Is CEO human capital related to firm performance?

The global economy experienced continuous growth from 2002 to 2007 until the U.S. subprime mortgage crisis caused instability in worldwide stock markets. Simultaneously, global CEO turnover continued to fall to 13.8 percent in 2007. In contrast, the CEO turnover rate in Australia increased to 18 percent in 2007. The purpose of this paper is to determine under what conditions a change in a CEO is associated with firm performance. Succinctly, does the firm’s decision to replace the CEO depend on the CEO’s human capital or firm performance? The empirical study of Australian listed firms (2005 – 2008) shows that firm performance is not a determinant of CEO turnover, rather a CEO with less valuable human capital is more likely to be replaced. The study also finds that merely changing the CEO is not associated firm performance. Rather, there is a positive association between firm performance and the successor’s general human capital for firms that replace the CEO. Specifically, it is the internal successor’s general human capital that is an important determinant of increasing firm performance. These results are important because they imply that CEO turnover is a result of a more active market for CEOs and contributes to explaining why firms retain CEOs despite poor firm performance.

Integrating agency and resource dependence theory : firm profitability, industry regulation, and board task performance

Boards of directors are key governancemechanisms in organizations and fulfill twomain tasks:monitoringmanagers and firm performance, and providing advice and access to resources. In spite of a wealth of researchmuch remains unknown about how boards attend to the two tasks. This study investigates whether organizational (firm profitability) and environmental factors (industry regulation) affect board task performance. The data combine CEOs' responses to a questionnaire, and archival data from a sample of large Italian firms. Findings show that past firm performance is negatively associatedwith board monitoring and advice tasks; greater industry regulation enhances perceived board task performance; board monitoring and advice tasks tend to reinforce each other, despite their theoretical and practical distinction.

Discrepancy between antennal and behavioral responses for enantiomers of a-Pinene : electrophysiology and behavior of helicoverpa armigera (Lepidoptera)

The ability of adult cotton bollworm, Helicoverpa armigera (Hübner), to distinguish and respond to enantiomers of α-pinene was investigated with electrophysiological and behavioral methods. Electroantennogram recordings using mixtures of the enantiomers at saturating dose levels, and single unit electrophysiology, indicated that the two forms were detected by the same receptor neurons. The relative size of the electroantennogram response was higher for the (−) compared to the (+) form, indicating greater affinity for the (−) form at the level of the dendrites. Behavioral assays investigated the ability of moths to discriminate between, and respond to the (+) and (−) forms of α-pinene. Moths with no odor conditioning showed an innate preference for (+)-α-pinene. This preference displayed by naïve moths was not significantly different from the preferences of moths conditioned on (+)-α-pinene. However, we found a significant difference in preference between moths conditioned on the (−) enantiomer compared to naïve moths and moths conditioned on (+)-α-pinene, showing that learning plays an important role in the behavioral response. Moths are less able to distinguish between enantiomers of α-pinene than different odors (e.g., phenylacetaldehyde versus (−)-α-pinene) in learning experiments. The relevance of receptor discrimination of enantiomers and learning ability of the moths in host plant choice is discussed.

From concept to capability : developing design thinking within a professional services firm

Corporate business and management are embracing design thinking for its potential to deliver competitive advantage through helping them be more innovative, differentiate their brands, and bring more customer centric products and services to market (Brown, 2008). As consumers continue to expect more personalisation and customisation from their service providers, the use of design thinking for innovation within organisations is a logical progression. To date however, there is little empirical literature discussing how organisations are setting about integrating design thinking into their culture and innovation practices. This paper is a first step in initiating a scholarly discussion on the integration of design thinking within organisational culture. Deloitte Australia is a large professional services firm employing over 5700 staff in 12 offices across Australia. The company provides a range of services to clients in the areas of audit, tax, financial advisory and consulting. In early 2011 the company made a strategic commitment to introducing design thinking into the organisation’s practices. While it already maintains a strong innovation culture, to date it had largely been operating within an analytical business environment. For Deloitte, design thinking is an opportunity to create better outcomes for the people they serve – both internal and external stakeholders (Brown and Wyatt, 2010). Research was conducted using case study methodology and ethnographic methods from June to September 2011 at the Melbourne Deloitte office. It involved three methods of data collection: semi structured interviews, participant observation and artifact analysis. This paper presents preliminary case study findings of Deloitte’s approach to building awareness and a consistent understanding of design thinking, as well as large scale capability, across the firm. Deloitte’s commitment to transforming its culture to one of design thinking poses significant potential for understanding how design thinking is comprehended, enabled and integrated within a complex organisational environment.

Business in troubled waters : does adverse attitude affect firm value?

This paper investigates the relationship between US MNCs' valuations and anti-Americanism in countries where MNCs' foreign subsidiaries are located. We find that MNCs suffer value-destruction when they enter markets where people express severe anti-Americanism. However, we uncover that geographic diversification into these high anti-Americanism countries significantly increases firm value if the MNC has high levels of intangibles such as technological know-how and marketing expertise. Our findings are consistent with the notion that the advantages from internalizing the cross-border transfer of intangibles are greater when barriers to competition are higher.

Enterprise policy and the metagovernance of firm capabilities

The underlying logic of enterprise policy is that there are impediments to change in economic systems that can be traced to the path-dependent behaviors of economic actors that prevent them from exploring new knowledge and new ways of doing things. Enterprise policy involves firm-level interventions delivered by distributed networks of business advisors coordinated by knowledge intermediaries. These metagovernance arrangements are able to disrupt the path-dependent behaviors of organizations. The logic and benefits of enterprise policy are explored through reference to public administration, strategic management and evolutionary theory, and three case studies.

The relationship between children's emotional and cognitive self-regulation at 2 to 3 years and prosocial behavior in the early years of school

This study used data from Growing Up in Australia: The Longitudinal Study of Australian Children (LSAC) to investigate how parent report of children’s emotional and cognitive regulation at age 2-3 years was associated with teacher ratings of children’s prosocial behaviors in the early years of school. A sample of 2,392 children was drawn from the LSAC Birth Cohort for the analyses. The analyses used structural equation modeling to estimate parameters of the relationships between key variables. Within the model, estimates of mother-reported emotional and cognitive regulation at age 2 to 3 years were significantly associated with teacher-reported prosocial behavior at 6 to 7 years. Emotional regulation was a slightly stronger indicator of prosocial behavior than cognitive regulation. Being female and from a family with a higher socioeconomic position were also associated with higher levels of prosocial behavior. Results are discussed in relation to the role of early childhood teachers in fostering children’s self-regulatory behaviors and in providing environments in which empathic and prosocial behaviors are modeled, guided, and scaffolded so that foundations are laid for caring behaviors to be understood and internalized by children.

Improving business process models using observed behavior

Process-aware information systems (PAISs) can be configured using a reference process model, which is typically obtained via expert interviews. Over time, however, contextual factors and system requirements may cause the operational process to start deviating from this reference model. While a reference model should ideally be updated to remain aligned with such changes, this is a costly and often neglected activity. We present a new process mining technique that automatically improves the reference model on the basis of the observed behavior as recorded in the event logs of a PAIS. We discuss how to balance the four basic quality dimensions for process mining (fitness, precision, simplicity and generalization) and a new dimension, namely the structural similarity between the reference model and the discovered model. We demonstrate the applicability of this technique using a real-life scenario from a Dutch municipality.

Examining young recreational sportswomen's intentions to engage in sun-protective behavior : the role of group and image norms

Researchers examined the sun-protective intentions and behavior of young, Caucasian, Australian sportswomen aged between 17 and 35 years (N = 100). The study adopted a 2 x 2 experimental design, comparing group norms (supportive vs. non-supportive) and image norms (tanned vs. pale) related to sun protection and taking into account group identification with friends and peers in the sport. While no significant findings emerged involving image norms, regression analyses revealed a significant two-way interaction for group norm x identification on recreational sportswomen's intentions to engage in sun protection in the next fortnight. Participants identifying strongly with their group had stronger intentions to engage in sun protection when exposed to a norm reflecting fellow recreational sportswomen engaging in sun-protective actions in comparison to those exposed to a non-supportive group. In addition, while prior intentions to engage in sun protection were not significantly related to sun-protection behavior, post-manipulation intentions after exposure to the sun-protective information that was provided were significantly related to follow-up behavior. Overall, the findings supported the importance of group-based social influences, rather than tanned media images, on sun-protective decisions among young recreational sportswomen and provided a targeted source for intervention strategies encouraging sun safety among this at-risk group for repeated sun exposure.

Social influences and the physical activity intentions of parents of young-children families: An extended Theory of Planned Behavior Approach

Evidence within Australia and internationally suggests parenthood as a risk factor for inactivity; however, research into understanding parental physical activity is scarce. Given that active parents can create active families and social factors are important for parents’ decision making, the authors investigated a range of social influences on parents’ intentions to be physically active. Parents (N = 580; 288 mothers and 292 fathers) of children younger than 5 years completed an extended Theory of Planned Behavior questionnaire either online or paper based. For both genders, attitude, control factors, group norms, friend general support, and an active parent identity predicted intentions, with social pressure and family support further predicting mothers’ intentions and active others further predicting fathers’ intentions. Attention to these factors and those specific to the genders may improve parents’ intentions to be physically active, thus maximizing the benefits to their own health and the healthy lifestyle practices for other family members.

Predicting the retention of first-time donors using an extended Theory of Planned Behavior

BACKGROUND: Donor retention is vital to blood collection agencies. Past research has highlighted the importance of early career behavior for long-term donor retention, yet research investigating the determinants of early donor behavior is scarce. Using an extended Theory of Planned Behavior (TPB), this study sought to identify the predictors of first-time blood donors' early career retention. STUDY DESIGN AND METHODS: First-time donors (n = 256) completed three surveys on blood donation. The standard TPB predictors and self-identity as a donor were assessed 3 weeks (Time 1) and at 4 months (Time 2) after an initial donation. Path analyses examined the utility of the extended TPB to predict redonation at 4 and 8 months after initial donation. RESULTS: The extended TPB provided a good fit to the data. Post-Time 1 and 2 behavior was consistently predicted by intention to redonate. Further, intention was predicted by attitudes, perceived control, and self-identity (Times 1 and 2). Donors' intentions to redonate at Time 1 were the strongest predictor of intention to donate at Time 2, while donors' behavior at Time 1 strengthened self-identity as a blood donor at Time 2. CONCLUSION: An extended TPB framework proved efficacious in revealing the determinants of first-time donor retention in an initial 8-month period. The results suggest that collection agencies should intervene to bolster donors' attitudes, perceived control, and identity as a donor during this crucial post–first donation period.

Illustrating outcomes for Australian nascent and young firm entrepreneurial activity

This paper examines the outcomes of nascent and young entrepreneurial firms in Australia. Findings of interest in this paper include: • After three years similar proportions of nascent firms reach an operational state (31 per cent), i.e. sales regularly exceed costs, compared with those that have terminated (35 per cent), and those who are still trying to achieve venture creation (34 per cent). This outcome closely mirrors the outcomes in the US PSED study. • The young firm sample shows that these new ventures remain more robust to firm closure. The vast majority of young firms (78 per cent) continue to be active in the market the last time they participated in CAUSEE. • The annual termination rate for young firms is 9 per cent at most, and 14 per cent cumulatively, while cumulatively only 8 per cent of young firms experience a drop-off in activity to be considered as having uncertain status. • The average number of employees in Nascent Firms is one person, the average number of Young Firm employees increases from two at first sampling to three after three years. • While the founders of exiting Nascent Firms are more likely to return to their old job upon termination of their business, Young Firm founders move on to new jobs. Regardless the majority of exiting firm founders rate their experience as positive and are prepared to attempt business creation in the future.

Entrepreneurial growth : the role of international knowledge acquisition as moderated by firm age

In line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of “total growth,” our study contributes to the understanding of entrepreneurial growth. By this we mean growth through expansion into new geographic markets and/or via the introduction of new products or services. Building on Penrose's theory of the growth of the firm and on the research streams she has in part inspired, we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad. We further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age. Utilizing longitudinal data on 138 small and medium-sized enterprises (SMEs), we find that the acquisition of knowledge from international markets fuels growth through market development, and that this effect is stronger for international expansion than domestic expansion. Our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services. Specifically, international knowledge acquisition has a positive effect on growth via new products/services development in young firms, but a negative effect in mature firms. We assume this reflects changes over time in how international knowledge is managed.

ACE research vignette 026 : Do Entrepreneurs’ Personal Networks Influence Small Firm Performance?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Dr. Rene Bakker, examines the evidence on the effects of a entrepreneurs’ personal networks on small firm performance, and the factors that moderate this relationship.

Does activity in computer game play have an impact on creative behavior?

This paper describes a behaviour analysis designed to measure the creative potential of computer game activities. The research approach applies a behavioural and verbal protocol to analyze the factors that influence the creative processes used by people as they play computer games from the puzzle genre. Creative components are measured by examining task motivation as well as domain-relevant and creativity-relevant skills factors. This paper focuses on how three puzzle games embody activity that might facilitate creative processes. The findings show that game playing activities significantly impact upon creative potential of computer games.