Session 216

Blame and Stigma in Response to Poor Orgnizational Outcomes

Track O

Date: Monday, October 5, 2015


Time: 16:45 – 18:00


Room: Director's Row E

Session Chair:

  • Donald Schepker, University of South Carolina

Title: A Resource-Dependence Model of the Loss of Outside Directorships among Outgoing Executives of Declining Firms


  • Han Jiang, University of Arizona
  • Jun Xia, University of Texas at Dallas
  • Albert Cannella Jr, Texas A&M University
  • Xiwei Yi, Rice University

Abstract: How would leaving a declining firm affect an outgoing executive’s subsequent career? Drawing on resource dependence theory, we resolve the question with a special instance, i.e., whether an outgoing executive will lose outside directorships after exiting a declining firm, with resource dependence theory. We found that outgoing executives are more likely to lose their outside directorships after exiting a declining firm when they have little social and human capital endowments while other executives and directors in the declining firm have abundant. These relationships will be moderated by the social/human capital of other directors in an interlock board and the alternative interlock links between the board and the declining firm. We expect our finding to contribute to both strategic leadership research and practice.

Title: Directors ' Professional Devaluation from Firm Bankruptcy: An Integrated Model of the Effects of Stigma, Devaluated Competence, and Gained Experience


  • Klavdia Evans, St. Mary's University
  • Dusya Vera, University of Houston
  • Seemantini Pathak, University of Missouri - St. Louis

Abstract: Building on signaling theory and the literature on judgment under uncertainties, we examine the effects of bankruptcy on directors’ professional future. We ask if the professional devaluation of directors takes place due to perceived devaluated competency or due to the burden of bankruptcy stigma. Moreover, we investigate if corporate failure unavoidably leads to professional devaluation or, in some cases, the elite labor market actually rewards the experience of bankruptcy. We differentiate among directors associated with the origin of the bankruptcy, its announcement and thee actual management of the bankruptcy, and argue that monitoring a company through the process to bankruptcy is a value-increasing experience and will be rewarded by the executive labor market.

Title: Don’t Dare to Knock Them off Their Pedestal: The Likelihood of CEO Dismissal Following a Loss in Firm Status


  • Seok-Hyun Hwang, Northwestern University
  • Ithai Stern, INSEAD

Abstract: We analyze how changes in a firm’s status affect the likelihood of CEO dismissal. Given directors’ concern for their own status, and considering that decreases in a firm’s status may cause its directors own status to deflate, we argue that when a firm loses status, its directors will have a greater likelihood of dismissing the CEO, independently of the firm’s financial performance. Moreover, we suggest that the effect of negative status change is amplified when directors have recently lost external directorships. The possibility of being marginalized from the inner circle would bolster their motivation to take corrective action and dismiss the CEO. Using data on Fortune’s Most Admired Companies from 2007 to 2012, we find strong support for our hypotheses.

Title: Who Wears a Bulletproof Vest? The Differential Impact of Firm Performance on CEO versus Non-CEO Turnover due to Corporate Misconduct


  • Xiwei Yi, Rice University
  • Yan Anthea Zhang, Rice University

Abstract: Recent studies have documented that firms with corporate misconduct tend to dismiss their executives and/or directors. However, we don’t know whether good firm performance may buffer executives/directors from dismissal in the context of corporate misconduct. In this study, we propose that firms with better performance are less likely to dismiss their executives/directors in the context of corporate misconduct than firms with lower performance. We also propose that the buffering effect of good firm performance differs between CEOs and non-CEO executives/directors in that good performance is more likely to protect CEOs than non-CEO executives/directors from being dismissed.

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

Strategic Management Society