Application of signaling theory in management research: Addressing major gaps in theory

Taj, Saud Al

doi:10.1016/j.emj.2016.02.001

Cited by 218 publications

(172 citation statements)

References 57 publications

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“…In strategy studies, signalers are generally firms (Deephouse, ; Karamanos, ; Zhang & Wiersema, ). Second, signal is information cues released purposely or unintentionally by signalers (Taj, ). Through various channels of transmission (e.g., the media and NGOs in our context), it has been shown that only information which is readily observed by outsiders can be used as efficacious signals (Connelly et al, ).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

How industry peers improve your sustainable development? The role of listed firms in environmental strategies

Yang

Wang

et al. 2018

Bus Strat Env

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Factors driving firms to become more sustainable have been widely investigated in the literature on environmental strategy, but some important horizontal factors are still missing, such as influence from peers in the same industry. Drawing on signaling theory and expectancy theory, we complement existing studies by highlighting the role of listed firms in raising other firms' awareness and motivation of adopting environmental strategies, while taking the moderating capability factor into account. By setting our study in the context of listed and nonlisted private‐owned enterprises in China, the empirical analysis of 1,391 nonlisted firms indicates that the number of listed firms in an industry has positive effects on both reactive and proactive environmental strategies of nonlisted firms. The superior performance of these listed peers motivates nonlisted firms to adopt a proactive environmental strategy but constraints the reactive one. These effects are further strengthened by the relative scale of a nonlisted firm.

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Section: Theoretical Backgroundmentioning

confidence: 99%

How industry peers improve your sustainable development? The role of listed firms in environmental strategies

Yang

Wang

et al. 2018

Bus Strat Env

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“…Signalling theory entails to the information asymmetry between organisation and market forces (Connelly et al 2011;Bae et al 2018;Taj 2016). The theory focuses on how an organisation deals with different signals.…”

Section: Signalling Theorymentioning

confidence: 99%

“…On the other hand, a negative signal provides necessary corrective actions against strategic planning. Connelly et al 2011 andTaj 2016 narrate that higher quality firms convey honest signals than lower quality firms. The most recent study of Bae et al 2018 finds South Asian business management (Bangladesh, India and Pakistan) uses sustainability disclosure to reduce information asymmetry and send/receive an honest signal.…”

Section: Signalling Theorymentioning

confidence: 99%

An emerging economy perspective on corporate sustainability reporting – main actors’ views on the current state of affairs in Pakistan

Mahmood¹,

Kouser²,

Masud

2019

AJSSR

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The purpose of this paper is to explore the main actors' views on the current state of sustainability reporting in a developing country context. This qualitative study is based on the interviews of 20 individuals and organizations from Pakistan who were identified as main actors involved in the practice of sustainability reporting. This paper draws on the arguments of multiple theoretical frameworks, including legitimacy theory, stakeholders' theory, institutional theory, political cost theory, and signalling theory. Following a semi-structured interview protocol, main actors were asked to share their views on the drivers and barriers of sustainability reporting, sufficiency and suitability of sustainability-related regulation and standards, perceived benefits of sustainability reporting, level of stakeholder engagement and transparency. Interviews were then analysed to compare the viewpoints of different stakeholder groups on various issues. This paper concludes that, like other emerging and developing economies, the practice of sustainability reporting is largely driven by the external forces. Foreign buyers, international professional associations and standard-setting organizations are playing a pivotal role in the emergence and development of sustainability reporting. Sustainability reporting awards also played an important role as they provide the normative basis and intangible benefits for reporting. Despite these external forces driving the emergence and development of SR in Pakistan, the structural and cultural conditions that exist in the societal context of Pakistan significantly impact the disclosure practices and organizational rationales for SR. In particular, weak government structures, lack of awareness and interest in sustainability matters, lack of regulation, lack of enforcement capabilities, lack of a political will has been identified as the main barriers of SR. The paper explores the perceptions of both managerial and non-managerial stakeholders regarding the current state of sustainability reporting in Pakistan.

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“…To achieve the shareholder's aims, this signalling needs to be observable by management (Connelly et al . ), and the anticipated outcomes of signalling may be adversely affected by unintended negative signalling (Taj ). Managers in turn may send signals to shareholders, either in response to shareholder action or to pre‐empt it (Goranova et al .…”

Section: Theoretical Approaches To Non‐financial Shareholder Activismmentioning

confidence: 99%

Non‐financial Shareholder Activism: A Process Model for Influencing Corporate Environmental and Social Performance*

Cundill

Smart

Wilson

2017

Int J Management Reviews

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Shareholders have become increasingly active in endeavouring to influence companies' environmental and social practices. In comparison with the mature field of financially motivated shareholder activism, limited enquiries have been carried out on its nonfinancial counterparts. This paper synthesizes the knowledge base through a review of the academic literature, exploring shareholder activism intended to affect corporate environmental and social performance. Theoretical perspectives appropriate to this phenomenon are critically appraised: in particular, insights from social movement theory, Hirschman's theory of exit, voice and loyalty and stakeholder salience theory, as well as the roles of signalling and symbolic management actions. Data from the literature are organized into a process model of non-financial shareholder influence. Underpinned by the influencing context, this conceptualization centres on three primary shareholder interventions: divestment, dialogue and shareholder proposals. These interventions are enabled through a range of actors and tools: coalitions, non-governmental organizations, codes and indices, the media and regulators. The interaction between interventions and the enabling actors and tools helps to determine managers' perceptions of shareholder salience. These perceptions subsequently shape the organizational behaviours that affect companies' symbolic and substantive environmental and social performance. An agenda to direct future research in this burgeoning field is articulated.

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Application of signaling theory in management research: Addressing major gaps in theory

Cited by 218 publications

References 57 publications

How industry peers improve your sustainable development? The role of listed firms in environmental strategies

How industry peers improve your sustainable development? The role of listed firms in environmental strategies

An emerging economy perspective on corporate sustainability reporting – main actors’ views on the current state of affairs in Pakistan

Non‐financial Shareholder Activism: A Process Model for Influencing Corporate Environmental and Social Performance*

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