The Role of Family Ties in Agency Contracts.

Drawing on data based on the entire population of Spanish newspapers over 27 years (1966-93), this study shows that firm performance and business risk are much stronger predictors of chief executive tenure when a firm's owners and its executive have family ties and that the organizational consequences of CEO dismissal are more favorable when the replaced CEO is a member of the family owning the firm. The study also demonstrates that executives operating under weakly relational (less ambiguous) contracts are held more accountable for firm performance and business risk outcomes, even under nonfamily contracting.

The importance of various work aspects and their organiza tional consequences using Hofstede's cultural dimensions

This study examines the importance employees place on various work aspects according to their nation's relative positioning along Hofstede's four cultural dimension: power distance, individualism, uncertainty avoidance, and masculinity/feminity. Based on a cross-national sample of over 5,000 employees representing 20 countries, the results uncover differential patterns of responses by cultural groupings. The data also suggest that importance and satisfaction interactively affect several organizational consequences critería: job satisfaction, company satisfaction, intent to leave the firm, and organizational cornmitment

The linkages between business strategies and compensation policies using miles and snow's framework

This study links a multidimensional measure of compensatíon strategy to Miles and Snow's (1978) business strategies, and examines their interactive impact on firm performance. The results reported here indicate that a more mechanistic compensation strategy makes a greater contribution to firm performance among defenders, while a more organic compensation strategy makes a greater contribution to firm performance among prospector

Management education in Ibero-America : an exploratory analysis and perspective

Considering the importance of management education for society and the pedagogical inadequacies that pose a threat to academic institutions, this article develops an exploratory approach for evaluating and monitoring the quality of management education within an Ibero American context. Latin American countries and Spain tend to think of themselves as an Ibero American region, so the overview of key issues in management education in this article is pertinent to the entire region. The data is important to policymakers who wish to enhance the quality of higher education, since well trained managers contribute to successful business strategies and superior organizational performance. Unfortunately, there is almost no empirical work available on the performance and effectiveness of higher education in Ibero American countries. Our study helps bridge that gap by providing useful data for evaluating and reflecting upon some of the variables associated with management education in a sample of Ibero American universities.Publicad

The effectiveness of organization-wide compensation strategies in technology intensive firms

This study examines compensation strategies formulated and implemented by high technology firms and their relative effectiveness. Based on a sample of 173 firms, empirical results indicate that the following pay strategies are most appropriate for high technology organizations: A greater emphasis on the individual rather than the job as the unit of analysis, sharing of risks between employees and the firm, an external market orientation, dispersed decision making authority for pay allocation purposes, reliance on aggregate incentives and a longer time orientation

The Role of Family Ties in Agency Contracts

Drawing on data based on the entire population of Spanish newspapers over 27 years (1966-93), this study shows that firm performance and business risk are much stronger predictors of chief executive tenure when a firm's owners and its executive have family ties and that the organizational consequences of CEO dismissal are more favorable when the replaced CEO is a member of the family owning the firm. The study also demonstrates that executives operating under weakly relational (less ambiguous) contracts are held more accountable for firm performance and business risk outcomes, even under nonfamily contracting.Publicad

Executive transitions, firm performance, organizational survival al and the nature of the principal-agent contract

Using an agency framework, this study examines how executive transitions very according to the nature of the relationship between agent and principal, tirm performance, and the executive's relative power. Using the entire population of Spanish newspapers during the period 1966-1993, we tind that declining performance is a precursor of executive changes, but that the impact is much greater for the second person in command. This suggests that entrenchment allows the top executive to be relatively insulated from firm performance, yet hold his/her subordinate accountable for that performance. We also find, contrary to an "scapegoat" or population ecology prediction, that executive changes have a positive impact on firm survival, and that the salutary organizational effect of managerial transitions is greatest for the top executive

Socioemotional wealth : an obstacle or a springboard to creativity, innovation, and entrepreneurship in family firms?

This chapter takes a socioemotional wealth (SEW) perspective to explain how families influence the sensing and seizing of entrepreneurial opportunities in family firms. Specifically, this model proposes that some aspects of the family's SEW are conducive to opportunity recognition, while others impair it. Moreover, the presence of SEW goals leads family owners to favor certain entrepreneurial outcomes because there is a socioemotional reward for the family, even if there are no clear economic advantages. It is also suggested that family ownership negatively affects firms' transforming capacity in innovation. The end goal of this presentation is to enhance understanding of the positive and negative aspects of the family dimension on entrepreneurship and to guide future research in this area

Compensation framing and the risk-taking behavior of the CEO: testing the influence of alternative reference points

El artículo analiza como el modo en el que el Director General (DG) de la empresa cataloga su retribución afecta al riesgo que asume en sus decisiones, así como el papel mediador del riesgo soportado. El estudio hace uso de una muestra de 108 empresas estadounidenses que comenzaron a cotizar en el mercado de valores en los años 1993, 1994 y 1995. La información de una encuesta realizada a los DG de estas empresas se completó con información secundaria. Se estima un modelo de ecuaciones estructurales que toma en consideración el efecto mediador del riesgo soportado en la relación entre la catalogación de la retribución – riesgo asumido. Los análisis indican que mientras los objetivos de resultados incluidos en el contrato de retribución del DG afectan de manera indirecta al riesgo asumido a través de su influencia en el componente de riesgo percibido de empleo del riesgo soportado, el nivel retributivo en relación a otros ejecutivos no tiene ningún efecto. Muestra por tanto que no todos los puntos de referencia son igualmente relevantes a la hora de definir la propensión del DG a asumir riesgos, ni que todos los elementos del riesgo soportado juegan el mismo papel. El artículo extiende trabajos previos centrados en la modelización del riesgo asumido por los gestores. El artículo proporciona una guía para reflexionar acerca de las consecuencias sobre el comportamiento del nivel retributivo en el mercado de ejecutivos y de los objetivos de rendimiento que se incluyen en los contratos de retribución. El artículo propone y contrasta un modelo sobre cómo diferentes puntos de referencia empleados para catalogar la retribución influyen sobre el riesgo asumido por el DG. A su vez proporciona el primer test de una proposición central del Behavioral Agency Model: el riesgo soportado media parcialmente la influencia de la catalogación de la retribución en el riesgo asumido.This paper seeks to analyze how compensation framing influences the risk-taking behavior of the firm’s chief executive officer (CEO), and the mediating role played by risk bearing. The study employs a sample of 108 US firms that issued an initial public offering in 1993, 1994 and 1995. Data from a survey filled out by the CEO of the firm are completed with secondary information. A structural equation model is estimated which explicitly considers the mediating effect of risk bearing on the compensation framing-risk taking relationship. The analyses indicate that while the performance targets included in the CEO’s compensation contract indirectly influence the riskiness of the CEO’s strategic decisions through its influence on the employment risk component of executive risk bearing, the level of compensation relative to peers does not. It shows that not all reference points are equally relevant in determining the CEO’s willingness to take risk, nor do all the elements of risk bearing play the same role in that partial mediation. The paper provides a refinement of previous work on modelling the risk-taking behavior of managers. The paper provides a guideline to think about the behavioral consequences of the pay level in the market for executives and the performance targets included in the compensation contracts. The paper proposes and tests a model on how different reference points used to frame compensation influence CEO risk taking. It also provides the first test of a central proposition of the behavioral agency model: risk bearing partially mediates the influence of compensation framing on risk taking.Martin Larraza‐Kintana acknowledges financial support provided by the Spanish Ministry of Education (project ECO2010‐21393‐C04‐03)

Socioemotional Wealth and Business Risks in Family-controlled Firms: Evidence from Spanish Olive Oil Mills

In this paper, we bring structural holes theory to different cultural contexts by studying the effect of structural holes in four high-tech companies in China and assessing whether they confer the benefits to individuals occupying the brokering position in a career network that have been found in Western contexts. On the level of national culture, we propose that the typical collectivistic culture of China will dampen the effects of structural holes. On the organizational level, we propose that in organizations that foster a high-commitment culture--a culture that emphasizes mutual investment between people--the control benefits of structural holes are dissonant with the dominant spirit of cooperation ,and the information benefits of structural holes cannot materialize due to the communal-sharing values in such organizations. Empirical results of network surveys confirm our hypotheses, and interview data add depth to our explanations. Brokers do not fit with the collectivistic values of China. Further, the more an organization possesses a clan-like, high-commitment culture, the more detrimental are structural holes for employees' career achievements such as salary or bonus, even after controlling for a host of other factors that may influence these career outcomes. In high commitment organizations, the "integrators" who bring people together to fill structural holes enjoy greater career benefits.Publicad