To Maximize Gains or Minimize Losses? Antecedents of CEO Regulatory Focus: An Empirical Study on the Chinese Listed Firms

Abstract

Abstract: The current research focuses on one of the motivation based and strategic important individual attributes of CEOs-regulatory foci (including promotion focus and prevention focus), and investigates their antecedents. We choose 122 financial and real estate firms listed on the Stock Exchange of Hong Kong as samples. CEOs' promotion focus and prevention focus are measured via content analysis based on "letters to shareholders" during the period from 2011 to 2014. Combining the results of content analysis with objective data from firms' annual report and WIND database, the study finds the following results. CEO tenure has an inverted U-shaped relationship with CEO promotion focus; CEO age is negatively related to CEO promotion focus; CEO incentive pay is positively related to promotion focus; CEO stock ownership is positively related to prevention focus; compared to CEOs of other firms, CEOs of stated-owned enterprises have higher level of promotion focus and prevention focus; firms' past performance is positively related to promotion focus, but negatively related to prevention focus.

Key words: regulatory focus, corporate governance, upper echelon theory

Lang Yi, Wang Hui. To Maximize Gains or Minimize Losses? Antecedents of CEO Regulatory Focus: An Empirical Study on the Chinese Listed Firms[J]. Management Review, 2022, 34(5): 218-234.

References

[1] Bromiley P., Rau D. Social, Behavioral, and Cognitive Influences on Upper Echelons During Strategy Process:A Literature Review[J]. Journal of Management, 2016,42(1):174-202
[2] Hambrick D. C., Mason P. A. Upper Echelons:The Organization as a Reflection of Its Top Managers[J]. Academy of Management Review, 1984,9(2):193-120
[3] Hambrick D. C. Upper Echelons Theory:An Update[J]. Academy of Management Review, 2007,32(2):334-343
[4] Adomako S., Opoku R. A., Frimpong K. The Moderating Influence of Competitive Intensity on the Relationship between CEOs' Regulatory Foci and Sme Internationalization[J]. Journal of International Management, 2017,23(3):268-278
[5] Gamache D. L., Mcnamara G., Mannor M. J., et al. Motivated to Acquire? The Impact of CEO Regulatory Focus on Firm Acquisitions[J]. Academy of Management Journal, 2015,58(4):1261-1282
[6] Kammerlander N., Burger D., Fust A., et al. Exploration and Exploitation in Established Small and Medium-Sized Enterprises:The Effect of CEOs' Regulatory Focus[J]. Journal of Business Venturing, 2015,30(4):582-602
[7] Higgins E. T. Making a Good Decision:Value from Fit[J]. The American Psychologist, 2000,55(11):1217-1230
[8] Higgins E. T. Beyond Pleasure and Pain[J]. The American Psychologist, 1997,52(12):1280-1300
[9] Brockner J., Higgins E. T., Low M. B. Regulatory Focus Theory and the Entrepreneurial Process[J]. Journal of Business Venturing, 2004,19(2):203-220
[10] Wowak A. J., Hambrick D. C. A Model of Person-Pay Interaction:How Executives Vary in Their Responses to Compensation Arrangements[J]. Strategic Management Journal, 2010,31(8):803-821
[11] Das T. K., Kumar R. Regulatory Focus and Opportunism in the Alliance Development Process[J]. Journal of Management Studies, 2011,37(3):682-708
[12] Hmieleski K. M., Baron R. A. Regulatory Focus and New Venture Performance:A Study of Entrepreneurial Opportunity Exploitation under Conditions of Risk versus Uncertainty[J]. Strategic Entrepreneurship Journal, 2008,2(4):285-299
[13] Lange D., Boivie S., Westphal J. D. Predicting Organizational Identification at the CEO Level[J]. Strategic Management Journal, 2015,36(8):1224-1244
[14] Gorman C. A., Meriac J. P., Overstreet B. L., et al. A Meta-analysis of the Regulatory Focus Nomological Network:Work-related Antecedents and Consequences[J]. Journal of Vocational Behavior, 2012,80(1):160-172
[15] Lanaj K., Chang C. H., Johnson R. E. Regulatory Focus and Work-related Outcomes:A Review and Meta-Analysis[J]. Psychological Bulletin, 2012,138(5):998-1034
[16] Fortin R., Goldberg G. M., Roth G. Bank Risk Taking at the Onset of the Current Banking Crisis[J]. Financial Review, 2010,45(4):891-913
[17] Hagendorff J., Vallascas F. CEO Pay Incentives and Risk-taking:Evidence from Bank Acquisitions[J]. Journal of Corporate Finance, 2011,17(4):1078-1095
[18] Pathan S. Strong Boards, CEO Power and Bank Risk-taking[J]. Journal of Banking & Finance, 2009,33(7):1340-1350
[19] Brockner J., Higgins E. T. Regulatory Focus Theory:Implications for the Study of Emotions at Work[J]. Organizational Behavior and Human Decision Processes, 2001,86(1):35-66
[20] Crowe E., Higgins E. T. Regulatory Focus and Strategic Inclinations:Promotion and Prevention in Decision-Making[J]. Organizational Behavior and Human Decision Processes, 1997,69(2):117-132
[21] Higgins E. T., Spiegel S. Promotion and Prevention Strategies for Self-Regulation:A Motivated Cognition Perspective[A]. In Baumeister R. F., Vohs K. D. (eds.). Handbook of Self-regulation:Research, Theory, and Applications[C]. New York:Guilford Press, 2004
[22] Fransen M. L., TerHoeven C. L. Matching the Message:The Role of Regulatory Fit in Negative Managerial Communication[J]. Communication Research, 2013,40(6):818-837
[23] Wallace C., Chen G. A Multilevel Integration of Personality, Climate, Self-regulation, and Performance[J]. Personnel Psychology, 2006,59(3):529-557
[24] Shin Y., Kim M., Choi J. N., et al. Does Team Culture Matter? Roles of Team Culture and Collective Regulatory Focus in Team Task and Creative Performance[J]. Group & Organization Management, 2016,41(2):232-265
[25] Kark R., Van Dijk D. Motivation to Lead, Motivation to Follow:The Role of the Self-regulatory Focus in Leadership Processes[J]. Academy of Management Review, 2007,32(2):500-528
[26] 张宏宇,李文,郎艺. 矛盾视角下调节焦点在领导力领域的应用[J]. 心理科学进展, 2019,27(4):711-725
[27] 许灏颖,杜晨朵,王震. 道德领导对员工越轨行为的影响:道德调节焦点和道德认同的作用[J]. 中国人力资源开发, 2014,(11):38-45
[28] Neubert M. J., Kacmar K. M., Carlson D. S., et al. Regulatory Focus as a Mediator of the Influence of Initiating Structure and Servant Leadership on Employee Behavior[J]. Journal of Applied Psychology, 2008,93(6):1220-1233
[29] Ahmadi S., Khanagha S., Berchicci L., et al. Are Managers Motivated to Explore in the Face of a New Technological Change? The Role of Regulatory Focus, Fit, and Complexity of Decision-making[J]. Journal of Management Studies, 2017,54(2):209-237
[30] Johnson P. D., Shull A., Wallace J. C. Regulatory Focus as a Mediator in Goal Orientation and Performance Relationships[J]. Journal of Organizational Behavior, 2011,32(5):751-766
[31] 李磊,尚玉钒. 基于调节焦点理论的领导对下属创造力影响机理研究[J]. 南开管理评论, 2011,14(5):4-11
[32] Marcel J. J., Barr P. S., Duhaime I. M. The Influence of Executive Cognition on Competitive Dynamics[J]. Strategic Management Journal, 2011,32(2):115-138
[33] Nadkarni S., Barr P. S. Environmental Context, Managerial Cognition, and Strategic Action:An Integrated View[J]. Strategic Management Journal, 2008,29(13):1395-1427
[34] Barker Iii V. L., Mueller G. C. CEO Characteristics and Firm R&D Spending[J]. Management Science, 2002,48(6):782-801
[35] Musteen M., Barker Iii V. L., Baeten V. L. CEO Attributes Associated with Attitude toward Change:The Direct and Moderating Effects of CEO Tenure[J]. Journal of Business Research, 2006,59(5):604-612
[36] Mcclelland P. L., Barker V. L., Oh W. Y. CEO Career Horizon and Tenure:Future Performance Implications under Different Contingencies[J]. Journal of Business Research, 2012,65(9):1387-1393
[37] Bantel K. A., Jackson S. E. Top Management and Innovations in Banking-Does the Composition of the Top Team Make a Difference[J]. Strategic Management Journal, 1989,10(1):107-124
[38] Weng D. H., Lin Z. Beyond CEO Tenure:The Effect of CEO Newness on Strategic Changes[J]. Journal of Management Studies, 2014,40(7):2009-2032
[39] Miller D. Stale in the Saddle:CEO Tenure and the Match between Organization and Environment[J]. Management Science, 1991,37(1):34-52
[40] Combs J. G., Ketchen D. J., Perryman A. A., et al. The Moderating Effect of CEO Power on the Board Composition-Firm Performance Relationship[J]. Journal of Management Studies, 2007,44(8):1299-1323
[41] Van Essen M., Otten J., Carberry E. J. Assessing Managerial Power Theory:A Meta-Analytic Approach to Understanding the Determinants of CEO Compensation[J]. Journal of Management, 2015,41(1):164-202
[42] 吴斌,刘灿辉,史建梁. 政府背景, 高管人力资本特征与风险投资企业成长能力:基于典型柑关方法的中小板市场经验证据[J]. 会计研究, 2011,(7):78-84
[43] Gringart E., Helmes E., Speelman C. Development of a Measure of Stereotypical Attitudes Towards Older Workers[J]. Australian Psychologist, 2013,48(2):110-118
[44] Shacklock K., Fulop L., Hort L. Managing Older Worker Exit and Re-entry Practices:A 'Revolving Door'?[J]. Asia Pacific Journal of Human Resources, 2007,45(2):151-167
[45] Burke D. M., Light L. L. Memory and Aging:The Role of Retrieval Processes[J]. Psychological Bulletin, 1981,90(3):513-546
[46] Vroom V. H., Pahl B. Relationship between Age and Risk Taking among Managers[J]. Journal of Applied Psychology, 1971,55(5):399-405
[47] Dechow P. M., Sloan R. G. Executive Incentives and the Horizon Problem:An Empirical Investigation[J]. Journal of Accounting & Economics, 1991,14(1):51-89
[48] Matta E., Beamish P. W. The Accentuated CEO Career Horizon Problem:Evidence from International Acquisitions[J]. Strategic Management Journal, 2008,29(7):683-700
[49] Yim S. The Acquisitiveness of Youth:CEO Age and Acquisition Behavior[J]. Journal of Financial Economics, 2013,108(1):250-273
[50] Smith C. W., Stulz R. M. The Determinants of Firms' Hedging Policies[J]. Journal of Financial and Quantitative Analysis, 1985,20(4):391-405
[51] Stiroh K. J. New Evidence on the Determinants of Bank Risk[J]. Journal of Financial Services Research, 2006,30(3):237-263
[52] Larraza-Kintana M., Wiseman R. M., Gomez-Mejia L. R., et al. Disentangling Compensation and Employment Risks Using the Behavioral Agency Model[J]. Strategic Management Journal, 2007,28(10):1001-1019
[53] Sanders W. G. Incentive Alignment, CEO Pay Level, and Firm Performance:A Case of "Heads I Win, Tails You Lose"?[J]. Human Resource Management, 2001,40(2):159-170
[54] Coles J. L., Daniel N. D., Naveen L. Managerial Incentives and Risk-Taking[J]. Journal of Financial Economics, 2006,79(2):431-468
[55] Kahneman D., Tversky A. Choices, Values, and Frames[A]. In Maclean L. C., Ziemba W. T. (eds.). Handbook of the Fundamentals of Financial Decision Making:Part I. World Scientific[C]. Beijing:World Scientific, 2013
[56] Bolton P., Mehran H., Shapiro J. Executive Compensation and Risk Taking[J]. Review of Finance, 2015,19(6):2139-2181
[57] Dong Y., Meng C., Firth M., et al. Ownership Structure and Risk-taking:Comparative Evidence from Private and State-controlled Banks in China[J]. International Review of Financial Analysis, 2014,36:120-130
[58] Sanchez M. E., Morchio G. Moving Closer to the Action:Examining Compensation Design Effects on Firm Risk[J]. Organization Science, 2008,19(4):548-566
[59] Latham S. F., Braun M. Managerial Risk, Innovation, and Organizational Decline[J]. Journal of Management, 2009,35(2):258-281
[60] 白重恩,路江涌,陶志刚,等. 国有企业改制效果的实证研究[J]. 经济研究, 2006,(8):4-13
[61] 刘瑞明,石磊. 国有企业的双重效率损失与经济增长[J]. 经济研究, 2010,(1):127-137
[62] Gedajlovic E. Ownership, Strategy and Performance:Is the Dichotomy Sufficient?[J]. Organization Studies, 1993,14(5):731-752
[63] Mascarenhas B. Strategic Group Dynamics[J]. Academy of Management Journal, 1989,32(2):333-352
[64] 杨瑞龙,王元,聂辉华. "准官员"的晋升机制:来自中国央企的证据[J]. 管理世界, 2013,(3):23-33
[65] 蓝海林. 中国企业战略行为的解释:一个整合情境-企业特征的概念框架[J]. 管理学报, 2014,11(5):653-658
[66] Peng M. W., Tan J., Tong T. W. Ownership Types and Strategic Groups in an Emerging Economy[J]. Journal of Management Studies, 2004,41(7):1105-1129
[67] 刘伟,佟仁城. 改进国有企业管理者经营业绩考核办法[J]. 中国人力资源开发, 2010,(8):101-104
[68] 江诗松,龚丽敏,魏江. 转型经济中后发企业的创新能力追赶路径:国有企业和民营企业的双城故事[J]. 管理世界, 2011,(12):96-115
[69] 曾庆生,陈信元. 国家控股、超额雇员与劳动力成本[J]. 经济研究, 2006,41(5):74-86
[70] 黄速建,余菁. 国有企业的性质、目标与社会责任[J]. 中国工业经济, 2006,(2):68-76
[71] 吴联生,林景艺,王亚平. 薪酬外部公平性, 股权性质与公司业绩[J]. 管理世界, 2010,(3):117-126
[72] Smith W. K., Lewis M. W. Toward a Theory of Paradox:A Dynamic Equilibrium Model of Organizing[J]. Academy of Management Review, 2011,36(2):381-403
[73] 叶广宇,蓝海林,李铁瑛. 中国企业横向整合管理模式研究及其理论模型[J]. 管理学报, 2012,9(4):499-505
[74] 叶广宇,刘美珍. 制度地位与企业横向整合管理模式多案例研究[J]. 管理学报, 2013,10(4):494-501
[75] Amit R., Schoemaker P. J. H. Strategic Assets and Organizational Rent[J]. Strategic Management Journal, 1993,14(1):33-46
[76] Krause R., Semadeni M. CEO Duality:A Review and Research Agenda[J]. Journal of Management:Official Journal of the Southern Management Association, 2014,40(1):252-282
[77] Scott W. R. Organisations:Rational, Natural and Open Systems[M]. Englewood Cliffs, NJ:Prentice Hall, 1992
[78] Busenbark J. R., Krause R., Boivie S., et al. Toward a Configurational Perspective on the CEO:A Review and Synthesis of the Management Literature[J]. Journal of Management, 2016,42(1):234-268
[79] Hambrick D. C., Black C., Fredrickson J. W. Executive Leadership of the High-technology Firm:What Is Special about It[A]. In Gomez-Mejia L. R., Lawless M. W. (eds.). Advances in Global High-technology Management[C]. Greenwich, CT:JAI Press, 1992
[80] Goodman R. Annual Reports Serving a Dual Marketing Function-Report of a Survey[J]. Public Relations Quarterly, 1980,24(2):21-24
[81] Barr P. S., Stimpert J. L., Huff A. S. Cognitive Change, Strategic Action, and Organizational Renewal[J]. Strategic Management Journal, 1992,13(1):15-36
[82] D'aveni R. A., Macmillan I. C. Crisis and the Content of Managerial Communications:A Study of the Focus of Attention of Top Managers in Surviving and Failing Firms[J]. Administrative Science Quarterly, 1990,35(4):634-657
[83] Yadav M. S., Prabhu J. C., Chandy R. K. Managing the Future:CEO Attention and Innovation Outcomes[J]. Journal of Marketing, 2007,71(4):84-101
[84] Eggers J. P., Kaplan S. Cognition and Renewal:Comparing CEO and Organizational Effects on Incumbent Adaptation to Technical Change[J]. Organization Science, 2009,20(2):461-477
[85] Kaplan S. Framing Contests:Strategy Making under Uncertainty[J]. Organization Science, 2008,19(5):729-752
[86] Mcclelland P. L., Liang X., Barker Iii V. L. CEO Commitment to the Status Quo:Replication and Extension Using Content Analysis[J]. Journal of Management, 2010,36(5):1251-1277
[87] Short J. C., Payne G. T., Brigham K. H., et al. Family Firms and Entrepreneurial Orientation in Publicly Traded Firms a Comparative Analysis of the S & P 500[J]. Family Business Review, 2009,22(1):9-24
[88] Weber R. P. Basic Content Analysis[M]. London:Sage, 1990
[89] Sapir E. Grading, a Study in Semantics[J]. Philosophy of Science, 1944,11(2):93-116
[90] Whorf B. L. Language, Thought and Reality:Selected Writings of Benjamin Lee Whorf[M]. Eastford, CT:Martino Fine Books, 1956
[91] Cho T. S., Hambrick D. C. Attention as the Mediator between Top Management Team Characteristics and Strategic Change:The Case of Airline Deregulation[J]. Organization Science, 2006,17(4):453-469
[92] Salancik G. R., Meindl J. R. Corporate Attributions as Strategic Illusions of Management Control[J]. Administrative Science Quarterly, 1984,29:238-254
[93] Johnson R. E., Steinman L. Use of Implicit Measures for Organizational Research:An Empirical Example[J]. Canadian Journal of Behavioural Science, 2009,41(4):202-212
[94] Johnson R. E., Chang C. H., Meyer T., et al. Approaching Success or Avoiding Failure? Approach and Avoidance Motives in the Work Domain[J]. European Journal of Personality, 2013,27(5):424-441
[95] Johnson R. E., Lanaj K., Tan J. A., et al. Putting Our Trust in Fairness:Justice and Regulatory Focus as Triggers of Trust and Cooperation in Research in Management[M]. Hartford, CT:Information Age Publishing, 2012
[96] Lockwood P., Jordan C. H., Kunda Z. Motivation by Positive or Negative Role Models:Regulatory Focus Determines Who will Best Inspire Us[J]. Journal of Personality and Social Psychology, 2002,83(4):854-864
[97] 吴嵩,金盛华,蔡頠,等. 基于语言内容的谎言识别[J]. 心理科学进展, 2012,20(3):457-466
[98] 黄金兰,林以正,谢亦泰,等. 中文版[语文探索与字词计算] 词典之建立[J]. 中华心理学刊, 2012,54(2):185-201
[99] Swann Jr W. B., Rentfrow P. J., Gosling S. D. The Precarious Couple Effect:Verbally Inhibited Men + Critical, Disinhibited Women=Bad Chemistry[J]. Journal of Personality and Social Psychology, 2003,85(6):1095-1106
[100] Judge T. A., Erez A., Bono J. E., et al. The Core Self-evaluations Scale:Development of a Measure[J]. Personnel Psychology, 2003,56(2):303-331
[101] Watson D., Clark L. A., Tellegen A. Development and Validation of Brief Measures of Positive and Negative Affect:The Panas Scales[J]. Journal of Personality and Social Psychology, 1988,54(6):1063-1070
[102] Venkatraman N., Ramanujam V. Measurement of Business Performance in Strategy Research:A Comparison of Approaches[J]. Academy of Management Review, 1986,11(4):801-814
[103] May D. O. Do Managerial Motives Influence Firm Risk Reduction Strategies?[J]. The Journal of Finance, 1995,50(4):1291-1308
[104] Reuber A. R., Fischer E. The Influence of the Management Team's International Experience on the Internationalization Behaviors of Smes[J]. Journal of International Business Studies, 1997,28(4):807-825
[105] Haleblian J., Finkelstein S. Top Management Team Size, CEO Dominance, and Firm Performance:The Moderating Roles of Environmental Turbulence and Discretion[J]. Academy of Management Journal, 1993,36(4):844-863
[106] Wright P., Kroll M., Elenkov D. Acquisition Returns, Increase in Firm Size, and Chief Executive Officer Compensation:The Moderating Role of Monitoring[J]. Academy of Management Journal, 2002,45(3):599-608
[107] 陈强. 高级计量经济学及Stata应用[M]. 北京:高等教育出版社, 2010
[108] Wooldridge J. Inverse Probability Weighted M-Estimators for Sample Selection, Attrition, and Stratification[J]. Portuguese Economic Journal, 2002,1(2):117-139
[109] Friedman R. S., Förster J. The Effects of Promotion and Prevention Cues on Creativity[J]. Journal of personality and Social Psychology, 2001,81(6):1001-1013
[110] Liberman N., Idson L. C., Camacho C. J., et al. Journal of Personality and Social Psychology[J]. Promotion and Prevention Choices between Stability and Change, 1999,77(6):1135-1145
[111] 李有根,赵锡斌. 国外经理自主权研究及测量[J]. 外国经济与管理, 2003,25(12):2-6