Session 103

Reputation: Organizational and Individual Dimensions

Track O

Date: Monday, October 8, 2012

 

Time: 09:30 – 10:45

Common Ground

Room: Club H


Facilitator:

  • Robert Wiseman, Michigan State University

Title: All Risk-Taking is Not the Same: Examining Competing Effects on Firm Risk and Performance with Meta-Analysis

Authors

  • Mathias Arrfelt, Arizona State University
  • Michael Mannor, University of Notre Dame
  • Jennifer Nahrgang, Arizona State University
  • Amanda Christensen, University of Cincinnati

Abstract: Although researchers have vigorously studied organizational risk-taking for over 35 years, little effort has been made to theoretically differentiate the unique relationships between different risk-taking choices and firm risk or firm performance. In this research we propose a new framework that builds from March’s exploration-exploitation work to argue that different risk-taking choices have distinct influences on firm outcomes. We then use the power of meta-analysis to examine the unique and competing effects of four of the most commonly studied risk-taking choices on firm risk and firm performance. Results from a meta-analysis of 161 unique studies (N = 251,569; overall k=170) demonstrate support for our framework and cast significant doubt on the idea that commonly studied firm risk-taking choices theoretically aggregate into one overarching risk-taking construct.

Title: CEO Appointments: How Investment Analyst Recommendations Influence the Board’s Choice of the Replacement CEO after Dismissal

Authors

  • Joshua Hernsberger, Western Kentucky University
  • Margarethe Wiersema, University of California, Irvine

Abstract: While the appointment of a new CEO after CEO dismissal is probably the single most important decision that a Board of Directors can make, we know little about the contextual factors that are likely to influence the board’s decision. In this study, we propose that investment analyst recommendations provide the board with information that may influence the selection of a replacement CEO after dismissal. Using panel data on firms listed in the S&P 500 for the 2000-2005 period that have experienced a CEO dismissal, we find that more positive analyst recommendations prior to dismissal result in the appointment of replacement CEOs with extensive top management team experience at the firm, while more negative recommendations result in the appointment of CEOs with high status.

Title: False Precision? Organizational Antecedents and Implications of Earnings Guidance Precision

Authors

  • Mathew Hayward, Monash University
  • Markus Fitza, Frankfurt School of Finance and Management
  • Don Moore, University of California-Berkeley

Abstract: In this article we contribute to the literatures on impression management by examining how the use of corporate earnings forecast precision serves as a means of communication with firm outsiders and as a means of persuasion that can positively influence the perceptions of stakeholders. We explore two major impression management motives that could influence earnings guidance precision: convincing stakeholders that performance will improve; and, shoring up the credibility of the organization and its leaders. Our find-ings strongly support these perspectives, pointing to the conditions in which organizations use precision as an impression management tool. Our results also suggest that greater precision in earnings guidance is more persuasive for stakeholders such as security analysts.

Title: Governance and Long-Run Performance of IPO Firms: The Impact of Prestigious-Affiliated Venture Capital

Authors

  • Thomas Steinberger, University of California-Irvine
  • Libby Weber, University of California, Irvine

Abstract: Susceptibility to governance problems arising from information asymmetries has made initial public offerings (IPOs) an attractive context for exploring how mechanisms such as venture capital (VC) backing mitigate agency costs under high uncertainty. The literature on VC backing of IPOs has long been driven by agency theoretic arguments that effective governance relies on contractually enforced ownership rights. Recent work, however, suggests that reputational incentives may also serve as effective mechanisms. It thus remains unclear whether information asymmetry in IPO transactions is eased primarily by contractual or reputational means. Using data on the long-run performance of IPOs backed by VC firms with prestigious affiliations, we find evidence that reputational characteristics serve as effective governance mechanisms, and that the emphasis on contractual mechanisms may be overstated.

Title: How Executive Hubris Affects Corporate Social Performance: Resource Dependence and Corporate Governance Perspectives

Authors

  • Yi Tang, Hong Kong Polytechnic University
  • Cuili Qian, City University of Hong Kong
  • Catherine Lam, City University of Hong Kong

Abstract: This study links executive hubris to corporate social performance (CSP). Grounded in the upper echelons perspective, resource dependence theory, and agency theory, hypotheses were developed and tested using a longitudinal archival data of the U.S. publicly listed firms from multiple industries, spanning from 1993-2010. The results render support to our main theoretical prediction: executive hubris has a negative relationship with a firm’s CSP. This negative relationship is weakened when the firm has a higher dependence on stakeholders for resources and when the interests of top executives are aligned with those of shareholders enabled by both the monitoring- and incentive-based corporate governance mechanisms. Implications for the upper echelons theory, the CSP research, and the corporate governance research were discussed.

Title: Repairing a Reputation: Firms\' Actions to Recover a Threatened Loss in Reputation

Authors

  • David Gomulya, Nanyang Technological University
  • Warren Boeker, University of Washington
  • Karen Wang, University of Washington

Abstract: Firm reputation has been the subject of a great deal of theorizing and research in organization studies. However, there is much less work on what actions firms may take to reestablish their reputation once they lose it, which can happen when firms commit deeply discrediting or stigmatizing acts. Our study examines firm responses that focus on the top management team: to what extent do the top executives of the organization change, what are the characteristics of these successors, and whether such characteristics can help repair a firm reputation? Our specific research setting is SEC-mandated restatements by publicly held firms.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 119: Strategic Leadership
Sun: 09:30 – 10:45
Session 120: Corporate Governance
Sun: 11:15 – 12:30
Session 122: Strategic Leadership and Corporate Governance Complementarities: Why we Are an IG
Sun: 15:15 – 16:30
Session 107: The Benefits of Experience: Vicarious and Otherwise
Mon: 08:00 – 09:15
Session 106: Why do Firms do Bad Things and What Do We Know about It?
Mon: 09:30 – 10:45
Session 103: Reputation: Organizational and Individual Dimensions
Mon: 13:30 – 14:45
Session 112: CEO and TMT Turnover: Firm Implications
Session 214: CEOs and Leadership
Mon: 16:30 – 17:45
Session 113: Large Shareholders are Doing it for Themselves
Tue: 08:00 – 09:15
Session 115: Board Member Characteristics and Board Diversity
Session 137: CEO Human Capital: Take a Little off the Top
Session 254: Capital Markets and Efficiency
Tue: 11:00 – 12:15
Session 111: Why Boards Look the Way They Do: Director Selection
Session 117: Heterogeneous Owner Types and their Influence
Tue: 14:15 – 15:30
Session 108: CEOs Matter, Don\'t They?
Session 116: Discretion and Compensation
Tue: 15:45 – 17:00
Session 114: Adoption of a Practice and its Implications
Tue: 17:30 – 18:45
Session 118: The TMT as a Unit
Session 215: CEO Personality and Characteristics Influencing Decision Making


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