The influence of investors’ opinions of human capital and multitasking on firm performance: a knowledge management perspective

Abstract

Purpose The purpose of this study is to examine the disruption-adaptation associated with knowledge management (KM) of entrepreneurial multitasking of top strategy and tactics executive (TSTE) succession in positions responsible for both S and T. This provides insight into KM and firm performance during turbulent periods. Design/methodology/approach The study examines investor’s opinions of human capital in the context of managerial succession. The data was based on 900 publicly available appointment announcements between 2006–2014, allowing for the examination of 459 observations of succession in 51 industries. Findings The findings indicate that the relationship between KM of entrepreneurial multitasking and firm performance was more positive for high innovation firms than for low innovation firms. As well, the relationship between investors’ opinions of a top executive manager’s human capital and firm performance is more positive for small firms than for large firms and more positive for high innovation firms than for low innovation firms. Research limitations/implications The study contributes to the literature by systematically examining the announced appointment of executives in one context where KM of entrepreneurial multitasking is prevalent – across marketing strategy and sales tactics (hereafter, S and T) responsibilities – for multiple firms listed at major US stock exchanges across a wide range of industries, using lagged performance data to discern performance outcomes. It highlights important issues related to organizational structure and human capital for firm performance and KM in dynamic environments. Further research could examine the impact on firm performance of a change in structure – from a joint sales and tactics position to a sales or tactics position and vice versa. By studying the impact of change to and from an intertwined position, future scholars can determine the level of risk stemming from coordination uncertainty changes with time. Practical implications Of practical relevance, the study shows that vesting dual responsibility for S and T in one executive during managerial succession may not be as universally valuable or adaptive as previously thought. One practical extension of this research may also be that larger firms that are more likely to have clearly defined silos may find that such vesting of multitasking responsibility not as valuable. High innovation and small firms may gain from new executives’ multitasking responsibility for S and T. Thus, firms should think twice before vesting S and T responsibilities with one incoming executive during the leadership change. Social implications Responsibility for both S and T compounds ambiguous accountability, frequently leaving the locus of customer-related problems unclear, and therefore unsolved. Originality/value Extant research has overlooked the relationship between the top management team’s (TMT) abilities to multitask firm performance over time across contexts of external and internal change, operationalized as firm innovation and firm size. Nor have studies explored the firm performance implications of external stakeholders’ opinions of such human capital across these contexts. A novel measure of executive-specific human capital – abnormal returns generated the appointment announcement, is introduced. Understanding the capability of a top executive to simultaneously multitask both S and T responsibilities is a critical component of KM; also relevant are investors’ opinions of their human capital, a particular oversight given the challenge of the “great transformational leader” with servant leadership theory (Carayannis et al., 2017; Gregory Stone et al., 2004).

The Impact of Voluntary and Involuntary Intellectual Capital Disclosure on Firm Value

“…Banking is also an industry that uses innovation and technology to deliver value to clients (Al-Dmour et al, 2020). Therefore, if a bank can manage and appropriately disclose its intellectual capital, which consists of knowledge, skills, competence, innovation, and experience, it will benefit the bank, increasing the firm value (Kryscynski et al, 2020;Vaid & Honig, 2020).…”

Knowledge management and project uncertainty in ppen innovation context

“…Organizational uncertainties reside mainly in information and communication technology for collaborative networks (Gomes et al, 2021b;Wiener, 2018). In addition, the sample considers that knowledge for projects is a strategic resource and that its absence enhances organizational uncertainties, especially when related to the market and technology (Gomes et al, 2021b;Le Masson et al, 2019;Vaid and Honig, 2020). Organizational uncertainties are reduced through strong collaborative organizational leadership, stakeholder management, strategic project alignment and definition of success criteria for innovative projects (Anokhin et al, 2011;Ben Arfi et al, 2019;Dahabieh et al, 2018;Wiener, 2018).…”

“…For OI projects, the authors refer to dynamic capabilities consisting of interorganizational processes for the dissemination, interpretation and implementation of strategic knowledge (Heger and Boman, 2015;Vaid and Honig, 2020). This is done through partnerships with customers, suppliers, universities and other associations that may contribute to the project (Ben Arfi et al, 2019;Cardoso and Ramos, 2016;Huang and Wu, 2014;Thanasopon et al, 2016).…”

The impacts of CEO’s knowledge structure on corporate innovation strategy

“…Profession reflects CEOs’ occupational histories, which represent their accumulated experience and skills at work. Inspired by Vaid and Honig (2020) who proposed the important potential of measuring the impacts of CEO’s intertwined position and the change in position structure on firm innovative performance, we take the indicator, the diversity of position , to measure the breadth of CEO professional knowledge. Furthermore, we briefly use working years to measure CEO’s knowledge depth in professional domain.…”