Steve Werner

How Much Does Performance Matter? A Meta-Analysis of CEO Pay Studies

Through a meta-analytic review of the empirical literature on the determinants of CEO pay, this study tests the hypothesized relationships between firm size, performance, and CEO pay. We show that firm size accounts for more than 40% of the variance in total CEO pay, while firm performance accounts for less than 5% of the variance. We also show that pay sensitivities are relatively similar for both changes in size (5% of the explained variance in pay) and changes in financial performance (4% of the explained variance in pay). The meta-analysis also suggests that moderator variables may play an important role, but we were unable to test for this.

Recent Developments in International Management Research: A Review of 20 Top Management Journals

This review analyzes recent trends in the international management (IM) literature from 1996 to 2000. The 271 articles located in 20 top management (and management related) journals are categorized into 12 distinct topics: (1) the global business environment; (2) internationalization; (3) entry mode decisions; (4) international joint ventures; (5) foreign direct investment (FDI); (6) international exchange; (7) transfer of knowledge; (8) strategic alliances and networks; (9) multinational enterprises; (10) subsidiary-headquarters relations; (11) subsidiary and multinational team management; and (12) expatriate management. Research in each of these areas is presented and linkages between the areas are reviewed. Concluding thoughts are offered relating to the pervasiveness, methodologies, and levels of analysis of IM research, as well as potential areas for future research.

Dunning's eclectic theory and the smaller firm: The impact of ownership and locational advantages on the choice of entry-modes in the computer software industry

This paper set out to investigate the entry-mode selection activities of small- and medium-sized service firms. Based on Dunnings eclectic theory (1988, Journal of International Business Studies, Vol. 19, No. 1, pp. 1-31; 1993, Multinational Enterprises and the Global Economy, AddisondashWesley) and previous entry-mode research, the entry-mode selection activities of US computer software firms were examined. The findings tend to indicate that ownership and locational advantages influence the entry-mode choice of small- and medium-sized firms in a manner similar to that of larger firms. Additionally, this study confirms the applicability of the eclectic theory of foreign direct investment to a second sector of the services industry.

Real Options, International Entry Mode Choice and Performance

Recent scholarship suggests that combining insights from real option theory with transaction cost economics may improve decision-making models. In response to this suggestion we develop and test a model of international entry mode choice that draws from both perspectives. Examining samples of Dutch and Greek firms entering Central and Eastern European markets, we found that adding real option variables to a transaction cost model significantly improved its explanatory power. Additionally, firms that used the combined real option/transaction cost predicted choices had significantly higher levels of subsidiary performance satisfaction than firms that did not. Our results suggest that effective managerial decision-making may involve more than mere transaction cost minimization considerations; real option value creation insights also appear to influence the success of decision outcomes.

Customer-Centric Science: Reporting Significant Research Results With Rigor, Relevance, and Practical Impact in Mind

In response to the ongoing concern regarding a science-practice gap, we propose a customer-centric approach to reporting significant research results that involves a sequence of three interdependent steps. The first step involves setting an alpha level (i.e., a priori Type I error rate) that considers the relative seriousness of falsely rejecting a null hypothesis of no effect or relationship (i.e., Type I error) relative to not detecting an existing effect or relationship (i.e., Type II error) and reporting the actual observed p value (i.e., probability that the data would be obtained if the null hypothesis is true). The second step involves reporting estimates of the size of the effect or relationship, which indicate the extent to which an outcome is explained or predicted. The third step includes reporting results of a qualitative study to gather evidence regarding the practical significance of the effect or relationship. Our proposal to report research results with rigor, relevance, and practical impact involves important changes in how we report research results with the goal to bridge the science-practice gap.

Other People's Money: The Effects of Ownership on Compensation Strategy and Managerial Pay

This study analyzes the compensation strategy of firms. We examined differences in the pay and incentives of lower-level managers in firms with different levels of management discretion. We found t...

Influences on Strategic Decision-making in the Dutch Financial Services Industry

Following recommendations by Rajagopalan, Rasheed, and Datta (1993) and Schwenk (1995), this study attempts to extend what is known about integrative models of strategic decision-making by examining decision-making variable interactions in a field study of non-North American managers. We find some evidence to support the use of integrative models and variable interaction. We also find that some previous results seem to generalize to our Dutch setting, whereas others do not. The study concludes by noting that: (1) integrating multiple perspectives (environmental-based decision-making and managerial characteristics) and including variable interactions enhances what we know about the strategic decision-making process; and (2) much more research is needed before knowing which aspects of strategic decisionmaking can be generalized and which cannot.

US managers' willingness to accept a global assignment: do expatriate benefits and assignment length make a difference?

Drawing on key tenets of expectancy theory, the present research study investigates the degree to which twelve different expatriate benefits explain managerial willingness to accept short-term and long-term global assignments. Hypotheses regarding main and interaction effects were tested on a sample of 418 globally oriented graduates of a top-ranked masters of international business studies programme at a university in the south-eastern United States. Analysing the data with ANOVA, nine out of the thirteen hypotheses were supported with all of the expatriate benefits having either main or interactive effects. A discussion and areas for future research are presented.

Industrial sector, perceived environmental uncertainty and entry mode strategy

Abstract Utilizing a multi-dimensional measure of perceived environmental uncertainty (PEU), we investigate both similarities and differences between services and manufacturing with respect to the impact of PEU (risk) on their international entry mode strategies. We hypothesize that due to unique product characteristics and modes of delivery, (1) for certain types of PEU (government/political, product market), services and manufacturing will respond similarly, while (2) services will respond quite differently from manufacturing to other particular types of perceived risk. The hypotheses were generally supported, showing that the use of a multi-dimensional measure of PEU is important in gaining a better understanding of strategic behavior in different industries.

The Impact of Workforce Reductions on Financial Performance: A Longitudinal Perspective

During the last two decades, workforce reductions played an integral role in the restructuring strategies of many companies, especially for Fortune 500 companies. However, research in this important area has been limited. A doubly (multivariate) repeated measures design was chosen for this study to determine the longitudinal impact of workforce reductions on financial performance. The largest 250 U. S. corporations, as measured by 1992 revenues, were divided into two groups based on whether or not the company announced a significant workforce reduction initiative of at least 3% during the period 1991–92. Financial performance was measured by growth in sales and market capitalization for the period 1989 to 1996, thus providing two years of pre-event data and six years of post-event data. We found that workforce reductions significantly improved subsequent financial performance, particularly in the short term.