The effect of upper echelons’ compensation on firm internationalization

CEO general work experience and FDI-based internationalization

Purpose

The purpose of this study is to study the impact of the chief executive officer (CEO) general work experience on the level of firm internationalization in the form of foreign direct investment.

Design/methodology/approach

The author collects and analyzes data on publicly traded US firms in the manufacturing sector from 1993 to 2012.

Findings

The author finds that CEOs with more general work experience tend to engage in a higher degree of foreign direct investment (FDI)-based internationalization. This relationship will be weakened by CEO stock ownership and enhanced by CEO Ivy League education.

Originality/value

This study enriches the understanding of the important role top managers play in internationalization decisions. The study also contributes to the literature on managerial risk-taking by exploring the outcomes of managerial risk-taking, which have been less studied than the antecedents.

International Performance of SMEs’ International Strategic Groups

The present research focuses on whether the different combinations of the micro, small and medium-sized enterprises’ (SMEs) international scale and scope affect their international performance differently. The major purpose of this research is to study the paramount relationship between the SMEs’ international strategies and international performance. With a sample composed of 307 international SMEs, our empirical analysis defines three different strategic groups regarding the scale and scope of internationalization, that is, a high, medium and low international exposure of the firms. The scope, as an important international strategic dimension, is taken from two angles, the number of countries and the number of regional blocs where the firms operate. We assessed the strategic groups’ implications on the firms’ international performance. The latter was taken as a multidimensional construct composed of the financial, strategic and overall international performance respectively. We used the hierarchical regression analysis to test our hypotheses, and major results emerged. Higher levels of commitment with the international markets lead to better financial, strategic and overall international performances. These results are of utmost importance from the theoretical point of view and for the strategic decision-making of SMEs, opening new avenues for future studies.

Hambrick and Mason’s “Upper Echelons Theory”: evolution and open avenues

Purpose

How has upper echelons theory (UET) (Hambrick and Mason, 1984) been evolving over time? Through the historical discussion, this paper aims to provide an updated – and also innovative from some aspects – big picture on this famous approach to strategic management. In fact, after more than 30 years since its original conceptualization, the authors believe that the UE field is mature enough for a critical attempt to provide all those scholars and practitioners interested in strategic leadership with a comprehensive ground for future analyses, a ground which, to the authors’ knowledge, is still missing.

Design/methodology/approach

The authors mostly use a historical narrative to offer a critical account of the conceptual and methodological developments occurring under UE lenses over time. The authors believe that the historical approach can be particularly useful because it can help understand and explain why and how these developments have been conjectured and implemented.

Findings

Two mainly intertwined insights emerge from our analysis: on the one hand, the developments subsequent to the seminal 1984 UE model have gradually, although constantly, reduced its strongly voluntarist assumptions on strategic leadership toward more moderated co-evolutionary lenses; on the other hand, the emerging psychological and cognitive moderators of UE variables are presently reinforcing the centrality of dominant coalitions, in that they affect their decision-making processes and strategic choices.

Originality/value

From the critical discussion, a possible updated UE model based on co-evolutionary lenses finally emerges. Prospective research avenues in this management field are also provided.