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Publication date: 13 March 2023

Matthew J. Hayes and Philip M. J. Reckers

Prior research in psychology reports an age-based bias against narcissists. We examine whether managers' reactions to narcissistic subordinates exhibit a similar bias. Using an…

Abstract

Prior research in psychology reports an age-based bias against narcissists. We examine whether managers' reactions to narcissistic subordinates exhibit a similar bias. Using an experimental method, where we manipulate subordinate narcissism, we find evidence of an age-based bias. Older managers react to a narcissistic subordinate by making conservative revisions to the subordinate's aggressive accounting estimates. They do so even at the cost of failing to meet a personally beneficial earnings target. A test of moderated mediation shows the actions of older managers (in their late 40s and older) were driven by their negative perceptions of the narcissistic subordinate. Our work demonstrates that not all individuals perceive narcissists the same way, and has implications for manger/subordinate relationships, and group dynamics involving mixed personalities and ages.

Article
Publication date: 1 February 2021

Mahdi Salehi, Safoura Rouhi, Mohana Usefi Moghadam and Faezeh Faramarzi

Success in corporate relative performance is one of the factors for the growth and durability of firms. Since the relative performance is a function of managers' decisions and…

Abstract

Purpose

Success in corporate relative performance is one of the factors for the growth and durability of firms. Since the relative performance is a function of managers' decisions and such decisions are under the influence of behavioral and psychological characteristics, this paper aims to assess the managers’ and auditors’ narcissism's effect on the management team's stability relative to corporate performance.

Design/methodology/approach

This paper has used the signature magnitude for examining narcissism and the regression model of Jenter and Kanaan (2015) for assessing relative corporate performance. The logistic regression is used to test the model of the management team's stability, and the multivariate regression is used to test the model of relative corporate performance. Research hypotheses were also examined using a sample of 768 listed year-companies on the Tehran Stock Exchange during 2012–2017 and by employing a panel data approach and fixed effects method.

Findings

The obtained results show a negative and significant relationship between managers' and auditors' narcissism and the management team's stability. The relationship between the narcissism of managers and auditors and relative corporate performance is positive and significant. Moreover, managers' narcissism positively and significantly impacts the relationship between auditors' narcissism and team management stability. A negative and significant relationship is evident between auditors’ narcissism and relative corporate performance.

Originality/value

This study's results can identify the effect of psychological components such as narcissism on people's performance by directing and influencing their decisions. Many studies have been conducted on narcissism, but none of them have examined the impact auditors’ and managers' narcissism has on the management team's stability and the corporate relative performance. Therefore, considering the importance of success in the corporate relative performance and benefits of the management team's stability, this study's results can reveal the importance of such features in accounting research. Also, the results of this research can make it important to know more about financial behavioral theory.

Details

International Journal of Productivity and Performance Management, vol. 71 no. 4
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 1 December 2022

Mahdi Salehi, Mohammed Ahmed Jabbar and Saleh Orfizadeh

This study investigates the relationship between management's psychological characteristics (managers' narcissism, overconfidence and managers' myopia) and earnings management in…

Abstract

Purpose

This study investigates the relationship between management's psychological characteristics (managers' narcissism, overconfidence and managers' myopia) and earnings management in the pre-Islamic State of Iraq and Syria (ISIS) and post-ISIS eras.

Design/methodology/approach

A multivariate regression model was used to test the hypotheses. The research hypotheses were tested using a sample of all companies listed on the Iraqi Stock Exchange from 2014 to 2020.

Findings

Findings indicate a positive and significant relationship between managers' narcissism, overconfidence and myopia with accrual and real earnings management. According to the results, the ISIS weakens the relationship between managers' narcissism, managers' overconfidence and managers' myopia with accrual and real earnings management.

Originality/value

Because no study has addressed this issue in Iraq so far, the results of this research can provide helpful information for its users and improve the knowledge and science in this area.

Details

Journal of Facilities Management , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-5967

Keywords

Article
Publication date: 16 November 2020

Mahdi Salehi, Amirhosein Afzal Aghaei Naeini and Safoura Rouhi

The primary purpose is to investigate the relationship between narcissism and managers' overconfidence in listed companies' risk-taking.

Abstract

Purpose

The primary purpose is to investigate the relationship between narcissism and managers' overconfidence in listed companies' risk-taking.

Design/methodology/approach

In this study, two criteria of signature and reward are used to measure manager's narcissism; manager's overconfidence, using multiple regression models and finally to measure companies' risk-taking by using companies' monthly returns. Multiple regression is employed to test the model using a sample of 890 firm-year participation on the Tehran Stock Exchange from 2012 to 2017 with panel data and model with fixed effects.

Findings

The findings indicate that the CEO's narcissism and the board of directors positively and significantly affect corporate risk-taking. Also, managers' overconfidence has a positive and significant relationship with corporate risk-taking.

Originality/value

The results of this study identified other factors affecting companies' risk-taking. This study also contributed to the development of the literature on narcissism, overconfidence and corporate risk-taking.

Details

The TQM Journal, vol. 33 no. 6
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 28 May 2021

Mohammad Almaleki, Mahdi Salehi and Mahdi Moradi

This study aims to investigate the impact of managerial narcissism and overconfidence on financial statements’ comparability. In other words, this paper seeks to answer the…

Abstract

Purpose

This study aims to investigate the impact of managerial narcissism and overconfidence on financial statements’ comparability. In other words, this paper seeks to answer the question of whether the personality characteristics of managers may affect the level of financial statements’ quality of commercial entities or not.

Design/methodology/approach

The research hypotheses are tested using a sample of 896 observations taken from the Tehran Stock Exchange and 245 observations from the Iraqi Stock Exchange during 2012 and 2018 using the multiple regression model based on the combined data technique.

Findings

The findings show that managerial narcissism is positively and significantly associated with Iran’s financial statement comparability. In contrast, Iraqi data articulate a negative association between these two variables. This paper finds that Chief Executive Officer overconfidence and financial statements’ comparability are negatively related in both countries. Following the market variation, the different findings suggest that institutional settings such as the general managerial style, adopting international accounting standards (now IFRS) leading to the extent of auditing market globally in Iraq and suffering from international sanctions in Iran, the governing business environment may play an allocative role in preparing financial statements.

Originality/value

The present research is the first research conducted in two emerging markets (Iran and Iraq) examining the relationship between managersnarcissism and overconfidence and financial statements’ comparability. Therefore, the present research in this area can significantly contribute to the development of science and knowledge.

Details

Journal of Facilities Management , vol. 19 no. 5
Type: Research Article
ISSN: 1472-5967

Keywords

Article
Publication date: 15 October 2021

Maryam Seifzadeh, Mahdi Salehi, Mohammadhamed Khanmohammadi and Bizhan Abedini

This study aims to concern about the relationship between management managerial attributes (management entrenchment, narcissism and overconfidence of the chief executive officer…

Abstract

Purpose

This study aims to concern about the relationship between management managerial attributes (management entrenchment, narcissism and overconfidence of the chief executive officer, board effort and real and accrual earnings management) and comparability of financial statements listed firms on the Tehran Stock Exchange. In other words, this paper aims to answer the question that “whether managerial attributes contribute significantly to the comparability of financial statements or not”.

Design/methodology/approach

The multivariate regression model is used for hypothesis testing. The hypotheses were examined using a sample of 768 listed observations on the Tehran Stock Exchange during 2012–2017 and by using from the multivariate regression pattern based on panel data techniques and the random-effects model.

Findings

The obtained results show a significant and negative relationship between management entrenchment, real and accrual earnings management, comparability and the relationship between management narcissism, overconfidence and board effort and comparability of financial statements is positive and significant.

Originality/value

As the present study is the pioneer study on such topics in the emerging markets, it provides valuable information concerning the intrinsic and acquired features of the management for users, analysts and legal institutions with a considerable impact on the comparability of financial statements. Moreover, this study’s results contribute significantly to the development of science and knowledge in this field and fill the gap in the literature.

Details

Journal of Facilities Management , vol. 20 no. 1
Type: Research Article
ISSN: 1472-5967

Keywords

Article
Publication date: 29 April 2021

Mahdi Salehi, Arash Arianpoor and Nader Naghshbandi

The main objective of the paper is to examine the relationship between managerial attributes (e.g. managerial entrenchment, managerial myopia and managerial overconfidence) and…

Abstract

Purpose

The main objective of the paper is to examine the relationship between managerial attributes (e.g. managerial entrenchment, managerial myopia and managerial overconfidence) and firm risk-taking on the Tehran Stock Exchange (TSE).

Design/methodology/approach

The study’s sample comprises 150 companies listed on the TSE from 2011 to 2017. Risk-taking is calculated as the standard deviation (SD) of stock return. Explanatory factor analysis was performed to calculate the weight of each of the five variables managerial ownership, board independence, chief executive officer (CEO) tenure, board compensation and CEO duality as a proxy for managerial entrenchment. The study by Anderson and Hsiao (1982) was also used to calculate managerial myopia, and the study by Schrand and Zechman (2012) was used to calculate managerial overconfidence.

Findings

The results indicate that the effect of managerial entrenchment and managerial myopia on risk-taking of listed firms on the TSE is positive and significant, implying that an increase in CEO entrenchment is likely to give rise to risk-taking. The authors conjecture that this finding could be due to the investment projects impairing the firm performance in the long run. Furthermore, the effect of managerial overconfidence on listed firms' risk-taking on the TSE is significantly negative. Since overconfidence is one of the traits of narcissism and corporate managers tend to be encouraged and admired, it is implied that they tend to make efficient and low-risk investments that ultimately reduce the firm risk-taking.

Originality/value

Several theoretical studies show that managerial behavior is a determining factor in the economy. One of the reasons which justify the originality of this study is the context and institutional environment. Undoubtedly, managerial behavior (e.g. managerial entrenchment, managerial myopia and managerial overconfidence) is expected to have some significant variations in developing countries compared to prevailing in developed countries, particularly in the Iranian stock market the economic sanctions. Furthermore, due to the direct impact of individuals' psychological and behavioral characteristics on their decisions and the effect of companies' risk-taking on increasing and decreasing shareholders and companies' wealth, this research is essential. Given the function of designed behavioral criteria for assessing risk-taking behaviors, the relationship between managerial attributes and firms' risk-taking is still unclear and investigated in this study.

Details

The TQM Journal, vol. 34 no. 4
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 22 July 2020

Maryam Seifzadeh, Mahdi Salehi, Bizhan Abedini and Mohammad Hossien Ranjbar

The present study attempts to assess the relationship between management characteristics (managerial entrenchment, CEO narcissism and overconfidence, managers' myopia, real and…

2298

Abstract

Purpose

The present study attempts to assess the relationship between management characteristics (managerial entrenchment, CEO narcissism and overconfidence, managers' myopia, real and accrual-based earnings management) and financial statement readability of listed firms on the Tehran Stock Exchange. In other words, this paper seeks to answer the question that “whether management characteristics have a favorable effect on financial statement readability or not.”

Design/methodology/approach

Multivariate regression model is used to meet the purpose of this study and research hypotheses are also examined using a sample of 1,050 listed observations on the Tehran Stock Exchange during 2012–2017 and by employing multiple regression patterns based on panel data technique and fixed effects model. Moreover, exploratory factor analysis of six variables (tenure, board independence, CEO duality, CEO ownership, board compensation and CEO change) is used for calculating managerial entrenchment and the FGO index is used for measuring readability.

Findings

The obtained results show that there is a negative and significant relationship between managerial entrenchment and accrual-based earnings management and a positive and significant relationship between real earnings management, managers' myopia, managers' narcissism and overconfidence and financial statement readability.

Originality/value

Since the present study is the first paper to investigate such a topic in the emerging markets, it provides useful information about intrinsic and acquisitive characteristics of management for accounting information users, analysts and legal institutions that contribute greatly to financial statement readability. Besides, the results of this study aid the development of science and knowledge in this field and fill the existing gap in the literature.

Details

EuroMed Journal of Business, vol. 16 no. 1
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 16 June 2021

Hadi Saeidi

This study aims to investigate the impacts of the psychological behaviors of managers, including entrenchment, myopia, narcissism and overconfidence, on money laundering at…

Abstract

Purpose

This study aims to investigate the impacts of the psychological behaviors of managers, including entrenchment, myopia, narcissism and overconfidence, on money laundering at Iranian companies listed on the Tehran Stock Exchange.

Design/methodology/approach

The present study is descriptive-correlational in terms of methodology and applied research in terms of objectives. The statistical population consisted of all companies listed on the Tehran Stock Exchange during 2013–2019. A total of 150 companies were selected as samples via screening. Logistic regression was used to analyze the data and test the hypotheses in EViews v10.

Findings

The findings revealed that management entrenchment, managerial myopia, managerial narcissism and managerial overconfidence have significant impacts on money laundering.

Originality/value

This study pioneer investigating the impacts of psychological behaviors among managers on money laundering in Iran. As an economic crime, money laundering poses an adverse impact on economic growth in countries. The continuous monitoring of manager performance and the deployment of performance measurement systems could prevent the negative impacts of manager behavior on money laundering.

Details

Journal of Money Laundering Control, vol. 25 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 16 November 2021

Hassan Mohammadzadeh Moghadam, Mahdi Salehi and Zohreh Hajiha

The present study aims to investigate the relationship between intellectual capital and the readability of financial statements with the mediating role of management…

Abstract

Purpose

The present study aims to investigate the relationship between intellectual capital and the readability of financial statements with the mediating role of management characteristics of companies listed on the Tehran Stock Exchange. In other words, this research tries to find the answer to whether intellectual capital can positively affect the readability of financial statements.

Design/methodology/approach

A multivariate regression model was used to test the hypotheses for this purpose. The research hypotheses were tested using a sample of 1,309 observations listed on the Tehran Stock Exchange from 2012 to 2018 and a multiple regression model based on panel data and fixed-effects models.

Findings

The results indicate that intellectual capital has a positive and significant relationship with the readability of financial statements, which means that with increasing intellectual capital in companies, financial statements’ readability also increases. Based on the hypothesis test results, it has been determined that narcissism, accrual and real earnings management have a negative effect on the relationship between intellectual capital and the readability of financial statements.

Originality/value

Since the present study examines such an issue in emerging markets, it provides users, analysts and legal entities with useful information about management’s inherent and acquired characteristics that significantly impact the purchase of audit opinion. This study’s results also contribute to developing science and knowledge in this field and close the literature gap.

Details

Journal of Facilities Management , vol. 21 no. 2
Type: Research Article
ISSN: 1472-5967

Keywords

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