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Ethnic Minority CEO Turnover: Resource‐Based and Leadership Categorization Perspectives
Abstract
We use the resource‐based theory and leadership categorization theory to develop hypotheses about ethnic minority CEO turnover. Using survival analysis, we test the hypotheses and find that, as a group, ethnic minority CEOs at U.S. firms experience only about half of the risk of turnover at any time as do non‐ethnic minority CEOs. However, the risk is not spread evenly across ethnic minority subgroups. Asian and Hispanic CEOs experience lower risk of turnover than non‐ethnic minority CEOs. Black CEOs of U.S. firms do not share this reduced risk of turnover. We find that the resource‐based theory is consistent with the turnover experience of Asian and Hispanic ethnic minority CEOs, but that it is not useful for explaining Black CEO turnover. Some implications of our findings are: 1.) in research, all minorities should not be treated as a single homogenous group, and 2.) in practice, it may be useful to increase CEO social capital to lengthen tenure.
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This study investigates whether board ethnic diversity is associated with stronger board monitoring outcomes. We explore a range of outcomes – CEO compensation, accounting misstatements, CEO turnover–performance sensitivity and acquisition performance – but find no evidence to support this. We also find no evidence that board ethnic diversity improves overall firm performance, even for those firms with higher agency problems. Our results are robust across different methodologies and have important practical implications, by informing the current public policy debate on board ethnic diversity.
Despite remarkably high levels of education and income, Asian Americans remain underrepresented at the top of the organizational hierarchy. Existing work suggests that a mismatch between the prototypical characteristics of business leaders (e.g., dominance) and stereotypes associated with Asian Americans (e.g., submissiveness) lowers the likelihood that Asian Americans will emerge as leaders. We predict that this reluctance to appoint Asian Americans will be attenuated when organizations experience performance decline because decision makers believe Asian Americans are inclined to sacrifice their self-interest to improve the welfare of others. We found support for these predictions using a multimethod approach. In an archival study of 4,951 CEOs across five decades, we find that Asian Americans were appointed almost two-and-a-half times more often during decline than nondecline (Study 1). Then, in three studies, we show that this pattern occurs because evaluators (a) prefer self-sacrificing leaders more when organizations are experiencing decline than success (Study 2); (b) expect Asian Americans leaders to behave in self-sacrificing ways in general (Study 3); and, consequently, (c) perceive that Asian Americans are better equipped to be leaders during decline than success (Study 4). We consider these findings in tandem with a set of exploratory analyses. This includes our finding that organizations experience decline only 12% of the time, suggesting that evaluators deem Asian Americans to be suitable leaders in circumstances that occur infrequently and are short-lived.
This paper documents a United States‐based experiment that tested response rates to an online travel survey request. The results of the experiment revealed a dramatically lower rate of response to requests sent by a researcher with an ethnically Chinese‐name than to an identical request from a researcher with a Western‐name. The importance of this study is evident to tourism practitioners and academic tourism researchers who so often rely upon survey‐based research. Recommendations for overcoming ethnic bias are provided.
This study advances a recategorization perspective to explain how an increasing number of directors have successfully obtained major board appointments and played important roles on boards despite their demographic differences from incumbent directors. We theorize and show that existing directors tend to select a demographically different new director who can be recategorized as an in-group member based on his or her similarities to them on other shared demographic characteristics. We further explain how a new director's prior social ties to existing directors strengthen this recategorization process and posit that recategorization increases demographically different directors' tenures and likelihood of becoming board committee members and chairs. Results from analyses of Fortune 500 boards from 1994 to 2006 provide strong support for our theory. This study suggests that increased board diversity on some demographic characteristics is associated with reduced diversity on others. It also suggests that some demographic characteristics, such as gender and ethnicity, would be more salient during the recategorization process than other characteristics. As a result, female and ethnic minority directors would need to be more similar to incumbents along shared dimensions than other demographically different directors (such as a young director) for them to be recategorized into the in-group.
Approaches related to inference-based processing (e.g., romance-of-leadership theory) would suggest that black leaders are evaluated positively after success. In contrast, approaches related to recognition-based processing (e.g., leader categorization theory) would suggest that, because of stereotyping, black leaders are evaluated negatively regardless of their performance. To reconcile this discrepancy, we predicted that evaluators would engage in goal-based stereotyping by perceiving that black leaders-and not white leaders-fail because of negative leader-based attributes and succeed because of positive nonleader attributes (i.e., compensatory stereotypes). Multilevel analyses of archival data in the context of college football in the United States supported our predictions.
We introduce the racial diversity congruence concept to examine how matching levels of racial diversity between store-unit employees and community members relate to store-unit sales performance. In a field study of 220 retail store units, we found evidence supporting social identity theory and information-based perspectives on the racial diversity congruence–sales performance relationship. Specifically, results show that a match between store-unit racial diversity and community racial diversity positively related to store-unit sales performance. In addition, superior store unit performance emerged when store units and communities had congruent levels of diversity at high (i.e., high-high racial diversity congruence) rather than low levels (i.e., low-low racial diversity congruence). Moreover, we found asymmetrical incongruence effects whereby racially-diverse store units in less-diverse communities outperformed store units with lower levels of racial diversity operating in diverse communities. The implications of our results are discussed in light of study limitations and future research needs.
We propose a supplemental perspective, based on organizational social capital, for examining the voluntary turnover-organizational performance relationship. We view existing organizational-level theories as those focusing on cost or human capital issues or, rarely, on a balance among these factors. But rapid changes in the nature of work, organizational structures, and interorganizational competitiveness increase the importance of studying the role of social capital in the voluntary turnover-organizational performance relationship. We highlight areas of correspondence and divergence among the various perspectives, discuss implications for various performance measures, and outline several research directions.
This paper investigates how every day interactions within senior centers may be conducive
to the generation of social capital that seniors can tap into, and how the creation
of social capital is shaped by the social positions and physical location of the individuals
involved. Based on 22 in-depth interviews and 15 months of field observations at two
centers in Phoenix, one serving Asians and the other Latinos, we find that the presence
of seniors in socially advantageous positions facilitates the flow of beneficial resources
for other seniors. Seeming ethnic differences in the generation of social capital actually
stem from the interaction of other forms of capital and the structure of opportunities
for different groups, reflecting broader patterns in the reproduction of inequality. These
observations may be policy-relevant with regard to the allocation of public resources in
the face of fiscal crises.
Purpose
– The purpose of this paper is to study gender diversity on the board of directors and the relation to risk management and corporate performance as measured by the variability of stock market return.
Design/methodology/approach
– The sample consists of companies from the RiskMetrics database from 2007 to 2011. This database contains information on corporate board of directors. Financial variables were collected from the Compustat database and CRSP database for the years 2005-2011. The authors then measure the effect of gender diversity on corporate performance in terms of firm risk, using the model by Cheng (2008) which measures the variability of stock market return.
Findings
– The study shows that more gender diversity on the board of directors impacts firm risk by contributing to lower variability of stock market return. The higher the percentage of female directors on the board, the lower the variability of corporate performance.
Originality/value
– The research design and findings assist in providing additional evidence about the role of women in corporate leadership positions and the association with corporate performance. The approach combines Cheng's (2008) model of stock market variability with the impact of gender diversity on the board of directors.
Black and Minority Ethnic (BME) employees appear to experience more difficulty reaching senior leadership positions than their white counterparts. Using Eagly and Carli’s (2007) metaphor of the labyrinth our aim was to give voice to black and minority ethnic managers who have successfully achieved senior management roles, and compare their leadership journeys with those of matched white managers. This paper used semi-structured interviews and attribution theory to examine how 20 black and minority ethnic and 20 white senior managers, from a UK government department made sense of significant career incidents in their leadership journeys. Template analysis was used to identify facilitators and barriers of career progression from causal explanations of these incidents. Although BME and white managers identified four common themes (visibility, networks, development, and line manager support), they differed in how they made sense of formal and informal organisational processes to achieve career progression. The findings are used to theorise about the individual and organisational factors that contribute to the leadership journeys of minority ethnic employees.
This study investigates the impact of CEO social capital on involuntary CEO turnover. We measure CEO social capital in two dimensions, social networks and political connections, which are both crucial factors of social capital in China. We find that both types of social capital are negatively associated with CEO involuntary turnover but work in different ways. Consistent with the resource-based view, CEOs with more extensive social networks have better access to external resources, particularly when firms face drastic economic scenarios. Consistent with the entrenchment perspective, having political connections reduces the likelihood of CEO involuntary turnover by increasing managerial entrenchment. To address endogeneity concerns, we employ the instrumental variable approach and the PSM approach, and our main findings continue to hold.
RESEARCH SUMMARY
We introduce an open‐source dataset documenting the reasons for CEO departure in S&P 1500 firms from 2000 through 2018. In our dataset we code for various forms of voluntary and involuntary departure. We compare our dataset to three published datasets in the CEO succession literature to assess both the qualitative and quantitative differences among them and to explore how these differences impact empirical findings associated with the performance‐CEO dismissal relationship. The dataset includes eight different classifications for CEO turnover, a narrative description of each departure event, and links to sources used in constructing the narrative so that future researchers can validate or adapt the coding. The resulting data are available at (https://doi.org/10.5281/zenodo.4543893).
MANAGERIAL SUMMARY
This paper describes the development of an open‐source database of all CEO dismissals and departures in the S&P 1500 between 2000 and 2018. Prior research on CEO turnover either does not capture the cause of departure or has coded the event independently, leading to inconsistencies and a lack of transparency in coding schemes. This has made it difficult to generate knowledge on the causes and consequences of CEO dismissal. We describe how we developed the database, and we explore how our dataset compares to prior CEO dismissal research. The resulting data are available at (https://doi.org/10.5281/zenodo.4543893).
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A rich literature has documented the negative association between dark skin tone and many dimensions of U.S.-born Americans’ life chances. Despite the importance of both skin tone and immigration in the American experience, few studies have explored the effect of skin tone on immigrant assimilation longitudinally. I analyze data from the New Immigrant Survey (NIS) 2003 to examine how skin tone is associated with occupational achievement at three time points: the last job held abroad, the first job held in the United States, and the current job. Dark-skinned immigrants experience steeper downward mobility at arrival in the United States and slower subsequent upward mobility relative to light-skinned immigrants, net of human and social capital, race/ethnicity, country of origin, visa type, and demographics. These findings shed light on multiple current literatures, including segmented assimilation theory, the multidimensionality of race, and the U.S. racial hierarchy.
Racial bias continues to act as one of the most thought provoking and controversial topics in our society. Even as organizations implement steps and policies to minimize discriminatory practices, evidence of bias in organizational decision-making persists. While much research has been devoted to the study of racial bias in hiring and promotion decisions, this study focuses on the effect of biases on employment outcomes of minority leaders after they have been hired or promoted to leadership positions that are comparable in quality to those of their white peers (i.e. no glass cliff present). More specifically, we investigate how discrimination influences performance rewards and employment separation decisions pertaining to minority leaders. The study uses archival data from the National Basketball Association collected from the year 2003 to 2015. From this data set, we utilize measures of head coaches' objective performance, reward allocation, and their likelihood of employment separation to find limited support for the hypotheses that minority leaders are given less time in position to achieve success and that when they do achieve success, they may be less likely than white leaders to be recognized for their accomplishments. Our findings suggest that in addition to researching selection processes, understanding why racial minorities are underrepresented in leadership positions also requires insight into the employment outcomes experienced by minority leaders.
Previous research has consistently shown that racial bias can influence employers’ perceptions and evaluations of Black individuals in hiring and promotion decisions. However, within-race differences (e.g., skin tone, Afrocentric features) can lead to variation in these decisions. In addition to phenotypical variation, ethnicity cues (e.g., perceived country of origin, name) may be important within-race factors influencing the perception and evaluations of Black job applicants. Using a resume evaluation paradigm, participants evaluated one of three resumes in which the target applicant’s name provided cues about ethnicity (either Black American, Black African, or White American). Results suggest that Black Americans may experience more discrimination in hiring and are generally perceived less positively across several employment-related domains than both White and Black African applicants. Specifically, we find that Black Americans are less likely to be selected for an interview or offered a job and are evaluated more negatively overall relative to Black Africans.
Your name tells a lot about you: your gender, ethnicity and so on. It has been shown that name embeddings are more effective in representing names than traditional substring features. However, our previous name embedding model is trained on private email data and are not publicly accessible. In this paper, we explore learning name embeddings from public Twitter data. We argue that Twitter embeddings have two key advantages: (i) they can and will be publicly released to support research community. (ii) even with a smaller training corpus, Twitter embeddings achieve similar performances on multiple tasks comparing to email embeddings.
As a test case to show the power of name embeddings, we investigate the modeling of lifespans. We find it interesting that adding name embeddings can further improve the performances of models using demographic features, which are traditionally used for lifespan modeling. Through residual analysis, we observe that fine-grained groups (potentially reflecting socioeconomic status) are the latent contributing factors encoded in name embeddings. These were previously hidden to demographic models, and may help to enhance the predictive power of a wide class of research studies.
We study the role of the contractual time horizon of CEOs for CEO turnover and corporate policies. Using hand-collected data on 3,954 fixed-term CEO contracts, we show that remaining time under contract predicts CEO turnover. When contracts are close to expiration, turnover is more likely and is more sensitive to performance. We also show a positive within-CEO relation between remaining time under contract and firm risk. Our results are similar across short and long contracts and are driven neither by firm or CEO survival, nor technological cycles. They are consistent with incentives to take long-term projects with interim volatility.
CEO dismissals attract considerable attention, presumably because of the visibility, publicity and intrigue that often surrounds the decision to fire the CEO. With the goal of advancing scholarly understanding of CEO dismissals, we examine whether CEO gender influences the likelihood of dismissal. We theorize and find that, ceteris paribus, female CEOs are significantly more likely to be dismissed than male CEOs. Perhaps even more importantly, we find a CEO gender by firm performance interaction such that male CEOs are less likely to be dismissed when firm performance is high (compared to when it is low), whereas female CEOs have a similar level of dismissal likelihood regardless of firm performance. Notably, our results are robust to multiple analytical techniques and various econometric specifications, bringing greater credence to the validity of our findings. Implications and directions for future research are also discussed.
Background:
Previous research has shown that social support is important for health and performance at work, but there is a lack of research regarding managers' social support at work, and if it needs to be improvedOBJECTIVE:To investigate managers' perception of work-related social support, and facilitators and hindrances that influence their seeking of social support at work.
Methods:
Semi-structured interviews with sixty-two managers in two Swedish organizations.
Results:
Work-related support, which strengthened their managerial image of being competent, was sought from sources within the workplace. Sensitive and personal support, where there was a risk of jeopardizing their image of being competent, was sought from sources outside the workplace. Access to arenas for support (location of the workplace, meetings, and vocational courses) and the managerial role could facilitate their support-seeking, but could also act as hindrances. Because attending different arenas for support were demanding, they refrained from seeking support if the demands were perceived as too high.
Conclusions:
Different supportive sources are distinguished based on what supportive function they have and in which arenas they are found, in order to preserve the confidence of the closest organization and to maintain the image of being a competent and performing manager.
ACADEMIC ABSTRACT
The role of homophily in CEO appointments at the largest corporations is an important subject in corporate governance. This subject is particularly important in a country like India where a multitude of religions, castes, and communities form its social fabric. We test for the role of homophily in professional CEO appointments in India by empirically examining the preference for same caste/religion CEOs by the largest firms. Using a unique dataset, assembled by detailed identification of castes/religions from family names and counterfactuals obtained through the Coarsened Exact Matching technique, we find that caste/religion plays a crucial role in CEO selection as a source of information (positive discrimination). The evidence is not consistent with its use to pursue taste‐based preferences (negative discrimination).
MANAGERIAL ABSTRACT
We test for the role of homophily in the appointments of CEOs in India by empirically examining the preference for same caste/religion CEOs by the largest firms. We find that caste/religion plays an important role in CEO selection, i.e., as a form of information or “positive discrimination.” The evidence is not consistent with its use to pursue taste‐based preferences or “negative discrimination.”
Research Summary: Firm performance and corporate governance have been shown to influence CEO selection, but our understanding of the role of social capital is more limited. In this study, we seek to provide further insight into the role of social capital by examining the influence of both “bonding” and “bridging” forms of social capital on CEO appointments. We find that candidates who have relational social capital, in terms of overlap with the CEO in organizational tenure, board tenure, and CEO tenure are more likely to be appointed as CEO. We also find that candidates who have external linkages to the CEO in the form of geographic, prestigious university, and prior employment affiliations are more likely to be appointed CEO.
Managerial Summary: The appointment of a new CEO has significant and widespread implications for the firm’s future strategic direction and performance, the relationship between the board and CEO, and perceptions by investors, employees, and other key stakeholders. Our study finds that candidates who have shared connections and experiences with the CEO in terms of geographic, prestigious university, or prior employment affiliations as well as overlap in terms of organizational tenure, board tenure, and CEO tenure are more likely to be appointed CEO. Given the enormous impact that executive appointments have on the strategic direction and performance of the company, it is important to recognize that social factors such as shared experiences and connections influence how candidates are perceived, and thus, may affect appointment decisions.
Nationality identification unlocks important demographic information, with many applications in biomedical and sociological research. Existing name-based nationality classifiers use name substrings as features and are trained on small, unrepresentative sets of labeled names, typically extracted from Wikipedia. As a result, these methods achieve limited performance and cannot support fine-grained classification.
We exploit the phenomena of homophily in communication patterns to learn name embeddings, a new representation that encodes gender, ethnicity, and nationality which is readily applicable to building classifiers and other systems. Through our analysis of 57M contact lists from a major Internet company, we are able to design a fine-grained nationality classifier covering 39 groups representing over 90% of the world population. In an evaluation against other published systems over 13 common classes, our F1 score (0.795) is substantial better than our closest competitor Ethnea (0.580). To the best of our knowledge, this is the most accurate, fine-grained nationality classifier available.
As a social media application, we apply our classifiers to the followers of major Twitter celebrities over six different domains. We demonstrate stark differences in the ethnicities of the followers of Trump and Obama, and in the sports and entertainments favored by different groups. Finally, we identify an anomalous political figure whose presumably inflated following appears largely incapable of reading the language he posts in.
We study the impact of appointing women to top executive positions from an investor perspective. We analyze whether shareholders value announcement of appointment of women to top positions differently than they do appointment of men. This study uses an international sample of 100 announcements of top executive appointments of women who replace men and investigates how shareholders respond to such appointments. This research combines an event study with a matched pair analysis to compare the response from investors regarding appointment of female versus male CEOs and CFOs. We establish that investors do not seem to value appointment of women significantly differently from that of men. This finding suggests that, from the investor perspective, there appears to be no business case for a particular gender when it comes to appointing a CEO or CFO.
We use the glass cliff to study the appointment and employment duration of 193 female CEOs between 1992 and 2014 in a sample of large, small and mid-size North American firms. Consistent with the glass cliff, we find that women are appointed as CEOs in precarious situations. However, we find female CEOs are 40% less likely to face turnover at any point after appointment than male CEOs. This conflicts with an implication of the glass cliff and differs significantly from existing research which shows that female CEOs have only a slightly lower risk of turnover than male CEOs. Our larger, more recent sample captures changes in the labour market that explain the departure from the results of earlier studies. We find evidence that the lower turnover rate of female CEOs is related to firms' desire to avoid the negative publicity that would accompany their termination, and we also show that greater education has a positive impact on CEO job security.
We examined stock market reactions to announcements of CEO appointments as a proxy for the perceived value created by these appointments. We examined differences in market reactions to the appointments of minority and women CEOs compared to white males. Our results indicate additional value creation through the appointment of African- American CEOs, but not through the appointment of female or Hispanic CEOs. We provide a potential explanation for this differential valuation of differing types of diversity.
This study investigates the relationship between the density of people’s ethno-racial in-group in their neighbourhoods (co-ethnic concentration) and trust in their neighbours. Previous studies demonstrate that ethno-racial diversity decreases trust in others, however, these studies rely on overly broad definitions of diversity and of trust, and often do not disaggregate the effects for Whites and ethno-racial minorities. Hence, this study examines the relationship between co-ethnic concentration and trust, focusing on how this relationship may change depending upon one’s ethno-racial status. Putnam’s (2007) analysis leads to a paradox in the sense that, according to the same principle that predicts declining trust amongst Whites, increasing diversity should lead to greater levels of trust for ethno-racial minorities whose share of the population increases with diversification. The findings demonstrate that there is a positive relationship between co-ethnic concentration and trust in neighbours and that this relationship holds for Whites as well as ethno-racial minorities.
In this paper we examine white male managers' intrapsychic and behavioral responses to the appointment of a female or a racial minority CEO at their firm. Drawing from intergroup relations literatures we theorize how and why the appointment of a minority-status CEO is likely to impact the amount of help that white male top managers provide to their fellow executives. We first explain how white male managers' negatively-biased perceptions of racial minority and female CEOs lead them to experience a diminished sense of organizational identification following the appointment of a minority-status CEO. We then examine how this diminished sense of organizational identification is likely to reduce white male managers' general propensities to provide help to other executives at the firm. We finally consider how reduced identification might have especially strong negative implications for the amount of help that white male managers provide to colleagues who are racial minorities or women. Our results consistently support our theoretical expectations that, following the appointment of a female or racial minority CEO, white male top managers tend to experience a diminished sense of organizational identification, and in turn provide less help to colleagues, with this reduction particularly pronounced for help provided to minority-status colleagues.
We examine the mobility of minority executives, defined as ethnic minority and female executives, in publicly listed U.S. firms. Minority executives as a whole experience lower promotion, higher demotion, and higher exit than Caucasian males. Female and African American executives account for the majority of these differences. Specifically, female executives experience lower promotion and exit, while African Americans experience lower promotion, higher demotion, and higher exit. In contrast, Asian and Hispanic executives do not experience different mobility outcomes from Caucasian executives.
A vast literature demonstrates how personal networks mirror and reproduce broader patterns of social inequality. The availability
of key resources through informal mechanisms is an important way that high-status Americans retain a host of social advantages.
Largely absent from this account of social capital inequality, however, is an explicit temporal dimension. The current article
addresses that gap by targeting the dynamic nature of personal networks. Specifically, we consider whether race/ethnicity
and socioeconomic status (SES) are associated with how US adults’ resource-providing ties persist or vanish between two time
points. Using panel data from the Portraits of American Life Study, we find that non-Whites and lower-SES Americans tend to
receive useful advice and practical help from fewer close ties than do White and higher-SES adults, while Black Americans
are especially likely to receive financial assistance from their network members. Models fail to indicate that non-Whites
lose these resourceful ties at a disproportionate rate over time. On the other hand, we find that income has a robust association
with the ability to retain ties initially providing advice and help. We interpret the latter findings as a temporal manifestation
of network-based inequality. The maintenance gap between higher- and lower-SES Americans, we argue, can reinforce other social
capital disparities by shaping dependable access to important resources and by altering their ability to effectively mobilize
resources. Network maintenance is a concept that could be useful to researchers studying how social capital matters for a
variety of instrumental and expressive outcomes.
Voter mobilization by unions has garnered some attention from scholars, and is seen as an important political tool. Unions often mobilize voters repeatedly across several campaigns; however, the literature treats mobilization as a singular event. This paper empirically analyzes turnout of 85,064 registered voters over 14 months at five election intervals in Los Angeles, exploring whether union-led mobilization is subject to diminishing returns across multiple elections. Results indicate that diminishing returns occur; three or more contacts are no more beneficial than one or two. Contact in recent elections is more effective than distant contact, and results differ slightly by contact type.
The present study seeks to examine the extent to which regional differences exist in racial distance when intermarriage is employed as an indicator. It also seeks to determine whether specific macrostructural factors like racial composition, extent of industrialisation, and immigrant influence can explain variations in racial distance. This study offers several findings including that the widely varying racial compositions of Brazilian metropolitan areas explain most (but not all) of the regional differences in intermarriage, and that, despite controls for racial composition, white outmarriage to blacks in the South is significantly lower than in other regions. Portuguese, Italian, and German immigrant influences bear no significant relationship to local rates of intermarriage. Although endogamy is preferred, there is less resistance to marriage between persons of proximate colour in comparison with the much higher resistance to marriage between whites and blacks. -from Author
Objectives
While a growing body of literature investigates the role of social capital in the labor market outcomes of immigrants, the verdict is still out on whether or not reliance on social networks enhances or constrains labor market performance. This study explores the effect of relying on social ties to find a job on the hourly earnings and occupational prestige of new legal immigrants in the United States.
Methods
Utilizing data from the New Immigrant Survey 2003 cohort, the effect on occupational outcomes of relying on social ties to locate a job is estimated using both ordinary least squares (OLS) regression and propensity score matching (PSM), to minimize observable selection bias. Propensity score matching is used to identify the treatment effect of using social contacts by comparing the outcomes of closely matched treatment and control groups.
Results
Both OLS and PSM estimates indicate that using a close contact to find a job has a detrimental effect on earnings and occupational prestige. The effect of social capital, however, varies across groups. Particularly, while social capital has little or no effect on the labor market outcomes of black and Hispanic immigrants, it has a detrimental effect on the occupational prestige of Asian and white immigrants (the effect being stronger for Asians than for whites).
Conclusion
Social capital research on immigrants’ outcomes should, therefore, take caution in generalizing from group‐specific research, as these findings point to contextual labor market effects of social capital.
Scholars are increasingly employing skin color measures to investigate racial stratification beyond the dimensions of self- or other-classification. Current understandings of the relationship between phenotypic traits, like skin color, and racial classification are incomplete. Scholars agree that perceptions of phenotypic traits shape how people classify others; it remains to be seen, however, whether racial classification in turn shapes people’s perceptions of phenotypic traits. The present study is based on an original survey experiment that tests whether assessments of others’ skin color are affected by a subtle racial cue, a name. Results indicate that skin color ratings are affected by the presence of a racially distinctive name: A significant share of people will rate the same face darker when that face is assigned a distinctively Hispanic name as opposed to a non-Hispanic name. In addition, ratings of male faces are more sensitive to racially distinctive names. The findings bear important lessons for our understanding of the social construction of race and its role in producing inequalities.
Women leaders contribute positively to organizations yet remain significantly underrepresented in corporate leadership positions. While the challenges women face are well-documented, less understood are the factors that shape the experience and success of women who, against significant odds, rise above the glass ceiling. This paper advances scholarship on women and leadership by analyzing the conditions under which women are promoted to top leadership positions and exploring the opportunities and challenges they face post-promotion. We draw on two data sources: comparison of the career trajectories of all women who have ever served as CEO in the Fortune 500 with a matched sample of men CEOs as well as in-depth interviews with women executives across a variety of sectors. Our analysis reveals that women are more likely than men to be promoted to high risk leadership positions and often lack the support or authority to accomplish their strategic goals. As a result, women leaders often experience shorter tenures compared to male peers. We consider the implication of our findings for theory, research and practice.
Purpose
– The purpose of this paper is to investigate whether transformational leadership behavior is a function of the leader’s own self-respect and his/her evaluation of being capable, significant, and worthy (self-esteem). It is also tested whether transformational leadership is related to innovation success.
Design/methodology/approach
– Data were collected from 411 entrepreneurs and managing directors of small- and medium-sized Austrian companies. The proposed hypotheses were tested using structural equation modeling (PLS).
Findings
– A strong and significant relationship between self-esteem and transformational leadership was found. Furthermore, data analyses revealed that transformational leadership has a positive impact on innovation success.
Originality/value
– This study reveals the important but heretofore neglected role of self-esteem, defined as a manager’s overall self-evaluation of his/her competences, as an important predictor of transformational leadership.
This study examines the effect of racial/ethnic minority CEOs and diverse corporate boards on corporate governance and product development. We test an author-constructed dataset of corporate practices, CEO race/ethnicity, and board racial/ethnic composition in Fortune 500 firms from 2001 to 2010. Findings suggest that diverse boards are positively associated with effective corporate governance practices and product development. Moreover, an interactive effect occurs between a diverse board and the race/ethnicity of the CEO in that corporate governance strengths and product innovation for the firm are increased when a White CEO operates with a diverse board. Thus, while promoting individual minority leaders is important, board diversity is paramount for achieving corporate benefits.
We integrate stereotype fit and interdependence theories to propose a model that explains how and why decision makers discriminate in selection decisions. Our model suggests that decision makers draw on stereotypes about members of different social groups to infer the degree to which candidates possess the specific ability required for the task. Decision makers perceive candidates that have a greater ability required for the task as less (more) instrumental to their personal outcomes if they expect to compete (cooperate) with the candidate, and they discriminate in favor of candidates that are perceived as more instrumental to them. We tested our theory in the context of racial (Studies 1-3) and age (Study 4) discrimination in selection decisions with all-Male samples and found evidence consistent with our predictions. By explaining when and why decision makers discriminate in favor of, but also against, members of their own social group, this research may help to explain the mixed support for the dominant view that decision makers exhibit favoritism toward candidates that belong to the same social group. In addition, our research demonstrates the importance of considering the largely overlooked role of interdependent relationships within the organization in order to understand discrimination in organizations.
Purpose - The purpose of this paper is to understand the conditions under which racial/ethnic minorities are promoted to top leadership positions in American corporations. In addition to testing the glass cliff theory for racial/ethnic minorities, the paper also develops and test two additional theoretical mechanisms: bold moves and the savior effect. While the glass cliff theory predicts racial/ethnic minorities will be promoted to struggling firms, the bold moves theory predicts the opposite, that racial/ethnic minorities will be promoted to strong firms. The savior effect predicts that minority CEOs will be replaced by white male leaders if firm performance struggles during their tenure. Design/methodology/approach - This paper relies on conditional logistic regression to analyze all CEO transitions among Fortune 500 companies over a 15-year period. Findings - Consistent with the bold moves thesis but contrary to the predictions of glass cliff theory, the results suggest that racial/ethnic minorities are more likely than white executives to be promoted CEO in strongly performing firms. As predicted by the savior effect theory, the paper also finds that when firm performance struggles under the leadership of racial/minority CEOs, these leaders are likely to be replaced by white CEOs. Research limitations/implications - The findings contradict theory of the glass cliff and suggest additional mechanisms that shape the promotion probability of minority leaders. Practical implications - Race and ethnicity shape promotion and replacement decisions for top leadership positions in important ways. While minority leaders are not set up to fail, as glass cliff theory would predict, the authors do find that confidence in the leadership of minority leaders may be tenuous. To overcome the risks of replacement of minority leaders, firms should seek to eliminate bias by allowing minority leaders enough time and resources to overcome declines in firm performance and increase the transparency of replacement decisions. Originality/value - This is one of the first studies to test the glass cliff thesis with regard to racial/ethnic minorities. The paper also develops and tests two new mechanisms related to leader succession: bold moves and the savior effect.
Although "valuing diversity" has become a watchword, field research on the impact of a culturally diverse workforce on organizational performance has not been forthcoming. Invoking a resource-based framework, in this study I examined the relationships among cultural (racial) diversity, business strategy, and firm performance in the banking industry. Racial diversity interacted with business strategy in determining firm performance measured in three different ways, as productivity, return on equity, and market performance. The results demonstrate that cultural diversity does in fact add value and, within the proper context, contributes to firm competitive advantage.
This study examines social discrimination in the attributions that top executives make about the performance of other firms with minority CEOs in their communications with journalists. Drawing from the literatures on intergroup relations and status competition, our theory suggests how out-group biases and negative forms of envy toward higher-status minority CEOs may increase the propensity for white male CEOs to make negative or internal attributions for the low performance of the minority CEOs' firms. We also examine how CEOs' internal attributions in conversations with journalists increase the tendency for those journalists to attribute performance to internal causes in reporting on the minority CEOs' firms. We consider how the gender and race of journalists could moderate the influence of CEOs' performance attributions on journalists' reports, such that female or racial minority journalists would be less easily persuaded by white male CEOs' internal attributions for the low performance of firms with female or racial minority CEOs, and thus less prone to issuing negative statements about the CEOs' leadership. Empirical analyses based on original survey data from a large sample of CEOs and journalists provided strong support for our hypotheses. We discuss implications of the findings for theory and research on social discrimination in the corporate elite and social psychological determinants of corporate leader reputation.
This study examines CEO influence in the board of director selection process and the theoretical mechanism by which CEO influence is presumed to affect subsequent board decision making on CEO compensation. We address both of these issues by linking political and social psychological perspectives on organizational governance. We propose that powerful CEOs seek to appoint new board members who are demographically similar, and therefore more sympathetic, to them. Using a longitudinal research design and data on 413 Fortune/Forbes 500 companies from 1986 to 1991, we examine whether increased demographic similarity affects board decision making with respect to CEO compensation contracts. The results show that (1) when incumbent CEOs are more powerful than their boards of directors, new directors are likely to be demographically similar to the firm's CEO; (2) when boards are more powerful than their CEOs, new directors resemble the existing board; and (3) greater demographic similarity between the CEO and the board is likely to result in more generous CEO compensation contracts. We discuss the implications of the strong effect of demographic similarity for corporate control issues.
Some researchers argue that negative racial stereotyping by white Americans is fueled in part by the continuing association between race and economic disadvantage. If blacks continue to fall behind economically, many whites reason, then blacks must not be trying hard enough. In this paper we draw on status construction theory to elucidate the social psychological processes that contribute to such reasoning. We also test several related hypotheses with national survey data. In keeping with theoretical expectations, our results indicate that whites' awareness of blacks' relatively disadvantaged position contributes to negative stereotyping. Moreover, this is the case even among whites who recognize the contribution of structural forces to economic outcomes. Thus awareness of blacks' disadvantaged position in society appears to buttress the very stereotypes that are used to explain and justify inequality in the first place. Policy implications and directions for future research are discussed.
This paper explains how surname distributions can be used as a way to measure rates of social mobility in contemporary and historical societies. This allows for estimates of social mobility rates for any population for which we know just two facts: the distribution of surnames overall, and the distribution of surnames among some elite or underclass. Such information exists, for example, for England back to 1300, and for Sweden back to 1700. However surname distributions reveal a different, more fundamental type of mobility than that conventionally estimated. Thus surname estimates also allow for measuring a different aspect of social mobility, the underlying average social status of families, but the aspect that matters for mobility of social groups, and for families across multiple generations.