Board of directors (BOD) bring valuable human and relational capital to firms but may act as self-interested agents by design. The purpose of this study is to investigate how the compensation of BOD members in high-technology sectors affects overall firm performance. We tested our specific hypotheses using panel regression methodology on data gathered from the CRSP, Compustat, BoardEx, and ExecuComp databases. Our final sample consisted of 9,127 firm years, and the companies in our sample were all high-tech publicly traded U.S. firms from 1992 to 2019. Our results showed that there is an association between BOD’s pay structure and firm performance (accounting-based return on assets and market-based Tobin’s Q). Our findings demonstrate originality and contribute to the literature since we empirically demonstrate that the level of variable BOD pay has a diminishing effect on return on assets and Tobin’s Q. This study advances our knowledge of executive compensation in the high technology sector.

The attention-based view contends that executives possess limited attentional capabilities that must be carefully allocated across different strategic issues. Although many scholars contend that narrow strategic attention breadth leads to better performance, others argue that broad strategic attention breadth may be more beneficial due to better opportunity scanning. We posit that the relationship between strategic attention breadth and performance will be inverted U-shaped, where strategic attention breadth is positively related to firm performance up to an optimal point, after which firms will see declining benefits due to executive cognitive overload. Furthermore, we propose that executives’ assessment of strategic opportunities will be influenced by the firm’s corporate social responsibility perspective, as the firm’s environmental and ethical commitment may mitigate executive blind spots and enhance opportunity selection. We support our hypotheses with multiple measures of firm performance and a content analysis of annual reports corresponding to a 5-year longitudinal sample of 2,245 S&P 500 firms.

This study addresses endogenous factors related to the strategic planning of corporate social responsibility (CSR). Our findings help explain the paradox: If better CSR always leads to better firm performance, why do so many companies either choose not to engage in CSR or act irresponsibly? Managers may make decisions regarding CSR based on the environment. Some companies may be better served through a proactive CSR strategy; however, others may be unable to achieve better performance through this strategy for a variety of endogenous causes. Our sample included 594 U.S. publicly traded companies with 2,019 firm-year observations. We empirically simulated scenarios where companies selected inappropriate CSR strategies and found that the companies were unable to achieve better firm performance if they did not select appropriate CSR strategies based on their internal and external environment. Practical and theoretical implications are discussed.

This study adopts the resource-based view (RBV) to explain the difference in firm profit and growth determinants. We argue that profit is driven more by valuable, rare, inimitable, and non-substitutable (VRIN) resources, and growth is driven more by versatile resources. Since some versatile resources, such as cash, are less firm-specific, the firm effect is more critical in determining profit than growth. We also expect that emerging market firms are more capable of utilizing versatile resources than developed market firms, and developed market firms are more capable of utilizing VRIN resources than emerging market firms. As a result, the determinants of firm performance also differ between emerging and developed markets. The study employs multilevel mixed models to decompose firm performance in US, Chinese, and global samples. The findings confirm that the firm effect is more important in influencing profit than growth, persisting across all three samples. The firm effect is also more important in influencing performance in developed countries than in emerging markets.

We provide a meta-analytic examination of the CEO overconfidence–firm performance relationship. Our results support a positive relationship between these focal variables. Drawing from trait activation theory and national cultural differences literatures, we find that cross-cultural effects moderate the focal relationship. More specifically, we find that the CEO overconfidence–firm performance relationship is stronger in high assertive, low institutional collectivistic, low in-group collectivistic, high future-oriented, high gender egalitarian, high performance-oriented, low power distance, and low uncertainty avoidance cultures. Consistent with the resource orchestration literature, we also find that entrepreneurial orientation mediates the focal relationship between CEO overconfidence and firm performance. Taken together, our results present a more nuanced picture of the CEO trait–firm performance relationship. In the future, researchers may consider examining additional CEO traits as well as additional contextual factors including internal, as well as environmental, factors.

The established literature has recognized revolving-door hiring as a means for firms to obtain protection against political risks and advance their business interests. This article theorizes about the cost of the revolving door between politics and business, which transmits uncertainty during turbulent times from the political system to firms. I empirically estimate the cost of revolving-door recruitment for over 3,000 publicly listed firms in the early years of a major corruption crackdown in China. I show that firm-level returns on revolving-door recruitment became negative during this period. In contrast to conventional corporate governance explanations, the mechanism proposed in this article emphasizes the external perceptions and financing of firms. Text analyses of over 1 million equity reports and bank-loan record data show that political connections act as a negative signal to external financiers, thereby discouraging external financing.

Using the meta-analysis technique, this research comprehensively reviews the existing open innovation (OI) literature, systematically aggregates empirical findings on the impact of OI on performance to identify key moderators and statistically tests the significance of these moderators in influencing the OI–performance relationship. Based on a comprehensive dataset of 2,377,123 firms and sub-firm units in 171 studies published from 2003 to 2018, this research demonstrates that the OI–performance relationship is significantly moderated by three key factors: performance measure, OI approach, and level of analysis. This research helps explain the conflicting findings regarding the OI–performance relationship in the existing literature, and contributes to the understanding of the effectiveness of OI practice.

Empirical research is largely supportive of the assertion of instrumental stakeholder theory that a positive relationship exists between “managing for stakeholders” and firm performance. However, despite considerable debate on the subject, the amount of variation across firm investments in stakeholders (stakeholder management performance) has not been adequately investigated. We address this gap using a sample of more than eighteen thousand firm-level observations over ten years. We find evidence to support an inverted U–shaped relationship between variation in stakeholder management performance and Tobin’s q, suggesting that firms that have some imbalance in their stakeholder management, but not too much, perform best. We discuss the implications of our study for instrumental stakeholder theory and managerial practice.

Drawing on Wales, Monsen, and McKelvie's (2011, Entrepreneurship Theory and Practice, 35(5), 895–923) model of entrepreneurial orientation pervasiveness and the strong culture hypothesis (Denison, 1984, Organization Dynamics, 13, 4–22), this study investigates how entrepreneurial orientation (EO) strength, defined as the level of agreement in the shared perceptions of EO, serves as a boundary condition of the EO–firm performance relationship. Four field studies provide evidence for a valid and reliable 10-item multidimensional measure of entrepreneurial orientation, the EO-10, which in turn, may be used to assess EO strength. We establish content and construct validity of the EO-10 (study 1; n = 447 employees), criterion-related validity with revenue growth and sales growth (study 2; n = 412 employees in 43 profit centers), and convergent validity with Covin and Slevin's (1989, Strategic Management Journal, 10, 75–87) 9-item measure (study 3; n = 291 employees). Finally, in study 4 (n = 853 employees nested in 22 organizations), we demonstrate the interactive effects of EO and EO strength on profit growth and revenue growth. In sum, this study provides conceptual and empirical evidence for the importance of EO strength as a moderator of the EO–firm performance relationship.

Managers make comprehensive strategic decisions to cope with environmental challenges. Questions remain regarding how different types of leadership styles influence top management team (TMT) strategic decision comprehensiveness (SDC) and firm performance. This study explores the impact of two different CEO leadership styles on TMT SDC and subsequent firm performance, considering the moderating role of TMT cognitive conflict. Based on data from 357 questionnaires of 126 firms in China, we found that 1) CEO empowering leadership positively affects SDC; 2) CEO directive leadership generates an inverted U-shaped effect on SDC; 3) the effect of SDC on firm performance is positive; and 4) TMT cognitive conflict weakens the relationship between CEO empowering leadership and SDC. This study takes a systematic approach by integrating CEO-TMT dynamics into SDC, which in turn affects firm performance, and thus offers a holistic view of how upper echelons influence firm performance.

This article studies the latent mechanisms underlying the non-linear correlation between a firm's relative innovation orientation of exploration vs exploitation and performance. We also investigate the moderating effects of cluster relationships on this relationship. Using a sample of 638 SMEs in four industry clusters in Tianjin, China, we confirm an inverted U-shaped correlation between a firm's relative innovation orientation and performance, and explicate the latent mechanisms underlying such an inverted U shape. We find that the number and strength of a firm's cluster relationships can moderate this inverted U-shaped curve: the former moves the turning point of the inverted U shape toward exploratory orientation, and the latter moves the turning point toward exploitative orientation. For improved performance, we discuss appropriate innovation balancing strategies for cluster firms with different cluster relationships, and optimal cluster strategies under different innovation-balancing conditions. This study adds to the increasing scholarly effort on latent mechanisms behind U-shaped relationships and moderating effects on such relationships in management research.

There is still an ongoing debate regarding the firm performance implications of pay gaps between top executives and subordinate employees. This study integrates relative deprivation theory and tournament theory to investigate the potential nonlinear effects of pay gaps. We expect that at low levels of pay inequality, increased inequality hurts firm productivity, while at higher levels of pay inequality, increased inequality helps firm productivity. Our study of Chinese firms confirms that pay gaps have an approximately U-shaped relationship with firm performance. This nonlinear relationship is weaker in state-owned enterprises (SOEs) than in non-SOEs, suggesting that state ownership is an important moderator in the association. Overall, this study explains previous mixed findings regarding consequences of pay gaps with meaningful implications for policymakers and entrepreneurs in China and other economies with similar cultural and institutional backgrounds.

How do political economic institutions and different types of institutional complementarity in particular influence firm behavior? Existing studies do not offer much help in answering this question. In this research, we systematically connect institutional complementarity and its two distinct logics (the logic of reinforcement and the logic of compensation) to firm performance. Using a sample of more than fourteen thousand firms from twenty advanced industrial democracies, our empirical analysis finds that institutional complementarity is related to firm performance in a distinct way. That is, the different logics of institutional complementarity apply only to specific segments of the economy. While the logic of reinforcement works for small firms and labor-intensive firms, the logic of compensation favors large firms and capital-intensive firms. The empirical novelty of our research lies in offering a cross-national, firm-level and large-n analysis of institutional complementarity. Theoretically, our finding of firm heterogeneity helps in establishing the boundary conditions of institutional complementarity and hence advances the general understanding of the subject.

Organizations have to strive in an uncertain and challenging environment. Hence, the role resilience played at work has been of special interest in the last decade, although empirical research is still scant, especially regarding the antecedents and the consequences resilience has. In this study we analyse the role corporate social responsibility plays towards employees (CSRE) in the promotion of resilience at work, and how resilience results in organizational learning capability (OLC) and firm performance. Structural equation modelling was used to test our model with a sample of 296 companies from different sectors. Results show that CSRE had a positive influence on organizational resilience, which in turn affected firm performance via OLC. Therefore, we tested the antecedents and consequences resilience had empirically, whose practical implications in terms of further human resource management activities are also discussed.

This paper extends the resource-capability-based view in strategic management and discusses the capabilities for the firms to stay competitive in emerging economies. Faced with low levels of efficiency, technology, and skills, firms in emerging economies need to implement best management practices to overcome operational inefficiency while engage in innovation processes to address new opportunities. They have to develop the capabilities to enhance efficiency, the capabilities to undertake innovation, and the synthesis capabilities to combine the two to keep rivals at bay. The paper tests hypotheses against a data set of more than 20,000 firms from 36 emerging economies provided by the World Bank in 2012–2015 and finds strong evidence to support the arguments. The paper finds that the three sets of capabilities are positively related to productivity and, through it, financial performance.

In comparison with other organizational forms, cooperatives have been found to offer poor product quality and suffer from low reputation. The main reasons discussed in the literature are information asymmetries, which leads to adverse selection and moral hazard, as well as the absence of profit orientation due to poorly specified and diluted property rights. However, although, in reality, many cooperatives indeed perform poorly, and some are apparently able to completely avoid or at least reduce the problems that are considered prototypical for this hybrid organizational form. Therefore, the purpose of this study is to identify the characteristics required to reduce the problems resulting from poorly specified property rights and information asymmetries and, hence, to successfully compete in the market. The data we use to identify the characteristics that separate “good” and “bad” cooperatives encompass 136 organizations in Austria, Germany, and northern Italy. Our logistic regression estimations show that older and larger cooperatives (in terms of acreage) have a significantly higher probability to be listed in at least one of two highly respected wine guides. Moreover, German cooperatives have a significantly lower probability of being listed than either Austrian or northern Italian cooperatives. The findings suggest that differences in performance can be explained by the management of cooperatives. (JEL Classifications: D23, D82, D86, J54, L22, L25, L66, P13, Q13)

A mission statement is a widely used strategic tool that emphasises an organisation’s uniqueness and identity. It was in the early 1980s that academics, managers, and consultants recognised the need for explicitly formulating a mission statement in organisations. Since then, mission statements have remained as a popular strategic tool in organisations. This article conducts a systematic literature review to synthesise research on mission statements. The analysis of the 53 articles selected includes a bibliometric and content analysis. According to their perspective, the works selected were grouped into four thematic areas: (1) mission statement development, (2) mission statement components, (3) mission impact on employees, and (4) mission impact on performance. The overreaching conclusion is that mission statements are widely used in practice but poorly researched in theory. Most articles adopt a managerial phenomenon-based strand, lacking a deep theoretical foundation. The article ends with suggestions for further research in terms of theory, practice, and methodology.

Is organizational slack good or bad for firm performance? Research addressing this question has obtained mixed results. Such studies have focused mainly on the impact of environmental conditions on the slack–performance relationship. In this study, instead of focusing on the uncontrollable external environment, we consider actions determined by firms internally, in particular strategic planning. Using data from 183 US firms, we explore the connection between organizational slack and firm performance with different levels of strategic planning. The results suggest that at low levels of strategic planning the slack–performance relationship is linear, while at high levels of strategic planning this relationship is inverse U shaped. We discuss the theoretical and practical implications of these findings.

Although they have often been found to be technically inefficient, cooperatives not only have survived in the wine industry but continue to play major roles in most European countries. Because the specific advantages of their “organizational architecture” (resource pooling and decentralization) seem to outweigh the disadvantages (vaguely defined property rights and high monitoring costs), this paper discusses organizational measures to improve the performance of cooperatives by addressing three different aspects of “organizational design” (managing entry and exit, motivating members, and investing in corporate culture). (JEL Classifications: D22, D23, L14, L21, L31)