Recent Issues

Vol.23/1 (2017, June)
On Regretful Hierarchy
Author JONGHOON BAE
Keywords Regrets, Organizational Culture, and Theory of the Firm
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This study evaluates the implications of regretful choices at the group level and suggests that regretful choices in the market may underlie the formation of hierarchy, i.e., a collectivity, which may not mitigate the hazards of transactions but serve to absorb personal emotions, i.e., regrets associated with market transactions. In so doing, this study seeks to identify the role of personal emotion in the theory of the firm vis-a-vis calculative trust that is arguably granted to the impersonal firm.
Vol.23/1 (2017, June)
The Impact of Non-Financial Stakeholders on Accounting Conservatism: The Case of Labor Unions
Author HSIN-YI (SHIRLEY) HSIEH, BOOCHUN JUNG, HAN YI
Keywords Accounting Conservatism, Conditional Conservatism, Labor Unions, Layoff
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This study examines the relation between labor union strength and conditional accounting conservatism. We argue that labor unions can have an increasing or decreasing effect on conditional conservatism due to considerations associated with layoffs and job security of union members. Using Basu’s (1997) asymmetric timeliness framework and multiple measures of union strength, we find that labor union strength leads to less conditional conservatism, even after controlling for known determinants of conditional conservatism. Our results are robust to endogeneity tests as well as a battery of other sensitivity tests. We further demonstrate that the negative relation likely results from unions’ ability to reduce the likelihood of layoffs. Overall, we provide fresh evidence about the impact of a key nonfinancial stakeholder, namely labor unions, on an important property of earnings.
Vol.22/2 (2016, December)
The Effects of Trait Positive Affect on Autonomy and Task Cohesion: The Moderating Roles of Individual Affective Dissimilarity and Group A ffective Diversity
Author Moon Joung Kim
Keywords trait positive affect, affective dissimilarity, affective diversity, autonomy, task cohesion
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In the present study, I examine how an individual’s trait positive affect (TPA) may interact with those of group members to generate important individual outcomes, such as autonomy and task cohesion. The proposed multilevel moderated mediation framework was tested using data collected from 293 employees in 66 workgroups. Results demonstrated that the indirect effect of TPA on task cohesion through autonomy is stronger when individual affective dissimilarity is low and group affective diversity is high. The analysis also confirmed the role of autonomy as the mediating mechanism between TPA and task cohesion.
Vol.22/2 (2016, December)
Why Does Forgiving Boost Creativity? The Role of Cognitive Persistence
Author SU SANG LEE, EUN JIN JUNG, JUNHA KIM, SUJIN LEE
Keywords forgiveness; creativity; cognitive persistence; conflict; dual pathway to creativity model
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This study elucidates the specific cognitive mechanism by which the act of forgiving enhances creativity. We use the dual pathway to creativity model to examine whether the act of forgiving increases creativity via cognitive persistence (generating detailed ideas within a small number of categories), but not via cognitive flexibility (generating multiple categories and switching ideas between categories). Two experiments conducted
Vol.22/2 (2016, December)
Testing Human Relations Hypothesis of the Hawthorne Studies
Author JEONG-YEON LEE
Keywords Hawthorne studies, social facilitation, social learning process, human relations, time series analysis
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Employing the method of time series analysis, this paper analyzes data obtained from the Hawthorne experiment from the perspective of human relations. Although previous studies adopted statistical tools to analyze the “first relay” experiments, direct inclusion of “human relations” variables was absent. The study includes “human relations” variables that suggest social facilitation and social learning process in the statistical analysis. Unlike previous studies, the direct inclusion of such variables resulted in the support for the human relations hypothesis.
Vol.22/2 (2016, December)
Which Performance Feedback Triggers Problemistic and Institutional Search in the Semiconductor Industry? Profit vs. Growth
Author SOO YON HAN, KYUNG MIN PARK
Keywords R&D intensity; performance aspiration; problemistic search; institutional search
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This paper investigates; first, the impact of profit and growth aspirations in triggering problemistic search; second, the existence of institutional or imitational search; and third, the influence of performance aspirations on institutional search in the global semiconductor industry. The empirical results show that the growth aspiration is a more significant performance measure affecting R&D intensity and the strong institutional search behavior is also evident in our research setting. The institutional search behavior is found to be strengthened by poor growth but weakened by low profit, suggesting a shift of attention between aspiration and survival when imitating others in R&D investment.
Vol.22/1 (2016, June)
Leader’s Role in Fostering Creativity:The Creativity Creation Model at KT AIT
Author SEONGWUK MOON, JAEHO SHIN, HONGSUK YANG, JAMES WON-KI HONG
Keywords creativity creation model, leadership, innovation performance
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To achieve innovation, constraints that block the effect of a company’s creative culture on innovation and creativity in the organization have to be removed. We propose the creativity creation model that takes account of these constraints and suggest that, to cultivate an innovative climate,
Vol.22/1 (2016, June)
Top Managers’ Political Conservatism and External Governance Choices
Author JONGSUB LEE, KWANG J. LEE
Keywords CEO political conservatism, corporate governance conservatism, external governance choices, entrenchment discount, G Index, E Index, staggered board, limits to amend bylaws, supermajority JEL Classification: G34
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We develop a theory of corporate governance conservatism that reflects the preference of politically conservative chief executive officers (CEOs) for stability and continuity in corporate governance provisions without managerial entrenchment. Our theory suggests that conservative CEOs tend to prefer corporate governance provisions against hostile takeover and drastic board turnover, but their emphasis on hard work and self-discipline are likely to lead them to run their firms more efficiently with less debt. Using a sample of 2,339 U.S. corporations in the 1996-2006 period, we find strong empirical support for this new theory. Firms with Republican CEOs, who are known to be politically conservative, are more likely to stagger the terms and elections of directors, limit shareholders’ ability to amend corporate bylaws and require supermajority for approval of mergers, but those CEOs are not associated with a significant impairment in shareholders’ value. Rather, we find firms run by Republican CEOs tend to have higher return on assets and lower leverage, consistent with the results documented by Hutton, Jiang, and Kumar (2014). Overall, our theory and empirical results highlight an important spillover effect of top managers’
Vol.22/1 (2016, June)
Why Do Some Asset Pricing Models Perform Poorly? Evidence from Irrationality, Transaction Costs, and Missing Factors
Author JOON CHAE, CHEOL-WON YANG
Keywords Asset Pricing Model; Transaction Cost; Investor irrationality; Missing Risk Factor; Fama and MacBeth (1973) Regression.
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We identify and horse race three causes for the underperformance of some asset pricing models: investor irrationality, transaction costs, and missing risk factors. Specifically, we regress the difference of realized over expected returns (pricing error) per various asset pricing models onto proxies for the reasons for explanatory breakdown. First, for the capital asset pricing model (CAPM) and six other models we find that both investor irrationality and transaction costs are significantly related to the pricing error controlling for firm size and valuation. Second, models with more risk factors than the CAPM cannot overcome the shortcoming of the CAPM due to investor irrationality and transaction costs. In conclusion, transaction costs and investor irrationality are shown to be impediments to enhancing
Vol.21/2 (2015, December)
The Hierarchy Myopia of Organizational Learning
Author NAMGYOO K. PARK, KIRA CHOI, JINJU LEE
Keywords myopia of learning, hierarchy, organizational learning performance
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Previous studies have been interested in how to maximize both the efficiency and the effectiveness of organizational learning. On the flipside, some studies have investigated the critical barriers to learning. We suggest organizational hierarchy as another cause and theoretically explore how it can deter learning performance. Specifically, we argue that the configuration of structure determines a prevalent form of learning method in an organization to consequently affect its learning performance. Using simulation modeling, we show that non-hierarchical organizations may be a better learning environment than hierarchical organizations. We also show that the contextual factors, such as problem complexity and member regrouping, may affect the base-line result. This study subsequently calls for further attention be paid to the key issues concerning the hierarchy and organization learning performance.
Seoul Journal of Business
ISSN 1226-9816 (Print)
ISSN 2713-6213 (Online)