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The single-minded pursuit of a short-termshareholder value maximization "mantra" by top managers often results in long-term value destruction for shareholders. We explain this paradox and develop an alternate, market-based approach labeled "competing for essential stakeholders" (CES). CES provides levers that promote long-term value creation for shareholders and for other essential firm stakeholders. Top managers using CES act as "operators" of the firm as a multisided marketplace. Increases in value creation for members on one side of the market make membership more attractive to those occupying the other sides, and vice versa. The result is increased value creation for all essential stakeholder groups. We discuss benefits of and barriers to CES. [ABSTRACT FROM AUTHOR]

The authors respond to an article that critiqued a previous article they had published regarding business enterprise reputation and the discretion of managers, particularly the link to outcome-based and behavior-based reputations. The article discusses the concept of reputation and their use of examples from the firms Toyota, Chipotle, and Apple.

Who constitutes the top management team (TMT)? What are the boundary conditions that distinguish the TMT from other managers? Despite nearly four decades of TMT research, the concept of the TMT remains poorly defined and often goes undefined in empirical TMT research. We conducted a review of the TMT literature to better understand how the TMT construct is conceptualized and operationalized, to identify gaps in alignment and consistency, and to develop a roadmap for scholars to improve both aspects of the literature. We review all TMT-related papers published in Financial Times 50 (FT50) journals between 1984 and 2019. Our analysis reveals (1) a wide discrepancy in conceptual definitions of the TMT among the minority of studies actually providing a conceptual definition, (2) operationalizations seemingly based more on data availability rather than alignment with a conceptual definition, and as a result, (3) an overall lack of coherence in understanding of the TMT phenomenon. We explore these challenges, develop a definition of the TMT that integrates insight from the academic and practitioner communities, and build a roadmap for future TMT and upper echelons research. [ABSTRACT FROM AUTHOR]

Agency theory-grounded research on boards of directors and firm legitimacy has historically viewed CEO power as de-legitimating, often taking this fact for granted in theorizing about external assessors' evaluations of a firm. With few exceptions, this literature has focused exclusively on capital market participants (e.g., investors, securities analysts) as the arbiters of a firm's legitimacy and has accordingly assumed that legitimate governance arrangements are those derived from the shareholder-oriented prescriptions of agency theory. We extend this line of research in new ways by arguing that customers also externally assess firm legitimacy, and that firms potentially adjust their governance characteristics to meet customers' norms and expectations. We argue that the cultural-cognitive institutions prevalent in customers' home countries influence their judgments regarding a firm's legitimacy, such that firms competing heavily in highpower distance cultures are more likely to have powerful CEOs, with CEO power a source of legitimacy--rather than illegitimacy--among customers. We also argue that the more dependent a firm is on its customers and the more salient cultural power distance is as a demand-side institutional norm, the greater this relationship will be. Data from 151 U.S. semiconductor and pharmaceutical firms over a 10-year period generally support our predictions. [ABSTRACT FROM AUTHOR]

Conceptualized as a meta‐construct, operations‐related structural flux (ORSF) refers to appointments and exits—voluntary or involuntary—of operations‐related executives, to and from the firm. This research leverages the contingency theory perspective to show that ORSF's influence on firm performance is contingent on contextual circumstances of such executive changes, specifically, appointments and exits—voluntary or involuntary. Examining executive turnover data from North American public firms between 2000 and 2016, the authors find that the firm‐level context of operations executives' turnover is consequential for firm performance. On average, operations appointments are adaptive, but operations exits, including those due to both voluntary and involuntary reasons, disrupt firm performance. However, parallel effects are not evident for marketing‐ and finance‐related appointments and exits. Furthermore, our study reveals that exit of one operations executive hurts firm performance (measured in terms of Tobin's q) by 3.3%. A post‐hoc analysis finds that firm performance of the sample firms that witness involuntary operations‐related exits (IVOpE)is, on average, 9.2% lower than that of the sample firms that do not witness IVOpE. These results indicate the outsized influence of operations‐related executives, who collectively are generally responsible for much of a firm's budget, workforce, resources, structures, and capabilities. [ABSTRACT FROM AUTHOR]

Past research has consistently shown that separation of CEO and board chair roles has no systematic effect on firm performance. In this study, we introduce the different forms of such separation: apprentice, departure, and demotion. In a study of Standard & Poor's (S&P) 1500 and Fortune 1000 firms, we find that separation of the two leadership roles positively impacts future firm performance when current performance is poor, but negatively impacts future firm performance when current performance is high. We find that this effect is most dramatic for demotion separations. Finally, we test theory about the permanency of CEO-board chair separation. Our results show that the different types of CEO-board chair separation have very distinct consequences. [ABSTRACT FROM AUTHOR]

Scholarship on strategic leadership and governance has long operated under the assumption that strategic leaders' influence and purview are predominantly constrained by organizational boundaries. Recent events and social movements have called this limited view of strategic leadership into question, however. In this editorial commentary, we explore the emerging trend of strategic leaders becoming—in both their own and stakeholders' perceptions—societal leaders advancing social change inside and outside their organizations. We examine the research implications of taking a broader view of these leaders' responsibility, one that reflects evolving social expectations. [ABSTRACT FROM AUTHOR]

CEO duality—the practice of a single individual serving as both CEO and board chair—has been the subject of academic interest for more than 20 years. In that time, boards’ use of CEO duality has fluctuated and the scholarly conceptualizations of the phenomenon have become more complex. As such, the need to understand CEO duality has only increased with time. We review and integrate the disparate literature on this topic so that future attempts to study it will benefit from a more complete understanding of the knowledge already produced. We review the demonstrated antecedents and consequences of CEO duality, pointing out that while much work has been done in this area, much remains that we do not understand. Finally, we offer new theoretical, methodological, and contextual directions that researchers could explore to extend knowledge about CEO duality. [ABSTRACT FROM AUTHOR]