The salience of ‘culture’s consequences’: the effects of cultural values on top executive commitment to the status quo

While top executives are argued to play a central role in strategic adaptation, evidence suggests that they are not equally open to organizational change. This study extends earlier investigation of the determinants of top executive commitment to the status quo (CSQ) to the international arena, examining the influence of cultural values on executive open-mindedness toward change. Using data from a survey of top managers in 20 countries, analyses reveal that values of individualism, uncertainty avoidance, power distance, and long-term orientation are significantly related to executives’ adherence to existing strategy and leadership profiles. Further, while confirming earlier findings that industry tenure is positively related to strategy CSQ, results show that tenure does not significantly affect leadership CSQ once cultural values are controlled. In summary, the findings reveal that culture has an important impact on executive mindsets, as demonstrated by the fact that executives of differing cultural background are not equally open to change in organizational strategy and leadership profiles. Second, the findings suggest that executives’ views of appropriate leadership profiles reflect the imprint of cultural socialization moreso than professional experience. Finally, and more broadly, the study offers empirical support for the view that values figure prominently in shaping executives’ strategic and leadership orientations. © 1997 by John Wiley & Sons, Ltd     

How sensitive is executive compensation to organizational size?

Prior empirical research has documented a large cross-sectional correlation between the level of executive pay and firm size. In contrast, this paper examines the association between percentage changes in executive compensation and percentage changes in organizational size. We analyze compensation and size data for executives at several levels of the corporate hierarchy for a sample of 303 firms. Our results indicate that the correlation between compensation and size is much smaller, although still statistically significant, in changes than in levels. This suggests that changes in an executive's compensation are not primarily driven by changes in organizational size.     

Learning across the life cycle: Experimentation and performance among the hollywood studio heads

Guided by notions from the literature on organizational learning, this paper investigates how product line experimentation and organizational performance change across the careers of top managers. Its subjects are the studio heads who ran all the major Hollywood film studios from 1936 to 1965. The study found first, that product line experimentation declines over the course of executive tenures; second, that there is an inverse U‐shaped relationship between top executive tenure and an organization's financial performance; and third, that product line experimentation is more likely to benefit financial performance late in top executives' tenures. These findings are consistent with a three‐stage ‘executive life cycle’. During the early years of their tenures, top managers experiment intensively with their product lines to learn about their business; later on their accumulated knowledge allows them to reduce experimentation and increase performance; finally, in their last years, executives reduce experimentation still further, and performance declines. Copyright © 2001 John Wiley & Sons, Ltd.     

Conceptualizing executive hubris: the role of (hyper‐)core self‐evaluations in strategic decision‐making

Researchers have long been interested in how an executive's self‐concept affects his or her behaviors, but have lacked a theoretically grounded, validated construct for conducting systematic inquires. The concept of ‘core self‐evaluation’ (CSE), which has been recently validated in the psychology literature, concisely encompasses and consolidates the common, overlapping portions of four previously unconnected personality dimensions: self‐esteem, self‐efficacy, locus of control, and emotional stability. CSE has great potential to provide substantial leverage for research on executive self‐concept. We review and reconcile prior research on related constructs in executive settings (including narcissism, hubris, and overconfidence) and argue that CSE should be adopted as a robust, well‐validated umbrella construct for research on executive self‐concept. Indeed, a very high level of CSE, or hyper‐CSE, aligns closely with what is often colloquially called ‘hubris.’ We anticipate that hyper‐CSE executives—who possess supreme levels of self‐confidence, self‐potency, and conviction that they will prevail—will manifest this trait in their job behaviors. We develop a set of integrated propositions that describe the implications of CSE for strategic decision processes, strategic choices, and organizational performance. Finally, we propose additional avenues for research. Copyright © 2005 John Wiley & Sons, Ltd.     

Strategic leadership and executive innovation influence: an international multi‐cluster comparative study

This study investigates the relationship of strategic leadership behaviors with executive innovation influence and the moderating effects of top management team (TMT)'s tenure heterogeneity and social culture on that relationship. Using survey data from six countries comprising three social cultures, strategic leadership behaviors were found to have a strong positive relationship with executive influence on both product–market and administrative innovations. In addition, TMT tenure heterogeneity moderated the relationship of strategic leadership behaviors with executive innovation influence for both types of innovation, while social culture moderated that relationship only in the case of administrative innovation. Copyright © 2005 John Wiley & Sons, Ltd.     

Executive succession: The importance of social capital in CEO appointments

Research Summary: Firm performance and corporate governance have been shown to influence CEO selection, but our understanding of the role of social capital is more limited. In this study, we seek to provide further insight into the role of social capital by examining the influence of both “bonding” and “bridging” forms of social capital on CEO appointments. We find that candidates who have relational social capital, in terms of overlap with the CEO in organizational tenure, board tenure, and CEO tenure are more likely to be appointed as CEO. We also find that candidates who have external linkages to the CEO in the form of geographic, prestigious university, and prior employment affiliations are more likely to be appointed CEO. Managerial Summary: The appointment of a new CEO has significant and widespread implications for the firm’s future strategic direction and performance, the relationship between the board and CEO, and perceptions by investors, employees, and other key stakeholders. Our study finds that candidates who have shared connections and experiences with the CEO in terms of geographic, prestigious university, or prior employment affiliations as well as overlap in terms of organizational tenure, board tenure, and CEO tenure are more likely to be appointed CEO. Given the enormous impact that executive appointments have on the strategic direction and performance of the company, it is important to recognize that social factors such as shared experiences and connections influence how candidates are perceived, and thus, may affect appointment decisions.     

Strategic awareness within top management teams

‘Strategic awareness’ is viewed in two ways: the extent to which an executive's perception of the organization's strategy aligns (a) with the organization's ‘realized’ strategy and (b) with the chief executive's perception. Strategic awareness is positively related to hierarchical level, but differs across the three industries studied. Awareness is greater in organizations that have recently changed their strategies than in those that have not.     

Asset ownership and incentives in early shareholder capitalism: Liverpool shipping in the eighteenth century

Research summary : We explore captain‐ownership and vessel performance in eighteenth‐century transatlantic shipping. Although contingent compensation often aligned incentives between captains and shipowners, one difficult‐to‐contract hazard was threat of capture during wartime. We exploit variation across time and routes to study the relationship between capture threat and captain‐ownership. Vessels were more likely to have captain‐owners when undertaking wartime voyages on routes susceptible to privateers. Captain‐owned vessels were less readily captured than those with nonowner captains, but more likely to forgo voyage profits to preserve the vessel's safety. These results are consistent with multitask agency, where residual claims to asset value rather than control rights influence captain behavior. This article is among the first to empirically isolate mechanisms distinguishing among major strands of organizational economics regarding asset ownership and performance. Managerial summary : Organizations face an enduring challenge: Owners hire an executive to act on their behalf, but it is difficult to ensure that the executive indeed acts in their interests. In this study, we exploit a useful historical context—eighteenth‐century transatlantic shipping from Liverpool—to explore the cause and effect of a captain's becoming part‐owner of his vessel. Captains became part‐owners for voyages likely to encounter enemy privateers. Captain‐owners were less likely to be captured, but were more willing to forgo cargo profits to preserve the vessel's safety. Our results provide a useful analogy to modern firm owners who must determine whether to award equity to executives, and to managers who must determine whether to provide assets to employees or rely on employee self‐provision of assets (e.g., tools for tradespeople). Copyright © 2016 John Wiley & Sons, Ltd.     

The Determinants of Performance Appraisal Systems: A Note (Do Brown and Heywood's Results for Australia Hold Up for Britain?)

This article offers a replication for Britain of Brown and Heywood's analysis of the determinants of performance appraisal in Australia. Although there are some important limiting differences between our two datasets — the Australia Workplace Industrial Relations Survey (AWIRS) and the Workplace Employment Relations Survey (WERS) — we reach one central point of agreement and one intriguing shared insight. First, performance appraisal is negatively associated with tenure: where employers cannot rely on the carrot of deferred pay or the stick of dismissal to motivate workers, they will tend to rely more on monitoring, ceteris paribus. Second, employer monitoring and performance pay may be complementary. However, consonant with the disparate results from the wider literature, there is more modest agreement on the contribution of specific human resource management practices, and still less on the role of job control.     

Red,blue, and purple firms: Organizational political ideology and corporate social responsibility

Research summary : Why do firms vary so much in their stances toward corporate social responsibility (CSR )? Prior research has emphasized the role of external pressures, as well as CEO preferences, while little attention has been paid to the possibility that CSR may also stem from prevailing beliefs among the body politic of the firm. We introduce the concept of organizational political ideology to explain how political beliefs of organizational members shape corporate advances in CSR . Using a novel measure based on the political contributions by employees of Fortune 500 firms, we find that ideology predicts advances in CSR . This effect appears stronger when CSR is rare in the firm's industry, when firms are high in human capital intensity, and when the CEO has had long organizational tenure . Managerial summary : Why do firms vary in their stances toward corporate social responsibility (CSR )? Prior research suggests that companies engage in CSR when under pressure to do so, or when their CEOs have liberal values. We introduce the concept of organizational political ideology, and argue that CSR may also result from the values of the larger employee population. Introducing a novel measure of organizational political ideology, based on employees' donations to the two major political parties in the United States, we find that liberal‐leaning companies engage in more CSR than conservative‐leaning companies, and even more so when other firms in the industry have weaker CSR records, when the company relies heavily on human resources and when the company's CEO has a long organizational tenure . Copyright © 2016 John Wiley & Sons, Ltd.     

Strategy and the environment: A study of corporate responses to crises

This paper describes an empirical study that examines the relationship between the type of external environment in which a firm operates and the repertoire of strategic responses the firm develops to cope with crises. The findings suggest that an executive's propensity to adopt a particular strategic posture depends on his perceptions of how well his firm can control its environment and on the costs of introducing change into the organization.     

A Closer Look at Cross‐Functional Collaboration and Product Innovativeness: Contingency Effects of Structural and Relational Context

This study applies a contingency perspective to examine how the intra‐organizational context influences the relationship between cross‐functional collaboration and product innovativeness. It focuses on the role of (1) formal, structural factors directly controllable by top management decisions and (2) more intangible, relational factors as potential enhancements of the firm's ability to convert cross‐functional collaboration into product innovativeness. A study of 232 firms confirms the hypotheses, finding that the relationship between cross‐functional collaboration and product innovativeness is stronger for higher levels of decision autonomy and shared responsibility (structural context) and social interaction, trust, and goal congruence (relational context). In addition, a post‐hoc analysis using a configurational approach to organizational contingencies reveals that organizations' relational context is more potent than their structural context for converting cross‐functional collaboration into product innovativeness. The study's implications and future research directions are discussed.     

She'‐e‐os: gender effects and investor reactions to the announcements of top executive appointments

This study uses Kanter's token status theory to link announcements of top executives to shareholder reactions, highlighting possible gender effects. Using a sample of top executive announcements from 1990 to 2000, our results show that investor reactions to the announcements of female CEOs are significantly more negative than those of their male counterparts. Furthermore, women who have been promoted from within a firm are viewed more positively than women who come from outside. To supplement our analysis of investor reactions, we also analyze the text of popular press articles surrounding the announcements of male and female CEOs. These results show that articles about the appointment of a female CEO tend to emphasize gender, gender‐related and other job or organizational considerations. Copyright © 2007 John Wiley & Sons, Ltd.     

The implications of strategy and social context for the relationship between top management team heterogeneity and firm performance

This research reexamines the link between top management team (TMT) heterogeneity and firm performance. Specifically, I theorize that the effects of education, work experience, and tenure on performance will depend upon the top management team's strategic and social context. In a test of such theorizing, I find that (1) the positive relationships between TMT educational, functional, and tenure heterogeneity and performance are contingent on complexity, as indicated by a firm's international strategy and, (2) such relationships are clearly stronger in short‐tenured top management teams. The theory and results presented here provide impetus for future studies, as well as suggest to upper echelon researchers that they think more critically about the conditions under which demographic characteristics are most likely to influence organizational outcomes like performance. Copyright © 2002 John Wiley & Sons, Ltd.     

Factors Affecting Perceptions of Smallest Meaningful Pay Increases

This analysis suggests that an individual's current level of earnings may be one of the most important variables influencing his/her perception of incremental increases. Also, job difficulty (measured in terms of the average number of nights spent away from home per month on job-related duties) contributes significantly to the explanation of SMPI for both the organizational recognition group and the monetary considerations group. For the ORG group, the pay increase an individual finds meaningful appears to be influenced as well by job input factors such as total work experience, tenure in present job, tenure with present employer, and age. These results support the hypothesis that individuals with relatively high levels of training and experience and higher current earnings will tend to have higher expectations with regard to salary increases than will others, and that these expectations in turn will be reflected in higher thresholds of what is perceived as the smallest meaningful pay increase. Overall, much of the evidence supports the hypothesis that the predictors of SMPI will be different for the ORG and MCG groups. However, the relatively small size of the MCG sample and the associated problem of multicollinearity dictate caution in generalizing our results.* In addition, our study suffers from problems related to model underspecification, insofar as some of the explanatory variables identified in Lawler's model of pay satisfaction were not considered.     

Organizational‐Level Gender Dissimilarity and Employee Commitment

This study explores the extent to which gender dissimilarity in the workplace affects employees' commitment to their organization, using data from the British (1998) Workplace Employee Relations Survey. The results showed that the effects of organizational‐level gender dissimilarity on organizational commitment were more complex than has commonly been assumed in the literature. The relationship between organizational‐level gender dissimilarity and employee commitment was U‐shaped for women whereas it was not significant for men. The relationship was moderated by the respondents' status as measured by their level of pay. For men, the relationship between gender dissimilarity and commitment was negative for high‐paid individuals but not for low‐paid ones, while for women the U‐shaped relationship was weaker for high‐paid individuals than for low‐paid individuals.     

Planning executive succession: The effect of recruitment source and organizational problems on anticipated tenure

This study examines the anticipated tenure of the chief executive officer (CEO) from the incumbent's point of view. An analysis of approximately 1500 questionnaires returned by corporate presidents reveals that anticipated tenure is generally little affected by whether the CEO is recruited from within or from outside the organization. However, under conditions of formalized succession planning and when confronted with specific problems, such as modernizing operations, mandates to increase sales and merger operations, there exist differences in anticipated tenure between inside and outside recruited CEOs. These differences are discussed in terms of their implications to corporate level succession planning.     

Dynamic managerial capabilities: Configuration and orchestration of top executives' capabilities and the firm's dominant logic

This paper contributes to the understanding of the executive team dynamic managerial capabilities by developing theory about the interplay between the firm's dominant logic and dynamic managerial capabilities (including managerial human capital, social capital, and cognition). We underscore the criticality of the two key CEO‐level functions: configuration and orchestration of senior executive team dynamic capabilities. We develop theory on how these functions create and sculpt the management team's absorptive capacity, which in turn shapes the team's adaptive capacity. We present theory about the distributed nature of efforts for organizational renewal where CEO's dynamic managerial capabilities in concerto with senior executive managerial capabilities will drive top management's ability to revitalize the firm's dominant logic and to achieve evolutionary fit. Copyright © 2012 John Wiley & Sons, Ltd.     

A model of person‐pay interaction: how executives vary in their responses to compensation arrangements

A wealth of research indicates that both executive characteristics and incentive compensation affect organizational outcomes, but the literatures within these two domains have followed distinct, separate paths. Our paper provides a framework for integrating these two perspectives. We introduce a new model that specifies how executive characteristics and incentives operate in tandem to influence strategic decisions and firm performance. We then illustrate our model by portraying how executive characteristics interact with a specific type of pay instrument—stock options—to affect executive behaviors and organizational outcomes. Focusing on three individual‐level attributes (executive motives and drives, cognitive frame, and self‐confidence), we develop propositions detailing how executives will vary in their risk‐taking behaviors in response to stock options. We further argue that stock options will amplify the implications of executive ability, such that option‐heavy incentive schemes will increase the performance of talented executives but worsen the performance of low‐ability executives. Our framework and propositions are meant to provide a starting point for future theorizing and empirical testing of the interactive effects of executive characteristics and incentive compensation on strategic decisions and organizational performance. Copyright © 2010 John Wiley & Sons, Ltd.     

Recreating and extending Japanese automobile buyer'supplier links in north America

We compare buyer'supplier links established by pairs of Japanese-owned automobile assemblers and component manufacturers operating in Japan and in North America during 1989-90. Eight assemblers and more than 170 Japanese component manufacturers had established North American manufacturing facilities. In total, Japanese automobile assembly organizations operating in North America had recreated about a quarter of their Japanese supply links. The suppliers that set up North American facilities had recreated almost 60 percent of their links with traditional buyers and formed more than 16 percent of the possible extension links with new assembler partners. We identify several economic and organizational factors that influence whether an existing buyer'supplier link will be recreated in a new location and whether firms that do not have a buyer'supplier relationship at home will form an extension link in the new location. We find that the presence of a long-term buyer'supplier relationship, buyer and supplier entry timing to the new location, the joint venture status of the buyer, supplier size, and the breadth of a supplier's sales base in the home market influence the likelihood that links will be recreated and extension links will be formed.