Session 145

Strategic Leadership and Corporate Strategy

Track O

Date: Tuesday, October 6, 2015

Track F

Time: 11:00 – 12:15

Paper

Room: Director's Row I


Session Chair:

  • Zheng Cheng, University of Wisconsin Milwaukee

Title: CEO-CFO Interpersonal Complementarity and Firm Acquisitions

Authors

  • Wei Shi, Indiana University

Abstract: This study examines the relationships between CEO-CFO interpersonal complementarity and firm acquisition intensity and performance. Specifically, I argue that pessimistic CFOs play an important devil’s advocacy role and can help optimistic CEOs conduct thorough evaluations of potential risks and pitfalls associated with mergers and acquisitions (M&As). As a result, in the presence of pessimistic CFOs, optimistic CEOs are less likely to engage in acquisitions but more likely to make high quality acquisition decisions. Empirically, I use the CEO positive linguistic tone in question-and-answer sections of earnings conference calls to capture CEO optimism and the CFO negative linguistic tone to capture CFO pessimism. Using a group of S&P 1500 CEOs and CFOs, I find that the interaction between the CEO positive tone and the CFO negative tone is negatively associated with acquisition intensity and acquisition premiums, but positively associated with acquisition performance and analysts’ issuing positive appraisal subsequent to acquisition announcements.

Title: Limiting Discretion: The Role of Parental Ties and Spin-off Strategic Change

Authors

  • Donald Schepker, University of South Carolina
  • John Pearce, Villanova University
  • Richard Robinson, University of South Carolina

Abstract: Research implicitly argues that strategic reorganization increases in firms that are spun-off. However, research has not yet examined the conditions under which such strategic change is likely to occur. Using arguments relating to managerial discretion, we argue that a child’s ties to the parent firm serve as a means of reducing the spin-off firm’s managerial discretion, which lessens post-spin-off strategic change. Further, we argue that this relationship is strongly influenced by the level of pre-spin-off performance of the spin-off firm. We test hypotheses addressing these issues in 65 spin-offs across 194 firm-year observations and find considerable support for our predictions.

Title: The Role of Power and Political Skill in Mergers of Equals

Authors

  • Rich Devine, Florida State University
  • Reginald Harris, Florida State University

Abstract: Mergers of equals (MOE) involve large, related firms of similar size and require significant restructuring and coordination. However, one of the legacy firms almost always dominates control of the new firm. Drawing on power theory and research in leadership on political skill, we argue that more powerful and politically skilled CEOs should be able to place their team in control and better handle the combination. Results generally run counter to predictions, however. Politically skilled CEOs were found more likely to gain control of the firm in MOEs, whereas the powerful CEOs came out on the losing end. Furthermore, powerful CEOs, when they did gain control, were associated with worse performance. Findings portray an interesting picture where powerful CEOs appear to be a liability in MOEs.

Title: Working Harder or Working Smarter? The Role of Corporate Directors’ Overpayment on Mergers and Acquisitions

Authors

  • Kalin Kolev, Marquette University
  • Robert Wiseman, Michigan State University
  • Donald Conlon, Michigan State University
  • Jerayr Haleblian, University of California, Riverside

Abstract: In this study, we examine the role of corporate directors' overpayment on mergers and acquisitions.
Drawing on equity theory, we argue that overpaying directors encourages them to raise their inputs and efforts by working harder (conducting more acquisitions) and working smarter (implementing more successful acquisitions). In addition, we posit that directors' overpayment interacts with CEO overpayment to affect acquisitions. Result provide evidence that overpaying directors results in more successful acquisitions; however, after a threshold too much overpayment leads to less successful acquisitions. Finally, simultaneously overpaying both directors and CEOs has negative consequences for acquisition outcomes.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 40: Strategic Leadership and Governance Expanding: Shifts and New Directions in Research
Sun: 09:45 – 11:00
Session 283: Editor Panel: Publishing Strategic Leadership and Governance Research
Sun: 11:15 – 12:30
Session 38: Big Game Hunting: Accessing and Interacting with Senior Executives for Empirical Research
Sun: 16:15 – 17:30
Session 139: Do Top Managers Matter? Expanding the Focus and Knowledge
Session 147: What Could Strategic IT Governance look like in Smart Cities?
Sun: 17:45 – 00:00
Session 324: Strategic Leadership and Governance Business Meeting
Mon: 08:00 – 09:15
Session 140: New Perspectives on the Outside Director Selection Process
Mon: 11:15 – 12:30
Session 141: Politics as Usual? Political Ideology in the Excutive Suite and Boardroom
Session 220: Perspectives on CEO Compensation
Mon: 13:45 – 15:00
Session 142: Top Management Teams, Senior Executives and Corporate outcomes
Session 215: Personality and Values in Strategic Leadership
Mon: 16:45 – 18:00
Session 216: Blame and Stigma in Response to Poor Orgnizational Outcomes
Session 218: Consequences of Top Management Attitudes and Orientations for the Firm
Tue: 08:00 – 09:15
Session 217: Leadership and Governance in Family Firms
Session 309: Looking Good and Sounding Better: Impression Management by CEOs
Tue: 11:00 – 12:15
Session 145: Strategic Leadership and Corporate Strategy
Session 214: Director Attributes, Director Actions and Director Effectiveness
Tue: 14:15 – 15:30
Session 146: Gender and Diversity in Strategic Leadership and Governance
Tue: 15:45 – 17:00
Session 219: A Tough Crowd: Critical Examinations by Owners and Stakeholders
Tue: 17:30 – 18:45
Session 144: Board Structure: What Works Best?
Session 189: Antecedents and Consequences of CEO Incentives

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 193: Phenomenon-driven Research in Strategic Management
Sun: 09:45 – 11:00
Session 221: Reflecting on the scope of the firm: New avenues for future research
Sun: 11:15 – 12:30
Session 194: The State and Future of Disciplinary Research in Strategic Management
Sun: 16:15 – 17:30
Session 113: Serial Acquisitions: Strategies and Processes
Sun: 17:45 – 00:00
Session 314: Corporate Strategy Business Meeting
Mon: 08:00 – 09:15
Session 111: Portfolio Management: Diversification and Divestitures
Session 176: Different Perspectives Informing Governance Choices: Partner Choice in Alliances vs. Acquisitions
Mon: 11:15 – 12:30
Session 195: Where Are the Boundaries of Strategic Management Research?
Session 210: M&A/JV Implementation
Mon: 16:45 – 18:00
Session 112: Acquisitions - Before the Deal
Session 243: Competitive Dynamics and Market Positioning
Tue: 08:00 – 09:15
Session 115: Horizontal and Vertical Scope: Interactions and Embeddedness
Session 272: Competitive Dimensions of Firm Boundary and Location Decisions
Tue: 11:00 – 12:15
Session 117: Issues and Answers for the Diversified Firm
Session 145: Strategic Leadership and Corporate Strategy
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 116: Acquisitions - After the Deal
Session 267: Healthcare Industry Dynamics, Relationships, and Activities
Tue: 15:45 – 17:00
Session 110: Models of Corporate Strategies
Tue: 17:30 – 18:45
Session 114: The Interplay Between Financial Markets & Advisors and the Acquiring Firm
Session 271: Spinouts


Strategic Management Society

Denver