Helping or Hindering? How Clients’ Experiences Relate to Their Robo Advisory Use

Firms are increasingly introducing new business models based on digital technologies in knowledge-intensive, risky contexts that were long immune to them. In the financial industry, banks are opening themselves to robo advisory, an algorithm-based service supporting private clients’ investment decisions. Based on our access to a recent data set of 11,302 clients from a leading German robo advisory provider, we have the unique opportunity to analyze how clients react to algorithm-based services in contexts with high uncertainty and risk. Guided by theorical foundations of knowledge and routines, we find clients’ personal and business experiences with the focal bank to both, help and hinder their robo advisory use

Corporate Governance Between Shareholder and Stakeholder Orientation: Lessons From Germany

It is highly debated whether corporations should primarily follow a shareholder or a stakeholder principle. This article addresses the debate with a closer look at Germany's current conceptualization of corporate governance. Despite the introduction of shareholder-oriented practices such as moderate amounts of stock-option pay and more transparent accounting standards, the German corporate governance system is considered to be a prototype of stakeholder orientation. Critics of this system claim that strong obligations to stakeholder interests are a drawback for German firms when competing internationally. However, if applied thoughtfully, an institutionally anchored stakeholder management can also have a number of advantages. We point to selected advantages of a stakeholder-oriented system, including the active integration of stakeholder knowledge, increased commitment for strategic decisions, and a longer term view on performance. Acknowledging potential problems arising from a stakeholder orientation as well as its unique benefits, we call for a modern stakeholder value system

Network Defense: Pruning, Grafting, and Closing to Prevent Leakage of Strategic Knowledge to Rivals

We explore how firms protect themselves from the risks of knowledge spillover to indirectly connected rivals in a network of interorganizational ties. We argue that the safeguards to limit opportunistic behavior by directly linked firms in a dyad, which have been the focus of extant research, are insufficient to overcome extra-dyadic leakage risks. Instead, firms terminate or avoid ties that expose their knowledge to indirectly linked rivals (“pruning” and “grafting”) and embed themselves in dense networks (“closing”) to prevent strategic knowledge spillover. Through a longitudinal study of German board interlocks during 1990–2003, we find that firms are more likely to prune, graft, and close their networks as they accumulate strategic knowledge and as the firms to which they are interlocked increasingly generate indirect ties to competitors, even when controlling for dyadic safeguards discussed by prior research. We capture strategic knowledge by tracking firms’ experience in the former Warsaw Pact countries from immediately after the sudden fall of communism in 1990 until 2003. The study introduces indirect links to rivals as a source of knowledge spillover in networks, shows how firms deal with extra-dyadic risks, and provides a defensive explanation for the evolution of network composition and structure

CEO Wrongdoing: A Review of Pressure, Opportunity, and Rationalization

Wrongdoing, and specifically that which is committed by top executives, has attracted scholars for decades for a number of reasons. Among them, the consequences of wrongdoing are widespread for organizations and the people in and around them. Due to the vast array of consequences, there continues to be new questions and additional scholarly attempts to uncover why it occurs. In this review, we build upon previous efforts to synthesize the body of literature regarding the antecedents of CEO wrongdoing utilizing a framework that sheds light on the status of the literature and where unanswered questions remain. We apply the Fraud Triangle, a framework drawn from the accounting literature, to derive conclusions about what we know about the pressures faced by CEOs, the opportunities afforded to CEOs to commit wrongdoing, and contributing factors to a CEO's ability to rationalize misbehavior. We organize the literature on these conceptual antecedents of CEO wrongdoing around internal (e.g., compensation structure and organizational culture) and external (e.g., shareholder pressure and social aspirations) forces. In doing so, we integrate findings from a variety of disciplines (i.e., accounting, finance, and sociology) but remain focused on management scholarship since the last review of organizational wrongdoing to provide an updated state of the literature. This review offers a clear framework and a common language;it highlights gaps in the literature and specific directions for future research with the ultimate goal of understanding why CEOs engage in wrongdoing

Probleme während der Lehre: Kritikpunkte von ostdeutschen Auszubildenden

In dem Beitrag werden die Ergebnisse aus einer Befragung ostdeutscher Auszubildender über Probleme während der Lehre referiert. Es wird untersucht, wie viele unabhängige Problemdimensionen unterscheidbar sind, welche Aspekte der Lehre besonders häufig kritisiert werden und welche Defizite die Zufriedenheit der Auszubildenden besonders stark beeinträchtigen. Dabei geht es um folgende Problemfelder: (1) betrieblicher Stellenwert der Ausbildung; (2) betriebliche Organisation des Ausbildungsablaufs; (3) Ausbildungsklima, Arbeitsklima und Betriebsklima; (4) Auslastung und Beanspruchung des Auszubildenden; (5) soziale Kontakte. Desweiteren wird gefragt, inwieweit sich in der Kritik der Auszubildenden eine spezifisch ostdeutsche Problematik widerspiegelt und ob sich die Ausbildungsqualität in den alten und neuen Ländern aus der Sicht der Jugendlichen wesentlich unterscheidet. Das bildungspolitisch wichtigste Fazit aus der Untersuchung lautet, daß die allgemeine Ausbildungsqualität von ostdeutschen Jugendlichen keinesfalls ungünstiger eingestuft wird als von westdeutschen Auszubildenden. (ICA

Recent developments in German corporate governance.

This paper provides an overview of the German corporate governance system. We review the governance role of large shareholders, creditors, the product market and the supervisory board. We also discuss the importance of mergers and acquisitions, the market in block trades, and the lack of a hostile takeover market. Given that Germany is often referred to as a bank-based economy, we pay particular attention to the role of the universal banks (Hausbanken). We show that the German system is characterised by a market for partial corporate control, large shareholders and bank/creditor monitoring, a two-tier (management and supervisory) board with co-determination between shareholders and employees on the supervisory board, a disciplinary product-market, and corporate governance regulation largely based on EU directives but with deep roots in the German codes and legal doctrine. Another important feature of the German system is its corporate governance efficiency criterion which is focused on the maximisation of stakeholder value rather than shareholder value. However, the German corporate governance system has experienced many important changes over the last decade. First, the relationship between ownership or control concentration and profitability has changed over time. Second, the pay-for-performance relation is influenced by large shareholder control: in firms with controlling blockholders and when a universal bank is simultaneously an equity- and debtholder, the pay-for-performance relation is lower than in widely-held firms or blockholder-controlled firms. Third, since 1995 several major regulatory initiatives (including voluntary codes) have increased transparency and accountability