Not all Risk Taking is Born Equal: The Behavioral Agency Model and CEO's Perception of Firm Efficacy

Geoffrey P. Martin · Nathan T. Washburn · Marianna Makri · Luis R. Gómez‐Mejía

37 citations0/0 files storedHuman Resource Management

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Accounting and Organizational Management Human Resource and Talent Management

Abstract

We examine the relationship between agent (CEO) risk bearing and the quality of executive risk‐taking outcomes, by examining the contingency effect of CEO perceived firm efficacy. In doing so, we extend the behavioral agency model (BAM) beyond predictions of risk magnitude to examining how CEO risk‐taking outcomes differ qualitatively in response to risk bearing. We argue that CEO risk bearing (due to stock options or cash compensation) will positively influence performance outcomes in the presence of higher perceived firm efficacy. However, this positive influence reverses when efficacy is lower. We demonstrate the utility of firm efficacy in exploring the effect of agent risk bearing on performance outcomes and provide the insight that the CEO pay‐performance relationship is influenced by the CEO’s perception of firm efficacy. © 2014 Wiley Periodicals, Inc.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 37 citations exist upstream.

References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1979Prospect Theory: An Analysis of Decision under Risk 1991Firm Resources and Sustained Competitive Advantage 2004Firm resources and sustained competitive advantage 1997Dynamic capabilities and strategic management 1988Prospect theory: An analysis of decision under risk 1978Social Learning Theory.2001Social Cognitive Theory: An Agentic Perspective

Cited by

2022Performance feedback on sales growth goal and OFDI location choices for firms in emerging economies 2018The two sides of CEO pay injustice 2024How do executive excess compensation affect enterprise technological innovation: Evidence from a panel threshold model of chinese biopharmaceutical companies 2019Behavioral agency and corporate entrepreneurship: CEO equity incentives & competitive behavior 2014Behavioral Agency Model: A Target-Oriented Approach for Executive Incentives

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.