Showing papers by "IE University published in 2017"

Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy

Abstract: Do firms gain environmental legitimacy when they conform to external expectations regarding the natural environment? Drawing on institutional logic and signaling theory, we investigate sources of heterogeneity in the impacts of environmental actions on environmental legitimacy. Longitudinal data (1997–2001) about 325 publicly traded U.S. firms in polluting industries support the notion that environmental actions help firms gain environmental legitimacy. However, some actions instead can harm this legitimacy if environmental performance deteriorates and the firm is subject to intense scrutiny from nongovernmental organizations. Thus, an important contribution of this research is to identify conditions under which greenwashing can backfire.

The impact of risk management on the frequency of supply chain disruptions: A configurational approach

Abstract: The purpose of this paper is to develop a taxonomy of how companies implement Supply Chain Risk Management (SCRM) in terms of two fundamental approaches: the first emerging from internal actions and operations within companies, and the other involving inter-organizational actions undertaken with external supply chain partners. This taxonomy aims to predict firms’ performance with regard to the frequency of supply chain disruption.,A cluster analysis of survey data from 908 firms representing 69 countries together with an analysis of variance.,The authors’ analysis demonstrates a clear structure of four different patterns of how companies manage supply chain risks: passive, internal, collaborative, and integral. The authors found that firms pursuing an inter-organizational orientation (collaborative and integral) face the lowest levels of supply chain disruption. On the contrary, strategies which simply concentrate on having greater control of internal operations are not vigorous enough to stop the cascade effect of a disruption at the supply chain level. Furthermore, the excellent performance of integral SCRM strategies also suggests that collaboration between buyers and suppliers ensures the efficacy of internal business continuity plans and security procedures.,Managers should play an active role in making sure that supply chain management and risk management disciplines evolve together. Obviously, when an exogenous event results in a supply chain disruption, a firm will try to put its operations under control through internal capabilities. But SCRM strategies designed proactively in advance with relevant partners are even more beneficial.,First, previous studies have limited the analysis of SCRM mainly to its reactive internal initiatives within a firm. This paper takes the SCRM literature beyond the internal focus by considering both internal and inter-organizational efforts and, more importantly, developing a single configurational model to analyze modes of interaction. Second, there is little empirical evidence showing the current situation of SCRM. Research in SCRM has been more qualitative than empirical, especially in global coverage. The research tackles this gap and, based on a broader scope of the samples the empirical findings show a higher level of generalizability.

Taking care of business: the impact of culture and gender on entrepreneurs’ blended value creation goals

Abstract: We examine entrepreneurs’ economic, social, and environmental goals for value creation for their new ventures. Drawing on ethics of care and theories of societal post-materialism, we develop a set of hypotheses predicting patterns of value creation across gender and countries. Using a sample of 15,141 entrepreneurs in 48 countries from the Global Entrepreneurship Monitor, we find that gender and cultural values of post-materialism significantly impact the kinds of value creation emphasized by entrepreneurs. Specifically, women entrepreneurs are more likely than men to emphasize social value goals over economic value creation goals. Individuals who start ventures in strong post-materialist societies are more likely to have social and environmental value creation goals and less likely to have economic value creation goals. Furthermore, as levels of post-materialism rise among societies, the relationship between value creation goals and gender changes, intensifying both the negative effect of being female on economic value goals and the positive effect on social value goals. In other words, post-materialism further widens the gender gap in value creation goals.

Entrepreneurial Orientation, Legitimation, and New Venture Performance

Abstract: Research summary We integrate research on entrepreneurial orientation and new venture legitimacy. To create value from an entrepreneurial orientation, firms need to possess necessary resources and capabilities, which new ventures often lack due to their liability of newness. We posit that legitimation helps overcome these constraints by enabling new ventures to acquire necessary resources and develop essential capabilities, and argue that entrepreneurial orientation and legitimation jointly enhance new venture performance. We analyzed data on 149 new ventures and found support for this argument. This study opens new research avenues by extending and incorporating explanations and predictions of entrepreneurial orientation and legitimation, two areas that largely have been considered as independent of each other. Managerial summary In the absence of a clear connection between legitimacy and economic returns, entrepreneurs and managers may not give strategic priority to legitimation. We find that new ventures with an entrepreneurial orientation as demonstrated by innovative, proactive, and risk-taking decisions and behaviors can achieve superior performance if they also actively undertake legitimation efforts to meet stakeholders’ cognitive, regulative, and normative expectations. This study suggests that neglecting legitimation as an important competitive tool may be a greater mistake than previously has been realized, especially for new ventures with an entrepreneurial orientation. Copyright © 2017 Strategic Management Society

Popularizing a Management Accounting Idea: The Case of the Balanced Scorecard

Abstract: We explore how the Balanced Scorecard (BSC ), as a management accounting technique, was developed and marketed as a general management practice. Drawing on actor network theory (ANT ), we analyze interviews with key actors associated with the BSC , insights gained from attending BSC training workshops, and other documentary evidence to construct a history of the BSC . Our historical analysis offers theoretical tools to understand how the various features of the accounting technique were translated and transformed, that is, shaped and solidified. This translation entailed processes of modification, labelling, framing, and specification of abstract categories and cause‐effect relations. We also examine the networks and associations that both shape the form of the BSC and mobilize the interests of various constituencies around it to produce what can be regarded as a global management technology. Finally, we highlight the strategies and actions used to maintain control of this technique through its continuous reinvention, and, by doing so, we emphasize the idea of strategic agency.

Exploring Corporations’ Dialogue About CSR in the Digital Era

Abstract: In this paper, we examined how companies are employing new media to engage in dialogue with their stakeholders about corporate social responsibility (CSR)-related matters. Through a qualitative theory-building study conducted in three stages over a period of 2 years, we discovered that corporations with reputations for CSR have built virtual spaces for dialogue about CSR, but that these spaces remain empty of dialogue. Our theory-building model highlights how the mix of four dialogue processes (i.e. directing, moderating, building open-scripts, and crowd-sourcing multi-dialogue) may allow companies to create open dialogue about CSR initiatives and avoid leaving these spaces empty. Contributions for CSR studies are discussed.

Financial Integration and Liquidity Crises

Abstract: This paper analyzes the effects of financial integration on the stability of the banking system. Financial integration allows banks in different regions to smooth local liquidity shocks by borrowing and lending on a world interbank market. We show under which conditions financial integration induces banks to reduce their liquidity holdings and to shift their portfolios toward more profitable but less liquid investments. Integration helps reallocate liquidity when different banks are hit by uncorrelated shocks. However, when a correlated (systemic) shock hits, the total liquid resources in the banking system are lower than in autarky. Therefore, financial integration leads to more stable interbank interest rates in normal times but to larger interest rate spikes in crises. These results hold in a setup in which financial integration is welfare improving from an ex ante point of view. We also look at the model’s implications for financial regulation and show that, in a second-best world, financial integrati...

Reasoning by Analogy and the Progress of Theory

Abstract: Many influential theories of organization rest on an analogical foundation: we think of the organization as if it were a governance structure, a nexus of contracts, a social network, or an informat...

Policy risk, Strategic decisions and contagion effects:Firm‐specific considerations

Abstract: Research summary: In this article, we investigate the firm-specific environment and its impact on firm strategy focusing on adverse changes in the policy environment and their effect on divestitures. We argue that experiencing a negative change in the firm-specific policy environment causes firms to reassess their exposure to policy risk and their ability to manage their policy environment, making them more likely to divest. Operationalizing negative shifts in the firm-specific policy environment through formal policy disputes between firms and governments, we find that following a dispute, firms are more likely to divest both in the country where the dispute occurs and in other countries in the same region. However, the impact of disputes on divestitures is firm specific, applying only to firms directly involved in a dispute. Managerial summary: What is the impact of change in the firm-specific environment on firm strategy? We argue that when firms directly experience a negative change in their policy environment that is specific to them, they negatively reassess their exposure to policy risk and their ability to manage their policy environment, which makes them more likely to undertake a divestiture. We analyze formal disputes between firms and governments that arise from adverse changes in policy and find that, following a dispute, firms are more likely to divest in the country where the dispute occurs and in other countries in the same region. However, the impact of disputes on divestitures is firm specific as it applies only to firms directly involved in a dispute. Copyright © 2016 John Wiley & Sons, Ltd.

Portfolio Entrepreneurship as a Mixed Gamble: A Winning Bet for Family Entrepreneurs in SMEs

Abstract: We conceptualize portfolio entrepreneurship (PE) decisions as a “mixed gamble” in which family entrepreneurs weigh potential gain and loss outcomes and analyze the unique socioemotional wealth trad...

Incidence and predictors of suicide attempts in bipolar I and II disorders: A 5-year follow-up study.

Abstract: Objectives Few long-term studies on bipolar disorder (BD) have investigated the incidence and risk factors of suicide attempts (SAs) specifically related to illness phases. We examined the incidence of SAs during different phases of BD in a long-term prospective cohort of bipolar I (BD-I) and bipolar II (BD-II) patients, and risk factors specifically for SAs during major depressive episodes (MDEs). Methods In the Jorvi Bipolar Study (JoBS), 191 BD-I and BD-II patients were followed using life-chart methodology. Prospective information on SAs of 177 patients (92.7%) during different illness phases was available up to 5 years. The incidence of SAs and their predictors were investigated using logistic and Poisson regression models. Analyses of risk factors for SAs occurring during MDEs were conducted using two-level random-intercept logistic regression models. Results During the 5 years of follow-up, 90 SAs per 718 patient-years occurred. The incidence was highest, over 120-fold higher than in euthymia, during mixed states (765/1000 person-years; 95% confidence interval [CI] 461−1269 person-years), and also very high in MDEs, almost 60-fold higher than in euthymia (354/1000 person-years; 95% CI 277−451 person-years). For risk of SAs during MDEs, the duration of MDEs, severity of depression, and cluster C personality disorders were significant predictors. Conclusions We confirmed in this long-term study that the highest incidences of SAs occur in mixed and major depressive illness phases. The variations in incidence rates between euthymia and illness phases were remarkably large, suggesting that the question “when” rather than “who” may be more relevant for suicide risk in BD. However, risk during MDEs is likely also influenced by personality factors.

The Lure of Work-Life Benefits: Perceived Person-Organization Fit As A Mechanism Explaining Job Seeker Attraction To Organizations

Abstract: Drawing from Person-Organization (P-O) fit theory, we explain how the provision of work-life benefits (WLBs) increases job seeker attraction to organizations during the early recruitment stage because of a perceived value fit between job seekers and the organization. Our results from an experimental study using a sample of 189 MBA students who belonged to two generational groups (Millennials and Gen X-ers) and were seeking employment during a period of economic recession support our expectations. We found that job seekers develop higher P-O fit perceptions for organizations that supplement standard pay with WLBs in their recruitment materials in comparison to organizations that supplement standard pay with healthcare benefits or offer only standard pay. In turn, such organizations are assessed as more attractive prospective employers. We also found that generational group moderated the path between P-O fit and job seeker attraction such that Millennial job seekers were more likely to be attracted towards organizations with which they had strong fit perceptions than their Gen X counterparts. Theoretical and practical implications of our findings are discussed

Team Familiarity and Productivity in Cardiac Surgery Operations: The Effect of Dispersion, Bottlenecks, and Task Complexity

Abstract: Fluid teams are commonly used by a variety of organizations to perform similar and repetitive yet highly critical and knowledge-intensive tasks. Such teams operate for a limited time, after which they dissolve and some of their members may work together again as part of another team. Using a granular data set of 6,206 cardiac surgeries from a private hospital in Europe over seven years, our study offers a new and detailed account of how team familiarity i.e., shared work experience influences team productivity. We highlight the role of nuanced team composition dynamics beyond average team familiarity. We observe that teams with high dispersion of pairwise familiarity exhibit lower team productivity, and the existence of a "bottleneck-pair" may significantly hinder overall knowledge transfer capability, thus, productivity of fluid teams. In addition, we find that the higher the percentage of familiarity gained from complex tasks, the higher the productivity of the team. Finally, our results suggest that the positive effect of average team familiarity on productivity is enhanced when performing more complicated tasks. Our study provides new operational insights to improve productivity of fluid teams with better team composition strategies.

Audit committees’ social capital and financial reporting quality

Abstract: We draw on social capital theory to examine the relationship between audit committee (AC) members’ social capital and financial reporting quality. Using US data for the period 2001–2010, our results suggest that non-AC directors’ social capital does not appear to be relevant to financial reporting quality. As far as AC members are concerned, our findings show a negative relationship between their social capital and financial reporting quality, suggesting a ‘dark side’ to social capital. Specifically, we find that sitting in multiple ACs (centrality) has a negative impact on reporting quality only for those AC members designated as financial experts. When other proxies for social capital are considered (connectedness, brokerage position and strong ties), our results show that the quality of financial reporting significantly decreases with the social capital of non-financial experts sitting in the AC. We contribute to prior research by: (i) relying on social capital theory, which is widely neglected in acco...

Place branding strategies in the context of new smart cities: Songdo IBD, Masdar and Skolkovo

Abstract: The expanding networks of information and communication technology (ICT) enabling the connection of places, people and objects shape the reality of urban development nowadays. Although the spread of digitally led urban innovations remains uneven around the world, some places have started a progressive transition towards smart city format. Two dimensions are usually highlighted among the main features of smart urban development. The reliance on the intensive use of ICT to address the most challenging issues of urban planning is emphasised from a technological perspective. On the other hand, a more holistic scenario enhances citizens’ inventiveness, collective intelligence and knowledge-based urban development. The impact of ICT on urban development and representation is particularly remarkable when an entire new city is built following a smart city approach. Three relevant examples would be Songdo International Business District (Songdo IBD) City in South Korea, Masdar City in Abu Dhabi and Skolkovo City in Russian Federation, built to challenge the status quo of urban dynamics. Through a case study approach, this paper explores the most salient features of the place branding strategy of these new smart cities, focussed on creating an exclusive and technology-led business innovation ecosystem for highly skilled residents.

Information technology outsourcing: asset transfer and the role of contract

Abstract: Information technology outsourcing (ITO) is the predominant mode of acquiring information systems services, providing clear evidence that the economics of service delivery favor external service providers over in-house information systems departments. An interesting feature of many large ITO arrangements is that the production assets necessary for service delivery are transferred to the vendor. The argument in favor of such asset transfers, based in property rights theory, is that they are necessary to incentivize vendors to continue to invest in transaction-specific assets to improve service. On the other hand, transaction cost economics predicts that transferring such assets increases bilateral dependence and will elevate the risk of post-contractual opportunistic behavior. The contracting challenge in this context is to specify the terms of exchange to achieve the client's objectives for outsourcing while managing the risks of asset transfer. We develop a theoretical framework to derive propositions on contract design in the presence of asset transfer. We identify the importance of contractual clauses that mitigate the associated risks and the complementary role of compensation mechanisms, specifically the pricing scheme and IT-related performance incentives. We have compiled a unique dataset that allows us to test our propositions by comparing ITO contracts that include asset transfer to those that do not. We find that asset transfer does significantly affect contract design, manifested in the inclusion of clauses that protect both clients and vendors. Outsourcing objectives are more likely to be met when contracts include compensation mechanisms that complement asset transfer.

Rewards for Patents and Inventor Behaviors in Industrial Research and Development

Abstract: This study investigates the effects of rewards in a research and development (R&D) setting in which employees’ inventive efforts lead to patented inventions. Pay for performance (PFP) for inventions is associated with two challenges: Low-quality inventions may be rewarded (false positives), and high-quality inventions may be overlooked (false negatives). Building on previous findings regarding the motivational and informational effects of rewards, we use social identity theory to predict that different types of inventors react differently to such false positive and false negative information. Specifically, we hypothesize that PFP that produces false positives has detrimental effects on corporate inventors with a taste for science, who are motivated by scientific prestige, reputation, and intellectual curiosity. The empirical results from survey data related to 3,995 inventor–patent pairs show that, for this particular group of inventors, false positives are associated with reduced effort in research activ...

Tether or Stepping Stone? The Relationship between Perceived External Reputation and Collective Voluntary Turnover Rates:

Abstract: Signaling theory suggests that resources such as firm reputation can send multiple signals that create dual pressures on stakeholders. These tensions are apparent when examining the relationship be...

Just about money? CEO satisfaction and firm performance in small family firms

Abstract: This paper examines how family ownership and family ties influence the relative importance of economic and non-economic goals on the CEO’s satisfaction with the firm. Using a sample of small high-tech family and non-family firms, we show that the influence of past firm economic performance on CEO satisfaction is weaker in the case of CEOs leading a family firm. Our results also suggest that this influence becomes weaker as the family firm transitions into subsequent generations. However, contrary to our expectations, we were not able to find a differential effect of firm performance on CEO satisfaction between CEOs who belong to the controlling family and those who do not.

Accounting historians engaging with scholars inside and outside accounting: Issues, opportunities and obstacles

Abstract: Originating in a panel presentation at the eighth Accounting History International Conference, this study offers a reflection on the issues, opportunities and obstacles which may arise when account...

A metatheoretical framework of diversity in teams

Abstract: In the last 22 years, research on diversity in teams has been propelled by information processing and social categorization theories, and more recently, by theories of disparity/(in)justice and acc...

Mortgage Supply and Housing Rents

Abstract: We show that a contraction of mortgage supply after the Great Recession has increased housing rents. Our empirical strategy exploits heterogeneity in MSAs' exposure to regulatory shocks experienced by lenders over the 2010-2014 period. Tighter lending standards have increased demand for rental housing and have led to higher rents, depressed homeownership rates and an increase in rental supply. Absent the credit supply contraction, annual rent growth would have been 2.1 percentage points lower over 2010-2014 in MSAs where lending standards rose from their 2008 levels.

Individuals’ Considerations When Responding to Competing Logics: Insights From Identity Control Theory

Abstract: The question how individuals experience and respond to competing logics has recently received intensified attention, but current theories remain incoherent, and research is restricted to situations...