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Ann Peng, Rebecca Mitchell, and John M. Schaubroeck
In recent years scholars of abusive supervision have expanded the scope of outcomes examined and have advanced new psychological and social processes to account for these and other outcomes. Besides the commonly used relational theories such as justice theory and social exchange theory, recent studies have more frequently drawn from theories about emotion to describe how abusive supervision influences the behavior, attitudes, and well-being of both the victims and the perpetrators. In addition, an increasing number of studies have examined the antecedents of abusive supervision. The studied antecedents include personality, behavioral, and situational characteristics of the supervisors and/or the subordinates. Studies have reported how characteristics of the supervisor and that of the focal victim interact to determining abuse frequency. Formerly postulated outcomes of abusive supervision (e.g., subordinate performance) have also been identified as antecedents of abusive supervision. This points to a need to model dynamic and mutually reciprocal processes between leader abusive behavior and follower responses with longitudinal data. Moreover, extending prior research that has exclusively focused on the victim’s perspective, scholars have started to take the supervisor’s perspective and the lens of third-parties, such as victims’ coworkers, to understand the broad impact of abusive supervision. Finally, a small number of studies have started to model abusive supervision as a multilevel phenomenon. These studies have examined a group aggregated measure of abusive supervision, examining its influence as an antecedent of individual level outcomes and as a moderator of relationships between individuals’ experiences of abusive supervision and personal outcomes. More research could be devoted to establishing the causal effects of abusive supervision and to developing organizational interventions to reduce abusive supervision.
Academic integrity is an interdisciplinary concept that provides the foundation for every aspect and all levels of education. The term evokes strong emotions in teachers, researchers, and students—not least because it is usually associated with negative behaviors. When considering academic integrity, the discussion tends to revolve around cheating, plagiarism, dishonesty, fraud, and other academic malpractice and how best to prevent these behaviors. A more productive approach entails a focus on promoting the positive values of honesty, trust, fairness, respect, responsibility, and courage (International Center for Academic Integrity, 2013) as the intrinsically motivated drivers for ethical academic practice. Academic integrity is much more than “a student issue” and requires commitment from all stakeholders in the academic community, including undergraduate and postgraduate students, teachers, established researchers, senior managers, policymakers, support staff, and administrators.
Tracey J. Riley and Alex C. Yen
Although accounting is typically seen as a numbers-oriented discipline, with an emphasis on quantifying economic events and activity, the nexus of language and accounting, specifically the role of language in communicating corporate accounting results, has received an increasing amount of attention in recent years. This is because quantified accounting results (e.g., earnings per share, sales revenue) are rarely communicated in isolation. Rather, they are usually accompanied by a non-quantitative narrative, such as an earnings press release, a corporate annual report, or the president’s letter, which, along with conference calls and content at corporate websites, we collectively refer to as “accounting narratives.” These narratives allow management to elaborate on and contextualize the financial performance of the company. However, because they are not as extensively regulated as the financial statements and are not standardized, these narratives can also be used by companies for impression-management purposes, to obfuscate (poor) performance and to “spin” the financial results to the companies’ favor.
Research into accounting narratives dates back to 1952 and has focused on a wide variety of features of narratives and on how those features affect financial statement readers’ (most notably, investors’) reactions. The earliest studies focused on accounting narratives’ readability by performing a syntactic analysis to assess the cognitive difficulty of written passages. This line of research has found that accounting narratives are syntactically complex and difficult to read and that management intentionally makes bad news less readable in order to strain the readers’ cognitive processes and lead to lower comprehension of the bad news. In addition to this evidence of obfuscation, researchers have found support for managers engaging in attributional framing, which is the tendency to attribute positive outcomes to actions within the company and negative outcomes to actions external to the company (e.g., the government or the weather) in an effort to influence readers’ perception of good versus bad news. More recently, researchers have found that managers use syntactic (sentence structure), semantic (word meaning), and metasemantic (abstract versus concrete construal) manipulation and make broad stylistic choices such as emphasis, length, and scenario form. In terms of how those features affect the readers of the narratives, readers (most notably, investors) have been shown to respond to length and readability; level of negativity; words pertaining to risk, uncertainty, credibility, commitment, and responsibility; justifications of excuses of poor performance; optimistic and pessimistic tone; vivid versus pallid language; internal versus external attributions; and use of self-references.
Torben Juul Andersen and Carina Antonia Hallin
Contemporary organizations operate under turbulent business conditions and must adapt their strategies to ongoing changes. Sustainable performance can be achieved when the organization engages in interactive processes that link emerging opportunities to forward-looking analytics. But few organizations are able to practice this consistently. Fast processes performed by managers at the frontline respond to ongoing environmental stimuli and slow processes initiated by managers at the center interpret events and reasons about updated strategic actions. Current experiential insights from the fast processes can be aggregated systematically to inform the slow processes of reasoning. When the fast and slow processes interact they can form a dynamic system that adapts organizational activities to changing conditions.
G. Tyge Payne and Oleg V. Petrenko
Agency theory is one the most prominent theoretical perspectives utilized in business and management research. Agency theory argues—using fundamental assumptions that agents are: (a) self-interested, (b) boundedly rational, and (c) different from principals in their goals and risk-taking preferences—that a problem occurs when one party (a principal) employs another (an agent) to make decisions and act in their stead. Essentially, the value of a principal-agent relationship is not optimized because the two contracted parties may have different interests and information is asymmetric (not equal). Agency costs are the result of principal and agent conflicts of interest and disagreements regarding actions that are taken. As such, monitoring and incentive-alignment systems are used to curb costs associated with opportunist behavior.
Agency theory is commonly utilized to understand and explain corporate governance phenomena, including executive incentive alignment, board monitoring, and control of top managers; this strand of the literature is founded in economics and represents the bulk of the research in business and management. However, other important principal-agent relationships are commonly seen in business and society, such as with politicians/voters, brokers/investors, and lawyers/clients, and have benefited from the vast stream of research that has explored the principal-agent relationship in various forms and contexts. Also, alternative theoretical perspectives have emerged to accommodate variations of the principal-agent relationship. Namely, principal-principal agency, behavioral agency, and stewardship theories are prominent alternative theories that challenge, expand, or relax the basic assumptions of the classic theory to extend our understanding of important relationships and mechanisms in business and management.
Oscar Holmes IV
Despite the term being coined in the early 1990s, heteronormativity is a longstanding and enduring hierarchical social system that identifies heterosexuality as the standard sexuality and normalizes gender-specific behaviors and roles for men, women, and transgender and non-binary individuals. As a system, it defines and enforces beliefs and practices about what is ‘normal’ in everyday life. Although there are many factors that shape heteronormative beliefs and attitudes, religion, the government, education, and workplaces are the principal macro-level factors that normalize and institutionalize heteronormative beliefs and attitudes. These institutions contribute an outsize influence on the perpetuation of heteronormativity in society because these institutions create and inculcate the norms and standards of what are and are not acceptable values, attitudes, beliefs, and behaviors in our society. As such, in order to create effective interventions to eliminate the negative outcomes of heteronormativity, particular attention should be paid to each of these institutions. Parents, relatives, and other adults contribute to the normalization and institutionalization of heteronormativity at the individual- or micro-level. Although some people benefit from the system of heteronormativity (mainly heterosexual cisgender conforming men), much of the research on heteronormativity focuses on the negative outcomes. Heteronormativity is responsible for a host of pernicious outcomes such as lower self-esteem, job satisfaction, and organizational commitment, and greater rates of suicide ideation, verbal and physical abuse, and workplace mistreatment and discrimination. Future research should investigate identify effective micro- and macro-level interventions that could mitigate or eliminate the negative effects of heteronormativity.
Andy El-Zayaty and Russell Coff
Many discussions of the creation and appropriation of value stop at the firm level. Imperfections in the market allow for a firm to gain competitive advantage, thereby appropriating rents from the market. What has often been overlooked is the continued process of appropriation within firms by parties ranging from shareholders to managers to employees. Porter’s “five forces” model and the resource-based view of the firm laid out the determinants of value creation at the firm level, but it was left to others to explore the onward distribution of that value. Many strategic management and strategic human capital scholars have explored the manner in which employees and managers use their bargaining power vis-à-vis the firm to appropriate value—sometimes in a manner that may not align with the interests of shareholders. In addition, cooperative game theorists provided unique insights into the way in which parties divide firm surplus among each other. Ultimately, the creation of value is merely the beginning of a complex, multiparty process of bargaining and competition for the rights to claim rents.
Steven A. Stewart and Allen C. Amason
Since the earliest days of strategic management research, scholars have sought to measure and model the effects of top managers on organizational performance. A watershed moment in this effort came with the 1984 introduction of Hambrick and Mason’s upper echelon view and their contention that firms are a reflection of their top management teams (TMT). An explosion of research followed and hundreds, if not thousands, of manuscripts have since been published on the subject. While a number of excellent reviews of this extensive literature exist, a relative few have asked questions about the overall state and future of the field. We undertook this assessment in an effort to answer some key questions. Are we still making progress on the big questions that gave rise to the upper echelon view, or have we reached a point of diminishing returns with this stream of research? If we are at an inflection point, what are the issues that should drive future inquiry about top management teams?
Good assessment and feedback are essential for high student achievement, retention, and satisfaction in contemporary higher education, and adopting a fit-for-purpose approach that emphasizes assessment for learning can have a significant impact, but it is a complex and highly nuanced process so needs careful and research-informed design principles. Here the crucial importance of assessment in contemporary higher education pedagogy is considered, the key principles of good assessment are reviewed, and some suggestions are made for a framework to effectively interrogate individual practice with a view to continuous improvement.
Additionally, different means of offering feedback can help students to get the measure of their learning and point them toward future enhancement strategies but must be achieved in ways that are manageable for all stakeholders. Taxing questions are provided here for use by curriculum designers and all those who deliver and assess it enabling them to draw together key issues into a workable framework for assessment enhancement.
The board of directors serves multiple corporate governance functions, including monitoring management, providing oversight on strategic issues, and linking the organization to the broader external environment. Researchers have become increasingly interested in board interlocks and how content transmitted via these linkages shapes firm outcomes, such as corporate structure and strategies. As influential mechanisms to manage environmental uncertainty and facilitate information exchange, Board interlocks are created by directors who are affiliated with more than one firm via employment or board service and allow the board to capture a diversity of strategic experiences. One critical corporate decision that may be influenced by interlocks and strategic diffusion is diversification (i.e., in which products and markets to compete). Directors draw on their own experiences with diversification strategies at other firms to help guide and manage ongoing strategic decision-making. There is broad scholarship on interlocks and the individuals who create them, with extant research reporting that some firms are more likely to imitate or learn from their interlock partners than others. Prior findings suggest that the conditions under which information is transmitted via interlock, such as an individual director’s experience with diversification strategies at other firms, may make that information more influential to the focal firm’s own strategic decision-making related to diversification. A more holistic framework captures factors related to the individual interlocking director, the board and firm overall and the context surrounding these linkages and relationships, helping to promote future research. Understanding the social context surrounding board interlocks offers opportunities to more deeply examine how these interconnections serve in pursuit of the board’s fundamental purpose of protecting shareholder investment from managerial self-interest. Overall, integrating multi-level factors will offer new insights into the influence of board interlocks on firm strategies on both sides of the partnership. Expanding knowledge of how inter-firm linkages transmit knowledge influential to board decision-making can also improve our understanding of board effectiveness and corporate governance.
Mallory E. Compton and Kenneth J. Meier
Pathologies inherent in democratic political systems have consequences for bureaucracy, and they need to be examined. Limited in time, resources, and expertise, elected officials turn to bureaucratic institutions to carry out policy goals but all too often give public agencies too little support or too few resources to implement them effectively. In response to the challenges imposed by politics, public agencies have sought organizational solutions. Bureaucracies facing shortages of material resources, clear goals, representation of minority interests, or public trust have in recent decades adopted less hierarchical structures, exploited networks and privatization, and taken a representative role. In other words, the evolution of postbureaucratic governance institutions is in part a consequence of political incentives. Efforts to diagnose and resolve many of the shortcomings attributed to bureaucracy therefore require an accounting of the political processes shaping the context in which public managers and bureaucrats operate.
Asli M. Colpan and Alvaro Cuervo-Cazurra
Business groups are an organizational model in which collections of legally independent firms bounded together with formal and informal ties use collaborative arrangements to enhance their collective welfare. Among the different varieties of business groups, diversified business groups that exhibit unrelated product diversification under central control, and often containing chains of publicly listed firms, are the most-studied type in the management literature. The reason is that they challenge two traditionally held assumptions. First, broad and especially unrelated diversification have a negative impact on performance, and thus business groups should focus on a narrow scope of related businesses. Second, such diversification is only sustainable in emerging economies in which market and institutional underdevelopment are more common and where business groups can provide a solution to such imperfections. However, a historical perspective indicates that diversified business groups are a long-lived organizational model and are present in emerging and advanced economies, illustrating how business groups adapt to different market and institutional settings. This evolutionary approach also highlights the importance of going beyond diversification when studying business groups and redirecting studies toward the evolution of the group structure, their internal administrative mechanisms, and other strategic actions beyond diversification such as internationalization.
The complexity of modern careers requires personal agency in managing career development and employability capital as personal resources for career success. Individuals’ employability capital also serves as a valuable resource for the sustainable performance of organizations. Individuals’ ability to proactively engage in career self-management behaviors through the use of a comprehensive range of self-regulatory capabilities, known as career metacapacities, contributes to their employability capital. Organizational career development supports initiatives that consider individuals’ proactivity in light of conditions that influence their motivational states, and availability of personal resources helps organizations benefit from individuals who bring information, knowledge, capacities, and relationship networks (i.e., employability capital) into their work that ultimately contribute to the organization’s capability to sustain performance in uncertain, highly competitive business markets. Career development support practices should embrace the individualization of modern-day careers, the need for whole-life management, and the multiple meanings that career success has for individuals.
Nydia MacGregor and Tammy L. Madsen
A substantial volume of research in economic geography, organization theory, and strategy examines the geographic concentration of interconnected firms, industries, and institutions. Theoretical and empirical work has named a host of agglomeration advantages (and disadvantages) with much agreement on the significance of clusters for firms, innovation, and regional growth. The core assertion of this vein of research is that geographically concentrated factors of production create self-reinforcing benefits, yielding increasing returns over time. The types of externalities (or agglomeration economies) generally fall into four categories: specialized labor or inputs, knowledge spillovers, diversity of actors and activity, and localized competition. Arising from multiple sources, each of these externalities attracts new and established firms and skilled workers.
Along with recent advancements in evolution economics, newer research embraces the idea that the agglomeration mechanisms that benefit clusters may evolve over time. While some have considered industry and cluster life-cycle approaches, the complex adaptive systems (CAS) theory provides a well-founded framework for developing a theory of cluster evolution for several reasons. In particular, the content and stages of complex adaptive systems directly connect with those of a cluster, comprising its multiple, evolving dimensions and their interplay over time. Importantly, this view emphasizes that the externalities associated with agglomeration may not have stable effects, and thus, what fosters advantage in a cluster will change as the cluster evolves. Furthermore, by including a cluster’s degree of resilience and ability for renewal, the CAS lens addresses two significant attributes absent from cyclical approaches.
Related research in various disciplines may further contribute to our understanding of cluster evolution. Studies of regional resilience (usually focused on a specific spatial unit rather than its industrial sectors) may correspond to the reorganization phase associated with clusters viewed as complex adaptive systems. In a similar vein, examining the shifting temporal dynamics and development trajectories resulting from discontinuous shocks may explain a cluster’s emergence and ultimate long-term renewal. Finally, the strain of research examining the relationship between policy initiatives and cluster development remains sparse. To offer the greatest theoretical and empirical traction, future research should examine policy outcomes aligned with specific stages of cluster evolution and include the relevant levels and scope of analysis. In sum, there is ample opportunity to further explore the complexities and interactions among firms, industries, networks, and institutions evident across the whole of a cluster’s evolution.
In a new era of corporate governance defined by increasing shareholder empowerment, scrutiny from external stakeholders, and governance failures, there has been a movement toward redefining corporate governance models and the roles of boards. As a result, researchers and practitioners are left wondering what it means to be an effective board, and how a board can operate in the best interests of a firm’s stakeholders in this current environment. Exploring the expanded roles and demands of directors grounded in shareholder and director primacy debates, as well as reviewing theories and contingencies that link corporate boards to task, group, firm, and enterprise-level outcomes, a research agenda is identified that might better identify the parameters of board effectiveness.
Thomas Donaldson and Diana C. Robertson
Serious research into corporate ethics is nearly half a century old. Two approaches have dominated research; one is normative, the other empirical. The former, the normative approach, develops theories and norms that are prescriptive, that is, ones that are designed to guide corporate behavior. The latter, the empirical approach, investigates the character and causes of corporate behavior by examining corporate governance structures, policies, corporate relationships, and managerial behavior with the aim of explaining and predicting corporate behavior. Normative research has been led by scholars in the fields of moral philosophy, theology and legal theory. Empirical research has been led by scholars in the fields of sociology, psychology, economics, marketing, finance, and management.
While utilizing distinct methods, the two approaches are symbiotic. Ethical and legal theory are irrelevant without factual context. Similarly, empirical theories are sterile unless translated into corporate guidance. The following description of the history of research in corporate ethics demonstrates that normative research methods are indispensable tools for empirical inquiry, even as empirical methods are indispensable tools for normative inquiry.
Erik E. Lehmann
Corporate governance is a recent concept that encompasses the costs caused by managerial misbehavior. It is concerned with how organizations in general, and corporations in particular, produce value and how that value is distributed among the members of the corporation, its stakeholders. The interrelation of value production and value distribution links the ubiquitous technological aspect (the production of value) with the moral and ethical dimension (the distribution of value). Corporate governance is concerned with this link in general, but more specifically with the moral and ethical dimensions of distributing the generated value among the stakeholders. Value in firms is created by firm-specific investments, and the motivation and coordination of value-enhancing activities and investment is protected by the power concentrated at the pyramidal top of the organization. In modern companies, it is the CEO and the top management who decide how to create value and how to distribute it among the relevant stakeholders. Due to asymmetric information and the imperfect nature of markets and contracts, adverse selection and moral hazard problems occur, where delegated (selected) managers could act in their own interest at the costs of other relevant stakeholders.
Corporate governance can be understood as a two-tailed concept. The first aspect is about identifying the (most) relevant stakeholder(s), separating theory and practice into two different and conflicting streams: the stakeholder value approach and the shareholder value approach. The second aspect of the concept is about providing and analyzing different mechanisms, reducing the costs induced by moral hazard and adverse selection effects, and balancing out the motivation and coordination problems of the relevant stakeholders. Corporate governance is an interdisciplinary concept encompassing academic fields such as finance, economics, accounting, law, taxation, and psychology, among others.
As countries differ according to their institutions (i.e., legal and political systems, norms, and rules), firms differ according to their size, age, dominant shareholders, or industries. Thus, concepts in corporate governance differ along these dimensions as well. And while the underlying characteristics vary in time, continuously or as a result of an exogenous shock, concepts in corporate governance are dynamic and static, offering a challenging field of interest for academics, policymakers, and firm managers.
Margarethe F. Wiersema and Joseph B. Beck
Corporate or product diversification represents a strategic decision. Specifically, it addresses the strategic question regarding in which businesses the firm will compete. A single-business company that expands its strategic scope by adding new businesses becomes a diversified, multibusiness company. The means by which a company expands its strategic scope is by acquiring businesses, investing in the development of new businesses, or both. Similarly, an already diversified firm can reduce its strategic scope by divesting from or closing businesses.
There are two fundamentally different types of corporate diversification strategy, depending on the interrelatedness of the businesses in the company’s portfolio: related diversification and unrelated diversification. Related diversification occurs when the businesses in the company’s portfolio share strategic assets or resources, such as technology, a brand name, or distribution channels. Unrelated diversification occurs when a company’s businesses do not share strategic assets or resources and do not have interrelationships of strategic importance. Companies can pursue both types of diversification simultaneously, and thus have a portfolio of businesses both related and unrelated. In addition to variations in the type of diversification, companies can vary in the extent of their diversification, ranging from business portfolios with very limited diversification to highly diversified portfolios.
Decisions regarding the diversification strategy of a firm represent major strategic scope decisions since they impact the markets and industries in which the company will compete. Companies can increase or reduce their level of diversification for a variety of reasons. Economic motives, for example, include the pursuit of economies of multiproduct scale and scope, whereby per-unit costs may be lowered through the increase in sales volume or other fixed-cost reducing benefits associated with growth through diversification. In addition, companies may diversify for strategic reasons, such as enhancement of capabilities or superior competitive positioning through entry into new product markets. Similarly, economic and strategic reasons can motivate the firm to refocus and reduce its level of diversification when the strategic and economic rationales for being in a particular business are no longer justified.
The performance consequences of corporate diversification can vary, depending on both the extent of the firm’s diversification and the type of diversification. In general, research indicates that high levels of diversification are value-destroying due to the integrative and complexity-associated costs that administering an extremely diversified portfolio imposes on management. Nevertheless, related diversification, where the company shares underlying resources across its business portfolio (e.g., brand, technology, and distribution channels), can lead to higher levels of performance than can unrelated diversification, due to the potential for enhanced profitability from leveraging shared resources. Corporate diversification was a major U.S. business trend in the 1960s. During the 1980s, however, pressure from the capital market for shareholder wealth maximization led to the adoption of strategies whereby many companies refocused their business portfolios and thus reduced their levels of corporate diversification by divesting unrelated businesses in order to concentrate on their predominant or core business.
Michael D. Mumford, Robert Martin, and Samantha N. Elliott
Creative thinking is the basis for innovation in firms. And the need for strategy-relevant innovations has generated a new concern with how people go about solving the kinds of problems that call for creative thought. Although many variables influence people’s ability to provide creative problem solutions, it is assumed the ways in which people work with or process knowledge provides the basis for successful creative problem-solving efforts. Additionally, there has been evidence bearing on the processing activities that contribute to creative problem solving. It is noted that at least eight distinct processing activities are involved in most incidents of creative problem solving: (1) problem definition, (2) information gathering, (3) concept selection, (4) conceptual combination, (5) idea generation, (6) idea evaluation, (7) implementation planning, and (8) adaptive monitoring. There are strategies people employ in effective execution of each of these processes, along with contextual variables that contribute to, or inhibit, effective process execution. Subsequently, there are key variables that operate in the workplace that contribute to, or inhibit, effective execution of these processing operations. These observations, of course, lead to implications for management of innovative efforts in firms.
Elissa L. Perry and Aitong Li
Although defined in numerous and sometimes inconsistent ways in the literature, diversity climate can be described as employees’ shared perceptions of the extent to which their organization values diversity as reflected in the policies, practices, and procedures that the organization rewards, supports, and expects. Diversity climate studied at the individual level (individual perceptions of the impact of the work environment on the individual’s own well-being) is referred to as psychological climate. When it is conceived of and studied at the group or organization level (employees’ shared perceptions of their work environment aggregated to the unit level), it is referred to as group- or organizational-level climate. Two consistent criticisms raised in recent reviews continue to plague diversity climate research. These can most simply be stated as a lack of clarity about what diversity climate is and is not, and inconsistency in how diversity climate is measured and aligns (or does not) with how it has been conceptualized. Despite these criticisms, there is evidence that diversity climate can positively impact individuals’ (especially minority group members’) work-related attitudes (e.g., organizational commitment, satisfaction) and unit-level outcomes (e.g., performance). As a result, diversity climate is both practically relevant to organizations and conceptually meaningful to researchers.