A Different Perspective on the Nonfamily vs. Family CEO Debate

[We’re pleased to welcome authors Rüveyda Kelleci of Hasselt University, Frank Lambrechts of Hasselt University, Wim Voordeckers of Hasselt University, and Jolien Huybrechts of Maastricht University. They recently published an article in the Family Business Review entitled “CEO Personality: A Different Perspective on the Nonfamily Versus Family CEO Debate,” which is currently free to read for a limited time. Below, they reflect on the inspiration for conducting this research:]

What motivated you to pursue this research?

Current family business research on family firm CEOs has mainly focused on the characteristic of “family kinship” to explain the differences and the performance effects of nonfamily vs. family CEOs; however, such research has neglected other aspects of CEOs that may better explain their behavior. Indeed, we argue that the strategy and success of the family firm critically depends on the leadership behavior of the firm’s CEO, which is largely driven by CEO personality. Given that CEO personality has been largely unexplored in the family business domain, we wanted to address this substantial knowledge gap. Therefore, based on a unique, hand-collected dataset, we examined the personality traits of nonfamily and family CEOs in privately held Belgian family firms.

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

Our research is one of the only studies to empirically examine the very hard to come by data on personality of family firm CEOs. Therefore, our study can serve as a foundation for future research in this unusual, yet important area. We offer a fresh new perspective on the debate about nonfamily vs. family CEOs and thereby alter the way in which differences between the two CEO types are commonly viewed. We argue that family kinship alone cannot fully explain or predict the differences between nonfamily and family CEOs and that we must incorporate their personalities. We find significant differences between nonfamily and family CEOs with regard to nine personality traits: independent minded, democratic, data rational, behavioral, detail conscious, conscientious, relaxed, worrying, and trusting. The findings suggest a very balanced personality profile for nonfamily CEOs and a rather strong-willed personality for family CEOs. Our findings also reveal several personality traits of nonfamily CEOs that are significantly associated with firm financial performance. Surprisingly, for family CEOs, we find no such indications. Moreover, our results call into question some assumptions in the literature about how family CEOs and nonfamily CEOs differ and provide a deeper understanding of prior work. We hope our study will become an important springboard for future research on CEO personality in family firms.

What advice would you give to new scholars and incoming researchers in this particular field of study?

One approach to advance our knowledge of family firm CEOs is to integrate family business research with insights from research on personality. This can help family business scholars to deepen and/or question current assumptions and predictions about differences in behavior between family and nonfamily CEOs. Moreover, as prior research has found that the success of the family firm reflects CEO personality, we argue that a deeper understanding of the personality traits of CEOs in family firms will further the debate on the conduct and performance of family firms. The findings of our study provide numerous fruitful avenues for future research.

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Restricted Variance Interaction Effects

[We’re pleased to welcome authors Jose Cortina of Virginia Commonwealth University,  Tine Koehler of the University of Melbourne, Kathleen R. Keeler of Virginia Commonwealth University, and Bo Bernhard Nielsen of the University of Sydney and Copenhagen Business School. They recently published an article in Journal of Management entitled “Restricted Variance Interaction Effects: What they are and why they are your friends,” which is currently free to read for a limited time. Below, Dr. Cortina reveals the inspiration for conducting this research :]

JOM_44.1_72ppiRGB_powerpointI had read about Mischel’s situation strength notion when I was an undergrad. The idea was that, in strong situations, everyone behaves the same way regardless of individual differences like conscientiousness or extraversion. In weak situations where there aren’t clear norms for behavior, individual differences rule. This phenomenon results in Mischel’s personality by situation interaction such that personality predicts behavior in weak situations but not in strong situations. That made sense to me, and I didn’t giveit much more thought.

Until few years ago. Some of my students were interested in this stuff, so I started reading more about the situation strength hypothesis. Then, as always, I started to question. First, do authors who rely on Mischel’s theory for their hypotheses actually test for variance differences as per the theory? (Spoiler alert-the answer is no, but that paper is under review elsewhere). Second, might it be that this sort of phenomenon goes beyond personality by situation interactions? The more I thought about this second question, the more intrigued I became.

Then I was on sabbatical at the University of Sydney, and I was looking for an excuse to collaborate with Bo Nielsen on something related to international business. It occurred to me that a more general sort of interaction, something that I began calling a restricted variance interaction, was quite common in IB research. So Bo, my longtime partner in crime Tine Kohler, and I published a paper to this effect in JIBS. But the more I thought about it, the more I realized that RV interactions went beyond IB. They were, in fact, everywhere, and at every level of analysis, from within person to between country. If we ever start doing interplanetary research, I bet we find RV interactions there too.
We started fiddling with data and equations, and we discovered that there was a lot of interesting stuff going on with these interactions. First, restriction of variance affects unstandardized weights, but not standardized weights. Second, while restriction on the DV weakens prediction as per Mischel, restriction on the IV actually has the opposite effect! Third, restriction on a mediator has no effect on the indirect effect. Fourth, higher order RV interactions are also entirely possible. Fifth, RV interactions have their own testing requirements. And the more we looked in the literature, the more we found examples of these and other RV interaction phenomena. Put all of this together, add my student Kate Keeler to the team, and you have our JOM paper.

This paper is one of three that Tine, Bo, Kate, and I are working on. The more that people look at the field through an RV lens, the easier they will find it to support their interaction hypotheses. My hope is that, through these various papers, we can generate enough interest in RV interactions that it reaches a tipping point such that everyone gets some exposure to the thinking that underlies these phenomena. Then we will see interaction hypotheses with stronger foundations than is currently the case. Here’s hopin’.

 

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Individuals’ Personal Resistance to Change

overcoming-2127669_1920[We’re pleased to welcome author Shaul Oreg of The Hebrew University of Jerusalem. He recently published an article in the Journal of Applied Behavioral Science entitled “Resistance to Change and Performance: Toward a More Even-Handed View of Dispositional Resistance,” which is currently free to read for a limited time. Below, Dr. Oreg reflect on the inspiration for conducting this research:]

JABS_72ppiRGB_powerpointMy interest in this project derived from my desire to counter the negative view of the resistance to change concept in general, and the notion of individuals’ personal resistance to change more specifically. As a rule, resistance to change is considered to be bad, irrational, and harmful. Accordingly, individuals who are predisposed to resist change are typically viewed in a negative light. They are seen as inferior to those individuals who seek out change and thrive in dynamic environments. This is unfortunate given that there are many situations in our lives in which it is the routine and stable environment that dominates and that requires our attention. We are often required to maintain high levels of motivation and performance in environments that are routine and often monotonous. As such, individuals who shy away from change and prefer routines may actually have an advantage over change-seekers in such stable environments. This is what I set out to demonstrate in this project.

One of the challenges in the project was to devise routine and dynamic environments in the lab that would capture the essence of these environments in real life. Another challenge was obtaining evidence from both laboratory and field settings.

The findings nicely demonstrate both the advantages and disadvantages of dispositional resistance to change in the context of task performance. Whereas high-resistors perform more poorly on dynamic tasks, they outperform their change-loving counterparts when performing routine tasks. Of the four dimensions of the dispositional resistance to change trait, it is the routine-seeking dimension that yields this pattern most consistently.

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Resistance tag photo attributed to NeuPaddy. (CC)

Beyond Developmental: The Decision-Making Applications of Personality Tests

5529311561_4ba9be7419_zThe use of personality assessments in organizations has often been limited to developmental applications. However, growing support for data-driven decision-making in recent years has made it apparent that personality assessments could also become a resource for talent management decisions. In a recent paper from Journal of Applied Behavioral Science entitled “Does Purpose Matter? The Stability of Personality Assessments in Organization Development and Talent Management Applications Over Time”, authors Allan H. Church, Christina R. Fleck, Garett C. Foster, Rebecca C. Levine, Felix J. Lopez, and Christopher T. Rotolo investigate the consistency of personality data over time and whether the changing application of personality assessments changes their validity. The abstract for the paper:

Personality assessment has a long history of application in the workplace. While the field of organization development has historically focused on developmental aspects of personality tools, other disciplines such as industrial-organizational psychology have emphasized its psychometric properties. The importance of data-driven insights for talent management (e.g., the identification of high potentials, succession Current Issue Coverplanning, coaching), however, is placing increasing pressure on all types of applied behavioral scientists to better understand the stability of personality tools for decision-making purposes. The current study presents research conducted with 207 senior leaders in a global consumer products organization on the use of personality assessment data over time and across two different conditions: development only and development to decision making. Results using three different tools (based on the Hogan Assessment Suite) indicate that core personality and personality derailers are generally not affected by the purpose of the assessment, though derailers do tend to moderate over time. The manifestation of values, motives, and preferences were found to change across administrations. Implications for organizational development and talent management applications are discussed.

You can read the paper, “Does Purpose Matter? The Stability of Personality Assessments in Organization Development and Talent Management Applications Over Time,” from Journal of Applied Behavioral Science free for the next two weeks by clicking here. Want to stay current on all of the latest research published by Journal of Applied Behavioral ScienceClick here to sign up for e-alerts!

*Image attributed to Service Design Berlin (CC)

How Do CEOs Shape Corporate Culture?

In some ways, corporate culture is the personality Meeting Board Roomof a company, and just like human personalities, corporate cultures can vary widely. Many factors impact a company’s culture, but perhaps the most significant determining factor of culture is the values and actions of an organization’s senior leaders. In their article, “The Promise and Problems of Organizational Culture: CEO Personality, Culture, and Firm Performance,” published in the December 2014 issue of Group & Organization Management, authors Charles A. O’Reilly III of Standford University, David F. Caldwell of Santa Clara University, Jennifer A. Chatman of UC Berkeley, and Bernadette Doerr of UC Berkeley delve into the topic of organizational culture. Their paper specifically discusses how much a CEO’s personality impacts organizational culture, and how culture can in turn impact organizational performance.

home_coverThe abstract:

Studies of organizational culture are almost always based on two assumptions: (a) Senior leaders are the prime determinant of the culture, and (b) culture is related to consequential organizational outcomes. Although intuitively reasonable and often accepted as fact, the empirical evidence for these is surprisingly thin, and the results are quite mixed. Almost no research has jointly investigated these assumptions and how they are linked. The purpose of this article is to empirically link CEO personality to culture and organizational culture to objective measures of firm performance. Using data from respondents in 32 high-technology companies, we show that CEO personality affects a firm’s culture and that culture is subsequently related to a broad set of organizational outcomes including a firm’s financial performance (revenue growth, Tobin’s Q), reputation, analysts’ stock recommendations, and employee attitudes. We discuss the implications of these findings for future research on organizational culture.

You can read “The Promise and Problems of Organizational Culture: CEO Personality, Culture, and Firm Performance” from Group & Organization Management free for the next two weeks by clicking here. Want to know about all the latest research from Group & Organization Management? Click here to sign up for e-alerts!

Albert Bandura Responds to Commentaries: “On the Functional Properties of Perceived Self-Efficacy Revisited”

JOM 41(3)_Covers.inddIn his paper entitled “On the Functional Properties of Perceived Self-Efficacy Revisited,” Albert Bandura discussed the functional properties of perceived self-efficacy. He concluded with an invitation to readers to submit commentaries on his article. Since the paper made its appearance in the January 2012 issue of Journal of Management, this call was answered by Jeffrey B. Vancouver; Joshua J. Jackson, Patrick L. Hill, and Brent W. Roberts; Gillian B. Yeo and Andrew Neal; and Ronald Bledow. Dr. Bandura recently published a response to these commentaries in the OnlineFirst section of Journal of Management entitled “On Deconstructing Commentaries Regarding Alternative Theories of Self-Regulation.”

The abstract:

The present commentary addresses issues raised in four replies to my editorial on the functional properties of perceived self-efficacy (Bandura, 2012). In my comments on the paper by Jackson, Hill, and Roberts (2012), I discuss the arbitrary nature of “disposition” and question whether an essentially atheoretical computer-structured inventory based on a mixture of superficially assessed habitual behaviors constitutes a theory of personality. In another set of comments, which speak to the paper by Vancouver (2012), I identify two major flaws in Powers’ (1991) perceptual control theory and document experimental compromises in Vancouver’s efforts to demonstrate that goals and self-efficacy operate counteractively. My comments on the Yeo and Neal (2013) paper center on their unsuccessful efforts to explain and verify the proposition that general and specific self-efficacy work at cross-purposes. In response to Bledow’s (2013) entry, I address the conceptual ambiguity of his theory of unconscious self-motivation, misconstruals of the role of self-efficacy in the process of change, and marginalization of the functional role of consciousness in human behavior.

You can read “On Deconstructing Commentaries Regarding Alternative Theories of Self-Regulation” from Journal of Management free for the next 30 days by clicking here. Interested in reading the original and commentaries as well? Click here to view the collection. Want to know about all the latest research and commentaries like this from Journal of Management? Click here to sign up for e-alerts!

Does Mental Ability Affect Question Interpretation on Personality Tests?

[We’re pleased to welcome Amy DuVernet who was the corresponding author on the article “General Mental Ability as a Source of Differential Functioning in Personality Scales” from Organizational Research Methods.]

Individuals vary on a number of characteristics. Our ability to accurately measure their standings on those characteristics is pivotal to our understanding of individual differences and the drivers of individual behavior. Our study focused specifically on the interaction between personality measurement and intelligence (i.e., general mental ability). We utilized Item Response Theory techniques to examine differences in item characteristics across groups of varying levels of general 07ORM13_Covers.inddmental ability. In other words, we investigated whether intelligence plays a role in the way an individual interprets and responds to questions designed to gauge personality traits, such as extraversion and conscientiousness.

A person high in intelligence may be better able to interpret and thus respond to a personality item if that item uses complex language or requires a great deal of cognitive processing. For example, the International Personality Item Pool (Goldberg, Johnson, Eber, Hogan, Ashton, Cloninger, & Gough, 2006) item “I shirk my duties” requires respondents to understand the meaning of the relatively uncommon term “shirk”, to recall instances of shirked work duties, and to gauge how those recollections map onto the response options (e.g., strongly agree to strongly disagree).

Our results confirmed that, while most personality items did not demonstrate significantly different characteristics across groups, certain items are indeed interpreted differently by individuals with highly different intelligence levels. For example, all negatively keyed items (i.e., items in which strong endorsement indicates less of the underlying trait being measured) exhibited differential item functioning, suggesting that respondents with low cognitive ability interpreted and responded to these items differently than those with high cognitive ability. These findings have implications for the construction of personality and other noncognitive measures. Ideally, the measurement of these constructs should not be influenced by individuals’ intelligence; however, the results of this study indicate that intelligence can influence the response process for non-cognitive measures.

Click here to read General Mental Ability as a Source of Differential Functioning in Personality Scales” from Organizational Research Methods. Make sure to sign up for e-alerts by clicking here and stay up to date on all the latest from Organizational Research Methods!

 amy-duvernet-ph-dAmy M. DuVernet is the Director of Corporate Research at Training Industry, Inc, where her work focuses on learning and development research to inform best practices. She earned her PhD in Industrial and Organizational Psychology from North Carolina State University.

natalie-wrightNatalie Wright is an assistant professor in the Department of Psychology and Counseling at Valdosta State University. She earned her PhD in industrial and organizational psychology from North Carolina State University in 2013. Her current research focuses on the psychometric evaluation of psychological measurements.

adam2Adam W. Meade is Professor of Psychology at North Carolina State University. His interests relate to the application of quantitative methods in organizational research in novel approaches to psychological measurement. He serves on various editor boards and as Associate Editor for Organizational Research Methods.

chrisChris Coughlin is a Senior Research Scientist on the Product Development and Innovation team at CEB. In this role, he leads the development, validation, and implementation of call center, software, and computer skill simulations. Prior to joining CEB, he worked on organizational development initiatives at Spherion, a Randstad company. He earned his BS in Psychology from the University of Georgia and his MS in Industrial-Organizational Psychology from Valdosta State University. He is a member of the Society of Industrial and Organizational Psychology, Society for Human Resource Management, and the American Psychological Association.

tracyTracy M. Kantrowitz is Vice President of Research and Development at CEB’s SHL Talent Measurement Solutions. In this role, she is responsible for the development of assessment content and research related to employee selection. Dr. Kantrowitz has published in leading journals and presented at national conferences on topics such as predictors of job performance, computer adaptive testing (CAT), and unproctored internet testing (UIT). Dr. Kantrowitz holds a PhD in industrial/organizational psychology from the Georgia Institute of Technology.