The relationship between top management team innovation orientation and firm growth: The mediating role of firm innovativeness

Upper echelon theory and research on innovation have considered top management teams and their behaviour and characteristics as important factors that positively influence innovativeness and organizational outcomes. Yet, innovation research has mostly focused on individual new product projects, and their performance and impact on firm performance. Recent research has started to apply a more holistic view in terms of innovation, by considering firm-wide innovation instead of single new products. Upper echelon research has concentrated on direct relationships between top management team characteristics and organizational outcomes. But recent research calls for mediating effects of the relationship between top management team characteristics and organizational outcomes. Hence, this study introduces firm innovativeness as a mediator between top management team innovation orientation and firm growth. Focusing on small and medium-sized firms, which often represent highly innovative firms, results show that firm innovativeness fully mediates the relationship between top management team innovation orientation and firm growth. Implications and future research are discussed.

A longitudinal cross-country study of entrepreneurial orientation

As recent research documents, there has been an impressive effort of studying the entrepreneurial orientation construct and its nomological role. However, most research has been very context specific and based on the analyses of cross-sectional information. We study causal performance effects from entrepreneurial orientation and its key dimensions in two economic contexts–developed and emerging markets. Gathering data on a sample of 94 firms in developed market context and 108 in emerging market context at two time-points we explore our hypotheses. The results suggest that in a developed economy entrepreneurial orientation has a positive impact on firm performance, whereas in the emerging market context this effect is negative. Furthermore, we assess the contribution of each dimension to the aggregate construct and reveal the importance of risk-taking in both contexts. Finally, we highlight the role of environmental dynamism and explain its varying effect

Pre-Election Positions and Voting Behaviour in Parliament: Consistency among Swiss MPs

This article examines the determinants of positional incongruence between pre-election statements and post-election behaviour in the Swiss parliament between 2003 and 2009. The question is examined at the individual MP level, which is appropriate for dispersion-of-powers systems like Switzerland. While the overall rate of political congruence reaches about 85%, a multilevel logit analysis detects the underlying factors which push or curb a candidate's propensity to change his or her mind once elected. The results show that positional changes are more likely when (1) MPs are freshmen, (2) individual voting behaviour is invisible to the public, (3) the electoral district magnitude is not small, (4) the vote is not about a party's core issue, (5) the MP belongs to a party which is located in the political centre, and (6) if the pre-election statement dissents from the majority position of the legislative party group. Of these factors, the last one is paramount.

Three Essays on Age and Firm Performance

Old captains at the helm: Chairman age and firm performance Urs Waelchli and Jonas Zeller December, 2012 This paper examines whether the chairmen of the board (COBs) impose their life-cycles on the firms over which they preside. Using a large sample of unlisted firms we find a robust negative relation between COB age and firm performance. COBs age much like ‘ordinary’ people. Their cognitive abilities deteriorate and they experience significant shifts in motivation. Deteriorating cognitive abilities are the main driver of the performance effect that we observe. The results imply that succession planning problems in unlisted firms are real. Mandatory retirement age clauses cannot solve these problems. Corporate Aging around the World Jonas Zeller January, 2014 This paper examines whether firms internationally age as US firms do (Loderer, Stulz, and Wälchli, 2013). Using a large panel, I find that Tobin’s Q monotonically falls with firm Age across all nineteen countries in the sample. The decrease varies across countries but is generally extremely robust and economically significant. ROA, sales growth, and market share decrease over a firm’s lifetime in most countries as well. Furthermore, older firms reduce their capital expenditures and R&D outlays. Instead, they distribute more cash to their shareholders. Overall, the results suggest that corporate aging is not confined to the US but is a genuine phenomenon that affects listed firms worldwide. This evidence supports the hypothesis that corporate aging is driven by managers who optimally focus on managing their assets in place and neglect the development of growth opportunities. I finally ask whether the managers’ choice and with it the magnitude of the decline in Tobin’s Q is a function of country-level institutional settings. I find that most notably firms age faster in countries where employees are relatively well protected by labor regulation. Is employment protection the fountain of corporate youth? Claudio Loderer, Urs Wälchli, Jonas Zeller* September 2014 Acharya, Baghai, and Subramanian (2012, 2013) find that employment protection legislation (EPL) encourages innovation. We argue that this effect should be particularly strong in mature firms. We would therefore also expect EPL to boost growth opportunities. Using the natural Experiment created by the staggered passage of changes in EPL across seventeen countries, we find evidence that employment protection legislation does indeed stimulate Innovation efforts, especially in mature firms. The effect is stronger in countries in which patents are owned by the firm and in the context of regular contracts. Consistent with that, EPL encourages risk taking. Overall, however, there is Little evidence that the effect of EPL on innovation effort translates into higher firm value, not even in mature firms. EPL does motivate employees in those firms to put in a greater effort, as evidenced by stronger sales growth. Yet it also increases costs, reduces profitability, and depresses Tobin’s Q ratios in all firms, especially the mature ones, possibly because of the rigidities that characterize these firms [Loderer, Stulz, and Waelchli (2014)].

Effects, but no interactions, of ubiquitous pesticide and parasite stressors on honey bee (Apis mellifera) lifespan and behaviour in a colony environment

Interactions between pesticides and parasites are believed to be responsible for increased mortality of honey bee (Apis mellifera) colonies in the northern hemisphere. Previous efforts have employed experimental approaches using small groups under laboratory conditions to investigate influence of these stressors on honey bee physiology and behaviour, although both the colony level and field conditions play a key role for eusocial honey bees. Here, we challenged honey bee workers under in vivo colony conditions with sublethal doses of the neonicotinoid thiacloprid, the miticide tau-fluvalinate and the endoparasite Nosema ceranae, to investigate potential effects on longevity and behaviour using observation hives. In contrast to previous laboratory studies, our results do not suggest interactions among stressors, but rather lone effects of pesticides and the parasite on mortality and behaviour, respectively. These effects appear to be weak due to different outcomes at the two study sites, thereby suggesting that the role of thiacloprid, tau-fluvalinate and N. ceranae and interactions among them may have been overemphasized. In the future, investigations into the effects of honey bee stressors should prioritize the use of colonies maintained under a variety of environmental conditions in order to obtain more biologically relevant data.

Individual and group level trajectories of behavioural development in Border collies.

In order to assess dogs’ personality changes during ontogeny, a cohort of 69 Border collies was followed up from six to 18–24 months. When the dogs were 6, 12, and 18–24 months old, their owners repeatedly filled in a dog personality questionnaire (DPQ), which yielded five personality factors divided into fifteen facets. All five DPQ factors were highly correlated between the three age classes, indicating that the dogs’ personality remained consistent relative to other individuals. Nonetheless, at the group level significant changes with age were found for four of the five DPQ factors. Fearfulness, Aggression towards People, Responsiveness to Training and Aggression towards Animals increased with age; only Activity/Excitability did not change significantly over time. These changes in DPQ factor scores occurred mainly between the ages of 6 and 12 months, although some facets changed beyond this age. No sex differences were found for any of the tested factors or facets, suggesting that individual variation in personality was greater than male/female differences. There were significant litter effects for the factors Fearfulness, Aggression towards People and Activity/Excitability, indicating either a strong genetic basis for these traits or a high influence of the shared early environment. To conclude, from the age of six months, consistency in personality relative to other individuals can be observed in Border collies. However, at the group level, increases in fearful and aggressive behaviours occur up to 12 months and for some traits up to two years, highlighting the need for early interventions. Follow-up studies are needed to assess trajectories of personality development prior to six months and after two years, and to include a wider variety of breeds.

The Effectiveness of Firms' Strategic Orientations: Investigating Multiple Theoretical Perspectives

The strategic orientation of firms can take on many forms. Researchers most commonly distinguish between entrepreneurial, market, and learning orientations. In combination, strategic orientations represent a firm's value proposition in terms of the markets in which it operates, where it deploys its resources, and which behavioral patterns are established. This thesis provides insights into the effectiveness of strategic orientations by adopting multiple theoretical perspectives. The strategic orientations of entrepreneurial, market, learning, and innovation orientations are investigated in an isolated as well as interrelated manner. The first research article concentrates on entrepreneurial orientation as its conceptualization and operationalization is subject to several debates in the literature. This conceptual study shows how the challenges of the entrepreneurial orientation construct can be overcome in future research to arrive at a higher level of construct clarity. Thereby, the theoretical perspectives of entrepreneurial dominant logic and the theory of planned behavior are employed. The literature has predominantly focused on investigating the effectiveness of particular strategic orientations. Recently, scholars have stressed their synergetic impact on firm performance and, as such, the relevance of considering their combined role in creating superior value for firms. However, empirical research on their interrelatedness remains scant and dispersed, making it necessary to conduct further research on strategic orientations in an integrative manner. As such, the second research article demonstrates which interrelated roles are played by entrepreneurial, market, and learning orientations in their relationship to firm performance. The rich body of existing knowledge is synthesized by means of meta-analysis under the perspective of strategic coalignment as well as the resource-based view of the firm.

The Family’s Financial Support as a “Poisoned Gift”: A Family Embeddedness Perspective on Entrepreneurial Intentions

We argue that greater availability of financial support by the family for creating a new venture entails stronger financial and non-financial obligations. Cognizant of these obligations, potential founders anticipate negative performance implications for the planned firm and threats to the family system in the case of their non-fulfillment. We thus postulate that the formation of actual entrepreneurial intentions is less likely the greater the available financial support. We confirm this by studying a sample of 23,304 respondents from 19 countries and find the negative relationship to be dependent on family cohesion and on individual entrepreneurial self-efficacy.

Putting Up a Big Front: Car Design and Size Affect Road-Crossing Behaviour

Previous research suggests that people tend to see faces in car fronts and that they attribute personality characteristics to car faces. In the present study we investigated whether car design influences pedestrian road-crossing behaviour. An immersive virtual reality environment with a zebra crossing scenario was used to determine a) whether the minimum accepted distance for crossing the street is larger for cars with a dominant appearance than for cars with a friendly appearance and b) whether the speed of dominant-looking cars is overestimated as compared to friendly-looking cars. Participants completed both tasks while either standing on the pavement or on the centre island. We found that people started to cross the road later in front of friendly-looking low-power cars compared to dominant-looking high-power cars, but only if the cars were relatively large in size. For small cars we found no effect of power. The speed of smaller cars was estimated to be higher compared to large cars (size-speed bias). Furthermore, there was an effect of starting position: From the centre island, participants entered the road significantly later (i. e. closer to the approaching car) and left the road later than when starting from the pavement. Similarly, the speed of the cars was estimated significantly lower when standing on the centre island compared to the pavement. To our knowledge, this is the first study to show that car fronts elicit responses on a behavioural level.

Intergenerational Transfer of Family Firm Control: Discount Expectations of Potential Successors

Building on institutional theory and family sociology literature we explore the logics that underlie the formation of transaction price expectations related to the intergenerational transfer of corporate ownership in private family firms. By probing a sample of 3'487 students with family business background from 20 countries we show that next generation family members expect to receive a 56.58% discount in comparison to some nonfamily buyer (i.e. the family discount) when taking over the parent's firm. We also show that the logic underlying the formation of family discount expectations is characterized by parental altruism, filial reciprocity, filial decency and parental inducement. These norms embrace both the family and market logics and accommodate the duties and demands of children and parents in determining a fair transfer price. These findings are important for institutional theory as well as for family business and entrepreneurial exit literatures.

How much and what kind of entrepreneurial orientation is needed for family business continuity?

The present paper examines to what degree the Entrepreneurial Orientation (EO) construct is prolific in explaining business activity of firms with a transgenerational outlook. In particular, we are challenging the fundamental claim by entrepreneurship scholars that the more entrepreneurial a firm is, hence the higher it scores in the five EO dimensions, the more successful it should be in the long-run.

How much Entrepreneurial Orientation (EO) is needed for Long-term Success?

According to the STEP research framework, entrepreneurial orientation (EO) is one key element of transgenerational value creation. EO refers to key entrepreneurial processes in a company, i.e. to the methods, practices and decision-making styles managers use to act entrepreneurially. 3 EO consists of five main dimensions and several sub dimensions. However, there is a puzzle. Many studies suggest that the higher EO, the more successful a company is. But this seems not always to be true. Just think of many of the dot.com firms at the end of the 1990s. Firm members could act very autonomously, the companies were very innovative, took high risks, were very proactive and very aggressive in the market. However, most of them were not able to survive for more than a few years. So how entrepreneurial has a firm to be in order to achieve long-term success?