Top Executives Research Articles

Diversity of returnee executives' foreign experience and corporate social responsibility performance.

Top managers' past experiences (e.g., foreign experience) significantly impact their decision-making behavior, which may influence firms' sustainable development. The available literature, focusing on the role of the increase in the number of top executives with foreign experience in corporate social responsibility (CSR), yields mixed results. In order to clarify the ambiguous relationship between executive foreign experience and CSR, we empirically examine the effect of the geographic diversity of top executives' foreign experience on CSR. Based on a hand-collected dataset of the top management team's (TMT's) foreign experience, we demonstrate the positive impact of the geographic diversity of returnee executives' foreign experience on firms' CSR using Chinese A-share listed firms from 2009 to 2018. Moreover, this impact is stronger in firms with political connections with the central government and in regions with good market development. Furthermore, the mechanism analysis shows that returnee executives drive firms' CSR by promoting corporate donations and green innovation. This paper offers clear policy implications by suggesting that hiring returnees with a broad geographic scope of foreign experience as corporate executives is an efficient way to enhance firms' CSR.

Diversity Hiring in the Purview of Providing Equal Employment Opportunity: Importance and Impact on Organizational Productivity

In today's global business landscape, social responsibility encompasses diversity management, with organizations striving to enhance inclusivity of underrepresented individuals. The employee selection process is crucial in diversity management, as it influences an organization's branding and commitment to diversity. Top executives are focusing on talent diversity and inclusion to drive innovation and create a competitive advantage. Gender parity in the workplace is a social cause and business imperative. Leaders are focusing on making businesses more attractive to diverse workforces, especially female talent. Employers have struggled to balance compliance with affirmative action laws and ensure fair selection processes. This paper analyzes EEO provisions and diversity management in the United States, focusing on discrimination and efforts to address them. It discusses the unresolved EEO issues in the US, particularly gender diversity, and its implications for other countries. The paper also reviews HR challenges in employing selection methods and the impact of diversity selection practices on organizational culture.

Unravelling the Impact of Executive Confidence on Firm Profitability

The focus of this research is on the Upper Echelon Theory, asserting that CEO&’s cognitive attributes exert a major effect on organizational outcomes. The present study adds to the behavioural finance and strategic management literature by investigating the association between Chief Executive Officer&’s (CEO) confidence and firm profitability in the Indian context. A sample of S&P BSE 100 Indian firms for five financial years has been used to examine the aforementioned relationship, using panel regression analysis. The findings reveal that CEO overconfidence favourably impacts the company&’s profitability as overconfident CEOs enjoy the early mover advantage in the market through quick and innovative decisions and gain competitive strength by overinvesting in good but risky projects. These findings contribute novel insights to the existing literature by exploring the most prevalent managerial behavioural bias and its impact on corporate profitability in the Indian context. The analysis may assist the policymakers responsible for framing recruitment and compensation policies and developing an optimum monitoring system to capitalize on the cognitive traits of top executives in India.

Navigating institutional pressure: Role of dynamic managerial capabilities and strategic agility in healthcare organizations’ renewal

ABSTRACT This paper aimed to analyze healthcare organizations’ pressures regarding digitalization caused by uncertainties after the pandemic. The study investigates the relationship among healthcare organizations‘ institutional pressure, dynamic managerial capabilities (DMC), strategic agility, and strategic renewal, focusing on selected private hospitals in Indonesia. Top executives and managerial personnel responded to our survey within five months before the investigation. Data were analyzed using partial least squares structural equation modelling (PLS-SEM) with hierarchical component models (HCMs). The study found that institutional pressures positively impacted strategic agility, whereas DMC strengthened the connection between institutional pressure and strategic agility. This study also indicates that strategic agility influences strategic renewal positively.

The National Team: Stock market interventions and corporate catering behavior

We examine corporate catering behavior following the Chinese government's stock market interventions in 2015, which result in significant stock overvaluation. The government's direct share purchases cause higher levels of horizontal agency conflicts between the controlling and minority shareholders, and the affected firms are more likely to cater to the controlling shareholders and top executives' aversion to receiving overvalued stocks. We focus on the changes in stock dividends and equity-based executive compensation and find evidence consistent with the catering hypothesis while employing difference-in-difference approach. Our study demonstrates the intricate interactions between state interventions and corporate decisions.

Military Experience of Senior Executives and Business Credit Supply of Enterprises

This study is based on the data of Chinese A-share listed companies from 2005 to 2022 and empirically examines the relationship between senior executives' military experience and the supply of commercial credit by enterprises. The research findings suggest that senior executives with military experience can significantly enhance the level of commercial credit supply by the company. The mechanism analysis indicates that top executives' military experience promotes the provision of greater business credit through two pathways: mitigating the level of information asymmetry within the company and strengthening the effectiveness of internal controls. Heterogeneity tests reveal that the positive impact of top executives' military experience on the acquisition of commercial credit supply is particularly pronounced in eastern region companies as well as state-owned holding companies. This study addresses the existing research gap by shedding light on the specific effects and pathways of top executives' military experience in promoting the provision of business credit, thus enhancing our understanding of their personal traits and life experiences. Furthermore, it provides valuable insights for improving the evaluation system of commercial credit within enterprises.

Does managerial pay disparity influence BHC default risk?

This study investigates the relationship between managerial pay disparity (i.e., pay inequality of the CEO with other top executives and other employees) and default risk (measured using an innovative market-based credit default swap spread). The research relies on panel data for 1992 to 2018 from 198 U.S. bank holding companies (BHCs). We find that managerial pay disparity is negatively related to BHC default risk, suggesting greater pay disparity does not necessarily contribute to excessive risk-taking and instability in the banking sector. However, additional analysis reveals that managerial pay disparity is associated with higher default risk among BHCs with assets of less than USD 50 billion. We also find that greater managerial pay disparity is detrimental to BHC stability in the presence of weaker board monitoring (in the form of less gender-diverse boards and higher board co-option). Overall, these findings suggest that BHC size and board monitoring mechanisms are important factors in understanding the influence of managerial pay disparity on BHC stability.

Realizing potential: a real option perspective on communities of practice in organizational transformation

This research aims to explore the recognized advantages of Communities of Practice (CoPs) in enhancing knowledge sharing and spurring organizational transformation. Despite their acknowledged importance, CoPs often receive inadequate attention or representation in numerous organizations, likely due to leaders' unfamiliarity or insufficient skills to manage such groups. This study introduces the "Real Option Perspective" as the recommended approach for top executives to understand and leverage CoPs. Initially, it clarifies the concepts of CoPs and the Real Option Perspective, highlighting their significance. These concepts then lay the groundwork for developing a management model for CoPs. The proposed management trajectory for CoPs involves five phases: Investment in CoPs, Recognition of Stagnation, Re-engagement with CoPs, Transition of Value, and finally, Dissolution and Feedback. This research seeks to expand the applicability of the Real Options framework in managing CoPs, providing leaders with strategic insights to fully realize the potential of CoPs in line with organizational objectives.

State owned enterprises as multinational firms: the case of two power transmission firms in Canada and in India

ABSTRACT How do state owned enterprises behave when they have to perform as multinational firms? Do they respect their original mission or do they act like private multinational firms? The analysis of Hydro-Québec and Power Grid Corporation of India Limited, two companies transmitting electricity over the border and doing consultancy and investment in distant countries, shows the impact of share ownership and the nature of the top executives, as well as the role of the political environment and of the opportunities, taken or missed, in the process. The application of an analytical model reveals the complexity of such an unusual situation.

From COVID-19 to the war in Ukraine: evidence of a Schumpeterian transformation of food logistics

This study analyzes the changes that have occurred in food logistics in the three years since the emergence of the COVID-19 pandemic and the one year since the war in Ukraine commenced. Food logistics companies are highly sensitive to demand shocks, energy prices, and staff availability. In this study, “first-hand” information was collected in the Iberian Peninsula, and it showed a process of Schumpeterian transformation. This crisis environment in which food logistics companies have been operating has opened a unique opportunity to renew operating procedures and seek new solutions, products, and markets. Therefore, food logistics companies have developed more effective communication strategies and innovative, profitable, and forward-looking commercial strategies to adapt to the new needs of their clients, applied more efficient transport planning and management methods, implemented new technologies to increase automation and digitization in warehouses, transport platforms, and trucks, and boosted market concentration and investment in infrastructure. Therefore, public authorities and top executives must focus on promoting and facilitating these improvements.

When MNEs bribe more? The role of managerial discretion

PurposeThis paper builds upon managerial discretion literature to study the relationship between foreign ownership and bribery intensity.Design/methodology/approachBuilding on World Bank’s data of 9,386 firms from 125 countries over the period 2006–2018, this paper uses Tobit regression, ordered probit and logit models to empirically test the hypotheses.FindingsThis paper finds that firms have higher bribery intensity when executives have a higher level of managerial discretion. Smaller firms with slack financial resources tend to bribe more when they face more government intervention, munificent and uncertain industrial environment.Originality/valueExtant corruption literature has addressed the effects of external institutional settings and internal corporate governance on bribery offering among multinational enterprises (MNEs). How much, and under what condition do top executives matter in bribery activities are yet to be answered. This paper integrates the concept of managerial discretion with corruption and bribery literature and offers a potential answer to the above question. In addition, prior corruption and bribery literature have primarily studied bribery through either micro- or macro-level analysis. This paper adopts multiple-level of analyses and elucidates the foreign ownership and bribery relationship from the organizational and industrial levels.

WHY MANAGEMENT HAS GOTTEN WORSE AND THE LEADERSHIP ISSUES BEHIND THAT

AbstractThe author, Professor of Management at The Wharton School and Director of Wharton’s Center for Human Resources, discusses the background of what in his view is the worsening of management of employees in today’s organizations. He cites considerable research and historical background to this effect, while also relating the leadership issues that have led to this situation. For instance: “Remarkably, 29% of those who are promoted now leave within a month because promotions often come with no pay increase and with more work and responsibility. A third of US managers now report that they received no management training of any kind either before becoming a manager or after.” He also cites the power and “influence of the investor world, which relies on financial accounting to judge company performance, and the fact that financial accounting simply cannot address human capital.” In looking for ways to improve these systemic issues, he believes that “the way forward starts with Boards of Directors who have the long‐run success of their companies in mind and who guide the top executives. It is important that they help executives avoid blind spots about people issues that are common in a ‘finance‐first’ approach to management.”

Analysis of the Connection Between Executive Remuneration and Corporate Fiscal Achievement

The interplay between top executive pays and fiscal achievements remains at the forefront of discourse in organizational leadership and governance frameworks. Understanding the connection between executive incentives and performance outcomes is crucial for effective corporate governance. This study dives deep into the tapestry of research that dissects these nuanced interactions. Executive compensation, a critical component of corporate governance, directly influences the behaviors and decision-making of top executives. Simultaneously, financial performance serves as a key indicator of a company's operational health and ability to generate value. According to the analysis, the relationship between both is complete and multifaceted. In some cases, higher levels of executive remuneration are positively correlated with improved financial performance, while negative correlations also exist. The relationship between the two is influenced by characteristics, e.g., corporate governance, industry characteristics, company performance, and individual executive characteristics. Numerous studies are currently available on the relationship between the two. However, it is important to acknowledge the limitations and shortcomings of the existing studies, which may impact the generalizability and applicability of the findings. In conclusion, the nexus between executive compensation and financial output is a complex and multidimensional issue that requires further in-depth research and study.

The rising business of video streaming in Mena

This study examines how the video streaming business is developing in the Arab region. It delineates the video streaming ecosystem and discusse”s the opportunities for video streamers, local and global, to operate and grow in the Arabian market. Similarly, the study discusses video streamers’ challenges in a complex and changing media environment. Using computer-aided analysis software (QSR NVIVO 12), the research analyzes semi-structured interviews with streaming services’ top executives operating in MENA. It found that video streamers capitalize on the sizeable Arab market to grow, the way broadcasters developed the pan-Arab market in the 1990s. Localizing content, developing talent, investing in marketing and analytics, building partnerships, and diversifying memberships and payment models are essential factors in growing the streaming business. Similarly, infrastructure limitations, political context, and underdeveloped markets in the region hinder the sustainability of the streaming business.

Can military executives overcome difficulties in corporate value creation? ——Evidence from China

We examine whether military executives have the capacity to handle tough circumstances at a time of COVID-19 pandemic. We find that, firms led by military executives experience less likelihood of financial distress and higher firm value during COVID-19 pandemic. The results are robust to alternative measures of main variables and samples, and to ruling out alternative explanations. This effect is more pronounced for firms with top executives that have longer tenure and higher percentage of ownership, and higher percentage of military executives on top management teams. Further, we also find that executives with military experience improve firm value by adopting proactive strategies, such as diversifying by business segment, strengthening online business and improving cost-efficiency. Our finding suggests the important role of executives' personal traits in leading firms overcome adversity in downturns.

Organizational learning, strategic guanxi networking, co-creation marketing strategy and B2B export performance: evidence from emerging market export venture

PurposeDrawing on the organizational learning and relational governance literature, this study aims to advance a theoretical model to explain the export performance of emerging market export ventures.Design/methodology/approachThis study selects quantitative methodology because the main objective of this study is to explore the role of export ventures’ performance (past) on guanxi networking, co-creation marketing strategies and present performance.FindingsThe empirical evidence suggests that guanxi networking and co-creation strategy can mediate the relationship between export venture performance in the preceding year and export venture performance in the following year. In addition, this study also provides some guidance for emerging market export ventures on how to build a strong guanxi networking and create opportunities for collaboration when the effect of export performance in the preceding year on current performance is absent.Originality/valueThe authors propose the inclusion of strategic guanxi networking-related factors (e.g. top executives’ ties with business-to-business customers, such as distributors in the host market) in the prior performance-current performance paradigm. The outcomes of this study also contribute to extant organizational learning theory research by integrating preceding performance research with the co-creation theory. The study offers new insights into organizational learning and relational governance from the emerging market perspective.

Human resources practices as a mechanism for improving performance within public institutions and state-owned enterprises in Morocco

In an economic environment marked by rapid change, characterized by factors such as globalization and increasing demands from stakeholders and clients, public institutions and state-owned enterprises have become significant players through their multiple interventions in providing public services to citizens and businesses, in implementing structuring projects for economic and social development, and in promoting investment. This paper aims to examine the correlation between human resource management and employee performance within Moroccan public institutions and state-owned enterprises to understand how these organizations should manage their human capital to enhance their performance. The sample consists of 67 top executives of Moroccan entities operating in various sectors. Data were collected through a self-administered questionnaire completed by the participants. Partial least squares (PLS) was used to estimate structural equation models and analyze causal relationships between variables. SmartPLS 4 software was employed for model analysis. The findings reveal a positive and significant impact of training, selective recruitment, digital transformation, and performance-based compensation on employee performance improvement. The results indicate that the T-values are 3.126, 2.870, 2.178, and 2.406, respectively. Regarding the Q² value, it stands at 0.899, confirming the model’s predictive capability. The GoF coefficient is 0.851, affirming the overall validity of the model. However, it was observed that there is no significant link between job security and performance, as the T-values did not exceed the threshold of 1.64. This study suggests adopting changes in HRM practices to enhance the organizational performance of public institutions and state-owned enterprises.

The impact of co-opted executives on earnings management

PurposeThe authors seek to analyze the impact of weak corporate governance by top executives of a firm on the firm's earnings reports. This research is meant to further emphasize the impact of co-opted executives on a firm, primarily through their impact on earnings management.Design/methodology/approachUsing financial data from 11,473 firm-year observations, the authors utilize ordinary least squares (OLS), 2-stage IV regressions, propensity score matching (PSM) and entropy balancing to analyze the impact of a co-opted top management team on discretionary accruals and restatements.FindingsThe authors find empirical evidence that firms with weak corporate governance from top executives are more likely to manipulate reported earnings and have lower financial reporting quality. The authors also find that the effect of co-opted executives on earnings management is weaker when a chief executive officer's (CEO’s) incentives are not aligned with those of top executives, suggesting that executives prevent earnings management due to reputational concerns. Co-opted chief financial officers (CFOs) increase the magnitude of earnings management in a firm but are not solely responsible for the authors' results.Originality/valueThe authors' results suggest that the top executive team provides an important first defense in the prevention of earnings management and corporate wrongdoing. Co-option of the top executive team may be an important consideration when doing research into corporate governance.

Categorization of organizational reputation and subordinate organizations' global funding outcome: A higher education perspective

Reputation is critical for building relationships with business customers in the global marketplace. However, in structurally connected organization configurations, the literature focuses mainly on one of the functional unit's reputations (either subordinate or superordinate organization), leaving out the interplay of reputation among various units in the organization. Drawing on identity and categorization theories, we develop a framework to examine the effects of brand reputation at both levels. Our study context is higher education, where business schools (subordinate) operate as autonomous entities globally yet are dependent on universities (superordinate) for policy decisions. We specify a random effects model on a 10-year panel dataset of 193 business schools to account for unobserved heterogeneity, potential selection bias, and endogeneity of reputation. Our findings suggest that brand reputation attributes at the subordinate and superordinate levels both individually and synergistically affect subordinate funding outcomes (i.e., business-school endowment). Furthermore, subordinate-level resource-utilization signals, such as diversification strategies and top executives' backgrounds, and superordinate-level policy signals, such as organization ownership and inclusivity, inform donor decisions and moderate the reputation–funding relationship. Our study suggests that administrators and managers should consider donor identity salience in marketing efforts.

The Changing Ranks of Corporate Leaders

The leaders of business are a continued focus of interest in management research and in the broader society. Their attributes speak to social mobility, inequality, and who holds positions of power and influence in society. This article examines the attributes of the ten highest-ranked executives of the largest corporate enterprises in the United States—the Fortune 100—and compares how they have changed over the past 40 years, a period when many assumptions about businesses and the people who run them have changed. While there has been significant change in some areas, such as the increase in the proportion of women and foreign-born executives and the rise in outside hiring, there is no evidence of an increase in younger leaders who advance faster than their predecessors and spend an ever-shorter time with their employer. In fact, top executives now are as old as their peers were in the 1950s, and their tenure with their employer is rising.