This fall prof. dr. Koen Heimeriks of Warwick Business School and I organized a well received Extension Conference on ‘Behavioral Biases and Corporate Transformation Strategies’ for the Strategic Management Society in London.
Hosted by Atos London, we discussed the intriguing theme of ‘Behavioral Biases and Corporate Transformation Strategies’. With keynote speakers from Warton BusinessSchool and Pennsylvania State University,and a panelist set of prominent and outspoken individuals from both academia and practice, the event was highly inspirational on various fronts. Sessions revolved around original examples, new insights and evolving theories that shed light on how behavioral bias affect strategic decision making. With excellent attendance we clearly touched upon a phenomenon that can significantly implicate strategic decision making and implementation of strategic tasks.
W put together an exciting program with inspirational speakers, such as:
Phil Dunne, Managing Partner Ronald Berger London
Robert Hoskisson, George R. Brown Professor Emeritus of Management, Rice University
Francesco Castellaneta, Professor of Strategy and Entrepreneurship, SKEMA
Emilie R. Feldman, Michael L. Tarnopol Professor of Management, University of Pennsylvania
Arjan Groen, former Partner at EY-Parthenon, Senior Executive & Advisor in Transformation & Strategic Growth
Chris Vialle, Partner Monitor Deloitte
Mark DesJardine, The Pennsylvania State University
Gerry McNamara, the McConnell Professor of Management, Michigan State University
Mario Schijven, Assistant Professor of Business Administration, University of Illinois
Whom interacted across the following three core session themes throughout the day:
SESSION 1: PRIVATE EQUITY GOVERNANCE AND CAPABILITY DEVELOPMENT IN ACQUISITIONS AND SELL-OFFS
Private equity (PE) plays an increasingly important role in worldwide acquisition activity. While extant research offers significant insights into what targets PE select (Kaul et al., 2018), how PE are organized (Hoskisson et al., 2013), and how corporate buyers operate (e.g., Castellaneta and Zollo, 2014), relatively little is known about how private equity engages in acquisitions and sell-offs. Extant work highlights the type of target PE selects and argues their financial, governance, and operational engineering displays a superior form of governance. However, much remains unspecified about the decision-making process and acquisition strategies PE firms use.
This session focuses on highlighting extant insights and offering future research ideas for governance and capability of how private equity manage acquisition decisions.
SESSION 2: STAKEHOLDER MANAGEMENT AND IMPRESSION OFFSETTING IN STRATEGIC TASKS
The management of stakeholders plays an increasingly important role to value creation in strategic tasks. Along with other stakeholders, such as suppliers and employees, activist investors are rapidly occupying a more prominent spot when it comes to managing impression around the announcement of key strategic tasks. With activist shareholders taking an equity stake in a company with the intention to influence the control or the management (Chen and Feldman, 2018; DesJardine and Durand, 2020), shareholder activism is seen as a key corporate governance mechanism to steer strategic decision making.
Acknowledging the increasing prominence of activist investors and impression management, this session identifies current insights and highlights new research directions on stakeholders, activist investors, and how impression management affects behavior and outcomes in strategic tasks.
SESSION 3: PSYCHOLOGICAL TRAITS AND STRATEGIC DECISION MAKING
CEOs as the key decision makers in strategic tasks invoke biases in strategic decision making (e.g., Navis and Ozbek, 2016). Psychological traits at board level, such as overconfidence, extraversion, and narcissism are frequently reported to have a negative bearing on strategic decision making and outcomes. Yet, research on the influence of CEO psychological traits on firm performance outcomes has yielded mixed results. On the one hand, in the context of strategic decision making acquirer CEO level psychological traits have been associated with negative short-term stock market reactions (Malmendier and Tate, 2008). On the other hand, behavioral signaling by the CEO to generate value with a specific strategic action can represent a positive signal to investors in terms of strategic viability and implementation feasibility (Gamache et al., 2019; Schijven and Hitt, 2012).
This session seeks to offer novel insights and solicits new contributions to upper echelon and behavioral antecedents to strategic decision making. Beyond reviewing the existing contributions on the topic, it aims to outline avenues for future research (Devers et al., 2020).
The various track details are recapped here for your convenience.