Donald C. Hambrick
Abstracts of Recent Publications and
Working Papers

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Generativity, Working Paper

Abstract: ...

CEO Sociopolitical Activism, Working Paper

Abstract: ...

CEO Cognitive Complexity, Working Paper

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CEO Selection as Risk-taking: A New Vantage on the Debate About the Consequences of Insiders Versus Outsiders, T. Quigley, D.C Hambrick, V.F. Misangyi, and G.A. Rizzi, Strategic Management Journal, Forthcoming.

Research Summary: Our paper sheds new light on the performance implications associated with insider versus outsider CEOs. We frame CEO selection as risk-taking, in which outsiders are relatively risky hires, with a greater tendency to generate extreme performance outcomes—either positive or negative—as compared to insiders. We base this expectation on two complementary theoretical perspectives: human capital and information asymmetry. We conduct multiple tests on large samples of CEO successions, with controls for endogeneity, and find that outsiders are indeed associated with more extreme performance outcomes than are insiders.

Managerial Summary: We shed new light on the performance implications associated with outsider CEOs. Instead of asking the customary question, ‘Do outsider CEOs, on average, perform better or worse than insider CEOs?,’ we frame CEO selection as risk-taking. Under this view, outsiders are relatively risky hires, with a greater likelihood of generating extreme performance outcomes—either positive or negative—as compared to insiders. We conduct multiple tests on large samples of CEO successions and find that outsiders are indeed associated with more extreme performance outcomes than are insiders.

Evenhandedness in Resource Allocation: Its Relationship with CEO Ideology, Organizational Discretion, and Firm Performance, A. Gupta, F. Briscoe, and D.C. Hambrick, Academy of Management Review, October 2018.

Abstract: We develop a new explanation for why some organizations are relatively evenhanded, while others are more disparate, in allocating resources to subunits. Recognizing the central role of chief executive officers (CEOs) in resource allocation, we argue that CEOs’ personal values regarding egalitarianism, as manifested in their political ideologies, will lead to different allocation styles. Liberal CEOs will favor evenhandedness, while conservatives will tolerate greater disparities. Placing this primary expectation in a social context, we then argue that the effects of a CEO’s values are amplified when aligned with the prevailing ideology among organizational members, and conversely are muted when misaligned. Then, examining how instrumental incentives moderate the enactment of CEO values, we envision motivated cognition as a potent psychological process, which leads CEOs to “double down” on their personal values when they have more to gain or lose (when pay is more equity-based or the CEO has larger shareholdings). Finally, we consider the implications of our values-based framework for firm performance, arguing that evenhanded allocations are beneficial when organizational ideology is liberal, but harmful when the organization leans conservative. We test our ideas on a sample of multibusiness firms, using personal political donations to capture ideologies. We find considerable support for our hypotheses.

The Shackles of CEO Celebrity: Sociocognitive and Behavioral Role Constraints on "Star" Leaders, J.B. Lovelace, D.C. Hambrick, and T.G. Pollock, Academy of Management Review, July 2018.

Abstract: We set forth a new theory for understanding the consequences of CEO celebrity. The fulcrum of our theory is the reality that CEOs attain celebrity because they are cast into specific archetypes, rather than for their general achievements. We present a typology of common CEO celebrity archetypes (creator, transformer, rebel, savior) and then detail a model highlighting the consequences associated with attaining celebrity of a given type. These consequences include an array of sociocognitive outcomes, which, in turn, constrain celebrity CEOs to those behaviors associated with their particular celebrity archetypes. The sociocognitive outcomes’ main effects are moderated by the role intensity of the specific archetype, the CEO’s degree of narcissism, and the temporal arc (rate of ascent and duration) of celebrity. Finally, we argue that the effects of CEO celebrity on firm performance are contingent on the continuity of external and internal contextual conditions. If conditions change appreciably, the celebrity CEO’s rigidities become severe liabilities, explaining the documented tendency for CEO celebrity to bring about, on average, unfavorable firm outcomes.

The Role of Executive Symbolism in Advancing New Strategic Themes in Organizations: A Social Influence Perspective, D.C. Hambrick and J.B. Lovelace, Academy of Management Review, January 2018.

Abstract: Contributing to the sensegiving literature and organizational change literature, we set forth a theory for predicting the relative effectiveness, or ineffectiveness, of executive symbolism in advancing new strategic themes (specific new priorities) in organizations. Unpacking the concept of executive symbolism and describing why executive actions carry symbolic significance, we primarily assess the “theme-aligned symbolic action” – an executive action undertaken with the intention of sending a message in support of some new theme. We draw from social influence theory to develop an integrated set of propositions for predicting members’ reactions, or affective responses, to such actions. The predictive factors include attributes of the action itself, the reputation of the executive, and predispositions of respective members to the theme. As an outgrowth of this analysis, we conclude that theme-aligned symbols, no matter how artful, will almost always be ineffective in eliciting positive reactions from members who are antagonistic toward the theme. In turn, we introduce the concept of the “theme-muting symbol” – a symbolic action intended to minimize the prominence or apparent implications of a new theme – and we place this concept in the social influence framework as well. We discuss practical implications and present an agenda for future research.

Red, Blue, and Purple Firms: Organizational Political Ideology and Corporate Social Responsibility, A. Gupta, F. Briscoe, and D.C. Hambrick, Strategic Management Journal, May 2017.

Research Summary: Why do firms vary so much in their stances toward corporate social responsibility (CSR)? Prior research has emphasized the role of external pressures, as well as CEO preferences, while little attention has been paid to the possibility that CSR may also stem from prevailing beliefs among the body politic of the firm. We introduce the concept of organizational political ideology to explain how political beliefs of organizational members shape corporate advances in CSR. Using a novel measure based on the political contributions by employees of Fortune 500 firms, we find that ideology predicts advances in CSR. This effect appears stronger when CSR is rare in the firm’s industry, when firms are high in human capital intensity, and when the CEO has had long organizational tenure.

Managerial Summary: Why do firms vary in their stances toward corporate social responsibility (CSR)? Prior research suggests that companies engage in CSR when under pressure to do so, or when their CEOs have liberal values. We introduce the concept of organizational political ideology, and argue that CSR may also result from the values of the larger employee population. Introducing a novel measure of organizational political ideology, based on employees’ donations to the two major political parties in the United States, we find that liberal-leaning companies engage in more CSR than conservative-leaning companies; and even more so when other firms in the industry have weaker CSR records, when the company relies heavily on human resources, and when the company’s CEO has a long organizational tenure.

The Quad Model for Identifying a Corporate Director's Potential for Effective Monitoring: Toward a New Theory of Board Sufficiency, D.C. Hambrick, V.F. Misangyi, and C.A. Park, Academy of Management Jounal, July 2015.

Abstract: We introduce a new theoretical perspective for predicting effective monitoring, which involves a two-stage logic. First, we focus on individual directors, arguing that effective monitoring is highly likely when a given director possesses certain qualities. Based on prior research not previously coalesced, we set forth this baseline proposition: a director's likeliyhood of being an effective monitor in any given domain (say, financial matters) is greatly increased when he or she has all four of the following qualities: independence, expertise in that domain, bandwidth, and motivation. Second, we extend this quadrilateral model - or quad model - to make propositions at the board level. We argue that it is not sufficient for these four qualities to be distributed among all directors on a given board, since this makes it likely there will be no directors who can rise to the challenging task of monitoring. We propose that having just one quad-qualified director will be more predictive of board efficacy than will be any customary board descriptors. And we posit that if a board has two or more quad-qualified directors who can bolster and amplify each other, the company's likelihood of governance failures will be especially reduced. We discuss theoretical and practical implications and lay out a research agenda.

Has the "CEO Effect" Increased in Recent Decades? A New Explanation for the Great Rise in America's Attention to Corporate Leaders, T.J. Quigley and D.C. Hambrick, Strategic Management Journal, June 2015.

Abstract: We introduce a new explanation for one of the most pronounced phenomena on the American business landscape in recent decades: a dramatic increase in attributions of CEO significance. Specifically, we test the possibility that America's CEOs became seen as increasingly significant because they were, in fact, increasingly significant. Employing variance partitioning methodologies on data spanning 60 years and more than 18,000 firm-years, we find that the proportion of variance in performance explained by individual CEOs, or "the CEO effect," increased substantially over the decades of study. We discuss the theoretical and practical implications of this finding.

Structural Interdependence Within Top Management Teams: A Key Moderator of Upper Echelons Predictions, D.C. Hambrick, S.E. Humphrey, and A. Gupta, Strategic Management Journal, March 2015.

Abstract: Studies of the effects of top management team (TMT) composition on organizational outcomes have yielded mixed and confusing results. A possible breakthrough resides in the reality that TMTs vary in how they are fundamentally structured. Some are structured such that members operate independently of each other, while others are set up such that roles are highly interdependent. We examine the potential for three facets of structural interdependence - horizontal, vertical, and reward interdependence - to resolve ambiguities regarding effects of TMT heterogeneity. Based on a sample of TMTs in technology firms, we find that the three facets of structural interdependence are potent moderators of two classic predictions: the positive association between TMT heterogeneity and member departures, and between TMT heterogeneity and firm performance.

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