Executives

There has been a strong push for workplace diversity in the United States (U.S.) in recent years. Work teams consisting of employees with diverse backgrounds can augment firms’ competitive advantage. This view is consistent with the cognitive diversity hypothesis, which depicts multiple perspectives generated by cognitive differences among organizational members resulting in creative problem-solving. In this study, I investigate the role of cognitive diversity, measured by differences in a set of seven cultural traits between the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), in shaping firm financial reporting quality. Relying on the upper-echelon theory that executive characteristics affect firm outcomes and the cognitive diversity hypothesis that diversity reduces groupthink, sparks innovation, increases employee retention rate, and builds a positive firm culture, I expect to find a positive relationship between cognitive diversity and financial reporting quality.
In determining firm performance and outcomes, differences in executive demographic characteristics such as age, tenure, gender, and race may have an impact on how executive cognitive perceptions, values, and information sets, shape their decisions and outcomes. Therefore, I then examine the effect of executive demographic diversity on the link between executive cognitive diversity and financial reporting quality. Diversity has received a lot of attention over the last decades, but it is unclear ex ante how different types of diversity interact with each other in shaping firm outcomes. Therefore, I examine but do not hypothesize the direction of the effect of executive demographic diversity on the link between executive cognitive diversity and financial reporting quality.

The impact of executive cognitive bases and values on corporate strategic change was examined in a longitudinal study of the computer hardware industry. Corporate strategic change was separated into pattern and magnitude dimensions as suggested by Ginsberg (1988). These dimensions complement the logic of Tushman and Romanelli (1985) who suggest that organizations proceed through long periods of stability or adjustment, punctuated by periods of metamorphic change or reorientation. I proposed that executive cognitive bases and values would be associated with strategic reorientation but not strategic adjustment since executive perceptions and responses are the internal driving forces that direct and redirect organizations (Romanelli & Tushman, 1988). Panel data analysis techniques were used to test the hypotheses developed in this study. Corporate strategic reorientation and adjustment were operationalized by changes in unrelated and related diversification, and changes in between-stage and within-stage vertical integration, respectively. The mean organization tenure and functional background heterogeneity of top management teams were used as proxies for executive cognitive bases and values. Results provided overall support for the hypotheses. Mean organization tenure was negatively related to unrelated diversification change, while neither mean organization tenure nor functional background heterogeneity were associated with related diversification change. Functional background heterogeneity was positively related to between-stage vertical integration change, however, contrary to expectations, it was negatively related to within-stage vertical integration change. These findings confirm and extend the literature which relates managerial characteristics to strategic change.

Utilizing a modified Delphi Technique research study, consensus was sought from 298 practitioners in the public assembly facility management (PAFM) industry regarding their perceptions on varied matters connected to the academic preparation of managers/executives serving the industry. A comprehensive literature review and a prior pilot study were conducted for the purpose of creating the initial survey (Questionnaire 1). The pilot study consisted of an open-ended interview session with a panel (N=16) of PAFM managers. Sixty-four (64) of 66 consensus-seeking items attained consensus from the respondents (N=298) after Questionnaire 1 results were tabulated. Respondents were given the opportunity to re-assess their Questionnaire 1 choices in Questionnaire 2 and if compelled, change them. Items related to Kinesiology and Physical Education did not attain consensus status in Questionnaire 1 or Questionnaire 2. This study concluded: a) academic program in PAFM is beneficial to the industry (96%) and 63.5% viewed the degree as very important or essential; b) the preferred academic delivery level was Bachelors/undergraduate (52.7%); c) the degree program should be housed in Business (42%); d) the preferred competencies and skill sets were identified; e) the preferred course components were identified.