Managerial Tenure Research Articles

Effect of Financial Literacy on Investment Decisions of Food and Beverage Manufacturing Companies in Kenya

Financial literacy plays critical role in ensuring that one is equipped with knowledge and skills needed tomanage finances which eventually help companies realize financial stability and help management makeinformed financial decisions. The objectives that guided the study includes: to evaluate the effect of rationalfactors literacy, financial analytical skills, irrational factor management skills and past performanceawareness on investment decisions of food and beverage manufacturing companies Kenya, the lastresearch objective was to assess the moderating role of managerial tenure on the relationship betweenfinancial literacy and investment decisions of food and beverage manufacturing companies Kenya. Thestudy was guided by the decision theory, Upper Echelons Theory and Prospect theory. An explanatoryresearch design was employed. The study found that financial literacy significantly affects the investmentdecision. The results demonstrated a significant positive impact of rational factors (β=0.245, p=0.00),financial analytical skills (β=0.607, p=0.000), irrational factors management (β=0.379, p=0.000), pastperformance management (β=0.319, p=0.000) on investment decisions. The study concluded that Enhancingfinancial literacy can lead to smarter investment decisions and organizational success.

Performance Evaluation Disagreement

This paper studies investor disagreement in the performance evaluation of equity mutual funds by comparing two existing approaches and estimating its relations with fund characteristics, active management level and fund flows. We find that investors disagree more about the performance of funds that have higher expense ratio and turnover, lower manager tenure and dividend yield, and that are older, smaller and part of a larger family. Disagreement is also higher for funds that follow riskier investment style strategies and deviate more from their benchmarks. Finally, larger disagreement leads to more net fund flows. These findings suggest that heterogeneous investors do not value funds with aggressive active trading strategies similarly, and that favorable valuations by some clienteles result in positive demands for this type of management.

Does top managers' tenure matter to management accounting system design?

PurposeThis study aims to investigate the relationship between top manager tenure and the sophistication level of management accounting system (MAS) in extant literature.Design/methodology/approachCumulating evidence from 31 studies (N = 12,739), this study meta-analytically examines the central question of whether top managers' tenure is significantly associated with MAS sophistication after correcting individual studies for statistical artifacts. The study also assesses the strength of this association bniy exploring the influence of several moderating factors.FindingsThe findings show that long-tenured top managers are not significantly related to MAS sophistication. However, the moderator analtgcqyses indicate that the relationship between top manager tenure and MAS sophistication is moderated by tenure measurement type, firm sector and size. The study provides evidence for the significant moderation of tenure measurement type (i.e. position tenure). The results also argue that top manager tenure matters for MAS sophistication in small- and medium-sized enterprises (SMEs) and firms in the private sector.Originality/valueThe meta-analysis summarizes existing studies quantitatively to expand prior narrative reviews by providing definitive evidence of the overall effect of top manager tenure on MAS sophistication.

Salespeople’s competitive intelligence, efficiency, and performance: The role of intelligence diversity and manager's tenure

Although previous studies support the main effect of a salesperson’s competitive intelligence (CI) on job-related outcomes, little, if any, attention has been given to the mechanisms that moderate this relationship. Drawing on social capital theory, the authors propose that CI diversity (i.e., disparity) diminishes salesperson CI's main effect on efficiency and performance. On the other hand, managers’ tenure in the store amplifies such a relationship. The authors tested the theoretical model using multilevel data collected from managers and salespeople representing 74 wholesales and 175 vendors. The study results demonstrated that the CI-performance link was weakened when there were high CI diversity. The reason is that a high CI diversity presented divergences among salespeople about the market understandings. Whereas, when there are high levels of managers’ tenure, there is an amplified influence of CI on performance. The logic is a communication and dissemination of intelligence to the sales team.

Recruitment and Selection in the Public Sector: Do Rules Shape Managers’ Practices?

This study investigates the effects of optimal rule control on recruitment and selection practices in public organizations. Although rules are argued to constrain organizational practices and organizational performance, there is limited knowledge about the relationship of optimal rule control to recruitment and selection practices from a managerial perspective. By conducting a study with survey responses from 1,000 public frontline managers, combined with administrative data, this article investigates how optimal rule control is associated with the formation of recruitment objectives and selections based on values and cultural fit. Findings indicate a positive relationship between optimal rule control and the formation of recruitment objectives and selections based on fit. Unexpectedly, managerial tenure does not seem to moderate the association between optimal rule control and recruitment and selection practices. The study contributes to the public human resource management literature by focusing on the influence of organizational rules on human resource practices.

Accounting Information and Contracting Dynamics

I develop a dynamic principal-agent framework to examine the role of accounting information in a long-term contracting relationship with uncertainty over fundamental performance in which intertemporal incentives and termination are jointly determined. Learning and the reversal property embedded in the accounting performance measurement system gives rise to an accounting-driven demand for long-term incentives. Measurement precision directly influences the performance-based vesting behavior of these incentives over the course of the contracting relationship. Furthermore, equilibrium manipulation of the accounting report becomes increasingly positive as the agency approaches termination because such a policy reduces the chance of inefficient termination. My framework allows for falsifiable predictions regarding the relationship between the properties of accounting measurement and the evolving nature of incentives over the manager's tenure, managerial risk-taking activity, and managerial turnover.

The Performance of Sharia Equity Fund Investment Manager

Sharia mutual funds are fund raising activities from investors to be managed by investment managers with sharia-based management, namely by not investing funds in companies whose types and scope of business are not in accordance with Islamic sharia. This study was conducted to determine the effect of turnover ratio, expenses ratio, fund size, managerial tenure, and fund selection skills on the performance of sharia mutual fund investment managers in Indonesia. The data used in this study are monthly Net Asset Value, BI rate, IHSG, annual turnover data, annual expenses ratio data, and prospectus of 9 sharia stock mutual funds from December 2014 to December 2018. Samples were taken based on the purposive sampling method during this research. The measurement of the performance of sharia equity fund investment managers uses the Sharpe Ratio method. The method used is multiple linear regression analysis and classic assumption tests using descriptive statistical tests, multicollinearity tests, and heteroscedasticity tests using EVIEWS 10 statistical software. The results of this study indicate that turnover ratio, fund size, fund selection skills significantly influence performance Islamic mutual fund investment manager. While expenses and managerial tenure ratios do not significantly influence the performance of investment managers in Islamic mutual funds.

Interpreting Smoke Signals: Fire Ecology and Land Management for Four Federally Listed Birds

Recovery of listed species requires that land managers and research biologists work together to address the factors affecting population stability and growth. In Florida, an essential factor affecting rare species habitat quality and restoration is fire management. Fire plays an essential role in restoring and maintaining almost every upland ecosystem in Florida, but fires also have negative effects (e.g., mortality and displacement) that play out today within an altered landscape where rare species are often limited to small, fragmented areas and negative effects may be accentuated. Fire effects also are complex, not well studied experimentally, and likely to change as urbanization and global temperatures increase over coming decades. These conditions can create missteps in both fire research and fire management without regular communication between scientists and practitioners. We assessed the fire-related research associated with 4 federally listed birds in Florida: Cape Sable seaside sparrow (Ammodramus martimus mirabilis), Florida grasshopper sparrow (A. savannarum floridanus), Florida scrub-jay (Aphelocoma coerulescens), and red-cockaded woodpecker (Dryobates borealis). Fire research has not addressed the needs of some of these species for starkly different reasons. Land managers, in turn, have not successfully applied the recommendations of fire research in other instances. Our results point to fire frequency as an important focus for practitioners managing habitat for rare species in Florida. Our review also suggests that successful integration of research and management will be best served when (1) ecological burning practices are used, (2) local fire management goals are prioritized annually, (3) instructional products are developed for managers, (4) land manager tenure is promoted, (5) stakeholders meet regularly, and (6) creative solutions are devised to overcome staff and equipment shortages.

Threshold effect of scale and skill in active mutual fund management

In this paper, we apply threshold estimation techniques to study the size-performance relationship in the US mutual fund industry. Existing studies have found diseconomies of scale, and we add our contribution to this by considering possible non-linear decreasing returns to scale caused by fund age and manager tenure. We find significant threshold effects of both fund age and manager tenure at approximately three to four years in the size-performance relationship. Compared with younger funds, older funds have more severe decreasing returns to scale as the industry size increases.

City Manager Turnover Revisited: Effects of the Institutional Structure and Length of Tenure on City Manager Turnover

This study attempts to test a well-known model of city manager turnover. We use a Binary TSCS (Time-Series Cross-Section) analysis to address the problem of duration dependence, which typically occurs when the assumption is that a turnover decision at a certain point of time is entirely independent of previous decisions in the turnover data. In essence, manager turnover should be understood not as a single event at a given point in time but rather as being affected by the duration of tenure. Our empirical analysis of turnover data from 156 large cities in the United States for the period 1984–1999 indicate that, particularly when the length of manager tenure was controlled for, political push factors had significant effects on city manager turnover that were not detected by means of the ordinary logit analysis. The result on time duration suggests that longer tenure can reduce the likelihood of city manager turnover.

CEO Horizon, Optimal Pay Duration, and the Escalation of Short‐Termism

ABSTRACTThis paper studies optimal contracts when managers manipulate their performance measure at the expense of firm value. Optimal contracts defer compensation. The manager's incentives vest over time at an increasing rate, and compensation becomes very sensitive to short‐term performance. This generates an endogenous horizon problem whereby managers intensify performance manipulation in their final years in office. Contracts are designed to encourage effort while minimizing the adverse effects of manipulation. We characterize the optimal mix of short‐ and long‐term compensation along the manager's tenure, the optimal vesting period of incentive pay, and the dynamics of short‐termism over the CEO's tenure.

Does persistence explain ESG disclosure decisions?

AbstractAdvocates of an increased focus on environmental, social and governance (ESG) initiatives have argued that increased ESG disclosure is a necessary first step. Given the limited regulatory requirements on ESG disclosure, managerial preference serves as a primary determinant of ESG transparency. Using data on ESG disclosure from Bloomberg, I examine the extent to which disclosure persistence on the behalf of firm management, as proxied by managerial tenure, affects firms' ESG disclosure strategies. Overall, I find that ESG disclosure quality and ESG disclosure variability are reduced as management tenure increases. Further, I find that the replacement of a firm's CEO interrupts disclosure persistence; e.g., median ESG disclosure scores increase by roughly 9.7% in the two years following the replacement of a firm's CEO. The results of this study highlight one inhibitor, i.e. persistence, to inducing more complete, transparent ESG disclosure.

Contrived Competition and Manufactured Uncertainty: Understanding Managerial Job Insecurity Narratives in Large Corporations

The article addresses the debate over insecurity and precarity in managerial work. It notes while some commentators suggest advanced economies are characterized by managerial job insecurity, others argue the same economies possess stable managerial tenure rates. To make sense of this conundrum, qualitative data from semi-structured interviews with managers working in large corporations in liberal-market (USA, UK) and coordinated-market (Japan) societies are analysed. The aim is to assess whether sensitivity to managerial job insecurity is widespread and if so reflects wider corporate strategies of ‘contrived competition’ and ‘manufactured uncertainty’. It is argued such notions can influence managers’ understanding of their work situation through (re)producing narratives of employment precarity. Contrary to the message from many database and questionnaire studies, evidence from this international and longitudinal study suggests awareness of job insecurity is indeed widespread and does affect managers’ views of their employment situation and prospects.

Persistence in Style-Adjusted Mutual Fund Returns

The literature on mutual fund persistence took a hit with the finding that one-year stock momentum and expense ratios account for most of the persistence in mutual fund performance (Carhart, 1992; Carhart, 1997). However, since equity mutual funds are grouped into styles (e.g., large value, small growth, mid-cap growth, etc.) and are often confined to trading stocks within their style, one should measure fund performance relative to style when investigating managerial ability. Using CRSP mutual fund data and a methodology similar to Carhart (1997), we find that differences in style-adjusted fund returns persist for up to six years. Neither one-year momentum nor expense ratios explain our results. Our results are also robust to controlling for size, book-to-market equity, load, and total net assets. Since manager tenure is about four years, our results suggest that managerial ability may not be as dead as it seems.

Corporate restructuring, work intensification and perceptual politics: Exploring the ambiguity of managerial job insecurity

Whereas social theorists, qualitative investigators and survey-based analysts suggest advanced economies are increasingly characterized by managerial job insecurity, database and questionnaire researchers propose relatively stable tenure rates for managers. This article aims to make sense of this ambiguity. First, following interviews with managers in Japan, the UK and the USA, the authors offer support for the ‘global convergence’ thesis, through data reflecting greater job insecurity generated by comparable and recurrent corporate restructuring. Second, considering research suggesting relative stability in managerial tenure rates, the authors argue that their findings – signifying increased insecurity – can be explained in terms of the ‘perceptual politics’ of US-style shareholder capitalism impinging, hegemonically, upon occupational sensibilities. Third, in conclusion, they suggest that everyday managerial experience can be understood in light of corporations purposively instilling a perceptual ‘insecurity message’ in managers, essentially as part of a tangible control strategy directed at the inexorable ratcheting-up of management productivity demands globally.

Lending Organization and Credit Supply During the 2008-09 Crisis

Using a dataset that combines bank organizational variables with information on firms’ credit demand and balance-sheet indicators, we investigate the impact of how bank lending was organized on credit dynamics during the 2008-09 financial crisis. Our main findings suggest that the organization of lending to non-financial firms had an impact on the ability of banks to expand credit. Those that made substantial use of credit scoring techniques actually moderated the pace of credit growth during the economic downturn. At the same time, banks that delegated more power to branch managers were likely to expand lending at a faster rate. Finally, contrary to the evidence from the pre-crisis period, we find that lengthy branch manager tenure in the same branch was detrimental to the rate of credit growth. These findings are robust to a broad set of robustness checks.

Lending Organization and Credit Supply During the 2008–2009 Crisis

Using a dataset that combines bank organizational variables, information on firms' credit demand and balance sheet indicators, we investigate the impact of lending organization on credit dynamics during the 2008–2009 crisis period. Our main findings suggest that the variables shaping the organization of a bank in its lending to non‐financial firms have a complex impact on its ability to expand credit. Banks that made substantial use of credit scoring techniques actually reduced their credit expansion during the economic downturn. At the same time, banks that delegated more power to their branch managers were likely to expand loans at a higher rate. Finally, contrary to the evidence from the pre‐crisis period, we find that longer branch manager tenure in the same branch is detrimental to the credit growth rate. These findings are robust to a wide set of robustness checks.

Cash flow timing skills of socially responsible mutual fund investors

This paper studies, for the first time, the cash flow timing skills of socially responsible (SR) mutual fund investors. Our findings show that SR investors neither worsen nor improve their returns according to their cash flow timing decisions, although they show good timing for net purchase and perverse timing for net withdrawal decisions. When controlling for fund characteristics, investors in larger, institutional, with longer mean manager tenure, lower expense ratio, no load, lower mean turnover ratio and a fee level below the average funds, show better timing results; in other words, sophisticated and better informed investors make better cash flow timing decisions. Controlling for SR strategy, green fund investors (our proxy for profit-seeking investors) had the worst results (similar to those obtained for conventional investors in the prior literature), and religious fund investors (our proxy for the values-driven profile) had results that were most different from conventional investors.

Managerial Rents vs. Shareholder Value in Delegated Portfolio Management: The Case of Closed-End Funds

Based on the records of 1183 individual fund managers from 1985 to 2010, we investigate manager compensation and discipline in the closed-end fund industry and their implications for manager performance and fund discounts. We nd that managers generating high shareholder surplus, as proxied by fund premium, capture rents on their skills by expansions of assets under management and increases in management fees; however, managers with a high discount are not penalized accordingly. Managers with poor NAV performance suer from asset contractions, but such discipline is insignicant for managers with long tenure. In support of the hypotheses of manager entrenchment and decreasing returns to scale, NAV performance and premium decline with manager tenure and the size of assets under management. Finally, consistent with the conjecture that adjustments of assets under management and management fees in response to extreme performance break the premium-performance relation, the fund premium responds positively only to the NAV performance in the medium range.

Team‐specific Human Capital and Performance

AbstractIn this paper we explore the effects of team‐specific human capital (TSHC) on performance. We do so by delineating between two dimensions of TSHC, relating to team members and the team manager, and then exploring how the two dimensions may interact in shaping performance. Employing a 10‐year panel of football teams from the English Premier League we find that team members’ TSHC has a positive and significant effect on team performance, which is positively moderated by managers’ TSHC. Our results attest to the importance of considering both the team member and team manager dimensions of TSHC, and how the performance effects of team members’ TSHC are shaped by managers’ TSHC. Our results stand in stark contrast to the dramatic reduction in managerial tenure that has characterized the English Premier League in recent years.