Session 114

Adoption of a Practice and its Implications

Track O

Date: Tuesday, October 9, 2012

 

Time: 15:45 – 17:00

Paper

Room: Meeting Hall IV (b)


Session Chair:

  • Toru Yoshikawa, Singapore Management University

Title: An Irony of the Shareholder-Value-Maximization Logic: The Earnings Cult and Decline of Conglomerates

Authors

  • Jiwook Jung, Harvard University
  • Guilhem Bascle, Catholic University of Louvain

Abstract: This proposal reveals an irony of the institutionalization of the logic of shareholder-value-maximization. We develop and test a theoretical framework that presents how the active efforts of firms to meet a precept of this logic—performing what securities analysts forecast—can lead them to enjoy short-term benefits, but can also eventually backlash on them by forcing them to carry out substantive policy reforms such as announcing divestiture deals reinforcing their corporate focus. We test our theoretical arguments on a sample of large publicly traded U.S. firms from 1985 to 2006. Implications of our work for institutional theory and corporate strategy research are discussed.

Title: Conformity Follows Deviation: Evidence from Board Reform in Japan

Authors

  • Daisuke Uchida, Kyushu University

Abstract: This study extends diffusion studies by examining how past adopters’ implementation of diffusing practice influences potential adopters. An empirical analysis is performed with a sample of board reforms in Japan for the period from 1997 through 2010, in particular, the adoption and implementation of the corporate executive officer system (EOS) among large Japanese firms. Using a piecewise constant exponential model, I find that the likelihood of subsequent adoption increases when adopters in the same industry have modified the practice,adopters in the same industry implement the practice in various ways, and adopters in the same industry implement the practice but deviate from the feature intended initially.

Title: The Impact of a Board Level Technology Committee on Technology Outcomes and Firm Performance

Authors

  • Brent Clark, University of Nebraska at Omaha
  • Karen Schnatterly, University of Missouri
  • Richard Johnson, University of Missouri
  • Scott Johnson, Oklahoma State University

Abstract: While the relationship between board composition and firm performance is highly equivocal, we argue that there are stronger connections between board composition and other outcomes. In particular, we suggest that technology committees play a critical advisory role and are related to the technological output and performance of the firm. We hypothesize the firms that adopt technological committees will behave differently than firms that do not and that the composition of the technology committee will influence its impact on the firm. We propose to test these hypotheses with a sample of firms that have adopted a technology committee matched with similar firms that have not. Preliminary findings indicate that, within three years, adopting firms are performing significantly better than their non-adopter matches.

Title: When Do Board Interlocks Matter? The Adoption of Shareholder-Oriented Practices in Japan

Authors

  • Toru Yoshikawa, Singapore Management University
  • Jungwook Shim, Kyoto Sangyo University

Abstract: This study examines the adoption of stock buyback and executive stock option compensation in Japanese firms. We investigate whether the presence of interlocking directors who sit on boards of other firms that adopted those practices is related to the adoption of the same practices by the focal firm. We also examine whether there are any differences in the effects of such board interlocks between family-controlled firms and non family-controlled firms. Our findings show that the presence of interlocking directors is significantly related to the adoptions. We also found that while the effect of such directors on the adoption of a stock buyback plan is stronger for non family-controlled firms, the effect on the adoption of a stock option pay is stronger for family-controlled 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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