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Research on dynamic capabilities (DCs) has focused primarily on reactive DC deployment (i.e., opportunity discovery) with less attention being paid to proactive DC deployment (i.e., opportunity creation). Drawing on the opportunity creation perspective in entrepreneurship, we argue that proactive DC deployment is characterized by uncertainty, which makes deductive reasoning less effective and thus requires the use of heuristic reasoning. We also incorporate the evolutionary logic of variation, selection, and retention to theorize about the role of heuristic reasoning in the process of proactive DC deployment. Specifically, we integrate the concept of ecologically rational heuristic reasoning to answer two key questions: First, how does ecologically rational heuristic reasoning facilitate proactive DC deployment when the decision context is uncertain? Second, why is ecologically rational heuristic reasoning effective for proactive DC deployment? In summary, our paper advances the ongoing debate concerning DCs and the way in which heuristic reasoning assists a firm in deploying such capabilities. [ABSTRACT FROM AUTHOR]

Crises are harmful events that can influence organizational outcomes, leading to significant scholarly and practitioner interest in crisis management. A limitation of this line of inquiry, however, is that it typically glosses over stakeholders' multiple concerns and the multiple factors that comprise organizations' response strategies. To address this limitation, we delineate stakeholders' crisis concerns into rational, emotional, and moral aspects. We then develop a typology along two dimensions of crisis response strategies—accountability and attention—to predict the likelihood that a specific strategy mitigates each of these concerns. We theorize that certain strategies mitigate just one type of concern, while others mitigate multiple concerns—albeit with a lower likelihood of success. Finally, we apply our typology to an organization's social evaluations—that is, important, proximal outcomes affected by a crisis—in order to better understand the trade-offs associated with managing stakeholders' multiple concerns. [ABSTRACT FROM AUTHOR]

Firms can use a range of proactive impression management behaviors to reduce the impact of a negative event on firm outcomes. When a negative event is unpredictable, we theorize that firms can engage in ostentatious behaviors that display the firm's affluence and robust resource base. We term these behaviors "flaunting," and we present a two-part model that investigates how flaunting can reduce the impact of an unpredictable negative event on firm outcomes and why it is effective at doing so. In part one, we theorize how flaunting can generate net positive stakeholder group evaluations by enhancing distinctiveness among stakeholder groups. In part two, we theorize that the net positive stakeholder group evaluations can buffer the impact of an unpredictable negative event on firm outcomes. We also maintain that this buffering effect is amplified when the flaunting firm actively manages stakeholder group distinctiveness. Thus, while flaunting can be both off-putting and enticing to different stakeholder groups, we theorize that courting the love of some may be worth the cost of being disliked (or worse) by others. [ABSTRACT FROM AUTHOR]

Existing work on legacy in management has focused on the upper echelons and on the "legator"—the person leaving the legacy. Drawing on the meaning maintenance model and concepts surrounding psychological ownership and identity, we build a model that focuses on "legatees"—the beneficiaries of the legacy—in the lower echelons. The departure of a manager, informal leader, or star serves as a disruption to legatees' mental representations of their working world. That disruption causes them to attend to issues of ownership (either psychological ownership or disownership of the legacy) and identity (either identification or rivalry with the legator) in order to fulfill salient needs. Fulfilling continuity and belonging needs results in two behaviors that enhance the durability of the legator's contributions: maintaining and evangelizing. Fulfilling distinctiveness and efficacy needs results in two behaviors that reduce the durability of the legator's contributions: neglecting and erasing. We theorize that these relationships are moderated by two aspects of the legacy: its magnitude and its content (in terms of whether the contributions are tangible or intangible). We describe the implications of our model for the legacy literature in management and lay out an agenda for future research. [ABSTRACT FROM AUTHOR]

Managing grand challenges demands a relational leader who encourages collaboration, coordination, and trust with various stakeholders. Although leaders appear to play a critical role in addressing grand challenges, relatively little research exists about the factors that inform stakeholder perceptions of leaders during a grand challenge. To address this limitation, we integrate implicit leadership theory and gender role theory to consider stakeholders' gender prescriptive expectations when evaluating leader effectiveness during the COVID-19 pandemic. We theorize that stakeholders advantage female leaders based on mental schemas of what is required in a pandemic—relational leadership—and stakeholders' prescriptive expectations of female leaders as more relational. Using a laboratory experiment, we find that female leaders are perceived as more relational, and hence, more effective than their male counterparts. Our findings advance scholars' and practitioners' understanding of strategic leadership, stakeholder management, and grand challenges. [ABSTRACT FROM AUTHOR]

Negative social evaluations and the strategies a firm employs to manage them have garnered significant attention among management scholars. However, past research has given less attention to the social media era's revolutionary effects on these dynamics. In the present paper, we theorize that the social media era's greater velocity, emotionality, and communality increase the likelihood that social disapproval will spread faster and more empathetically among a more heterogeneous set of constituents. We develop a framework that explicates how a firm's response strategies can prevent, contain, and attenuate "social disapproval," which we define as constituents' general enmity toward a firm. Our framework predicts that a firm's greater initial transparency is more likely to prevent social disapproval, while a reticent response to others' initial disclosures is more effective at containing it. Once social disapproval has spread, however, we posit that a firm can more effectively attenuate it by responding more deliberatively and accommodatively. Further, we theorize how traditional media era contingencies of event severity, actor prominence, and message inauthenticity take on additional meaning and have unexpected effects on the social disapproval management process in the social media era. [ABSTRACT FROM AUTHOR]

We develop theory to explain how CEOs' observable personality traits influence market perceptions of firm risk and shareholder returns. Using a linguistic tool to measure nearly 3,000 CEOs' personality traits, we find that CEOs' observed levels of conscientiousness, neuroticism, and extraversion have important consequences for the perceived riskiness of the firm, as reflected in stock volatility. We also find that these traits alter the relationship between stock risk and returns. Whereas financial economic theory generally posits a positive relationship between risk and returns, on average, we find that this relationship may be either positive or negative for a specific firm depending upon the observed personality of its CEO. Our theory and findings extend upper echelons research by showing that CEOs' personality traits not only affect market perceptions of the firm but also how those perceptions translate into value creation. [ABSTRACT FROM AUTHOR]

How a firm is perceived has implications for strategy formulation, strategy implementation, and firm outcomes. However, strategic management researchers have traditionally devoted less attention to theories that address these perceptual implications. This special topic forum (STF) includes six articles that use a sociocognitive lens to help expand our theoretical understanding of strategy and strategic management. A sociocognitive perspective encompasses how observers perceive, interpret, and make sense of an organization's strategic processes, actions, and related outcomes. The goal of this STF is therefore to advance theory in an integral domain of management scholarship while also augmenting well-known frameworks for teaching and practice. Specifically, the articles not only reflect the work that has taken place over the past three decades but also generate important theoretical and practical advances. We introduce each article, explain the key strategic questions it addresses, and offer suggestions for future research. [ABSTRACT FROM AUTHOR]

In this article a study was carried out to examine the effects of stock-based incentives on CEO earnings manipulation behaviors with regard to prospect theory and synthesizing agency theory. Findings show that CEOs were more likely to manipulate firm earnings when they had more out-of-the-money options and ownership of lower stock.

We extend current research about corporate corruption and charismatic leadership by developing a multidimensional model involving stakeholder pressures, environmental factors, charismatic leaders', and their followers. Specifically, we propose that stakeholder [...]

In this article we set the context for this special issue focusing on individual and organizational reintegration in the aftermath of transgressions that violate ethical and legal boundaries. Following a brief introduction to the topic we provide an overview of each of the four articles selected for this special issue. We then present a number of potentially fruitful empirical, theoretical, and normative directions management and ethics scholars might pursue in order to further advance this evolving literature. [ABSTRACT FROM AUTHOR]