Temporal Orientation and Executive Performance
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Temporal Orientation and Executive Performance

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Questions and Answers

What is the relationship between a firm's temporal alignment with environmental changes and its performance?

  • Alignment has no impact on competitive actions.
  • Better alignment leads to superior performance. (correct)
  • Worse alignment leads to increased market share.
  • It does not affect performance.

    • Which aspect of executives does Upper Echelons Theory emphasize as influential over strategic choices?

  • Market trends and competitor movements.
  • Employee satisfaction and engagement.
  • Financial resources available to the firm.
  • Personal experiences and values of executives. (correct)

    • What is indicated by a firm's increase in strength set according to the content?

  • It reduces the firm's market share.
  • It leads to consumer dissatisfaction.
  • It decreases the likelihood of attack.
  • It results in competitive advantage. (correct)

    • What must firms integrate to cope with external uncertainties effectively?

    <p>Strengths and weaknesses of capabilities.</p> Signup and view all the answers

    Which of the following best describes the findings related to high velocity (HV) and low velocity (LV) environments?

    <p>Performance is more positive in HV environments.</p> Signup and view all the answers

    What type of research is suggested for future exploration related to executive temporal orientation?

    <p>Explore different mechanisms of the executive-environment relationship.</p> Signup and view all the answers

    How do firms with a high weakness set typically perform relative to their competitors?

    <p>They tend to have reduced relative performance.</p> Signup and view all the answers

    What do the findings suggest about matching competitive actions to environmental timing?

    <p>It enhances the likelihood of better performance.</p> Signup and view all the answers

    How do shareholders of companies with stronger environmental performance typically react to eco-harmful behavior announcements?

    <p>They react less negatively than other shareholders.</p> Signup and view all the answers

    What is suggested about firms that do not comply with green norms?

    <p>They are punished for their non-compliance.</p> Signup and view all the answers

    What effect does a higher stock of Corporate Social Responsibility (CSR) have on a company's punishment for eco-harmful behavior?

    <p>Decreases the punishment.</p> Signup and view all the answers

    What do firms risk when external CSR actions outweigh internal CSR actions?

    <p>Being perceived as engaging in 'green-washing'.</p> Signup and view all the answers

    How does increasing external pressure to become green affect the perception of companies?

    <p>It increases negative effects from negative news.</p> Signup and view all the answers

    What is indicated about the relationship between CSR and firm performance?

    <p>It is statistically significant and positive.</p> Signup and view all the answers

    What common mistake do many firms make regarding their CSR efforts?

    <p>Not communicating internal CSR actions externally.</p> Signup and view all the answers

    Which strategy is recommended for managers to enhance environmental performance?

    <p>Implement training and establish green committees.</p> Signup and view all the answers

    What role does environmental munificence play in changing a firm's weakness sets?

    <p>It reduces weakness sets over time.</p> Signup and view all the answers

    What is suggested by hypothesis H1 regarding a firm's strength sets?

    <p>It has a positive curvilinear relationship with relative performance.</p> Signup and view all the answers

    What does hypothesis H3b imply about low strength sets?

    <p>They have a negative effect on relative performance.</p> Signup and view all the answers

    How do prior performance and environmental munificence differ concerning their impact on changes in capability sets?

    <p>Prior performance is endogenous while environmental munificence is exogenous.</p> Signup and view all the answers

    Which statement about precarious advantage is true based on the hypotheses discussed?

    <p>It produces greater variability in performance outcomes.</p> Signup and view all the answers

    Which factor is described as having no control over its effects on firm performance?

    <p>Environmental munificence</p> Signup and view all the answers

    Which hypothesis suggests a negative impact on relative performance due to high weakness sets?

    <p>H3b</p> Signup and view all the answers

    What is the expected outcome of higher prior performance according to hypothesis H4?

    <p>It leads to an increase in firm strength sets over time.</p> Signup and view all the answers

    How does human capital theory primarily impact a firm's productivity?

    <p>It improves knowledge and skills without guaranteeing financial gain.</p> Signup and view all the answers

    What challenge do firms face when trying to capture returns from training investments?

    <p>Wages often rise faster than productivity improvements.</p> Signup and view all the answers

    What is one potential advantage of firm-specific training?

    <p>It increases productivity with skills hard for competitors to imitate.</p> Signup and view all the answers

    What role do high job-switching costs play in the labor market?

    <p>They limit the mobility of trained employees, creating labor market frictions.</p> Signup and view all the answers

    What is the relationship between employee commitment and training investments?

    <p>Employees may agree to lower wages due to feeling committed after training.</p> Signup and view all the answers

    How can firms gain sustainable competitive advantages according to imperfect labor markets?

    <p>By using firm-specific skills to improve financial performance.</p> Signup and view all the answers

    What does the resource-based view suggest regarding investments in human capital?

    <p>Higher financial performance requires investments in complementary resources.</p> Signup and view all the answers

    How might firms experience performance losses when hiring experienced employees from rival firms?

    <p>They may have lower productivity due to adjustment issues.</p> Signup and view all the answers

    What is the primary benefit of investing in human capital according to the provided content?

    <p>Enhanced firm performance through complementarities</p> Signup and view all the answers

    Which hypothesis suggests a positive stock price reaction linked to effective human capital investments?

    <p>H1: A signal of effective human capital investments leads to a positive stock price reaction.</p> Signup and view all the answers

    How does R&D intensity impact the stock price reaction to signals of human capital investments?

    <p>Higher R&amp;D intensity leads to a greater positive stock price reaction.</p> Signup and view all the answers

    What relationship is suggested between physical capital intensity and positive stock price reaction in the content?

    <p>Higher physical capital intensity leads to a lesser positive stock price reaction.</p> Signup and view all the answers

    According to the findings, what happens to firms that receive awards for human capital management?

    <p>They experience significantly positive abnormal stock returns.</p> Signup and view all the answers

    What factor positively influences the effectiveness of human capital investments, according to the content?

    <p>High advertising intensity</p> Signup and view all the answers

    Which factor, when combined with human capital investments, does NOT amplify financial impacts?

    <p>Market competition</p> Signup and view all the answers

    What methodology was used to analyze the financial performance of firms?

    <p>Accounting measures and event study</p> Signup and view all the answers

    What is one hypothesis regarding the interaction effects of R&D and physical capital intensity?

    <p>Higher interaction leads to greater positive stock price reactions.</p> Signup and view all the answers

    Study Notes

    Temporal Orientation

    • Executives with more positive temporal orientation (PTD) in high-velocity environments are more likely to have negative performance.
    • Executives with more positive temporal orientation (PTD) in low-velocity environments are more likely to have positive performance.
    • Executives with inverted U-shaped temporal focus distance (FTD) in high-velocity environments.
    • Executives with positive temporal focus distance (FTD) in low-velocity environments.
    • There is a connection between an executive's temporal orientation and the temporal features of their environment.
    • Understanding an executive's temporal orientation in isolation is insufficient, the macro temporal features of the environment must also be considered.
    • Companies that align their competitive actions with the timing of environmental changes tend to perform better.

    Capability Strengths and Weaknesses

    • Firms with stronger capability sets tend to outperform their competitors.
    • A firm’s weakness set is negatively correlated with its relative performance.
    • Firms should integrate their capabilities to handle external uncertainties and meet customer needs.
    • Environmental munificence (resource availability) and prior performance impact a firm’s capability sets over time.
    • Environmental munificence is unlikely to affect a firm’s strength set, but it can help reduce weaknesses.

    Environmental Munificence and Firm Performance

    • Firms with higher environmental munificence experience reductions in their weakness sets over time.
    • Firms with higher prior performance tend to experience increases in their strength sets over time.
    • Firms with higher prior performance experience reductions in their weakness sets over time.

    Corporate Social Responsibility (CSR)

    • Shareholders react more positively to the announcement of eco-friendly initiatives when companies face more severe environmental concerns.
    • Shareholders react less negatively to the announcement of eco-harmful behavior when companies have strong environmental performance.
    • Shareholders are more likely to react negatively to the announcement of eco-harmful events when firms face more severe environmental concerns.
    • Increased pressure to become more environmentally friendly leads to greater negative impact from negative news.
    • Companies are penalized for not complying with environmental norms.
    • Once firms become more environmentally friendly, they receive less shareholder reward.
    • CSR investments have decreasing marginal returns, meaning additional investments in CSR yield less value as initial investments increase.
    • Firms with a high stock of CSR are less likely to face punishment for eco-harmful behavior.
    • Positive past perceptions about a firm’s CSR mitigate negative shareholder reactions, effectively acting as insurance.

    Human Capital Investments

    • Human capital investments can benefit firms financially, but the impact varies depending on several factors.
    • Firms that receive awards for excellence in training and human capital management experience significant positive abnormal stock returns.
    • Investments in human capital are more impactful when combined with high R&D intensity, physical capital intensity, and advertising, demonstrating the power of complementarities.

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    Description

    This quiz explores the relationship between temporal orientation and performance in varying environmental contexts for executives. It delves into how positive temporal orientation can lead to different outcomes based on the velocity of the environment. Understanding these dynamics is crucial for companies looking to enhance their competitive actions.

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