Extending the managerial power theory of executive pay: A cross national test

Contextual factors are typically neglected in both theorizing and empirical tests on executive pay. The fast majority of empirical investigations use data from U.S. based firms. Theoretical implications are typically developed, understood and tested on the basis of the U.S. context. However, the U.S. case is not the world wide standard. Pay in other countries is on average considerably lower and have a different pay mix. The puzzle that from the typical use of agency theory can’t be explained is the variance of pay practices that exist not only within countries but also across countries. This paper extends scholars renewed attention to managerial power theory on executive pay. It sets out how and why institutional theory must be included in explanations of executive pay. On the basis of a sample of executive pay packages from 17 different countries we test the theoretical extensions. Results indicate that institutions interact with firm level determinants of executive pay. Explanations for executive pay should therefore account for the variance of pay practices within and across countries. Highlighting that the institutional embeddedness of pay practices play an important role in finding conclusive explanations of current pay practices.Executive compensation, corporate governance, managerial discretion, power, agency theory, institutional theory

So you call that research? : mending methodological biases in strategy and organization departments of top business schools

We believe that all strategy and organization (SO) scholars should be able to decide for themselves whether to specialize in certain parts of the knowledge cycle or adopt a broader, multi-method view on the scientific process. In a situation of ―methodological pluralism‖, individuals might choose to contribute to the construction of new administrative theories by means of qualitative works like case studies, ethnographies, biographies, or grounded theory studies (e.g., see Denzin and Lincoln, 2000). Others could then specialize in testing these theories by means of experiments, surveys, or longitudinal econometric studies (e.g., see Lewis-Beck, 1987-2004). Again others could combine both approaches in Herculean attempts to conduct high-impact, integrative research with the potential to change the way we understand the field as a whole

Stakeholder integration

This study examines the central contention ofinstrumental stakeholder theory— namely, that firms that breed trust-based, cooperative ties with their stakeholders will have a competitive advantage over firms that do not.Acase study of the introduction ofgenetically modified food products in the Netherlands provided the basis for the empirical analysis. The results support the instrumental stakeholder management thesis, showing that stakeholder integration, through the development ofmutually enforcing relationships with external parties, may result in both organizational learning and societal legitimacy

Strategic Issues Management and Organizational Outcomes

This paper assesses whether strategic issues management activities contribute anything worthwhile to corporate performance by reporting two studies on the issues management strategies of Dutch food firms during the recent introduction of genetically modified ingredients. The first study applied grounded theory methods to assess which issues management activities were used most prominently by industry incumbents. The results indicated that in the present setting companies most significantly relied on stakeholder integration techniques and capability development. The second study used survey data to link these activities to a broad array of organizational outcome variables. The data showed that the adoption of issues management activities positively influenced firm competitiveness as well the relative standing of firms amongst their peers. Key words: issues management; stakeholder integration; capability development; competitive advantage; corporate reputationissues management; stakeholder integration; capability development; competitive advantage; corporate reputation

A Neo-Weberian Theory of the Firm

In the field of organization studies, two types of theories of the firm exist: "why" and "how" theories. "Why" theories use the instrument of comparative analysis to explain why firms exist despite various institutional alternatives. "How" theories, in contrast, employ intra-organizational perspectives to explore how firms meaningfully connect the actions of many interdependently operating individuals to collective outcomes. Since both theories are complements rather than substitutes, the field of organization studies would benefit from the development of a parsimonious theory that integrates "why" and "how" perspectives. It is argued that Max Weber's writings on bureaucracy, and especially his focus on the organization as a set of decision rules (Urteilsgründe), provide an exceptionally meaningful conceptual background structure for such a theory. The paper demonstrates that a Neo-Weberian, decision rule-based theory of the firm can simultaneously provide reasons for the existence of the firm and explore the nature of coordination and cooperation within the firm itself.decision rules, theory of the firm, Weberian sociology, transaction cost economics, knowledge-based perspectives

Cross-sector collaborations in global supply chains as an opportunity structure:How NGOs promote corporate sustainability in China

This paper presents new theory and evidence on how cross-border, cross-sector collaborations affect the global diffusion of sustainable practices. By highlighting the structural characteristics of global supply chains, we study how non-governmental organizations (NGOs) constrained by autocratic political regimes exploit the collaborative opportunities presented by foreign multinational enterprises (MNEs) to enhance local firms’ sustainability performance. Drawing on social movement and resource dependence theories, we propose that global supply chains that tie MNEs to their local partners offer these NGOs a favorable opportunity structure to gain leverage over local firms by establishing MNE–NGO collaborations. This two-step form of leverage helps NGOs increase their influence and legitimacy to facilitate the adoption of sustainable practices by local firms within the MNEs’ global supply-chain networks. Yet, this mediated stakeholder effect decreases when governmentally produced structural conditions reduce the synergistic potential of this opportunity structure: greater priority given to environmental protection by governments substitutes for MNE–NGO collaborations. To test our theory, we examine the relationship between Chinese NGOs’ collaborations with 167 MNEs across 24 countries and these MNEs’ local green supply-chain ratings in the period 2014–2020. This study contributes to the literature on social movements, MNE–NGO collaborations, and sustainability in global supply chains.</p

Country portfolio diversity and firms’ portfolio adjustment decisions:A behavioral perspective

Taking a behavioral perspective, we explore how environmental diversity in a firm's country portfolio shapes managers’ decisions to adjust the portfolio through foreign entries and exits. We argue that country portfolio diversity causes firms to exponentially incur behavioral failures and coordination costs that serve as a distress signal to managers, who therefore increasingly restrict foreign entries and increasingly undertake foreign exits as a function of such diversity. Applying performance feedback theory, we also argue that managers’ tendency to interpret behavioral failures and coordination costs from portfolio diversity as a distress signal – and, hence, their tendency to restrict entries and undertake exits as a function of such diversity – depends on whether their firm performs below or above their aspirations. Using measures of cultural, administrative, geographic and economic portfolio diversity, we find support for our ideas in a panel data analysis of all foreign entries and exits by 232 retailers from 24 countries over the period 2001–2007. Our findings illustrate the value of applying a behavioral lens to explain changes in a firm's full set of international activities.</p

Organizational Identity Formation: Processes of Identity Imprinting and Enactment in the Dutch Microbrewing Landscape1

On the basis of a qualitative study of fifty-nine recently founded Dutch microbreweries, we develop a conceptual model of organizational identity formation. We employ old institutionalism as a theoretical lens to integrate several prior findings concerning the potential sources of organizational identity, such as (a) the identities of authoritative organizational insiders, (b) the preferences and judgments of organizational audiences, and (c) the identities of organizational peers. Each of these sources is shown to critically influence the two most central identity formation processes: the initial imprinting of potential identity attributes upon organizations, and the subsequent enactment of a selection of these by organizational insiders

How cross-cultural experience shapes emerging-market multinationals’ domestic performance after a cross-border acquisition

Although many cross-border acquisitions (CBAs) by emerging-market multinationals (EMMs) are aimed at improving domestic operating performance, the conditions under which such CBAs are the most effective have been underexplored. Drawing on global strategy research on resource recombination and organizational learning, we propose that the effectiveness of domestic-improvement oriented CBAs crucially depends on EMMs' cross-cultural experience, as EMMs apply different forms of resource recombination to such CBAs as a function of that experience, with varying degrees of success. Specifically, we hypothesize a U-shaped relationship between an EMM's cross-cultural experience and the domestic productivity growth it realizes from a domestic-improvement oriented CBA, and that this relationship is steeper for acquisitions involving more intensive integration or relatively larger targets but flatter for acquirers from countries with larger institutional voids. Measuring both the depth and breadth of firms' cross-cultural experience, we obtain support for our hypotheses in a sample of 423 domestic-improvement oriented CBAs by manufacturing firms from 13 emerging economies, thereby shedding light on what determines the effectiveness of such CBAs.</p

TEMPERING TEMPERANCE? A CONTINGENCY APPROACH TO SOCIAL MOVEMENTS’ ENTRY DETERRENCE IN SCOTTISH WHISKY DISTILLING, 1823–1921

What makes social movements successfully deter entry in contested industries? We develop a contingency framework explaining how movements’ success depends on the internal fit between their private and public politics strategies with the tactics of mass and elite mobilization. We also highlight the importance of how these tactics fit with external conditions like the cognitive legitimacy of the industry and industry countermobilization. When movements rely on a private politics strategy to condemn an industry in the eyes of the public, social movement mass will be decisive. Alternatively, when movements use a public politics strategy to push for regulatory intervention, mobilization of elites is crucial. We develop our understanding of external contingency factors by exploring how cognitive legitimacy residuals from local ancestral populations affect both mass-driven private politics and elite-driven public politics, and how national-level industry countermobilization efforts affect elite-driven public politics strategies. We test these ideas in a historical study of the Scottish whisky distilling industry during the rise of temperance movements (1823–1921). We contribute to the social movements literature by showing how movements’ entry deterrence in contested industries depends on the internal fit between their strategies and mobilization tactics, as well as on their engagement with external contingencies.</p