Technological disruption, digital innovations, and societal changes have pushed corporate transformation to top executive agendas. While this propels the importance of a firm’s propensity and ability to divest, acquire, and collaborate, behavioral biases can significantly implicate the decision making and implementation of these strategic tasks.
This Extension highlights new insights and theories that shed light on how behavioral bias affect strategic decision making. We offer a full day program, based on three distinct, yet intertwined themes across several sessions on behavioral biases in strategic tasks. Each of the sessions will showcase various angles on the initiation of and the responses to strategic tasks. Relative to the main (track) questions, a variety of panelists combining academic and practitioner backgrounds will discuss the characteristics of strategic decisions (to be) made, as well as the behavioral characteristics of management relative to those of other active stakeholders to the decision making and implementation process will be scrutinized.
Outline of the sessions, which comprise a one-day program: the first three sessions each feature a keynote presentation which is followed by two commentary presentations from a thought leader from academia and one from practice. The fourth session revolves around a lively Roundtable format to which all Keynote and commentary speakers contribute and which will involve a plenary Q&A and discussion. At the end of the day, a social event will be hosted at one of the London Pubs to offer a great final experience to all participants.
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).
SESSION 4: CLOSING ROUNDTABLE WITH ALL KEYNOTES (45 minutes)
The fourth session comprises a closing roundtable with all keynotes, continuing in a plenary Q&A.
09.00 – 09.30 Assembly & registration
09.30 – 09.45 Welcome & introduction
09.45 – 10.45 Session 1: Private equity governance and capability development in acquisitions and sell-offs
10.45 – 11.15 Coffee break
11.15 – 12.15 Session 2: Stakeholder management and impression offsetting in strategic tasks
12.15 – 13.45 Lunch break
13.45 – 14.00 Reconvene
14.00 – 15.00 Session 3: Psychological traits and strategic decision making
15.00 – 15.15 Coffee break
15.15 – 16.15 Session 4: Roundtable (*) with all keynotes
* Discussing prior conference and during conference questions to stimulate future research and provide opportunity for young scholar interaction. Format is recipient to a hybrid format, inserting digital touch to accommodate those not attending in person due to COVID reasons.
16.00 – 16.30 Closing remarks
16.30 – 18.00 Drinks / social networking – London Pub