Does Cultural Difference Affect Investment–Cash Flow Sensitivity? Evidence from OECD Countries

We investigate the influence of national culture on corporate investment–cash flow sensitivity. We conjecture that national culture shapes managerial perceptions of information asymmetry and agency problems, thus impacting the investment–cash flow relationship. We document empirical evidence in support of our claim. By linking the investment–cash flow sensitivity to cultural differences, our findings show that, while collectivism has an attenuating influence, uncertainty avoidance, power distance and masculinity have a reinforcing effect on the relationship between cash flow and investment. Our results hold for a sample of 205,268 firm‐years across 24 OECD countries between 1990 and 2017, and are robust after accounting for alternative statistical approaches, sample compositions and measures of cultural dimensions, along with controls for institutional and governmental factors. In addition, by decomposing cash flow into uses and sources of funds in a dynamic multi‐equation model, where firms make financing and investment decisions jointly subject to the constraint that sources must equal uses of cash, we find that national culture shapes how firms react to changes in cash flow.     

Zombies and Originals: How Cultural Theory Informs Stakeholder Management

The question of stakeholder salience has recently resurfaced in the suggestion that the ethical foundations of corporate cultures result in stakeholder cultures that largely explain how firms allocate resources among stakeholders. The present article seeks to complement this novel approach to understanding stakeholder management by adding insights from the multilevel influences that create the corporate culture in the first place, and ultimately affect managers in their stakeholder decisions. This article draws on cultural theory to examine how the individuals who compose firms present group and grid solidarity that results in cultural biases in the corporate culture. These cultural biases—individualism, hierarchy, fatalism, and egalitarianism—are then paired with the stakeholder cultures they enable, and inferences are extracted concerning the salience managers are likely to accord to various classes of stakeholders as a result. Future research and managerial implications stemming from this new view on stakeholder management conclude this article.     

Building Trusting Multicultural Organizations: Rethinking the Influence of Culture on Interpersonal Trust Development in the Workplace

Building trusting, multicultural organizations require us to accentuate ‘sharedness’ rather than identifying differences. This study investigates how organizational members activate multiple sources of cultural values to develop trust with their colleagues from different cultural backgrounds. Through a series of surveys followed by semi-structured interviews, data were collected from members operating in five different multinational organizations based in Germany and South Africa. Analyzed abductively, our findings illustrate the multiple sources of cultural values that influence members' disposition to trust and their assessment of their colleague's trustworthiness. We further show how four levels of trust emerge as an outcome of the interplay between these various cultural dimensions. Through our multidimensional operationalization of culture, we show how variations, not only across, but within individuals can hinder or promote trusting relationships in the workplace. This study highlights the need for more nuanced approaches towards the examination of the influence of culture on trust.     

Organizational Behaviour and National Cultures

A survey is presented of the degree to which organizational behaviour is found to vary between national cultures. The conceptual framework provided by Hofstede (1980) is used to interpret many of the differences reported. Aspects of organizational behaviour which are examined include classifications of managerial values by national culture, organizational structure, leadership behaviour, negotiation processes and human resource management policies. Some of the implications of the differences found for multicultural management, for career development and for training programmes are then explored. It is concluded that there is an increasing need to prepare managers for multicultural experience and to ensure that evaluations of selection, training and career planning are more firmly grounded than is apparent from the present literature.     

Advancing our understanding of cultural heterogeneity with unsupervised machine learning

National boundaries and country averages are commonly used as delimiters and proxies for culture. By doing so, not enough attention is paid to cultural heterogeneity within and overlays between countries. Deploying a Kohonen self-organizing map (SOM) as an unsupervised machine learning technique on 106,382 individual-level survey data from 66 countries, this article identifies distinct worldwide cultural prototypes, isolates dominantly occurring prototypes within countries, and uses them to calculate cultural core values. It also provides new measures for within-country cultural heterogeneity, between-country cultural differences, and cultural isolation. The results not only show the usefulness of machine learning algorithms in inductive international business research, but also have managerial relevance for international marketing and management.     

Managerial sensemaking of interaction within business relationships: A cultural perspective

In this study, we take the perspective of the individual manager in order to understand the role of culture in managerial sensemaking on interaction within business relationships. Extant literature has found business-to-business relationships and interaction between managers to be an essential part of conducting business. However, it has mostly ignored the role of culture in the process. This has not accounted for the possibility that managers with different cultural backgrounds may differently make sense about business interactions.     

Creative and innovative behaviours of corporate directors: an elusive role of task-related conflicts

The aim of the present work is to examine corporate directors’ boardroom interactions associated with conflicts as well as creativity and innovation phenomena. In line with the behavioral perspective in research on boards, we investigate relationships between task conflicts, an emerging creative and innovative boardroom climate as well as directors’ work behaviors. Drawing upon the survey data from 423 corporate directors, we tested hypothesized relationships by the means of the structural equation modelling technique. The results provide evidence suggesting that task-related conflicts among corporate directors appear to be equally detrimental for the psychological workgroup climate as they are advantageous for initiating creative and innovative work behaviours. In other words, the positive effect of task conflicts on directors’ creative and innovative work behaviours occurs so long as such conflicts do not simultaneously impair their perception of the creative/innovative boardroom environment. By integrating the literature on workplace group conflicts, creativity and innovation with the corporate governance writings, this study offers a new insight into corporate directors functioning. Presented findings have clear implications for future board research and managerial practice.     

Putting the Global in Global Work: An Intercultural Lens on the Practice of Cross-National Collaboration

Collaboration across national boundaries has become increasingly prevalent over the last decade, yet the management literature remains remarkably unhelpful in answering questions about what happens when people across nations and cultures work closely together. We review the management literature that reports empirical studies of global work and conclude that few of these studies, despite their explicit focus on globally distributed work, meaningfully examine the intercultural aspects of these collaborations. We assume an intercultural lens to understand what gets lost by not examining the global in global work and conclude that the very process by which workers who reside in different countries confront, explore, and resolve cultural differences begs for more clarity. Further, we conclude that a more contextual and dynamic view of culture is necessary to shed light on these processes. We use two examples—social networks and technology use—to illustrate how cultural differences might generate different patterns of behavior, and consider the effect of these potential incompatibilities on global work and workers as they collaborate across national boundaries.     

How does interpersonal justice affect outside directors’ governance behavior? A cross-cultural comparison

We examine the impact of interpersonal justice among outside directors on the board and between a director and the CEO regarding the director’s monitoring and resource provision behaviors in different cultural contexts. We argue that directors from individualistic countries are more influenced by CEO interpersonal justice while directors from collectivistic countries are more affected by the board interpersonal justice. Our main effect results indicate that interpersonal justice with board members is positively related to both monitoring and resource provision by a director, while CEO interpersonal justice is related only to resource provision. Our results also show different effects on the director’s behaviors between three countries, i.e., Canada, Singapore, and Spain. We found that CEO interpersonal justice is positively associated with resource provision in Canada, while board interpersonal justice is positively related to both monitoring and resource provision in Singapore and Spain. These results suggest that directors discharge their board duties differently by how they are treated by other directors and the CEO and that their governance behaviors vary by culture. This study contributes to the literature on comparative corporate governance by showing the differences in directors’ behaviors in different cultural contexts.     

Strategic management of dynamic growth

A great deal of theoretical and empirical work has been performed on firm growth following Edith Penrose's (1959) classic book, but there is growing concern among researchers and practitioners about the relevance of research as the business environment becomes increasingly dynamic. This Special Issue is motivated by concerns surrounding the need to rethink established theories of firm growth in the face of blurring boundaries among markets and technologies, increased competition, innovation, and intense competitive dynamics. Comprised of six articles, the Special Issue examines growth in a variety of ways and across industries and types of firms, showing how firm choices for pursuing growth extend beyond the dichotomy between internal and external growth. The contributions include a review of existing literature and new ideas on the role of human capital on firm growth, such as recruiting and retaining the right people, or developing managerial capabilities to direct limited resources to more productive uses. The impact of regulatory policies, industry life-cycle, and venture capital on firm growth are also investigated in novel ways.     

The Translational Role of Hybrid Nurse Middle Managers in Implementing Clinical Guidelines: Effect of,and upon,Professional and Managerial Hierarchies

Our study uses qualitative and interpretative design to analyse what hybrid nurse middle managers do in their managerial practice, what affects this, and to what effect, focusing upon implementing policy‐driven guidelines on the clinical frontline. Examining two comparative hospital cases and drawing upon Scandinavian institutionalism, we conceive their role as one of ‘translation’. On the one hand, they exhibit strategic agency. On the other hand, their managerial role not only influences, but is influenced by, professional and managerial hierarchies. In both hospitals, in the short term we see how hybrid nurse middle managers are able to mediate professional and managerial hierarchies and implement clinical guidelines through translational work. However, in one case, they less effectively accommodate policy‐driven, managerial pressure towards compliance with government regulations and financial parsimony. In this case, the outcome of their translational work is not sustained in the longer term, as professional and managerial hierarchies reassert themselves. Drawing upon the example of their managerial role in healthcare, we highlight that hybrid middle managers enact a strategic translational role and outline situational constraints that impact this more strategic role.     

Boards,governance and value creation in grant-giving foundations

The non-profit sector is a sizeable and highly dynamic component of economies and societies throughout the world. The expectations placed upon non-profit organizations raise fundamental issues such as the capacity of these organizations to deliver, their accountability to the various constituencies that they serve and their capacity to create value. The effectiveness of these organizations should not be taken for granted, and it is therefore important to understand which factors affect their ability to create value. This paper investigates the relationships between the specific knowledge and experience possessed by board members and foundations’ commitment to pursue high value-added activities, such as the improvement of the performance of grant recipients or social innovation. It uses an empirical analysis to apply statistical techniques to a sample of Italian banking foundations. Our results show that, of the various types of skills and background possessed by board members, the managerial skills of business experts are particularly relevant for value creation by grant-giving foundations. The article therefore contributes to the discussion on the relationship between board skills and organizational outcomes.     

The configurational effects of board monitoring and the institutional environment on CEO compensation: a country-level fuzzy-set analysis

This study examines the causal complexity of how the effectiveness of board monitoring influences CEO compensation around the world. Previous research drawing from the managerial power theory and ‘increased career risks’ perspective offer alternative arguments for how low and high levels of effective monitoring by boards of directors influence CEO compensation. Adopting a configurational approach using fuzzy-set qualitative comparative analysis, we explore the idea that there are multiple causal paths leading to high levels of CEO compensation, such that theoretical logic from both theories may be relevant contingent upon the institutional environment in which the relationship is embedded. Our findings in a sample of 38 countries suggest that high CEO compensation is an outcome of both the presence and absence of effective board monitoring depending upon how it combines with minority investor protections and the cultural dimensions of power distance, uncertainty avoidance, and individualism, as well as the overall stock market value. Specifically, in countries with high levels of effective board monitoring, high CEO compensation will be more likely when the country’s culture is high in uncertainty avoidance, low in power distance and when there are strong protections for minority investors. Whereas in countries with low levels of effective board monitoring, high CEO compensation will be more likely when power distance is high and uncertainty avoidance is low and when there are weak protections for minority investors. Our country-level study highlights the theoretical strengths of employing a configurational approach to explore the complex interrelationships of governance mechanisms and the contexts in which they manifest.     

Reordering Spatial and Social Relations: A Case Study of Professional and Managerial Flexworkers

Research on flexible work practices has focused primarily on social relationships, individual identity, work/work–life balance experience and performance. This paper aims to add another dimension by focusing on space and, specifically, the performance of space by professional flexworkers as they reorder their home and work lives through the process of becoming flexworkers. Drawing on Law's ‘modes of ordering’ and Latourian actor network theory, as well as on Beyes and Steyaert's recent contribution on ‘performing space’, the paper considers how flexworkers themselves reorganize space(s) as an ongoing accomplishment. The purpose and contribution is to offer an alternative to the view that the home and work are rigid containers fixed in social structure, to one that views them as self‐referential space(s), reordered by flexworkers as they seek to ‘keep the social moving’. The paper is based on an empirical study of employees in a Canadian subsidiary of a large hi‐tech multinational corporation. It examines organizational policy documents and interviews with managerial and non‐managerial flexworkers to identify how social and spatial relations are reordered and performed.     

A TUTORIAL ON BOTTLENECK DYNAMICS: A HEURISTIC SCHEDULING METHODOLOGY

We give a tutorial on bottleneck dynamics. Bottleneck dynamics is a scheduling framework that uses approximate dual resource prices to make decentralized decisions. The basic idea is to establish a price for a resource as a function of the set of jobs that need to be processed by the resource. Tasks are then sequenced according to a cost/benefit ratio. Starting with one resource sequencing problems, we describe how priorities for jobs can be developed and how they translate into resource prices. We then describe how resource prices can be approximated in a multiresource situation and how lead times which are critical for these approximations can be accurately computed. We also describe a number of studies that have shown bottleneck dynamics to be an effective approach in several different problem areas.     

Evolving Perceptions of Clinical Management in Acute Hospitals in England

Clinical management is at the centre of organizational change in the contemporary British hospital sector, and throws up important questions about the relationship between medicine and management. Through the analysis of business planning as a key organizational process the interpretative frameworks which guide the perceptions of the roles of clinical directors and directorate managers can be understood. This paper presents empirical material from a study of an acute hospital trust going through a full business planning cycle, and traces the evolving interpretations of the nature, content and form of clinical management. It also provides insights into the changing face of the medical profession and its place within the health services domain.     

Women on corporate boards: key influencers or tokens?

This paper investigates how the increasing ratio of women directors on corporate boards is associated with decision-making dynamics, specifically the perceived participation and influence of the women on the board. We test hypotheses using a sample of 458 women on Norwegian corporate boards where the ratio of women directors among board members ranges from 11 to 100%. Overall, we find that women perceive that they have a high level of information sharing, a low level of self-censorship, and a high level of influence across the different ratios of board membership held by women directors. These results support the notion of women directors as significant influencers. However, the results also show that women directors perceive that they do receive more information and engage in more informal social interaction when the ratio increases, and perceived influence does also increase when the ratio increases.     

Improving performance in a contracted physician network

Health care organizations face significant performance challenges. Achieving desired results requires the highest level of partnership with independent physicians. Tufts Health Plan invited medical directors of its affiliated groups to participate in a leadership development process to improve clinical, service, and business performance. The design included performance review, gap analysis, priority setting, improvement work plans, and defining the optimum practice culture. Medical directors practiced core leadership capabilities, including building a shared context, getting physician buy-in, and managing outliers. The peer learning environment has been sustained in redesigned medical directors' meetings. There has been significant performance improvement in several practices and enhanced relations between the health plan and medical directors.     

The interface of the top management team and the board: A dynamic managerial capabilities perspective

Although top management teams use their human capital, social capital, and cognition (i.e., dynamic managerial capabilities) to drive strategic change in their firms, faultlines within these teams may dampen the strategic change that they produce. While boards can enable but also restrict these change efforts, we know little about how precisely a board's monitoring and advice-giving condition the impact of the top management team's dynamic managerial capabilities on strategic change. We clarify how intense monitoring and advice-giving affect strategic change when faultlines between the top management team's and board's dynamic managerial capabilities are more or less salient. We explain that intense monitoring further stifles both the breadth and speed of strategic change that can be accomplished, and that this is more pronounced when the faultlines between the two bodies are strong. Furthermore, we outline that intensive advice-giving can be beneficial in improving the breadth of strategic change, but more so when these faultlines are weak and less so when they are strong. Notably we illuminate that the reverse happens in terms of speed of strategic change: intensive advice-giving can be detrimental engendering a further dampening of strategic change speed which is more pronounced when these faultlines are strong but less when they are weak.