Session Details: Session 1098

Social Networks

Track F

Date: Monday, October 13, 2008

 

Time: 17:00 – 18:15

Common Ground

Room: Salon 4


Facilitator:
Brian Boyd, City University of Hong Kong

Title: An Inside Look at Acquisition Capability Development: Experience Heterogeneity and the Locus of Organizational Learning

Authors

  • Mario Schijven, University of Illinois at Urbana-Champaign
  • Xavier Martin, Tilburg University

Abstract: Building on transfer theory, we argue that the widespread assumption of the firm as a monolithic learning entity has constrained rigorous theorizing about acquisition capability development. We theorize that the locus of learning is primarily situated at the business, rather than the corporate, level and that, as a result, acquisition capability is developed through rich interplay between pockets of experience located both within and across firms. Specifically, we hypothesize that these different learning mechanisms lead to widely different performance effects and investigate important moderators. We test our theory using panel data on all the acquisition activity engaged in by each of the 269 BUs of 52 U.S. software firms, as well as that of their competitors, over the 40 quarterly periods from 1998 through 2007.

Title: Can Governance Mechanisms Interfere with Corporate Elites' Fiduciary Duties? The Case of Chapter 11 Bankruptcy

Authors

  • Rob White, Iowa State University
  • Jonathan Arthurs, Oregon State University
  • Robert Hoskisson, Rice University
  • Thomas Dalziel, University of Cincinnati

Abstract: During bankruptcy the fiduciary duty of corporate executives and directors is primarily owed to creditors rather than to shareholders (D’Aveni, 1990). Despite this, the corporate elite heading these firms continue to work in a governance structure built largely to reinforce behavior directed in the interest of shareholders. This presents an interesting dilemma to managers and directors as their legal duty pulls them one way while many governance forces push them another direction. In this context we test whether ownership and governance mechanisms including managerial stock ownership, board structure, and ownership concentration affect the degree to which firm elites fulfill their fiduciary duty toward creditors as they craft a bankruptcy reorganization plan. Implications for agency theory are discussed.

Title: Collaborative New Product Development Through a Micro-Political Theory Lens

Authors

  • Christian Welling, University of St. Gallen

Abstract: This paper develops propositions that try to establish a link between the micropolitical variables of power and incremental planning and the outcome of the collaborative New Product Development (NPD) process. It will be argued that power balances and imbalances among the actors involved in the product development process will influence the outcome of the NPD project, and that in particular high power bases of one actor and micropolitical behavior of the low-power actor both negatively influence the success of NPD projects. It will therefore be argued that the power construct has an inverted U-shaped effect on the outcome of the NPD process. Furthermore, incremental strategy making will be introduced as having a positive influence on NPD projects.

Title: Does Foreign Ownership Drive the Convergence in Corporate Governance? Evidence from Foreign Partial Acquisitions of U.S. Firms

Authors

  • Jun-Koo Kang, Michigan State University
  • Jin-Mo Kim, Rutgers University
  • Hicheon Kim, Korea University

Abstract: Using data on foreign partial acquisitions of the U.S. firms, we explore what influences the extent of corporate governance activities of foreign investors. We find that the extent of corporate governance activities—such as hostile takeovers, board representation, and non-routine top executive turnover—of foreign blockholders in U.S. firms is related to shareholder rights protection in their home countries. In addition, the independence of foreign investors and the availability of free cash flow increase the effects of shareholder rights protection in their home countries. Our findings challenge the argument that globalization would lead to the international convergence in corporate governance. We conclude by discussing implications for the comparative corporate governance literature.

Title: From Fiction to Fact: The Impact of CEO Social Networks

Authors

  • Thomas Kirchmaier, University of Manchester
  • Konstantinos Stathopoulos, University of Manchester

Abstract: This paper investigates the relationship between a CEO’s social network, firm identity, and firm performance. There are two competing theories that predict contradictory outcomes. Following social network theory, one would expect a positive relation between social networks and firm performance, while agency theory in general and Bebchuk’s managerial power approach in particular predicts a negative relationship between social networks and firm performance. Based on a new and comprehensive measure of CEOs social networks, we observe for 363 non-financial firms in the UK that the size of a CEO’s social network affects firm performance negatively. Even so, growth companies are actively seeking CEOs with a large social network, which is in line with the social network theory. Still, we find evidence in support of the argument that well-connected CEOs use the power they obtain through their social network to the detriment of shareholders.

Title: The Impact of Nomination Committees on the Characteristics of Newly Recruited Directors

Authors

  • Aurélien Eminet, Catholic University of Lyon
  • Zied Guedri, EMLYON Business School

Abstract: This research paper examines the impact of the creation of nomination committees on the characteristics of newly recruited directors. We hypothesize a positive relationship between the creation of a nomination committee and the likelihood of appointment of directors having a reputation of being “active”. We further suggest that this relationship is moderated by the composition of nomination committees (whether the CEO is a member of the committee and the percentage of non-executive directors who are members of the committee) and by board interlocks (more specifically, the number of direct and indirect network links between members of the nomination committee and newly recruited directors). Strong support for our hypotheses was drawn using a sample of 250 firms over the 2000-2005 period.

All Sessions in Track F...

Mon: 11:15 – 12:30
Session 1089: Make, Ally or Buy
Session 1096: Executive Compensation
Mon: 15:30 – 16:45
Session 1086: Alternative Views of Value Creation
Session 1090: CEO Pay
Session 1107: Executive and External Forces in Strategy
Mon: 17:00 – 18:15
Session 1091: Impression Management
Session 1098: Social Networks
Tue: 11:15 – 12:30
Session 1093: Succesion and Team Dynamics
Session 1103: Social and Human Capital
Tue: 14:30 – 15:45
Session 1095: Diversification
Session 1105: Governance Perspectives
Wed: 10:00 – 11:15
Session 1104: Managing Alliance Relationships
Session 1106: New Corporate Strategy Perspectives
Wed: 11:30 – 12:45
Session 1088: Acquisitive Growth Strategies
Session 1092: Dynamic Strategies and Resources


Strategic Management Society

Cologne Conference