Donald C. Hambrick
Abstracts of Recent Publications and Working Papers

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For MBA & EMBA Students:

• Strategy Implementation and Organizational Change Syllabus

For Researchers & Doctoral Students:

• List of Publications
• Abstracts of Recent Publications and Working Papers
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• Doctoral Seminar In Strategic Management Syllabus

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Abstract: In preparing for their IPOs, firms have incentives to enlist prestigious affiliates to signal their quality. We describe two theoretical mechanisms for explaining the amount and pace of prestige-enhancement that a firm engages in during the year leading up to an IPO, as well as the costs involved. The "snowball model" represents our consolidated portrayal of some well-known processes that cause those organizations that already have the most prestige to steadily accumulate even more. The "dressing-up model" is built upon a phenomenon that has not been studied in the macro-organizational context: deadline-induced remediation. Examining final-year hiring of prestigious executives and directors in a sample of 242 software IPOs, we find that the snowball model substantially explains final-year prestigious hiring. But there is also strong evidence of a tandem dressing-up process. As the final year counts down, prestige-scarce firms engage in aggressive hiring of prestigious executives and directors, and they pay a relatively higher price in doing so.

Abstract: Scholars have studied how the social associations of corporate executives affect their access to information and their decisions. The entire focus, however, has been on lateral peer-to-peer associations. Prior research has not addressed vertical associations, or the idea that interaction with peer elites yields different perceptions and behaviors than does interaction with parties of lower social status. In this paper, we introduce and develop the concept of elitist association, which we define as a stable behavioral pattern of some corporate executives by which they engage nearly exclusively in associations with other elites while minimizing or even entirely avoiding associations with non-elites. We propose several individual-level antecedents to explain why some executives engage in this behavior more than others. We then discuss the effects of elitist association on executives' access to information, empathy, and social comparison processes - all of which affect their decisions and organizations. Finally, we consider implications for theory as well as for practical affairs.

Abstract: In this essay, we seek to identify the contributions that strategy and organizational researchers have made, and continue to make, in enhancing our understanding of a wide variety of important corporate governance questions. We begin by discussing how these research contributions stem from a willingness to draw from and contribute to different streams of intellectual thought, and we provide an orienting framework to situate this work.

Abstract: Numerous histories of the early days of individual academic fields have been written, but scholars have generally stopped short of proposing generalizable frameworks or testable propositions for why these focal fields survived and prospered. We integrate logics from social movement theory and the sociology of science to model the rise of an aspiring academic community as an admittance-seeking social movement, consisting of three major elements: differentiation, mobilization, and legitimacy-building. The paper offers propositions based on in-depth analysis of the rise of a specific field within the administrative sciences: strategic management.

Abstract: We develop a model for explaining the process by which corporate failure leads to professional devaluation for individual elites. We envision that corporate failure evokes a stigmatization process, in which society's arbiters-encompassing social, legal, and economic arbiters-engage in constituent minded sensemaking to interpret the conditions surrounding the failure, including the characteristics of the individual elite, and arrive at judgments about the person's blameworthiness. Arbiters are guided by their professional standards and rationality; but they are also susceptible to their own cognitive and emotional biases, and the anticipated biases of their constituents, making arbiters' self-related concerns salient in the stigmatization process. Arbiters take cues from each other, which can cause stigmatization to diffuse-to multiple audiences, with great repetition, and often entailing an ever-growing list of the target's defects. The greater the aggregate stigmatization, the greater the economic devaluation the person will experience, but an elite's social capital can moderate stigmatization and devaluation. Implications of this research for the study of stigma and stigmatization as well as "settling-up" in managerial labor markets are discussed.

Abstract: We unpack the concept of managerial risk-taking, distinguishing among three of its major elements: the size of the outlay; the variance of the potential outcomes; and the likelihood of extreme loss. We then apply our framework in hypothesizing the effects of CEO stock options on strategic behavior and company performance. We find that CEO stock options engender high levels of investment outlays and bring about extreme corporate performance (big gains and big losses), suggesting that stock options prompt CEOs to make high-variance bets, not simply larger bets. Finally, we find that option-loaded CEOs deliver more big losses than big gains.

Abstract: Our study extends upper-echelons theory by introducing CEO narcissism as a formal construct for explaining company strategy and performance. Drawing on psychological research indicating that narcissism is a personality dimension, rather than just a pathological disorder, we empirically study 111 CEOs in the computer and software industries. We rely on five unobtrusive indicators of CEO narcissism. These indicators, which come from multiple sources, cohere and allow us to develop a multi-item CEO narcissism index. We find considerable support for our hypotheses: narcissism in CEOs is positively related to strategic dynamism and grandiosity, and it engenders extreme and fluctuating organizational performance. We conclude the paper by suggesting future research on CEO narcissism.

Abstract: It is commonly asserted that the field of strategic management is fragmented and lacks a coherent identity. This skepticism, however, is paradoxically at odds with the great success that strategic management has enjoyed. How might one explain this paradox? We seek answers to this question by relying first on a large-scale survey of strategic management scholars from which we derive an implicit consensual definition of the field - as tacitly held by its members. We then supplement this implicit definition with an examination of the espoused definitions of the field obtained from a group of boundary-spanning scholars. Our findings suggest that strategic management's success as a field emerges from an underlying consensus that enables it to attract multiple perspectives, while still maintaining its coherent distinctiveness.

Abstract: Do CEOs matter more in some countries than in others? Based on a theoretical consideration of three fundamental national-level institutions - national values, prevailing firm ownership structures, and board governance arrangements - we argue that CEOs in different countries face systematically different degrees of constraint on their latitudes of action, and hence they differ in how much effect they have on firm performance. To test these ideas, we apply a variance components analysis methodology to 15-year matched samples of 100 U.S. firms, 100 German firms, and 100 Japanese firms. Results provide strong, robust evidence that the effect of CEOs on firm performance - for good and for ill - is substantially greater in U.S. firms than in German and Japanese firms.

Abstract: The central premise of upper echelons theory is that executives' experiences, values, and personalities greatly influence their interpretations of the situations they face, and in turn affect their choices. At the invitation of the editor, this paper recaps the AMR article in which the theory was originally presented (Hambrick and Mason, 1984), discusses subsequent refinements of the theory, and lays out several promising avenues for future upper echelons research.