CEO Leadership, Strategic Decision Comprehensiveness, and Firm Performance: The Moderating Role of TMT Cognitive Conflict

ABSTRACT Managers make comprehensive strategic decisions to cope with environmental challenges. Questions remain regarding how different types of leadership styles influence top management team (TMT) strategic decision comprehensiveness (SDC) and firm performance. This study explores the impact of two different CEO leadership styles on TMT SDC and subsequent firm performance, considering the moderating role of TMT cognitive conflict. Based on data from 357 questionnaires of 126 firms in China, we found that 1) CEO empowering leadership positively affects SDC; 2) CEO directive leadership generates an inverted U-shaped effect on SDC; 3) the effect of SDC on firm performance is positive; and 4) TMT cognitive conflict weakens the relationship between CEO empowering leadership and SDC. This study takes a systematic approach by integrating CEO-TMT dynamics into SDC, which in turn affects firm performance, and thus offers a holistic view of how upper echelons influence firm performance.

Corporate Social Responsibility and Technological Innovation

This study examines the relation between corporate social responsibility (CSR) and firm innovation. We replicate and extend the work of Mao and Weathers (2019), who investigate employee treatment and innovation, and find that CSR has an incremental effect on innovation outcomes (measured as citation-weighted patent counts) beyond the documented effect of employee treatment. The CSR effect mostly comes from CSR strengths rather than concerns. This effect remains robust after we address potential endogeneity concerns using three identification strategies. We also find that the CSR effect exists only in situations of more effective board monitoring, stronger CEO leadership, and greater employee human capital, and is greater in complex firms. Our overall evidence is consistent with the argument that CSR enhances technological innovation as it helps firms develop internal resources and capabilities related to creative corporate culture, long-term orientation, and employee knowledge and skills that are critical and conducive to innovation success.

Does perceived morality of CEO activism matter? Understanding employees' responses to CEO actions on sociopolitical issues

PurposeFrom an internal perspective, the purpose of this study is to understand employees' responses to chief executive officer (CEO) activism, a phenomenon wherein a company's CEO expresses his/her own opinions and ideas on controversial sociopolitical issues. Integrating corporate social responsibility (CSR), public relations and leadership literature, this study examines the effects of employees' expectations toward CEOs and transformational CEO leadership on the perceived morality of CEO activism and its attitudinal and behavioral outcomes.Design/methodology/approachAn online survey was conducted with 417 full-time employees in the US whose CEO has been engaging in sociopolitical issues.FindingsThe results showed that employees' ethical expectations toward their CEOs and transformational CEO leadership were positively associated with perceived morality of CEO activism, whereas economic expectations toward CEOs had no significant relationship with it. In turn, perceived morality of CEO activism contributed to employees' positive attitudes and supportive behaviors for their CEOs and their companies.Originality/valueThis study is among the first attempts to examine the effectiveness of CEO activism from an internal perspective, drawing from CSR, public relations and leadership literature.

Embracing the duality of consideration and initiating structure: CEO leadership behaviors and small firm performance

PurposeThis paper examines the relationship between chief executive officers' (CEOs') leadership behaviors (consideration and initiating structure) and firm and individual performance (i.e. profitability, affective commitment and employees' willingness to change) in small and medium-sized firms (SMEs) that need to adapt to changing environments.Design/methodology/approachSurvey data was collected from SMEs (28 firms, 235 employees) in the accounting industry along with objective performance register data (profit and return on assets). The predicted model was tested with multilevel structural equations modeling (MSEM) using a maximum likelihood estimator.FindingsThe CEO leadership behavior of initiating structure was positively related to firms' profitability, while the CEO leadership behavior of consideration was positively related to employees' willingness to change and affective commitment.Practical implicationsSmall accounting firms typically offer standard services that are now being replaced by digital solutions. These firms have an incentive to offer new services, such as business advisory services. Therefore, leaders should embrace the duality of consideration and initiating structure to gain employees' willingness to change and optimize overall firm performance.Originality/valueThe paper contributes to leadership literature by examining a novel context (CEO consideration and initiation of structure in SMEs in uncertain environments) using a combination of firm performance measures (e.g. objective outcomes at the firm level and employees' willingness to change as a new measure at the individual level). In addition, it reports a comprehensive test of the full model using MSEM, the findings of which demonstrate the importance of dual leadership behaviors for CEOs.