Self‐Service Operations at Retail Stores: The Role of Inter‐Customer Interactions

Inter‐customer interactions are important to the operation of self‐services in retail settings. More specifically, when self‐service terminals are used as part of customers’ checkout processes in retail operations without the explicit involvement of retailers as the direct service providers, inter‐customer interactions become a significant managerial issue. In this article, we examine the impact of inter‐customer interactions at retail self‐service terminals on customers’ service quality perceptions and repeat purchase intentions at retail stores. We conduct a scenario‐based experimental design (N = 674) using a 2 × 2 factorial design in which inter‐customer interactions are divided into “positive” vs. “negative” and occur during the “waiting” or during the actual “transaction” stages of self‐services at a retail store. We use attribution theory to develop the hypotheses. The results demonstrate that, through their interactions, fellow customers can exert influences on a focal customer's quality perceptions and repeat purchasing intentions toward a retail store. Furthermore, these influences were impacted by how customers attribute blame or assign responsibility toward the retail store. Service operations managers should leverage these interactions by designing into self‐service settings the capacities and interfaces that are best suited for customers’ co‐production of their self‐service experiences.     

The queen bee: A myth? The effect of top-level female leadership on subordinate females

We investigate the effect of female leadership on gender differences in public and private organizations. Female leadership impact was constructed using a quasi-experiment involving mayoral elections, and our research used a sample of 8.3 million organizations distributed over 5600 Brazilian municipalities. Our main results show that when municipalities in which a woman was elected leader (treatment group) are compared with municipalities in which a male was elected leader (control group) there was an increase in the number of top and middle female managers in public organizations. Two aspects contribute to the results: time and command/role model. The time effect is important because our results are obtained with reelected women – in their second term – and the command/role model (the queen bee phenomenon is either small, or non-existent) is important because of the institutional characteristics of public organizations: female leaders (mayor) have much asymmetrical power and decision-making discretion, i.e., she chooses the top managers. These top managers then choose middle managers influenced by female leadership (a role model). We obtained no significant results for private organizations. Our work contributes to the literature on leadership by addressing some specific issues: an empirical investigation with a causal effect between the variables (regression-discontinuity design – a non-parametric estimation), the importance of role models, and how the observed effects are time-dependent. Insofar as public organizations are concerned, the evidence from our large-scale study suggests that the queen bee phenomenon may be a myth; instead, of keeping subordinate women at bay, our results show that women leaders who are afforded much managerial discretion behave in a benevolent manner toward subordinate women. The term “Regal Leader” instead of “Queen Bee” is thus a more appropriate characterization of women in top positions of power.     

Executive Discretion and Corporate Performance as Determinants of CEO Compensation,Contingent on External Monitoring Activities

In this paper we discuss the potential impactof managerial discretion and firm performanceon CEO compensation, contingent on the extentof monitoring activities. We argue that CEOcompensation may be positively related toexecutive discretion and corporate performancefor firms that have vigilant external monitors. We alternatively contend that CEO compensationmay neither be associated with discretion norperformance for firms with passive externalmonitors. The empirical results are supportiveof our contentions.     

The Intrinsic Value of Decision Rights

Philosophers, psychologists, and economists have long argued that certain decision rights carry not only instrumental value but may also be valuable for their own sake. The ideas of autonomy, freedom, and liberty derive their intuitive appeal—at least partly—from an assumed positive intrinsic value of decision rights. Providing clean evidence for the existence of this intrinsic value and measuring its size, however, is intricate. Here, we develop a method capable of achieving these goals. The data reveal that the large majority of our subjects intrinsically value decision rights beyond their instrumental benefit. The intrinsic valuation of decision rights has potentially important consequences for corporate governance, human resource management, and optimal job design: it may explain why managers value power, why employees appreciate jobs with task discretion, why individuals sort into self‐employment, and why the reallocation of decision rights is often very difficult and cumbersome. Our method and results may also prove useful in developing an empirical revealed preference foundation for concepts such as “freedom of choice” and “individual autonomy.”     

CEO Incentives,Takeover Protection and Corporate Innovation

This study examines the effects of CEO equity‐based compensation and anti‐takeover provisions on corporate innovation. Using a large sample of US firms over the period 1996–2014, we find that long‐term incentives have a stronger influence on innovation when combined with takeover threats. We also show that equity‐based compensation is more likely to spur innovation for small firms and firms in industries with high product market competition and innovation pressure. However, this effect is somewhat weaker in the presence of anti‐takeover provisions, suggesting that takeover protection encourages managerial shirking even when external competition is high. Finally, in addition to the existing evidence on the valuation effect of CEO equity‐based compensation, we identify innovation as an important channel through which managerial incentives can enhance firm value. Our results have potential implications for shareholders, managers and policymakers.     

Informality and Employment Relationships in Small Firms: Humour,Ambiguity and Straight‐talking

This paper presents in‐depth qualitative research on three small professional service firms whose owner‐managers sought to introduce greater degrees of formality in their firms’ working practices and employment relationships. We focus on humour as an ambiguous medium of informality, yet viewed by owner‐managers as a tool at their disposal. However, while early studies of humour in small and medium‐sized enterprises support such a functionalist view, our findings indicate its significant limitations. We argue that humour obscures but does not resolve disjunctive interests and it remains stubbornly ambiguous and resistant to attempts to functionalize it. Our findings contribute to studies of humour in small and medium‐sized enterprises by challenging its utility as a means of managerial control or employee resistance. They also contribute to studies of employment relationships by exploring humour's potentially disruptive influence within the formality–informality span, especially as small and medium‐sized enterprises seek greater degrees of formalization, with implications for how those relationships are conducted and (re)negotiated on an ongoing basis.     

TMT functional complementarity and post-IPO performance: Evidence from the U.S. biotechnology industry

Drawing insights from the resource dependence and the upper echelons theories, this study examines how top management team (TMT) IPO reconfiguration – the managerial change between immediately before and after an initial public offering (IPO), affects firm performance in the post-IPO years. We investigate this through the lens of TMT functional complementarity - the degree of differing functional knowledge held by the firm's TMT in the pre-and post-IPO stage. We argue that TMT functional complementarity positively affects firm post-IPO performance. Further, this relationship is positively moderated by executive managerial discretion, measured by CEO duality and TMT insider board membership. We test our model using a sample of 250 US biotechnology firms that went public from 1991 to 2019, and the empirical results largely support our hypotheses. This study contributes to the literature of upper echelons, technology-based ventures, and IPO firms.     

Sources of Bias in the Recall of Self‐Generated Data: The Role of Anchoring1

This study examines two issues. First, we assess the reliability of employment data self‐generated by respondents using a survey panel of 280 firms surveyed in 1999 and again in 2002. Our results show that there is a close correlation between self‐generated and archival secondary data. Second, we test for bias in the recall of previous years' employment levels and the sources of such bias. We assess three reasons for recall bias: respondent‐level factors; firm‐level factors; and anchoring. Our regression results indicate that: owners and new respondents; those in firms that changed legal status and/or location; those in smaller firms; and those in growing or declining firms were biased in their recall of prior employment. In addition, growing firms tended to underestimate their growth, which points to anchoring as an explanation for these biases. These biases imply that we have to be careful in delineating performance measures and cautious about how we interpret self‐generated managerial information.     

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.     

Operational Productivity,Corporate Social Performance,Financial Performance,and Risk in Manufacturing Firms

We examine the relationship between Operational Productivity (OP), Corporate Social Performance (CSP), Financial Performance (FP), and risk. Our sample frame comprises 476 firms in nine US manufacturing industries during the period 1999–2009. We employ DEA‐based measures for OP and CSP, two operationalizations for FP to reflect current profitability and market value, and two operationalizations for risk to reflect bankruptcy risk and stock price volatility. We confirm that OP is essential for good financial performance and reduced risk (as expected), but the main effects of CSP are mixed. Importantly, we find that OP moderates the CSP–FP and CSP–risk relationships. Specifically, if OP is poor, CSP is of limited benefit to FP or risk. However, at or above a threshold level of OP, firms can use CSP to build upon it to yield further improvements in FP and reductions in risk. We discuss the implications of our findings for theory and practice.     

“Seeing to be seen”: The manager’s political economy of visibility in new ways of working

Recent changes in the world of work have modified the conditions of the exercise of management in ways that challenge managers’ traditional authority and identity, both symbolically and physically. In this context, we analyse the “visibilizing process” of managers, through which they attempt to make themselves more visible, in ways that reaffirm their authority and restore their identity as managers. To that end, we develop a Foucauldian framework on power and visibility, which sheds light on the “political economy of visibility” of the manager. We apply this framework to a case study that encouraged a re-spatialization of remote work in coworking spaces. The findings show how the manager in our case study staged his own visibility, by enhancing managerial control, to manage his invisibility and shape his intertwined identities. Through the visibilizing process, the manager legitimated his role, materialized his function, and restored his authority.     

Coalitions of Actors and Managerial Innovations in the Healthcare and Social Healthcare Sector

This paper studies the behavior of a variety of stakeholders around the adoption of managerial innovations desired by operational managers of health services institutions. We show that if the operational manager may cause the managerial innovation, the tool prospective is subject to power games around coalitions of actors. The study of several management situations in health services institutions enables us, using the game theory, to highlight the “winning”, “losing” and “uncertain” coalitions that can achieve operational management within the establishment to settle a managerial innovation.     

Decision-making Autonomy in UK International Equity Joint Ventures

This paper investigates approaches to decision making in international joint ventures (IJVs) from the perspectives of the transactions cost and resource‐based theories of the firm. In particular, the concept of autonomy in decision‐making in a sample of UK‐European equity joint ventures is examined. The study adopts a multi‐method personal interview and self‐administered questionnaire approach to examine managerial perceptions of decision‐making and autonomy in the parent firms and the joint venture. The findings show that there are differences in the perception of autonomy between each of the parent firms, and between the parent firms and the IJV management. When we unpack the nature of autonomy in detail, it is found that IJV managers have greater degrees of operational autonomy than strategic autonomy and that decision making by IJV managers takes place within the context of constraints set within the IJV's business plan. This confirms the transaction cost theory which posits that key internal markets (for management, technology and capital) will be under parent control and also supports the resource based view that key capabilities are protected under the business plan established by the parent firms. The influence on IJV autonomy of the moderating variables IJV performance and IJV duration are also examined.     

Constructing managerial manoeuvring space in contradictory contexts

This paper discusses manoeuvring space and demonstrates how autonomy, power and discretion need to be understood as constructed and integrated behaviours where managers manoeuvre between dilemmas in their own management practices. Twenty-seven Norwegian police managers were shadowed and interviewed. We found that constructions of manoeuvring space presupposed that managers balanced dilemmas. We identified three different strategies through which managers constructed manoeuvring space by navigating between dilemmas and actively constructing demands and constraints. These strategies were (1) decoupling, (2) sensegiving and (3) strategic positioning. Our findings add to the managerial discretion literature, arguing that constructions of manoeuvring space are central to managers’ development and to how they create opportunities and possibilities to make choices that balance conflicting dilemmas in contradictory contexts.     

The Role of Revenue‐Focused Managerial Performance Measures in Supply Chain Coordination

Many firms employ revenue‐focused managerial performance measures (RF‐MPMs) that cause managers to worry more about revenues than about costs. Although this can seemingly misalign the interests of a manager, we show that the use of such measures can help supply chain partners to overcome hold‐up issues with respect to capacity and promotion investments. We develop a game theoretic model in which two supply chain partners engage in repeated interactions in which the supplier invests in capacity and the buyer invests in demand promotion. Following the realization of demand in each period, the two firms negotiate over the output quantity and wholesale price. The novelty of our model is that we allow the owners of each firm to delegate decision‐making power and negotiating responsibility to a free‐agent manager. We characterize the conditions under which the owners of both firms employ RF‐MPMs in equilibrium and benefit from doing so. For a special case of our model, we show that for the owners of the buyer, an RF‐MPM is equivalent to a price only relational contract, and that it complements a price and quantity relational contract as a mechanism for mitigating hold‐up issues.     

The Role of Experience in Prioritizing Adherence to SOPs in Police Agencies

Research has perennially substantiated the belief that experience is a crucial determinant of an officer’s ability to effectively use discretion in making decisions. Officers cite experience as “the best teacher”, and police managers are likely to agree, usually with an anecdote or two about their personal maturation experiences. This study is an attempt to investigate this question with a bit more subtlety. In the following sections, we will: (1) explain the theory behind the discretion-experience relationship we propose, as well as theoretical opposition to this notion, (2) hone in on the perceived importance of agency standard operating procedures as an influence on discretion, (3) demonstrate that the relationship between officer experience and the priority attributed to SOPs is parabolic, and (4) discuss our findings in the context of structural functional organizational theory.     

Do CEOs exercise managerial discretion to save their jobs?

Chief Executive Officers (CEOs) wield considerable power and authority. In many industries and contexts, CEO turnover is studied in terms of antecedents, the event itself, and the related consequences. However, the extent to which CEOs exert their power and attempt to prevent their dismissal has not been thoroughly examined. In this study, we examine the role of CEOs exercising managerial discretion in their effort to prevent their own corporate demise. We hypothesize that CEOs cut discretionary expenses such as research and development, advertising, and rent in order to boost earnings and enhance financial performance. A sample of CEO turnover from Standard and Poor’s ExecComp database for the period 1992–1998 in US firms yielded 474 turnover firms and 2,066 control firm-years. We tested the effects of CEO turnover and managerial discretion on firm performance measured by cumulative abnormal stock returns. We also compared the turnover and non-turnover firms in terms of pattern of discretionary spending prior to CEO turnover. The results are consistent with our prediction that CEOs facing termination attempt to post higher earnings by reducing discretionary spending after controlling for firm performance, firm diversification, book to market ratio, and CEO ownership, industry-, and year dummies.     

Supply Networks as a Complex Adaptive System: Toward Simulation‐Based Theory Building on Evolutionary Decision Making

In this article, we examine how the firms embedded in supply networks engage in decision making over time. The supply networks as a complex adaptive system are simulated using cellular automata (CA) through a dynamic evolution of cooperation (i.e., “voice” decision) and defection (i.e., “exit” decision) among supply network agents (i.e., firms). Simple local rules of interaction among firms generate complex patterns of cooperation and defection decisions in the supply network. The incentive schemes underlying decision making are derived through different configurations of the payoff‐matrix based on the game theory argument. The prisoner's dilemma game allows capturing the localized decision‐making process by rational agents, and the CA model allows the self‐organizing outcome to emerge. By observing the evolution of decision making by cooperating and defecting agents, we offer testable propositions regarding relationship development and distributed nature of governance mechanisms for managing supply networks.     

Idiosyncratic volatility,executive compensation and corporate governance: examination of the direct and moderate effects

Entrenchment of private benefits by the CEO or dominant owners can lead corporations to avoid riskier but more private benefits resulting in greater idiosyncratic volatility and information flow trading. Using a unique database of 806 listed firms, we investigate the impact of CEO compensation and corporate governance on idiosyncratic volatility and information flow trading. We find strong and robust evidence that equity-based (fixed income) CEO compensation is negatively (positively) related to volatility and information trading. Incorporating an agent principal–principal perspective into our models of managerial discretion provides us with an accurate prediction of how the proportion of CEO compensation and the degree of entrenchment will influence risk-taking decisions as well as how equity-based compensation interacts with related-party transaction and ownership dispersion to influence stock volatility. Finally, we find that idiosyncratic volatility and information flow trading are also affected by CEO compensation and corporate governance, which act as instrumental variables, while subject to environmental variants and the jointly determined.     

POM Forum: Transfer of Changing Production Know‐How

Even with the rich literature on knowledge management, we still don't know enough about how the rate of change in production‐know‐how affects the choice of mechanisms for its transfer. Codifying tacit know‐how helps, but codification becomes more challenging as the know‐how changes more frequently. Transfer of tacit know‐how becomes much more complicated when it changes often. We need more research in this area, particularly to help production and operations managers who must ultimately use the new know‐how and change their companies' production processes. The paper suggests a framework as a step in that direction. The framework focuses on the interplay between the level of codification and the rate of change of production know‐how, and identifies four zones for classifying production know‐how: “slow and codified,” “slow and tacit,” “fast and codified,” and “fast and tacit.” Examples from McDonald̂s, Club Med, Intel, and AOL are used to illustrate primary transfer mechanisms for each zone (manuals and systems, people, joint‐development, and projects, respectively). Appropriate absorptive capacities in the production units for each zone are also identified. Since the ultimate responsibility of operations managers is to improve (i.e., change) their production know‐how as fast as possible, they would be wise to adopt policies that are closer to those suited for the “fast and codified” zone. Intel and Toyota show good models.