A Comparison Study of Manufacturing Industry in Taiwan and China: Manager's Perceptions of Environment,Capability, Strategy and Performance

This article compares managers' perceptions of environment, capability, strategy and business performance in Taiwan and China. Based on an analysis of survey data collected from the fastener industry, results show that the industrial environment and network capability are significantly associated with performance in China, but not in Taiwan. The findings highlight the difference between actual and perceived situations which results from what specific context decision makers find themselves in and how they allocate attention to specific issues. In addition, path analysis reveals that both organizational and network capability of Chinese firms are significantly associated with strategy and performance. This demonstrates that the strategy selected by the Chinese firms as a mediator influences their performance. Implications of these findings are discussed.     

Are Overconfident CEOs Better Innovators?

Previous empirical work on adverse consequences of CEO overconfidence raises the question of why firms hire overconfident managers. Theoretical research suggests a reason: overconfidence can benefit shareholders by increasing investment in risky projects. Using options‐ and press‐based proxies for CEO overconfidence, we find that over the 1993–2003 period, firms with overconfident CEOs have greater return volatility, invest more in innovation, obtain more patents and patent citations, and achieve greater innovative success for given research and development expenditures. However, overconfident managers achieve greater innovation only in innovative industries. Our findings suggest that overconfidence helps CEOs exploit innovative growth opportunities.