The Moderating Influence of Competitive Intensity on the Relationship between CEOs' Regulatory Foci and SME Internationalization

The international business literature has mainly focused on the impact of top managers' psychological attributes on firms' strategic decisions. However, the potential moderating influence of industry conditions such as competition, has not been well explored. Deriving insights from the regulatory focus and upper echelons theories, this paper extends the international business and regulatory focus literature by investigating how the impact influence of CEOs' regulatory foci on firms' degree of internationalization depends on the intensity of competitive market conditions. Using primary data gathered from 289 small and medium-sized enterprises (SMEs) in Ghana, the findings of the study revealed when competition is intense in the domestic market, the potency of a CEO's promotion focus as a driver of internationalization is amplified. In addition, the research shows that intense domestic market competition weakens the negative influence of a CEO's prevention focus on a firm's degree of internationalization. These findings have important research and managerial implications for international business.     

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.     

Imitate Others? Not if We Have the Chance: Competitive Differentiation in Medical Malpractice Insurers' Pricing Decisions under Uncertainty

Several perspectives assert that organizations facing uncertainty tend to imitate other organizations' actions. While one might therefore expect to see great homogeneity across fields characterized by uncertainty, it is surprising that this homogeneity has not been observed more frequently in practice. Research investigating this puzzle has typically focused on the role played by organizational characteristics or the information organizations possess about their environments. Instead, this study turns attention to the information others possess about the organization. To that end, I disaggregate organizational uncertainty into the uncertainty facing decision makers and the uncertainty faced by others about what those decision makers might ultimately do, providing a more fine grained analysis of uncertainty and its impact on competitive action than typically offered in this literature. I suggest that uncertainty in competitors' evaluations of the organization provides an opportunity for the organization to differentiate itself rather than imitate others. I also suggest that this effect is stronger than the effects of the uncertainty facing the decision makers themselves. Related hypotheses are tested on a panel of medical malpractice insurance providers. The study's perspective generates unique predictions regarding imitation and differentiation in this industry and across other contexts featuring both uncertainty and competition.     

Cognitive model of patient aggression towards health care staff: The patient's perspective

Abstract

Aggression towards health care staff has become the focus for research as well as for government intervention. Negative effects upon staff and organizations have been established, yet few detailed explanations are offered for this aggression, and none represents the patient's perspective. This paper presents a model from the patient's perspective that takes account of situational variables, while also focusing upon patient cognitions. It also considers physiological responses related to arousal that might underpin aggression in an anxiety-provoking situation. In a previous study the frequency with which aggression was preceded by some anxiety-provoking event and the extent to which assailants displayed diminished cognitive processing were established; these were incorporated into the model. Increased anxiety commonly experienced by patients can have a negative effect upon cognitive processing. Anxiety generates a hyper-vigilance for threatening stimuli, induces selective attentional bias for threat, and causes a narrowing of attention, thus reducing cues and information upon which to make accurate appraisals and attributions. With such impairments, patients may make negative rather than positive attributions regarding actions of staff, which are frequently anxiety provoking. Thus, patients perceive staff behaviour as threatening rather than benign, and in the absence of positive attributions it will invoke an aggressive response. What health care staff perceive as aggression may be seen by patients as a defence against perceived attack. Changes in policy that take this into account may reduce future aggressive incidents.     

The role of transformational leadership in enhancing organizational innovation: Hypotheses and some preliminary findings

A wide range of factors has been found to affect organizational innovation. Of these, top managers' leadership style has been identified as being one of the most, if not the most, important. Yet, few studies have empirically examined the link between this factor and innovation at the organizational level. This study builds on the extant literature to propose four hypotheses about how top managers' leadership styles directly and indirectly (via empowerment and organizational climate) affect their companies' innovation. A multisource approach is used to collect survey data from 32 Taiwanese companies in the electronics/telecommunications industry. The findings support a direct and positive link between a style of leadership that has been labeled as “transformational” and organizational innovation. They also indicate that transformational leadership has significant and positive relations with both empowerment and an innovation-supporting organizational climate. The former is found to have a significant but negative relation with organizational innovation, while the latter has a significant and positive relationship. The implications of the findings and possible directions for future research are discussed.     

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.     

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.     

Socio-biographical Antecedents of Intercultural Effectiveness: The Neglected Factors1

Behavioural, attitudinal, cognitive and personality traits factors have been recognized as the main determinants of intercultural effectiveness. This paper argues for the need to recognize the plausibility that expatriates having similar behavioural, attitudinal, cognitive and traits characteristics may vary significantly in their intercultural effectiveness. This is because some expatriates may be effective or ineffective by chance or birth (ascribed rather than achieved). Therefore expatriates' ‘socio-biographical’ background, such as hisher ethnicity, age, nationality, educational qualification, profession (role) and religion, is noted as among the most significant factors that can impact on intercultural effectiveness. It is argued that these variables deserve serious attention given the diversity of expatriates from different national and ethnic backgrounds.     

Understanding Managers' Moral Decision-Making

The paper discusses managers' moral decision-making based on analyses of managers' talk when they are facing a morally problematic situation. The qualitative data was collected by a survey questionnaire from Finnish top managers in large manufacturing companies. The research questions are: How managers construct good in their speech? How managers reason for a moral choice? Managers' reasoning is analysed by grouping the responses according to whether they agree or disagree with the presented moral dilemma, and by finding the cultural distinctions managers make in the responses. The analysis shows that ethical theories are used, if not explicitly, at least implicitly in managers' moral decision-making. Good is constructed in managers' speech by either referring to the consequences of an action, to certain moral norms or rules, or to the culturally accepted way of action. The content of the reasons for a moral choice varies depending on whether the response reflects disagreeing, agreeing or uncertain attitude towards the given moral dilemma.     

Should knowledge be distorted? Managers' knowledge distortion strategies and organizational learning in different environments

Organizational learning provides a sustainable competitive advantage for an enterprise facing a highly volatile environment, and managers' knowledge sharing strategies are of vital importance to organizational learning. This study systematically evaluates the effects of managers' knowledge distortion types (i.e., misrepresentation and omission), distortion levels, and distortion preferences in a formal organizational context under various environments. Multi-agent simulation results demonstrate that a slight level of managers' knowledge misrepresentation and a high level of managers' knowledge omission are beneficial in a closed system. With increasing turnover rate, both misrepresentation and omission are detrimental. Moreover, in an open system with environmental turbulence, misrepresentation is valuable to performance, while omission is neutral. In general, misrepresentation plays a leading role in the simultaneous combination of two distortion strategies. Implications for future research and practice are discussed.     

Cognitive model of patient aggression towards health care staff: The patient's perspective

Aggression towards health care staff has become the focus for research as well as for government intervention. Negative effects upon staff and organizations have been established, yet few detailed explanations are offered for this aggression, and none represents the patient's perspective. This paper presents a model from the patient's perspective that takes account of situational variables, while also focusing upon patient cognitions. It also considers physiological responses related to arousal that might underpin aggression in an anxiety-provoking situation. In a previous study the frequency with which aggression was preceded by some anxiety-provoking event and the extent to which assailants displayed diminished cognitive processing were established; these were incorporated into the model. Increased anxiety commonly experienced by patients can have a negative effect upon cognitive processing. Anxiety generates a hyper-vigilance for threatening stimuli, induces selective attentional bias for threat, and causes a narrowing of attention, thus reducing cues and information upon which to make accurate appraisals and attributions. With such impairments, patients may make negative rather than positive attributions regarding actions of staff, which are frequently anxiety provoking. Thus, patients perceive staff behaviour as threatening rather than benign, and in the absence of positive attributions it will invoke an aggressive response. What health care staff perceive as aggression may be seen by patients as a defence against perceived attack. Changes in policy that take this into account may reduce future aggressive incidents.     

Top Management Teams,Business Models,and Performance of Biotechnology Ventures: An Upper Echelon Perspective*

In this paper we introduce a new contingency variable that moderates the effect of top management team composition on organizational performance – the organization's business model. Arguing from an upper echelon perspective and drawing on data from 99 German biotechnology ventures, we show that founder‐based firm‐specific experience of management team members can have either a positive or a negative effect on performance, depending on whether the venture pursues a platform or a therapeutics business model, respectively. Our results also show that managers' experience collected in the pharmaceutical industry has a positive effect on performance, and that this effect is more positive for therapeutics than for platform ventures. We discuss the implications of these findings for the literature on upper echelons and entrepreneurial founding teams.     

Phases of the Adoption of Innovation in Organizations: Effects of Environment,Organization and Top Managers1

Multidimensional empirical examinations of the adoption of innovations in organizations, and the influence of factors within each dimension on the phases of adoption, are scarce. This study examines the effects of environmental, organizational and top managers' characteristics on the initiation, adoption decision and implementation of innovation. Using a sample of approximately 1200 public organizations in the United States, we found that while each dimension accounts for unique variance in the adoption of innovation, organizational characteristics and top managers' attitudes toward innovation have a stronger influence than environmental and top managers' demographic characteristics. We also found no difference in the direction of effects of any antecedent, but did find differences in the significance of effects of several antecedents, on the phases of innovation adoption. We discuss the implications of these findings and suggest ideas for future research.     

Strategic Influences of Technological Innovation in Greece

This exploratory paper analyses the ‘importance’ and ‘awareness’ of a set of established ‘strategic’ influences of technological innovation in the context of a European newly‐industrialized country. The author interviewed 105 Greek manufacturing firms (mainly SMEs) and measured their perceived innovation rate as well as 17 ‘strategic’ factors regarding top‐management practices and characteristics. Using correlation and regression analysis the initial group of factors was reduced to a subset of five ‘major importance’ influences of innovation, namely: incorporation of technology plans in the business strategy, managerial attitude towards risk, perceived intensity of competition and rate of change of customer needs, and finally status of the CEO (owner‐CEOs were associated with higher innovation rate than appointed CEOs). The ‘statistical’ results are exploratory and have to be treated with caution, as they are highly dependent on the accuracy of the respondents' perception of their company's innovation rate and top‐management practices and characteristics. The ‘statistical’ results were then compared with the managers' perception on the important factors determining innovation (also measured during the interviews). Overall the perceptual analysis confirmed the significance of the statistically important variables, with the exception of a disagreement in the direction of association between the status of the CEO and the rate of innovation. In general, top‐management characteristics proved more important ‘strategic’ influences of innovation for the Greek SMEs than corporate practices. The study also indicated that the important influences of innovation were generally scarce in the Greek institutional context. The highly innovative companies were the ones to overcome country‐specific innovation barriers such as the low supply of technology, the low level of competition and the risk‐averse national culture.     

International mergers and takeovers: A review of trends and recent developments

“Merger-mania” is an unquestioned piece of jargon in current vogue. In this study of international merger and take-over activity in the 1980's, the authors assess current trends in relation to the last 20 years.They detect several new features: the changing nature of the aggressor, the urge to merge in foreign markets, and the tendency for companies to integrate within existing industry boundaries rather than diversifying into new sectors.The cockpits are the major industrialised countries of Europe as well as the United States, but mergers in Japan although still somewhat rare, are on the increase.There are several conclusions of note. International takeovers appear to lead to industrial domination, the European “invasion” of the US remains as strong as ever, and company acquisition away from product diversification and geographical diversification looks like a winning formula.     

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.     

Joint Pricing and Contingent Free-Shipping Decisions in B2C Transactions

We consider an online retailer's joint pricing and contingent free-shipping (CFS) decisions in both monopoly and duopoly structures, which is an important marketing-operations interface problem. We begin by investigating the impacts of a retailer's decisions on consumers' purchase behaviors, and show that the CFS strategy is useful to acquire the consumers with large order sizes. Then, we compute the probability of repeated purchases, and construct an expected profit function for an online retailer in the monopolistic setting. We find that the fixed shipping fees may have the largest impact on the retailer's profit among all shipping-related parameters, and the retailer can benefit more from homogeneous markets than from heterogeneous ones. Next, we consider the competition between two retailers in the duopoly structure, and analytically show that, if two retailers have identical fixed and variable shipping fees, then their equilibrium decisions are equal. In order to numerically find a Nash equilibrium for two retailers, we develop a simulation approach using Arena and OptQuest. Our simulation-based examples suggest that, as a result of the competition, the two retailers should decrease their profit margins but increase their CFS cutoff levels if they have the same fixed and also the same variable shipping fees.     

The Alliance Experience Transfer Effect: The Case of Industry Convergence in the Telecommunications Equipment Industry

A central premise of the industry change literature is that firms change their strategic actions when an industry changes. Industry convergence (IC), the blending of boundaries between industries creating competition among firms that previously did not compete, is increasingly impacting many industries and is a salient case of industry change. Acquisitions are an important action shaping the course of IC because they trigger imitation and bandwagon effects further accelerating IC. This paper focuses on why and when learning from alliances reduces uncertainty resulting in acquisitions during IC: an ‘alliance experience transfer effect’. We demonstrate the utility of this mechanism for the substitution‐based form of IC that occurred between the telecommunications equipment and computer networking industries. Our key insight is that when the extent of IC is low there are significant transfer effects but, as the extent of IC increases, firms have access to an expanding volume and diversity of information sources that reduce uncertainty, thus weakening the transfer effect mechanism. We contribute to the alliance–acquisition relationship and learning literatures by demonstrating that the alliance experience transfer effect mechanism explains changes in firm strategic action (alliancing and acquiring) as the extent of IC changes. We also introduce a semi‐convergence perspective by directly measuring the extent of IC.     

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.     

Corporate Diversification,Information Asymmetry and Insider Trading

The literature suggests that corporate diversification destroys firm value. This value destruction is usually considered to be a consequence of managers' pursuing diversification strategies to benefit themselves rather than to increase firm value. This paper provides evidence that casts doubt on this agency theory‐based explanation for corporate diversification. Evidence based on insider trading suggests that managers themselves consider their diversification strategies to be value‐increasing. Specifically, it is documented that corporate insiders (directors) purchase more of their firms' shares in the open market when corporate diversification is high. Moreover, insiders purchase more when the level of diversification discount is high, suggesting that they disagree with outside investors' undervaluation due to diversification. It is also found that the market reaction to insiders' purchases is positively related to corporate diversification. This result suggests that outsiders consider the amount of favourable information contained in insiders' purchases to increase with the extent of corporate diversification.