https://rodrigocanales.com/research daily 0.75 2021-12-17 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639534914901-6QWA1A3806OGVWRKFWUN/FULL-REPORT+copy+2.jpg Research Home https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639535171641-XTRDQ5F3ZV7T883P1VAF/policias.jpg Research Home https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639535458506-8AWJKGPI0EJND0TIUBCR/IMG_1890.JPG Research Home https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639535835240-QFRFK4S3LT5LZL8I2L84/incertidumbre.jpg Research Home https://rodrigocanales.com/research/smes daily 0.75 2021-12-17 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/4eda2ae7-01e6-4b9c-b01e-98cd286f544a/IMG_1891.JPG SME Finance - From its origins, a central question of organizational theory is how firms balance the efficiency and reliability that result from centralization and standardization of decisions with the adaptability, flexibility, and innovation that result from decentralization, local customization, and experimentation. This tension is especially salient for organizations that pursue multiple missions (e.g. hybrid organizations), or those that must rely on relational ties (e.g. financial firms). For example, young and small firms depend disproportionately on external finance for their survival and growth. They also lack substantial collateral, formal reporting mechanisms, or track records, which makes them difficult to find, evaluate, and monitor. This creates pressures for banks and microcredit organizations that lend to small firms to find economies of scale, standardize processes, and automate lending decisions to reduce costs. But because small firms lack structure and face more uncertainty, the “soft information” that is best conveyed through relational ties is uniquely valuable in lending decisions. Employees with personal ties to clients use their local knowledge and private information to interpret, enact, and improve rules and procedures. Lending firms, therefore, are constantly pulled in the opposite directions of standardization and flexibility and a long research tradition in finance has studied the benefits and costs of each. In my work exploring these questions, I straddle levels of analysis and combine rich ethnographic data with longitudinal loan-level datasets from lending organizations. I also exploit different sources of exogenous variation, such as random loan officer rotations, exogenous determinants of branch locations, or natural variation in loan officer enforcement styles. In a first paper with Ramana Nanda (2012), we analyze these tensions at the organizational level. We contrast the performance of centralized vs. decentralized lending structures. In decentralized banks, branch managers have greater autonomy over lending decisions, so they have an incentive to use “soft information” when setting loan terms. Client firms that are smaller or have less verifiable information are more likely to be approved for and receive larger loans from decentralized banks, as theorized by prior finance research. We show, however, that this only holds true when there is local competition between banks. In concentrated markets, decentralized banks are more likely to cherry pick the best clients, give them smaller loans, and charge them higher rates. Branch managers in decentralized structures, therefore, use soft information profitably. But for small borrowers, the benefits of decentralized lending structures are dependent on the context. In a next set of papers I straddle the team and individual levels of analysis. In two related papers (2011, 2012), I show that loan officers exercise discretion productively, to (i) better serve clients, (ii) improve bank rules, and (iii) defend officer status within the organization. This, however, runs counter to organizational pressures to centralize decisions to reduce prohibitive costs. While rule bending provides substantial benefits to the organization, it also carries significant costs. Officers who bend the rules are more difficult and costly to manage. Furthermore, it is not automatic that actors will use their discretion to benefit the firm. They could become too close to clients or withhold private information for their personal benefit. To manage these contradictions, firms can follow several approaches. In my 2014 paper, I compare branches that contain higher concentrations of agents who follow rules strictly, adhere to a flexible relational model, or blend both strategies. Branches that have a preponderance of agents who blend both styles experience a decrease in organizational performance, but so do branches with high concentrations of agents who practice either pure style. In contrast, branches that contain “discretionary diversity”—a balanced distribution of agents with opposing styles—perform best. This is because loan officers process lending decisions in branch-level credit committees, where they must justify their actions to peers. Discretionary diversity within teams creates a productive tension that pushes loan officers to justify their decisions according to broader organizational goals and promotes a balance between routines and discretion. A complementary paper with Minkyung Kim, K. Sudhir, and Kosuke Uetake (2019a) focuses on the individual level. It shows that loan officers do engage in moral hazard and withholding of private information. This is reduced, however, when they are made accountable for their decisions by tying their pay to loan performance and repayment. To reduce loan officers’ grip on private client information, they can be randomly rotated. While this creates some information loss and severed relationships, in the aggregate the firm benefits from improved alignment of loan officer effort. Next, with Jason Greenberg (2015), we straddle the individual and organizational levels, to study whether individual employees or the firms that employ them retain the relational capital created between a firm and its clients. We show that loan officer rotations increase the probability that a client will become delinquent, underscoring that relational contracts can only exist between individuals (the loan officer and the client). This disruption, however, is mitigated when the loan officer is replaced by another who follows a similar relational style. Thus, relational contracts between organizations and individuals can continue in the face of turnover if agents are replaced with others who exhibit consistent relational styles, and organizations can create a sustainable competitive advantage through routines that train their agents (and clients) to develop consistent interaction styles. My work in this area contributes to organization theory by showing that even though bureaucratic (standardized, centralized) and relational (customized, decentralized) models represent contradictory philosophies, they can coexist and enhance one another, but only if explicit structures are established to ensure that they remain in productive balance. https://rodrigocanales.com/research/institutions daily 0.75 2025-01-16 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/fd904dc3-5d81-49ee-a2f7-77bb02608b70/baleros.jpg Institutions - Well-functioning institutions are necessary preconditions for economic development. But endogenous institutional change is, by definition, difficult. In two separate papers, I use matched-case comparisons that follow change efforts from their early stages to advance our understanding of systemic change. Both papers take an “inhabited institutions” approach to study how individuals relate to systems in the attempt to purposefully change them. The first (2016), focuses on the question of how individuals discover, experiment with, and legitimize new organizational practices that can challenge the status quo and create new institutional realities. It analyzes the creation of the small business credit market in Mexico. I use variation in the strategies that actors followed and the results they achieved across banks and Mexican states to show that successful institutional entrepreneurs operated at two distinct layers to promote institutional change. One entailed invisible, undocumented, tactical work to recruit team members, find resources, negotiate with stakeholders, run small-scale experiments, and coordinate action. The second (and the focus of prior research) entailed purposefully visible, staged, and scripted symbolic work. While invisible work was seen as the “real work” that consumed most energy, symbolic work was essential to advance every stage of the change process. The findings clarify that institutions operate through generalized beliefs about public codes, or what “everybody thinks everybody thinks.” Thus, within stable institutions there are always individuals who privately envision potential alternatives, even as they publicly endorse the existing order. For every successful and documented case of institutional change, there is significant invisible work by actors who, often, are the unreported agents of institutional change. https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/f5d2965c-cf78-4bf8-8157-b924f8628f19/einp_spiral.jpg.png Institutions - A second paper with Mikaela Bradbury, Tony Sheldon, and Charlie Cannon (ASQ 2024), explores a complementary challenge of systemic change, which requires actors to jointly experiment with new approaches and practices across organizations, sectors, and communities of practice. This need to collaborate and learn across boundaries amplifies the uncertainty inherent in organizational innovation. Our work examines eight international development interventions across four countries to identify the mechanisms that allow individuals across organizations and communities of practice to coordinate for risky systemic change. To contain the amplified uncertainty of systemic change, successful actors built a set of scaffolds that granted temporary support to all stakeholders. They are scaffolds because, while clearly structural, they are also temporary, modular, and interdependent. They provided support along two complementary dimensions, allowing actors to establish temporary, shared norms and engage in coherent action. One set of structural scaffolds constituted tangible elements like physical spaces, managerial skill, and financial resources that removed critical constraints for all relevant stakeholders. They set the stage for actors to explore new ways of relating and performing. A second set of programmatic scaffolds provided direction and order to ensure that the structural scaffolds were used to their potential, coherently, and in pursuit of a collective goal. We thus provide an integrated model for how actors initiate and sustain risky systemic change across organizations and communities of practice. We are developing these ideas further in a book (outlined here). We are also distilling key elements in articles written for practitioners (e.g. 2019). https://rodrigocanales.com/research/startups daily 0.75 2025-01-16 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/b4847c30-0eb3-4ccc-bd16-e3eaf145b333/IMG_0432.jpeg Startups - While job creation is one of the main reasons why policymakers seek to promote entrepreneurship, practically no research has looked at the quality of startup jobs. In two papers, we begin to explore the issue. In the first paper, with Olav Sorenson, Michael Dahl, and Diane Burton (OS 2021), we use Danish registry data to evaluate the attractiveness of startup jobs for individuals. Startup employees earn 17% less over the next decade than those hired by established firms. Half of this differential reflects that startups hire employees with less human capital. But when we use matching to compare individuals with identical characteristics, we still find a long-term economic penalty from startup employment driven by two factors: startup jobs are uncertain and can lead to costly spells of unemployment and job mobility becomes constrained. And yet, startup work is increasingly popular among high-skilled employees, raising questions about how they understand and experience the risks, benefits, and costs of joining a startup. In the second, inductive study with Matt Regele, Nazanin Eftekhari, and Max Groberg (SMJ 2025), we analyze the organizational and structural factors behind the observed penalty. The paper reveals that individuals recognize that startup jobs represent higher risks but believe that this will only affect their short-term earnings and be offset by autonomy, learning, and professional advancement. These expectations are rarely met, because venture capital-backed entrepreneurship pushes for fast growth and de-diversification to seek “home runs.” This creates environments that amplify uncertainty, impair learning, and place individuals in idiosyncratic and fast-changing jobs with limited opportunities to develop marketable human capital. The need to recruit skilled workers leads founders and investors to withhold information from employees and perpetuate unrealistic narratives, which, ironically, employees then uphold. Together, the papers demonstrate how the structures that investors and founders establish to manage the uncertainty of entrepreneurship result in unexpectedly disadvantaged career trajectories for startup employees, with clear implications for entrepreneurship theory, policy, and practice. https://rodrigocanales.com/research/police daily 0.75 2025-01-16 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/2200f889-06b7-4117-a632-bd0a7a6ae909/_DSC0053.JPG Police - Public safety as a fundamental precondition for entrepreneurial activity, particularly in emerging markets. Yet, the local police forces that are the first, indispensable lever of public safety face myriad challenges, but no clear framework to inform integral police reform. Given the urgency of the problem and the scale required to study it, I decided to seek institutional partnerships and funding to launch a research program to study police forces as organizations, through two research streams. The first explores questions of organizational design and reform. Police forces are, first and foremost, organizations that face particularly acute versions of the general problems of organizing. And Mexico is a valuable laboratory for their study, as there are more than 2,000 police forces with enormous variance in their structural configurations, organizational practices, and development paths. To study them, we put together the first comprehensive longitudinal dataset of all Mexican police forces, registering their organizational characteristics between 2010 and 2018. We integrated more than 25 public and private data sources about their structural characteristics and their social, demographic, and economic contexts. To gain additional insight into their detailed managerial practices, we conducted two rounds (2018, 2020) of in-depth interviews with a representative sample of ~500 police forces using an instrument adapted for policing from the World Management Survey (WMS; Bloom and Van Reenen 2007). We have also done extensive fieldwork, documenting nine matched cases of committed efforts of police reform across the country through more than 750 interviews. Finally, we partnered with private firms to gain access to detailed data about consumer habits and behaviors. Our first contribution will be to open this dataset to all interested researchers. The overarching goal is to analyze what it means to build the organizational capacity of police forces to create organizations that are trusted, effective, and resilient. A first paper out of this research, together with Jess Zarkin (second round review) describes the Police-WMS and provides an overview of the managerial practices of police forces across Mexico. The granularity of the data also allows me to identify how specific practices cluster together and are complementary, and to build theory on optimal vs. suboptimal organizational equilibria, path dependencies, trajectories of organizational development, and the role of leadership. In the second stream of research, we partnered with the Mexico City police to study how to improve citizen engagement, trust, and perceptions of police legitimacy. We conducted a randomized controlled trial with 1,854 police officers and managers to determine whether procedural justice training and citizen engagement could improve their behavior. We designed novel instruments to measure treatment effects on the perception of officers (baseline-endline surveys), the internalization of the training (400 in-depth interviews based on a photo-journal exercise), and on their behavior (600 simulated, “mystery shopper” interactions with professional actors). The first three papers out of this stream document causal, substantive, and positive effects of the training. In the first, with Marina Gonzalez, Juan Santini, and Alexis Cherem (forthcoming, Management Science), we document improvements in police officer perceptions, behavioral intentions, and identification with the profession of policing. The second, together with Amy Wrzesniewski, unpacks the causal effects of the training on police officer behavior in the field to develop novel theory on how perceptions of legitimacy and trust are constructed through interactions. And the third, together with Jess Zarkin and Lluvia Gonzalez, shows that the training had profound causal impacts in how police officers conceived of their role and professional identity, shifting away from self-identifying as strong enforcers and towards seeing themselves as trusted protectors. These different lines of work contribute to a variety of organizational theories. They demonstrate both that training can have profound impacts in the perceptions, identities, and behaviors of organizational actors as well as the mechanisms through which these impacts travel. They also make meaningful contributions to questions of organizational design and institutional development. But they also have clear implications for practice. For example, we contributed substantially to the federal administration’s National Policing Model, we have helped escalate Procedural Justice training to the entire MCPD force, and we have supported training for several cities across Mexico. https://rodrigocanales.com/contact daily 0.75 2022-07-01 https://rodrigocanales.com/publications daily 0.75 2026-03-26 https://rodrigocanales.com/media daily 0.75 2021-12-18 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791182888-ZBZ62QAOPSKPRPSQ4OPB/canales_ted.jpg Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791210336-UR47NFP881X1NZAFT7YG/Screen+Shot+2021-12-17+at+7.09.07+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791297624-YUWUTBRRRDUC8JGQ4C9I/Screen+Shot+2021-12-17+at+7.16.49+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791373961-0HZ21SVYP465N9FE3AVV/biz_drugs_netflix.jpg Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791492770-4RYE0IMOR03MD8M2SPJ6/adam_ruins.jpeg Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791698191-64HJOMD6PVDM7TAFS8H4/Screen+Shot+2021-12-17+at+7.12.54+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639791877593-1GCD7474R9BRWXQJ2H4Q/Screen+Shot+2021-12-17+at+7.15.46+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639792027645-MNESXM3G5LA2FH1OWXK6/Screen+Shot+2021-12-17+at+7.17.46+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639792232725-B6NJUM3JEWEYU1D9DQ1O/Screen+Shot+2021-12-17+at+7.18.56+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639792416301-VQBVJXWT5XCBFZT92F3Q/Screen+Shot+2021-12-17+at+7.19.53+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639792447084-WWZBW1CBF8MJFFSZ8KGE/Screen+Shot+2021-12-17+at+7.20.39+PM.png Media https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1639792860337-MPLH13GNLMUA5AWRQH1L/Screen+Shot+2021-12-17+at+8.59.57+PM.png Media https://rodrigocanales.com/asq-einp-appendix daily 0.75 2024-04-02 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/407b3750-ffd0-40ac-8622-4974deb3b910/aqua%2B.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/dbc994e1-9de8-4d2b-b422-2efb0da2e852/CALIE.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/95688a0a-3d1d-4be1-8549-1d9dbe6a821c/FUEL.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/7dc6a19a-4aa3-4a44-bac1-b885b1a5b859/GUP.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/1b3a380a-69c8-4e11-9d14-85d9e9bfa42d/PPE.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/73d8f3e2-160d-49d9-b869-81e582e468d6/progresa.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/17ae25cb-91c1-4c2e-9d1b-b6a26ebf6a37/EvidenceInPractice_CaseStudy_TaRL-1mshy9c.jpg ASQ Appendix https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/8f1d3327-30c1-42d4-bb9b-dcbfa8a3afe8/TCAI.jpg ASQ Appendix https://rodrigocanales.com/susiloreviews daily 0.75 2026-03-26 https://rodrigocanales.com/home daily 1.0 2026-03-26 https://images.squarespace-cdn.com/content/v1/61b773af4a04bd0ca198fed8/8d2d51e1-4b5b-419c-a033-43734c9099d6/Rodrigo+Canales+-+0016+%281%29.jpg Home Rodrigo studies how individuals can purposefully change complex organizations or systems, with a special interest in the role of institutions for economic development. Rodrigo's work explores how individuals’ backgrounds, professional identities, and organizational positions affect how they relate to existing structures and the strategies they pursue to change them. His work contributes to a deeper understanding of the mechanisms that allow institutions to operate and change. Rodrigo has done work in entrepreneurial finance and microfinance, in the nature of startup jobs, as well as in the institutional implications of the Mexican war on drugs. His current research focuses on two broad streams. The first explores transdisciplinary collaborations that seek to solve grand challenges. For example, intersectoral collaborations that seek to integrate rigorous evidence into development policies and practices. The second explores how to build effective, resilient, and trusted justice system organizations (including the police and civil courts). Rodrigo is faculty director of Questrom’s Social Impact Program. Before, he was Associate Professor of Organizational Behavior at the Yale School of Management, where he taught the Innovator Perspective. His research has been funded by the Merida Initiative / INL, USAID, and other foundations. He sits in the advisory board of the Dalai Lama Center for Ethics and Transformative Values at MIT; he spent the 2014-2015 academic year advising the Mexican government on the US-Mexico bilateral relationship; and sits in the Board of Trustees of the Nature Conservancy.