An Empirical Exploration of Decision-making Under Agency Controls and Stewardship Structure

abstract Two theories have emerged in the managerial control literature as to the best way for organizations to ensure that managers are acting in the firm's best interest: agency theory, which stresses controlling decision‐makers through monitoring and incentives aligned with organizational goals, and stewardship theory, which stresses that decision‐makers will act in the organization's best interest even in the absence of controls. Much of the research investigating the utility of these two positions is based on archival data where actual decision‐making can only be inferred. In this study, we utilize a laboratory methodology in order to determine if decision‐makers actually make different decisions when under the types of control (or lack thereof) suggested in these two theories. The results of this study show that individuals under agency controls invest more in alternatives that maximize profits of an organization than individuals under stewardship controls.     

Evaluating intergenerational risks

Climate policies have stochastic consequences that involve a great number of generations. This calls for evaluating social risk (what kind of societies will future people be born into) rather than individual risk (what will happen to people during their own lifetimes). We respond to this call by proposing and axiomatizing probability adjusted rank-discounted critical-level generalized utilitarianism (PARDCLU) through a key axiom ensuring that the social welfare order both is ethical and satisfies first-order stochastic dominance. PARDCLU yields a new useful perspective on intergenerational risks, is ethical in contrast to discounted utilitarianism, and avoids objections that have been raised against other ethical criteria. We show that PARDCLU handles situations with positive probability of human extinction and is linked to decision theory by yielding rank-dependent expected utilitarianism—but with additional structure—in a special case.     

Irrational decision making: Cultural influence on environmental nonprofit organizations' advocacy strategies

The determinants of environmental nonprofit organizations' (ENPOs) advocacy strategies is particularly important in East Asian countries, such as Taiwan, in which the public values harmony and aggressive movements are often controversial because of the influence of Confucianism. What triggers ENPOs in Taiwan to initiate aggressive environmental protests is consequently a question worth investigating. Accordingly, this study sought answers to the unasked question: How do ENPOs' decision makers decide what types of advocacy activities to pursue? To answer this question, this study utilized cultural theory (CT) to develop hypotheses to test data collected through an online survey in Taiwan. The evidence confirms what CT predicted. ENPOs' decision making on advocacy activities is neither affected by their organizational scale/resources nor the effectiveness and acceptance of environmental activities. Instead, ENPOs' organizational culture plays a crucial role, especially in explaining advocacy activities that are relatively controversial and less accepted by the Taiwanese public. ENPOs that have egalitarian and individualistic organizational cultures are more likely to initiate every type of environmental activity, especially protest-based activities. Based on the results, organizational culture may be useful in explaining the bounded rationality behind decision making. This result also indicates that ENPOs in Taiwan should plan more carefully before initiating activities. Actions without careful planning may result in resource waste and legitimacy challenges. The results of this study can be beneficial for ENPOs to reconsider their decision making regarding environmental advocacy.     

Ethical climate and pro-social rule breaking in the workplace

Pro-social rule breaking (PSRB), rule-breaking to promote the interests of the organization, is a burgeoning topic on the scholarly landscape, but drivers of this behavior remain largely unexplained. This paper seeks to extend theory on PSRB by conceptualizing this behavior as an ethical decision requiring tradeoffs and ethical assessments. Specifically, we offer a model of PSRB that contextualizes the behavior within Victor and Cullen's (1988) five-dimensional typology of organizational ethical climate. We offer a set of propositions that provides theory on the role of each climate type on PSRB, as well as additional theorizing about salient individual attributes that impact PSRB. In addition to clarifying PSRB as an ethical decision, this paper offers theory at multiple levels of analysis on what drives PSRB. Specifically core self-evaluations are proposed as antecedents to PSRB. This theorizing is also integrated into literature on HR policy and HR decision-making implications of the model for HR practitioners are discussed, and a set of future research directions are offered.     

A framework for strategic decision making and performance among Chinese managers

This study develops an integrative model that explains the relationship between Chinese culture, managers' strategic decision making (SDM) processes, and organizational performance. For the study 1200 participants were randomly selected from a business club's company register, resulting in 204 valid respondents. The results highlighted two significant SDM paths used by managers: (1) the cognitive-speed path, which suggested that Overseas Chinese managers (the Chinese who live outside of Mainland China) focus on the big picture, draw analogies from past experiences, and use extensive networks to reduce the duration of the decision process; and (2) the social-political path which shows that Overseas Chinese managers focus on collective interests, strive to maintain harmony, and to save face while using a collaborative style to handle conflict; this approach reduces dysfunctional political behavior, while reinforcing the decision team's focus on common goals. From these results we concluded that a speedier decision making process (based on intuition, experience, and networks) accompanied by the appropriate use of political behavior (that created harmony, through a hierarchical structure, during conflict management) in the Overseas Chinese managers' strategic decision making process could positively influence organizational performance.     

Exploring the reshoring and insourcing decision making process: toward an agenda for future research

The topics of reshoring and insourcing have recently become more widely discussed among operations management and international business scholars and managers, as some firms are revoking their offshoring and outsourcing decisions. This research focuses on and clarifies the decision making processes related to the two distinct, yet closely related phenomena of reshoring and insourcing. It presents a conceptual framework of all theoretically possible reshoring and insourcing decisions, illustrated in its applicability by a review of the United States and German business press. Then four future research avenues are developed as part of an overall decision making framework together with an overview of specific research questions for this emergent field. Further research avenues include the need to differentiate between reshoring/insourcing as strategic direction or reaction to failure, studying organizational readiness in addition to decision drivers, improve coverage of the implementation stage and explore further contingency factors such as technological advancement as well as to focus on decision makers as the unit of analysis.     

Toward a broader view of age discrimination in employment-related decisions: a joint consideration of organizational factors and cognitive processes

We propose that organizational factors (structure, values, and technology) influence raters' decision making processes which, in turn, can result in age discrimination in employment-related decisions. Specifically, organizational factors may influence (a) the extent to which jobs become age-typed, (b) the extent to which a worker's age is salient and activates age-associated job stereotypes and (c) the extent to which raters are able to base their employment-related decisions on the perceived match between job and worker information. The practical and theoretical implications of our approach are discussed and directions for future research are offered.     

Why Do Strategic Alliances Persist? A Behavioral Decision Model

Strategic alliances are considered a flexible form of organizing, yet they are often long‐lived. Even when systematic benefit–cost analysis suggests that their organizational form should be changed or terminated, some alliances still persist. Drawing on behavioral decision theory, we propose a theoretical model that explains this phenomenon. Decision makers are subject to a variety of biases that can lead to the overvaluation of the net benefits of an alliance and, hence, inhibit the change or discontinuation of underperforming alliances. Our model illustrates how decision‐making biases at the individual, interpersonal, organizational, and interorganizational levels are moderated by the design of an alliance and the tools employed in the decision‐making process. This behavioral decision perspective advances our theoretical understanding of the longevity of strategic alliances and their embeddedness in complex decision‐making contexts. Copyright © 2014 John Wiley & Sons, Ltd.     

Robustness as a corporate objective under uncertainty

This paper examines the nature of the objective function of the firm when operating under conditions of uncertainty. Robustness is presented as a purposeful maximand for decision making both under conditions of certainty and uncertainty - a robust decision being one in which the decision maker retains the maximum flexibility with regard to future decisions after an initial decision has been made. Its incorporation within a managerial objective function provides a measurable scale for making choices between alternative courses of action, including under conditions of internal organizational conflict and environmental reaction by other decision makers.     

Organizational Learning in Project‐Based Companies: A Process Thinking Approach

Although a traditional project model is clearly useful for laying out the patterns of relationships surrounding a project, it does not provide the temporally embedded accounts that enable us to understand how organizational learning takes place. The process thinking perspective offers a means to solving this problem. This article provides an analysis of how different processes interact dynamically in order to benefit project‐based companies' organizational learning. Two findings from this study are: (1) organizational learning is a dynamic concept that emphasizes the continually changing nature of a project‐based company and (2) sensemaking and negotiation of meaning are ongoing processes in project‐based companies.     

Managerial telework allowance decisions – a vignette study among German managers

Managers play an important role in the implementation of telework in organizations since they frequently have final approval over employees' requests for telework arrangements. Drawing upon March's (1994) dual-logic theory of decision making, the study examines antecedents of managers' responses to employees' requests for telework. Using a vignette study with a balanced experimental design, we investigated the impact of person-related, task-related and organizational context factors on managerial telework allowance decisions in German organizations. Several person- and task-related factors were found to be significantly related to managers' telework allowance decisions. Organizational context factors, such as a family-supportive organizational culture and formal policies were found to either directly or indirectly influence managers' responses to employees' requests for telework. More specifically, formal telework policies were important in stimulating favorable managerial telework allowance decisions when applicant criticality was low and the organizational culture was family-unsupportive. In line with March's (1994) theory of decision making, the study shows that utility maximization is only one perspective of decision making which managers apply to telework allowance decisions. Rule following and considerations of appropriateness are also taken into account by managers when deciding upon employees' telework requests.     

Exploring the effects of mergers and acquisitions on acquirers' sustainability orientation: Embedding,adding, or losing sustainability

Mergers and acquisitions (M&A) have been primarily investigated from a shareholder-centric perspective of economic value maximization. However, this type of strategic initiatives also carries relevant implications for companies' capacity to respond to increasing social and environmental concerns among their stakeholders. In this study, we explore the processes related to, and nonfinancial consequences of, acquisitions involving sustainability-oriented firms. Leveraging interviews with business decision makers and secondary data covering the pre- and post-acquisition phases, we find three main paths leading the acquiring firms to embed, add, or lose sustainability. Therefore, three possible post-acquisition outcomes emerge, associated with differences in acquirers' focus on sustainability infusing the deal rationale, their due diligence activity, and practices of stakeholder management and integration in the post-acquisition phase.     

The relationships of organizational justice,social exchange,psychological contract,and expatriate adjustment: an example of Taiwanese business expatriates

In the field of international human resource management, studies have seldom examined organizational justice, social exchange, and psychological contract together as important factors in influencing the expatriate adjustment process. The purpose of this research is to fill the research gap by examining these factors and their relationships with expatriate adjustment. The researcher conducted a survey of Taiwanese business expatriates during the first quarter of 2007, collecting 219 valid samples for analysis. A hierarchical regression model was used to test the research framework hypotheses, which showed that expatriates' perception of organizational justice has a positive influence both on their perceptions of social exchange and on their psychological contract fulfillment. Expatriates' perceived that social exchange has a positive influence on their perceptions of psychological contract fulfillment and foreign adjustment. Finally, research implications are discussed and future study suggestions are recommended.     

The Olympic Effect: Employee Reactions to Their Employer's Sponsorship of a High‐Profile Global Sporting Event

With companies investing vast sums of money on sponsoring high‐profile sports events, it is surprising that very little research exists to examine the possible impact that this has on the sponsors’ employees. This two‐wave panel study explores the indirect role that Olympic sponsorship and employee support for this sponsorship has on increases in organizational identification and discretionary effort—via, that is, pride and employee assessments of their employer's corporate social responsibility (CSR) credentials. The current study surveyed 241 employees (from three countries) in two phases across a 12‐month period in the run‐up to the 2012 London Olympics. Olympic sponsorship support was found to be positively associated with organizational pride and CSR perceptions, which both predict increases in organizational identification and discretionary effort (controlling for earlier baseline levels of these outcomes). In addition, there is also evidence of an indirect positive effect (through CSR perceptions and pride) of Olympic sponsorship support on increases in organizational identification and discretionary effort. The implications of these findings for decision makers considering sponsoring major sporting events are discussed; the findings provide interesting insights that can help HR functions to understand the consequences of sports sponsorship and processes involved that explain positive employee responses. © 2015 Wiley Periodicals, Inc.     

An exploratory study of gender in project management: Interrelationships with role,location, technology,and project cost

This study explores whether gender differences in project managers are related to gender differences in their team members. Gender differences are explored in the context of project managers' and team members' location to one another, the project team's use of technology, and the cost and size of the project teams. Using log‐linear analysis of 563 project team members' responses, several significant findings are reported—including the likelihood of same‐gender project manager and team member dyads as well as gender differences in project contextual factors. Implications for organizational and project management researchers and decision makers conclude the article.     

When Rule Makers Become Rule Breakers: Employee Level Outcomes of Managerial Pro-Social Rule Breaking

We extend Morrison’s (2006) construct of pro-social rule breaking (PSRB) in two important ways. First, we explicate the processes through which PSRB may have unintended negative consequences. Second, we provide a conceptual model intended to guide future research into PSRB. The model discusses the mechanisms through which managerial PSRB may lead to negative employee outcomes. Specifically, we propose that when managers engage in PSRB, more complex processes (perceptions of organizational justice, attributions of management by employees, and psychological contract violations) mediate the unintended employee level outcomes of managerial PSRB.     

Selecting Board Members: The Impact of Common Knowledge on Gender Diversity – An Experimental Investigation

Using a corporate governance experiment, we explore the role of common knowledge of diversity on board members' selection. Our results show that common knowledge of diversity impacts significantly and negatively the proportion of women selected on boards and in a higher proportion in sectors perceived as ‘masculine’. We also bring evidence of an order effect that makes the selection of men on boards likelier for the first chosen members. This bias is stronger for male decision makers. This article provides implications and directions for future research for the understanding of decision making involved in the selection process for board members. Copyright © 2016 John Wiley & Sons, Ltd.     

Data sustainability: Data governance in data infrastructures across technological and human generations

The paper highlights the importance of data sustainability in the data infrastructures aimed at long-term knowledge discoveries. Data sustainability refers to data's capacity to endure across technological and human generations, and it problematizes the data governance literature from a temporal perspective. Existing work has already moved the literature from the organizational setting to more complex interorganizational settings, highlighting discrepancies between normative data governance models and organizational practices. We broaden this literature temporally by examining and outlining research directions for data sustainability from different meta-theoretical perspectives – evolutionary, relational, and durational. Data sustainability across technological and human generations navigates complementary and competing temporal demands: Data need to transition across socio-technical regimes over time, yet be embedded in social and material networks to be meaningful; historical and present data also must remain available and accessible in near and distant futures, for going back in time and seeing new data linkages and combinations. We argue that data sustainability is critical in ensuring progression in social and environmental sustainability. The paper contributes both to data governance and sustainability literatures.     

Improving volunteer retention efforts in public library systems: how communication and inclusion impact female and male volunteers differently

Although volunteer levels are near all‐time highs, volunteer coordinators are increasingly spending more time on retention efforts. The purpose of this study is to measure the impact of organizational communication and inclusive behaviors on volunteers' intention to continue volunteering. Through a survey of 472 volunteers in three library systems, research revealed that two organizational communication theories can improve the effectiveness of volunteer coordinator efforts. Specifically, structural equation modeling revealed that social group inclusion and overall participation in organizational events were the strongest predictors of female volunteers' future intentions to volunteer whereas event participation, being included in the organization's information network, and participating in decision making were the strongest predictors for male volunteers. Relationship indicators successfully predicted which volunteers were most likely to continue volunteering. Copyright © 2011 John Wiley & Sons, Ltd.