In this article, we depart from prior research, which has typically focused on the acquiring firm CEO, and adopt a behavioral agency perspective to examine how self-interested target CEOs’ equity wealth shapes acquisition premium decisions. We argue that deal-specific windfall gains upon the acquisition announcement trigger immediate upward shifts in CEOs’ reference points, heightening risk aversion and motivating value-preserving behavior during the public pre-acquisition phase. Using a sample of 435 U.S. domestic acquisitions from 1994 to 2020, we find that larger windfall gains are associated with smaller increases in final acquisition premiums. Importantly, the type of prospective wealth available to the CEO moderates this effect in opposing ways: organizational prospects, such as strong revenue growth, weaken the pull of loss aversion and encourage more aggressive bargaining, whereas personal prospects, such as post-acquisition retention, amplify loss aversion. Our findings highlight the behavioral consequences of sudden, event-driven wealth shocks and reveal how different forms of prospective value shape target CEOs’ influence over acquisition outcomes after bids become public.

Scholars have become increasingly interested in CEO sociopolitical activism, or instances where CEOs take public stands on heated societal debates. So far, though, researchers have largely overlooked an extraordinary imbalance in this phenomenon: In nearly all cases, CEOs have expressed support for liberal positions, and only very rarely for conservative positions. In this analytic essay, we propose four explanations for this puzzling asymmetry. First, there are fewer opportunities for conservative activism than for liberal activism. Second, CEOs may anticipate that conservative activism would agitate key liberal-leaning stakeholder groups. Third, CEOs may anticipate that supporting conservative positions would be inconsistent with conveying images of their firms as future-oriented. Fourth, CEOs tend to believe in staying out of society’s “non-business” debates. We discuss the practical and scholarly implications of our conclusions.

To mitigate the potential adverse effects of corporate misconduct, firms often dismiss the chief executive officer (CEO) and appoint an outsider. Such actions are commonly interpreted as signals of firms’ commitment to reducing the likelihood of future misconduct. However, empirical findings linking misconduct to CEO turnover remain inconsistent. We argue that this inconsistency stems from a general neglect of nuances in both the nature of misconduct and directors’ oversight roles. We theorize that variation in CEO attribution based on misconduct type and firm performance helps explain these dismissal and appointment decisions. We test our arguments by distinguishing between two types of misconduct—CEO personal misconduct, where attribution is higher, and firm-level financial misconduct, where attribution is lower. Analyzing 59 CEO personal misconduct events matched by industry, firm size, and time period to 324 financial misconduct events, we find that these dismissal and appointment decisions are shaped by misconduct type, with firm performance moderating these relationships.

Practitioners and researchers often look toward the moves of CEOs who have successfully led their firms to strategy uniqueness—leapfrogging over competitors by deviating from industry norms. Yet, such bold moves tend to be met with organizational resistance precisely because of their unprecedented nature. Drawing on regulatory focus theory and the behavioral theory of the firm, we theorize that while a promotion focus is a key aspirational driver for CEOs to pursue strategy uniqueness, CEOs must also have an in-depth understanding of their firms to successfully translate their strategically unique ideas into reality. We test these expectations in a sample of S&P 500 firms spanning 2010–2020, measuring strategy uniqueness using segment-level data and operationalizing CEO regulatory focus through content analysis of approximately 24,000 quarterly earnings calls. Our findings confirm that CEO promotion focus positively relates to strategy uniqueness and that organizational experience strengthens this relationship.

Despite ample evidence that curiosity plays a significant role in information seeking, we know little about the influence of CEO curiosity on strategic decisions. Building on established psychology research, we distinguish between two central curiosity types: interest-type curiosity—the joyful pursuit of novel information, and deprivation-type curiosity—the urge to address and close information gaps. We hypothesize that CEO I-type curiosity is positively associated with strategic change, while CEO D-type curiosity is negatively related to it. Since CEO curiosity entails a social aspect, it influences how a CEO acquires information from TMT members. We therefore examine the moderating role of TMT size and change. Applying a novel text measure for CEO curiosity types to S&P 500 firms, we find that the CEO D-type curiosity relates negatively to strategic change, while CEO I-type curiosity does not relate to it significantly. Larger TMTs seem to alleviate CEO D-type curiosity’s negative effect, while TMT changes appear to strengthen CEO I-type curiosity’s positive impact. This study contributes to upper echelons research by providing first insights into CEO curiosity’s multifaceted dimensions and their differential effect on change.

We examine the impact of CEOs’ moral foundations—innate source of moral intuitions—on firms’ environmental, social, and governance performance. Using a linguistic technique on unscripted texts spoken by 1860 CEOs of S&P 1500 firms over 5 years, we found that CEOs with higher binding moral foundations (i.e., focus on expectations of key stakeholder groups) are associated with lower environmental, social, and governance performance. In contrast, we found that CEOs with higher individualizing moral foundations (i.e., focus on well-being of individuals in general) are associated with higher environmental, social, and governance performance. Our study contributes to the upper echelons theory by providing evidence that CEO morality matters for environmental, social, and governance outcomes. We add to moral foundations theory by showing that a bi-dimensional lens on CEO’s morality (i.e., binding vs individualizing) reveals nuances on environmental, social, and governance outcomes.

Transaction cost theory is one of the most commonly used theories to explain how firms govern their economic activities. In the context of cross-border collaborations, transaction cost theory proposes that dissimilarities between the partners’ home countries, which constitute a key source of behavioral uncertainty, affect how collaborations are governed (i.e. whether firms opt for equity joint ventures or non-equity alliances). Although many firms are likely to face more than one dimension of dissimilarity—for example, in terms language and religion, as well as culture—studies in transaction cost theory typically focus on how each source of dissimilarity impacts governance choices independently, in isolation. We integrate insights from research on decision-making and social psychology into the logic of transaction cost theory to theorize about how multiple dimensions of dissimilarity interactively impact governance choices in collaborative agreements, such that the influence of a given level of dissimilarity is not independent of the level of dissimilarity in other dimensions. Specifically, we propose that the impact of dissimilarity on a given dimension on these governance choices will be lower, that is, negatively moderated, when dissimilarities on other dimensions are higher. For example, a given level of cultural distance will have a greater impact on governance choice when linguistic distance is low (because cultural distance becomes more distinctive) as compared to a case when linguistic distance is not low. Our analysis of 21,951 cross-border non-equity alliances and equity joint ventures yields support for our predictions.

While prior research has established a link between the attention an organization allocates to the external environment and its adaptations to environmental change, the nature of the cognitive processes that underlie this link remains underexamined. In this study, we explore how patterns of attentional engagement—that is, the extent to which attention allocation is focused and/or consistent over time—influence the organization’s formulation of strategic responses to discontinuous change. We advance a situated perspective on attentional engagement by suggesting how the type of learning and cognitive processes are situated in different attentional-engagement structures, and can, in turn, lead to heterogeneous strategic responses to the same discontinuous change. Specifically, we formulate a theoretical model elaborating how varied levels of attentional focus and attentional consistency affect whether organizations respond by breaking, reinforcing, hedging, or maintaining the status quo. Subsequently, we develop and test our arguments using a dataset covering US banking firms from 2002 to 2010—a period that includes the US housing crisis.

This study integrates the attention-based view with Edith Penrose’s theory of growth to examine how the interplay between managerial attention and newly created technological resources influences firm growth. I draw upon research showing that combining broad types of knowledge during R&D creates new technological resources that are potentially valuable, and also relatively complex and ambiguous, making them challenging to utilize effectively. I theorize that attention’s temporal orientation shapes how managers understand complex technologies and construe opportunities for their use. I hypothesize that a shorter-term attentional focus is incongruent with broad knowledge combination, resulting in a less effective and more incremental use of newly created, complex technologies and lower levels of growth. Conversely, a longer-term attentional focus helps managers understand and identify novel, strategic opportunities for such complex technologies, leading to comparatively higher levels of growth. Analysis supports these predictions using a panel data set of 327 firms between 2003 and 2017.