Mark Fenton-O'Creevy

Personality and domain‐specific risk taking

The concept of risk propensity has been the subject of both theoretical and empirical investigation, but with little consensus about its definition and measurement. To address this need, a new scale assessing overall risk propensity in terms of reported frequency of risk behaviours in six domains was developed and applied: recreation, health, career, finance, safety and social. The paper describes the properties of the scale and its correlates: demographic variables, biographical self‐reports, and the NEO PI‐R, a Five Factor personality inventory (N = 2041). There are three main results. First, risk propensity has clear links with age and sex, and with objective measures of career‐related risk taking (changing jobs and setting up a business). Second, the data show risk propensity to be strongly rooted in personality. A clear Big Five pattern emerges for overall risk propensity, combining high extraversion and openness with low neuroticism, agreeableness, and conscientiousness. At the subscale level, sensation‐seeking surfaces as a key important component of risk propensity. Third, risk propensity differs markedly in its distribution across job types and business sectors. These findings are interpreted as indicating that risk takers are of three non‐exclusive types: stimulation seekers, goal achievers, and risk adapters. Only the first group is truly risk seeking, the others are more correctly viewed as risk bearers. The implications for risk research and management are discussed.

Human resource management in US subsidiaries in Europe and Australia: centralisation or autonomy?

We explore determinants of subsidiary autonomy in setting human resource management (HRM) practices within US-parented multinational enterprises (MNEs), in Europe and Australia. We examine both the effect of strategic context and the effect of the institutional location of the subsidiary. We find that US MNEs show greater centralisation of control over HRM where the subsidiary faces global markets, in coordinated market economies vs liberal market economies, and where union density is low.

Employee involvement and the middle manager: evidence from a survey of organizations

Although the literature on employee involvement suggests that some organizations experience significant benefits to employee attitudes and productivity, the results from individual studies vary widely. This study focuses on those factors that may mediate the success or failure of employee involvement practices, especially the role played by middle managers. A postal survey of 155 organizations examined the perceived outcomes of different employee involvement practices and the support or resistance attributed to middle managers. Hypothesized correlates of middle management resistance to employee involvement were examined. As hypothesized, positive outcomes of employee involvement were lower in organizations that experienced middle management resistance. The study supports the view that middle managers may resist employee involvement practices in response to threats to self interest (managerial job loss and delayering). However, lack of congruence between organizational systems and structures and the goals of EI and divided or unclear senior management support for EI were also found to be strongly related to middle management resistance.

Traders, managers and loss aversion in investment banking: a field study

The paper examines the management of traders in financial markets from the perspectives of agency and prospect theory. Using interview data from a sample of traders and managers in four investment banks, the paper argues that managers focus on avoiding losses rather than making gains. This focus emerges from the characteristics of managers and the nature of their role. The implications for agency and prospect theory, together with the policy issues for managers, are discussed.

Opening Up the Blackbox: A UK Case Study of Top Managers’ Attitudes to their Performance-Related Pay

This paper examines the attitudes of the top managers within one large financial services organization in the UK to fixed and variable components of their compensation package. The rationale for performance-related pay for senior managers is to align their interests with those of the shareholders, but little is known about the views of top managers on the effectiveness of such incentives. The results suggest that the design of effective bonus systems is not just a technical issue: perceptions of market fairness with respect to the compensation package and the clear communication of goals are important in getting senior managers to focus on shareholder interests.

Diffusion of human resource management systems in UK headquartered multinational enterprises: integrating institutional and strategic choice explanations

This study examines the factors associated with the cross-national diffusion of HRM systems within Multinational Enterprises (MNEs) through the lens of the strategic choice and neo-institutional perspectives. Both perspectives are successful in predicting diffusion. The institutional contexts of business units within multinationals and key strategic context variables are shown, in a study of 20 UK multinationals in Europe, to have significant and interacting relationships with the degree of similarity between affiliate HRM systems and those of their parent counterparts.

Stock Market Investors’ Use of Stop Losses and the Disposition Effect

The disposition effect is an investment bias where investors hold stocks at a loss longer than stocks at a gain. This bias is associated with poorer investment performance and exhibited to a greater extent by investors with less experience and less sophistication. A method of managing susceptibility to the bias is through use of stop losses. Using the trading records of UK stock market individual investors from 2006 to 2009, this paper shows that stop losses used as part of investment decisions are an effective tool for inoculating against the disposition effect. We also show that investors who use stop losses have less experience and that, when not using stop losses, these investors are more reluctant to realise losses than other investors.

I Understood the Words but I Didn't Know What They Meant: Japanese Online MBA Students' Experiences of British Assessment Practices.

Abstract We report on a case study of high Japanese student failure rates in an online MBA programme. Drawing on interviews, and reviews of exam and assignment scripts we frame the problems faced by these students in terms of a ‘language as social practice’ approach and highlight the students’ failure to understand the specific language games that underpin the course assessment approach. We note the way in which the distance learning and online context can make the challenges faced by international students less immediately visible to both students and institution.

Effects of managerial communication as moderated by LMX and trait NA

Purpose – Using the concept of disconfirming communication to define interpersonal mistreatment, the purpose of this paper is to explore the impact of specific negative managerial communication behaviors on employee emotions, while taking into account both leader-member exchange (LMX) and employee trait negative affect (NA). Design/methodology/approach – In all, 275 working adults completed surveys about their managers’ confirming and disconfirming communication and their own emotional responses to these communications. Findings – The positive relationship between disconfirming managerial communication and employee negative felt emotion was reduced when LMX was high and was increased for employees with high trait NA personalities. Research limitations/implications – While the cross-sectional design exposes the study to potential common method bias, a priori and post hoc procedures minimized this risk, confirming it has a negligible impact on the results. Practical implications – Study insights and the new...

Intuition, expertise and emotion in the decision making of investment bank traders

The role of intuition may be especially dominant in organizations embedded in turbulent environments (Khatri & Ng, 2000). Dane and Pratt (2007) argue that intuition will be more likely to function as an effective component of decision making in performance domains that require significant experience and complex domain-relevant schema, a description that fits the world of financial trading. Traders are also frequently engaged in decision making that is characterized by time pressure, high risk, complexity and imperfect information. In a previous study (Fenton-O’Creevy et al., 2011), the second author found that many high performing traders deploy a reflective and critical approach to the use and development of intuition, which they understand as well-founded in prior experience. In this chapter we draw on our prior research to discuss the role of intuition in the work of professional traders. We bring together the results of our research on emotion regulation of investment bank traders (Fenton-O’Creevy et al., 2005, 2011, 2012; Vohra & Fenton-O’Creevy, 2011) with research on expertise and affect-based intuition (Baylor, 2001; Dane & Pratt, 2007; Simon, 1987; Sinclair & Ashkanasy, 2005; Weiss & Cropanzano, 1996) to argue that since more effective emotion regulation is associated with greater experience and more effective use of emotions in decision making (Fenton-O’Creevy et al., 2012) and emotions underpin the use of intuition (Lieberman, 2000; Sinclair & Ashkanasy, 2005), then effective emotion regulation will be essential in the deployment of expert intuition.