Category Archives: Original Article

Gambling culture and internal control extensiveness

Posted on by

Abstract

While cultural traits in a firm's location impact corporate operation, the role of local cultures on a firm's internal control effectiveness (ICE) remains unclear. Using data from a sample of Chinese firms from 2009 to 2019, we examine how the gambling culture in Chinese provinces where firms are located impacts the firms' ICE. We use per capita lottery sales of the provinces to proxy for gambling culture in China and find that firms raise their ICE in environments with strong gambling cultures. The results are robust to five components of ICE (control environment, risk assessment, control activity, information and communication, and internal monitoring), alternative metrics of gambling metrics, and after accounting for endogeneity. A mediating analysis also shows that firms in regions with a strong gambling culture engage in risky activities, which increases their ICE. Additional analyses suggest that the effect is more salient for firms with poor internal corporate governance, firms located in poor legal environments, firms with poor audit quality, or firms with more local external stakeholders, echoing that ICE and monitoring are partial substitutes.

The Role of Multistakeholder Initiatives in the Radicalization of Resistance: The Forest Stewardship Council and the Mapuche Conflict in Chile

Posted on by

Abstract

Multi-stakeholder initiatives (MSIs) that address sustainability concerns have grown in importance in recent years. These private governance measures involving market, state and civil society actors aim to resolve disagreements between stakeholders through stakeholder engagement practices. However, our empirical study of the Mapuche conflict in Chile shows how a multi-stakeholder initiative contributed to the radicalization of a protest movement leading to an escalation of violence that left all actors worse off. The implementation of the Forest Stewardship Council (FSC) certification scheme, perhaps the best known MSI, exacerbated existing political discontent among the Indigenous Mapuche peoples who were resisting the expansion of industrial forest on their lands in southern Chile. Our findings indicate that MSIs cannot address the needs of marginalized stakeholders and may further undermine their interests. Our analysis enhances our understanding of the outcomes of MSIs by describing processes of radicalization as well as the role of the state in conflicts. The FSC certification scheme was incapable of addressing the key Mapuche demand for land rights. Instead, it raised false expectations, which coupled with corporate irresponsibility and state repression led to an escalation of violence. The increasing reliance on private governance measures in natural resource management, especially in countries of the so-called Global South, can further exacerbate existing conflicts and hence it is important to understand how and why MSIs lead to negative outcomes.

Giving it all You’ve Got: How Daily Self‐Sacrifice and Self‐Esteem Regulate the Double‐Edged Effects of Callings

Posted on by

Abstract

Occupational callings are a combination of passion and enjoyment with a sense of duty and destiny. Pursuing a calling is a double-edged sword, sometimes beneficial and sometimes detrimental, but it is unclear why it has contradictory effects. We show how daily self-sacrifice behaviour explains these effects and reveals how workers regulate their callings on a daily basis. We argue that people with intense callings use self-sacrifice to attain daily calling goals. However, this has a cost to their wellbeing in terms of daily emotional exhaustion. Diary data from church ministers and chaplains reveals that daily self-sacrifice behaviour mediates the positive effects of calling intensity, via felt obligations, on both daily calling goal attainment and emotional exhaustion. Within-person, we show how state self-esteem further regulates this double-edged process both within a day and from one day to the next. Low morning state self-esteem promotes daily self-sacrifice and is indirectly related to higher calling goal attainment and emotional exhaustion via daily self-sacrifice. But morning self-esteem is itself predicted positively by the previous days’ goal attainment and negatively by emotional exhaustion. Therefore, state self-esteem in conjunction with daily self-sacrifice behaviour and its double-edged effects represents a daily regulation mechanism for self-sacrifice in callings.

Social Comparison Inside Business Groups and Strategic Change: Evidence from Group‐affiliated Chinese Firms

Posted on by

Abstract

This study examines the effect of performance feedback on strategic change with a focus on internal social comparison in a business group context. We argue that group affiliates are more responsive to internal social comparison with group peers than to external social comparison with industry peers. However, the salience of internal social comparison is subject to institutional contingencies. We test these arguments using panel data from 1449 group affiliates in China during the period 2005–12. We find that internal social comparison has a greater effect on a group affiliate's strategic change than does external social comparison. Moreover, this effect differential is smaller in groups located in regions with more developed market institutions but larger in state-owned groups and groups managed by internally promoted CEOs.

Firms’ Response to Slacktivism: When and Why are E‐Petitions Effective?

Posted on by

Abstract

E-petitions have evoked an important debate about the potential for digital activism to pressure firms to change social policies and practices. One prevailing perspective is that slacktivism, a tendency of online supporters to provide only token support, undermines any possible impact. An alternative perspective is that social media dynamics underlying digital activism offer new pathways for social activists to pressure firms toward social change. To explore this debate, we combine insights from research on social movements, social media, and the logic of connective action to theorize the impact of social media mechanisms such as e-petition connectivity and velocity. With a hand-coded database of 1587 e-petitions targeting Fortune 500 firms from 2012 to 2017 through the platform Change.org, we empirically evaluate whether these e-petitions matter. Our empirical results strongly suggest that e-petitions do matter, and we explain when digital activism has impact. The activation of social media mechanisms spreads negative information and directly intensifies the threat to the targeted firm's reputation, pressuring firms to concede to e-petitioner demands. Furthermore, our findings indicate that firm visibility and resource availability can represent boundary conditions for the firm's vulnerability and ability to respond to digital activism.

Tax‐Motivated Relocations of Headquarters: The Role of Affinity Bias among Socially‐Responsible Blockholders and CEOs

Posted on by

Abstract

While socially-responsible large shareholders have been shown to have a substantial impact on corporate leaders’ decisions on social responsibility, prior research remains silent on whether that impact is subject to bias among these two sets of actors. To shed light on this issue, we study the role of socially-responsible blockholders as well as CEOs in the occurrence of tax-motivated international relocations of corporate headquarters (HQs) – a key form of shareholder-oriented behaviour. Drawing on stewardship theory and corporate governance research, we first hypothesize that responsible blockholders’ total equity stake in a firm is negatively related to a firm's propensity to undertake a tax-motivated HQ relocation. Using complementary insights from social identity theory, we then propose that both socially-responsible blockholders and CEOs tend to identify more strongly with compatriots than with foreigners. This leads us to hypothesize that (a) the stake of responsible domestic blockholders is more negatively related to a firm's relocation propensity than the stake of responsible foreign blockholders, and that (b) the stake of responsible blockholders that are compatriots of their firm's CEO is more negatively related to that propensity than the stake of responsible blockholders with a different nationality than the CEO's. Logit analyses of a sample of US firms covering the period 1998–2017 lend substantial support to our hypotheses, indicating that affinity bias among socially-responsible blockholders and CEOs shapes the occurrence of a key form of shareholder-oriented behaviour.

Forged at Workforce Entry? CEO Imprinting, Information Uncertainty and Merger Wave Timing

Posted on by

Abstract

We examine the imprinting effect of labour market conditions on a CEO's merger wave timing decisions. Based on a sample of 720 CEOs of US-based firms in merger waves between 1995 and 2018, we found that CEOs who started their careers during periods of poor labour market conditions tend to delay merger wave entry, while those who began under better conditions act earlier. We also found that the market uncertainty at the beginning of the merger wave decays this effect on CEOs whose workforce entry coincided with poor labour market conditions. This study contributes to the M&A literature by highlighting the long-term impact of early career experiences on CEO merger wave timing decisions and how those preferences may decay when faced with different conditions later in their careers.

Attracted to the Hustle? An Impression Management Perspective on Entrepreneurial Hustle in New Venture Recruitment

Posted on by

Abstract

Research has shown that impression management helps entrepreneurs access critical resources, but insights into applying concrete impression management techniques in new venture recruitment remain scarce. This knowledge gap represents a challenge for new ventures facing disadvantages in recruitment. We propose self-presentations of entrepreneurial hustle as an effective impression management technique for entrepreneurs. Such self-presentations to applicants increase the perceived competence and thereby the attractiveness of entrepreneurs' new ventures. We introduce applicants' individual entrepreneurial orientation and entrepreneurs' gender as factors influencing the relationship between entrepreneurial hustle and perceived entrepreneurial competence. Employing an experimental vignette methodology across three samples – a main sample drawn from mTurk (N = 613) and two additional samples from Prolific (N = 130) and German management students (N = 188) – we find that perceived competence mediates the relationship between entrepreneurial hustle and perceived organizational attractiveness. While individual entrepreneurial orientation weakens the effect of entrepreneurial hustle self-presentations on perceived competence, we do not find an influence of entrepreneurs' gender. This research indicates mechanisms and contingencies regarding the effect of entrepreneurial hustle self-presentations. Our results advance not only research on entrepreneurial hustle but also theory on interviewer-level impression management and new venture recruitment.

Eristic Legitimation of Controversial Managerial Decisions

Posted on by

Abstract

This paper investigates the eristic legitimation of managerial decisions – managerial interactions to win without reasoned persuasion of the counterparty – in the context of career-advancement disputes. This mode of legitimation can be ethically questionable, particularly when powerful managers have the licence for it, while less powerful subordinates may have ‘no other choice’ than reasoned persuasion to address their concerns. The present study involves two sets of interviews to explore eristic legitimations and associated moral and political processes. The first involves former employees who had career advancement disputes with their former managers, and the second, HR professionals with expertise in dealing with employee complaints. Our analysis suggests that managing unfairness concerns can be destructive when managerial authorities argue eristically by exploiting ambiguities around performance, tasks, goals and moral principles. The novelty of this study is that it explores how ambiguities shape managerial handling of employees’ justice concerns and how eristic legitimations during ethical decision-making can have deleterious consequences for organizations and individual careers. While this study contributes to research on the rhetorical strategies of managers, it has important implications for interactional justice and ethical decision-making research.

Opportunity or Threat? Exploring Middle Manager Roles in the Face of Digital Transformation

Posted on by

Abstract

With the proliferation of automation technology, controversy concerning the impact of digital automation on middle-managers’ strategic importance is rising. Some scholars adopt an ‘automation-as-a-threat’ view to argue that digital automation replaces middle-managers’ strategic value. On the contrary, others take an ‘automation-as-an-opportunity’ view to underscore the role accumulation advantages digital automation offers for individuals in organizations. We acknowledge this debate and develop a contingency-based role-theoretical framework, suggesting that the impact of automation on middle-managers’ strategic involvement depends on: (a) the nature of the middle-management tasks subject to automation, and (b) the level of the individual middle-manager's task-related expertise and simultaneous role embeddedness – as defined by their position tenure. We test our framework using longitudinal survey data from German, Swiss and Austrian firms at four time points. Overall, our work takes an important step toward unravelling the complex and contingent impact of digital automation on middle-managers’ strategic involvement in contemporary organizations.