MANAGERIAL OPTIMISM AND DEBT FINANCING: CASE STUDY ON INDONESIA’S MANUFACTURING LISTED FIRMS

Managerial’s psychology can affect financial decision in the company. This paper analyzes the influence of managerial optimism on the debt financing by using regression analysis. The dependent variable in this paper is debt financing. The independent variable is managerial optimism and the control variable are firm value, firm size, and firm performance that are occurred in the previous period. The samples used in this study are manufacturing companies that listed in Indonesian Stock Exchange during 2010-2014. The result on this study shows that managerial optimism, firm value, and firm size that are occurred in the previous period have positive significant effect on debt financing, whereas firm performance in the previous period has negative significant impact on debt financing

Managerial Optimism and Debt Financing: Case Study on Indonesia Manufacturing Listed Firms

Managerial's psychology can affect financial decision in the company. This paper analyzes the influence of managerial optimism on the debt financing by using regression analysis. The dependent variable in this paper is debt financing. The independent variable is managerial optimism and the control variable are firm value, firm size, and firm performance that are occurred in the previous period. The sample used in this study is manufacturing companies that listed in Indonesian stock exchange during 2010-2014. The result on this study shows that managerial optimism, firm value, and firm size that are occurred in the previous period have positive significantly impact on debt financing, whereas firm performance in the previous period has negative significantly impact on debt financing

Dividend Guidance to Manage Analyst Dividend Expectations

Using a sample of dividend payers from 12 European countries, we document that managers guide analyst dividend expectations to avoid reporting dividends below the consensus forecast. Specifically, we show that dividend guidance predicts (1) a substantial reduction in analyst dividend forecast optimism over the course of the fiscal year and (2) that a firm will meet or beat the consensus dividend forecast by a small margin. Managers guide analyst dividend expectations to avoid negative price reactions when reporting negative dividend surprises. Our results, which are robust to endogeneity and self-selection concerns and control for contemporaneous earnings guidance, highlight the important role dividend guidance plays in managing analyst dividend expectations

Supervision and the dynamics of collusion : a rule of optimism?

In the UK, Serious Case Reviews and Inquiries undertaken over the last five decades continue to evidence that children are both silenced and rendered invisible as a result of parental behaviour and professional inaction. There have been recent calls for practitioners to enact greater professional curiosity in child protection practice, whilst simultaneously acknowledging that practitioners have less opportunity to be curious in overly bureaucratic and unsupportive environments. Good-quality supervision may provide one mechanism to encourage professional curiosity, but supervision and the supervisory processes therein have received scant attention or scrutiny within such inquiries. Whilst supervision can act as a conduit to encourage good practice, ensuring compliance with standards and promoting the positive well-being of individual practitioners (the core conditions under which professional curiosity may flourish), we hypothesise that complex relational dynamics have the potential to disrupt such endeavours. In the discussion that follows, we shall first seek to explore the tenets of good supervision, before scrutinising the potential pitfalls, with a focus on how one specific factor, the rule of optimism, may be transposed onto the supervisory relationship and, as in front line practice, how it may stifle professional curiosity in the supervisory relationship

Coaching-Based Leadership Intervention Program: A Controlled Trial Study

In spite of the potential benefits that coaching-based leadership interventions can bring to organizations, basic questions remain about their impact on developing coaching skills and increasing psychological capital (PsyCap), work engagement and in- and extra-role performance. In a controlled trial study, 41 executives and middle managers (25 in the experimental group and 16 in the waiting-list control group) from an automotive sector company in Spain received pre-assessment feedback, a coaching-based leadership group workshop, and three individual executive coaching sessions over a period of 3 months. The intervention program used a strengths-based approach and the RE-GROW model, and it was conducted by executive coaching psychologists external to the organization. Participants (N = 41) and their supervisors (N = 41) and employees (N = 180) took part in a pre-post-follow up 360-degree assessment during the research period. Quantitative data were analyzed using Analyses of Variance (ANOVA) with a 2 2 design, paired-samples t-tests, and univariate analyses between groups. Results indicated that the intervention program was successful in increasing the participants’ coaching-based leadership skills, PsyCap, work engagement, and in- and extrarole performance. Qualitative measures were also applied, and results from individual responses provided additional support for the study hypotheses. Regarding practical implications, the results suggest that the Coaching-based Leadership Intervention Program can be valuable as an applied positive intervention to help leaders develop coaching skills and enhance well-being and optimal functioning in organizations

Behavioral Corporate Finance: A Survey

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as rational responses to securities market mispricing. The second approach emphasizes that managers are less than fully rational. It studies the effect of nonstandard preferences and judgmental biases on managerial decisions. This survey reviews the theory, empirical challenges, and current evidence pertaining to each approach. Overall, the behavioral approaches help to explain a number of important financing and investment patterns. The survey closes with a list of open questions.

Biased interpretation of performance feedback: The role of ceo overconfidence

Research summary: This study examines how managerial biases in the form of overconfidence change the interpretation of performance feedback and, consequently, shape a firm's risk taking in response to it. Our formal analysis suggests that CEO overconfidence is associated with a lower willingness to increase firm risk taking when facing negative performance feedback and a higher willingness to decrease risk when facing positive feedback. An extension of our model also shows that, when firms are operating close to their survival level, the effects of CEO overconfidence will reverse. We test our predictions empirically with a sample of 847 American manufacturing firms in the years 1992 to 2014. Our results are consistent with our hypotheses and are robust to different empirical operationalizations of CEO overconfidence. Managerial summary: Managers evaluate the success of their current business strategy through feedback in the form of their firm's current financial results relative to their own previous performance or that of their peers. Our results show that overconfident CEOs interpret information about the financial situation of their firms more optimistically than non-overconfident CEOs, which in turn causes them to exhibit a less pronounced reaction to both positive or negative performance feedback. It is thus crucial that managers are clearly aware of how their interpretations and reactions to feedback are affected by their own deeply held personal beliefs and dispositions

Mental Frames and Organizational Decision-making: Facing the Challenges of Change

Adjusting to the strategic, business and economic changes requires efficient decision-making procedures which can in turn be highly affected by the underlying mental frames that the leaders of the organization hold. This article examines the impact of these mental frames on decision-making with respect to a specific attribute of a decision-making process: the belief that a CEO of a co-operative holds regarding member commitment. The analysis develops a simple theoretical model that shows how the co-op CEO’s obsolete mental frame creates distortions on decision making that can have negative effects on co-op’s strategic decisions and its market share. The starting point of the analysis is the case of the Saskatchewan Wheat Pool (SWP) – a Canadian grain handling, agri-food processing and marketing company that had little success in adapting to the changing economic environment of the Canadian agriculture.Industrial Organization,

Structuring the decision process

This chapter includes a discussion of leadership decisions and stress. Many leaders are daily exposed to stress when they must make decisions, and there are often social reasons for this. Social standards suggest that a leader must be proactive and make decisions and not flee the situation. Conflict often creates stress in decision-making situations. It is important for leaders to understand that it is not stress in itself that leads to bad decisions, rather, bad decisions may be the result of time pressure in the sense that leaders have not been able to gather enough relevant information. Thus, it is worthwhile for leaders to be able to prioritize properly in order to cope with stressful situations. In some situations, a leader chooses to delegate the decisions to his/her team and then it is important to guard against «groupthink», a phenomenon where members of a team put consensus before anything else as a result of the peer pressure. A number of methods are presented that enable leaders to avoid this phenomenon. Often leaders are involved in decision-making situations where they are forced to navigate between objectives that are in strong conflict with each other. We are talking about «decision dilemmas». These are characterized by the existence of a conflict between the top leadership's desire to control the activities and their wish to give autonomy and independence to the various units. It is important for leaders to be able to strike a balance in different dilemma situations and understand how to best manage conflicts when they aris