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Using a sample of Chinese listed firms from 2007 to 2017, this study investigates the impact of trust on corporate innovation. We find that firms located in provinces with higher trust levels have both higher innovation inputs and outputs, indicating trust plays an important role in promoting corporate innovation. We further document that this association is more pronounced for firms with a higher degree of information asymmetry between boards and managers, and when CEOs have stronger incentives to engage in opportunistic behavior in innovation activities. In addition, we find that forced CEO turnover-performance sensitivity is lower and managers are less likely to underinvest in R&D in high trust areas, suggesting trust enhances corporate innovation through relationship alignment between shareholders and managers. We also find that trust promotes not only the quantity but also the quality of corporate innovation. Our study complements existing research that investigates factors encouraging corporate innovation and extends a growing body of literature that examines the impact of trust on corporate decisions. [ABSTRACT FROM AUTHOR]

We develop a behavioral–decision model to highlight entrepreneurs’ decision making behind venture opportunism. We find that opportunism can present to entrepreneurs and their new ventures a risky yet beneficial choice to secure short–term gains at potential social costs. We posit that, motivated by loss aversion, entrepreneurs may accept the risk and engage in opportunism when their ventures confront economic losses. For instance, a high risk of venture failure may motivate entrepreneurs to act opportunistically in the hope that the failure can be averted. We further posit that such loss–averse decisions will be moderated by the entrepreneurs’ personal bonds to their new ventures. That is, the scale of entrepreneurs’ personal investment in their ventures will intensify their economic loss aversion posed by venture failure risk. In contrast, when entrepreneurs use their personal social capital to support their ventures, they will personally bear more of the down–side risks of opportunistic behavior and thus be less likely to act opportunistically to countervail a potential economic loss. Results based on the data collected from 244 NEEQ–listed new ventures in Beijing and Tianjin in China support our predictions. [ABSTRACT FROM AUTHOR]

Research on buyer-supplier relationships ( BSRs) has often focused on only one side of the relationship and, thus, has tended to overlook asymmetries. Yet, a buyer (supplier) may often deal with a bigger supplier (buyer) or one that has higher levels of trust, respect, and reciprocity. Therefore, we examined how two types of asymmetries-size and relational capital-affect perceived opportunism and performance. We used dyadic data from 106 buyers and their matched suppliers gathered from a survey and an archival database. The results demonstrate that the degree and direction of both asymmetries affect the BSR. Our results also reveal that an imbalance of relational capital in a firm's favor may have the opposite effect from that intended. In other words, the firm's counterpart perceives more, rather than less, firm opportunism. The results also suggest that a buyer observes lower benefits in the presence of size asymmetry, whereas the supplier's perception of benefits is unaffected. Thus, our research represents a significant step forward in understanding BSRs and asymmetries by (i) bringing attention to two key asymmetries inherent in BSRs and (ii) showing that these asymmetries are not unidirectional in their influence on perceived opportunism and performance. [ABSTRACT FROM AUTHOR]

The relationship between contractual and relational arrangements in interorganizational relationships has been subject to an ongoing debate. We propose that in the context of cross-border partnerships, the governance mechanisms can be both substitutes and complements depending upon contingencies posed by uncertainties of two different origins: environmental and behavioral. We argue that environmental uncertainty (i.e., instability and unpredictability of the external environment) drives the formal and relational arrangements into a more substitutive relationship by elevating the adaptation complications in which increasing reliance on either form of governance inhibits the effective operation of the other. Contrastingly, behavioral uncertainty (in the form of inadequate common grounds and shared frameworks among collaborating firms) encumbers the understanding of partner behavior and conduct and drives the governance mechanisms into a more complementary relationship in which contractual and relational mechanisms facilitate the effective operation of each other. Empirical results from 205 crossborder partnerships of large U.S. firms support our theorized relationships. [ABSTRACT FROM AUTHOR]

The concept of greed is one of the oldest social constructs; however, greed as a managerial attribute that affects firm outcomes has yet to attract scholarly attention in management. In this study, we examine the relationship of CEO greed to shareholder wealth. After anchoring greed to familiar constructs in organizational literature, we test our hypotheses on a sample of over 300 publicly traded firms from multiple industries. As predicted, greed has a negative relationship with shareholder return, but this relationship is moderated by the presence of a powerful, independent board, managerial discretion, and CEO tenure. The contributions of this study, which include refining our understanding of self-interest and opportunism, developing the greed construct, and illustrating its impact on shareholder wealth, are intended to open a new line of inquiry in the management literature. [ABSTRACT FROM AUTHOR]

Academic researchers have paid significant attention to the drivers of opportunistic behavior, yet our understanding of how opportunistic behavior can be mitigated remains relatively fragmented. Our investigation will focus on the social context and more specifically on the role of social capital in the deterrence of opportunistic behavior. On the basis of two qualitative case studies in the financial sector, we will illustrate how the structural, cognitive and relational dimensions of social capital can reduce internal and behavioral uncertainty between the outsourcing partners, thereby facilitating the mitigation of opportunistic behavior. In our study we combine the theory of transaction costs with social capital theory and demonstrate how they can usefully complement each other to enhance our understanding of mechanisms that can deter opportunistic behavior. [ABSTRACT FROM AUTHOR]

Prior research documents the value of network relationships to firm behavior but is relatively silent on how networks influence opportunism in distribution channels. Focusing on a common type of distribution networks in which multiple distributors serve a single, dominant supplier, this study moves beyond a dyadic view to examine how a focal distributor's relational and structural embeddedness in such a distribution network influences its opportunism toward the dominant supplier. In particular, we postulate that a distributor's relational embeddedness in the network curbs its opportunism, whereas its network centrality, as a form of structural embeddedness in the network, promotes its opportunism. Moreover, we propose that relational embeddedness magnifies the role of a focal distributor's dependence on the supplier in suppressing the distributor's opportunism, whereas network centrality buffers such a role. We first empirically test these hypotheses using data collected from car dealers in China; the results provide support for the hypotheses. We then develop an analytical model to validate and further explain the underlying mechanisms of the network effects. Our analytical results not only validate the empirical results but also provide guidance for managers on controlling opportunism in distribution networks. [ABSTRACT FROM AUTHOR]

According to evolutionary game theory, multiple exchanges with partners are necessary to foster cooperation. Multiple exchanges with partners tend to enhance the good experience of the partners and the predictability of their behaviour and should therefore increase cooperativeness. This study explored whether social embeddedness, or the preference for close and stable social relationships, a variable which tends to increase multiple exchanges, is associated with more cooperative attitudes; and whether social embeddedness increases cooperative behavior towards unknown partners in a game situation. The first study, with 169 undergraduates, indicated that social embeddedness (preference for close and durable social relations) was negatively associated with opportunistic attitudes. The second study had a sample of 60 undergraduates playing a Trust Game with unknown partners and showed that self-reported social embeddedness was positively correlated with scores for cooperative economic behavior towards the partners. These results highlight the relationships of social embeddedness with cooperative attitudes and behaviour. [ABSTRACT FROM AUTHOR]

We posit that parent-child relationships lead to subsequent leader-member exchange (LMX) differentiation in family firms. This differentiation shapes a child's behavior toward the firm. Altruism is proposed to further increase the effects of LMX differentiation on workplace behavior by fostering feelings of entitlement or rebellion among out-group children and strengthening in-group children's commitment to the firm. Our article breaks new ground by explaining how parent-child relationships and LMX can result in deviant behavior in family firms, how parental altruism can create vicious and virtuous circles of behavior and how stewardship and opportunism can occur within the same family firm. [ABSTRACT FROM AUTHOR]

This study investigates contracting mechanisms in situations of opportunistic disputes between organizations. The authors specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. They use a unique data set of 102 buyer–supplier disputes to explore in depth different types of opportunism – that is, strong form versus weak form opportunism – and different types of contracting mechanisms – that is, the controlling and coordinating functions of formal contracts and the cooperative and competitive sides of relational contracts. The authors’ detailed empirical analysis suggests distinct relationships between the different contracting mechanisms, the different types of opportunism, and the level of legal fees necessary to deal with the dispute. From these findings the authors derive implications for research on the role of contractual mechanisms in dealing with interorganizational opportunism. [ABSTRACT FROM PUBLISHER]

Prior scholarship on stewardship as a principle of administration largely portrays stewardship as too idealistic and dependent upon situational factors to be institutionalized in large-scale organizations. Through a case study of the Edmonton Public Schools, this study explores the extent to which stewardship can be institutionalized as a central organizing principle, thereby ensuring performance and checking corruption in ways that are consistent with the primacy of intrinsic motivation. The study deepens our understanding of the challenges that managers face in reconciling stewardship with a bureaucratic context, documents practices that have been used to deal with these challenges, and more broadly discusses how it might be possible for islands of stewardship to emerge in a world governed by assumptions of human opportunism. To this end the paper develops a model of the choice that organization members face in deciding to elect a principal-agent or a stewardship posture within large-scale organizations. This model draws on assumptions of human ambivalence in choosing between self-serving and altruistic modes of conduct. [ABSTRACT FROM AUTHOR]

The authors examine the motivational determinants of interfirm alliance behavior through the sociocognitive principle of regulatory focus, with particular reference to the role of opportunism at the formation, operation, and outcome stages of alliance development. Regulatory focus pertains to whether an organization engages with the external world to achieve positive outcomes (promotion focus) or to avoid negative outcomes (prevention focus). The authors believe that the motivational orientations of the alliancing firms play key roles in shaping tolerance for opportunism, and they argue, broadly, that alliance firms with a promotion regulatory focus will be more tolerant of their partners’ opportunistic behavior than alliance firms with a prevention regulatory focus. Propositions are developed regarding the linkages between the regulatory focus of an alliance firm and its sensitivity to partner opportunism in the different stages of alliance development. The authors discuss further research directions and the managerial implications of their analysis. [ABSTRACT FROM AUTHOR]