Causation and effectuation processes: A validation study

We develop and validate measures of causation and effectuation approaches to new venture creation and test our measures with two samples of entrepreneurs in young firms. Our measure of causation is a well-defined and coherent uni-dimensional construct. We propose that effectuation is a formative, multidimensional construct with three associated sub-dimensions (experimentation, affordable loss, and flexibility) and one dimension shared with the causation construct (pre-commitments). As specified by Sarasvathy (2001), we also show that causation is negatively associated with uncertainty, while experimentation, a sub-dimension of effectuation, is positively correlated with uncertainty. The major contribution is the resulting validated scales that measure causation and effectuation.     

Consumer Fear of Online Identity Theft: Scale Development and Validation

One unwelcome side effect accompanying the rise of e-commerce concerns the increase in cyber-crime, which in turn contributes to consumer fear of online identity theft (FOIT). This research details the development and validation of a FOIT scale that measures individual differences in consumers' proneness to feel negative emotions in relation to shopping online, specifically, the fear that others may illicitly use their identifying details. Based on literature insights, findings from qualitative interviews (n = 43), and three quantitative studies in Germany (n = 345, n = 539, n = 1,150) conducted in various online contexts, the authors propose a two-dimensional FOIT scale. Comprehensive validation procedures which involve relating FOIT to antecedents and consequences suggest the usefulness of the FOIT scale. Suggestions for future research and managerial implications are discussed.     

Perceived uncertainty and behavioral logic: Temporality and unanticipated consequences in the new venture creation process

In this study, drawing on effectuation theory, we combine analytical strategies for process data to examine inductively and theorize how founder teams' perceptions of uncertainty and behavioral logics develop during new venture creation processes. The results reveal four phases and suggest a possible evolution from a causal conditional relationship between perceived uncertainty and behavioral logics to an integrative relationship. We bring to light the notion of temporality and unanticipated consequences, discuss their central roles in perceived uncertainty, effectuation, and causation, and offer revelatory insights into why and when effectuation is used in relation to uncertainty and entrepreneurial action.     

Business corruption in Ukraine: A way to get things done?

Corruption at the firm level is a very complex issue better understood within its cultural, national, and historical contexts. Using Ukrainian firms as an example via two data sets from 2013 (n = 625) and 2015 (n = 120), we describe two types of corruption: (1) the abuse of power by individuals or groups for private gain, and (2) abuse of power by CEOs and general managers not for their own private gain, but for the gain of other individuals or groups. The latter abuse of power—either within or beyond the existing rules, laws, and norms—is often the only way to get things done in Ukraine. On the other hand, corruption might also be used to hinder business activities. This ambivalent function is the main challenge in mitigating corruption.     

Corporate effectuation: Entrepreneurial action and its impact on R&D project performance

Innovative products are widely recognized as an important source of competitive advantage. However, many companies have difficulties finding efficient and successful approaches to different types of R&D projects, particularly those that involve a high level of innovativeness. Therefore, the present study moves effectuation theory from the entrepreneurial context to R&D research. First, the characteristics of an effectual approach in the context of R&D projects are developed and differentiated from those of conventional prediction-based strategies (causation). Second, using a thorough qualitative and quantitative scale-development process to capture particularities of effectual and causal dimensions in the R&D context, expert interviews and a pilot study (123 R&D projects), the study develops a multi-factor measurement model of effectuation and causation. These measures are validated in a follow-up study with a larger sample of 400 projects. Third, the new measures are applied to test two central hypotheses: (a) effectuation is positively related to success in highly innovative contexts, (b) causation approaches are beneficial in projects with low levels of innovativeness. Overall, this study moves the effectuation logic from the entrepreneurial to the corporate R&D context, captures its particularities, and investigates its performance outcomes.     

Antecedents and consequences of effectuation and causation in the international new venture creation process

The selection of the entry mode in an international market is of key importance for the venture. A process-based perspective on entry mode selection can add to the International Business and International Entrepreneurship literature. Framing the international market entry as an entrepreneurial process, this paper analyzes the antecedents and consequences of causation and effectuation in the entry mode selection. For the analysis, regression-based techniques were used on a sample of 65 gazelles. The results indicate that experienced entrepreneurs tend to apply effectuation rather than causation, while uncertainty does not have a systematic influence. Entrepreneurs using causation-based international new venture creation processes tend to engage in export-type entry modes, while effectuation-based international new venture creation processes do not predetermine the entry mode.     

Getting beyond carry trade: What makes a safe haven currency?

The main objective of this paper is to investigate the fundamentals of safe haven currencies, which are those currencies that provide an hedge for a reference portfolio of risky assets, conditional on shocks to global risk aversion. We analyse a large panel of 52 currencies in advanced and emerging countries over almost 25 years of data. We find that only a few factors are robustly associated to a safe haven status, most notably the net foreign asset position, an indicator of external vulnerability, and whether currencies have been a good hedge in the past. In addition, the currencies of large, less financially open economies are a good hedge against global risk aversion shocks. By contrast, the level of the interest rate spread vs. the US is significant only during the latest crisis. Finally, we find some evidence of non-linearity as the importance of the fundamentals is stronger during crisis times.     

A cross-national analysis of perceptions of corporate governance principles

Increased trade between developed and emerging economies has led to a gradual convergence of policies related to corporate governance as multinational firms attempt to standardize best practices worldwide. Due in part to this movement organizations such as the OECD and World Bank have contributed to the streamlining of acceptable protocol for publicly traded firms around the globe. In 1999 the OECD Principles of Corporate Governance were endorsed by OECD ministers in an attempt to influence policymakers by setting global governance standards. Yet the extent to which perceptions of these principles vary between OECD members and non-members is unclear. Obtaining a greater understanding of how individuals from diverse nations perceive these principles is important to managers as they maneuver through the complex world of international business. In this study we employ relational demography theory to develop and test a survey instrument in the Kingdom of Saudi Arabia and in the United States to assess perceptions of OECD principles. Results from a survey of 284 managers (Saudi Arabia n = 168, USA n = 116) suggest that regardless of culture perceptions of shareholder rights are positively related to beliefs about the integrity of the national legal and regulatory framework. Also, differences between the Saudi and U.S. samples on perceptions of shareholder participation, disclosure and the role of the audit function are identified. Managerial implications and future research directions are also discussed.     

Examining Biased Assimilation of Brand-related Online Reviews

This paper examines the impact of pre-existing brand attitudes on consumer processing of electronic word-of-mouth (eWOM). This topic is particularly important for brands that simultaneously possess strongly pronounced proponents as well as opponents. Two experimental studies using univalent (study 1, N = 538) and mixed (study 2, N = 262) sets of online reviews find indications for biased assimilation effects of eWOM processing. Consumers perceive positive (negative) arguments in online reviews as more (less) persuasive when having a positive (negative) attitude towards the brand. Perceived persuasiveness in turn influences behavioral intentions and acts as a mediator on the relationship between attitude and behavioral intentions. We examine two moderators of this effect. When priming individuals to focus on other consumers (vs. a self-focus prime), the biased assimilation effect is weaker (study 3a, N = 131). In contrast, we show that biased assimilation becomes stronger under conditions of high (vs. low) cognitive impairment (study 3b, N = 124). Our findings contribute to the literature on the relationship between eWOM and brands and advance our understanding of potential outcomes of brand polarization.     

Can market frictions really explain the price impact asymmetry of block trades? Evidence from the Saudi Stock Market

We empirically examine the price impact of block trades, in the Saudi Stock Market over the time period of 2005–2008. Using a unique dataset of intraday data consisting of 2.3 million block buys and 1.9 million block sales, we find an asymmetry in the price impact of block purchases and sales. The asymmetry persists even when we account for the bid–ask bias in block trades, which is contrary to the previous literature. Overall, our findings suggest that in an emerging market where institutional trading is relatively scarce, market microstructure cannot explain the asymmetry in the price impact of large trades.     

Values associated with luxury brand consumption and the role of gender

We investigate the role of gender in the perceptions of and motives for luxury brand consumption. Based on the social structural theory of gender, we propose that differences in men's and women's luxury values result from asymmetries in social status. We conduct three studies with samples of frequent luxury brand buyers. Study 1 (N = 512) generates main values associated with luxury brand consumption. Study 2 (N = 640) identifies a four-factor model of luxury brand values, including refinement, heritage, exclusivity, and elitism, and shows that women give more importance to refinement, while men give more importance to exclusivity and elitism. Study 3 (N = 1024) demonstrates that public self-consciousness has a stronger positive influence on refinement for women rather than men. In contrast, consumer need for uniqueness and status consumption exert respectively a stronger positive influence on exclusivity and elitism for men rather than women.     

The effects of marketer- and advocate-initiated online service recovery responses on silent bystanders

Dissatisfied customers increasingly voice their complaints on social media. These negative comments and subsequent responses are an important information source for potential customers. In a consumer-empowered era, these responses not only originate from marketers, but are often articulated by engaged brand advocates. In this study we investigate the effect of both marketers' and advocates' responses to service failures on bystanders' favorable and unfavorable brand-related reactions. Specifically, two scenario-based experiments (n₁ = 731; n₂ = 361) were conducted in which specific webcare response types and sources were systematically manipulated. Results show that companies are particularly effective in enhancing bystander-brand relationships by means of credible and accommodative responses and sometimes even with credible, defensive responses. Most importantly, however, brand advocates can help the company to increase favorable brand-related outcomes with accommodative responses and mitigate unfavorable outcomes with web-specific defensive responses.     

Intentional social action in virtual communities

There is growing evidence of the increasing participation in, and influence of, virtual communities in digital environments. To help explain this irresistible allure, the individual and social determinants of the member's intentions to participate are investigated. Conceptualizing virtual community participation as intentional social action, we explicate the concept of “we-intentions”, and use the Model of Goal-Directed Behavior to explain members’ we-intentions. Virtual community influences pertaining to compliance, internalization, and social identity are also elaborated on. An empirical study of regular virtual community participants (N = 157) finds that we-intentions to participate are functions of both individual determinants (positive anticipated emotions and desires), and community influences (social identity). Implications for marketing and future research opportunities are discussed.     

Building acquaintance brands via Snapchat for the college student market

College students are inseparable from their smartphones, and heavily engaged in Snapchat. This social media app allows low-consequence expression: messages disappear within 10 seconds to 24 hours of their receipt, depending on the content. Because college students seem strongly attracted to Snapchat, the implications for brand managers interested in reaching this target market deserve exploration. Four focus groups of self-described heavy users show that this media app allows college students to enter the virtual Snapchatverse and find a sweet spot of acquaintances. The sweet spot is associated with feelings of relatability, inclusion, and effortlessness and has the potential to produce empowering experiences. The verbal protocols of college students suggest that Snapchat is an ideal social media for developing acquaintance brands: brands that aim to make themselves part of an inclusive, feel-good experience or highly relatable acquaintances.     

Toward a new measure of organizational environmental citizenship behavior

Previous work has conceptualized workplace pro-environmental behaviors within the organizational citizenship behavior framework and a scale to measure these behaviors has been developed. The goal of the present research was to address conceptual and psychometric issues of this scale by: (a) conceptualizing organizational environmental citizenship behavior within the dominant target-based framework, (b) developing and refining a new, more comprehensive measure of organizational environmental citizenship behavior and (c) validating this new measure by providing evidence for its content, construct, convergent, discriminant, concurrent, incremental concurrent and nomological validity, and its internal and temporal stability. To this end, six separate studies (N = 652) were conducted, which together produced a psychometrically acceptable measure of organizational environmental citizenship behavior. Theoretical and practical implications from this research and direction for future research are discussed.     

International network formation,home market institutional support and post-entry performance of international new ventures

Effectuation and causation decision-making logics are noted to be major alternative approaches to international network formation. However, knowledge is lacking on how and the conditions under which the two approaches contribute to post-entry performance of international new ventures (INVs). We integrate the theory of effectuation and institutional development logic to explain how effectuation and causation approaches to international network formation individually and jointly contribute to post-entry performance under varying conditions of home market institutional support. We test our proposed framework on primary data from 228 INVs in a sub-Saharan African economy. Results suggest that greater uses of both effectuation and causation approaches to international network formation are associated with stronger post-entry performance. More interestingly, results show that the joint effect of the two international network formation approaches on post-entry performance is amplified under conditions of low home market institutional support. Our findings provide theoretical and managerial insights on the importance of complementing effectual and causal reasoning in international network formation in weak home market institutional environments.     

Exploring the effectiveness of foreign brand communication: Consumer culture ad imagery and brand schema incongruity

Drawing from international branding literature and schema incongruity research, the present study (a) assesses foreign brand communication effectiveness by juxtaposing three alternative advertising approaches based on local, foreign and global consumer culture imagery, and (b) investigates the mechanism underlying consumers' responses to foreign brand communication. In a 2 (foreign brand schema vs. control) × 3 (local vs. foreign vs. global ad type) full-factorial, between-subjects experiment with a consumer sample, we find that ads portraying global consumer culture imagery only moderately violate consumer perceptions of brand foreignness and lead to more favorable ad attitudes. Furthermore, moderated-mediation analysis shows that when the global ad imagery is meaningfully linked to the foreign brand, perceptions of credibility increase and positively influence ad attitude. However, if consumers cannot make sense of the ad, this effect is reversed and negatively influences subsequent responses. Theoretical and managerial implications of the findings are discussed and future research directions identified.     

Consumers' cognitive and affective responses to brand origin misclassifications: Does confidence in brand origin identification matter?

Although research on country-of-origin (COO) effects in general is abundant, findings regarding the phenomenon of brand origin misclassification (i.e., consumers' association of a brand with the wrong COO) remain limited and inconclusive. This study fills this research gap by investigating how consumers' cognitive and affective responses upon learning the true origin of a previously misclassified brand drive the extent to which they revise their brand evaluation. Specifically, the authors explore the role of consumers' confidence in brand origin identification in this context. The results from an empirical study in South Korea (N = 259) suggest that consumers tend to adjust their brand evaluations only if the true COO is perceived more favorably; they tend not to take a worse COO into consideration. Moreover, negative emotions lead to greater losses in brand evaluation than positive emotions lead to gains in that respect.     

Brothers in blood,yet strangers to global brand purchase: A four-country study of the role of consumer personality

Although personality traits have repeatedly been shown to influence consumer behavior, their impact on willingness to buy global brands has yet to be empirically investigated. Based on a four-country sample (N = 4539) of South East European consumers, we test alternative pathways linking consumer personality traits to global brand purchase intentions. Our findings show that extraversion, neuroticism, conscientiousness and openness to experience impact purchase intentions mediated through consumers' global brand associations, domestic country bias and price sensitivity. Implications of the findings for theory and practice are considered and future research directions identified.     

From entrepreneurial intentions to actions: Self-control and action-related doubt,fear, and aversion

This study draws on the Rubicon model of action phases to study the actions or lack of actions that follow the formation of entrepreneurial intentions. Concurrently, it examines the roles of self-control and action-related emotions in explaining the intention–action gap using longitudinal survey data (N = 161). The results show that self-control positively moderates the relationship between intention and action, and that it counters the rise of action-related fear, doubt, and aversion. We also find evidence for interaction effects between action aversion, action doubt, and intention strength. Our results signal the importance of studying moderators of the intention–action relationship.