Higher Highs and Lower Lows: The Role of Corporate Social Responsibility in CEO Dismissal

Research summary: Investing a firm's resources in corporate social responsibility (CSR) initiatives remains a contentious issue. While research suggests firm financial performance is the primary driver of CEO dismissal, we propose that CSR will provide important additional context when interpreting a firm's financial performance. Consistent with this prediction, our results suggest that past CSR decisions amplify the negative relationship between financial performance and CEO dismissal. Specifically, we find that greater prior investments in CSR appear to expose CEOs of firms with poor financial performance to a greater risk of dismissal. In contrast, greater past investments in CSR appear to help shield CEOs of firms with good financial performance from dismissal. These findings provide novel insight into how CEOs' career outcomes may be affected by earlier CSR decisions. Managerial summary: In this study, we examined a potential personal consequence for CEOs related to corporate social responsibility (CSR). We explored the role prior investments in CSR play when a board evaluates the firm's financial performance and considers whether or not to fire the CEO. Our results suggest that while financial performance sets the overall tone of a CEO's evaluation, CSR amplifies that baseline evaluation. Specifically, our results suggest that greater past investments in CSR appear to (a) greatly increase the likelihood of CEO dismissal when financial performance is poor, and (b) somewhat reduce the likelihood of CEO dismissal when financial performance is good. Thus, striving to deliver profits in a socially responsible manner may have both positive and negative personal consequences. Copyright © 2017 John Wiley & Sons, Ltd.     

Parental perception of lunch schemes in Danish kindergartens: A cross-sectional survey

Children’s daily consumption of food in childcare institutions has an impact on their public health nutritional status. The collaboration of parents and employees of kindergartens is important to ensure healthy eating habits among the next generation. Consequently, evaluations of lunch schemes are important to provide a good foundation for enhancing communication between home and institutional settings. The aim of this article is to assess parental satisfaction and identify themes related to parental perceptions of lunch schemes in Danish kindergartens. A survey was developed and distributed in four kindergartens with lunch schemes. A combination of closed and open questions were used to evaluate satisfaction and identify positive and negative aspects of the lunch schemes. Parents of 93 children participated in the study and the response rate was 55%. Eighty-nine percent expressed satisfaction with their children’s lunch scheme. According to parents, the most positive aspects were that lunch schemes serve a variety of food, their ability to prevent neophobia, that children learn that eating is a social occasion, and that the arrangements offer convenience to parents. The negative aspects identified were the lack of communication between the kindergarten childcare institutions and the parents regarding the food. Overall, parents are very satisfied with their children’s lunch schemes; however, the information between institutions and parents could be improved.     

Déjà Vu: The Effect of Executives and Directors with Prior Banking Crisis Experience on Bank Outcomes around the Global Financial Crisis

We investigate the effect of executives and directors with prior banking crisis experience on bank outcomes around the global financial crisis (GFC). Executives and directors with previous experience leading banks through a bank crisis may have been uniquely able to understand the risks, recognize the warnings signs early, and thus respond more effectively to the GFC. Controlling for other executive, director, and bank‐level characteristics, we examine whether bank performance, risk taking, and accounting quality in the period immediately before and during the GFC are affected by having executives or directors who previously served as bank executives or directors during the 1980s/1990s banking crisis (80s/90s crisis). Overall, we find that banks led by these crisis‐experienced executives and directors exhibit stronger performance, lower risk taking, and higher accounting quality in the period around the GFC. These effects are strongest among bank leaders for whom the 80s/90s crisis was most salient. Results are robust to propensity‐matched samples and other analyses performed to rule out alternative explanations. Our results suggest these individuals were able to learn from prior crisis experience.     

Fissures in the marketing strategies of South Asian restaurants in Edinburgh

This exploratory study sought to investigate South Asian restaurants in Edinburgh, Scotland, UK in order to obtain a preliminary identification of marketing gaps compromising their future profitability. The aims of the study were to expose and understand the relative importance attached by owners and managers of South Asian restaurants in Edinburgh to the different elements of the marketing mix. South Asian restaurants form a small but important sector of the restaurant in market in towns throughout the UK and are characteristically of disproportionate financial and social importance to the communities who run them. South Asian restaurants in Edinburgh, as in most towns in the UK, are run primarily by the Bangladeshi community and are under increasing pressure as the variety of restaurants operating in the sector increases. The results of the study make evident that any initiatives taken to support South Asian restaurants should include awareness‐raising actions. Building awareness, which is perceived to be currently partially understood, of the importance of studying markets, customers and competitors is essential before any advice is given on how to accomplish these monitoring tasks. Equally, a fundamental priority is to encourage self‐critical and proactive approaches to business, thus increasing the capacity to identify possible problems and implement correcting measures.     

Resource Curse or Not: A Question of Appropriability*

Whether natural resources are good or bad for a country's development are shown to depend on the interaction between institutional setting and, crucially, the types of resources possessed by the country. Some natural resources are, for economical and technical reasons, more likely to cause problems such as rent‐seeking and conflicts than others. This potential problem can, however, be countered by good institutional quality. In contrast to the traditional resource curse hypothesis, we show the impact of natural resources on economic growth to be non‐monotonic in institutional quality, and increasingly so for certain types of resources. In particular, countries rich in minerals are cursed only if they have low‐quality institutions, while the curse is reversed if institutions are sufficiently good. Furthermore, if countries are rich in diamonds and precious metals, these effects—both positive and negative—are larger.     

Making strategy: learning by doing

Companies find it difficult to change strategy for many reasons, but one stands out: strategic thinking is not a core managerial competence at most companies. Executives hone their capabilities by tackling problems over and over again. Changing strategy, however, is not usually a task that they face repeatedly. Once companies have found a strategy that works, they want to use it, not change it. Consequently, most managers do not develop a competence in strategic thinking. This Manager's Tool Kit presents a three-stage method executives can use to conceive and implement a creative and coherent strategy themselves. The first stage is to identify and map the driving forces that the company needs to address. The process of mapping provides strategy-making teams with visual representations of team members' assumptions, those pictures, in turn, enable managers to achieve consensus in determining the driving forces. Once a senior management team has formulated a new strategy, it must align the strategy with the company's resource-allocation process to make implementation possible. Senior management teams can translate their strategy into action by using aggregate project planning. And management teams that link strategy and innovation through that planning process will develop a competence in implementing strategic change. The author guides the reader through the three stages of strategy making by examining the case of a manufacturing company that was losing ground to competitors. After mapping the driving forces, the company's senior managers were able to devise a new strategy that allowed the business to maintain a competitive advantage in its industry.     

Understanding consumers' in-store visual perception: The influence of package design features on visual attention

It is widely accepted that the human brain has limited capacity for perceptual stimuli and consumers' visual attention, when searching for a particular product or brand in a grocery store, should then be limited by the boundaries of their own perceptual capacity. In this exploratory study, we examine the relationship between abundant in-store stimuli and limited human perceptual capacity. Specifically, we test the influence of package design features on visual attention. Data was collected through two eye-tracking experiments, one in a grocery store using wireless eye-tracking equipment, and another in a lab setting. Findings show that consumers have fragmented visual attention during grocery shopping, and that their visual attention is simultaneously influenced and disrupted by the shelf display. Physical design features such as shape and contrast dominate the initial phase of searching. Time pressure and familiarity with the grocery store are studied and discussed.     

Equilibrium in securities markets with heterogeneous investors and unspanned income risk

In a finite time horizon, incomplete market, continuous-time setting with dividends and investor incomes governed by arithmetic Brownian motions, we derive closed-form solutions for the equilibrium risk-free rate and stock price for an economy with finitely many heterogeneous CARA investors and unspanned income risk. In equilibrium, the Sharpe ratio is the same as in an otherwise identical complete market economy, whereas the risk-free rate is lower and, consequently, the stock price is higher. The reduction in the risk-free rate is highest when the more risk-averse investors face the largest unspanned income risk.     

NEW PUBLIC MANAGEMENT: The effects of contractualism and devolution on political control

This article analyzes effects and implications of New Public Management (NPM) when implemented in the civil service systems in New Zealand and Norway, focusing especially on the effects of devolution and contractualism on political control. Using a transformative perspective, we interpret these effects as a result of a melding of environmental factors, polity features and national historical-institutional constraints. Norway scores low on both environmental and internal factors enhancing administrative reform, furthering a soft version of NPM and small changes in political control. In contrast a combination of external pressure, weak countervailing cultural forces and ‘elective dictatorship’ in New Zealand produces a radical version of NPM, resulting in a weakening of central political control.