CEO transformational leadership and organizational outcomes: The mediating role of human–capital-enhancing human resource management

Using a field survey and company data of 170 firms in Singapore, we tested an integrated theoretical model relating CEO transformational leadership (TL), human–capital-enhancing human resource management (HRM), and organizational outcomes, including subjective assessment of organizational performance, absenteeism, and average sales. We found that human–capital-enhancing HRM fully mediates the relationship between CEO transformational leadership and subjective assessment of organizational outcomes and partially mediates the relationship between CEO transformational leadership and absenteeism. We discuss practical and theoretical implications.     

Implementing human resource development best practices: Replication or re-creation?

Abstract

Firms increasingly introduce HRD ‘best practices’ developed somewhere else, but results often fall short of expectations. Much of existing theory fails to guide the implementation of HRD best practices because it does not recognize how introduced practices interact with existing practices in the firm. In this paper, we contrast the dominant perspective ‘Implementation as Replication’ with a perspective of ‘Implementation as Re-creation’. Through four stages of the implementation process, we identify and discuss how these contrasting perspectives yield different implications for how firms go about introducing HRD best practices. First, when firms take up a practice, is this a process of adoption or translation? Second, is it assumed that new knowledge can be implanted directly and lead to new behaviour, or is active experimentation a necessary precondition to gain new knowledge? Third, are deviations from the intended plan considered errors to be corrected or sources for learning? Fourth, are introduced best practices treated in isolation or as integral parts of the firm's management system? We argue that implementation efforts guided by the re-creation perspective increase the prospects of HRD best practices succeeding as a useful tool in the receiving firm.     

Evidence-based human resource management practices in three EU developing member states: Can managers tell truth from fallacy?

Good management practice is assumed to be the product of a good knowledge base and its application, not least in Human Resource Management (HRM). The aim of this study is to assess the extent to which managers adhere to practices of HRM that are more likely to be upheld by research evidence as opposed to beliefs for which research evidence is highly lacking. In addition, it evaluates practitioners’ explanations about adopting HR practices. This study was conducted in three European Union (EU) developing countries (Poland, Croatia and Malta). A mixed-methods approach is adopted, utilising a web-based questionnaire targeting a purposive sample of 300 practitioners occupying managerial positions and directly involved in people management (Study 1), followed by 20 in-depth interviews with similar participants (Study 2). Our study reveals that managers are always fully cognisant of the main body of research evidence related to specific HR practices. Practitioners are more likely to access required knowledge for applications through popular sources rather than more reliable ones due to time constraints, inaccessibility and inability to evaluate evidence. While they appreciate the role of theory, the leap from theory to application is not easy or straightforward, commenting that large gaps between research and practice prevail. These overall trends may imply that practitioners base their decisions on personal experience rather than on evidence-based knowledge or expertise acquired through evidence-grounded applications. Results suggest that future research should focus on closing the gap by evaluating how academics impart the knowledge and how practitioners apply that knowledge.     

Market reactions to acquisition announcements: The importance of signaling ‘why’ and ‘where’

Acquisitions are risky events but not all acquisitions involve the same levels of risk. We suggest that the announced acquisition motive – the ‘why’ of the acquisition – is an important risk signal. We categorize acquisition motives and distinguish between acquisitions with ‘pure explore’ and ‘pure exploit’ motives. Recognizing that most acquisitions have multiple motives, we identify acquisitions with ‘ambidextrous’ motives – that is different combinations of explorative and exploitative motives – too. Then, building on recent contributions to signaling theory, we argue that the ‘why’ will matter more, if the ‘where’ pertains to a high-risk setting. We measure this using target-to-acquirer industry relatedness. We find that the market reacts more positively to pure acquisitions, aimed at exploration or exploitation, compared to ambidextrous acquisitions. We show that the market reacts more positively to ambidextrous acquisitions orientated towards exploitation than ambidextrous acquisitions orientated toward exploration. Finally, we find that relatedness moderates this relationship, in that the market is more willing to tolerate exploration in a related industry. Our core contribution is to the literatures on acquisition motives and ambidexterity. We provide new insights into the incidence of specific motives, the ways in which they are mixed, and the market's reaction to their announcement. In addition, we contribute to the emerging literature that takes on behavioral perspective of market reactions by showing that the ‘why’ and ‘where’ of an acquisition matter.     

Does age diversity boost technological innovation? Exploring the moderating role of HR practices

We shed new light on the linkages between age diversity and technological innovation, and explore the moderating effect of human resource practices on such relationships. Based on a linked dataset that contains cross-sectional survey data and longitudinal employer–employee data from Luxembourg, we show that the effect of age diversity on innovation depends on the age distribution pattern of employees: positive for firms characterized by heterogeneous age groups (variety), negative for those dominated by polarized age groups (polarization). HR practices such as information sharing mitigate the adverse effects of age polarization on innovation. Practices enhancing development such as training are found to play a significant and negative role in moderating the relationship between age diversity and innovation. We illustrate how academics and practitioners may use HR practices within the context of a heterogeneous aging workforce and the age-related differences in values and abilities between generations.     

Perceived technological turbulence and individual ambidexterity – The moderating role of formalization

Today's turbulent environment, with fast and unpredictable technological changes, requires employees to increasingly act ambidextrously, i.e., to simultaneously incorporate exploitative and explorative tasks in their work roles. To improve our understanding of how to foster individual ambidexterity in technologically turbulent environments, we draw on organizational management theories by arguing (1) that perceived technological turbulence directly affects individual ambidexterity in a positive way and (2) that organizations can strengthen this effect by providing employees with internal stability in these times of external changes through high degrees of formalization. Using data collected in a three-wave online survey of 739 German employees, this study demonstrates that employees who perceive high degrees of technological turbulence in their organization's environment show high degrees of ambidexterity in their work. In addition, we show that formalization in the form of written rules, procedures, and instructions positively moderates this relationship so that employees' ambidexterity is highest when both perceptions of technological turbulence and formalization are high. We conclude by discussing the implications of these findings for the ambidexterity literature, for future research and managerial practice.     

Fostering operational management “Best Practices” in subsidiary plants in the Western Balkans: The role of MNC home-country environment and resource allocation

We investigate the adoption of operational management “best practices” in multinational corporation (MNC) subsidiary plants in the Western Balkans. Building on the Practice-Based View (PBV), we suggest that subsidiary plants are more likely to operate according to widely recognized best practices, if these practices are already common in the MNC home country. We also examine the degree to which the MNC can facilitate best practices in their plants by allocating organizational and human resources. We test our hypotheses using survey data from subsidiary managers and secondary company data (n = 129), supplemented with manager interviews (n = 14), collected from European, U.S., and Asian MNCs with subsidiary plants in Bosnia and Herzegovina, Croatia, Serbia, and North Macedonia. Results indicate that the subsidiary plants adopt practices that are common in the MNC home country. They do so to a greater extent when the MNC commits organizational resources to the plants, such as codified written procedures and trainings. Contrary to our expectations, there is no benefit to allocating human resources, such as expatriates and business travelers. We provide insights into the transfer and implementation of best practices in the Western Balkan context, enhance our understanding of the PBV by presenting a specific application of this theoretical perspective, and provide practically relevant results for managers and policymakers.     

Executive turnover – Firms’ subsequent performances and the moderating role of organizational characteristics

I apply context-emergent turnover (CET) theory to investigate how different organizational characteristics moderate the effect of executive turnover on firm performance. I suggest and investigate different organizational characteristics as contextual factors. I find that executive turnover reduces future sales and employment growth, and show that three organizational characteristics (the firm's age, top management tenure, and employee tenure) moderate this effect. These results contribute to our understanding of the role of context in moderating executive turnover. Previous studies that examined the performance effects of executive turnover have often struggled to prove the causality between this event and a firms' post-turnover performance conclusively. The problem is that executive turnover is often correlated with a firm's current performance and expected future challenges. I address this endogeneity problem by exploiting the exogenous variation in firms' performances following 516 top managers' unexpected deaths. I use a matched sample to investigate which organizational characteristics that mitigate the negative effect on the firms' subsequent performances resulting from these executive turnovers. I obtained this sample randomly from a comprehensive dataset containing yearly observations of all Danish firms from 1995 to 2007.     

When bankers feel guilty–Employees’ vicarious guilt and the support of moral business practices

Media regularly report on misconduct and ethical transgression in a variety of professions, including banking. This research investigates the conditions under which individual employees experience guilt for wrongdoings on behalf of their profession. In a sample of 295 bankers, I find an inverted u-shaped relationship between professional identification and collective guilt. Furthermore, the data indicates a positive relationship between levels of experienced guilt and degree of moral intentions, such as supporting stricter regulations that aim to prevent future professional malpractice. The study's results present guilt as a central factor related to professional identification and intentions towards improving ethical business practices.     

Strategic human resource management: where have we come from and where should we be going?

Strategic human resource management (SHRM) implies a concern with the ways in which HRM is critical to organizational effectiveness. This straightforward assertion is examined in theory and through research evidence to reveal high levels of complexity in relation to how, when and why the interconnection between HRM and organizational outcomes is achieved. The two dominant normative models of 'best fit' and 'best practice' are considered. The paper concludes that the HR strategies of firms are heavily shaped by contextual contingencies, including national, sectoral and organizational factors. However, such a conclusion does not invalidate all 'best-practice' thinking. Although constrained in certain ways, underpinning principles of labour management still have relevance to practice as essential attributes of a firm's ability to compete in its chosen markets. The paper then considers the resource-based view (RBV) of the firm and asks whether this provides a better basis for the development of theory in SHRM and in understanding the contribution of HRM to the achievement of sustained competitive advantage. While limits to the utility of RBV in respect of SHRM theory are identified, important implications for research are signalled. Trends in the RBV literature are pushing all those interested in strategy towards studies of intellectual capital, learning processes and organizational adaptability. Researchers in HRM could, if they wished, play a central role in these developments because questions of how to attract, motivate and develop workers with critical and scarce abilities, and develop effective processes of work organization, must be fundamental to any model of knowledge-based competition. Greater progress will be made when organizations are studied in a much more interdisciplinary or systemic way.     

The role of the board in shaping foundations’ strategy: an empirical study

This paper investigates the relationships of the choice of philanthropic strategy with board capital (diversity and networks), board activities (board processes, internal board committees, and board effectiveness), and CEO leadership. Using a sample of 110 Italian foundations, the research shows that board processes have the strongest positive association with an evolved strategic approach to philanthropic institutional grant-giving, while board diversity and strong CEO leadership are associated with the strategic approach only under certain conditions. In particular, good governance processes (e.g., training the board, self-evaluation of trustees, setting the stage for effective board and committee meetings, implementing control software, and steering meetings to improve the board’s analysis) are positively associated with evolved strategic approaches to philanthropy (e.g., signaling other funders for the best grantees, improving the performance of grant recipients, and advancing selected social fields’ state of knowledge and practice).     

Newcomers’ reactions to unfulfilled leadership expectations: An attribution theory approach

This paper examines newcomers’ reactions when facing unfulfilled leadership expectations. Although leaders are ascribed a key role in newcomers’ socialization, very little is known about newcomers’ expectations of leadership and their subsequent behaviors when these expectations are not fulfilled. Against the background of a follower-centered perspective, we develop a differentiated model of newcomers’ leadership attributions. As general attribution theory has recently shown, causal links are not always made in clear-cut ways. Thus, there may be several steps between the attribution and non-attribution of leadership. As our qualitative empirical study in Germany reveals, different unfulfilled leadership expectation types lead to equally different leadership attribution levels, with various behavioral consequences for newcomers. We suggest a dynamic model, starting with investing in a relationship before newcomers choose refusing reactions such as confrontation or withdrawal.     

Do emotionally perceptive leaders motivate higher employee performance? The moderating role of task interdependence and power distance

Extant emotional intelligence research has examined the relationship between employees' emotional intelligence and their job performance. We developed theory to extend this line of research to the domain of leader–employee relationships. Integrating emotional intelligence research with social exchange theory, we contended that leaders' emotion perceptions enhance employees' job performance. Drawing from social impact theory, we further argued that the strength of this relationship depends upon two contextual variables: within-group task interdependence and power distance. We tested our hypotheses using a sample of 350 employee nested in 74 workgroups. Hierarchical linear modeling results supported the hypothesized relationships between leaders' emotion perceptions and employees' job performance, and revealed that this relationship was strengthened by task interdependence and attenuated by power distance.     

The moderating role of leader and follower sex in dyads on the leadership behavior–leader effectiveness relationships

Transformational leadership (TL) and leader–member exchange (LMX) literatures provide theoretical frameworks and accompanying empirical evidence for studying the relationship between leader behavior and effectiveness. Although prior attention has been given to gender differences in leadership style and leader effectiveness, the moderating effects of the sex of the leader and subordinate on the leadership–leader effectiveness relationship have not been investigated. In a field study of employees from a manufacturing plant, we examined whether leader and subordinate sex, and the sex composition of the leader–subordinate dyad, moderated the linkages of each set of leader behaviors (i.e., TL and LMX) with actual evaluations of leader effectiveness provided by the leader's subordinates and direct supervisor. Although female leaders were rated as more effective than male leaders overall, a fine-grained analysis of leader–subordinate dyads revealed that the male leaders benefited more than the female leaders from the use of transformational leadership in the leader behavior–leader effectiveness relationship. Implications and future research directions are discussed.     

How to beat early movers: The role of competitive strategy and industry dynamism on followers’ performance in the telecommunications industry

The idea of first-mover advantages is frequently used by both managers and academics alike. Despite its importance for understanding the performance of entry in new markets, the evidence remains mixed. Our study advances research on the entry timing-performance relationship by adopting a contingency perspective that includes both micro (competitive strategies) and macro (industry dynamics) dimensions to explain differences in entrants' profitability. In this paper we focus on follower firms and propose that cost leadership is the best strategy for them to successfully entering a market. In addition, recognizing the contingency effect of industry dynamism, we also examine how market growth and technology evolution affect the effectiveness of followers’ competitive strategies. Specifically, we propose that followers will be better off by using cost strategies in growing markets, while when operating in contexts of technological change the performance of the cost leadership strategy will be lower.     

Leader–member exchange and organizational dehumanization: The role of supervisor’s organizational embodiment

This research examined the negative relationship between leader–member exchange (LMX) and organizational dehumanization (i.e., employees’ perceptions that their organization treats them like tools), and specifically the consequences of this LMX–dehumanization relationship on employees’ emotional exhaustion, affective commitment, and voice behaviors. Further, given that supervisors act as representatives of the organization, we argued that these relationships would be stronger for employees identifying their supervisor with the organization (i.e., high supervisor’s organizational embodiment). Across two samples, results showed that high-quality LMX was negatively associated with organizational dehumanization. Further, organizational dehumanization was found to mediate the relationships between LMX and outcomes (i.e., emotional exhaustion, affective commitment, and voice behaviors). Finally, the mediation model was moderated by supervisor’s organizational embodiment. More specifically, the negative effects of LMX on organizational dehumanization and its subsequent outcomes were stronger when leaders were perceived as sharing many characteristics with their organization. This research expands the recent and scarce knowledge on the determinants, boundary conditions and outcomes of organizational dehumanization. Our findings suggest that interpersonal relationships at work and, in particular, very common supervisor-related perceptions should be considered when examining organizational dehumanization.     

The Career Advancement Prospects of Managers and Professionals: Are MIS Employees Unique?

The present study examined the career advancement prospects of MIS and non-MIS employees, as well as the relationships of career advancement prospects with job performance evaluations, job satisfaction, career satisfaction, and organizational commitment for MIS and non-MIS professionals and managers. Participants included 134 MIS professionals and managers and 397 non-MIS professionals and managers of a large communications company. The results provided no evidence that MIS employees experience more restricted career advancement prospects than non-MIS employees. In addition, job performance evaluations generally had positive effects on career advancement prospects; career advancement prospects had a number of positive effects on job satisfaction, career satisfaction, and organizational commitment; and job satisfaction and career satisfaction had positive effects on organizational commitment. These findings are related to prior research, suggestions for future research are offered, and implications for the management of MIS employees are identified.     

Leveraging middle managers’ brokerage for corporate entrepreneurship: The role of multilevel social capital configurations

Building on recent efforts to bring a socio-political perspective to social capital research, we develop and test a multilevel framework that explains why middle managers who occupy brokerage positions differ in their ability and willingness to engage in entrepreneurial behavior. More specifically, we provide a contextualized understanding of the links among middle managers' brokerage, their political-support ties, and their personal initiative. Results derived from data on 383 middle managers and 72 top managers in 34 business units indicate that political-support ties with top managers strengthen the relationship between middle managers’ brokerage and personal initiative. However, this positive effect depends on the social capital resources available in the focal business unit. It is attenuated in business units with a supportive and trusting social context and amplified in business units with high levels of internal connectedness. By uncovering these incompatibilities and complementarities, our study demonstrates the value of accounting for different social capital configurations and the interplay of their inherent social capital resources when examining the effects of brokerage on corporate entrepreneurship.     

The challenge of board composition: Effects of board resource variety and faultlines on the degree of a firm’s international activity

This study explores the relationship between diversity in board composition and the degree of a firm's international activity. Specifically, we posit that board resource variety has a positive relationship with the international activity of the firm and that the strength of board faultlines moderates this relationship. Using data collected from Spanish public companies over the period 2005 to 2010, our analysis shows strong support for our hypotheses. Our work contributes to the literature on board's diversity by demonstrating that board resource variety should be captured by considering “the director profile” rather than any single attribute and that this type of variety can engender subgroups that weakens its benefits. Therefore, our results have implications for the strategic management challenge international firms face when they put together their boards. A corporate board needs to structure itself in such a way as to benefit from the wealth of the variety of its resources, but without succumbing to the risks posed by conflicts between subgroups arising from the presence of faultlines.