Abstract: Decisions about allocation of resources to research and development (R&D), referred to here as R&D search, are critically important for competitive advantage. Using panel data collected yearly over a period of nine years, this paper re-visits existing theories of backward-looking and forward-looking decision models for R&D search in the important context of young technology-based firms. Some of the findings confirming existing models, but overall the findings contradict existing models. Not only are young technology-based firms found to increase search when aspirations are not met, but they do the same when performance surpasses aspirations. Both positive and negative outlooks reinforce the effects of performance feedback. The combined effect is that the more outcomes and expectations deviate from aspirations the more young technology-based firms invest in R&D search.

Abstract: Performance comparisons play a key role in driving firm behavior in organizational learning models. However, in some industry contexts, conventional measures of performance such as profitability or revenues do not facilitate accurate comparisons between firms. We argue that novel performance indicators are essential to understand the dynamics of firm behavior in such contexts. We introduce a new measure of performance feedback based on conversion ability, defined as a firm-level ability to turn new ideas into successful products. We employ this measure to analyze decisions to develop products in new versus existing market segments (i.e. exploration vs. exploitation) in the biotechnology industry. Our results suggest that managerial assessments of conversion ability are a key input to decision-making when new product development is lengthy, costly and risky.

Abstract: I argue, on the basis of the comparative ignorance hypothesis that foreign decision-maker tend to perceive economic settings under uncertainty as more ambiguous than locals. Thus, they are more likely to opt for the status quo in order to neglect the option under ambiguity instead of opting for the existing choice as the best economic decision. Consequently, foreign decision-makers choice to rely on the status quo causes a relative organizational performance disadvantage. Empirical findings for business owners’ choice to change industrial sectors, the decision to divest from the old business in order to start anew, and the subsequent performance implications supports these hypotheses. The framework demonstrates that foreign decision-makers’ strategic choices have a negative effect on their businesses relative performance, as foreign decision-maker are more likely to perceive strategic decisions under uncertainty as decisions under ambiguity instead of risk.

Abstract: This paper aims at explaining differences in decision making performance on the basis of choice patterns implemented by 89 individuals while playing a four armed bandit task. We observe the emergence of strategies which differ in terms of content, myopia and ultimately performance. Our results extend current research by operationalizing the concept of myopia, and decomposing it into its constituent building blocks. Our results show that the different levels of myopia in choice strategies reliably predict performance.

Abstract: Current literature suggests that when CEOs approach retirement, they are more likely to be risk-averse and refrain from initiating a long-term strategy because they want to optimize their wealth before their departure. This argument relies on the assumption that near-retirement CEOs are motivated by self-interest. Psychological literature, however, has long recognized the validity of self- and other- interests as human motives which can impact human behavior. Building on this literature, we propose that near-retirement CEOs can also be motivated by other-interest. We employ CEO loyalty to the firm as a representative construct of other-interest motive and empirically examine its impacts on near-retirement CEOs’ strategic decisions. Preliminary findings suggest that CEO loyalty can moderate the agency problems at the end of their career.

Abstract: Confidence is important for top managers who need to make difficult decisions in uncertain environments. While researchers have examined antecedents and consequences of overconfidence and/or hubris, the other side of confidence, namely underconfidence and humility, has attracted limited attention. Moreover, most research to date has been done in the context of individualistic western culture. To fill the gap, this research conceptually distinguishes underconfidence and humility and examines the antecedents and consequences in the context of Japan. This research utilizes a sample of Japanese CEOs and argues that their forecasts of stock market reflect their attitude in terms of underconfidence or humility. It is further argued that humility leads to more risk-taking and higher performance, while underconfidence results in less risk-taking and lower performance.