John R. Busenbark

Toward a Configurational Perspective on the CEO A Review and Synthesis of the Management Literature

Management literature offers substantial insight about many aspects of CEO-related phenomena. Whether it involves aspects of the position of CEO, personal characteristics of the CEO, or the environment in which the CEO operates, research about the CEO has yielded a number of important findings. Despite the proliferation of research regarding the CEO, we find that the literature as a whole is fragmented. By this, we mean that the CEO is often used as a context to test discrete theories. In this article, we contend that the fragmentation in the literature is a result of scholarship existing within theoretical fault lines and rarely venturing to incorporate theories beyond a given domain. This fragmentation results in inconsistent and inconclusive findings in the CEO-related literature. We propose an integrative framework, which we call the configurational perspective on the CEO, to help resolve this fragmentation problem. The configurational perspective on the CEO highlights three separate CEO-related research domains: the position, the person, and the environment. In taking stock of research in each of these domains, we address how they can be integrated in different configurations to help reduce the fragmented nature of the literature.

A Review of the Internal Capital Allocation Literature: Piecing Together the Capital Allocation Puzzle

Allocating internal financial capital represents a key task for managers of multidivisional corporations. This has led to a wealth of research and theorizing about capital allocation and whether or not managers allocate capital successfully. However, capital allocation research has diverged in a number of directions that reflect different and often incompatible perspectives, underlying frameworks, and outcomes. The result is a puzzle, wherein scholars have found little consistent substantive relation between capital allocation, business unit characteristics, and firm performance. Through our review, we seek to bring clarity to this puzzle by identifying problems in the literature and by offering a solution. We suggest problems in the literature stem from the disparate approaches scholars have taken when studying capital allocation, including assessments of what constitutes and prevents successful allocation. We begin by organizing these approaches into a framework that highlights key allocation strategies and the primary impediments to allocation success that scholars have used to build their models. We then suggest that managers may employ a number of allocation strategies and that scholars need to recognize that not all corporate managers employ the same strategy. We contend that a resurgence of obtrusive, qualitative, and multilevel studies may help explain why managers select one strategy over another. Ultimately, we recommend scholars delve into the black box of organizations to truly understand capital allocation.

L'Chaim: Jewish holidays and stock market returns

Purpose - The purpose of this paper is to investigate the impact of Jewish holidays on US stock market returns. Design/methodology/approach - The authors use event study and regression methodology to determine abnormal returns on Jewish holidays and windowed periods surrounding the day. In order to seclude the results to Jewish holidays, the authors control for several other known events that impact stock market returns. To substantiate claims of abnormal returns, the authors also use the Fama-French four-factor model to seek alpha and evidence returns on Jewish holidays. Findings - This study shows, during the 1990-2009 period, an increase in average daily returns 32 times greater on nine Jewish holidays than on the other trading days of the year. The demeanor of the specific Jewish holidays also influences stock market returns, as the market returns increase (decrease) on the joyous (solemn) Jewish holidays. Also, individual investors, rather than institutional investors, are a greater catalyst for the increased returns. Originality/value - Previous research details increased stock market returns on US holidays and several other events. However, no definable research exists on stock market returns on Jewish holidays. The findings in this paper are valuable to investors who event-trade, and are also valuable to investors and behavioral-finance researchers who seek to understand how demeanor and moods may impact buying/selling decisions.

Divided We Fall: How Ratios Undermine Research in Strategic Management

Despite scholars’ admonitions regarding the use of ratios in statistical analyses, the practice is common in management research. This is particularly true in the area of strategic management, where important variables of interest are operationalized as ratios. In this study, we employ simulations to demonstrate the implications of using ratios in statistical analyses. Our simulations illustrate that ratio variables produce inaccurate parameter estimates and can result in lower levels of statistical power (i.e., the ability to uncover hypothesized relationships). We also find that when an independent or a dependent variable is a ratio, the relationship between the independent and dependent variable fluctuates as the dispersion of the denominator changes. These fluctuations occur even when the correlations between the unscaled variables remain exactly the same. We also find that including ratios in models as control variables influences estimates of relationships between focal independent and dependent variables. This is true even when neither the independent or dependent variable is a ratio. We provide several recommendations for researchers who may be interested in avoiding the pitfalls of ratio variables.

When Do Managers Disclose Negative Information? A Voluntary Disclosure Theory Perspective

Managers must often decide whether or not to disclose information regarding negative events. Voluntarily disclosing negative information can unnecessarily draw attention to the negative event, but ...