It pays to pay attention: How firm's and competitor's marketing levers affect investor attention and firm value

Investors' attention to a firm's stock has been demonstrated to influence stock returns (Da et al., 2011). But does a firm's marketing information draw attention to a firm's stock? Research in finance, accounting, and marketing has investigated advertising as one potential driver of investors' attention to a firm's stock. How about other potential marketing drivers? The authors develop hypotheses related to the impact of the changes in four marketing levers: advertising, product development announcements, WOM, and customer satisfaction on the change in investor attention to a firm's stock. Furthermore, they investigate the moderating role of competitors' marketing levers in these relationships.To test the hypotheses, they compile a panel dataset with 349 firms covering the 2007–2017 period. The results suggest that the changes in the focal firm's advertising and WOM have a positive and significant impact on the changes in investor attention to the focal firm’s stock. Furthermore, these effects are amplified when there is an increase in competitors' advertising spending and WOM, respectively. For the customer satisfaction lever, the results suggest that the change in competitors' customer satisfaction enhances the impact of the change in focal firm's customer satisfaction on investor attention. Collectively, the results suggest that investors attend to the firm's and its competitors' marketing information in a much more nuanced manner than previously thought.     

A longitudinal study of the relationship between export activity and innovation in the Spanish firm: The moderating role of productivity

Does innovation lead the firm to export more products, or does a firm's export propensity induce it to innovate? How does a firm's productivity level change this relationship? After confirming that exporters develop more innovations than non-exporters, this study attempts to answer these questions by studying two effects. First, we analyse the impact of innovation on a firm's export activities while addressing potential endogeneity concerns. Second, we examine the impact of export activity on a firm's innovation performance. We must address both questions when considering firm productivity. To this end, we conduct a longitudinal analysis of 14,142 observations of an annual average of 1767 Spanish firms within the manufacturing sector during the period from 2001 to 2008. The results suggest that the self-selection hypothesis adequately explains the observed phenomena. That is, innovation induces firms to increase their export activities. This finding is robust to endogeneity. Nevertheless, firms do not experience any learning-by-exporting effects on the obtaining of product or process innovations. Productivity does not modify any of these relationships.     

The Harm of Symbolic Actions and Green-Washing: Corporate Actions and Communications on Environmental Performance and Their Financial Implications

We examine over 100 top performing Canadian firms in visibly polluting industries as we seek to answer four research questions: What specific environmental issues are firms addressing? How do these issues differ between industries? Are both symbolic and substantive actions financially beneficial? Does green-washing, measured as the difference between symbolic and substantive action, and/or green-highlighting, measured as the combined effect of symbolic and substantive actions, pay? We find that substantive actions of environmental issues (green walk) neither harm nor benefit firms financially, but symbolic actions (green talk) are negatively related to financial performance. We also find that green-washing (discrepancy between green talk and green walk) has a negative effect on financial performance and green-highlighting (concentrated efforts of the talk and walk) has no effect on financial performance. In this article, we provide explanations of our findings and put forth future research directions.     

The sociology of knowledge: Toward an existential view of business ethics

Business ethics is the study of ethics as it applies to a particular sphere of human activity. As such, business ethics presupposes a difference between an individual's experience within a business organization and his or her experience outside the organization. But how do we examine this difference? How do we discuss an individual's experience of “everyday reality”? What processes create and sustain this reality, and how does one's version of “reality” affect what is, and what is not, ethical? This paper outlines an approach to these questions based on theory from the sociology of knowledge, an approach which makes some progress towards making business ethics more existential. The sociology of knowledge, and particularly the social constructionist perspective, is concerned with how an institution creates “knowledge” and how this “knowledge” affects the cognitive processes of the individuals who make up the institution. The dialectic nature of the interdependent processes which shape both the individual and the organization are important in understanding how business ethics, as one kind of social knowledge, are enacted. Examining these processes leads to several interesting hypotheses about the nature of both the study and practice of business ethics. XXX“Only individuals have a sense of responsibility.” — Friedrich Nietzsche     

Where the eyes go,the body follows?: Understanding the impact of strategic orientation on corporate social performance

This research seeks to address two questions with respect to firm corporate social performance (CSP): (1) “do different strategic orientations have differential impacts on a firm's overall CSP?”; and, if so, (2) “is there an effect of a firm's strategic orientation on the types of CSP that a firm implements?” Using a unique dataset that combines survey data on firms' strategic orientations for 115 US-based firms with CSP data from MSCI-ESG, we empirically examine the impacts on CSP levels of four different firm strategic orientations: customer, competitor, interfunctional coordination, and shareholder. Our empirical analysis demonstrates that (1) firms with a stronger orientation toward customers have higher levels of CSP overall, and (2) when firms have a stronger customer orientation, we find that the firm has higher CSP levels in domains dedicated toward secondary stakeholders, while firms with a stronger shareholder orientation exhibit higher levels of CSP dedicated toward primary stakeholders.     

“Good governance”, democracy and development paradigms

“Good governance” has become a central term in the international discussion on development co-operation. What is actually meant by “good governance”? By which yardstick can it be measured? How is governance related to development, political participation and democracy? What implications does this have for bilateral and multilateral donors?     

Cooperative Agent Systems: Artificial Agents Play the Ultimatum Game

We explore computational approaches for artificial agents to play the ultimatum game. We compare our agents' behavior with that predicted by classical game theory, as well as behavior found in experimental (or behavioral) economics investigations. In particular, we study the following questions: How do artificial agents perform in playing the ultimatum game against fixed rules, dynamic rules, and rotating rules? How do coevolving artificial agents perform? Will learning software agents do better? What is the value of intelligence? What will happen when smart learning agents play against dumb (no-learning) agents? What will be the impact of agent memory size on performance? This exploratory study provides experimental results pertaining to these questions.     

Optimal promotion planning for a product launch in the presence of word-of-mouth

Marketing managers concern that Word-of-Mouth (WOM) can affect the efficiency of sales promotion policy. Sales promotion might also amplify the strength of WOM which further complicates decision-making. In this study, we deploy an agent-based simulation optimization framework to find an efficient sales promotion plan in the presence of WOM for launching re-purchasable products. In this model, consumers' purchase decisions are influenced by price history, availability and satisfaction of the consumers, and positive/negative WOM. We show that taking WOM on board while determining the promotion plan can significantly increase the net present value. However, amplifying WOM might damage the firm's profit for some product categories.     

Who Learns What?—A Study Based on Entrepreneurs from Biotechnology New Ventures

Despite a proliferation of research in the field of entrepreneurship, our understanding of entrepreneurial learning remains limited. We do not have systematic answers to many key questions. To what extent does the context of the learning shape that learning? How does the prior experience of an entrepreneur influence what they learn in new ventures? Does the specific role that the entrepreneur plays in a new venture, and the characteristics of the venture team, influence learning? To address this gap, and to progress the broader program of empirical research into entrepreneurial learning, we need to more fully explicate both the context and the content of learning. That is the objective and contribution of this study. We find that prior experience, the “division of (decision‐making) labor” and the “knowledge” characteristic of the venture team shape learning. One implication is that future research will need to assess more carefully both the content of new learning from the new venture experience, and the context of learning.     

Benevolent dictatorship and buyer-supplier exchange

In this research, we identify and advance the concept of benevolence as a key social exchange mechanism in buyer-supplier exchange. Specifically, we (1) advance a theoretical model of benevolence to include affective, calculative, and normative dimensions, (2) highlight specific actions and resources that a focal firm uses to promote the perception of benevolence, including concessions, idiosyncratic investments, and reputation, and (3) identify how these perceptions, mediated by its own rising commitment to the exchange, impact the focal firm's economic response (i.e., concessions and idiosyncratic investments). In particular, we explore the possibility of “benevolent dictators” in exchanges marked by power asymmetry. Our model and conclusions are drawn from the confidential reports of over 500 informants at the boundaries of firms across multiple industries. Our results demonstrate the differential effects of a partner firm's actions and reputation on the three forms of benevolence and find evidence for how powerful partner firms can signal their benevolence to weaker firms through the use of concessions, dedicated investments and marketplace reputation. Moreover, we show that the responses of the partner firm to the focal firm's benevolence are not simply a reciprocation of the focal firm's actions, but are instead mediated through the enhanced commitment of the focal firm with implications for theory and management practice.     

On the role of alliance management capability,organizational compatibility,and interaction quality in interorganizational technology transfer

Interorganizational technology transfer (ITT) is a key component of firms' innovation processes. ITT involves purposeful, goal-oriented interactions between two or more organizations to exchange technological knowledge and/or artifacts and rights. Using the relational view, this study develops and empirically tests a research framework that incorporates key factors of technology transfer success to answer three questions: (1) How do various managerial routines and procedures that as a whole reflect a firm's alliance management capability influence interaction quality in ITT? (2) How does interaction quality in turn influence technology transfer success? (3) Which configurations of organizational and interactional factors contribute to technology transfer success? By examining the causal chain from alliance management capability through interorganizational interaction quality to technology transfer success, this study explains linkages between important antecedents and consequences of interaction quality and thus contributes to a better understanding of the interorganizational exchange processes that determine technology transfer success.     

Ethics and Values in Nonunion Employment Arbitration:A Historical Study of Organizational Due Processin the Private Sector

This paper provides a historical overview of the interrelationship between the use of nonunion employment arbitration and the ethics of employee organizational due process. Key research questions to be explored include the following, among others: Why are expectations about due process in organizations increasing? How are these expectations being exhibited? What is the nature of fair treatment of employees in relation to nonunion employment arbitration? Should arbitration in the nonunion employment relationship be nurtured? A final objective of this paper is to study some of the current initiatives that neutral agencies have adopted to ensure that nonunion arbitration is fair, just, and equitable for a firm's employees.     

Toward a Common Good Theory of the Firm: The Tasubinsa Case

Tasubinsa is a “Special Employment and Occupational Center” constituted in accordance with Spanish Law where 90% of the workers have mental, sensorial or physical impairments of at least 30%. Its positive experience of more than 15 years provides entirely different responses from mainstream neoclassical theory (transaction cost theory, agency theory, and shareholder theory) to basic questions such as “What is a firm?”, “What is its purpose?”, “Who owns a firm?”, and “What do a firm’s owners seek?”. The article discusses how these different premises give rise to a distinctive corporate culture centered on the handicapped person.     

Keep it vague? New product preannouncement,regulatory focus,and word-of-mouth

This paper aims to examine the interaction between firm's new product preannouncement (NPP) strategies and consumers' regulatory foci on their WOM intention and the underlying mechanisms. In three experiments, we find that (1) the promotion-focused (prevention-focused) consumers have higher WOM intentions for vague (specific) NPP; (2) curiosity (outcome expectancy) mediates the effects of the NPP strategies on WOM intention for promotion-focused (prevention-focused) consumers; and (3) brand familiarity plays a moderating role, such that the interaction effect between NPP strategy and regulatory focus on consumers' WOM intention holds for a low-familiarity brand only. Our research contributes to a better understanding of NPP strategies and provides actionable strategic support for firms to conduct NPP.     

Learning to talk like an urban woodsman: an artistic intervention

This paper is an artist's statement about the Re Made project, an artwork that parodies the urban woodsman aesthetic of Best Made Co., which markets designer axes through the rhetoric of authenticity, the appropriation of working-class identities and the revitalization of traditional male roles. Re Made Co. replace Best Made Co.’s $300 urban axe with a $300 toilet plunger and satirizes their marketing campaign through social media, graphic design, video and photography. This project uses critical design to pose pivotal questions, such as: What are the implications of transforming a useful tool into a symbolic object? How is working-class labor sold as white-collar fantasy? What are the contradictory references that promise “authentic” experiences? This paper analyzes the Best Made Co. brand's cultural references to masculinity, outdoorsmen and the frontier, their photographic language of snapshot images and designed aesthetic, reveals the consequences of these expressions, and proposes strategies for reassigning value.     

Market Orientation in Vertical Business Networks

Abstract

This research addresses three questions: (1) Why are some business network firms more market orientated than others? (2) What effect does the environmental uncertainty have on the network performance impact of market orientation activities performed by a network firm? (3) Does network embeddedness influence the effectiveness of a firm's market orientation activities? The findings from a study on a vertical grocery network suggest that the performance impact of market orientation activities depends on the network identity of the network firm. Network embeddedness of a network firm is found to enhance this performance link. Finally, uncertain market environments favor down-stream allocation of market orientation activities in our sample.     

Up the ante: Electronic word of mouth and its effects on firm reputation and performance

Prior management research on firm reputation has acknowledged the importance of word of mouth (WOM) in influencing key choices made by businesses, as well as by individuals. In recent developments, Internet-based WOM forums aggregate vast amounts of information relevant to firm strategy and operations. For example, online social media communities aggregate information generated by both the firm (i.e. firm-generated content FGC) and users (i.e. user-generated content UGC). We theorize that FGC and UGC generate reputation benefits for a company in the form of two intermediate information mechanisms: information diversity and valence. We first undertake a qualitative content analysis to investigate the extent to which FGC and UGC generate information diversity and valence. We then test the hypothesis that both information diversity and valence increase a firm's financial performance. Our findings show that electronic WOM as transmitted through social media communities enhances a firm's reputation and thereby its performance through both these effects (i.e. embedded information and valence). We thus fully delineate the determinants of ‘good reputation’ in these social environments. As part of our robustness checks, we also consider the impact of price and quality, the two specific FGC components, on firm performance. Our findings further confirm these relationships.     

The commercial contribution of clinical studies for pharmaceutical drugs

Pharmaceutical drugs are rigorously evaluated through clinical studies. The commercial consequences of such clinical studies, both to the promotion for and sales of drugs, are largely under-researched. The present study answers the following research questions: 1) How does the evolution of clinical study outcomes affect product sales? 2) How does the evolution of clinical study outcomes affect a firm's promotion expenditures to physicians and consumers? 3) Is the assessment of the responsiveness of sales to promotion expenditures biased when the analyst omits the role of clinical studies? We summarize a comprehensive body of clinical studies in three metrics: valence, dispersion, and volume. We extend the literature with the following findings. A higher valence and volume of clinical studies (i.e., more positive and larger number of studies) increase sales. A higher valence of clinical studies increases spending on both direct-to-consumer advertising and direct-to-physician promotion. A higher dispersion among clinical studies decreases spending on direct-to-consumer advertising. A higher volume of clinical studies has no effect on direct-to-physician promotion, but decreases direct-to-consumer advertising. Furthermore, the results show that omitting these metrics from a market response model leads to an overestimation of the responsiveness of sales to promotion expenditures.     

Can we talk about ethics anymore?

It is difficult to talk about ethics in Australia these days, because (a) the different metamoral languages make it difficult for people to communicate on moral matters; (b) there are no generally accepted criteria for assessing the meaning and truth of moral propositions; and (c) witness talks larger in these matters than theoretical expertise, and the ideals that favour the acceptance of credible role models are no longer generally accepted. We should not assume that we can say anything meaningful about “business ethics”. One reason for this arises from the Australian experience of the '80s: the fruits of a profound cynicism are now with us, as prominent figures find themselves in court to defend their actions, and seem amazed that they are accused of doing anything wrong at all. We may want to stop something like this from happening again, but if the language of business ethics meant nothing to these people, how can we hope that it will mean much to us, or to future generations? A second reason (or group of reasons) arises from the nature of ethics itself. Business ethics, after all, does not exist in a vacuum; its language will not mean much to people who do not agree on what they mean whenever they talk about right and wrong. Some people, for example, measure the rightness or wrongness of actions in terms of their consequences; for others, on the other hand, some actions are wrong, no mater what the consequences. How are they to talk to each other? What is at issue here is what ethical propositions mean, and how one can measure their truth. And there is another reason. As Socrates pointed out long ago, ethics is not a theoretical science, which can be taught and learnt as dispassionately as mathematics. It is practical, and so engages teacher and pupil in an entirely different way: one cannot say one thing, and do another. When you have read a journal like this, will you necessarily be a better person or a more honest businessman/woman?     

Global competition and diffusion of the “A”list

Focusing on the global diffusion of the “A” list consisting of predominantly U.S.-based journals, we argue that such diffusion represents an important form of professionalization in the management of business schools. The diffusion can also be viewed as an intellectual movement in the age of global competition characterized by a flat world. How can we explain the recent diffusion of the “A” list? More important, how does such diffusion impact the future of business and management scholarship? Addressing these important but underexplored questions, we identify the multilevel factors that explain the diffusion, and predict its likely trajectory and its impact on future scholarship.