill Starbuck, as well as the reviewers and editors Elizabeth George and Sim Sitkin. The first author is also grateful for financial support received from Cambridge Overseas Trust, Jesus College (Oxford), the Chiang Ching-kuo Foundation, and the Ministry of Education (Taiwan) that sponsored his PhD dissertation.

Notes

1. We thank one of the reviewers for pointing out this interesting direction.

2. Merton (1968) coined this term from Gospel of Matthew: “For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away”. ∼Matthew 25:29, New Revised Standard Version.

3. We thank one of the reviewers for the suggestion of separating this perspective on luck from others.

4. This example is adapted from a now classic example Nagel (1976) developed: two law-abiding drivers, one of whom experienced an unexpected and uncontrollable event-a young child running in front of the car and this driver hit and killed the girl whereas the other driver arrived the destination uneventfully. Philosophers ask: should we blame the former driver more than the latter one? Our adapted example happens in typical management context but the essence is identical to the one developed by Nagel (1976).