Abstract
The role of board independence on R&D investment’ choice decided by committed managers: The cognitive management of executives’ discretion
Highlights
Innovation, as managerial decisional latitude, which requires optimistic attitude, long term horizon (James, 1999), risk-taking culture (Olivero & Jarboui, 2006), overconfidence (Chen et al, 2011) and specific expertise (Musteen et al, 2006), was managed, for a long time, through ensuring persuasive communication using discipline, motivation, empowerment, and by building structure that enhance learning
The need to seek the most effective corporate governance mechanisms is motivated by the agency problem which sees that sound corporate governance makes it more likely for owners of capital to monitor the activities of managers either directly through voting on crucial matters or indirectly through the board of directors (Levine, 2005)
Bayesian network is used in this paper to explain quantitatively the effect of commitment bias on the CEO’s behavior in innovation investment decision
Summary
Innovation, as managerial decisional latitude, which requires optimistic attitude, long term horizon (James, 1999), risk-taking culture (Olivero & Jarboui, 2006), overconfidence (Chen et al, 2011) and specific expertise (Musteen et al, 2006), was managed, for a long time, through ensuring persuasive communication using discipline, motivation, empowerment, and by building structure that enhance learning. Researchers and theorists who are interested in evoking the human inventiveness in initiating the innovation; have developed a stream of literature within the perspective of strategic choice theory initiated by Hambrick and Mason (1984). These researchers in strategic choice theory tend to reveal the role of managerial latitude as the force of action within the firm but it proceeds upon the pressure of environment. Walker (2009) argues that efficient board is one of the key drivers of effective corporate governance. Companies were encouraged to amplify the proportion of independent directors on their board
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have