Getting By With The Advice Of Their Friends: Ceos' Advice Networks And Firms' Strategic Responses To Poor Performance

This paper theorizes that relatively poor firm performance can prompt chief executive officers (CEOs) to seek more advice from executives of other firms who are their friends or similar to them and less advice from acquaintances or dissimilar others and suggests how and why this pattern of advice seeking could reduce firms' propensity to change corporate strategy in response to poor performance. We test our hypotheses with large-sample survey data on the identities of CEOs' advice contacts and archival data on firm performance and corporate strategy. The results confirm our hypotheses and show that executives' social network ties can influence firms' responses to economic adversity, in particular by inhibiting strategic change in response to relatively poor firm performance. Additional findings indicate that CEOs' advice seeking in response to low performance may ultimately have negative consequences for subsequent performance, suggesting how CEOs' social network ties could play an indirect role in organizational decline and downward spirals in firm performance.Business Administratio

Internal Controls After Sarbanes-Oxley: Revisiting Corporate Law\u27s Duty of Care as Responsibility for Systems

Revisiting section 3.4.2 of Clark\u27s Corporate Law (\u27Duty of Care as Responsibility for Systems ) reminds us, however, that the internal controls story actually goes back many decades, and that many of the strategic issues that are at the heart of section 404 have long been contentious. My Article will briefly update Clark\u27s account through the late 1980s and 1990s before returning to Sarbanes-Oxley and rulemaking thereunder by the SEC and the newly created Public Company Accounting Oversight Board ( PCAOB ). My main point builds on one of Clark\u27s but digs deeper. Internal controls requirements, whether federal or state, are incoherent unless and until one articulates clearly for whose benefit they exist, and to what end. There are, in fact, a number of competing articulations. The failure to identify a single and coherent rationale creates significant uncertainty, which has been exploited by players in the legal, accounting, consulting, and information technology fields. Companies are probably spending more time and resources on 404 compliance than a reasonable reading of the legislation and the rules necessarily requires, heavily influenced by those who gain from issuer over-compliance. This rent-seeking compromises the political viability and substantive quality of what is at the heart a beneficial statutory reform

Digital orientation and environmental performance in times of technological change

Digitalization is increasingly seen as a strategic means for firms to yield competitive and environmental advantages. Still, current empirical research does not yet provide ample evidence on how a firm's strategic posture towards digitalization connects to environmental performance. This study examines the link between digital orientation and environmental performance as well as the moderating role of technological turbulence. The natural-resource-based view and literature on strategic orientations provide the conceptual foundations. The hypotheses are tested with data from 515 U.S. Standard and Poor's 500 companies with 2,800 firm observations from 2009 to 2019. The results indicate that, first, a firm's digital orientation has a significant and positive effect on environmental performance and, second, this effect is even more pronounced in technologically turbulent business environments. In sum, our findings suggest that managers can improve their firm's environmental performance and competitive position by increasing the digital orientation within their organizations. We thus add to the literature on the natural-resource-based view by identifying digital orientation as a strategy aligned with the natural environment. Finally, we derive practical implications for managers and policymakers aiming to bring together digitalization and green strategies