ItemThe Complementarity Between Signal Informativeness and Monitoring(Wiley, 2022-08-26) Chaigneau, Pierre; Sahuguet, NicolasA firm that must decide whether to retain or terminate a manager can rely on several sources of information to assess managerial ability. When it relies on a performance signal and monitoring, we show that a more informative signal can surprisingly increase the value of monitoring. Then, signal precision and monitoring are complements. This happens if a more precise information system makes some signals more negative indicators of managerial ability that still do not trigger termination. When the turnover cost is high enough and the manager is more entrenched after a positive performance, an increase in signal precision increases expected monitoring. In firms with a high turnover cost, a less informative signal is compounded by worse monitoring after a disappointing performance. This “bad corporate governance trap” makes it hard for these firms to eventually improve performance. ItemRe-evaluating the Offshoring Decision: A Behavioral Approach to the Role of Performance Discrepancy(Wiley, 2022-08-09) Stefano, Elia; Goerzen, Anthony; Piscitello, Lucia; Valentino, AlfredoFirms are in a continuous process of critically re-evaluating their offshoring strategies due to performance discrepancies. While prior research has focused on the implementation of organizational responses to performance shortfalls, we examine the offline search process, a key antecedent of organizational change, during which firms simultaneously explore alternative solutions when facing either a positive or a negative discrepancy between performance and aspirations. We adopt the Behavioral Theory of the Firm (BTOF) to investigate how the search process is affected by the size and nature (as being positive or negative) of the discrepancy as well as how it is moderated by cognitive biases. By examining 441 offshoring initiatives, we study firms’ search processes in a novel context that refers either to “local” solutions that are close to the current activity (i.e., expansion in the same host country) or “distant” solutions that are far from the current one (i.e., relocation to a third country or to the home country). Our results provide new insights into organizational search, namely that performance shortfalls lead to distant search unless this choice is moderated by a location-specific anchor bias relating to the strategic importance of host location, while positive discrepancies trigger local search with decision-makers more inclined to consider expansion in the current host country. ItemThe Best Laid Plans: Why New Parents Fail to Habituate Practices(Journal of Consumer Research (JCR), 2019-01-18) Thomas, Tandy; Epp, Amber MConsumers regularly fail to habituate newly adopted practices. In contrast to established practices, this often occurs because understanding a practice is different from actually doing it. Our work explores this “messiness of doing” and explains why consumers successfully habituate some newly adopted practices after experiencing obstacles (i.e., misaligned practice elements) but not others. Utilizing a longitudinal approach that follows first-time parents from pregnancy through the first eight months postpartum, we track how parents plan for practices and how those plans unfold. We document a process whereby parents first engage in extensive planning and preparation prior to the birth of their child, during which parents build two realignment capabilities (anticipation and integration). After the baby’s arrival, some practices invariably do not work. Parents respond to these misalignments by following one of five paths—differentiated by the capabilities parents build while planning—that result in practice abandonment, vulnerable habituation, or habituation. Our work highlights the challenges associated with translating a social practice into an enacted practice and the corresponding importance of accumulating realignment capabilities during planning. To facilitate habituation of newly adopted practices, how consumers make plans for these practices may ultimately matter more than what they actually plan to do. ItemAlliance Portfolio Configurations and Competitive Action Frequency(Sage, 2016-05-01) Andrevski, Goce; Brass, Daniel J.; Ferrier, Walter J.We advance competitive dynamics research by introducing alliance portfolio configuration as an important antecedent of competitive action frequency. We propose and test a model for developing effective alliance portfolio configurations that enhance a firm’s ability to discover, conceptualize, and carry out new competitive actions. Our model consists of three overlapping components: (a) opportunity recognition capacity as evidenced by the portfolio attribute of structural holes, (b) opportunity development capacity as indicated by R&D alliance scope, and (c) action execution capacity as exhibited by equity alliances with trusted partners. We hypothesize and find a multiplicative effect of the configuration of all three alliance portfolio attributes on the frequency of competitive actions carried out by 12 large global automobile manufacturing firms with 1,471 unique partners and 37,520 alliances formed over a 16-year period (1988 to 2003). The three-way configuration of portfolio attributes was stronger for more complex competitive actions requiring more time, expertise, and resources to develop and execute. ItemRacial Diversity and Firm Performance: The Mediating Role of Competitive Intensity(Sage, 2014-03-01) Andrevski, Goce; Richard, Orlando C.; Shaw, Jason D.The authors examine the mediating role of competitive intensity in the relationship between managerial racial diversity and firm performance (i.e., market share gain and average stock return). Racial diversity relates to firm performance via firms’ capacity to compete intensively (i.e., to introduce new competitive actions frequently). An analysis reveals that environmental munificence moderates competitive intensity’s mediating effect: Racially diverse management groups compete more intensively and perform better when they compete in munificent environments. The authors also find support for a moderated mediation model that simultaneously tests all components of their framework.