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Decision-making rationality is said to be bounded by managers’ cognitive capabilities. Recent studies indicate that accounting functions evolved to augment the cognitively bounded human brain in handling complex economic exchanges. The neuroscience discipline suggests that human brains have the ability to implement “automatic” processes of positive versus negative emotional stimuli to make rational decisions. Neuroscientific evidence shows that the activations in the ventral striatum decrease with negative emotional information/motives and increase with positive emotional information/motives. The authors, hence, argue that our understanding of the decision-making rationality in financial and managerial decisions could be enhanced by using a functional neuroimaging approach.

Decision-making rationality has been focal in debt covenant violation and earnings management research. The contracting theory predicts a relationship between managers’ decisions and the proximity of violating debt covenants. However, no prior research has investigated brain activities associated with the evaluation of debt covenant violation and earnings management. Meanwhile, in another strand of research, there is an extensive prior literature concerning the consequences of managers’ decisions and the use of accounting information in relation to their evaluative style, i.e., supervisory style. The authors argue that the relationship between the proximity to debt covenants violation and earnings management incentives is contingent upon managers’ supervisory style. However, no previous research has examined the impact of the supervisory style on earnings management in the context of the proximity to debt covenants violation and other earnings management incentives.

In this research note, we argue that neuroaccounting could be relied on to examine the relationship between the proximity to debt covenants and earnings management, contingent upon managers’ supervisory style, by capturing brain activities. The adoption of the neuroscience functional neuroimaging approach in this field should contribute to the understanding of managers’ behaviors and provide implications for research and practitioners. The goal of this research note is to provide a new avenue for future research in this field.

The purpose of this paper is to address an important gap in the literature by investigating the relationship between organizational climate and performance in small businesses.

Data were collected from 100 retail pharmacies in Sydney, Australia where a manager and up to three staff members and three buying customers were interviewed in each pharmacy.

Supportive climates tend to be associated with higher organizational performance (i.e. financial performance, staff satisfaction, customer satisfaction) in small retail pharmacies, and may reduce staff turnover.

The results suggest that managers should consider creating warm and supportive organizational climates to enhance business performance, employee job satisfaction and organizational commitment, and increase employee tenure.

This paper is among the first to empirically establish a direct link between organizational climate and the performance of small businesses, in particular in retail pharmacies. Both financial and non‐financial measures of performance confirm reports based on larger firms that performance is enhanced in the presence of more supportive organizational climates. A further benefit of supportive climates, namely lower staff turnover in small businesses, was also evident.

The purpose of this paper is to develop a conceptual model to determine whether organizational climate (OC) mediates the effect of managerial skills (MSs) on business performance in small businesses, such as pharmacies.

The model proposed in this research was tested using separate questionnaires specifically designed for managers, employees and clients. The data set consists of responses from 301 managers, 470 clients and 328 employees from community pharmacies in Tehran, capital of Iran, which were analyzed using structural equation modeling.

Although the results indicated no significant direct relationship between MSs and pharmacy performance (PP), they also confirmed that having a context-appropriate set of MSs can positively affect PP via the mediating effect of OC.

This is the first study investigating how MSs improve performance in retail pharmacies. Although this research focuses specifically on small businesses in the pharmaceutical industry, it nevertheless contributes to the literature by showing the importance of OC.

This paper evaluates the influence of the institutional context on the dynamics of institutional change and the possibilities for human agency in this process.

A comparison of the emergence of the temporary work agency industry in five countries is used to illustrate the influence of three elements of the institutional context: high/low pressure field emergence, societal confidence, and power and discretion of the emerging industry.

The analysis reveals how these three elements affect the dynamics of new field development. It shows the interaction between institutionalising and de‐institutionalising pressures and the dialectical nature of the process when comparing the developments over time between different national (institutional) contexts.

Propositions for further research are formulated. Combining the effects of the three situational variables three models of industry institutionalization are established: autonomous development, constrained development and societalisation.

The findings illustrate the situated condition of human and organizational agency in processes of institutional entrepreneurship. Our analysis also shows how early externally constraining effects slow down early institutionalisation of a new organizational field, but at the same time trigger processes of institutional structuration that strengthen the institutionalising role of the industry in the long run.

The comparative analysis helps to see how the dynamics of institutional renewal are affected by institutional context and highlights the situated nature of effective human agency.

Ample evidence suggests that firm innovativeness is important for firm competitiveness. Despite the significance of the CEO for firm outcomes in general, the role of the CEO in firm innovativeness remains unclear. The purpose of this paper is to focus on the impact of two CEO characteristics – organizational identification and risk propensity – on firm innovativeness. The authors also adopt a contingency view to examine the moderating role of organizational size.

Using data from 159 information technology firms based in India, the authors hypothesize that CEO organizational identification and risk propensity will have a positive effect on firm innovativeness. The authors further hypothesize that smaller organizations will benefit more from the positive effects of CEO organizational identification and CEO risk propensity.

The empirical findings indicate that CEO organizational identification and risk propensity positively influence firm innovativeness. Also positive effects of CEO organizational identification and CEO risk propensity are more in smaller organizations.

This study highlights the role of CEO characteristics in the pursuit of firm innovativeness. Significantly, the study shows that both CEO organizational identification and risk propensity can enhance firm innovativeness. However, their effectiveness is contingent on organizational size.

The purpose of this paper is to examine the role of multinational corporations (MNCs) in local institutional change. To what extent do multinational organizations help or hinder change, in particular new industry creation?

The paper presents a qualitative case study examining the role of multinational temporary work agencies in the development of temporary agency market in Spain.

The authors find that while multinational firms were less constrained by the norms, values and logics of the home environment, they also encountered specific challenges in the implementation of new practices. First, high‐profile introduction of a novel practice requires checks and balances to manage unanticipated developments, such as undesirable activities by opportunistic actors that may derail the change process. Second, rapid growth is not conducive to concerted efforts at industry level, leaving the public identity of the institutional innovation extremely vulnerable. Third, high‐profile change is also vulnerable to redefinition of the practice through misinterpretation or misuse by inexperienced users.

The findings highlight the interaction between global and local actors in the development of a novel market and the main findings provide three concrete aspects of the change process that need to be carefully monitored in processes of MNC‐driven institutional change.

MNCs have been argued to be important agents of change in an organizational field as they are less bound by the norms, values and logics of any particular institutional environment. The authors' analysis shows how this disconnectedness of MNCs can also hinder the change effort in three important ways.

Organizational researchers have long recognized the important role that top managers play within entrepreneurial firms (Ireland, Hitt and Sirmon 2003). Utilizing Covin and Slevin’s (1989) conceptual framework, the current study explores three key entrepreneurial characteristics of top managers and the impact these characteristics have on firm performance. Specifically, we argue that top managers with a high tolerance of risk, those who favor innovative activities and those who display a high degree of proactiveness will positively impact firm performance. In addition, this study examines the influence of top managers’ prestige, structural and expert power on the relationship between entrepreneurial orientation and firm performance. We conclude the study with a discussion of theoretical and practical implications of our findings and suggestions for future research in this area of study.

The purpose of this exploratory study is to examine the impact of leadership on workgroup climate and performance in a religious/church‐based non‐profit organization.

The impact of leadership is investigated using a questionnaire comprised of established scales such as the transformational leadership scales (TLS), team climate inventory questionnaire (TCI), team effectiveness, workgroup cohesion, and interdependence scales. This is a context based study that considers the unique culture comprised of social, political, economic, technologic, personnel, and personal concerns. Descriptive, correlation, hierarchical regression, and SPSS macro developed by Preacher and Hayes were used as statistical techniques to assess the indirect effects (Sobel Tests) of variables.

Transformational leadership was identified as a key variable for the functioning of workgroup performance whilst transactional leadership was identified as a key influencing factor of workgroup climate. In addition, the study found a significant and positive large effect of workgroup climate on workgroup performance whilst both transformational and transactional leadership did not influence workgroup performance through workgroup climate. This finding provides areas in need of further research.

There is likely to be posing risks of method variance or response biases as all data were drawn from employee surveys. There is also likely to be selection bias as the authors could not directly compare respondents with non‐respondents. The fact that there may be operational differences in other as well as smaller organizations, based on the limited size and the ability to allocate job functions, could limit the generalization of this result to other organizations.

This study makes a significant contribution to both scholarly theory and workplace practice in the non‐profit sector as the findings indicated that the influence of workgroup climate on workgroup performance provided an enabling context for the delivery of leadership in a religious/church‐based non‐profit organization.

The purpose of this paper is to investigate how misalignments between the organizational climate (measured as information‐processing demand) and the leadership style (measured as information‐processing capability) may result in negative performance consequences.

The empirical part of the paper is based on questionnaire data. Key informant is the CEO and thus there is a focus on the CEO's perception of climate and leadership style. Data are subjected to regression analysis.

The results indicate that misalignments between climate and leadership style are problematic for organizational performance. This is supported by the empirical findings that show partial support for three out of four hypotheses and full support for the fourth hypothesis.

Data cover information on Danish small‐ and medium‐sized firms. These cross‐sectional data and cannot study the effects of misalignments over time.

Because the findings show that misalignments between climate and leadership style are problematic to organizational level of performance, this implies that in case of misfits either the climate or the leadership style must be changed.

The main contribution of the paper is that the framework allows an explicit understanding of which managerial actions are needed to manage particular types of climate. Further, the framework enables an understanding of how misalignments may result in poor performance.