How stigmatized are dismissed chief executives? The role of character questioning causal accounts and executive capital in dismissed CEO reemployment

Research Summary: Despite the prevalence of CEO dismissal, theory only briefly explores its consequences. Past research indicates few fired CEOs regain employment. We suggest dismissal stigmatizes executives; however, stigmatization is greatest when character questioning causal accounts exist, which affect the likelihood of regaining a CEO position. Furthermore, we argue that reputational and social capital provide signals of executive quality that moderate the level of stigmatization experienced when character questioning causal accounts exist. Following 280 dismissed CEOs, we find that social capital increases the likelihood of rehiring for those with character questioning causal accounts, but negatively impacts those without causal accounts. Alternatively, we find reputational capital positively influences those without causal accounts, while having a slight negative relationship for those with causal accounts. Managerial Summary: Dismissed CEOs often desire second chances to run companies; however, few are ever afforded the opportunity. We explore what allows some dismissed CEOs to regain employment as a CEO. We find that reasons surrounding a CEO's dismissal influence such prospects depending on the CEO's prior reputation and social capital. In particular, social capital through elite education increases the likelihood of regaining a position when the CEO's character is called into question. Alternatively, a strong reputation increases the likelihood of regaining a CEO position when a CEO's character has not been called into question. These findings suggest that dismissed CEOs can regain a CEO position; however, this likelihood is strongly influenced by how others perceive the executive and their concerns about prior behavior.     

Does transformational leadership facilitate technological innovation? The moderating roles of innovative culture and incentive compensation

The present research investigates the relationships between SBU-level transformational leadership and technological innovation, as well as the moderating effects of innovative culture and incentive compensation. Paired data were gathered from 102 senior managers and 258 employees in 102 Taiwanese strategic business units (SBUs). The results indicate that transformational leadership behaviors promote technological innovation at the SBU level. Interestingly, a stronger innovative culture is a substitute for transformational leadership behavior for facilitating technological innovation. In addition, financial-incentive adoption neutralizes the relationship between transformational leadership and technological innovation.     

Is the future static or dynamic? The role of culture on escalation of commitment in new product development

Escalation of commitment in new product development has been studied extensively for the last four decades but the impact of culture on the escalation phenomenon remains largely unexplored. This study investigates how culture impacts the decision to escalate or deescalate commitment to new products. Americans are analytic thinkers whereas Chinese tend to be holistic thinkers. When it comes to decision making, analytic thinkers focus on field independent and abstract factors and believe that future is linear and static, whereas holistic thinkers focus more on contextual factors and believe that future is dynamic and nonlinear. Hence, Chinese are more likely to escalate their commitment relative to Americans on receiving a negative performance report in the new product development process. A lab experiment using weekend MBA students and managers was used to test this underlying hypothesis. The findings confirmed that analytical thinkers use fewer factors than holistic thinkers in making new product decisions, and that Chinese managers are more likely to escalate their commitment relative to American managers. The decision to escalate or de-escalate was moderated by perceived product innovativeness.     

The distinctive effects of dual-level leadership behaviors on employees’ trust in leadership: An empirical study from China

The loss of trust within and between organizations has become serious worldwide, especially in China. In this study, we seek to explain why as well as how leaders at two different levels (i.e., the top management and the supervisory levels) affect employees?? trust in leadership at the two levels distinctively, especially in the context of China as an emerging economy. Adopting the perspective of multi-level social exchanges within organizations, we develop a dual-level model with perceived organizational support and leader?Cmember exchange as two major mediating mechanisms for the distinctive effects of transformational leadership behaviors on employees?? trust in leadership at both top management and supervisory levels, respectively. The empirical evidence based on a sample of 357 Chinese employees and their supervisors supports the proposed model. Both theoretical and practical implications of our findings are discussed.     

Organizational leadership: How much does it matter?

I study the influence of leadership on organizational performance and worker wellbeing using data from the 2004 and 2011 Workplace Employment Relations Survey (WERS). Our most conservative estimates from fixed effects regressions on a panel of organizations reveal that virtuous leadership is significantly and positively linked to an upbeat assessment of organizational performance, and an increase in worker wellbeing. Specifically, the estimates reveal that an increase in leadership quality by one standard deviation increases organizational performance and worker job satisfaction by 0.27 and 0.73 standard deviations, respectively, while it leads to a fall in worker job anxiety by 0.13 standard deviations. The results support the hypothesis that good leadership is vital for the success of business, including worker wellbeing, which organizational policymakers ought to heed. There is a dearth of empirical evidence on organizational leadership as an institution and its influence on organizational outcomes, which this article aims to address.     

Traditional culture echoes? The impact of clan culture upon partner surname sharing: Evidence from Chinese supply chains

In many emerging countries, firms face formal institutional voids that raise both the cost and the level of difficulty of business operations. In this study, we examine a unique culture-rooted mechanism that may address those voids, and this comes in the form of supply chain partner surname sharing based on the legacy of clan identification. Using a unique Chinese dataset that was manually collected and merged from multiple sources, we find that firms registered in the region with a stronger clan culture are more likely to cooperate with supply chain partners with the same surname. This positive effect of clan culture is negatively moderated further by the level of subnational marketization. Therefore, we shed new light on the supply chain-level implications of clan culture, an Asian cultural-specific topic that has received little attention in marketing and supply chain literature.     

The role of senior management in opportunity formation: Direct involvement or reactive selection?

Research Summary : Much research suggests that entrepreneurial opportunities in established firms result from bottom‐up initiative in a diverse workforce, senior management's main role in the entrepreneurial process is to select among opportunities generated in the bottom‐up process, and it should refrain from directly getting involved in this process. We develop an alternative and more active view of the role of senior management in the opportunity formation process in which senior management intervenes in the entrepreneurial process to resolve coordination and collaboration problems across initiatives and decide on resource allocation. We proffer rival hypotheses concerning the effect of such senior management involvement in the entrepreneurial process. Specifically, we hypothesize that the positive relations between bottom‐up initiative/employee diversity and opportunity formation are positively (negatively) moderated by such direct involvement by senior management. We examine these ideas using two matched data sources: a double‐respondent survey of CEOs and HR managers and employer–employee register data. We find support for the view that senior management involvement positively moderates the relations between bottom‐up processes/diversity and opportunity formation. Managerial Summary : What are the processes through which entrepreneurial opportunities emerge in established companies? Research has pointed to diversity and bottom‐up initiative, but our understanding is limited with respect to what senior managers should do to optimally promote entrepreneurship in such companies. In one view, senior management should keep a distance and limit their involvement to picking the best opportunities out of those they are presented with in the bottom‐up process. In contrast, we argue that given bottom‐up initiative in the context of a diverse workforce, senior management should play a more direct role in the entrepreneurial process. The reason is that senior‐management involvement at early stages of the opportunity formation process is required to handle the management challenges arising from diversity and bottom‐up initiative. Overall, our study suggests that firms that wish to seize the potential benefits (in terms of entrepreneurial opportunities) of having a more diverse workforce and more bottom‐up initiative need senior managers that directly engage in the entrepreneurial process.     

Causal or effectual? Dynamics of decision making logics in servitization

This study explores servitization as an innovative market strategy for manufacturers and investigates how the decision making logics change over time in the servitization transformation process. Effectuation theory is applied to examine servitization as a new theoretical exploration. A longitudinal case study of a global heavy vehicle manufacturer's servitization process in China reveals that the decision makers adjust their decision making logics depending on the stage of the servitization process and associated risk patterns. As the servitization process evolves into a more sophisticated stage, decision makers will change their decision making logics from a causation dominant logic to an effectuation dominant logic in order to cope with the increased risks. Effectuation theory originally developed from entrepreneurship research is found to be a valid theory for the explanation of the risk and uncertainty control behaviors in the servitization transformation process of manufacturing firms.     

Training and Promotion: Allocation of Skills or Incentives?

This paper analyzes the impact of training on the probability of promotion. Results from the British Household Panel Survey indicate that training increases the probability of promotion of female workers, but not that of male workers. In terms of wages, men obtain significant returns from (general and specific) training acquired with their current employer, while women profit from general training. Overall, results suggest that career moves of women are importantly affected by the market value of their skills, while those of men fit better a model of promotions as providers of incentives.     

Safeguarding or coordinating? Unfolding the dual-function of contracts in manufacturer-distributor relationships

By unfolding the simultaneous presence of the safeguarding function (i.e., contract monitoring) and coordinating function (i.e., joint action) of contracts, the current research operationalizes the dual-function of contracts and ascertains their effects on stimulating interfirm relationships. Analyzing the data collected from 512 manufacturers, we find that, first, contract specificity is positively associated with contract monitoring and joint action. Second, contract monitoring mediates the negative relationship between contract specificity and distributors' opportunistic behavior, while joint action mediates the positive relationship between contract specificity and channel cooperative performance. Third, while joint action directly improves channel performance, contract monitoring does not directly influence channel performance; rather, it promotes channel performance through inhibiting distributors' opportunism. In addition, contract monitoring and joint action substitute for each other in their influence on distributors' opportunism. Overall, we enrich and add insights into the literature on contractual governance by operationalizing the dual-function of contracts and investigating the underlying mechanisms of the dual-function in their influence over different channel outcomes     

Dynamics of contention in the gig economy: Rage against the platform,customer or state?

Protest in the gig economy has taken many forms and targets (platforms, customers and state officials). However, researchers are yet to adequately account for this diversity. We use a European survey of Upwork and PeoplePerHour platform workers to investigate worker orientation towards different forms of protest. Results reveal that worker anger, dependence and digital communication shape contention in the remote gig economy. Support for collective organisation is associated with anger at platforms as well as their dependence on the platform and communication with other workers. Individual action against clients is associated with anger and communication but not dependence. Support for state regulation is associated only with anger but not dependence or communication. We conclude that the relational approach entailed by Mobilisation Theory can aid explanation in the gig economy by shedding light on the dynamic process by which solidarity and dependence alter the perceived cost/benefits of particular remedies to injustice.     

Last dance or second chance? Firm performance,CEO career horizon,and the separation of board leadership roles

In recent years, many firms have chosen to separate their CEO and board chair positions. Prior research has demonstrated that there are three forms that a CEO–board chair separation can take: apprentice, departure, and demotion. In this paper, we examine the antecedents of these three types. Our results show that the three types of separation each have different profiles in terms of the prior performance of the firm, the independence of the board, and the career horizon of the incumbent CEO. The findings in this paper provide unique insights into the factors that drive boards' structural choices. As questions about board leadership structure become more nuanced and more relevant in both scholarship and practice, a full understanding of these factors will only become more important. Copyright © 2013 John Wiley & Sons, Ltd.     

Product innovation through coopetition in alliances: Singular or plural governance?

This study researches how firms can improve their product innovation in coopetition alliances through alliance governance. Our survey-based study of 372 vertical alliances in the medical device industry contributes to a clarification of prior studies' contrasting findings on product innovation when coopetition is present in alliances. Our results show that the singular use of relational governance improves product innovativeness in vertical alliances that experience growing levels of coopetition. In contrast, the singular use of transactional governance reduces product innovativeness with growing coopetition. When firms apply both relational and transactional governance as plural governance, vertical coopetition alliances get access to new ways to improve their product innovativeness.     

New Employee Relations Strategies in Britain: Towards Individualism or Partnership?

This article addresses the themes of individualism, partnership and collectivism in British industrial relations by reporting on a detailed three-year case-study-based research project. Drawing on this data set, we offer insights into practical developments in contemporary workplaces and into the thinking of managers and employee representatives as they attempt to steer new paths in their relations. In particular, we examine what happens in practice when senior management teams, in previously collectivized organizations, set out with the explicit intent of shifting the balance of emphasis towards more 'individualized' relations with employees and/or to devise new 'partnership' arrangements.     

Occupational Licensing in the EU: Protecting Consumers or Limiting Competition?

Occupational licensing regulations require workers in many different professions to obtain a special permit to work legally in their chosen field. Although professional associations argue that the only goal of professional licensing is to protect the public, occupational regulation may also reduce competition: for example, by reducing entry. This paper reviews the recent literature and policy developments on the subject, with a focus on the European Union.

     

Organization governance form in franchising: efficient contracting or organizational momentum?

We examine firms' choice of organizational governance form. Using longitudinal data on a sample of business format franchisors operating in North America, we show that the cross‐sectional evidence commonly used to demonstrate support for efficient contracting explanations for organizational governance form is not robust to the year of investigation, firm effects, or selection effects. We theorize that this outcome may result from dynamic processes through which a firm's organizational governance form evolves. We develop and test two hypotheses for the effects of organizational momentum on organizational governance form, and find that organizational momentum is a robust predictor. Our results suggest that researchers consider the dynamics of momentum in explaining the form of firm governance. Copyright © 2008 John Wiley & Sons, Ltd.     

Leveraging Social Network Sites in New Product Development: Opportunity or Hype?

Leveraging social network sites is high on the list of priorities for a lot of businesses that are eager to find more effective ways to reach, learn about, and engage customers in new product development (NPD). However, the rapidly changing landscape of social network sites can be difficult to navigate successfully and doubts remain about whether and how they can be used to good effect. In fact, empirical research confirming a positive relationship between the use of social network sites in NPD and business performance is scarce. This paper reports on research examining the use of social network sites for three purposes, namely for market research guiding the development of new products, for getting customers to collaborate in the NPD process, and for new product launch. The results of this research suggest that the benefits expected from using social network sites in NPD are largely not being realized by businesses. Using social network sites to conduct market research leading into the NPD process was not found to contribute to business performance, and in fact was found to have negative relationships with both profitability and market growth. Using social network sites to get customers to collaborate in the NPD process was found to be positively related with innovativeness but not with market growth or profitability. Finally, using social network sites for new product launch was where the most positive indications were seen, since this was found to be positively related with innovativeness, market growth, and profitability. Thus, it appears that while businesses may get good results from using social network sites for product launch, they still have a learning curve to traverse before they can successfully use them for market research or customer collaboration in NPD. While there is currently a great deal of enthusiasm—even hype—about the potential opportunities of using social network sites for NPD, this research suggests that businesses should move carefully and recognize that just jumping on the social network bandwagon will not insure success.     

Working more or working less? Contingent allocation of reseller effort in distribution channels

Because resellers in business markets typically represent multiple suppliers, a key variable in the study of channels of distribution is reseller allocation of effort, which involves understanding how much time and resources a reseller devotes to a supplier to help the supplier support its products. While allocation of effort is of vital importance to channel practitioners, it has been under studied in the academic literature. We propose a conceptual model based on the competing values framework, which suggests that firms balance different, changing, and incompatible challenges, making high performance outcomes difficult to attain. We suggest that these stressors, or channel concerns can be identified as an economic concern, a stability concern, a harmony concern, and an adaptation concern. Such concerns affect the allocation of reseller effort through two moderating conditions of the environment: territory volatility and territory stagnancy. An exploratory study featuring 26 semi-structured depth interviews and 162 responses from a survey of distributors in the brewing industry provide data for hypothesis testing. In general, good support is found for our model. Reseller allocation of effort is affected by the interaction of four channel concerns and two types of territory difficulties. Actionable managerial recommendations are provided.     

Viewpoint: Effectiveness or consumer acceptance? Tradeoffs in selecting healthy eating nudges

Governments and companies that want to promote healthier eating must consider both the effectiveness and the acceptance of the ‘nudges’ given to consumers. Our review of the literature uncovers a wide range of nudges towards healthy eating, from nutrition labeling to portion size reductions, which are found to vary greatly in effectiveness and levels of public acceptance (64% of women; 52% of men). Acceptance of a nudge is inversely related to its effectiveness: only 43% of respondents approved the most effective intervention – portion and package size reductions. Approval levels increased with the perceived effectiveness of the nudge and with the perception that the nudge is good for both health and business (as opposed to only one of the two), especially among respondents who identify as conservatives. To encourage acceptance of the most effective nudge strategies, governments and companies should therefore correct misconceptions about which nudges work best, and should underscore the win-win potential for health and business.