Hedge fund activism has become an integral part of publicly traded firms, and our paper adopts a behavioral lens to examine how the hostility of tactics employed by activist hedge funds may influence the response of target firms. Drawing on cognitive mechanisms and insights from interviews with investment professionals, we propose that activists’ use of hostile tactics may paradoxically trigger greater resistance from target firms. Specifically, we argue that management and the board may seek greater desire for control, and experience ego threat and heightened anxiety in the face of hostility, which increases target firm resistance. Using a sample of 731 activist hedge fund campaigns from 2002 to 2015, we find that target firms are more likely to resist when the activist hedge fund uses more hostile tactics. Further, our findings indicate that resistance towards hostile tactics increases when activist demands challenge the position of management or the board, but is mitigated by a firm’s prior activism experience or boards with more directors that have experienced hostile campaigns.

Schumpeter famously popularized “creative destruction” as the process whereby new entrants replaced existing firms. In most cases, however, some incumbent firms survive and even thrive across technological discontinuities. Moving beyond incumbent-entrant dynamics, organizations and innovation research has begun to explore incumbent heterogeneity in response to technological change—why some incumbents do well and adapt, whereas others struggle. As a phenomenon-driven research area, scholars with different theoretical perspectives have brought their own lenses to bear, but these perspectives have evolved independently. The result is a research stream with a scattered collection of detailed, within-industry perspectives on the phenomenon without a clear ability to link different mechanisms or articulate boundary conditions. This article brings these relevant literatures together to paint a more holistic picture of incumbent adaptation to technological change. To improve generalizability and begin building a more general, cross-industry theory, we emphasize recognizing specific nuances of different technological changes and how they fit with the existing capabilities, knowledge, position, and cognition of incumbent firms to understand which incumbents are swept away in the wave of creative destruction and which may survive.

Risk taking is the willingness to accept the level of risk associated with a certain decision. In other words, it refers to making decision that entails risk. In this article, we focus on managerial risk-taking. We discuss the variable risk preference model in depth, summarize the effect of performance feedback on risk-taking, and highlight some of the strategy research on risk-taking that takes the upper echelon perspective of organizations. The variable risk preference model assumes that managers have two reference points in making risky decisions – aspiration point and survival point – and which reference point they pay attention to affects their risk-taking behavior. Performance feedback has an influence on risk-taking that often makes decision-makers take a more longitudinal perspective and change their risk attitudes. Some strategy research on managerial risk-taking that adopts the upper echelon perspective examines the linkages between trait and risk-taking behavior and between incentive structure and risk-taking.

Risk is the situation under which the decision outcomes and their probabilities of occurrences are known to the decision-maker, and uncertainty is the situation under which such information is not available to the decision-maker. Research on decision-making under risk and uncertainty has two broad streams: normative and descriptive. Normative research models how decision should be made under risk and uncertainty, whereas descriptive research studies how decisions under risk and uncertainty are actually made. Descriptive studies have exposed weaknesses of some normative models in describing people’s judgment and decision-making and have compelled the creation of more intricate models that better reflect people’s decision under risk and uncertainty.

People prefer harms caused by omission to equal or lesser harms caused by action, a tendency known as omission bias. Several studies, however, have challenged the existence of this bias, and some even found evidence of the opposite bias (i.e., action bias). In this paper, we study when omission bias is more likely to manifest than action bias. Building on prospect theory, we hypothesize that people will show more omission bias in high stakes situations. By conducting two laboratory experiments and through analyzing the Major League Baseball (MLB) batters’ swinging behaviors, we find support for this hypothesis in three different high stakes contexts (monetary, environmental, and rivalry), and we conclude that omission bias is more likely to occur in high stakes decision-making situations. We also test whether this relationship is mediated by affect–anticipated regret and happiness–and find that only anticipated happiness partially mediates the effect of stakes on omission bias.

This paper examines whether statutory limits on work hours causally improve employee health. We exploit South Korea’s 2018 reform, which reduced the maximum workweek from 68 to 52 hours while exempting certain transportation and healthcare industries, as a quasi-natural experiment. Using administrative health screening data from the National Health Insurance Service—comprising over 1.23 million employee-year observations with objective clinical biomarkers—we estimate difference-in-differences models comparing employees in treated industries to those in exempt but otherwise comparable sectors. We find that the reform significantly reduced body mass index (BMI), fasting blood sugar (FBS), and liver enzyme levels (SGOT and SGPT) among treated employees relative to controls. These improvements were accompanied by reduced drinking frequency and increased exercise frequency, consistent with lower chronic stress and expanded opportunities for recovery, respectively. However, the benefits were concentrated among higher-income and male employees; the lowest-income quintile experienced no improvement and even adverse effects on liver function. These findings indicate that work hour regulations can improve population health, but that their distributional consequences—particularly for economically vulnerable workers—warrant careful attention in policy design.

When adapting to technological change, two-sided platforms face a unique challenge: the two interdependent sides they serve may hold conflicting preferences about whether and when to adopt new technology. Platforms that allocate greater organizational attention to one side in order to solve the initial “chicken-and-egg” problem may later find themselves constrained when that side’s preferences diverge from those of the other. Drawing on the attention-based view, we theorize that structural attention allocation shapes how platforms interpret technological change and determines adoption timing, with distinct performance implications. We test our predictions using data from 887 U.S. local newspapers during the early phase of the digital revolution, a period in which advertisers preferred rapid adoption of digital technology while readers preferred delayed adoption. We find that reader-focused newspapers adopted digital technology significantly later than advertiser-focused newspapers. Subsequently, delayed adoption protected print circulation for reader-focused newspapers but universally harmed digital performance regardless of attention structure. Overall, our findings indicate that platforms’ structural attention allocation, established early in their life cycle, creates path-dependent strategic responses to technological change.

Shareholder value maximization, despite criticism, retains its significance as a key corporate objective. Proponents of shareholder theory argue that shareholder value is synonymous with firm value and that prioritizing shareholder interests leads to better firm performance. Building on the Attention-Based View (ABV), we argue that there is a critical trade-off: when shareholder demands dominate organizational attention hierarchies, firms may neglect operational management, specifically product quality oversight. We theorize that heightened attention to shareholders—amplified by their urgency, legitimacy, and power—reallocates managerial focus and organizational resources away from quality control processes, increasing the likelihood of product recalls. Using a natural experiment (SEC Regulation SHO) that exogenously increases attention to shareholders for a random set of firms, we find that treated firms experience significantly higher product recall rates compared to control firms. This effect is stronger for firms with higher short-term institutional ownership (higher shareholder urgency), more real earnings management (higher shareholder legitimacy), and greater financial distress (higher shareholder power). Our findings reveal an underexplored cost of shareholder primacy: compromised product quality.