30 research outputs found
The disappearing âDeutschland AGâ â an analysis of blockholdings in German large caps
The German corporate governance system changed substantially over the last ten years. Meanwhile, ownership structures
of German firms changed significantly. The paper examines the phenomenon of changing ownership structures by
studying blockholdings of German large caps between 1997 and 2006. It examines the dynamics of blockholdings by
analyzing the evolution of free float and block trades, where at least 5% of voting rights change hands. Two findings
emerge. First, the authors find that free float increases from 65% in 1997 to 75% in 2006, mainly caused by German
financials and German government entities. Simultaneously, they observe a surprisingly high number of block trades: on
average 1.6 block trades per firm from 1997 to 2006. Second, the authors find that particularly individuals and German
industrials are guarantors for a stable ownership structure. German financials or German government entities as blockowners
increase the free float and the likelihood of block trades. Moreover, block trades are more likely to occur in firms
having foreign investors as owners. The findings are of interest with respect to the evolution of the so-called âDeutschland
AGâ but also with respect to the current anchor shareholder discussion
Der Realoptionsansatz als Controllinginstrument in jungen Wachstumsunternehmen
Auf der Basis des RationalitĂ€tssicherungsansatzes untersucht Kerstin H. FaaĂ die controllingrelevanten Merkmale von JWU sowie die Anforderungen an ein Controllinginstrument in JWU und nimmt anschlieĂend eine umfassende Kosten- und Nutzenanalyse des Realoptionsansatzes vor. Sie leitet einen Handlungsleitfaden fĂŒr die stufenweise Anwendung des Ansatzes ab und zeigt Möglichkeiten zur Nutzung des Wertbeitrages des Realoptionsansatzes als Controllinginstrument in JWU auf
Values and corporate responsibility. CSR and sustainable development
In times when numerous scandals have challenged companiesâ social legitimacy, CSR might serve as a legitimacy booster. But which is the most effective CSR strategy for improving legitimacy? This study examines how corporate social responsibility activity (CSRA) and corporate social responsibility communication (CSRC) impact legitimacy. The empirical results indicate that neither CSRA nor CSRC has a standalone effect; nonetheless, CSR is important for legitimacy: A CSR strategy that combines high levels of CSRA with low levels of CSRC emerges as the most effective for (re)gaining legitimacy, while an opposite strategy that combines low levels of CSRA with high levels of CSRC emerges as the worst
The effectiveness of combinations of CSR talk and action as strategies for (re)gaining legitimacy
A number of scandals have challenged the social legitimacy of companies. Since corporate social responsibility (CSR) is about the pursuit of public and stakeholder objectives beyond the bottom line, a company's level of commitment to such altruistic aims is reflected in its CSR investments. It follows, then, that companies can use CSR as a vehicle for improving their legitimacy in the eyes of stakeholders and of society in general. Little research exists on the effectiveness of CSR strategies for improving legitimacy. The present study addresses this lacuna by examining how CSR communication and activity impact legitimacy. My results indicate that neither CSR communication nor CSR activity have a stand-alone effect on legitimacy. Nonetheless, CSR is important with respect to legitimacy. CSR strategies consisting of different combinations of talk and action are ranked in order of their legitimacy impact, and then this hypothetical ranking is empirically tested against a sample of German companies. Some hypotheses are confirmed while others are rejected. CSR strategies combining low levels of communication with high levels of CSR action emerge as the most effective for (re)gaining legitimacy, while those combining high levels of communication with low levels of action emerge as the worst in this regard
The impact of commitment to the status quo on managerial discretion
Managerial discretion has been frequently used in management literature to explain why top executives have more or less influence on firmsâ success. However, very limited evidence exists on how managerial characteristics shape individual levels of discretion. We empirically analyze how the CEOâs commitment to the status quo (CSQ) affects the personal level of discretion. Our results show that high CSQ reduces the level of managerial discretion. Thus, our study contributes to both the literature on managerial discretion by uncovering rare evidence on its dependence on managerial characteristics and the literature on CSQ by identifying a new dimension of CSQ consequences
Hampering the change: Consequences of the CEO's strategic commitment under managerial discretion
CEOs play a central role for the strategic outcomes of their firms. Although research has provided many insights about the factors determining CEOs' openness toward strategic changes, the consequences of these attitudes have not been sufficiently investigated. To assess the consequences of willingness for change at the CEO level, we used the concepts of Commitment to the Status Quo (CSQ) (i.e., the belief in the enduring correctness of current strategies) and evaluate its effects for strategic persistence under the moderating role of managerial discretion. Our sample is based on 178 publicly traded firms in Germany over 10 years. Our results show that CSQ at the CEO level is crucial for strategic development only in situations of sufficiently high managerial discretion. Namely, a significant impact of the CEO's mental attitude is observable only in scenarios with high product differentiability, high market growth, bad past performance, or small companies
CEO succession and the CEO's commitment to the status quo
Chief executive officer (CEO) commitment to the status quo (CSQ) is expected to play an important role in any firmâs strategic adaptation. CSQ is used often as an explanation for strategic change occurring after CEO succession: new CEOs are expected to reveal a lower CSQ than established CEOs. Although widely accepted in the literature, this relationship remains imputed but unobserved. We address this research gap and analyze whether new CEOs reveal lower CSQ than established CEOs. By analyzing the letters to the shareholders of German HDAX firms, we find empirical support for our hypothesis of a lower CSQ of newly appointed CEOs compared to established CEOs. However, our detailed analyses provide a differentiated picture. We find support for a lower CSQ of successors after a forced CEO turnover compared to successors after a voluntary turnover, which indicates an influence of the mandate for change on the CEOâs CSQ. However, against the widespread assumption, we do not find support for a lower CSQ of outside successors compared to inside successors, which calls for deeper analyses of the insiderness of new CEOs. Further, our supplementary analyses propose a revised tenure effect: the widely assumed relationship of an increase in CSQ when CEO tenure increases might be driven mainly by the event of CEO succession and may not universally and continuously increase over time, pointing to a âwindow of opportunityâ to initiate strategic change shortly after the succession event. By analyzing the relationship between CEO succession and CEO CSQ, our results contribute to the CSQ literature and provide fruitful impulses for the CEO succession literature
Time for future is now - CEO temporal focus and firms' strategic responses to water challenges
This study examines how CEO temporal focus â the extent to which CEOs devotes their attention to the past, present, and future â shapes strategic responses to global grand challenges such as natural resource scarcity. Analyzing water scarcity as one of the global risks of highest concern, we propose that CEO attention to the present and future are critical in addressing the inherent time conflict of managing natural resource scarcity. Using an 11- year panel data set of large- and medium-sized German firms, we find support for our three hypotheses: CEOs who are high in present focus tend to integrate water scarcity in their firmâs strategy only as a pure threat. However, to tackle the grand challenge of water scarcity â in terms of recognizing and implementing valuable water-related business opportunities â they need to be future-oriented. Additionally, we find evidence that future-oriented CEOs shy away from identifying water scarcity as a pure threat without initiating specific mitigating and value-creating strategic actions. These findings contribute to the literature on strategic implications of CEOsâ subjective view of time
Challenging corporate commitment to CSR: Do CEOs keep talking about corporate social responsibility (CSR) issues in times of the global financial crisis?
Purpose
In times of crisis, the fundamental principles of companies erode, leading to strategy shifts. This paper aims to examine whether corporate social responsibility (CSR) is on managementâs agenda in times of crisis, indicating CSR embeddedness into corporate strategy. The focus is on the four pillars of CSR: social, environment, economy and governance.
Design/methodology/approach
Starting points are competing hypotheses based on shareholder and stakeholder theory. Chief executive officer (CEO) letters to shareholders of German HDAX firms from 2003 to 2012 are analyzed by means of computer-aided text analysis.
Findings
The authors find that CEOs talk less about CSR in times of crisis, especially about social and governance issues, indicating that CSR is not fully embedded into corporate strategy, and that, in times of crisis, other aspects gain more importance on managementâs agenda
Forward-looking reporting caught between company performance and the economic situation
This research explores both the impact of company performance and economic situation on the degree of future orientation in company reporting and the textual emphasis within forward-looking statements (company-external vs. company-internal prospective information). The examination is built on annual reports of all German HDAX companies during the period from 2003 to 2012. The results of the regression analysis reveal that high profitability and an improvement in the economy lead to an increased future orientation in company reporting. Hence, companies in an advantageous position send signals of long-lasting positive developments to capital markets. Results concerning the textual emphasis of the companies' forward-looking reporting demonstrate that the degree of forward-looking external statements increases due to company's profitability and to a downturn in the economy. In contrast, the degree of forward-looking internal statements increases due to an improvement in the economic situation. Furthermore, the economic situation positively directs the relation between performance and prospective internal reporting. Thus, forward-looking reporting focuses on the company's environment more strongly only if the economic situation is in decline (problem-oriented attention control) or if the current advantageous position of the company is preserved by the consideration of potential opportunities and risks arising from the company's environment