Opportunism in Capital Budget Recommendations: The Effects of Past Performance and Its Attributions*

This study uses an experiment to examine the separate and combined effects of managers' loss aversion and their causal attributions about their divisions' performance on tendencies to make goal‐incongruent capital budget recommendations. We find that managers' recommendations are biased by their loss aversion. In particular, managers of high‐performing divisions are more likely than managers of low‐performing divisions to propose investments that maximize their division's short‐term profits at the expense of the firm's long‐term value. We also find that managers' recommendations are biased by their causal attributions. In particular, managers are more likely to propose investments that maximize their division's short‐term profits at the expense of the firm's long‐term value when they attribute their division's performance to external causes (e.g., task difficulty or luck) rather than to internal causes (e.g., managerial ability or effort). Further, the effects of causal attributions are greater for managers of high‐performing divisions than for managers of low‐performing divisions. The study's findings are important because loss aversion and causal attributions are often manifested in firms. Thus, they may bias managers' decisions, which in turn may be detrimental to the firms' long‐term value.     

Risk Preferences,Probability Weighting,and Strategy Tradeoffs in Wildfire Management

Wildfires present a complex applied risk management environment, but relatively little attention has been paid to behavioral and cognitive responses to risk among public agency wildfire managers. This study investigates responses to risk, including probability weighting and risk aversion, in a wildfire management context using a survey‐based experiment administered to federal wildfire managers. Respondents were presented with a multiattribute lottery‐choice experiment where each lottery is defined by three outcome attributes: expenditures for fire suppression, damage to private property, and exposure of firefighters to the risk of aviation‐related fatalities. Respondents choose one of two strategies, each of which includes “good” (low cost/low damage) and “bad” (high cost/high damage) outcomes that occur with varying probabilities. The choice task also incorporates an information framing experiment to test whether information about fatality risk to firefighters alters managers' responses to risk. Results suggest that managers exhibit risk aversion and nonlinear probability weighting, which can result in choices that do not minimize expected expenditures, property damage, or firefighter exposure. Information framing tends to result in choices that reduce the risk of aviation fatalities, but exacerbates nonlinear probability weighting.     

Perceptions of facial dominance,trustworthiness and attractiveness predict managerial pay awards in experimental tasks

Positive associations between physical attractiveness and employee reward are well-documented within the organisational literature. Although the impact of facial cues to trustworthiness and dominance on a number of social outcomes has been established outside of the workplace, the extent to which they, in addition to attractiveness, affect pay at different managerial levels is yet to be investigated. This paper presents research into this issue using a face payment task for shop floor managers (Retail Managers) and senior managers (Heads of Retail Operations). Evaluations indicated that all three facial cues were positively associated with awarded pay at both managerial levels. Moreover, attractiveness had a significantly stronger link with shop-floor managers' than senior managers' pay, whereas perceived trustworthiness and perceived dominance had significantly stronger links with pay for senior managers than shop-floor managers. It further emerged that women were paid more in this experimental task where pay was awarded solely based on facial features and that the facial features were more predictive of women's than men's pay. Awareness of the role of physical cues in pay awards can be considered by organisations to reduce biases in remuneration.     

How managers’ risk perceptions affect their willingness to blame advisors as scapegoats

Managers spend considerable amounts of corporate money to hire consultants. The research proposes two potential benefits of consultants' advice: increasing decision accuracy and sharing responsibility with the advisor. In contrast to previous research, which has predominantly focused on factors influencing decisional accuracy, this paper evaluates the sharing of responsibility in the form of using an advisor as a scapegoat. We conduct an online experiment with 175 managers from German-speaking countries in an investment setting. We find that the presence of a potential scapegoat positively affects advice utilization in an economic boom but negatively affects such utilization in an economic crisis due to managers' varying risk perceptions. Managers' risk perceptions are the main drivers of scapegoating as a form of managerial blame avoiding decision-making. We contribute to management research and highlight managers’ opportunistic motives behind consulting (costly) advice.     

Dealing with Ethical Dilemmas in Organizational Change Processes

Several theories exist on how managers think aboutethical responsibilities in a business environment.Some stress the economic way of thinking and explainwhy there is no space for moral reasoning in abusiness environment. Others claim that in a businessenvironment also moral considerations can play animportant role. In this article, we will explore theway managers have actually dealt with potentialdilemmas in organizational change processes,especially changes with drastic consequences foremployees. Do managers consider moral arguments? Dothey feel a moral responsibility towards theiremployees? And in what way do they include a moralresponsibility in the decision process and itsoutcomes? These questions were investigated throughcase studies in two organisations and interviews withsix managers in other companies. The framework whichis used in the research will be described and the mainresults of the field-research will be presented. Wedid find that managers actually strived to some extentfor fair and morally responsible solutions in dilemmasituations, but in another way then we expectedbeforehand. Managers did not base their acting onmoral arguments. Instead they used a more pragmaticapproach wherein acting in a morally responsible wayis based on strategic arguments, such as the positiveeffects for the organisation in the long run.     

Individual Sense of Justice: A Utility Representation

We present an axiomatic model depicting the choice behavior of a self‐interest seeking moral individual over random allocation procedures. Individual preferences are decomposed into a self‐interest component and a component representing the individual's moral value judgment. Each component has a distinct utility representation, and the preference relation depicting the choice behavior is representable by a real‐valued function defined on the components utilities. The utility representing the self‐interest component is linear and the utility representing the individual's moral value judgment is quasi‐concave. The addition of a hexagon condition implies that the utility representing the individual's preference is additively separable in the components utilities.     

How Should Autonomous Cars Drive? A Preference for Defaults in Moral Judgments Under Risk and Uncertainty

Autonomous vehicles (AVs) promise to make traffic safer, but their societal integration poses ethical challenges. What behavior of AVs is morally acceptable in critical traffic situations when consequences are only probabilistically known (a situation of risk) or even unknown (a situation of uncertainty)?  How do people retrospectively evaluate the behavior of an AV in situations in which a road user has been harmed? We addressed these questions in two empirical studies (N = 1,638) that approximated the real‐world conditions under which AVs operate by varying the degree of risk and uncertainty of the situation. In Experiment 1, subjects learned that an AV had to decide between staying in the lane or swerving. Each action could lead to a collision with another road user, with some known or unknown likelihood. Subjects’ decision preferences and moral judgments varied considerably with specified probabilities under risk, yet less so under uncertainty. The results suggest that staying in the lane and performing an emergency stop is considered a reasonable default, even when this action does not minimize expected loss. Experiment 2 demonstrated that if an AV collided with another road user, subjects’ retrospective evaluations of the default action were also more robust against unwanted outcome and hindsight effects than the alternative swerve maneuver. The findings highlight the importance of investigating moral judgments under risk and uncertainty in order to develop policies that are societally acceptable even under critical conditions.     

Are there Gender Differences in the Ethics Judgments of Marketing Managers?

This study found that moral reasoning predicts intention to act in an ethical dilemma, but that this behavior is not modified by gender differences. Fishbein and Ajzen’s Reasoned Action model was used to predict intention to act in ethical dilemmas, while the Kohlberg and Gilligan paradigms of moral reasoning were introduced as exogenous variables. The theory of reasoned action model was found to be a good predictor of intention as hypothesized. Suggestions for further research are included. This revised version was published online in July 2006 with corrections to the Cover Date.     

The role of personal values in the charismatic leadership of corporate managers: A model and preliminary field study

This study used multi-source field data collected in five organizations to examine linkages among managers' personal value system (i.e., intensity of openness to change, traditional, collectivistic work, self-transcendent, and self-enhancement values), charismatic leadership of managers, and three outcome measures. Two-hundred and eighteen managers provided self-reports of their personal values and ratings of their followers' extra effort and organizational citizenship behavior (OCB). Nine-hundred and forty-five subordinates rated the focal managers' charismatic leadership. Superiors of the focal managers provided ratings of managerial performance 2 months after collecting the managers' and subordinates' ratings. Results indicated that traditional, collectivistic work, self-transcendent, and self-enhancement values related positively to charismatic leadership, which predicted managerial performance and followers' extra effort and OCB. Managerial performance moderated the relationships between leaders' values, charismatic leadership, and followers' outcomes.     

Integrity's place among the character strengths of middle-level managers and top-level executives

One purpose of this study was to extend integrity research in organizations into the ranks of middle management. We therefore examined whether middle-level managers' behavioral manifestations of integrity related to ratings of their performance. Results of hierarchical regression analysis indicated that direct report ratings of a middle-level manager's integrity were positively related to boss ratings of that manager's performance. A second purpose of this study was to understand differences in integrity's relative importance to performance among other character strengths, and as a function of context (e.g., managerial level). We extend research in this area by showing, through relative weight analysis, that integrity was relatively less important to middle-level managers' current performance compared to other character strengths (e.g., social intelligence). In contrast, integrity was relatively more important for the performance of top-level executives — roles middle-level managers may hold in the future. Implications of these results for future research and practice as well as the current study's limitations are discussed.     

Does valuing androgyny and femininity lead to a female advantage? The relationship between gender-role,transformational leadership and identification

The notion of ‘think manager–think male’ has been demonstrated in many studies. The current study examines whether leaders are perceived as more effective when they have ‘feminine’, ‘masculine’ or ‘androgynous’ characteristics, and how this relates to the leader's and followers' sex. Using carefully matched samples of 930 employees of 76 bank managers, we studied the relationship between managers' gender-role identity (perceived ‘femininity’, ‘masculinity’ and ‘androgyny’) and how this relates to leadership effectiveness in terms of transformational leadership and personal identification with the leader. Our findings show that among both male and female leaders, ‘androgyny’ was more strongly related to transformational leadership and followers' identification than ‘non-androgyny’, and that leaders' ‘femininity’ was more strongly related to leadership effectiveness than ‘masculinity’. Furthermore, the results show that women paid a higher penalty for not being perceived as ‘androgynous’ (mixing ‘femininity’ and ‘masculinity’), in comparison to men with regard to personal identification. When examining same- versus cross-sex relationships, we found that ‘non-androgynous’ male managers were rated higher by their male employees than by their female employees. Our findings suggest that women and men who are interested in being perceived as effective leaders may be well advised to blend ‘feminine’ and ‘masculine’ behaviors, and even more so when they are in situations of non-congruency (i.e., women in leadership roles and leading in cross-sex relationships). We discuss the implications of these findings for both theory and practice.     

Career patterns of top managers in Europe: Signs of further globalisation?

Investigating career patterns of top managers has been a prominent topic in European Management Journal (EMJ) since the 1990s. Our article contributes to ongoing debates about national differences in top managers' career patterns between European countries. An open question is whether globalisation processes may have challenged the existence of specific career patterns and whether they may have transformed the profiles of business elites in Europe. Our article uses recent data from four European countries (France, Germany, Switzerland and the UK), collected in a way similar to an EMJ article published in 2013, with the objective to assess potential developments that have taken place over the last decade. Some of the major changes relate to the growing relevance of business school degrees or certificates (such as MBA degrees), a higher proportion of non-nationals and women on boards, more managers with international experience and an increasing number of top managers with a prior career with auditing or consulting firms. The article provides not only new empirical insights, but also a review of the key characteristics of top managers’ careers, some methodological reflections on cross-national comparison and new research avenues at the cross-roads of career literature and upper echelons literature. By shedding light on the career patterns of key decision-makers in large European firms, the article offers new insights for researchers, educators and managers alike.     

How Managers Talk about their Consumption of Popular Management Concepts: Identity,Rules and Situations

This paper analyses how top managers account for their consumption of popular management concepts. By ‘consumption’ we refer to managers acting as active users of popular management concepts within their organizations. After reviewing the relevant literature, we argue that the logic of appropriateness is a better theoretical perspective to view, understand and analyse managers' accounts of concept consumption than is the logic of consequence. We apply this perspective to extensive interviews we conducted with top managers in Germany. Based on the managers' own accounts of how they understand and apply popular management concepts, we identified four discourse categories: (1) learning from others' experiences, (2) controlling organizational change, (3) gaining external legitimacy and (4) collective sensemaking. We argue that these discourse categories all draw on the social norm of rationality central to managerial identity, while differing in socially defined rules about how rationality is realized in typical management situations. Our findings strongly encourage researchers, when investigating popular management concepts in the future, to take into account the situational nature of rationality that circumstantiates the consumption of concepts.     

Fundamental Dynamics in Complex Organizational Change: A Longitudinal Inquiry into Hydro-Québec's Management

Co-operation is the essence of an organization's existence and a key condition for its long-term survival: but change efforts can put such co-operation to a harsh test. Too often this is caused not by change itself, but managers' tendency to stick to oversimplified ideas or tools and to pursue their implementation to the exclusion of other factors. Lacking a stable beacon, managers are often led adrift by the momentum of the change they initiate. This article uses a 20 year long longitudinal study of Hydro-Québec, one of the largest power utilities in North America, to show how the dynamics of change led away from the need to maintain co-operation and thus tend to emphasize trivia. We argue that, in a major change effort, co-operation will only be achieved by maintaining a balance between Position in the environment, organizational Context and the behaviour of People in the organization's community. This three-legged PCP framework is proposed as a structure for understanding and managing complex change efforts. The dynamics of the PCP framework are also examined to derive patterns and recommendations for managers keen to avoid a drift towards trivia.     

Refining the Concept of Political Will: A Gender Perspective

While politics are known to be prevalent at managerial levels, there is currently little insight into what drives managers to engage in organizational politics and whether there are gender differences in this respect. In the current study we explore the concept of political will by using a qualitative approach based on 14 semi‐structured interviews with managers (five men and nine women) in a global semiconductor company. We identify key dimensions of managerial political will consisting of three attitudinal ambivalences: functional, ethical and emotional. We also examine gender differences along these dimensions and discuss managers' political will in the context of a masculine organizational setting. We conclude by discussing the theoretical and practical implications of the findings and further research directions.     

Hong Kong managers' perceptions of American business values

This report describes empirical research conducted to study the research question, “To what extent do foreign managers' own cultural values influence their perceptions of the corporate values of companies in other cultures?” Using the authors' “Business Values Questionnaire,” business managers from Hong Kong gave their perceptions of publicly stated corporate values of very large U.S. service companies. A similar United States sample was used as a comparison group. Results gave partial support to the authors' hypotheses that an individual's own cultural values influence perceived values of another culture.     

Decoding the Signal Effects of Job Candidate Attraction to Corporate Social Practices

This article seeks to go beyond the implied assumption from previous research that job candidate attraction to corporate social practices is equivalent across individuals. To this end, we propose a framework for categorizing individuals' attraction to different corporate social performance profiles. Our framework is grounded in relational models theory and Mitroff's model of managers' “ideal organizations.” An inductive approach was used to elaborate upon the model and assess the extent to which candidates preferences vary. Data were collected from prospective job seekers regarding their attraction to social practices that benefit or harm various stakeholders, and these responses were used to develop profiles of job candidates' attraction to distinct profiles of organizations' social practices. The results provide a guide for managers who wish to improve the likelihood that an organization's social practices reflect what is best about its culture.     

Subsidiary managers' initiative pursuit: A behavioral agency model

Subsidiary managers' decisions to pursue initiatives for innovative product introductions in their host markets provide opportunities for rent creation, but also bear risks for the multinational corporation (MNC). However, we lack insights into which factors drive such decisions. Grounded in behavioral agency theory, our study investigates which factors at the individual level, the corporate level, and the subsidiary's implementation context increase subsidiary managers' likelihood of initiative pursuit. We propose that an individual manager's capability and the MNC's entrepreneurial orientation serve as reference points in a specific implementation context. Based on a stated-choice experiment with 799 respondents, results show that subsidiary managers' likelihood to pursue an innovation initiative varies depending on the context, and the choice of implementation mode activates subsidiary managers' gain frames. Our findings advance theory by providing granularity on the situational complexity across multiple methodological levels that instigate subsidiary managers' initiative pursuit.     

Participation in Strategic Decision Making: The Role of Organizational Predisposition and Issue Interpretation*

Each time managers are faced with a strategic decision they decide how to decide. Specifically, they make choices about who has necessary information and, therefore, who needs to participate in the decision. Such responses to strategic issues are believed to be affected by the way in which decision makers interpret issues. However, organizations develop habitual responses to issues and may be predisposed because of their attention to rules and routines, or because of past performance, to respond to strategic issues in certain ways regardless of how issues are interpreted. We examined the direct and indirect effects of predisposition (rule orientation and past financial performance) and interpretation of strategic issues on the participation of internal stakeholder groups in strategic decision making. Executives in 52 organizations indicated that rule orientation and performance are directly linked to participation in strategic decision making, and that interpretation and rule orientation are directly linked to each other. Implications for managers include the notion that any effort to improve decision-making effectiveness by shaping how organizational members frame and interpret issues will be constrained by the organization's existing routines as well as its past performance.     

Beneath the mask:: Examining the relationship of self-presentation attributes and impression management to charismatic leadership

We tested several hypotheses derived from Gardner and Avolio's [Acad. Manage. Rev. 23 (1998) 32.] self-presentational theory of charismatic leadership. We collected multisource field data in an information technology (IT) consulting firm and examined linkages among managers' self-system attributes (i.e., desired charismatic identity, self-monitoring), pro-social and self-serving impression management of managers, charismatic leadership of managers, and two measures of performance. Eighty-three managers provided self-reports of self-system attributes. Six months later, 249 subordinates rated the focal managers' impression management and charismatic leadership styles. Superiors of the focal managers provided performance ratings 7 months after collecting the subordinate ratings. Results indicated that complexity of desired charismatic identity was positively related to self-monitoring. Self-monitoring was negatively related to ratings of pro-social impression management and positively related to ratings of self-serving impression management. Pro-social impression management related positively to charismatic leadership, which predicted managerial and unit performance.