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Research Summary: Although research has explored how executive hubris shapes organizational actions, we theorize that hubris can also develop outside the executive suite. We introduce the construct organizational hubris, which we define as a durable, collective attitude marked by exaggerated pride and confidence in the organization. Organizational hubris differs from executive hubris in terms of level (individual versus collective) and target (self‐focused vs. organization‐focused). We argue that organizational hubris can develop among high‐identification organizations via an external route (positive external attributions) or an internal route (charismatic messaging from top leaders), or both. Once developed, organizational hubris affects important outcomes by shaping (1) how external stakeholders perceive the organization, (2) how insiders treat external stakeholders, and (3) the relationship among internal stakeholders—particularly between employees and top managers. Managerial Summary: Among the many stories of corporate excess, some organizations exhibit a sense of superiority—the view that success is inevitable and failure impossible—that can shape their very nature. In this article, we depart from the idea that hubris is confined to the C‐suite and introduce the construct organizational hubris, which we define as a durable, collective attitude marked by exaggerated pride and confidence in the organization. Organizational hubris can develop from positive external attributions and/or charismatic messaging from top leaders. Once developed, organizational hubris affects important strategic outcomes by shaping (1) how external stakeholders perceive the organization, (2) how insiders treat external stakeholders, and (3) the relationship among internal stakeholders—particularly between employees and top managers. [ABSTRACT FROM AUTHOR]

Research Summary: We examine how a firm defends its capability and character reputations in response to different violations. We develop our core theoretical mechanism—stakeholders' situational expectations—to theorize that the effectiveness of a firm's response strategy following a violation depends on the nature of the violation and the reputational judgment being made. We test our hypotheses using two longitudinal violation samples and novel media‐based measures of reputation. Generally, we find that a more accommodative strategy is an effective defense following a capability violation, but it is less effective following a character violation. In supplemental analyses, we also discover that a more accommodative strategy is less effective at managing general reputation. Ultimately, our theory and findings suggest that reputation defense is more complex than previously considered. Managerial Summary: We shed light on the challenges managers face in defending their multiple reputations following a violation. We suggest that the type of violation affects stakeholders' expectations of the firm, and that these expectations differentially threaten a firm's multiple reputations as well as the efficacy of its response strategy. Using a sample of capability‐based (unintentional financial restatements) and character‐based (environmental malfeasance) violations, we find that a more accommodative response strategy can defend certain reputations following a capability‐based violation but can be detrimental to other reputations. We also find accommodativeness to be generally harmful following a character‐based violation. Ultimately, our results suggest that managers should consider both the type of reputation they are defending and the nature of the violation when implementing a response strategy. [ABSTRACT FROM AUTHOR]

Research summary: Emerging reputation research suggests that high-reputation firms will act to maintain their reputations in the face of high expectations. Yet, this research remains unclear on how high-reputation firms do so. We advance this research by exploring three questions related to high-reputation firms' differential acquisition behaviors: Do high-reputation firms make more acquisitions than similar firms without this distinction? What kind of acquisitions do they make? How do investors react to high-reputation firms' differential acquisition behaviors? We find that high-reputation firms make more acquisitions and more unrelated acquisitions than other firms. Yet, we also find that investors bid down high-reputation firms' stock more than other firms' in response to acquisition announcements, suggesting that investors are skeptical of how high-reputation firms maintain their reputations. Managerial summary: We know that high-reputation firms wish to maintain their elite standing in the face of high-market expectations, but we know little about how they do so. We explore this puzzle by investigating how reputation maintenance influences high-reputation firms' acquisition behaviors. We classify high-reputation firms are those firms that make Fortune's Most Admired annual list, and we find that high-reputation firms make more acquisitions and more unrelated ones than other firms. Surprisingly, we also find that the market tends to react negatively to these acquisitions. Thus, managers may want to reconsider their strategy of making acquisitions as a means to maintain their firms' high reputations. Copyright © 2017 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]