Management and Strategy - HKU Business School

11 June

Getting Ahead by Pleasing Stakeholders? Linking Rosy Strategic Decision-Making to Promotion in Investment Banks.

SPEAKER

Prof. Mathew Hayward
Professor
Monash University

ABSTRACT

We examine whether and how over-optimistic decision-making affects professionals’ short-term promotion prospects. Specifically, we study whether over-optimistic professionals are more likely to be promoted than more accurate and pessimistic ones. Because decision-making arises in a social context, we further examine institutional factors that moderate the link between over-optimistic judgment and promotion. Analyzing hand and machine-collected LinkedIn observations on sell-side security analysts’ promotions, we find that those making upside or optimistic errors in judgment tend to be promoted relative to those who are accurate (i.e., realists) and those who make downside errors in judgment (i.e., pessimists). Promotion tends to be even more likely when analysts comply with the normative expectations of their industry.

20 May

From Overwhelmed to Empowered: How Artificial Intelligence Augments Managers in Employee Training

SPEAKER

Prof. Nan Jia
Dean’s Associate Professor in Business Administration
Associate Professor of Strategic Management
Marshall School of Business
University of Southern California

ABSTRACT

One in five employees at companies in the United States manages others. Effective management boosts workplace productivity and enhances employee well-being, but modern managers are increasingly overwhelmed by the growing organizational demands for various managerial skills. Artificial intelligence (AI) can provide valuable assistance, especially in analyzing workplace data to assess employee performance and to generate feedback for employees, a traditional managerial responsibility. Our randomized field experiment reveals two significant ways AI can enhance managerial effectiveness in employee training. First, we found that employees receiving AI-generated feedback via managers performed better than those trained solely by managers. This improvement was attributed to the superior quality of AI feedback. Second, the success of AI augmentation varied with managers’ leadership styles. Employees with managers demonstrating a transformational leadership style, characterized by strong interpersonal relationships, responded better to AI-assisted training. This leadership style led employees to value and adopt AI feedback more fully. Furthermore, our qualitative analysis indicated that the impact of managerial relationships only became significant when employees were uncertain about the feedback’s quality. Employees trained with AI and transformational leaders also reported a more positive workplace attitude. Our findings suggest that AI, when integrated with effective leadership, can not only boost productivity but also enhance employee well-being.

09 May

Seeking Credibility: Impartial Courts, Geopolitics, and Location Choice for Patent Litigation

SPEAKER

Prof. Minyuan Zhao
Associate Professor of Strategy
Olin Business School
Washington University in St. Louis

ABSTRACT

Multinational enterprises (MNEs) often engage in “forum shopping,” i.e., choosing courts that offer a good chance of winning while delivering an effective message to potential infringers worldwide. With heightened geopolitical tensions, however, litigation outcomes are often about the identities of the litigants rather than the merits of the cases, compromising their effectiveness in global deterrence. Thus, for firms originating from one antagonist country and suing competitors from the other, impartial courts immune from political pressures are particularly appealing. Using a large sample of global patent litigation cases, we find supportive evidence that the importance of court impartiality in firms’ litigation location decisions is enhanced when the geopolitical tension between litigants’ home countries increases, and the effect is weaker for industries with country-specific regulatory bodies.

25 April

Mastering Anticipatory Impression Management in Earnings Conference: Motivation, Casting, and Market Reactions

SPEAKER

Prof. Helen Hu
Professor of Strategic Management
University of Melbourne

ABSTRACT

This study investigates how Chinese listed firms may use earnings conferences for the purpose of anticipatory impression management (AIM) to proactively build a positive image before the disclosure of financial misconduct. The specific event timeline—after committing financial misconduct but prior to regulators’ misconduct announcement—allows us to predict whether the focal firm uses earnings conferences as an AIM tactic. Additionally, the number of earnings conferences will increase with the severity of the misconduct. Moreover, we unfold the mechanism that shapes the qualitative information delivered through AIM conferences, with a particular emphasis on casting, i.e., the attendance of independent directors. This casting depends on the independent directors’ AIM value for the focal firm and their monitoring capabilities in detecting financial misconduct. Lastly, we posit that AIM conferences will buffer investors’ perceptions of negative events, positively influencing market reactions to misconduct announcements. Drawing on data from all Chinese-listed firms that committed financial misconduct from 2016 to 2020, we identified 122 AIM conferences and provided evidence for our hypotheses.

08 April

CEO Contract Length and Contract Renewal: Impression Management of CSR Engagement

SPEAKER

Prof. Guoli Chen
Professor of Strategy
INSEAD

ABSTRACT

We examine the implications of chief executive officer (CEO)’s initial contract length for corporate social responsibility (CSR). We posit that, faced with greater time pressure to demonstrate their abilities, CEOs with shorter initial contract lengths are more likely than other CEOs to engage in impression management by making CSR efforts to impress their boards of directors. While CSR engagement generally enhances the probability of the CEO’s contract renewal, this effect is particularly strong for CEOs with shorter contracts. Nevertheless, firms with less busy boards are less likely than firms with busy boards to renew CEO contracts based on CSR efforts. Using a sample of U.S. firms with new CEO appointments between 1990 and 2017, we provide empirical evidence to support our theory and hypotheses. Our results are robust to a series of additional analyses, including using the U.K.’s Corporate Governance Code reform as an exogenous shock to address potential endogeneity issues. We also find that CEOs with shorter initial contracts are more likely to mention CSR key words in conference calls and engage in more visible CSR. We discuss our contribution to the CEO employment contract, CSR and corporate governance literature.

05 April

The Institutional Origins of the Startup Gender Gap: Evidence from a Regression Discontinuity-in-Time Approach

SPEAKER

Prof. Olenka Kacperczyk
Professor of Strategy and Entrepreneurship
London Business School

ABSTRACT

Women remain underrepresented not only as startup founders but also as joiners. However, limited understanding persists regarding the sources of this disparity. Traditional explanations that focus on individuals and their preferences fail to fully account for the emergence of the gender gap. Shifting focus to institutions, we examine the regulatory origins of women underrepresentation among new venture recruits. Specifically, we theorize that stringent employment protection laws that rachet up termination costs, will diminish women’s chances because startups, compared to incumbents, are less willing to take risks on women. However, when institutional protection becomes less restrictive, allowing for low-cost probationary trials, women’s likelihood of being hired by a startup rather than an incumbent increases more than men’s, potentially narrowing the startup gender gap. Through an analysis of Portuguese registry data from 2009 to 2013 and the application of the Regression in Time Discontinuity Design, we provide support for our assertions. Following the implementation of a reform that reduces the cost of terminating employees, women’s relative chances to join startups relative to joining incumbents increase, especially when firms are provided with scant informational cues for evaluating prospective hires. Overall, our study documents institutional origins of gender disparities in startup hires, while also emphasizing how institutional change can help increase women’s representation among startup hires.

02 April

To Greener Pastures They Go? Employee Responses to Corporate Social Irresponsibility

SPEAKER

Prof. Forrest Briscoe
Professor of Management
Smeal College of Business
The Pennsylvania State University

ABSTRACT

Employees are attracted to firms with socially responsible records, but are they willing to leave when their employer violates environmental or social norms? We theorize that stakeholder violations cause employees to revise how they see their employer such that they disassociate and become more willing to leave their employer after stakeholder violations. We further suggest that an employee’s existing association with their organization and the employer’s record for social responsibility moderate this relationship, as both shape how employees process their employer’s stakeholder violations. Finally, we posit that employees who leave their employer after stakeholder violations will join organizations with records of fewer stakeholder violations. We test our ideas using data on employee departures in 761 of the largest U.S. public companies from 2013 to 2020, constructed from detailed employee job history records. We find considerable support for our theory, showing that violations equivalent to 5% of annual revenues translate into a 4.7% increase in employee departures. This study extends research on the human capital consequences of corporate social (ir)responsibility.

27 March

Privilege and Prejudice: Shareholder Primacy and the Relevance of Social Class Backgrounds for CEO Contenders’ Selection Prospects

SPEAKER

Prof. Abhinav Gupta
Professor of Management
Foster School of Business
The University of Washington

ABSTRACT

Research has found that contenders from upper-class backgrounds are favored for CEO positions over those from humbler origins. However, in the decades since the last analysis was conducted, Corporate America has undergone significant changes that have institutionalized shareholder primacy as the dominant organizing principle. This study examines the implications of these macro-institutional changes. We begin with anticipating a steady amplification of upper-class bias in CEO selection since the 1970s and then examine how inter-firm differences in conformity to shareholder primacy correspond to the heightening of upper-class bias. We hypothesize that firms that have espoused commitment to shareholder primacy in their formal communications or have adopted practices consonant with its tenets will exhibit a stronger preference for upper-class CEO contenders. We then theorize that the influence of shareholder primacy would also manifest through the relative salience of distinct stakeholder groups, hypothesizing that concentrated ownership by affluent shareholders and collective bargaining agreements with unions will amplify and dampen, respectively, the upper-class bias in CEO selection. Using a novel dataset that compares the social class backgrounds of 456 rival candidates who competed in 228 CEO contests from 1970 to 2013, we find considerable support for our hypotheses.

22 March

Network Position and Performance: Advantage or Privilege?

SPEAKER

Prof. Christopher Rider
Thomas C. Kinnear Professor
Associate Professor of Entrepreneurial Studies
Ross School of Business
University of Michigan

ABSTRACT

We reconsider the relationship between an organization’s performance and its position within an inter-organizational network (i.e., the position-performance relationship). We contrast the notion of position as an advantage borne of superior capabilities with that of position as a privilege borne of superior opportunities. We then propose an analytical framework for decomposing the position-performance relationship into positional determinants and consequences. Analyzing data on new firms entering the U.S. venture capital industry’s co-investment network between 2000 and 2017, we reproduce the position-performance relationship associated with advantages in firm capabilities. We also demonstrate that, consistent with privileged opportunities, this relationship is attenuated by accounting for the ascribed (i.e., race, ethnicity, gender) and achieved (i.e., prior education and employment) characteristics of firm personnel at founding. We conclude with a discussion of the assumptions justifying advantage and privilege interpretations of the position-performance relationship.

18 March

On Hiring via Secondary Employment Affiliations

SPEAKER

Prof. Filippo Carlo Wezel
Professor of Management and Organizations
USI Lugano (Switzerland)

ABSTRACT

Our paper establishes the phenomenon of hiring via secondary employment affiliations as an effective practice that organizations leverage when targeting employees of other organizations. Our data-driven exploration of the population of hires among Swedish private sector firms suggests that employers achieve better employment outcomes when hiring via secondary employment affiliations. More specifically larger salary increases, higher chances of promotion, and lower rates of inter-firm mobility are observed among employees hired via secondary employment affiliations compared to conventional hires (i.e., employees hired from another organization without a secondary employment affiliation). These differences appear most pronounced among younger and smaller firms. We elaborate on the conceptual implications of these findings for organizations.