Examining Experience Portfolios of Subsidiary Executives in Multinational Firms

[We’re pleased to welcome author Dr. Marketa Rickley of the University of Iowa. Dr. Rickley recently published an article in Journal of Management entitled “Cultural Generalists and Cultural Specialists: Examining Experience Portfolios of Subsidiary Executives in Multinational Firms,” which is currently free to read for a limited time. Below, Dr. Rickley reveals the inspiration for conducting this research:]

JOM_44.1_72ppiRGB_powerpointWhat motivated you to pursue this research?

How multinational companies (MNCs) allocate executives to manage foreign subsidiaries located in diverse and challenging markets has long fascinated researchers. However, the emphasis of this research stream has largely been on the antecedents and consequences of selecting expatriates versus local managers. Based on the observations that both expatriate and local managers often have substantial international experiences to draw on to manage a foreign subsidiary, this study sought to move away from placing foreign subsidiary executives into just two distinct categories, which are often insufficient and may be potentially misleading in characterizing these individuals’ experiential backgrounds. This study instead analyzed the depth and breadth of foreign subsidiary executives’ previous international experiences relative to the institutional distance between the MNC headquarters country and the foreign subsidiary country.

In some cases, the MNC headquarters country and the foreign subsidiary country are quite similar. In other cases, the foreign country is quite different along economic, political, and cultural dimensions, making the market presumably more difficult to manage from the perspective of MNC headquarters. The main focus of this research was to determine whether in these more “institutionally distant” foreign subsidiary markets MNCs select executives with (i) a broader or (ii) a more relevant set of previous international experiences. In other words, do they select cultural generalists or cultural specialists to manage more distant foreign markets

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

The answers provided by this study to the research questions above were quite surprising to me personally. I expected that MNCs would select executives whose previous international experiences matched the specific challenge at hand. But instead, the results showed that MNCs reach for cultural generalists – that is, for individuals with a broad set of previous cultural experiences that are not necessarily relevant to the headquarters—subsidiary country pair. Interestingly, this finding is true in both the expatriate and local manager sub-sample.

In what ways is your research innovative, and how do you think it will impact the field?

Apart from digging deeper into the experiential backgrounds of expatriates and local managers, this study is innovative in the way that it measures generality and specificity of previous international experience. Generality is measured as the cultural distance between the country where the experience was earned, and the executive’s country of origin. Specificity is measured as the cultural distance between the country where the experience was earned, and the “other” country in the headquarters—subsidiary country pair. That is, for a French-owned foreign subsidiary in Romania, its Romanian executive’s specificity international experience would be measured against France – which is the “other” country in the headquarters—subsidiary country pair. The same Romanian executive’s generality of international experience would be measured against Romania – his/her country of origin. Particularly novel about this approach is the fact that each international experience is time-weighted by the number of years the individual spent abroad. Few other studies have been able to analyze international experience at this fine-grained level of detail.

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The Effect of Linguistic Style in an MD&A on Stock Market Reaction

[We’re pleased to welcome authors Dr. Mohamed M. Tailab and Dr. Marshall J. Burak of Lincoln University. They recently published an article in International Journal of Business Communication entitled “Examining the Effect of Linguistic Style in an MD&A on Stock Market Reaction,” which is currently free to read for a limited time. Below, they discuss this research:]

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Language as the currency of most human social processes can be converted to words. Investors and market participants attach very different connotations to the words, rely more on intuition than hard data, and react more to the verbal tone. Quantitative information contained in financial annual reports in general and in an MD&A in particular does not provide a complete picture to the investors about the expected firm value. So, the need arises to analyze the effect of narrative disclosures on market reaction as well. In addition, analyzing narrative disclosures is more easily understood than quantitative data, but at the same time it offers a different perspective. This initiated our research interests and concerns to explore in depth the impact of linguistic style in narrative disclosures on decision makers.Therefore, we decided to investigate the effect of language used in the MD&A between the speaker (management) and the listeners (investors), which in turn influences market reaction. We had hypothesized that the stock market (return and risk) has a significant response to the linguistic tone contained in the MD&A. Even though the initial hypotheses have never been proven, this study proves principles about the usefulness of an MD&A to investors.

This work expands on the understanding of the business communication literature by using an interdisciplinary approach. This approach has emerged the narrative disclosures with applied linguistic and market reaction. To this end, this paper is the first to use the partial least squares – structural equation modeling (PLS-SEM) approach and contributes to the existing body of knowledge in several ways including (a) a new approach to strengths, (b) evaluation of MD&A content, (c) proof that MD&A length does not play a strong role in market reaction, and (d) findings that capital assets pricing model (CAPM) or Farm-French models are more reliable than the realized volatility.

The study indicates that the average of negative tone is greater than the average of positive words in the MD&A. This may be because the study period started in 2010, there is a possibility that the financial crisis still has an effect on the verbal tone of MD&A reports, and allows the management writers to be more conservative. One interesting observation is that the linguistic content in an MD&A was not consistent with financial performance. It can be concluded that that management most likely does not use its financial performance as a guide for writing the MD&A, or maybe it has another criterion for delivering its message to the investors.
A challenging aspect of this work is that using dictionaries built by researchers in other fields (e.g., psychology) may not be appropriate for a content analysis of financial reports. We have limited our research by neglecting the investors’ types and their preferences. So, it would be better if future researches studied the investors’ preferences, what information investors need to find in the MD&A before making their decisions.The study recommends conducting a more efficient analysis of the narrative disclosures to investigate whether management writers communicate truthful information to investors by offering relevant data about financial performance.

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Does Collective Pay for Performance Work?

[We’re pleased to welcome authors Anthony J. Nyberg, Mark A. Maltarich, Dhuha “Dee” Abdulsalam, Spenser M. Essman, and Ormonde Cragun of the University of South Carolina. They recently published an article in Journal of Management entitled “Collective Pay-For-Performance (PFP): A Cross-Disciplinary Review and Meta-Analysis,” which is currently free to read for a limited time. Watch the video abstract the authors have created!

Below, they reveal the inspiration for conducting this research:]

JOM_44.1_72ppiRGB_powerpointWhat motivated you to pursue this research?

We investigated collective pay for performance (PFP) – pay that is contingent on collective outcomes – for two reasons: First, collective pay is becoming increasingly important and common among organizations. Second, there appear to be discrepancies between the empirical evidence and theoretical explanations for some of these widely used compensation practices.
Organizations are increasingly using collective PFP to motivate interdependent units; however, research on the topic is dispersed across multiple literature streams, and even findings within literature streams, are often contradictory. For instance, some theoretical perspectives suggest that collective PFP should decrease motivation, particularly among higher performers, resulting in lower unit performance; however, collective PFP is generally positively associated with unit performance. Consequently, we integrated multi-disciplinary research fields to try to reconcile disparate findings and improve our understanding of the relationship between collective PFP and unit performance, and to direct future research towards unanswered collective PFP questions.
In what ways is your research innovative, and how do you think it will impact the field?

In conducting this review, we were able to consolidate research from multiple fields (i.e. organizational behavior/psychology, strategic management, economics, and human resources) and multiple pay types (e.g. profit sharing, stock options, team pay), which allowed us to identify where our knowledge was well developed and where research is still needed. We were able to empirically confirm, through the use of meta-analytic techniques, that collective PFP is positively associated with unit performance. Theoretically, we identified inconsistencies across fields and developed an agenda for future research. It is our hope that other researchers can use this review as a guide to help address important unanswered questions regarding collective PFP.

What did not make it into your published manuscript that you would like to share with us?

The large body of research on collective PFP required substantial time and space to summarize key lessons. Because of this, our manuscript was able to identify but not answer many suggestions for future research. This means that that there remains a need for additional theoretical insights about how collective PFP functions. Specifically, explicating the sorting versus incentive effects and the temporal aspects of collective PFP remain important future topics to be addressed. Additionally, future research should consider examining the effects of collective PFP on alternative outcomes (e.g. competitive advantage) and how collective PFP operates in the context of larger compensation and HR systems.

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The Generative Interplay Between Learning and Playing in Managing and Organizing

[We’re pleased to welcome authors Dr. Barbara Simpson of the University of Strathclyde, Dr. Rory Trace of the University of Strathclyde, and Dr. Alia Weston of OCAD University. They recently published an article in Management Learning entitled “Traveling concepts: Performative movements in learning/playing,” which is currently free to read for a limited time. Below, Dr. Simpson reveals the inspiration for conducting this research :]

mlqb_48_3.coverWhat drew the three of us together to write this article was our shared interest in the generative interplay between learning and playing. We each approach this topic differently – Barbara takes a dynamic practice approach, Rory is interested in understanding creative action , and Alia comes from the perspective of researching non-conventional work practices – but we were sure that our differences could be productively co-informing. The underlying thread of commonality amongst us is a deep commitment to a process ontology, which invites a performative reimagining of the relationship between theory and research methodology.

Our article offers novel contributions to theory, methodology, and the empirical domain of artisanal food production. In terms of theory, we propose a processual formulation of playing and learning as opposite sides of the same coin, inseparable and co-emergent. This theoretical framing then demands some new thinking about methodology, which we have responded to by developing the idea of travelling concepts. These, we suggest, can sensitize and orientate the researcher’s gaze when s/he joins in the emergent dynamics of organizing, acting as a traveller’s aid or rough guide to help understanding and to direct inquiry.

Playfulness runs throughout our theoretical and empirical arguments, but we also wanted to ‘walk our own talk’ by being playful in presenting our insights to readers. As a consequence, the journey towards publishing this article has presented its own unique challenges and rewards, however we do sincerely hope it will now provide inspiration to other researchers who are seeking to take different approaches to researching the social dynamics of organizing.

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Understanding Students’ Engagement in Higher Education

[We’re pleased to welcome author Dr. Alexander Kofinas of University of Bedfordshire. Dr. Kofinas recently published an article in Management Learning entitled “Managing the sublime aesthetic when communicating an assessment regime: The Burkean Pendulum,” which is currently free to read for a limited time. Below, Dr. Kofinas reveals the inspiration for conducting this research :]

mlqb_48_3.cover

What motivated you to pursue this research?

When looking back to this piece of work I realise that the main motivation for pursuing the publication of this conceptual work is the sympathy I have for the students and their perturbations. I think sometimes the academy is relatively dismissive of the emotive aspects of learning and the sheer terror that some of my students seem to feel when facing new concepts, new ideas and new knowledge. At times, it appears like a small death; the death of the students’ previous state of knowledge and being. And yet looking back at my own learning journey it is in those small deaths and re-births, in those moments where I felt the abjection, the fear, the pressure; in those moments memories grew memories that I hold dear. And in those moments, my then classmates, housemates, friends, and teachers became an important aspect of my interpretation of my story. Thus there is something attractive in this fear and in overcoming it, and the closest word to describe this feeling of attraction has been the sublime as described by Burke.

What is the most important/ influential piece of scholarship you’ve read in the last year?

It is hard to isolate a single influential piece of scholarship; it is in blending them that I get insight. So better to talk about a specific blend that helped with this published work. To make sense of the sublime and its connection to the learning journey of my students I tapped into an eclectic range of literature which rarely focussed on Higher Education. However, the breakthrough for this article was only possible when I made the connection between productive failure (which is akin to Argyris’ double-loop learning), with the way Kant was treating the feeling of the sublime; it was the realisation that Kant was treating the sublime almost as a failure of cognition to conquer the external world that provided that mechanism behind the burkean pendulum.

What did not make it into your published manuscript that you would like to share with us?

As usual, there is much that did not make it to the final manuscript. The original manuscript had 3x the concepts and ideas and was a bit of a… mess. Arguably the most important part removed was probably the section on flow and terror management theory; in the original manuscript I had suggested that flow (as in Goleman’s flow) is part of the terror management process and thus a way to overcome the sublime. There may be here scope for a future paper that seriously examines the beauty side of the aesthetic motivation and its link to flow. Terror Management theory (TMT) also would be good to explore explicitly, I was sad to remove it but in the end it was the sublime thread that was the priority. However, I still think that the TMT authors in that field have tapped something that may be uncomfortable to many but it is of primary importance to acknowledge and investigate; Death is a vital part of our life and that in learning both life and death are present…

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Call for Proposals: Family Business Review Special Issue

Make an impact on Family Business Research and submit a special issues proposal to the Family Business Review!

fbra_30_2.coverFamily Business Review (FBR) a refereed journal published quarterly since 1988, is a scholarly publication devoted exclusively to exploration of the dynamics of family-controlled enterprise, including firms ranging in size from the very large to the relatively small.

For more details click here.

Manuscripts should be submitted electronically to http://mc.manuscriptcentral.com/fbr.

You will need to create an account in order to submit your manuscript. The system will notify you once we receive the manuscript and have sent it out for review.

Don’t forget to sign up for email alerts through the journal homepage so you never miss the latest research.

Management, Social Sustainability, Reputation, and Financial Performance Relationships

[We’re pleased to welcome authors, Dr. Robert Sroufe of Duquesne University Pittsburgh and Dr. Venugopal Gopalakrishna-Remani of The University of Texas at Tyler. They recently published an article in Organization & Environment entitled “Management, Social Sustainability, Reputation, and Financial Performance Relationships: An Empirical Examination of U.S. Firms,” which is currently free to read for a limited time. Below, Dr. Sroufe discusses the motivations for this research:]

O&E_72ppiRGB_powerpointThe motivation for this study on Management, Social Sustainability and Reputation can be found in our profound interest in how innovative organizations integrate sustainability. We developed a unique sample of top ranked Fortune 500 multinational companies to better understand how sustainability practices lead to improved performance. In doing so, we propose new constructs and item development while testing relationships to tradition measures of financial performance. This study looks at exemplary MNCs as identified by Newsweek, The Corporate Knights, and Best Corporate Citizens rankings. Firm level performance is assessed during the time of country level cuts to GHG emissions set by the Kyoto Protocol, and during a period of time in which there was a difficult recession in the U.S. The uniqueness of our study and the results operationalize multiple dimensions of sustainability and ask the question has social performance lived up to the promises made on its behalf?

A challenging aspect of this study is the development of new sustainability constructs involving management, social performance and reputation. We were able to utilize multiple measures from both Newsweek and Bloomberg to develop and assess new constructs. We found there are significant benefits to sustainability management practices, yet there is more to explore and learn about the practices and relationships involving social sustainability performance. We hope this study provides a foundation for future research into social sustainability and evolving management practices.

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