An Empirical Investigation on the Appointments of Supply Chain and Operations Management Executives

Abstract

T his paper provides empirical evidence on the performance effects and choice of appointments of supply chain and operations management executives (SCOMEs). The analysis is based on a sample of 681 SCOME appointments that were publicly announced during the 2000-2011 period. We find that the stock market reaction is positive on the day of the announcement. Categorizing the SCOME appointments as new or old and insider or outsider, we find that the market reaction for newly created SCOME positions is positive. The market also reacts more positively when a SCOME is an outsider rather than an insider. The strongest positive reaction is observed when outsiders are hired for newly created SCOME positions. We find evidence of both poor stock price performance and poor operating performance in the period preceding the appointment of new SCOMEs. New SCOME appointments are not followed by an immediate improvement in stock price and operating performance. However, there is no further decline in performance, suggesting that the decline observed in the preappointment period does not continue after the new SCOME is appointed. We also find that the likelihood of a SCOME being an outsider is greater for firms that are smaller, operate in more concentrated industries, and have experienced poor prior performance.

Career Patterns of Supply Chain Executives: An Optimal Matching Analysis

“…The small share of women in SCM is in line with recent studies that found SCM to be a male‐dominated profession (Hendricks et al. ; O'Marah ). Of the executives in the sample, 86.6% work in Germany, 8.8% in Switzerland, and 4.6% in Austria, a distribution that is proportional to these countries’ populations.…”

“…This definition complies with the description by Dalton () and is also applicable to the labels used by Hendricks et al. (). In line with those authors and the CSCMP's definition (), we consider “CSCOs,” SCM “(executive/senior) vice presidents,” “directors,” and “heads” (and the equivalents “principals,” “leaders,” and “Leiter”) to be SCEs in this study.…”

“…Hendricks et al. () investigate the stock market reaction to appointments of supply chain and operations executives. They extend the search terms for SCEs to “chief,” “(vice) president,” “director,” and “head.” Likewise, the Council of Supply Chain Management Professionals (CSCMP) advocates a broader definition of “executives,” proposing a model that distinguishes among three primary levels in SCM: “executives,” “managers,” and “analysts” (CSCMP ).…”

Firm Actions Toward Data Breach Incidents and Firm Equity Value: An Empirical Study

“…Several studies have estimated abnormal returns using the four-factor model [30] [33]. The fourfactor model posits a linear relationship between the stock return and four factors over a given time period (Formula 1): (1) where R it is the return of stock i on day t, α i is the intercept of the relationship for stock i, R ft is the riskfree return on day t, R mt is the return on the market portfolio on day t, SMB t is the small minus big size portfolio return on day t, HML t is the high minus low book-to-market portfolio return on day t, UMD t is the past-one-year winners-minus-losers stock portfolio return on day t, and ε it is the error term [14]. Abnormal returns are defined as the difference between the actual return and an estimated expected return in the absence of an event.…”

Matching and Winning? The Impact of Upper and Middle Managers on Team Performance

“…Bertrand and Schoar (2003) present the seminal econometric analysis of upper level manager effects on firm policy and performance. Recent analyses on game developers (Mollick, 2012), supervisors (Lazear et al, 2015), store managers (Siebert and Zubanov, 2010), operations managers (Hendricks et al, 2014) and car sales managers (Owen et al, 2015) document similar evidence for managers at lower organizational levels. 2 For education, a positive correlation is usually found (Chevalier andEllison, 1999, Goldfarb andXiao, 2011), with the exception of Mair (2005).…”