Session 219

A Tough Crowd: Critical Examinations by Owners and Stakeholders

Track O

Date: Tuesday, October 6, 2015

Track X

Time: 15:45 – 17:00

Common Ground

Room: Plaza Court 3


Facilitator:

  • Scott Johnson, Oklahoma State University

Title: Legitimacy in Foreign Capital Markets: Examining Chinese Firms Cross-listed in US and Hong Kong

Authors

  • Feibo Shao, Oklahoma State University
  • Scott Johnson, Oklahoma State University

Abstract: This study explores how investors in foreign markets perceive state ownership and executives’ political connections of cross-listed firms. Investors perceive these firm attributes through the lens of their own institutional context and their perceptions of the Chinese government. Investors in the United States perceive the strong intervention of the Chinese government in the economy as illegitimate whereas investors in Hong Kong have a much more pragmatic view of the role of the Chinese government. We propose that for Chinese firms cross-listed in US, state ownership and executives’ political connections are perceived negatively, whereas for Chinese firms cross-listed in Hong Kong, state ownership and executives’ political connections are perceived positively.

Title: Negative Board Certifications and Their Impact on Individual Directors

Authors

  • Karen Schnatterly, University of Missouri
  • John Berns, University of Mississippi
  • Serge da Motta Veiga, American University
  • Andrew Ward, Lehigh University

Abstract: A certification initiated by a recognized source is a third-party quality signal or cognitive shortcut which may impact the perception of organizations and individuals, which can also impact outcomes for them. While evidence indicates that positive certifications predict outcomes such as firm performance and CEO pay, we know little about the role of negative certifications and their impact on individuals, such as board directors. In this study, we examine how negative board certifications influence the directors’ number of future directorships, as well as the quality of these future directorships.

Title: No Good Deed Goes Unpunished: The Effect of Social Performance on Socially Oriented Shareholder Activism

Authors

  • Abhijith G. Acharya, Singapore Management University
  • David Gras, Texas Christian University
  • Ryan Krause, Texas Christian University

Abstract: Theory and research on understanding activists targeting corporations have developed on two paths. On one path, scholars have applied agency theory to explain the involvement of shareholders in firm decision-making with a clear emphasis on financial issues. On the other path, scholars have taken a social movement perspective and highlight non-shareholder activists’ primary emphasis on non-financial, or social, issues. As a result of this distinction in the literature, extant theory and research offer no clear explanation for shareholder activism advocating for a stronger organizational focus on social issues. We examine the contrasting logics of the two theoretical lenses in a model predicting firm-level socially oriented shareholder activism as a consequence of change in corporate social performance. Our findings broadly support the social movement perspective.

Title: Shareholder Information and Controversial Activities: Investor Reactions to Seasoned Equity Offerings from Financial Institutions

Authors

  • John Busenbark, University of Georgia
  • Matthew Semadeni, Arizona State University

Abstract: Monitoring capital market returns represents a primary concern for both managers and academics. Although stock market returns to organizational activities are thought to represent the perceived value of those activities, it is unclear whether or not this is actually the case. Building on a line of recent work in financial economics and accounting, we demonstrate that investors rely on information cues to help cope with limited attention. We find that investors respond negatively to activities when managers could engage in opportunistic behavior, but that these negative responses are significantly hampered by the presence of information to help investors rationalize why the activity is occurring. We couple principles from information economics and agency theory to contribute research in corporate governance.

Title: The Influence of Bondholders on Corporate Innovation

Authors

  • Jonathan O'Brien, University of Nebraska
  • Pengfei Ye, Rensselaer Polytechnic Institute
  • Iftekhar Hasan, Fordham University

Abstract: Strategy research has found that debt tends to have a detrimental effect on firm innovation. In this paper, we employ a stakeholder bargaining perspective to argue that this effect will be most pronounced when the firm’s bonds are concentrated in the hands of ‘bond blockholders’. Furthermore, we contend that the temporal orientation of bondholders will influence this relationship because it impacts the degree to which bondholders are motivated to encourage and support long-term value creation for the firm as opposed to just focusing on short-term value appropriation. Moreover, while agency theory has long suggested that there is an inherent conflict of interest between shareholders and bondholders, our results suggest that the temporal orientation of investors matters much more than the type of security they hold.

Title: The Influence of Shareholder Activism in the Form of 13D Filings on Firm Outcomes

Authors

  • Michael Withers, Texas A&M University
  • Kai Xu, University of Texas at San Antonio
  • Michael A. Hitt, Texas A&M University and TCU
  • Leonard Bierman, Texas A&M University
  • Cheryl Trahms Chapman, Minnesota State University-Mankato

Abstract: While agency theory suggests that concentrated ownership influences a variety of strategic outcomes, research has yet to examine the potential for strategic change to emerge directly from actions taken by concentrated owners to influence the organization. In this study, we focus shareholder activism in the form of 13D filings and examine its influence on strategic change. We also explore whether such shareholder activism actions attract other investors who may benefit from the 13D investor’s influence on a firm’s strategy. Finally, we examine board independence and CEO leadership structure as potentially important factors for the 13D investor influence through shareholder activism. Our research offers several contributions to the literature on corporate governance and suggests a number of important questions for future research.

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 X...

Sun: 08:00 – 09:15
Session 74: Open Strategy Workshops: Lessons Learned from Practising Strategizing
Sun: 09:45 – 11:00
Session 29: The Elephant in the Room: How public policy and institutions help drive innovation, entrepreneurship, and firm performance
Session 76: The evolution of the strategy as a profession and the field of strategy
Sun: 11:15 – 12:30
Session 12: Environmental Entrepreneurship: How and When do Entrepreneurs address Environmental Degradation?
Session 38: Big Game Hunting: Accessing and Interacting with Senior Executives for Empirical Research
Sun: 13:45 – 14:30
Session 307: Lifetime Achievement Award Recipient
Sun: 14:45 – 15:45
Session 7: New Frontiers in Technologies, Fields, and Business Models: Implications for Academic and Practice Knowledge Creation
Sun: 16:15 – 17:30
Session 61: The Institutional Level of Strategizing Activities
Session 261: Knowledge Creation and Sharing in Virtual Communities
Mon: 08:00 – 09:15
Session 72: External Influences: Audiences and Media
Session 126: Entry Mode & Cross-Border Acquisitions
Session 140: New Perspectives on the Outside Director Selection Process
Mon: 09:45 – 11:00
Session 8: Elevating our Understanding of Organizational Performance: Bridging the Frontiers of Business and Corporate Strategies
Mon: 11:15 – 12:30
Session 149: Management and Coordination of Multinationals
Session 220: Perspectives on CEO Compensation
Mon: 13:45 – 15:00
Session 16: Human Capital and Innovation
Session 37: Political Ties: Knots or Bows?
Session 63: Political and Material Aspects of Strategy Making
Session 97: Accelerators, corporate VCs and new venture creation
Session 258: Explainng CSR: External Factors
Mon: 15:15 – 16:15
Session 227: Mergers, Acquisitions and Divestitures: Reconfiguring Resource Bases for Value Creation and Growth
Session 308: Strategy Beyond the Firm: Creating and Capturing Value from External Resources
Session 310: When the Smoke Clears: The Emergence of the Cannabis Industry
Session 311: Theory Fragmentation in Strategic Management?
Session 312: Climate Change: Why and How Should Strategic Management Care?
Mon: 16:45 – 18:00
Session 42: The Word is Out! Stakeholder Responses to Public Signals of Firms' Behaviors
Session 112: Acquisitions - Before the Deal
Tue: 08:00 – 09:15
Session 309: Looking Good and Sounding Better: Impression Management by CEOs
Tue: 09:45 – 10:45
Session 9: Whatever Happened to Theory in Strategic Management?
Tue: 11:00 – 12:15
Session 70: CEO Characteristics: Microfoundations of Behavioral Strategy
Tue: 14:15 – 15:30
Session 116: Acquisitions - After the Deal
Tue: 15:45 – 17:00
Session 52: Entrepreneurial business models
Session 219: A Tough Crowd: Critical Examinations by Owners and Stakeholders
Session 262: Pioneering Knowledge
Tue: 17:30 – 18:45
Session 144: Board Structure: What Works Best?
Session 208: Internationalization Strategies and Performance


Strategic Management Society

Denver