Managerial Characteristics, Corporate Strategy And Cost Stickiness

According to the traditional model of cost habits,the relationship between cost and business volume is linear,that is,the cost is symmetrical with the increase of traffic volume and reduction.However,in reality,the cost management behavior of managers will make the relationship between cost and business volume nonlinear,that is,the reduction of cost when the volume of business declines may be less than the increase of cost when the volume of business increases(cost stickiness).It may also be greater than the cost increase(cost anti-stickiness)when the business volume increases.Therefore,the study of the cost and cost stickiness is of great significance both in practice and in theory.With the increasing attention of scholars at home and abroad on the formulation and implementation of corporate strategies,the choice of strategies with great prospects and deep motivation has become an increasingly important topic for top management,while managers have macroeconomics in strategy formulation and implementation.The situation and the relationship between the various elements within the company are particularly important.The theory of enterprise strategic cost management shows that managers will actively adjust the cost structure of enterprises in the formulation and implementation of corporate strategies to match their strategic decisions,which affects the adjustment ability,speed and scope of enterprise costs to a certain extent..At the same time,because the will of top management is reflected to a certain extent as the various business management activities of the company,their own personalities,experiences,knowledge and values will be embedded in all aspects of corporate activities in the face of situations and choices..Therefore,it is particularly important to examine the impact of managerial characteristics on the relationship between corporate strategy and cost.This paper first reviews the related literature on managerial characteristics,corporate strategy and cost stickiness,and puts forward relevant research hypotheses based on principal-agent theory,incomplete contract theory,and enterprise strategic management theory,with 2003-2017 China Shanghai and Shenzhen.The two cities' A-share listed companies are samples,empirically testing the relationship between corporate strategy and cost stickiness and its impact mechanism,and examining the impact of managerial characteristics on corporate strategy and cost-viscosity relationship.The empirical analysis has three parts: firstly,it examines whether the difference of strategy type selection has different influence on cost stickiness;secondly,it examines the mechanism of enterprise strategy affecting cost stickiness;finally,it studies the influence of manager characteristics on corporate strategy and cost stickiness.According to the empirical results of the article,the following conclusions are drawn: First,the more aggressive the enterprise strategy,the higher the level of cost stickiness,that is,the formulation and implementation of the offensive strategy increases the resource adjustment cost and agency cost,and thus increases the cost stickiness level,while the defensive type The resilience of the strategic robustness characteristics to the enterprise resource adjustment cost and agency cost has somewhat eased the cost stickiness.At the same time,due to the long-term and stable corporate strategy,its impact on cost stickiness is sustainable.Second,the enterprise strategy affects the cost stickiness by adjusting the adjustment cost and agency cost,that is,the adjustment cost and the agency cost are the intermediary mechanisms of the strategic influence of the enterprise.Third,managers with high risk appetite and high confidence will weaken the conservative tendency of the company in the process of corporate strategy formulation and implementation,and encourage the pioneering behavior of the company,thereby increasing the cost stickiness;and the managers with low risk preference and weak confidence.It will strengthen the mitigation effect of defensive strategy on cost stickiness.In addition,managers' risk appetite and overconfidence can significantly enhance the sustained impact of corporate strategy on cost stickiness.The main contributions of this paper are as follows:(1)Most of the existing literature have studied the impact of corporate strategy on business performance,shareholder and corporate value,and did not involve the impact on cost and cost decisions.This paper starts from the type of strategy and studies its cost and expense.The impact and its impact mechanism provide a useful reference for better strategic decision-making and cost management.(2)This paper examines the impact of non-financial factors on managerial characteristics heterogeneity on micro-financial characteristics,and provides useful experience and inspiration for studying the relationship between non-financial factors and financial factors.