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Strategic Management
| Articles | Content |
|---|---|
| Eisenhardt, 1989 | Agency Theory |
| Agency problem | Eisenhardt, 1989 Happens when goals conflict/and can't confirm agents' work |
| Solutions to Agency Problem | Behavior-based contracts and outcome-based contracts Outcome-based - ties agents to firm performance to better align their goals with their principals Behavior-based - information monitoring in place, agents are less risk averse, less specific job duty |
| Agency Theory Assumptions | Eisenhardt, 1989 People are self-interested, risk aversion dictates contracts and problem, people bounded by rationality, information is a commodity, agents/principals' goals conflict |
| Dalton et al., 2007 | Agency theory |
| Dalton et al., 2007 - 3 approaches, what research is agency theory dominant in? | Agency theory is dominant perspective for governance research 3 approaches: independence of BOD, equity ownership, market for corporate control |
| Dalton et al., 2007 - what is theory a subset of? | CSR, shareholder value maximization, stakeholder theory, stewardship |
| Dalton et al., 2007 - what is market for corporate control? | Research focuses on mkt reg that occurs when other corp. gov fails. Premise: when managers implement excessive agency costs so undervaluing firm harming stakeholders. -vulnerable to takeover |
| Dalton et al., 2007- Jensen on corporate takeovers | takeovers are beneficial considering they protect shareholders from managers who d not utilize resources properly. Research found takeovers generated positive returns for firm shareholders & returns for acquiring is=0. Neg: failure, job loss, large debt |
| Dalton et al., 2007 - board leadership | A.T. Is the CEO also chair of the board? - may have too much power as both but could be a good leader and increase firm performance No research found t suggested independence of BOD significantly influences financial performance |
| Dalton et al., 2007 - BOD Independence | central problem is whether the board can significantly monitor a ceo and firm subjectively in the best interest of shareholders |
| Dalton et al., 2007 - equity ownership | This research stream focuses on aligning the officers' and directors' interests to that of the stakeholders through equity ownership (i.e. stocks, compensation, tied to firm performance) - Little support for mitigating agency theory |
| Jensen & Meckling (1976) are... | founders of modern day Agency Theory |
| Founders of modern day agency theory... | Jensen & Meckling, 1976 |
| Espino-Rodriguez & Lai, 2014 | Hotel study that looks at the moderating relationship of asset specificity between competitive strategy and outsourcing The more specific the asset or service or task - the less likely to outsource |
| Espino-Rodriguez & Lai, 2014 - what theory is their hotel study on? | Transaction cost economics |
| Geyskins et al., 2006 - overall purpose | Paper reviews how org. makes boundary decisions to make, buy, or ally Hierarchical gov. vs. market gov. vs. relational gov |
| Geyskins et al., 2006 - TCE dimensions | Uncertainties, asset specificity*, transaction frequency |
| Geyskins et al., 2006 - TCE assumptions | people are bounded rational, risk neutral, opportunistic |
| Geyskins et al., 2006 - TCE uncertainty types | Two types: environmental and behavioral Environmental: volume and technological uncertainties Behavioral - level of contractual compliance |
| Geyskins et al., 2006 -TCE propositions/findings | more Asset spec. (AS)= use hierarchical gov (HG); more vol. uncert. = use HG; more tech. uncert. = market gov (MG); more behavioral uncert= HG; between MG and relational gov, use RG for more AS. If overall uncert increase = MG over RG; HG/RG= ^performance |
| Williamson, 1981 | Founder of TCE |
| Who is considered "founder of TCE"? | Williamson, 1981 |
| Williamson, 1981 - what is TCE | Used natural selection idea proposing that governance structures that can better economize transaction costs would eventually replace those that have worse abilities -- determines efficient outcomes |
| Geyskins et al., 2006 - what is decision being researched? | Whether a transaction is better internally (vertical integration) or externally (market governance/outsourcing) |
| McIvor, 2009 focuses on what two theories? | RBV and TCE |
| McIvor, 2009 - how is decision to outsource dictated? | Dictated by competitive advantage provided by the activities & determining whether the firm has the resources/capabilities to perform activities internally Cases discussed by importance of RBV decision theory - suggesting firms should not outsource if CA |
| Espino-Rodriguez & Lai, 2014 - how do asset specificity and differentiation affect actual/desired outsourcing? | negative impact Hotels generally only outsource things of low asset specificity |
| Scott, 1987 wrote about what theory? | Institutional theory |
| What theory can institutional theory be tied to? | RBV |
| Scott, 1987 - what is institutional theory? | Belief that rules are resources and can shape a firm to make more powerful by accepting social norms, complying with govt, complying with professional orgs |
| Mahoney et al., 1992 is tied to what theory? | RBV |
| Mahoney et al., 1992 - 2 purposes of RBV | 1. RBV shapes limits of diversified growth, resource constraints (ex. shortage of financial/managerial capital) -> specify limits to growth 2. RBV explains drivers for diversification (unused resources) |
| Mahoney et al., 1992 - 2 other purposes of RBV | 3. RBV predicts direction of diversification. That is a firm's direction of drivers is influenced by available resources 4. RBV explains & predicts superior performance of (related) diversification |
| Barney, 1991 is "father" of | RBV |
| Barney, 1991 RBV definitions | Firm resources are comp. adv. leads to sustained C.A. Any resource that improves efficiency Currently not used by others/likelihood of use is low C.A is sustained only if exists after efforts to duplicate end No sustained CA if all firms have same res |
| Barney, 1991 what are the 4 characteristics/barriers to entry for sustained competitive advantage? | 1. valuable 2. rare 3. imperfectly imitable (dependency on time and space) 4. No strategically equivalent substitutes |
| Priem et al., 2001 - RBV | Built off Barney Same assumptions: res. are distributed heterogeneously, prod. resources can't be transferred firm-firm w/o costs. Looks at 1 resource vs. collection to see what creates C.A |
| Combs et al., 2011 writes about what concept? | franchising |
| Combs et al., 2011 - why franchise (5)? | Reasons to franchise: resource scarcity, royalties, growth, intellectual capital, agency theory decreases risks Ater '13 - advertising ensures pricing points Perryman '12- bigger mkts inc. fran. Kosova '12- fran decisions based on firm/mkt |
| Hambrick et al., 2007 writes about what theory? | Upper echelons theory |
| Hambrick et al., 2007 - posits what? | 1) execs act on basis of their personalized interpretations of the strategic situations they face 2) these personalized constructions are a function of the execs' experiences/values/personalities execs matter as much to comp. outcomes as theory assumes? |
| Aguilera et al., 2010 writes about what concept? | Corporate governance |
| Aguilera et al., 2010 -what theory is it related to? | Agency theory -- also mentioned in Schleifer & Vishney, 1997 |
| Aguilera et al., 2010 - what types of factors influence corporate governance | political, economics, cultural, legal |
| Schleifer & Vishney, 1997 studies what? | Corporate governance |
| Schleifer & Vishney, 1997 - definition of corporate governance | A system of rules, practices & processes by which a company is directed and controlled. Involves balance of interests of shareholders incl: managers, customers, suppliers, financiers, government, community |
| La Porta et al., 2000 studies what? | corporate governance |
| La Porta et al., 2000 argue what must occur in corporate governance in order for financial markets to be successful? | Some type of investor protection must be instated and upheld by a country's judicial system, the market itself, or through sanctions imposed by government agencies |
| La Porta et al., 2000 wanted to prove what in their corporate governance paper? What is purpose of their paper? | - prove legal approach is best for C.G. - they explored expropriation (act of taking private property by government to use for public) - found that level of investor protection is dependent on ownership and control -bank centered vs. market centered |
| Aguilera & Jackson, 2010 write about what topic? | corporate governance |
| Aguilera & Jackson, 2010 say there are 4 theoretical paradigms for corporate governance? | 1. legal, 2. political, 3. economic, 4. culture |
| Hambrick et al., 2015- study was about what topic? What was purpose? | Upper echelons. Purpose was to test if structural interdependence was a moderator between top mgmt team (TMT) tenure heterogeneity and firm performance/member departure rates |
| Hambrick et al., 2015 - what are the three types of structural interdependence? | 1. horizontal - degree a member's actions are affected by other members 2. vertical - degree members are peers instead of superiors 3. reward - degree a member's rewards depend on company performance or ground instead of themselves |
| Hambrick et al., 2015 study found...? | -The greater degree of interdependence, the stronger positive association between tenure heterogeneity and member departure rates -The greater degree of interdependence, the stronger pos. association between TMT tenure heterogeneity & firm performance |
| Hambrick, 2007 says what characteristics help to explain firm performance and what characteristics can be used as proxy for executives' cognitive frames? | -TMT characteristics will better explain firm performance -Demographic characteristics of executive can be used as proxy |
| Carpenter et al., 2004 studies what topic? | upper echelons theory |
| Carpenter et al., 2004 purpose of paper was? | TO look at top management's ability to influence the every day decisions and performance of an organization |
| Kaplan, 2008 and O'Reilly et al., 2010 study what? | CEO compensation |
| Kaplan, 2008 and O'Reilly et al., 2010 explained in their paper that...? | -ceo comp. matches what market forces dictate - psychological dynamics that occur between CEOs and B.O.D.s could highlight missing components of agency theory model -Exec. compl is group decision -Psychological factors increase variance in CEO pay |
| Kaplan, 2008 purpose was to | -Respond to critics about his study that claimed ceos are compensated fairly. Proved CEOs are not overpaid and their increase in salary matches magnitude of other peoples in different industry. All pay is market driven |
| Upneja & Ozdemir, 2014 studies what? | CEO compensation |
| Upneja & Ozdemir, 2014 purpose of study was? | Does exec compensation drive firm performance or does firm performance drive compensation? -It was found compensation drives firm performance -Agency problem -This was a weak study due to its variables and weak hypotheses |
| Devers et al., 2007 studies what topic? | CEO compensation |
| Devers et al., 2007 found what out related to stock options for CEO compensation? | CEOs place subjective values on stock options that are far different from objective values -Stock options follow prospect theory, risk averse when in the money, while risk seeking when negative Agency Theory does not properly evaluate options |
| Haleblian et al., 2009 looks at what topic? | Mergers and Acquisitions |
| Haleblian et al., 2009 what are antecedents, moderators, and outcomes of mergers and acquisitions? | Antecedents: value creation, managerial self-interest, environmental factors, firm change Moderators: deal characteristics, managerial effects, environmental factors, firm characteristics Outcomes: turnover, acquisition premium |
| Canina et al., 2010 looks at what topic? | mergers and acquisitions |
| Canina et al., 2010 found out what in lodging industry about mergers? | - mergers are more successful in lodging industry than others - merger success is measured by stock prices before/after |
| Canina et al., 2010 -- what are stages of a merger? | 1) premerger process, 2) actual deal, 3) postmerger integration |
| Rugman et al., 2011 studies what topic? | International business strategy |
| Rugman et al., 2011 what are unit of analysis for international business theory? | country level/ FDI; MNE & FSAs, now MNE is considered a network and the subsidiaries are the units of measure |
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