managerial agency
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2021 ◽  
pp. 014920632110638
Author(s):  
Songcui Hu ◽  
Richard J. Gentry ◽  
Timothy J. Quigley ◽  
Steven Boivie

The Behavioral Theory of the Firm suggests that performance below an aspiration triggers problemistic search that can lead to organizational change and risk-taking. This compelling perspective has spawned considerable empirical examination of diverse strategic outcomes as firms’ responses to performance feedback. However, empirical studies have provided inconsistent evidence of problemistic search effects on various organizational search outcomes. This empirical controversy is likely attributed to the fact that most research has considered problemistic search as a firm-level and relatively routinized process with a high degree of automaticity in firms’ responses to performance feedback while overlooking the role of managerial agency. Rather than viewing problemistic search as an automatic firm-level process, we believe that behavioral responses are shaped, at least partially, by top executives, notably CEOs. To this end, we first examine whether problemistic search effects vary across a range of organizational change and risk outcomes. We then explore whether the relative size of firm and CEO effects varies across different search outcomes. Using a multilevel approach, we show not only the heterogeneity in problemistic search effects on different organizational outcomes but also heterogeneity in the relative size of firm and CEO effects on these outcomes. While firm effects are substantial in directing some strategic decisions, as proposed by the problemistic search model, CEO effects are large for certain organizational outcomes, such as changes in resource allocation. This study serves as a jumping-off point for future theorizing and empirical work on problemistic search that incorporate the role of managerial agency.


2021 ◽  
pp. 031289622097844
Author(s):  
Tim Williams ◽  
Melissa Edwards ◽  
Tamsin Angus-Leppan ◽  
Suzanne Benn

Corporate sustainability is a priority for organisations, but the nature of the enabling intra-organisational activities, processes and managerial agency is not well understood. In this study, we examine the activity and agency of corporate sustainability managers through a narrative approach and the novel theoretical lens of ‘sustainability work’: purposeful and strategic activities to shape the social-symbolic context such that social and environmental outcomes are prioritised. Analysing how individuals across a range of diverse organisations and industries frame their activity, we identify three overlapping and co-occurring broad subsets of sustainability work: goal-directed, other-directed and self-directed. Through our notion of sustainability work, we contribute by recasting managerial agency in the enabling of sustainability as occurring in the social-symbolic realm and highlighting the implications in both theory and practice for the professionalisation of sustainability. JEL Classification: M10, M14


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Saima Karim ◽  
Muhammad Ilyas

PurposeThe aim of this study is to investigate the effect of foreign institutional investors (FII) on the contribution of cash and dividend to firm's value in the context of Japan.Design/methodology/approachThis study used a sample of 1,929 nonfinancial firms listed in Tokyo Stock Exchange in the period from 2002 to 2016. For data analysis, pooled OLS regression with firm and year fixed effect is applied. Further, the p-value of difference is used to test the null hypothesis of equal coefficients.FindingsThe findings depict that cash holdings contribute more to firm's value when ownership by FII is high. Contrarily, dividends contribute more to firm's value when ownership by FII is low. The results remain consistent after using excess cash holdings instead of cash holdings and after re-estimating the main regression model in the presence of top 30% and bottom 30% ownership level.Research limitations/implicationsThis study is limited to Japanese nonfinancial sector. The results implied that firms where the probability of managerial agency cost and expropriation of cash is high, the presence of FII mitigates the agency cost and positively influences the contribution of cash to firm's value. Overall, this research highlighted the disciplinary and monitoring role of FII in Japan.Originality/valueThis study provides new insights on the monitoring and governance role of foreign institutions, showing that FII promote better cash management and utilization, which significantly affects the contribution of cash holdings to firm's value.


2020 ◽  
Vol 10 (2) ◽  
pp. 149
Author(s):  
Arsinda Inggar Pawitri ◽  
Muniya Alteza

The aim of this study was to determine the effect of liquidity, profitability, leverage, operating capacity, and managerial agency costs on financial distress in manufacturing companies listed on Indonesia Stock Exchange. The research period used was 2015-2017. The type of this research was associative causal with quantitative approach. The population of this study includes all manufacturing companies listed on Indonesia Stock Exchange. The sampling technique used was purposive sampling, and obtained as many as 84 companies, consists of 42 companies that experienced financial distress, and 42 companies that didn’t experience financial distress as comparison company. Data analysis conducted through logistic regression. Based on this research, it was concluded that liquidity proxied by current ratio had no effect to financial distress. Profitability proxied by return on asset had no effect on financial distress. Leverage proxied by debt to asset ratio had a significant and possitiveeffect on financial distress. Operating capacity proxied with total asset turnover had no effect on financial distress. Managerial Agency costs had no effect on financial distress. The Nagelkerke R Square’s score in this study was 0.491 which means that the ability of liquidity, profitability, leverage, operating capacity, and managerial agency were able to explain the variable of financial distress condition by 49.1%. The remaining of 50.9% dependent variables were explained by other factors outside the model.


2020 ◽  
pp. 112
Author(s):  
Muhammad Sanyasa Tyaga ◽  
Farida Titik Kristanti

Companies are required to be able to maintain the survival of the company so that the company's goals can be achieved properly. Financial distress is one of the factors that causes companies to not be able to maintain their survival so that the company's goals are not achieved. Factors that cause the company is in a state of distress are internal and external factors. This study uses internal factors such as financial ratios, size, agency costs and external factor is inflation. This research method is a quantitative method using time series data. The regression model used is the cox proportional hazard regression model. Determination of the sample using purposive sampling so that 81 samples were used in this study. Based on the results of partial tests, leverage, liquidity, activity, company size, managerial agency costs do not have a significant effect on financial distress. Only inflation has a significant positive effect on financial distress.


Author(s):  
Gail T. Fairhurst ◽  
Mathew L. Sheep

How are identities constituted in a post-truth context? To answer this question, the authors of this chapter take a paradox approach to identity, which can address the contradictions of a post-truth era. They show how the paradoxical tensions that actors experience serve as discursive resources for individual and collective identities. The authors assert that the greater the interrelatedness of paradoxical tensions evidenced in discourse, the more likely are they to knot in a dynamic interplay that may result in self-referential action of a contradictory or paradoxical nature. Drawing from the logic of extreme context research, the chapter examines the discourse of the post-truth presidency of Donald J. Trump to illustrate how identity knotting subverts managerial agency in identity construction.


2019 ◽  
Vol 31 (2) ◽  
pp. 262-278
Author(s):  
Rutvica Andrijasevic ◽  
Devi Sacchetto ◽  
Ngai Pun

This article aims to provide insight into the employment relations in China-based multinational companies internationalising to Europe, a still relatively unexplored topic. We investigate the transfer of work and employment practices from Foxconn’s manufacturing headquarters in mainland China to its subsidiaries in Czechia and the factors that influence the firm’s internationalisation of production. By drawing upon original ethnographic fieldwork, the study makes a two-fold contribution. First, it shows the analytical inadequacy of the ‘latecomer’ model which assumes that the Chinese firm is an asset seeker. Second, it illustrates the relevance of diversity of labour and non-institutionalised forms of workers’ agency for theorisation of internationalisation. These topics are still insufficiently addressed by the literature that favours managerial agency and the model of distinctive and stable national labour forces. The study contributes to the theoretical debates on internationalisation by illustrating the limits of the national institutionalist perspective, the importance of considering a multi-scalar analytical framework and the relevance of labour composition in shaping multinational employment relations. JEL Codes: J61, J42, L23


Author(s):  
Bela Indah Prastiwi ◽  
Rosiyana Dewi

<p><em>The objective of this empirical study is to analyze the effect of Managerial agency cost and Ownership Structure, either separately or simultaneously, on Financial distress in Manufactur Companies that listed on BEI at 2015-2017 . Range of period used in this study is three years, for 2015-2017.Population of the study is all manufacturing companies listed in BEI without delisting, relisting, or moving sector on 2015-2017 period. Method of sampling in this research is purposive sampling method. As the criteria established, there are 261 companies used as sampel. Type of data is secondary data secondary data which is retrieved from financial report manufacturing. In this research, multiple linear regression model is used to analyze data. Result shows that: partially (1) Managerial agency cost has an effect on Financial distress, and (2) Ownership Structure has an effect on Financial distress. Simultaneously Managerial agency cost and Ownership Structure has effect on Financial distress.</em></p>


2019 ◽  
Vol 9 (1) ◽  
pp. 44-80
Author(s):  
Ioannis Spyridopoulos

Abstract I investigate whether restrictive loan covenants disrupt or improve firms’ operating performance. Using an instrumental variables approach to address the endogenous relationship between covenant strictness and firms’ efficiency, I find that stricter loan covenants lead to an increase in profitability and firm value even when firms do not violate a covenant. Stricter covenants improve performance only in firms with managerial agency conflicts: those without large shareholder ownership, facing softer competition in their product market, or with weaker shareholder rights. The evidence suggests that by designing stringent contracts ex ante, creditors create positive externalities in poorly governed firms through managerial incentives. Received December 7, 2018; editorial decision May 31, 2019 by Editor Uday Rajan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.


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