Sidney L. Barton

Diversification Strategy and Systematic Risk: Another Look

The article presents information on a study which used both strategic management and financial theory to explore the relationship between corporate diversification strategy and systematic or market...

Capital Structure Decision Making in Privately Held Firms: Beyond the Finance Paradigm

Capital structure theories grounded in the finance paradigm (agency theory, transaction cost theory) have contributed to our understanding of capital structure decision making. However, they do not address the intricacies of capital structure decision making from a managerial choice perspective, especially in privately held firms. This article brings together research from strategic management, decision sciences, and social psychology to develop a conceptual model for understanding capital structure decision making in privately held firms. In general, it is posited that capital structure decisions are influenced by the firm owners attitude toward debt as moderated by external environmental conditions. Attitude toward debt is a function of ones belief about debt as influenced by the individuals need for control, risk propensity, experience, social norms, and personal net worth. The integration of theoretical perspectives yields eight propositions for understanding the determinants of privately held firm capital structure.

Framing the problem and making decisions: the facts are not enough

Results of an experiment in which a sample of experienced engineers, scientists, and managers-people who would be expected to be objective decision-makers and who report themselves to be rational decision makers-are influenced by very subtle informational cues are presented. These subtle cues did not alter the object facts in research and development financial allocation decisions, but they did apparently alter the decision-makers reference point. The cues also altered the degree of risk perceived in the decision scenario. As a result, the decision-makers exposed to different frames made different decisions and reported perceiving different levels of risk in the decision episode. >

Affect, Risk, and Decision Criticality - Replication and Extension in a Business Setting

Abstract Results from a field study with 113 members of an international engineering company indicate that a decision makers response to an organizational dilemma with uncertain outcomes is a function of task-related affect, perceived risk, and perceived decision criticality. While results were not wholly consistent with lab findings reported by Isen and Patrick (1983) and Isen and Geva (1987) , these field data indicate that business people adjust their decision making preferences in much the same manner as student subjects used in prior affect investigations. Further, the current study extends our understanding of affect and decision making in four ways: (1) using trained business people as subjects, (2) performing a task germane to the organization, (3) examining negative affect as an influential mood state, and (4) incorporating perceived decision criticality as a salient factor in the decision process. Findings are discussed relative to current research on affect and the role it plays in decision making.

Temporal and Contextual Change in the Measurement Structure of Financial Performance: Implications for Strategy Research

This study empirically examines the extent to which the measurement structure of accountingand market-based indicators converge on a financial performance construct by time period and by diversification strategy. In a longitudinal, single-factor model offinancial performance, it wasfound that the relationship of these two types offinancial performance measures changed in periods of stability versus instability andfor related diversifiers versus unrelated diversifiers. It is suggested that meta-analytic studies in strategy research may be able to incorporate situational factors in order to obtain more valid findings. In addition, implications for researchers selecting performance measures for current studies are discussed.

Paradoxes and Innovation in Family Firms: The Role of Paradoxical Thinking

Scholars stress that family firms are inherently paradoxical, and that tensions, such as tradition versus change, family liquidity versus business growth, and founder control versus successor autonomy, can both inhibit and foster innovation. Further, theorists propose that firms led by paradoxical thinkers are more likely to manage these tensions and fuel innovative behavior. Leveraging family business and organizational paradox literatures, this multi–stage exploratory study develops measures of paradoxical tensions and paradoxical thinking in family firms, and tests these propositions. Findings indicate that paradoxical tensions may stymie innovative behavior, but that leaders’ paradoxical thinking is positively related to innovative behavior.

'Rules of Conduct'; Applying Deference and Demeanor to Understand Status Inconsistency and Role Conflict in Family Firms

Erving Goffmans analysis of everyday life interaction rituals as significant social ceremonies (Goffman, 1963:8; 1956:473, 499; 1971: 62-65) is the foundation for the propositions presented in the paper. Applying the concepts of deference and demeanor developed by Goffman (1956), this paper will explore how the “rules of conduct” in regards to managing social position within family businesses may lead to conflict as a result of status inconsistency and role conflict. Subsequently, a typology is provided in which dysfunctional conflict may be managed by family firms based on the degree of individual deference or demeanor.