Top Executives Research Articles

“We made a mistake”: How top executives dialectically narrate strategic errors in situations of strategic change

Based on 21 in-depth interviews with chief executive officers (CEOs) and board chairs leading 900,000 people in large financial firms in Europe, this study surfaces the acknowledgment of strategic errors in top executives’ narratives as a broad theme associated with strategy change. This theme is intriguing because errors are typically associated with negative connotations undermining leaders’ self-image and credibility. More specifically, this study identifies in top executives’ error narratives a dialectic process consisting of mobilizing errors and de(if)fusing errors or distancing themselves from them; the paper models seven narrative practices within the process. As a first contribution to narrative research on strategy and change, this study introduces strategic errors as a narrative trigger in top executives’ retrospective accounts of strategy change, frequently associated with the plausible economic failure of their firms. Second, while extant research generally focuses on the coherence of individual narratives, this study adds on the relatively rare studies recognizing a dialectic in individual narratives on change.

Nexus between government surveillance on executive compensation and green innovation: Evidence from the type of state‐owned enterprises

AbstractThe Chinese government capped executive compensation in state‐owned enterprises (SOEs) to address income inequality and promote a more equitable distribution of wealth. This study investigates whether regulating top executives' pay alters their motivation for corporate green innovation (GI) initiatives. Using data from 2006 to 2018 for Chinese‐listed SOEs, the regression analysis and difference‐in‐difference methods revealed that government restrictions on executive compensation negatively affect GI. Furthermore, the types of SOE results show that the negative effect of pay restrictions on GI exists only in local SOEs, as opposed to central SOEs. Moreover, high managerial shareholding positively moderates this negative effect, demonstrating that the adverse effects of compensation restrictions are mitigated by the convergence of interests between managers and stakeholders. These findings are robust to instrumental variables and other robustness tests. This study provides policy recommendations for the government to boost its assistance in GI and establish new environment‐related incentives that motivate managers to promote GI and inspire enterprises to deploy sustainable environmental initiatives.

The impact of TCJA on CEO compensation

The 2017 Tax Cuts and Jobs Act (TCJA) expanded the impact of IRC Section 162(m) by disallowing a tax deduction for any compensation over $1 million paid to top executives. Under prior law, qualified performance-based compensation was exempt from the $1 million limit. Using OLS regressions, we examine whether TCJA affected CEO compensation immediately after enactment. We find evidence that CEO salaries, non-equity incentive pay, stock awards and total compensation are all higher after TCJA. While the law change increases the after-tax cost of compensation for the average firm, our results show that TCJA did not constrain CEO compensation. However, relative to the average effect, in cross-sectional analyses, we find some evidence that compensation was lower for strong CEOs post TCJA. We also find some evidence that CEOs at firms with high leverage and net deferred tax assets, including tax net operating losses, saw a decrease in various types of incentive compensation post TCJA.

Communication and power in the President of Real Madrid: in the wake of the Renaissance and Baroque masters of reputation

ABSTRACT Florentino Pérez is the most successful president of soccer organizations in the world. His leadership in Real Madrid is uncontested. This paper explores his use of communication and power. It delves into how Pérez’s use of communication parallels the one recommended by four great masters who wrote during the Renaissance and Baroque periods about using communication to project power: Nicolo Machiavelli, Baltasar Gracián, Francesco Guicciardini or Cardinal Mazarino. This paper is a content analysis of an exclusive interview Pérez gave on TV after the fiasco of the European Super League in 2021. This analysis shows how Pérez´s performance reflects the teachings of these masters in his deeds, appearance, the reconciliation of his public and private interests, and in the brevity with which he conveys his messages. The conclusion is that there are some atemporal principles in the strategic communication menu that work in the soccer industry when top executives try to gain popular support.

Hindustan Unilever Ltd. vs. Securities and Exchange Board of India

This case is a well-established precedent in the world of insider trading. But what is insider trading? According to Upstox, Insider Trading is the act of purchasing, selling, underwriting, or agreeing to underwrite the securities or stocks of an organization by key executives/personnel of the company who have access to UPSI - Unpublished Price Sensitive Information regarding the company. In simple language, it is an illegal practice to trade in a company's securities using sensitive information that hasn't been made public. Insider trading refers to the use of this information to make an erroneous profit or loss. The information is referred regarded as "price sensitive" since it may influence the market value of a company's shares. The first legislation addressing insider trading was the Securities and Exchange Board of India ("SEBI") Act, 1992, and the SEBI (Prohibition of Insider Trading) ("PIT") Regulations, 1992 and the Companies Act, 2013 ("The Act"), Section 195 was added to outlaw insider dealing in stocks. The SEBI PIT Regulations, 2015, which were implemented in 2015, superseded the 1992 regulations to update the capital market regulatory structure. Unpublished Price Sensitive Information ("UPSI") communication and trading while in possession of UPSI are covered by Regulations 3 and 4 of the PIT Regulations, 2015, respectively. Regulation 2(1) (n) of PIT 2015 defines UPSI, as follows: “(n) “unpublished price sensitive information” means any information, relating to a company or its securities directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following: (i) financial results;(ii) dividends;(iii) change in capital structure;(iv) mergers, de-mergers, acquisitions, de-listings, disposals and expansion of business and such other transactions; (v) changes in key managerial personnel; and(vi) material events with the listing agreement. NOTE: It is intended that information relating to a company or securities that are not generally available would-be unpublished price-sensitive information if it is likely to materially affect the price upon coming into the public domain. The types of matters that would ordinarily give rise to unpublished price sensitive information have been listed above to give illustrative guidance of unpublished price sensitive information.” A person who works for the firm whose shares they trade is an insider. For instance, he could be one of the company's directors, presidents, or top executives who own more than 10% of the stock. Even if a person is not employed by the company, they may have access to plenty of secret information about stock performance from a genuine corporate official. Examples of N.S.E insider trading include officers, directors, and staff who trade in the company's securities after learning of significant and private business happenings and friends, co-workers, or family members of such executives, directors, and staff who traded shares after learning of this knowledge.

Exploring the challenges and facilitators in the adoption of e-HRM practices in Indian higher education institutions: a qualitative exploration

PurposeDue to government policies, accreditation demands, competition, digital India reforms and National Education Policy (NEP) 2020, the need for electronic human resource management (e-HRM) has increased considerably in the Indian higher education (HE) sector, but the literature has revealed that the adoption of e-HRM practices in Indian HE institutions (HEIs) is still in its embryonic stage; therefore, the purpose of the current qualitative study is to explore the challenges and facilitators of e-HRM adoption in the Indian HE sector through interpretative phenomenological analysis (IPA).Design/methodology/approachThe present study incorporates IPA, to capture the personal lived experiences of the HR executives employed in the Indian HEIs. Using purposive sampling, semi-structured interviews were conducted with the HR executives employed in Indian universities and institutions to know the perspectives on the adoption of e-HRM practices in Indian HEIs.FindingsThe study identified two superordinate themes, namely, challenges and facilitators of e-HRM adoption in the Indian HE sector. The superordinate theme “challenges” comprises eight sub-themes. Further, the theme “facilitators” consists of six subthemes.Practical implicationsThe study has implications for the stakeholders of the HE sector, i.e. HR practitioners, top executives of the HE sector, government and HE regulators and other stakeholders of the HE sector.Originality/valueThis study has given deep insights into the challenges and facilitators in the adoption of e-HRM practices in the Indian HE sector, and to the best of the authors’ knowledge, no study till date has filled this knowledge gap through qualitative exploration using IPA.

The continuance commitment of family firm CEOs

This study seeks to extend the classic socio-emotional and stewardship perspective on family CEOs with a complementary rational-economic perspective on their agentic behavior. To this end, using a sample of 103 top executives of U.S. family firms, we investigate the relationship between continuance commitment of family CEOs and their perceptions of family cohesion and discuss how this relationship is moderated by firm performance. Integrating insights from research on organizational behavior into the family business literature, we discuss how key decision makers in the family business context engage in rational cost-benefit analyses regarding their own personal investments in the firm. Our findings suggest that the continuance commitment of family CEOs interacts with performance to enhance perceptions of family cohesion.

Appointment-Based CEO Connectedness and Employee Compensation: Empirical Evidence from China

Employee compensation is an often-neglected but essential part of corporate social responsibility which emphasizes caring for the needs of all stakeholders, including employees. In order to address pressure from stakeholders to strengthen prosocial acts, CEOs might prefer to raise employee compensation. However, other top executives are often reluctant to do so due to the concern that it reduces firm profits. In this paper, we propose that appointment-based CEO connectedness (ABCC) has a positive effect on employee compensation as it facilitates CEOs gaining support from the top management team to raise employee compensation. We employ multivariate linear regression as our research approach and find supportive evidence using data from Chinese listed firms during 2011–2020. Our results are robust to endogeneity concerns and survive an array of robustness checks. Heterogeneity tests show that this impact is stronger for firms facing less market competition and firms with low financial constraints. We further show that greater ABCC is associated with higher CSR scores of non-shareholders responsibility dimensions. Overall, our study suggests ABCC is conducive to the fulfillment of corporate social responsibility towards non-shareholders.

How performance pressure influences firms’ cross-boundary growth: the moderating effect of managerial discretion

PurposeIn today's complex and rapidly changing business environment, cross-boundary growth is increasingly critical to the survival or even success of organizations. The purpose of this study is to examine the forming mechanism of firm’s cross-boundary growth by integrating the two important antecedent factors of performance pressure and managerial discretion into a united framework and theoretically analyze the direct role of performance pressure on firm’s cross-boundary growth as well as reveal the moderating role of managerial discretion. Also, the authors select listed manufacturing companies in China as samples to empirically test the research hypotheses.Design/methodology/approachThe authors design a multiple regression model to perform empirical analysis by using a panel of 4,002 year-observations in 1,334 listed manufacturing companies between 2013 and 2016. The sample data sources mainly come from the Wind Database, which is mainland China's leading financial database and software services provider. The hypotheses proposed are tested by adopting a panel data set of the listed manufacturing companies of China.FindingsEmpirical results show that performance pressure has a positive effect on the cross-industry growth and cross-domestic regional growth but a negative effect on the cross-international regional growth, and managerial discretion has a different moderating effect. Specifically, capital intensity strengthens the positive effect of performance pressure on cross-industry growth but weakens the negative effect of performance pressure on cross-international regional growth. State ownership enhances the positive effect of performance pressure on cross-domestic regional growth but decreases the negative effect of performance pressure on cross-international regional growth. CEO duality increases the negative impact of performance pressure on cross-international regional growth.Practical implicationsThis study provides several implications for top executives, including how to dialectically consider the double-edged effect of performance pressure on cross-boundary growth of firms, create an appropriate environments of managerial discretion and design the types of cross-boundary growth strategies that top executives can follow in the volatility, uncertainty, complexity and ambiguity era.Originality/valueAlthough the relevant literature highlights the importance of performance pressure, it has not been related to the cross-boundary growth of firms. This paper makes an incremental contribution to the literature on the forming mechanisms of firm’s cross-boundary growth by providing an important perspective of performance pressure to firm growth determinants and taking into account the moderating role of managerial discretion.

CEO Job Demands, Characteristics, and Mental States: Implications for Top Executive Research

CEO Job Demands, Characteristics, and Mental States: Implications for Top Executive Research

A pathway to greater meaning in life and well-being for senior executives beset by anti-meaning.

Although work is a significant source of meaning for most people, the role of senior executive generates different meaning and well-being complexities than those experienced or faced by general employees. This study explored how meaning and anti-meaning components affect senior executives' experiences of meaning in life and well-being. The findings enabled devising a pathway to enhance senior executives' net experiences of meaning in life and well-being. A cross-sectional, semi-structured interview study design was used to gather rich qualitative data. Eight participants from southern and eastern Africa, who had held the position of chief executive officer or managing director for at least five years, were interviewed. The findings demonstrated that senior executives' work roles provide a significant source of meaning. However, the roles are accompanied by unavoidable anti-meanings, which are likely to generate additional anti-meanings if not tempered sufficiently, thus reducing the net meaning experienced. From the findings, a practical pathway was devised to assist top executives to deal with the bipolar relationship between meaning and anti-meaning. Consulting and counseling practitioners can utilize the pathway to guide, support, and counsel senior executives towards improved meaning, temper anti-meaning and improve well-being.

Are MBA CEOs really more risk-averse?

This paper extends the literature on upper echelons theory that emphasizes the impact of top executives' personal characteristics on their choices by examining the relationship between CEOs holding MBAs and the riskiness of corporate policies, including investment and financial policies. To do so, data belonging to all stocks listed on the S&P 500 is collected to cover the period from 2005 to 2020 and analyzed using a panel regression model. The findings show that CEOs holding MBAs tend to undertake less risky investments compared to others, but this negative relationship is induced by unobservable heterogeneities across firms and time-varying heterogeneity across industries. Moreover, the findings failed to find any relationship between CEO-holding MBAs and financial leverage, while the relationship is negative between CEO-holding MBAs and corporate liquidity. These findings strongly deny the well-documented risk-aversion behavior of CEO-holding MBAs and support their belief in “profit-first” and self-interest” principles.

Informed trading prior to financial misconduct: Evidence from option markets

This paper shows an abnormal level of option trading activities in the ten days before the revelation of financial misconduct in a sample of the SEC and/or DOJ enforcement actions. These abnormal option trading volumes are negatively associated with the subsequent stock returns to the announcements, and are positively linked to firm penalty, the number of violations, prison sentences, fraud charge, top executives number, potential firm deception toward auditors, impeded investigation, and violation period. Finally, abnormal option trading is related to the time to discovery and the likelihood of discovery. These results suggest that option traders detect firms engaged in financial misconducts.

Different strokes for different folks: The moderating effect of top managers’ political ideologies on the efficacy of top management team vertical pay disparities

A debate surrounds the utility of tournament theory prescription for the pay arrangements of top executives, based on competing perspectives on the relationship between vertical pay disparities and important firm outcomes. In this study, we attempt to reconcile the competing perspectives by offering a contingency view of the utility of tournament theory prescriptions. We integrate insights from the person-pay interaction theory with research on political ideology to show how top executive’s individual and top management team’s team-level political ideology shapes the relationship between vertical pay disparities and top executive departure and firm performance. Using data on US public firms, we find that liberal-leaning top executives are more likely to exit the firm at higher levels than at lower levels of vertical pay disparity, whereas conservative-leaning top executives are more likely to exit the firm at lower levels than at higher levels of vertical pay disparity. Furthermore, liberal-leaning top management teams perform better at lower levels than at higher levels of vertical pay disparity, whereas conservative-leaning top management teams perform better at higher levels than at lower levels of vertical pay disparity. We discuss the implications of these findings for the literature on executive compensation, corporate governance, and executive values.

Navigating circular economy: Unleashing the potential of political and supply chain analytics skills among top supply chain executives for environmental orientation, regenerative supply chain practices, and supply chain viability

AbstractIn a changing business environment, firms encounter significant challenges to fulfill sustainable development goals. However, firms can make substantial progress by adopting regenerative approaches grounded in circular economy principles, enabling them to effectively pursue sustainable development objectives such as responsible production and consumption (goal 12), climate action (goal 13), and the preservation of life on land (goal 15). However, there is a scarcity of research studies that offer guidance to top supply chain (SC) executives, aiming to enhance their environmental focus and enhance the SC viability through regenerative SC practices. This study employed the philosophical perspective of the natural resource‐based view. Advancing the SC literature, it tested a theoretical model to investigate the relationship between the political skills and SC analytics skills of top SC executives and the environmental orientation of SCs. Additionally, it examined the direct and indirect (via regenerative SC) relationships between a firm's environmental orientation and SC viability. This study also tested the moderating role of a firm's artificial intelligence‐driven big data analytics culture in these relationships. Applying a mixed‐methods approach, the study derived a theoretical model to link the aforementioned constructs. Apart from a qualitative investigation, data were also collected through a questionnaire‐based survey from 375 samples. The results indicated that the relationship between the political skills and SC analytics skills of top SC executives toward the environmental orientation of SCs is significant. Furthermore, they indicated that a firm's environmental orientation is positively related to a regenerative SC, which in turn enhances SC viability. The findings also provided evidence that a firm's AI‐driven big data analytics culture enhances the strength of these relationships. The current study extends the knowledge base by integrating the two unique concepts of digitalization and circular economy.

Kern County Hospital Authority Accused of Overpaying for Executive Services

No abstract available. Article truncated after 150 words. Becker’s Hospital Review is reporting that the Bakersfield, CA-based Kern County Hospital Authority, is accused by the local employee union of overpaying two private firms that provide its top executives (1). The union alleges that Cantu Management Group and Meridian Healthcare Partners - both based in Bakersfield - have exceeded contractual amounts by 40 percent to 147 percent, leading to $23 million in overpayments over the past four years. Andrew Cantu of Cantu Management Group is also the CFO of Kern County Hospital Authority and its management representative for independent audits. Russell Judd served as the hospital's CEO until December 2021, and remains president and owner of Meridian Healthcare Partners. A 9-page report alleges the hospital failed to disclose management compensation accurately, to properly correct the issue when notified, and attempted to conceal the overpayments. The union claims to have repeatedly brought questions about the hospital's financial management to the …

Top Executive of the Leading Company Expresses Great Hope for Basic Science: Interview with Dr. Yoshinori Hirai, Representative Director, President, and CEO AGC Inc.

Top Executive of the Leading Company Expresses Great Hope for Basic Science: Interview with Dr. Yoshinori Hirai, Representative Director, President, and CEO AGC Inc.

Internal alliance and firm risk

This paper studies the impact of internal alliances, measured by the fraction of top non-CEO executives and directors appointed during the current CEO's tenure, on firm risk. We find that firms with more executives or directors hired after the current CEO takes office are associated with higher-risk levels. This positive association is more prominent for rural and financially unconstrained firms, as well as periods outside the financial crisis. While internal coalition does not significantly affect low-risk investment, i.e., capital expenditures, it increases high-risk investment, i.e., research and development investment. Moreover, we find that firms with strong internal alliances are associated with lower firm value. Our results survive various robustness checks. Overall, this paper suggests that internal coalition is an important determinant of firm risk. Considering this aspect of board and management structures will lead to a better understanding of firm risk.

Investor choices in luxurious hotels in the era of COVID-19: an analytical approach to the case of Crete

The goal of this research is to identify the investment preferences of top managers and owners of four- and five-star hotels and the impact of the COVID-19 pandemic on their investment planning. The study examines various factors, including the individual characteristics of executives (such as gender, age group, education level, and position held in the hotel unit), and their perceptions of the pandemic’s effects on their investment planning. To the best of our knowledge, this is the first attempt to capture the pandemic’s impact on investment options, planning, and spending for luxury hotels. The study first conducted a structured questionnaire survey to record investment priorities under two distinct scenarios: one prior to the pandemic and another after the pandemic’s spread and containment measures. Statistical tests were then used to compare the results between the two periods, revealing clear differences in investment choices among top executives and owners. Chi-square tests were also employed to examine the impact of individual characteristics on executives’ perceptions of the pandemic’s impact on their investment planning and their willingness to limit investment spending. Ordinal regressions were used to explore association further. The findings show that participants’ age group was associated with their perception of the pandemic’s negative impact on investment planning and their willingness to limit investment spending. Participants’ position in the hotel unit partially explained their willingness to reduce investment resources during the pandemic. Therefore, the research highlights that the age of higher management in luxury hotels impacts the business's ability to adapt to the post-COVID-19 environment. The results also suggest that policy makers' public measures aimed at enhancing executives’ willingness to invest during difficult periods should consider these factors.

Accounting for the middle: motivations, extent, and limitations of middle managers’ earnings management

The accounting process is complex and prone to interference from the various parties involved. Using middle managers, we examine one of the unknowns of this process. They are able to influence earnings long before top executives can, but their actions are virtually untraceable in consolidated financial statements. We gather survey data from 77 middle managers to shed light on their motivations, the extent of their earnings management, and the relevant limitations of the associated practices. Our results indicate that there is no uniform motivation that drives all of these managers equally. The spectrum of reported motivations includes meeting targets, smoothing earnings, and reducing future expectations. Despite this diversity, a large majority of the surveyed middle managers state that they manage earnings substantially but mostly downwards. To this end, they employ both accounting actions, such as adjustments to provisions, and real actions, such as transaction shifts. In the opinions of the middle managers in this sample, the factors that most limit their discretion are auditors and internal controls. The results also reveal the influence of superiors on middle managers’ practices throughout the accounting process.