The 10 most-cited articles in Academy of Management Journal, 2018

Innovation activities create substantial firm value, but they are difficult to manage owing to agency risk, which is commonly thought to result in shirking, and hence underinvestment in innovation. However, agency risk can also create inefficient allocation of resources among innovation activities, on which the literature has provided limited understanding. We examine an important outcome created by agency risk—that agents pursue quantity of innovation at the expense of novelty—and investigate how it is influenced by corporate and public governance. We theorize that improved corporate governance tools, including better alignment of agents’ private incentives and stronger monitoring, and high-quality public governance reduce such agency risk in state-owned enterprises (SOEs). Furthermore, higher-quality public governance enhances the functioning of corporate governance tools in further reducing such agency risk in innovation. We test our theory by examining SOEs in China that responded to the state’s pro-innovation policies relying disproportionately on quantifiable outcomes (e.g.,…

Combining the theses of “problemistic search” and “slack search,” past research in the behavioral theory of the firm suggests that both low- and high-performing firms may engage in the same type of risk-taking activity. We counter this view with a consistent, motivation-based logic in the theory: low-performing firms are fixated on finding short-term solutions to immediate problems, so they have an increased probability of exhibiting deviant risk-taking behavior such as bribery, whereas high-performing firms are concerned about sustaining their competitive advantage in the long run and will more likely engage in aspirational risk taking such as research and development (R&D). Using a sample of 9,633 firm-year observations covering 2,224 listed companies in China, we find that, as a firm’s performance falls further below its aspiration level, it has larger abnormal entertainment spending, an implicit measure of bribery expenditure, but not higher R&D intensity. However, as a firm’s performance rises further above its aspiration level, it has greater R&D intensity, but not more…

This research investigates the link between workplace loneliness and job performance. Integrating the regulatory loop model of loneliness and the affect theory of social exchange, we develop a model of workplace loneliness. We focus on the central role of affiliation in explaining the loneliness–performance relationship, predicting that despite lonelier employees’ desire to connect with others, being lonelier is associated with lower job performance because of a lack of affiliation at work. Through a time-lagged field study of 672 employees and their 114 supervisors in two organizations, we find support that greater workplace loneliness is related to lower job performance; the mediators of this relationship are lonelier employees’ lower approachability and lesser affective commitment to their organizations. We also examine the moderating roles of the emotional cultures of companionate love and anger, as well as of the loneliness of other coworkers in the work group. Features of this affective affiliative context moderate some of the relationships between loneliness and the mediating…

Performance pressure focuses employee efforts toward enhanced performance. It is unclear, however, whether performance pressure serves as a productive or unproductive strategy for producing beneficial work behavior. Our research provides clarity on the dynamic nature of performance pressure. We theorize that reactions to performance pressure are influenced by daily fluctuations in how the pressure is appraised, and these fluctuations explain why performance pressure can be a double-edged sword, producing bright and dark side effects for organizations. We predict that, on a daily basis, performance pressure may be appraised as a threat, which promotes self-regulation depletion that explains dysfunctional behavior (i.e., incivility); daily performance pressure may also be appraised as a challenge, which elicits engagement that explains enhanced task proficiency and citizenship. Trait resilience is predicted to moderate these effects, promoting performance pressure to be appraised as a challenge rather than a threat, which then mitigates the depleting effects that produce dysfunctional…

Management scholars have demonstrated that CEOs look to cues provided from external stakeholders when determining the direction and timing of strategic action. Research has focused on “hard” forms of external performance feedback, primarily in the form of stock market reactions. To understand both whether and to what degree “soft” external performance feedback of strategic actions influences the subsequent strategic decisions of firms, we build our arguments from and contribute to upper echelons theory. We argue that negative media reactions to the announcement of a major acquisition will shape the degree to which the firm will engage in subsequent acquisition activity. However, our theory suggests that an important individual attribute, CEO temporal focus, will influence how sensitive CEOs are to media coverage. Using a sample of 747 large acquisitions made between 2006 and 2011, we find strong support for our hypotheses. Additionally, our supplemental analysis demonstrates an important difference between the influence of stock market and media reactions following an acquisition.…

A key challenge for entrepreneurs is to convince investors of their business ideas via a pitch. While scholars have started to explore how entrepreneurs convey their passion and preparedness in a pitch, they have overlooked the possible variation that exists in entrepreneurs’ verbal and nonverbal expressions. We build on research in cognitive science and entrepreneurship to examine the nature and influence of specific forms of speech and gesturing used by entrepreneurs when pitching. In an initial qualitative field study we identify distinct pitching strategies entrepreneurs use, involving different combinations of verbal tactics (i.e., using literal and figurative language to frame a venture) and gesture (i.e., using different types of hand gestures to emphasize parts of their pitch and convey product and venture ideas). In a subsequent experimental study, we examine the impact of these strategies on investors’ propensity to invest. We find that, although variation in the type of language used by an entrepreneur has limited effects, using gestures to depict and symbolize business…

Although theories of entrepreneurial action regularly acknowledge the importance of imagination, the ability is rarely defined or measured, and thus effectively treated as uniform in degree and type. Using a creative problem-solving lens, we identify and measure three different cognitive skills—creative, social, and practical imaginativeness—that vary across individuals. Each skill combines the ability of imagination with the knowledge needed to mentally simulate various task-related scenarios used in generating and selecting ideas for new value creation. We then conduct a quasi-experiment to examine each skill’s relative effect on new venture ideation. We find that the three imaginativeness skills vary across individuals and that they predict new venture idea quantity and quality differently over and above the effects of motivation, knowledge, and experience. We conclude with implications for theory development in entrepreneurship and creative problem-solving.

The vast majority of theory and research to date on transformational leadership has focused on how transformational leader behaviors influence followers, portraying those behaviors as unequivocally beneficial. We pivot from this predominant focus to a focus on the detriments of transformational leader behaviors for leaders themselves. Drawing from conservation of resources theory, we propose that although transformational leader behaviors produce gains for both leaders and followers, those behaviors also trigger losses for leaders themselves. The results of two experience-sampling studies, whereby leaders and their followers completed weekly surveys for six weeks, revealed that transformational leader behaviors were associated with increases in leader emotional exhaustion and subsequent leader turnover intentions, and these detrimental consequences occurred over and above benefits to followers (Study 1) and benefits to leaders themselves (Study 2). Furthermore, the extent to which transformational leader behaviors were associated with increases in emotional exhaustion depended upon…

This study explores the cost of legitimacy management in the context of corporate giving. Specifically, how much does an organization spend in order to manage external legitimacy? We view corporate giving as a means by which firms may seek external legitimacy, and propose that, in response to evaluations of external audiences, organizations strategically manage such costs under a tension between legitimacy and efficiency concerns. We examine this argument by developing an institutional theory of corporate giving and testing our hypotheses using the corporate giving behaviors of publicly listed Korean companies from 2003 to 2011. Consistent with our proposition concerning the role of external audiences in shaping legitimacy management costs, we show that strategic decisions regarding how much a firm spends on corporate giving are related to the extent that the firm receives positive or negative media attention. Furthermore, we find that the relationship between media evaluations and corporate giving varies with a firm’s performance, which suggests that its internal efficiency…