Symbolic Shareholder Democracy: Toward a Behavioral Understanding of the Role of Shareholder Voting in CEO Dismissals

2023 | Organization Science | Citations: 0

Authors: Andrei, Alina G.; van Oosterhout, J. (Hans); Sauerwald, Steve

Abstract: We investigate the effect of expressive shareholder dissent voting, in which sha ... Expand

Abstract: We investigate the effect of expressive shareholder dissent voting, in which shareholders use their votes symbolically to express their discontent with management, on subsequent chief executive officer (CEO) dismissals. Using the routine but highly symbolic executive board discharge proposal voted on at the annual shareholder meetings of German firms, we argue that the board of directors understands these votes as a “vote of confidence in management” that challenges the CEO’s mandate to lead the firm. Arguing that board chairs are uniquely positioned to take up the stance of a steward of the firm and its leadership, we examine how independent and family board chairs moderate the board’s response to expressive voting dissent. Using a sample of German public firms over the period 2008–2015, we find that expressive voting dissent increases the chance of CEO dismissal increasingly with the level of dissent expressed. Contrary to prevailing agency theoretical expectations, we do not find that independent chairs are more responsive to expressive voting dissent, nor that this relationship is strengthened by the degree of minority institutional investor ownership of the firm. Consistent with the symbolic perspective on shareholder voting that we seek to develop, however, we find that family chairs are more likely to lead the board to dismiss the CEO due to the intrinsic disvalue they incur from symbolic leadership legitimacy challenges in their firms, and that the positive effect of having a family chair on the dissent induced chance of CEO dismissal is strengthened by the level of family ownership in the firm. Funding: A University of Illinois at Chicago Summer Research Grant is gratefully acknowledged for S. Sauerwald. Collapse

Topics: corporate governance financial performance accounting organizational productivity

Methods: theory development statistical hypothesis test post-hoc analysis longitudinal research survival analysis

Theories: stewardship theory behavioral theory

Digitalization and Early Internationalization- Systematic Literature Review Analyses

2023 | HICSS | Citations: 0

Authors: Appiah, Emmanuel; Gabrielsson, Peter

Abstract: Substantial anecdotal evidence has been garnered to make it uncontentious to con ... Expand

Abstract: Substantial anecdotal evidence has been garnered to make it uncontentious to concede to studies that stress on the influence of digital technology on early internationalization of firms. Having an interest to study how studies on this phenomenon has progressed overtime. The present paper systematically evaluates internationalization literature in which issues of digitalization feature as a component underlying the causes, processes, and outcomes of early internationalization. This enables us to outline the development of major research areas in terms of themes, theoretical and methodological approaches. We contribute by proposing several future research directions. Collapse

Topics: information technology capability internet technology electronic business mobile system marketing management

Methods: literature sample structured literature research theory development cross sectional research literature study

INNOVATION ON THE VENDOR SIDE - ANALYZING THE EFFECTS OF INNOVATION INITIATIVES ON OUTSOURCING PROVIDERS' PERFORMANCE

2023 | European Conference On Information Systems | Citations: 0

Authors: Beimborn, Daniel; Mildenberger, Andreas

Abstract: Innovation through outsourcing' describes a firm's strategy to receive innovati ... Expand

Abstract: Innovation through outsourcing' describes a firm's strategy to receive innovation by outsourcing IT or IT-intensive processes to more competent and innovative service providers who, in turn, do not only operate those activities but also improve and innovate for or on behalf of their clients. This strategy has gathered some attention from recent research, though it has mainly examined the client perspective, yet. We contribute to this sub-field of outsourcing research by analyzing vendors' strategies to improve their innovation capability and thus to be more innovative for their clients. Based on a longitudinal dataset of 136 outsourcing vendors, we analyze which innovationenabling initiatives are related to superior firm performance (in terms of revenue growth). We find that particularly employee-involving initiatives are promising: outsourcing vendors that have implemented, e.g., idea/innovation platforms that support employee-driven innovation, receive above-average revenue growth. Collapse

Topics: innovation management outsourcing organizational productivity financial performance absorptive capacity

Methods: regression analysis method statistical hypothesis test longitudinal research Student's t-test linear regression analysis

Theories: dynamic capabilities theory

“Dear CEO and Board”: How Activist Investors’ Confidence in Tone Influences Campaign Success

2023 | Organization Science | Citations: 0

Authors: Brauer, Matthias; Wiersema, Margarethe; Binder, Philipp

Abstract: Activist hedge funds represent the most potent form of financial activism. Yet w ... Expand

Abstract: Activist hedge funds represent the most potent form of financial activism. Yet we do not fully understand how these activist investors, despite holding only a small stake in target firms, are able to influence management and the board to acquiesce to their demands, especially given the large uncertainty that their demands will improve shareholder value. Building on impression management (IM) theory, we propose that activist investors who express their concerns and demands with high confidence in their letters to target firms are likely to be perceived as knowledgeable and competent by the firm’s other shareholders, thus influencing the response of the firm’s management and board. In support of this theoretical proposition, results of our empirical analysis of 475 U.S. activist campaigns against U.S. companies between 2007 and 2019 suggest that confidence in tone in an activist’s letter, as a form of self-promotion, is positively associated with campaign success. We also observe that the positive association between confidence in tone in activist letters and campaign success is less for activists with greater success in prior campaigns and in campaigns with multiple activists. Our paper contributes to financial activism research by showing that activists’ verbal impression management can serve as an effective influence tactic in their campaigns. Our study also contributes to the emerging research stream on verbal IM by introducing a language attribute, confidence in tone, that has not been studied in management research and is distinct from past constructs examined in verbal IM research. Collapse

Topics: corporate governance strategic management organizational productivity decision making database system

Methods: descriptive statistic qualitative content analysis theory development linguistic analysis regression analysis method

Theories: behavioral theory

The Motivation of Companies to Implement Corporate Digital Responsibility Activities Voluntarily: An Empirical Assessment

2023 | International Conference on Business Informatics | Citations: 0

Authors: Carl, K. Valerie; Kubach, Michael; Mihale-Wilson, Cristina

Abstract: Technological advancements such as Artificial Intelligence afford new opportuni ... Expand

Abstract: Technological advancements such as Artificial Intelligence afford new opportunities and pose new challenges. In this context, Corporate Digital Responsibility (CDR) has gained increasing attention. CDR presents a comprehensive and well-structured approach to companies' responsibilities in the digital setting. While the threats of digitalization start to materialize, research on CDR is still in its infancy, with little empirical understanding of whether and why companies engage in CDR practices. This qualitative study addresses the motivation of companies to pursue CDR by conducting 29 expert interviews. In practice, firms implement CDR activities to follow their inner motivation or to satisfy external expectations. Our results indicate that motivation differs primarily according to the company size and the addressees of efforts. Motivational sources for conducting CDR activities are rather company-specific while allowing for some generalization based on company types. In this way, this study enables several future research avenues worth pursuing. Collapse

Topics: business-to-consumer business-to-business electronic business financial performance telephone

Methods: qualitative interview qualitative coding personal interview mixed method qualitative content analysis

Does the new entrant eat my pie or enlarge my pie? Market entry investigation in the online-to-offline on-demand context

2023 | Decision Support Systems | Citations: 0

Authors: Dai, Hongyan; Ta, La; Xu, Xun

Abstract: The facilitation of information technology has led to the rapid development of o ... Expand

Abstract: The facilitation of information technology has led to the rapid development of online-to-offline commerce, and this mode is attracting increasing businesses to enter the market. Its unique on-demand features affect con­ sumers’ shopping behaviors. This study uses a difference-in-difference approach with propensity score matching and machine learning approaches to examine the impact of a new giant online-to-offline entrant on consumers’ ordering and spending behavior. We find that overall, the new entrant has a negative impact on consumers’ ordering and spending from the perspective of existing providers. This negative impact is amplified if the con­ sumers are highly engaged on the platform. However, the new entrant effect is reduced if the providers use inhouse rather than outsourced deliverymen or consumers have a relatively long distance from the new entrant. Furthermore, the new entrant effect is altered if the platform implements technological innovation. On a provider level, the new entrant has a direct negative impact on consumers’ ordering and spending from homogenous providers; however, a positive spillover effect is observed in terms of increasing consumers’ spending on het­ erogeneous providers. The direct effect occurs immediately, while the spillover effect appears in a time-lagged pattern. On a product level, we find that the new entrant negatively affects consumers’ ordering and spending on substitute products also sold by the new entrant, but that their spending on non-substitute products is boosted. Our findings provide decision support for the new entrant and existing providers to expand the market to stimulate consumers’ purchase from both, to enhance their financial performance. Collapse

Topics: decision support digital innovation innovation management electronic commerce financial performance

Methods: experimental group k-means clustering machine learning computational algorithm Student's t-test

Do you see what I see? A social capital perspective on microtask gig worker opportunity recognition within electronic networks of practice

2023 | International Journal of Information Management | Citations: 0

Authors: Di Gangi, Paul M.; Howard, Jack L.; Goh, Samuel H.; Thatcher, Jason Bennett

Abstract: Microtask gig workers (MGWs) rely on digital platforms to arrange work agreement ... Expand

Abstract: Microtask gig workers (MGWs) rely on digital platforms to arrange work agreements with requesters to complete well-defined microtasks. Many MGWs use an electronic network of practice (ENP) to facilitate information sharing about desirable and undesirable microtasks. This study uses social capital theory to theorize how social capital’s dimensions – structural, cognitive, and relational – shape the development of uncertainty-reducing and individualized-skill benefits. Based on survey data from 436 Amazon Mechanical Turk (MTurk) workers, the findings demonstrate that unique social capital dimensions affect specific ENP benefits. Understanding the communication style of an ENP (i.e., cognitive social capital) positively influences the uncertainty-reducing benefits of microtask information quality (MIQ) related to MTurk work. Combined with expectations of reci­ procity and trust in ENP members (i.e., relational social capital), MIQ shapes microtask opportunity recognition (MOR), whereby individual MGWs identify opportunities to complete financially beneficial microtasks. The present study demonstrates that contextual factors, based on the coopetive nature of microtask ENPs, affect the interrelated structure of social capital theory and its underlying dimensions. Lastly, post hoc findings demon­ strate the influence of MOR on MGWs’ financial performance, challenging previously held assumptions about the role of MIQ within the microtask literature. Collapse

Topics: social capital financial performance platform worker data quality digital platform

Methods: survey post-hoc analysis structural equation modeling mediation analysis theory development

Theories: social capital theory lemon market theory

Variations in the Corporate Social Responsibility-Performance Relationship in Emerging Market Firms

2023 | Organization Science | Citations: 0

Authors: Cuervo-Cazurra, Alvaro; Purkayastha, Saptarshi; Ramaswamy, Kannan

Abstract: Corporate social responsibility (CSR) and its impact on performance have generat ... Expand

Abstract: Corporate social responsibility (CSR) and its impact on performance have generated a debate that has evolved across several perspectives (shareholder, stakeholder, resource-based, and contingency). Building on the resource-based and contingency perspectives, we shed new light on this debate by analyzing the impact of CSR on performance in emerging market firms, advancing the idea that CSR is a mechanism that helps address market and government failures. We first argue that CSR’s three constituent dimensions (environmental, social, and governance) vary in their impact on performance because each dimension has a different mitigating effect on contextual failures that hobble emerging market firms. Specifically, we contend that social CSR has a larger effect on performance than either governance CSR or environmental CSR for emerging market firms, because the former helps build capabilities that more directly reduce the negative consequences of government failures in the provision of public goods and services that firms need to operate efficiently. We then provide additional depth to this idea by arguing that other mechanisms used for mitigating market failures in an emerging market context, namely firm-level business group affiliation and country-level government policy nudges, strengthen this differential influence of each of the three dimensions of CSR on performance. Analyses of a sample of 89 publicly traded Indian firms from 2007 to 2017 support these arguments. Funding: A. Cuervo-Cazurra thanks the Lloyd Mullin fellowship at Northeastern University for financial support. S. Purkayastha thanks Indian Institute of Management, Calcutta for financial support. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1639. Collapse

Topics: organizational productivity database system public good legal context societal evaluation criteria

Methods: experimental group longitudinal research robustness check instrumental variables estimation difference in differences

Theories: resource based view of the firm

Does IT Enable Collusion or Competition: Examining the Effects of IT on Service Pricing in Multimarket Multihospital Systems

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Du, Kui; Tanriverdi, Hüseyin

Abstract: In the U.S., multihospital systems (MHSs) charge significantly higher prices fo ... Expand

Abstract: In the U.S., multihospital systems (MHSs) charge significantly higher prices for hospital services than stand-alone hospitals. Rivalry restraint theory suggests that MHS with multimarket contact (MMC) can tacitly collude and mutually forebear from price competition to keep their prices above competitive levels. We posit that the success of such MMC-induced rivalry restraints (the truce) is affected by two conflicting roles of IT at the corporate level and market unit levels, respectively. The corporate parent seeks to standardize IT applications enterprise-wide to coordinate market units as a means of jointly implementing the rivalry restraint strategy and keeping prices high enterprise-wide. However, market units, i.e., the member hospitals of MHS clustered in geographic patient markets, face competitive pressures to reduce their service costs. Market units seek to use differentiated IT applications to achieve cost reductions, which then fuel price competition in local markets, jeopardize the sustainability of the truce, and weaken the enterprise-wide price effects of the corporate parent's rivalry restraint strategy. In a longitudinal study of 195 multihospital systems in the U.S. in the 2005-2013 time period, we found support for these ideas. The corporate-wide standardization of the operational IT of MHS complements the rivalry restraint strategy to increase enterprise-wide prices. Market units' use of differentiated analytical IT reduces costs in local markets and weakens the price effects of the rivalry restraint strategy. The study advances IS research and practice by theorizing how the corporate-level and the market unit-level IT of a multi-unit, multimarket (MUMM) organization can have opposing moderating effects on the link between MMC and the average prices charged by the MUMM organization. Collapse

Topics: analytical information system operational information system database system health information system decision making

Methods: theory development robustness check instrumental variables estimation longitudinal research data modeling

The Returns to Nonmarket Strategies During Institutional Transitions: Investor Reactions to Actor and Tie Characteristics

2023 | Organization Science | Citations: 0

Authors: Gatignon, Aline; Gama, Marina A. B.; DeMello, Rodrigo B.

Abstract: We explain how investor perceptions of nonmarket strategies’ legitimacy, and the ... Expand

Abstract: We explain how investor perceptions of nonmarket strategies’ legitimacy, and thereby value, change during institutional transitions toward greater legal compliance. Indirect influence strategies should be better aligned with the transition and therefore become more legitimate than those associated with direct co-optation and control. Moreover, investors should assess this alignment based on two defining characteristics of firms’ nonmarket strategies, namely, the nonmarket actors and the ties involved. We, therefore, expect investors to value firms’ ties to nongovernmental organizations (NGOs) more than to political actors and ties formed via donations more than board ties. We test our hypotheses in the context of seven police raids that took place in Brazil in 2014; these raids launched “Operation Car Wash,” an anticorruption probe that signaled to investors a shift toward greater legal compliance at that point in time. Ultimately, we find that firms benefited the most when both nonmarket actors and ties were aligned with the institutional transition (i.e., NGO donations), and they suffered the most when both characteristics were misaligned (i.e., political board ties). Our findings integrate nonmarket strategies’ political and social facets by showing how actor and tie characteristics jointly explain their success or failure. They also contribute to explaining which firms will be better positioned to weather institutional transitions between legal capture and legal compliance. Funding: This work was supported by Getúlio Vargas Pesquisa-Fundação Getúlio Vargas; Govil Family Faculty Scholar Award; Wharton School, University of Pennsylvania. Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2022.1616. Collapse

Topics: database system corporate governance financial performance accounting corporate social responsibility

Methods: Wald test robustness check qualitative interview statistical hypothesis test theory development