Top Executives Research Articles

Indirect ambidextrous leadership as an alternative to direct ambidextrous leadership

PurposeThe purpose of this paper is to differentiate the ambidextrous leadership concept into direct and indirect types to provide an alternative when the requirements of direct ambidextrous leadership cannot be met.Design/methodology/approachDesk research is used in this paper to relate the ambidextrous leadership concept to the roles of leader and manager to more comprehensively determine the requirements for being a direct/indirect ambidextrously leading executive than is possible by referring only to opening and closing leadership or exploration and exploitation.FindingsSpecial requirements in the context of ambidextrous leadership can be transferred from the top executive/chief executive officer to third parties, for example, some control tasks in the area of exploitation can be distributed among the top management team, enabling the top executive to focus on tasks such as developing an organisation-wide vision and its strategic implementation. Indirect ambidextrous leadership exists if the top executive distributes exploitation tasks to third parties. Direct ambidextrous leadership exists if the top executive assumes leadership in both the exploration and exploitation areas. This means that the demands on the top executive are different in direct ambidextrous leadership and in indirect ambidextrous leadership.Originality/valueThe literature has not yet focused on the differentiation between direct and indirect ambidextrous leadership. This paper contributes towards closing this gap. The potential for indirect ambidextrous leadership can be essential for a company’s success because in addition to direct ambidextrous leadership, it represents the possibility of creating a sustainable organisation in a changing market.

Shifting perspectives: How scrutiny shapes the relationship between CEO gender and acquisition activity

AbstractResearch SummarySeveral upper echelons studies have found that firms led by female executives are less likely to engage in risky endeavors than those led by male top executives. We argue that conceptualizing female CEOs as universally conservative decision‐makers may paint too simplistic a picture and that the impact of CEO gender on strategic decision‐making may vary significantly depending on the given situation CEOs are experiencing. We integrate executive job demands and gender research to propose that scrutiny will exhibit differential effects on female and male CEOs' acquisition activity. We show that in high‐scrutiny contexts, the difference between male and female CEO acquisition activity disappears. In contrast, in low‐scrutiny contexts, the difference between male and female CEOs' acquisition activity is exaggerated.Managerial SummarySubstantial research has shown that female executives acquire at a lower rate than male executives. We argue that viewing female CEOs as universally conservative decision‐makers may paint too simplistic a picture and that the impact of CEO gender on strategic decision‐making may vary significantly depending on the given situation CEOs are experiencing. In particular, we argue and find that in high‐scrutiny contexts, the difference between male and female CEO acquisition activity disappears. This research suggests that managers should consider the impact of environmental context—especially the role of scrutiny—when considering the risk propensity of female leaders.

Chemours sells business, shuffles management

To better focus on core businesses such as fluorinated chemicals and titanium dioxide, Chemours has agreed to sell its glycolic acid business to the private equity firm Iron Path Capital for $137 million. While the company doesn’t break out sales for glycolic acid specifically, the business segment that houses the glycolic acid unit generated revenues of $116 million in 2022. Iron Path has founded the firm PureTech Scientific to run the business. Separately, Chemours has seen three top executives depart in the past 3 months. Chief Financial Officer Sameer Ralhan is leaving the company June 19; he is being replaced by Jonathan Lock, senior vice president and chief development officer, who joined Chemours in 2018. Alisha Bellezza, president of thermal and specialized solutions, resigned in May. And Edwin Sparks, president of titanium technologies and chemical solutions, left the firm at the end of March to lead W. R. Grace. Chemours

Tax Knowledge Diffusion Through Shared Audit Partners: Evidence From China

This study investigates how tax knowledge is diffused through auditors at the individual partner level. We find that firms sharing the same audit partner with low-tax firms exhibit lower effective tax rates ( ETRs) but not for firms that share the same audit office but with different partners. Using a difference-in-difference (DID) research design, we show that firms’ ETRs decline significantly after their existing audit partners start auditing a low-tax firm. Our findings suggest that the transfer of tax planning knowledge from low-tax firms to focal firms occurs mainly through common individual partners. Moreover, benefits to focal firms are stronger when their top executives have a social connection to the shared partners. Further analysis shows that audit partners are more likely to retain existing clients and charge higher audit fees for tax planning diffusion, indicating how audit partners benefit from sharing tax planning knowledge with their clients.

Auditing Elon Musk’s Impact on Hate Speech and Bots

On October 27th, 2022, Elon Musk purchased Twitter, becoming its new CEO and firing many top executives in the process. Musk listed fewer restrictions on content moderation and removal of spam bots among his goals for the platform. Given findings of prior research on moderation and hate speech in online communities, the promise of less strict content moderation poses the concern that hate will rise on Twitter. We examine the levels of hate speech and prevalence of bots before and after Musk's acquisition of the platform. We find that hate speech rose dramatically upon Musk purchasing Twitter and the prevalence of most types of bots increased, while the prevalence of astroturf bots decreased.

Thematic Analysis: The Cross-National Conflict Shifting of the NBA–China Controversy

In 2019, a controversy between the NBA and China broke out. Although their relationship continues today, negative consequences still linger and cloud their future. As a transnational organization, the NBA was involved in a cross-national controversy, aligning with the theory of cross-national conflict shifting. The current study analyzed 703 posts on Weibo and 1,500 tweets by thematic analysis. It revealed diverse themes of online public discussions regarding the NBA–China controversy. It also found that social media speeded up the transmission of cross-national conflict shifting and complicated the cross-national conflict as it shifted back and forth between the home and host countries. Moreover, the study findings showed that when top executives engage in advocacy by taking a public stand on a controversial sociopolitical issue and get involved with cross-national conflicts, it is hard to separate them from the organization they represent. Also, their public stance might lead to public suspicion that they used social advocacy for private interests. Finally, the themes from the social media posts suggested cultural differences and an ideology crash between the host and home countries’ publics, which generated grander challenges for transnational organizations to deal with.

Profitability of insider trading in Turkey

This study presents the first comprehensive evidence of insider trading patterns and abnormal profits in the Turkish stock market using almost 65,000 insider transactions for the period of 2008–2019. Our findings show that insiders earn a significant 6.58% abnormal profit during the one year following insider trading. Officers, directors, and institutional investors earn even more. Both purchases and sales are profitable. Top executives, major shareholders, and institutional investors earn significant dollar profits. Additionally, uninformed investors can beat the market by mimicking the portfolios of insiders, while evidence shows that regulatory changes do not reduce insiders’ profits. Finally, this study provides important trading implications for investors and regulatory implications for policymakers everywhere.

The mystery of choice of equity incentive model: based on the game theory analysis between shareholders and top executives

PurposeBased on the background of the restricted stock has gradually replaced stock option and has become the mainstream equity incentive model in China, this paper aims to investigate the which factors affect the choice of equity incentive model, and the impacts of equity incentive model.Design/methodology/approachThe theoretical analysis is based on the game theory between shareholders and top executives. The empirical analysis is based on the detailed data of equity incentives in China’s listed companies from 2006 to 2017; the logit method and least square method are implemented to estimate the regression coefficients and Black–Scholes options pricing model to estimate the value of restricted stock/option granted to the CEO.FindingsThis paper documents that enterprises with serious agency problems, high investment risks, high stock price synchronicity and great executive power are significantly and positively related to restricted stock. The main empirical findings still hold after several robust tests. In addition, restricted stock can significantly improve corporate performance when the performance evaluation index is strict and the validity period is long, while for the sample group with loose performance index and short validity period, restricted stock significantly reduces corporate performance.Originality/valueThis paper analyzes the “black box” of equity incentive model selection from the stakeholders’ game perspective by constructing a game theory model to investigate the reasons for the choice of equity incentive model in various situations, which enriches the research in this field. Moreover, this paper finds that restricted stock has both incentive and welfare characteristics, and the rationality of performance appraisal goals is the key factor leading to the difference in incentive effects. Overall, the research indicates that only well-designed equity incentive plans can improve corporate performance, which contributes to regulators and practitioners to form a rational understanding of restricted stock model and provides a reference for their decision-making.

Multiple Identities in High Reliability Organizations: A Case Study

It is generally accepted that consensus about the features of the “high reliability” identity allow organizations performing hazardous activities to act in an error-free manner. This work challenges this assumption, providing evidence of multiple identities in a High Reliability Organization. We conducted an inductive case study in a large oil and gas producer, whose top executives emphasized safety as a central and distinctive feature of the company. Our analysis was based on extensive data: presentations, interviews, observation, and conversations. The results permit us to describe two organizational identities of safety on offshore oil platforms: “controlling” and “caring.” We found that managers and workers interpreted safety both as imposing “strict sanctions” and possessing “meaningful value.” They expressed the organizational identity through varying forms of antinomies: authoritative versus respectful interactions and resisting versus adapting actions. These dynamics of identity help us better understand the organizational process of “becoming” highly reliable.

The Survey of Firms’ Inflation Expectations

The inflation expectations of individuals who lead firms can influence the prices that their firms charge customers and hence can influence overall inflation. This Economic Commentary summarizes results from the Survey of Firms’ Inflation Expectations (SoFIE), which asks top business executives for their inflation expectations once per quarter alongside a second question from a rotating set. We document that this group’s inflation expectations increased with the run-up in inflation over 2021 and 2022 but then began to decline in early 2023. The Cleveland Fed will post estimates from the Survey of Firms’ Inflation Expectations each quarter, available via clefed.org/SoFIE.

Proximity with affinity: How M&A top executives could exacerbate agency conflicts?

Dans cet article, nous étudions la création de valeur pour les acquéreurs ayant un cadre dirigeant dédié à la croissance externe lors d’une opération de Fusions-Acquisitions (F&A). En utilisant un échantillon de 10 777 opérations annoncées aux Etats-Unis entre 1993 et 2021, nos résultats montrent que la présence d’un cadre dirigeant en charge des F&A est négativement associée aux gains des acquéreurs. Nous explorons les mécanismes sous-jacents à ce résultat et trouvons des preuves d'effets d'agence : l'effet négatif des cadres dirigeants dédiés aux F&A est plus prononcé pour les méga-transactions et les entreprises où le directeur général est également président du conseil d’administration. Ce résultat soutient l'idée que lorsque l'équipe en charge des F&A est dirigée par un cadre dirigeant, ses intérêts sont alignés sur ceux du directeur général, ce qui peut amplifier les problèmes d'agence associés à une faible gouvernance interne. Nous explorons également d'autres facteurs tels que l'excès de confiance ou l’impact des erreurs d’évaluation des actions de l’acquéreur mais ne trouvons aucune preuve d'un mécanisme comportemental sous-jacent à nos résultats.

Professional service firms and the manufacturing of the corporate nobility

AbstractGlobal professional service firms (GPSFs) are key actors in contemporary capitalism. They (co-) produce and disseminate new business practices, linking firms, sectors, and countries, integrating them into a global system. We examine a second, less studied function of these firms: underpinning capitalism’s status hierarchies. We ask whether these firms have emerged as producers of a new corporate nobility—as an extension of elite universities, and as a stepping stone in the selection and promotion of top executives. Focusing on the US, we ask: do global professional service firms merely amplify the credentials of elite universities, or can they compensate for an absence of an elite education in the careers of US top managers? and do professional service firms equip future top managers with specific expertise or merely with symbolic capital? Based on a sample of 2,610 top executive managers from leading American firms in 2005 and 2018, we study the role law, consulting, or audit firms played in their careers. Using multinomial regression analyses, we find that the career function of GPSFs varies: consulting firms amplify existing status and enhance the symbolic capital of alumni, aiding their ascent to the most prestigious jobs in US top firms. In contrast, top managers leverage audit firm roles to compensate for a non-elite background, yet then tend to be channelled into narrow, specialist roles in top management. We relate these results to Bourdieu’s state nobility analysis and propose an augmented typology of these firms at the heart of contemporary capitalism.

Rippling effect of corporate governance and corporate social responsibility synergy on firm performance: The mediating role of corporate image

There is a lack of consensus on how corporate governance and CSR relationships manifest across different institutional contexts especially within emerging economies, despite the wealth of available studies on the two concepts. The purpose of this study is to examine the relationship between corporate governance and corporate social responsibility as well as their effect on the performance of manufacturing firms via corporate image. The quantitative approach was used to collect data from a sample of 328 top executives of selected manufacturing firms in Ghana using the purposive sampling technique. The data collected was analyzed using AMOS and Process Macro. The study found that corporate governance has a high tendency to catalyze corporate social responsibility performance. The study further revealed that good corporate governance practices enhance both corporate image and performance of firms. Corporate social responsibility was also found to have a significant positive relationship with both corporate image and performance of manufacturing firms. The study further illuminated that corporate governance and corporate social responsibility have an indirect effect on firm performance through corporate image. The study has demonstrated how corporate governance and corporate social responsibility synergistically impact the performance of manufacturing firms. The study helps advance knowledge on the synergy and convergence of CSR and corporate governance interfaces and offers rich insight into the corporate governance and CSR puzzles within the context of the emerging economy.

The gender gap among top business executives

This paper examines gender differences among top US business executives using a large executive-employer matched data set spanning the last quarter century. Female executives make up 6% of the sample and exhibit more labor market churning – both higher entry and higher exit rates. Unconditionally, women earn 26% less than men, which decreases to 8% once executive characteristics, firm characteristics, and in particular job title are accounted for. We find that female executives are disproportionately represented in firms with more temporal flexibility and female-friendly corporate cultures, but this does not explain the gender pay gap. Rather, corporate culture is correlated with gender pay gaps within firms; specifically the within-firm gender pay gap is significantly smaller at female-friendly firms.

Can military executives improve corporate performance? Evidence from industrial competitive pressure

We examine whether top executives with military experience improve corporate performance compared with nonmilitary executives. We find that firms with military executives have better sales growth, cost efficiency and operating performance than do firms with nonmilitary executives but mainly in highly competitive industries. The results are robust to adopting the PSM method and confronting changes in the competitive condition. Furthermore, we find that military executives influence corporate performance through the pressure resistance and organizational culture channels. In addition, executives with military experience are associated with fewer product recall and workplace safety cases and implement better quality and safety management than do nonmilitary executives. The relation is also strongest for highly competitive industries—even with financial constraints—indicating that military executives do not profit at the expense of product quality and workplace safety. Our findings suggest that military experience as a determinant of managerial traits constantly impacts decision-making and corporate performance.

Who really matters in corporate tax?

Internal and external parties meaningfully shape corporate tax outcomes. However, we lack a holistic understanding of the major parties involved and their comparative effects. Using proprietary IRS data for public and private firms, we identify the top executives, corporate accountants, external accounting firms, and individual tax preparers and examine the comparative importance of these parties on corporate tax outcomes. We find that external individual tax preparers matter much more than the accounting firms that employ them. Internal actors (top accountants and executives) explain more of the variation in corporate tax outcomes than external actors (individual tax preparers and accounting firms). We also find some evidence that individuals’ characteristics are associated with the tax behavior of the corporations they serve. Overall, we conclude that some of the actors who are unobservable in public data play a greater role in corporate tax outcomes than parties that are a focus of prior research.

Game changers in science and technology - now and beyond

The recent devastating pandemic has drastically reminded humanity of the importance of constant scientific and technological progress. A strong interdisciplinary dialogue between academic and industrial scientists of various specialties, entrepreneurs, managers and the public is paramount in triggering new breakthrough ideas which often emerge at the interface of disciplines. The following sections, compiled by a highly diverse group of authors, are summarizing recently achieved game-changing leaps in science and technology. The game-changers range from paradigm shifts in scientific theories to make impact over several decades to game-changers that have the potential to change our everyday lives tomorrow. The paper is an interdisciplinary dialogue of relevance for academic interdisciplinary thinkers, large corporations' strategic planners, and top executives alike; it provides a glimpse into what further breakthroughs the future may hold and thereby intends to spark new ideas with its readers.

It takes two to tango: Impact of salary co-movement between top executives and ordinary employees on corporate innovation

Building on social comparison theory, this study investigates the impact of salary co-movement between top executives and ordinary employees on corporate innovation. Using a sample of A-share listed companies in China from 2011 to 2017, we find that lockstep salary movement between top executives and ordinary employees positively influences corporate innovation. Furthermore, such effect is more pronounced for non-state-owned enterprises (non-SOEs), high-tech firms, and firms facing a highly competitive environment. Finally, this paper identifies heightened efforts and low turnover as two major mechanisms through which salary co-movement affects innovation. The takeaway message is that the optimal compensation policy for promoting innovation is to motivate both top executives and ordinary employees. Overly compensating one at the expense of the other will do just the opposite.

Chief Human Resource Officers and accounting disclosures: Illuminating the firm’s most important asset or window dressing?

Social activism, including movements towards equal pay, gender rights, and racial equality, has heightened public scrutiny, exerting pressure on firms to reassess and reform their human resource practices to ensure they align with current social and ethical norms. Chief Human Resource Officers (CHROs) have a potentially important role in defining and promoting appropriate human resource practices through human resource disclosures in corporate annual reports. We empirically examine the effect of CHROs on expanded human capital resource (HCR) disclosures, recently mandated by the SEC. We find that CHROs have a greater effect on the quality of HCR disclosures when they belong to the top management team, and less so when they belong to groups that are more poorly represented in top management, such as women, racial or ethnic minorities, or non-US nationals, and CHROs holding a liberal arts degree. Jointly considering the characteristics of CHROs, CEOs, and CFOs, we additionally find that pro-democratic political ideology is related to higher quality HCR disclosures. This study contributes to the literature by introducing a generalizable measure of HCR disclosure quality, uncovering significant heterogeneity in HCR disclosure quality across large US firms, and highlighting the role of CHROs in this process. In doing so, this study documents evidence that individual top executives in addition to the CEO and CFO can have a measurable effect on voluntary financial disclosures.

Supply chain agility and firm performance: testing serial mediations in pharmaceutical industry

PurposeThe supply chain agility (SCA) is becoming a source of competitive differentiation but debate on its antecedents which can result in optimal firm performance is still non-pervasive in the literature. Taking this gap into consideration, the current research aimed at investigating various enablers of supply chain agility of Pakistani pharmaceutical industry.Design/methodology/approachThe data were collected from 204 top executives working in different supply chain functions including planning, supplying, operations and purchasing in national and multinational pharmaceutical companies in Pakistan.FindingsThrough serial-mediation model, results revealed the strength of various SCA enablers, along with the mediating roles of delivery dependability.Originality/valueThis study adds in the literature on how various supply chain enablers and competencies help the organizations to achieve supply chain agility and performance, especially in a developing country.