Moderately Fast and Furious: A Screening and Behavioral Theory of New CEO Strategic Action Speed

Family ownership and family involvement as antecedents of strategic action: A longitudinal study of initial international entry

Research from the behavioral theory of the firm argues that declining performance below aspiration levels drives firms to engage in problemistic search that results in strategic actions designed to overcome performance shortfalls. This research has considered only strategic actions taken in the firm’s market environment though, such as investments in R&D. Firms operate and take strategic actions in both the market and nonmarket environment, the latter including firm interactions with the government. The research presented here argues that for reasons of risk aversion, firms facing declining performance below aspiration levels are likely to engage in strategic actions in the nonmarket environment immediately following a performance shortfall. In contrast, risk-taking preferences are argued to motivate firms to take strategic actions in the market environment in the future. We find support for these arguments utilizing 27 years of data from large U.S. firms.

Competitive dynamics in an emerging economy: Competitive pressures, resources, and the speed of action

Research based on the behavioral theory of the firm (BTOF) argues that firms will actively adopt strategic actions to respond to performance that falls below aspirations, that is performance shortfalls. However, most previous studies have focused on market-related strategic actions, paying less attention to the impact of performance shortfalls on non-market-related strategic actions, especially corporate social responsibility (CSR) and corporate social irresponsibility (CSI). In this study, we propose that firms facing performance shortfalls are likely to reduce CSR levels and increase CSI levels. In addition, we also propose that board characteristics (board size, board age and board tenure) have a significant moderating effect on the above relationship. Empirical analyses based on an unbalanced panel data of China's listed firms from 2010 to 2018 show that our arguments are largely supported.

About the Authors

Research Summary Private equity (PE) investors invest in a portfolio of firms, setting new, ambitious performance aspirations and providing monitoring and value‐adding services to help management attain these aspirations. Integrating a behavioral theory of the firm and corporate governance perspective, this study investigates how portfolio firms respond to performance feedback, considering heterogeneity in PE investors' incentives and influence toward a given portfolio firm's strategic actions. Using unique data from a PE investor including direct aspirations measures, we find that (1) portfolio firms' performance relative to aspirations, and (2) the PE investor's relative investment amounts and experience of PE‐appointed board members, interact to affect the distinct growth strategies (i.e., internal capital investments or external acquisitions) its portfolio firms pursue. Managerial Summary A PE investor may guide its portfolio firms differently. Incentives to intervene should be larger in case of larger investments, and influence should be more extensive in case of more senior PE board representatives. In this study, we examine how a PE investor's varying incentives and influence affect how PE‐backed firms strategically react to underperformance and overperformance. We find that a PE investor pushes for capital investments but deters acquisitions as performance shortfalls increase in a portfolio firm, when they have made larger investments and appointed more senior board members. In case of overperformance, a PE investor pushes toward acquisitions (and against capital investments) when they have invested more. Surprisingly, the opposite holds in case of more senior board members.

The paper examines how firms learn over time to allocate resources to alternative strategic actions in a changing business environment. We draw on psychological models of reinforcement learning to develop theory about how market feedback influence managerial beliefs about the attractiveness of strategic actions, which in turn shape choices about resource allocation. We extend this simple model of reinforcement learning with considerations from the behavioral theory of the firm to understand under what conditions managers rely more on their current beliefs in allocating resources. We test our hypotheses on an unbalanced panel of 58 video game publishers releasing games in 11 genres between 1997 and 2008. Controlling for several firm, industry and genre specific effects as well as the influence of vicarious learning on resource allocation, we find broad support for our hypotheses.

In recent years, environmental issues and problems have risen due to mass production, environmental destruction and global warming. For these reasons, consumers are changing their purchase preferences to environmentally friendly products. Additionally, strategic marketing actions of companies target their products and services to these kinds of consumer groups to gain market share and minimize their production costs. This research aims to understand the importance of promoting green products and then tries to explain consumers buying intensions and decision of green or ecological friendly products under the consumer behavior theory.

BackgroundPurchasing is a health financing function that involves the transfer of pooled resources to providers on behalf of a covered population. Little attention has been paid to the extent to which the views of that population are reflected in purchasing decisions. This article explores how purchasers in two financing mechanisms: the Formal Sector Social Health Insurance Programme (FSSHIP) operating under the Nigerian National Health Insurance Scheme (NHIS), and the tax-funded health system perform their roles in light of their responsibilities to the populations.MethodsA case study approach was adopted in which each financing mechanism is a case. Sixteen (16) in-depth interviews with purchasers and eight (8) focus group discussions with beneficiaries were held. Agency and organizational behavioural theories were used to characterise the purchaser-citizen relationships. A deductive framework approach was used to assess whether actions identified in a model of ‘ideal’ strategic purchasing actions were undertaken in each case.ResultsFor both cases, mechanisms exist to reflect people’s health needs in purchasing decisions, including quantitative and qualitative needs assessment, mechanisms to raise awareness of benefit entitlements and allow choice. However, purchasers do not use the mechanisms to effectively engage with and hold themselves accountable to the people. In the tax-funded system, weak information systems and unclear communication channels between the purchaser and citizens constrain assessment of needs; while timeliness of health information and poor engagement practices of Health Maintenance Organisations (HMOs) are the main constraints in FSSHIP. Inadequate information sharing in both mechanisms limits beneficiaries’ awareness of entitlements. Although beneficiaries of FSSHIP can choose providers, lack of information on the quality of services offered by providers constrains rational decision-making and the inability to change HMOs reduces HMO responsiveness to beneficiary needs.ConclusionsResponsiveness and accountability to beneficiaries are undervalued by purchasers in both financing mechanisms. In the tax-funded system, civil society organisations can facilitate engagement and accountability of purchasers and the people. In FSSHIP, NHIS needs to provide stronger stewardship of HMOs to promote effective engagement with members. Furthermore, the NHIS should introduce mechanisms that allow FSSHIP members to choose their own HMO, which could encourage HMOs to be more responsive to members.

The epidemic has been ongoing for nearly three years and has had a significant impact on many industries, especially the tourism industry. This study focuses on Ctrip homestays to study how companies gain customer trust and enhance brand value by enhancing social responsibility during the epidemic. At present, there is no consensus on whether corporate social responsibility can produce good results in crises. This study uses stakeholder theory, normative activation model, and planned behavior theory to study the impact of consumer trust and corporate consumer identity regulation of social responsibility on online repurchase intention. It also investigates the pathways through which individual and social norms affect corporate social responsibility’s willingness to repeat purchases. The survey sample selected 528 Chinese users of Ctrip. The research results showed that strategic charity activities directly affect consumers’ evaluation of corporate social responsibility, and environmental, economic, and ethical factors can also affect consumers’ evaluation of corporate social responsibility. Perceived corporate social responsibility does not directly affect consumers’ willingness to repurchase, but it indirectly affects consumers’ willingness to repurchase through their recognition of the company, while personal norms weaken the impact of perceived social responsibility and consumer trust on repurchase intention.

Drawing upon the theories of social skill and strategic action fields (SAFs), this article presents a SAF Framework for Implementation Research. In the framework, policy implementation systems are conceptualized as multilevel SAFs that form around a public service intervention. Within this context, socially skilled actors leverage diverse sources of authority—including but not limited to political authority—to enable change or stability to a public service intervention. While the framework has underpinnings in field theory, it is able to encompass multiple theoretical perspectives, including complexity theories, organizational theories, economic theories, and theories of human behavior. Importantly, the SAF Framework allows for the integration of results relevant to both management and policy—change in implementation systems, and change in the behavior or conditions of an external target group.

Advances in electronic banking technology, especially the internet banking channel, have created novel ways of handling daily banking affairs, and offered customers flexibility and accessibility that traditional methods have been unable to provide. However, the determination of e-banking success is determined not only by bank and government support but also by customers’ acceptance. Most of studies on information system as well as on internet banking were conducted in developed nations with high economy and technology development such as USA, European, developed Asian area; and in recent researches, those pure model were integrated to account the most relevant factors impacting customers’ technology adoption. The principal objectives of this research are to understand the consumers’ perception towards on their acceptance of internet banking in Vietnam. Given that there are many factors that can influence the usage of internet banking, this study integrates Technology Acceptance Model, Theory of Perceived Behavior, Innovation Diffusion Theory, Social Cognitive Theory, and combining with trust, and personal innovativeness. In the case of Vietnam, we predicted that, besides of technical factors, the effects of trust, personal innovativeness, and facilitating conditions are also important manifest in the relationships of perceptions with internet banking usage. Therefore, this study explores the adoption of Internet Banking by retails customers in Vietnam, and attempts to make sense from three angles: (i) the current adoption rate of Internet Banking; (ii) The influence of empirical factors; (iii) the potential impacts on the strategic activity of banking organizations operating in the Vietnam market. The results indicated that Trust, Self-efficacy, Facilitating condition, technology beliefs and social influence directly impact customers’ intention to adopt internet banking service. All hypotheses which tested the moderator effects of personal innovativeness in technology on four pairs of relationship are also supported, except pair of compatility and social influence on intention to use IBS, but personal innovativeness in technology tended to moderate those relationships. The results benefit the practitioners, internet banking system developers, bank decision makers and banking service providers. The study shed lights on the future plans and solutions to encourage broader implementation and usage of internet banking. Understanding customers’ perceptions on new products, especially new information technology can be a managerial tool in different phases of the development process, from concept initiation to design and implementation to customer support.

Failure is an unavoidable part of the innovation process. Previous studies have explored the impact of innovation failures on a variety of strategic actions. However, to date, whether and when firms – especially those in emerging economies – adopt overseas research and development (R&D) strategies in response to innovation failures remains unexplored. By integrating insights from the behavioural theory of the firm (BTOF) and springboard theory, our study theoretically analyzes and empirically examines the impact of continuous innovation failure on the overseas R&D activities of companies in emerging economies. Using a dataset comprised of Chinese listed manufacturing firms, we find that continuous innovation failure is positively related to the overseas R&D activities of companies in emerging economies. After considering the moderating effect of top management team (TMT) relational capital, we also find that TMT financial relational capital weakens the above relationship, while TMT government relational capital strengthens it.

Family firms are classically seen as risk averse organizations, and this is evident in their generally lower R&D investments compared to non-family firms. Recent research, however, challenges this predominant view and suggests that family firms can embrace higher strategic risk when faced with threats to their family-centered goals. Still, the internal and external conditions that drive variations in the strategic risk taking behaviors of family firms are little known and understood. This article adds to this literature by developing and testing a conceptual model of strategic risk taking that incorporates behavioral theory, family business literature, and the logic of the strategic reference point theory. With recognition that the interplay between family and economic goals determines heterogeneity in strategic actions of family firms, this model suggests that family managers respond differentially to the feedback information regarding internal and external reference points, and consequently identifies key drivers of variation in the R&D investment behavior of family firms. By examining the pattern in R&D investments of 437 Spanish private manufacturing firms from 2000 to 2006, this study shows how strategic inputs, strategic outputs, and external benchmarks produce variations in strategic decisions about R&D investments in family and non-family firms. The findings offer insights into how internal and external reference points are considered in family firms’ decision making, thereby contributing a deeper understanding into the circumstances under which family goals cope or collide with the economic goals of the firm, and how this influences strategic risk decisions in family firms.

PurposeThis study examines the conditions when “managerial perception of the contribution of social media” (SMC) enhances and inhibits entrepreneurially oriented small and medium-size enterprises' (SMEs') ability for new product introductions (NPI) to the market. We also propose that while firm proactiveness enhances the rate of NPI, managers' risk-taking attitude hurts the process even when managerial perceptions of social media use are high.Design/methodology/approachThis study uses the survey data collected from 322 SMEs in the US to examine the theoretical model. By adopting the partial least square (PLS-SEM) technique, the direct and moderating effects among the SMC, proactive behavior and risk-taking attitude on NPI are explored under dynamic and stable market conditions.FindingsEmpirical findings show that although SMC has a significant positive influence on the rate of NPI in case of SMEs', if the managers are risk-takers themselves, then social media use can distract them, make them overly adventurous trying to introduce too many products and hurt SMEs' innovation efforts with less NPI. We show that SMEs' entrepreneurial orientation (EO) has a differential impact on SMC-NPI relationship, especially in dynamic market conditions.Practical implicationsThe findings provide practical evidence that SMEs get benefitted when their managers perceive that the contributions from social media are positive for their firm. Contrary to the prior understanding of high risk and high return, managers' risk-taking attitude hurts SMEs innovation efforts. SMEs being resource-constrained, it is practically vital for them to be taking less risk while developing new products.Originality/valueThis research synthesizes the insights of the new and emerging “Strategy-as-practice view” and “Behavioral theory of the firm” to empirically examine how managerial perceptions on social media use shape firms' key strategic activity, NPI. This research also highlights the dark side of firm characteristics, such as managerial risk-taking attitude for SMEs.