The Effects Of CEO Affectivity On Firm Strategies:Three Empirical Essays

CEOs play the most important role in firm's strategic decisions.Earlier upper echelons research always focuses on how the observable characteristics of CEOs shape firm strategies.Recently,strategy scholars are starting to focus on the psychological characteristics of CEOs.Among the motivational attributes of CEOs,CEO affectivity is a commonly ignored factor in the strategic management field.Filling this blank space is important because affective traits are a primary aspect of daily life and influences one's social cognition,attention focus,attitudes,judgments,and behaviours.This thesis attempts to answer three research questions:First,how do CEO positive and negative affectivity impact corporate social responsibility?Second,how do CEO positive and negative affectivity impact CEO's reactions to CEO underpayment?Third,how does CEO affective ambivalence impact acquisition premiums?This thesis contains three empirical studies examining the role of CEO affectivity in organizational outcomes.The first essay grounds in the upper echelons theory and stakeholder theory,and establishes a link between CEO affectivity and corporate social responsibility.This study first develops the theoretical argument that CEO positive affectivity positively relates to a firm's corporate social responsibility,whereas CEO negative affectivity negatively relates to a firm's corporate social responsibility.This study then explores how the CEO long-term pay structure and CEO career horizon moderates these relationships.With a longitudinal dataset of S&P 500 index firms for the period between 1996 and 2014,the results support the hypotheses.The second essay discusses the moderating role of CEO affectivity on the relationship between CEO underpayment and firm's temporal orientation in investment choices.This study,based on the equity theory,first proposes that underpaid CEOs make shorter-term investments as a method to increase short-term performance and restore their compensation fairness.It then investigates how CEO affectivity influences CEOs' sensitivity to equity and therefore the impact of CEO underpayment on firm's temporal orientation.The empirical results support the hypotheses.The third essay examines the role of CEO affective ambivalence in reducing the size of premiums paid for an acquisition.Based on the law of requisite variety,it proposes that CEO affective ambivalence expands CEOs' cognitive complexity and improves their decision quality,thereby reducing acquisition premiums.The relationship between CEO affective ambivalence and acquisition premiums is further weakened by the business similarity between the acquirer and target and strengthened if the acquisition is cross-border versus domestic.Analyses of S&P 500 companies during the period from 1996 to 2014 largely support the theses.This thesis makes three contributions.First,this study also contributes to the upper echelons theory by introducing the new concept of CEO affectivity,which heeds proposals to bring constructs from the psychology.Second,it contributes to the literature on CEO affective traits by introducing the role of CEO affective ambivalence,thereby deepens the understanding of CEO affective traits' role in driving CEO behaviors and firm strategies.Third,this thesis contributes by incorporating CEO affectivity into the justice literature.