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Article
Publication date: 28 September 2011

Xin Liang and Joseph Picken

The purpose of this paper is to attempt to verify the predicted relationship between the demographic (i.e. tenure, functional background, etc.) difference and cognitive…

1445

Abstract

Purpose

The purpose of this paper is to attempt to verify the predicted relationship between the demographic (i.e. tenure, functional background, etc.) difference and cognitive difference among top managers and examine how such a relationship is affected by the communication among top managers.

Design/methodology/approach

The authors hypothesized that there is a positive relationship between demographic deviation and cognitive deviation of a focal manager on a TMT, and that such a relationship is mediated by the degree of communication that the focal manager has with other team members on the TMT. Using Structural Equation Modeling techniques, these hypotheses were tested based on a sample of 348 top managers that consist of 28 top management teams.

Findings

It was found that the hypothesized relationship between demographic deviation and cognitive deviation of a focal top manager was supported with respect to the tenure of a manager, but not the functional background of a manager. Moreover, it was found that communication frequency of a focal manager with other team members mediated the relationship between the tenure deviation and the cognitive deviation of the focal manager and that tenure deviation negatively influenced communication frequency, which in turn, negatively influenced the cognitive deviation of the manager.

Practical implications

These findings imply that: when constructing a competitive top management, practitioners such as boards of directors of a firm should pay more attention to the tenure diversity of a top management team because tenure diversity influences the cognitive diversity of the team; and communication among members of a management team can reduce the cognitive differences among members. However, communication happens more frequently among managers with similar tenure than among managers with dissimilar tenure. To promote consensus, managers need to watch for the forming of group fault lines along tenure within their teams.

Originality/value

As far as is known, this is the first study that uses relational demography to examine the influence of tenure difference on cognitive difference among members of a top management team and to expose a mediating role played by communication frequency.

Details

Leadership & Organization Development Journal, vol. 32 no. 7
Type: Research Article
ISSN: 0143-7739

Keywords

Open Access
Article
Publication date: 19 July 2022

Afsaneh Soroushyar

This study examines whether and how a client's business strategy can affect the relationship between auditor characteristics and financial reporting quality.

Abstract

Purpose

This study examines whether and how a client's business strategy can affect the relationship between auditor characteristics and financial reporting quality.

Design/methodology/approach

In this study, auditor industry specialization and tenure were used as proxies for auditor characteristics. The client business strategy was measured using the resource allocation index method. Finally, discretionary accruals are used to assess financial reporting quality. This study includes 1,450 firm-year observations and 145 companies listed on the Tehran Stock Exchange (TSE) over a ten-year period from 2011 to 2020. The research hypotheses were analyzed using a multivariate regression model and panel data.

Findings

The results show that auditor industry specialization increases financial reporting quality. This relationship improves when the client's business strategy deviates from the industry–normal strategy. The research findings state that auditor tenure has a positive association with financial reporting quality, and this relationship is strengthened when the company's business strategy deviates from the normal industry strategy.

Practical implications

The findings of this study provide important evidence for investors, firm management, and auditing firms. Investors must consider the auditor characteristics when selecting companies listed on the TSE. Managers of Iranian companies are advised to consider the auditor's characteristics when choosing an audit firm to increase financial reporting quality. Audit firms should evaluate their business strategies in audit planning to increase the quality of financial reporting.

Originality/value

To the best of the authors’ knowledge, this is the first empirical study to examine the relationship between auditor characteristics and the financial reporting quality in the emerging capital market by considering the clients' business strategy.

Details

Asian Journal of Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2443-4175

Keywords

Book part
Publication date: 11 August 2014

John G. Sessions and Nikolaos Theodoropoulos

Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available…

Abstract

Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to firms is to tilt the remuneration package over time such that the lure of high future earnings acts as a deterrent to current shirking. On the assumption that firms strive for the optimal trade-off between these various instruments, we develop a two-period model of efficiency wages in which increased monitoring attenuates the gradient of the wage-tenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction.

Details

New Analyses of Worker Well-Being
Type: Book
ISBN: 978-1-78350-056-7

Keywords

Article
Publication date: 25 June 2021

Daniel Tidbury, Steven F. Cahan and Li Chen

Board faultlines, which reflect intrinsic divisions of board members into relatively homogeneous subgroups, are associated with poor firm performance. This paper aims to…

Abstract

Purpose

Board faultlines, which reflect intrinsic divisions of board members into relatively homogeneous subgroups, are associated with poor firm performance. This paper aims to extend the existing board faultline research by examining how acquisition deal size moderates the negative implications of board faultlines.

Design/methodology/approach

This paper uses a sample of acquisitions and a quantitative research approach to conduct statistical analysis.

Findings

Using a sample of acquisitions announced between 2007 and 2016, this paper finds evidence suggesting that strong faultlines are associated with poorer acquisition outcomes in the long-term, but not in the short term. Further, this paper finds that the effect of faultline strength on long-term acquisition outcomes is weaker for larger acquisition deals than smaller acquisition deals. The findings are consistent with deal size moderating the relation between faultlines and acquisition outcomes.

Research limitations/implications

This paper addresses possible endogeneity through firm fixed effects and instrumental variable analysis. Although this paper provides evidence on the moderating role of deal size in the context of faultlines, future research could examine the role of additional moderators, such as pro-diversity, trust, board leadership and board and task characteristics.

Practical implications

The findings suggest that boards need to be aware of situations where the negative effects of faultlines are more likely to come to the fore. For example, faultlines are more likely to play a role in more routine, obscure monitoring than for high-profile strategic decisions.

Originality/value

The study is multidisciplinary as it draws on the management, organizational behaviour and psychology and finance literature. It contributes to the developing literature on faultlines in several important ways. First, this paper supports their view that faultlines have adverse effects on board performance by showing that faultlines negatively impact discrete strategic investment decisions. Second, this paper provides evidence that deals size moderates the faultline-acquisition performance relation, indicating that the role of faultlines is contextual. Third, this paper finds evidence that suggests investors do not factor in board faultlines when responding to acquisition announcements.

Details

Meditari Accountancy Research, vol. 30 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 24 January 2022

Ning Shen and Zhiyi Zhuo

Based on upper echelons (UE) theory, the purpose of this study is to investigate a conceptualized moderated mediation model for examining the effects of top management…

Abstract

Purpose

Based on upper echelons (UE) theory, the purpose of this study is to investigate a conceptualized moderated mediation model for examining the effects of top management team (TMT) heterogeneity and firm value in China through the mediating effect of product diversification, the moderating effect of ownership type between TMT heterogeneity and product diversification and the moderating effect of executive shareholding between product diversification and firm value.

Design/methodology/approach

Unbalanced panel data were collected over 5 years with a total of 6,597 observations, organized through the WIND (Wind Economic Database) and CSMAR (China Stock Market and Accounting Research) Database. The hypotheses were tested using structural equation modeling and analyzed with stata15.0 software.

Findings

The results indicated that product diversification plays a mediating role between TMT heterogeneity and firm value. In China, TMT heterogeneity of non–state-owned enterprises plays a more significant role in promoting product diversification than that of state-owned enterprises; executive shareholding strengthens the relationship between product diversification and firm value.

Research limitations/implications

The characteristic dimension of TMT is seen as a relatively static factor, and it is worth looking at whether a more dynamic system of evaluation and measurement can be established.

Originality/value

This study enriches theoretical research on TMT and contributes to UE theory in several ways. First, we studied the mediation effect of product diversification between TMT heterogeneity and firm value. This extends research on UE theory to possible process variables. Second, considering the influence of the unique institutional environment in China on corporate strategic decisions, the study investigates state-owned and non–state-owned enterprises. Specifically, it looks at the influence of ownership type as a moderating variable between TMT heterogeneity and product diversification. Third, the paper discusses the moderating effect of executive shareholding on the product diversification–firm value relationship. The research contributes to agency theory and expands research on different economic systems by implementing agency theory.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 5 May 2022

Cristina Simón, Jason D. Shaw, Isabel de Sivatte and Ricardo Olmos Albacete

The authors propose and test these boundary conditions to the relationship between voluntary collective turnover and unit performance: job and organizational tenure and…

Abstract

Purpose

The authors propose and test these boundary conditions to the relationship between voluntary collective turnover and unit performance: job and organizational tenure and the time clustering of turnover.

Design/methodology/approach

The authors analyze longitudinal data obtained from 231 units of an international clothing retailer in Spain assessed during 36 months.

Findings

The authors show that when the remaining workforce has moderate, but not low or high, levels of job and organizational tenure, the negative effect of quits on performance is buffered. Furthermore, their results show that time-clustered voluntary turnover patterns have stronger negative effects on unit performance than turnover patterns spread over time.

Originality/value

The authors extend the collective turnover literature addressing two qualitative properties of the content of voluntary turnover, the experience of the workers that remain in the unit after the turnover events happen and how these events are clustered/dispersed over time.

Details

Employee Relations: The International Journal, vol. 44 no. 6
Type: Research Article
ISSN: 0142-5455

Keywords

Article
Publication date: 10 December 2019

Kirsten Thommes and Janny Klabuhn

Past research on how to compose a team is ambiguous, especially with respect to diversity dimensions. The authors argue that previous inconsistencies in results have…

Abstract

Purpose

Past research on how to compose a team is ambiguous, especially with respect to diversity dimensions. The authors argue that previous inconsistencies in results have arisen for two main reasons. First, there is a lack of clarity about the concept of age diversity, as age separation, age variety and age disparity are frequently used synonymously, but capture very different aspects of diversity. Second, in many research settings, age and tenure diversity have been intertwined. When staffing teams, many staff managers ask for staffing advise concerning staff diversity in order to enhance efficiency. This staffing problem is mainly a question how homogeneous and heterogeneous teams should be composed. In this paper, the authors capture both – age and tenure diversity – as well as their interaction and argue that age separation and tenure variety are most likely to affect team performance in a routine task. The paper aims to discuss these issues.

Design/methodology/approach

The authors are testing the hypothesis using rich quantitative field data from a steel company.

Findings

The results show that age separation decreases performance while tenure variety increases performance. Moreover, the beneficial effects of tenure variety cannot arise when age separation is too large.

Research limitations/implications

The authors show that diversity research is very sensitive to the operationalization of diversity.

Practical implications

Managers can benefit from the study by learning how to optimally staff teams: while age diversity should be low, tenure diversity can be high.

Originality/value

Due to the unique data set, the authors can separate the influence of tenure and age diversity.

Details

Evidence-based HRM: a Global Forum for Empirical Scholarship, vol. 9 no. 1
Type: Research Article
ISSN: 2049-3983

Keywords

Article
Publication date: 23 October 2007

Michael L. McIntyre, Steven A. Murphy and Paul Mitchell

This paper seeks to argue that boards can be playing a more proactive role in contributing to organizational effectiveness and that their composition requires greater

5725

Abstract

Purpose

This paper seeks to argue that boards can be playing a more proactive role in contributing to organizational effectiveness and that their composition requires greater research attention. By integrating the organizational behaviour literature on teams with the governance literature, the paper empirically examines the relationship between key board composition variables and firm performance.

Design/methodology/approach

At this stage in the development of the approach, the focus is on a sub‐set of the elements proposed in the group dynamics literature. The population for this study comprises all companies included in the Canadian TSE 300 Composite Index (renamed the S&P/TSX Composite Index). This study uses cross‐sectional regression analyses to examine the nature of the relationships between board composition and firm performance.

Findings

The data analyses revealed that high levels of experience, appropriate team size, moderate levels of variation in age and team tenure were correlated with firm performance.

Research limitations/implications

Boards of directors (BOD) are teams whose effectiveness can be assessed through group dynamic constructs in the organizational behaviour literature. Further research is needed to examine the intricate dynamics that might moderate or mediate the relationship between board characteristics and firm performance.

Practical implications

The findings provide a much‐needed benchmark to consider whether the composition of boards is optimal, given the functions and mandate. In addition, the study highlights the opportunity costs of boards, restricting their roles to agency issues.

Originality/value

This interdisciplinary paper tests some of the many variables that can be extrapolated from the group dynamics research. The paper calls on boards to examine what BOD functionality really entails, and argues for more proactive behaviours aimed at strategic firm issues.

Details

Corporate Governance: The international journal of business in society, vol. 7 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 1 February 1998

BRETT MYORS

An alternative method of utility analysis based on tenure, rather than dollar value performance, is presented. The standard deviation of employees' tenure with an…

Abstract

An alternative method of utility analysis based on tenure, rather than dollar value performance, is presented. The standard deviation of employees' tenure with an organisation becomes the individual differences parameter, rather than SDy, and mean dollar value performance (Y) provides the scaling onto dollars. Results suggest that the new model produces utility estimates that are not significantly different from the classic Brogden‐Cronbach‐Gleser model.

Details

Journal of Human Resource Costing & Accounting, vol. 3 no. 2
Type: Research Article
ISSN: 1401-338X

Article
Publication date: 24 February 2020

Jan Philip Weber and Gabriel Lee

The purpose of this paper is twofold: first, the authors construct a country-specific time-varying private rental regulation index for 18 developed economies starting from…

Abstract

Purpose

The purpose of this paper is twofold: first, the authors construct a country-specific time-varying private rental regulation index for 18 developed economies starting from 1973 to 2014. Second, the authors analyze the effects of their index on the housing rental markets across 18 countries and states.

Design/methodology/approach

The authors’ index not only covers 18 developed economies over 42 years but also combines both tenure security and rent laws. The authors’ empirical framework is that of panel regressions with time and country fixed effects.

Findings

The authors’ index sheds further insights on the extent to which rent and tenure security laws have converged over the past 40 years for each economy. Moreover, the authors show three empirical results. First, stringent rent control regimes do lead to lower real rent growth rates than regimes with free rents. Second, soft rent control regimes with time-limited tenure security and minimum duration periods, however, may cause higher rent growth rates than free rent regimes. Third, rent-free regimes do not show significant high real rent appreciation rates.

Originality/value

The authors’ rental regulation index is the first time-varying index that covers more than 18 economies over 40 years.

Details

International Journal of Housing Markets and Analysis, vol. 13 no. 4
Type: Research Article
ISSN: 1753-8270

Keywords

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