Leadership & Organizational Behavior

Using the staggered adoption of universal demand (UD) laws in the United States, we study the effect of shareholder litigation risk on corporate disclosure. We find that disclosure significantly increases after UD laws make it more difficult to file derivative lawsuits. Specifically, firms issue more earnings forecasts and voluntary 8-K filings, and increase the length of management discussion and analysis (MD&A) in their 10-K filings. We further assess the direct and indirect channels through which UD laws affect firms' disclosure policies.

Inquiry into CSR as a human capital management tool has suggested that firms benefit from such activities because employees value the meaningfulness of these activities, which influences motivation and retention. We propose an alternate avenue through which firms can benefit from an important type of socially responsible activity — pro bono services — that does not require that employees derive utility from the meaningfulness of the activity.

Expectancies play an important and understudied role in influencing a negotiator's decision to be deceptive. Studies 1a–1e investigated the sources of negotiators' expectancies, finding evidence of projection and pessimism; negotiators consistently overestimated the prevalence of people who share their views on deception and assumed a sizable share of others embrace deceptive tactics. This phenomenon generalized beyond American samples to Chinese students (Study 1d) and Turkish adults (Study 1e).

We find that voters who associate themselves with the "winning team" in election, i.e., Leave voters in the 2016 UK Brexit vote and Trump voters in 2016 US presidential election, substantially increase their expectations for the stock market, but change their expectations of their household economic wellbeing only modestly. Respondents who associate themselves with the "losing team" are more varied in their responses, but the overall impact of the election outcome on this group is more muted.

We examine the effects of financial reporting regulation on firms' banking. Exploiting discontinuous public disclosure and auditing requirements assigned to otherwise similar small and medium-sized private firms, we document that financial reporting regulation reduces firms' reliance on concentrated and local bank relationships and increases banks' reliance on firms' financial reporting, consistent with a shift in firms' banking from relationship toward transactional approaches.

The current research explores the relationship between living abroad and self-concept clarity. We conducted six studies (N = 1,874) using different populations (online panels and MBA students), mixed methods (correlational and experimental), and complementary measures of self-concept clarity (self-report and self-other congruence through 360-degree ratings). Our results indicate that living abroad leads to a clearer sense of self because it prompts self-discerning reflections on whether parts of their identity truly define who they are or merely reflect their cultural upbringing.

When companies plan to build multi-category brands by adding new products to their product lines, two questions loom large: (1) whether and (2) when brand extensions perceived as distant (comparatively dissimilar) from the company’s existing core line of products should be introduced. Since many real-world firms have introduced distant brand extensions, this paper focuses on the second question: when the company should introduce a distant extension within a series of other closer extensions — a decision for which there is little research-based guidance for managers.

Recent evidence suggests that investors are inattentive to their portfolios and hire expensive portfolio managers. This paper develops a life-cycle portfolio-choice model in which the investor experiences loss-averse utility over news and can ignore his portfolio. In such a model, the investor prefers to ignore and not rebalance his portfolio most of the time because he dislikes bad news more than he likes good news such that expected news cause a first-order decrease in utility.

In today's turbulent business environment, customer retention presents a significant challenge for many service companies. Academics have generated a large body of research that addresses part of that challenge — with a particular focus on predicting customer churn. However, several other equally important aspects of managing retention have not received a similar level of attention, leaving many managerial problems not completely solved, and a program of academic research not completely aligned with managerial needs.