Journal of Management

Prior research has focused on the influence of long investors (e.g., institutional investors) on merger-and-acquisition (M&A) decisions. This study investigates the role of short sellers in shaping managerial acquisitiveness and M&A decision quality. Short sellers impose a downward pressure on stock prices by disseminating negative information to the market. Given that managerial wealth and job security hinge on stock prices, top managers respond to increased short selling by refraining from excessive M&A activities because M&As could provide opportunities for short sellers to spread negative information and dampen stock prices. Furthermore, the negative influence of short sellers on managerial acquisitiveness is enhanced by the market for corporate control as an external governance mechanism and by CEO equity ownership as an internal governance mechanism. When firms with increasing short selling do engage in M&As, they gain higher M&A announcement returns and operating performance. We test our hypotheses using firms in the S&P 1500 from 2002 to 2014 and find support for our arguments.

Given that many organizations are competitive and finance centered, organizational leaders may lead with a primary focus on bottom-line attainment, such that they are perceived by their subordinates as having a bottom-line mentality (BLM) that entails pursuing bottom-line outcomes above all else. Yet, the field is limited in understanding why such a leadership approach affects employees’ positive and negative contributions in the workplace. Drawing on social exchange theory, we theorize that supervisors high in BLM can influence employees’ felt obligation toward the bottom line, which in turn can influence employees’ task performance and unethical pro-organizational behavior (UPB). We also examine employee ambition as a moderator of this process. Using three-wave, multisource data collected from the financial services industry, our results revealed that high-BLM supervisors elevate employee task performance as well as UPB by motivating employees’ felt obligation toward the bottom line. Furthermore, we found that employee ambition served as a first-stage moderator, such that the mediated relationships were stronger when employee ambition was high as opposed to low. Our findings break away from the dominant dysfunctional view of BLM and provide a more balanced view of this mentality.

Four studies (a vignette-based experiment conducted in Portugal and Brazil, a two-wave multisource field study in Portugal, a three-wave field study in the United States, and a multisource field study in Portugal), in which conscientiousness, a “rival” of grit, was controlled for, provide theoretical and empirical evidence for a model testing what (e.g., grit in leaders), why (e.g., employee self-attributed grit), and when (e.g., leader support) grit supports thriving at work. First, gritty employees are more likely to thrive. Second, conveyed leader grit (i.e., grit as perceived by employees) predicts employee grit. Third, conveyed leader grit and leader self-attributed grit are conceptually different, and although the two relate positively with employee self-attributed grit, the former is a better predictor of employee self-attributed grit. Fourth, leader support operates as a boundary condition, in that the indirect association of conveyed leader grit with employee thriving is stronger when the leader is perceived as supportive. Our research also indicates that the concept of grit is more textured than habitually considered and that more attention must be paid to the boundary conditions of its development and impact.

Leader behaviors are dynamic and vary over time, and leaders’ actions at a given time can have ramifications for their subsequent behavior. Taking such a dynamic perspective on leader behaviors, we examined daily servant leadership behavior and its downstream effects on the leaders themselves from a within-person self-regulation perspective. Results from two experience sampling studies consistently revealed that engaging in daily servant leadership behavior can come at a cost for the leaders. Specifically, for leaders who are low in perspective taking, engaging in servant leadership behavior was associated with increases in same-day depletion and next-day withdrawal from their leadership role (i.e., greater laissez-faire behavior). However, for leaders who frequently exercise perspective taking, engaging in daily servant leadership behavior was instead associated with decreases in depletion and subsequent laissez-faire behavior, suggesting that servant leadership behaviors are replenishing for these individuals. Experience in perspective taking is therefore a key individual difference that determines whether enacting servant leadership behavior is beneficial or detrimental for leaders. We discuss theoretical and practical implications of our findings and provide avenues for future leadership research.

Firms can be horizontally diversified, with considerable breadth, or vertically integrated, with great depth. This study explores how breadth and depth affect each other as influenced by capability requirements and coordination demands. Using construction industry data, we assess the interdependence between contractors’ portfolios of building types (horizontal scope) and the extent of integration of the activities needed to complete each project (vertical scope). We find that vertical and horizontal scope have a negative interdependency only when contractors face managerial constraints due to coordination challenges. Further, we show that this effect can be mitigated through organizational structures that centralize key functions. Our findings highlight the importance of coordination in the theory of the firm, as we link firm boundaries to managerial coordination and internal organization.

Although transactional leadership is known to be the most common style of leadership in organizations, meta-analytic work has yet to fully uncover the relationship between transactional leadership and one of the most focal leadership outcomes: follower performance. Moreover, little is known about the mechanisms that explain why transactional leadership predicts follower performance. To address these gaps, the current article meta-analytically tests a model based on social exchange theory and self-determination theory in which transactional leadership is theorized to affect follower performance sequentially through leader–member exchange (LMX) and psychological empowerment. Specifically, we argue that although some leadership behaviors (e.g., contingent reward) may benefit performance via positive contributions to the leader–follower social exchange, some leadership behaviors (e.g., contingent reward) may simultaneously exhibit negative effects on performance via reduced empowerment. Our results demonstrate that transactional leadership displays both positive and negative indirect effects on follower performance. Furthermore, the pattern of these effects generalizes to two types of performance: task performance and contextual performance. These findings suggest that transactional leadership is a “double-edged sword” when predicting follower performance (e.g., contingent reward fosters LMX but hinders empowerment, whereas management by exception fosters empowerment but hinders LMX). We discuss how leaders can benefit from these findings, including modifying one’s delivery of transactional leadership approaches.

As teams continue to become more prevalent in modern-day organizations, researchers and organizations alike can benefit from a more nuanced understanding of teams’ decision-making process, which can ultimately impact organizational effectiveness. Although team processes are conceptualized as dynamic phenomena, they have largely been treated as static in research. In this study, we draw on the input-mediator-output-input and episodic team performance frameworks to advance a theoretical model of the dynamic, reciprocal effects of team rational decision strategy and team performance as well as the role of team composition of individual rational decision style. We sampled 320 participants in 85 teams competing in a 10-week business strategy simulation where teams made weekly strategic decisions that contributed to team performance. Teams composed of individuals with rational decision styles were more likely to adopt rational decision strategies, which led to better team performance. Additionally, results revealed a positive reciprocal effect between rational decision strategy and team performance such that teams with positive prior performance were more likely to engage in subsequent rational decision strategy. As hypothesized, team composition of members’ rational decision style was the primary determinant of team rational strategy during initial stages of team development, but the valence of outcome feedback (i.e., prior performance) took over as the stronger predictor of team rational strategy during later stages of team development. We contribute to the team and decision-making literatures by examining the dynamic process of team decision making and team performance.

Over the past decade, the rise of blockchain technology has led to the emergence of a growing number of decentralized platforms that are governed less by platform owners and more through community efforts. The emergence of blockchain platforms offers a unique opportunity to examine alternative structures for platform governance and to develop a theory around the value of centralized, semi-decentralized, and decentralized governance. Drawing on mechanism design theory, we evaluate the tradeoffs between centralization and decentralization and hypothesize semi-decentralization as a higher performing governance structure. Empirical evidence from the blockchain industry shows that decentralization has an inverted U-shaped relationship with platforms’ market capitalization, developer attention, and development activity. We further examine factors driving the decentralization of platform governance and find that digital platforms of the infrastructure layer—relative to those of the application layer—have a tendency to become more decentralized. This tendency, nevertheless, can be offset by experienced leaders to achieve semi-decentralization. Overall, this study contributes new insights on the characteristics, antecedents, and consequences of effective platform governance.