CEO regulatory focus and myopic marketing management

被引:12
|
作者
Chung, Tuck Siong [1 ]
Low, Angie [2 ]
机构
[1] Essec Business Sch, Singapore Campus, Singapore, Singapore
[2] Nanyang Technol Univ, Nanyang Business Sch, Singapore, Singapore
关键词
Myopic marketing management; CEO regulatory focus; CEO compensation; Analyst coverage; Environmental turbulence; Upper echelons theory; RESEARCH-AND-DEVELOPMENT; REAL EARNINGS MANAGEMENT; STOCK-MARKET; ENVIRONMENTAL DYNAMISM; SHAREHOLDER VALUE; FIRM PERFORMANCE; ANALYST COVERAGE; ORIENTATION; PREVENTION; PROMOTION;
D O I
10.1016/j.ijresmar.2021.09.004
中图分类号
F [经济];
学科分类号
02 ;
摘要
This study details the mechanisms on how CEO regulatory focus affects the salience of the gains versus losses involved in myopic marketing decision-making, and how such CEO psychological attributes interact with internal equity-based compensation, external pressure from equity analysts, and environmental turbulence to affect firms' myopic marketing management propensities. We find that when faced with short-term earnings pressure to meet earnings expectations and when time is no longer a resource, predominantly promotion-focused are more likely to engage in myopic marketing management to benefit from the temporary stock price increase, which comes from meeting or beating earnings expectations. Conversely, predominantly prevention-focused CEOs are less prone to such short-termist actions which results in long-term value loss. For the moderating variables, we find that: (1) equity-based compensation tends to attenuate myopic marketing tendencies of promotion-focused CEOs but have no impact on prevention-focused CEOs, (2) whether equity analysts improve monitoring or aggravate short-term earnings pressure depends on the CEO's regulatory focus, and (3) environmental turbulence does not increase the myopic marketing management tendencies of predominantly promotion-focused CEOs but rather intensifies the relunctance of prevention-focused CEOs to take short-termist actions. We further find that myopic marketing management mediates the impact of CEO regulatory focus on future firm performance. These findings have important implications for firms and boards when selecting new CEOs and structuring the compensation of existing CEOs. Firms need to simultaneously consider the fit between the CEOs' regulatory focus, firms' needs, the business environment, as well as CEO compensation structure. (c) 2021 Elsevier B.V. All rights reserved.
引用
收藏
页码:247 / 267
页数:21
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