Although current research has demonstrated that executive verbal communication could shape shareholders’ expectancy and responses, hazards of executive communication and firms’ follow-up responses are largely neglected. Integrating expectancy violation theory with prospect theory, we explore how different levels of managerial tone trigger a firm’s risk-taking to avoid violating shareholder expectancy. Using a computer-aided approach to identify managerial tones, our empirical study based on Chinese listed firms indicates that managers tend to take more risks (illustrated by higher performance volatility and acquisition spending) after delivering high-level (optimistic) or low-level (pessimistic) linguistic tones at an earnings communication conference. The results are robust by employing alternative measures, a random-effect model, 2SLS, and GPSM. We also identify a mediating role of shareholder reactions and the moderating role of firm prominence. These findings contribute to the executive communication literature by suggesting that managerial tone is a double-edged sword that strongly influences firms' risk-taking.

Purpose This paper aims to explore how manufacturing firms pursue business model innovation (BMI) through their use of outside-in thinking. Design/methodology/approach Survey data were collected on 175 Chinese manufacturing firms. A regression model was used to verify the research results. Findings Manufacturing firms rely on outside-in thinking to develop BMI under different market and institutional environments. From a whole-value-chain perspective, interacting with customers and sharing information with suppliers are two key ways to develop BMI. Research limitations/implications Firms focus on customer needs, sense the dynamics of external markets and technology and seize market opportunities to measure outside-in thinking. Empirical results suggest using other measures of outside-in thinking. BMI itself can be multidimensional, so scholars could consider BMI’s diverse dimensions and measurements, which may demand different kinds of outside-in thinking. Practical implications Manufacturing firms can use outside-in thinking to overcome inertia and rigidity and increase their knowledge, information and technology. Managers should develop outside-in thinking to respond quickly to emerging economies. Managers should use value chain collaboration and improve the firm’s capacity to interact with customers and suppliers to apply the benefits of outside-in thinking to their BMI. Originality/value The study explores how outside-in thinking is a key driver of BMI. Applying the whole-value-chain view, it finds that interacting with customers and suppliers connects outside-in thinking with BMI. It also highlights the effects of intense market competition and volatile government regulation on BMI.

In many emerging countries, firms face formal institutional voids that raise both the cost and the level of difficulty of business operations. In this study, we examine a unique culture-rooted mechanism that may address those voids, and this comes in the form of supply chain partner surname sharing based on the legacy of clan identification. Using a unique Chinese dataset that was manually collected and merged from multiple sources, we find that firms registered in the region with a stronger clan culture are more likely to cooperate with supply chain partners with the same surname. This positive effect of clan culture is negatively moderated further by the level of subnational marketization. Therefore, we shed new light on the supply chain-level implications of clan culture, an Asian cultural-specific topic that has received little attention in marketing and supply chain literature.