Performance feedback and problemistic search: The moderating effects of managerial and board outsiderness

Choi, Jaeho; Rhee, Mooweon; Kim, Young-Choon

doi:10.1016/j.jbusres.2019.04.039

Cited by 37 publications

(28 citation statements)

References 102 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…These findings should not be directly interpreted in the sense that more diverse boards are more prone to change. There may be a difference between their willingness to search for alternative courses of action (which is studied in this paper and in the related research of Haynes andHillman, 2010 andChoi et al, 2019) and their willingness to, ultimately, commit to strategic change (which was studied by Goodstein et al, 1994 andZeng andGreve, 2018). This idea may be summarized as follows: diversity may foster creativity but inhibit innovation (the implementation of creative ideas).…”

Section: Discussionmentioning

confidence: 98%

“…I believe that this study can motivate further research on the diversity characteristics of boards. The outsiderness of board members (Choi et al, 2019), the length of their tenure (as suggested by Dalton et al, 2007)…”

Section: Discussionmentioning

confidence: 99%

“…relatively little research examining the role of the board (Choi et al, 2019;Zhang and Greve, 2019;Zhong et al, 2021). This study represents an important contribution to this subject and the literature on performance feedback, as it sheds some light on the role of the firm's internal composition in its behavior.…”

Section: Boards and Firms' Randd Responsesmentioning

confidence: 91%

See 2 more Smart Citations

Corporate boards' and firms' R&D responses to performance feedback

Jirásek

2021

JSMA

View full text Add to dashboard Cite

PurposeA firm will respond to performance feedback, i.e. a comparison of its current performance with the goals to which it aspires, by means of changes in its search activity. There is an emerging body of literature that studies how such behavioral responses are shaped by important decision-makers inside firms. The study focuses on the corporate board – one of the most influential decision-making groups in terms of strategy. More specifically, the study aims to study the moderation effect of the size, turnover and age diversity of the board.Design/methodology/approachThe sample is based on the largest listed German automobile and manufacturing firms followed between the years 2001 and 2015. The sample is analyzed using fixed-effects panel data models.FindingsThe findings indicate that the age diversity of the corporate board and, partially, also the turnover of its members moderate firms' responsiveness to performance feedback. On the other hand, the size of the board does not seem to play a role. The study, therefore, supports the notion of taking into account the characteristics of the corporate board when analyzing strategic decision-making and points to areas for further research.Originality/valueThe study contributes to the literature by empirically testing the moderating effect of three characteristics of corporate boards that have not been largely tested in the literature to date.

show abstract

Section: Discussionmentioning

confidence: 98%

Section: Discussionmentioning

confidence: 99%

See 1 more Smart Citation

Corporate boards' and firms' R&D responses to performance feedback

Jirásek

2021

JSMA

View full text Add to dashboard Cite

show abstract

“…Desai (2008) found that operating experience, corporate legitimacy and firm age are boundary conditions for organizational performance feedback learning in the US railroad industry. Other moderators include the structure of executive compensation (Lim and McCann, 2014), outside experience of managers and independence of the boards (Choi et al , 2019), business group affiliation (Vissa et al , 2010), time horizon of strategic decisions (Lehman et al , 2011), level of internal resources (Kuusela et al , 2017), organizational structure (Joseph et al , 2016) and a firm's status and category distinctiveness (Kim and Rhee, 2017).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

“…As such, scholars have increasingly been interested in the environmental factors that may either amplify or constrain the effect of performance feedback on organizational change. For example, firm size (Audia and Greve, 2006), organizational success and failure experiences (Desai, 2008), executive compensation (Lim and McCann, 2014), outside experience of managers and the independence of boards (Choi et al , 2019), organizational structure (Joseph et al , 2016) and business group affiliation (Vissa et al , 2010) have been found to alter the outcomes of organizational performance feedback learning.…”

Section: Introductionmentioning

confidence: 99%

Performance feedback and organizational learning: the role of regulatory focus

Ahn

Cho

2020

View full text Add to dashboard Cite

PurposeThis study investigates how a firm's regulatory focus (i.e. promotion and prevention foci) affects growth- and efficiency-oriented strategic change, highlighting the role of organizational-level regulatory focus as a cognitive frame within which to interpret performance feedback and its subsequent effects on strategic decisions.Design/methodology/approachThe authors collected longitudinal data on 98 S&P 500 manufacturing firms for a seven-year period. The panel data, which includes texts from the firms' 10-K filings, were then analyzed using a feasible generalized least squares (FGLS) regression estimator to test the authors’ hypotheses.FindingsA firm's strategic change orientation is affected by its regulatory focus and performance feedback: a promotion focus increases the magnitude of growth-oriented strategic change, while a prevention focus favors efficiency-oriented strategic change. Furthermore, both foci moderate the effect of performance feedback on the strategic change orientation: under negative performance feedback, a promotion (prevention) focus increases (decreases) the magnitude of growth-oriented strategic change relative to that of efficiency-oriented change. The findings provide robust evidence that regulatory focus can influence how organizations learn from feedback and formulate strategic change.Research limitations/implicationsThe authors’ examination of regulatory focus and organizational learning process relied on large manufacturing firms in the USA. However, learning process could be quite different in small and/or young firms. Future work should expand to a wider range of organizational types, such as nascent entrepreneurial ventures. In addition, the authors’ measurement of regulatory focus using corporate text has inherent weakness and could be supplemented with alternative research methods, such as surveys, interviews or experiments. All in all, however, the findings of this study offer a novel behavioral perspective while demonstrating that a regulatory focus is an important antecedent of organizational learning.Practical implicationsThis study highlights the importance of motivational characteristics of the top managers in the process of organizational learning from performance feedback. Furthermore, recruitment of a new top manager should be aligned with the organizational context, values and goals. In addition, corporate governance systems such as managerial compensation schemes need to be carefully designed so as to maximize organizational resilience, especially in the context of performance downturn or environmental change. Establishing a constructive organizational culture so that strategic decisions are not overly swayed by the performance outcomes would also be crucial to the organizational learning process.Social implicationsThis study highlights the importance of understanding the motivational orientations of top managers in organizational learning. In terms of managerial compensation, for instance, an optimal incentive system should reflect the desired performance output by encouraging managerial behavior that corresponds to its objective. Furthermore, motivational orientation of new recruits should be considered in the context of the composition of the top management team members in order to achieve “optimal fit.” In addition, this study suggests that top executives' regulatory focus can be a key factor for organizations in balancing goals of different value orientations.Originality/valueThe findings of this study demonstrated that a firm-level regulatory focus has a significant effect on organizational learning and strategic change following performance feedback. The authors hope this study provides an impetus for future discussions on the microcognitive mechanisms of organizational learning by exploring the relations between organizations' regulatory foci, performance feedback and strategic change orientations.

show abstract

How do aspirations work? Financial performance shortfalls and firms' green innovation

Zhao,

Cheng,

Guo

2024

Bus Strat Env

View full text Add to dashboard Cite

Research on the behavioral theory of the firm (BTOF) highlights the role of performance shortfalls in managers' decision process. However, previous studies tend to ignore the heterogeneity of historical and social aspirations. This paper investigates how firms' green innovation, a typical environmental behavior, differently responds to financial performance shortfalls relative to historical and social aspirations. Based on the view of problemistic search, we argue and find that financial performance shortfalls derived from historical aspiration impair green innovation, whereas financial performance shortfalls derived from social aspiration first reduce and then promote green innovation, demonstrating a U‐shaped relationship. Moreover, we find that the two aspirations may interact to influence green innovation activities. Specifically, the negative effect of performance shortfalls (historical) is more pronounced when the financial performance is below social aspiration, whereas the U‐shaped effect is flattened if the financial performance is at or above historical aspiration. Further, we explore how the effects vary with financial constraints and manager overconfidence to distinguish the underlying mechanisms. Our study extends a nascent understanding of aspiration heterogeneity by revealing firms' different green innovation strategies in response to different aspirations.

show abstract

Performance feedback and problemistic search: The moderating effects of managerial and board outsiderness

Cited by 37 publications

References 102 publications

Corporate boards' and firms' R&D responses to performance feedback

Corporate boards' and firms' R&D responses to performance feedback

Performance feedback and organizational learning: the role of regulatory focus

How do aspirations work? Financial performance shortfalls and firms' green innovation

Contact Info

Product

Resources

About