[2] Alleviating managerial dilemmas in human-capital-intensive firms through incentives: Evidence from M&A legal advisors; Chatain, O. and Meyer-Doyle, P.; Strategic Management Journal, 2017, 38(2): 232-254.

Abstract: We examine how human-capital-intensive firms deploy their human assets and how firm-specific human capital interacts with incentives to influence this deployment. Our empirical context is the UK M&A legal market, where micro-data enable us to observe the allocation of lawyers to M&A mandates under different incentive regimes. We find that law firms actively equalize the workload among their lawyers to seek efficiency gains, while “stretching” lawyers with high firm-specific capital to a greater extent. However, lawyers with high firm-specific capital also appear to influence the staffing process in their favor, leading to unbalanced allocations and less sharing of projects and clients. Paradoxically, law firms may adopt a seniority-based rent-sharing system that weakens individual incentives to mitigate the impact of incentive conflicts on resource deployment.

[3] How Performance Incentives Shape Individual Exploration and Exploitation: Evidence from Micro-Data; Lee, S. and Meyer-Doyle, P.; Organization Science, 2017, 28(1): 19-38.

Abstract: The existing literature has highlighted the role of individuals in exploration and exploitation, yet our understanding of what shapes those activities at the individual level remains limited. We integrate the literatures on exploration-exploitation and incentives, to examine how incentives impact individual behavior to explore new ideas or exploit existing ideas. Using novel microdata on the commercial projects of sales employees at a South Korean e-commerce firm, we find that individuals engage in relatively more exploration when performance-based incentives are weakened; yet, interestingly, this increase in exploration is driven mainly by high-performing individuals in our setting. Weakening performance-based incentives also led to higher exploration performance via experiential learning, especially for individuals who worked in complex task environments. Overall, this study contributes to the literature on exploration-exploitation by examining how individual exploration and exploitation behavior and performance is shaped by incentives. We also contribute to the incentives literature by investigating the implications of incentives in an important domain, namely that of knowledge exploration behavior. The study also provides insights into important individual-level microfoundations of firm capabilities and performance by highlighting the important role of individuals in exploration-exploitation activities, and how this role is contextualized by the incentives a firm deploys.

[4] Disentangling the Microfoundations of Acquisition Behavior and Performance; Meyer-Doyle, P., Lee, S., and Helfat, C.E.; Strategic Management Journal, 2019, 40(11): 1733-1756.

Abstract: The acquisition literature has highlighted that both firm‐level and manager‐level factors shape acquisition outcomes, yet little is known about their relative contribution. We conduct a variance decomposition analysis to explore the contribution of CEO‐level versus firm‐level factors to acquisition behavior and performance. We also extend the methodology of variance decomposition in strategic management research by employing Poisson multi‐level models, and deriving the percentage of variance attributable to each level in a four‐level model. Although CEO and firm effects both explain a substantial share of the variance in acquisition behavior, the CEO‐effect is notably larger. CEO‐level factors also drive a large portion of the variance in acquisition performance. Overall, our study contributes to the literatures on acquisitions and variance decomposition, and has implications for dynamic capabilities.

[5] Generalist vs. Specialist CEOs and Acquisitions: Two-sided Matching and the Impact of CEO Characteristics on Firm Outcomes; Chen, G., Huang, S., Meyer-Doyle, P., and Mindruta, D.; Strategic Management Journal, 2021, 42(6): 1184-1214.

Abstract: To address endogeneity concerns stemming from firm-CEO matching, we deploy a two-sided matching model that identifies the complementarities arising from the CEO-firm match and subsequently account for these complementarities in empirical tests. Applying this approach, we examine how the nature of CEOs’ human capital affects the acquisition behavior and performance of firms. We find that generalist CEOs (CEOs with a broader set of knowledge and skills) are more likely to engage in unrelated acquisitions than specialist CEOs (CEOs with a narrower but deeper set of knowledge and skills). We also find that the fit between the nature of CEOs’ human capital and the type of acquisitions they undertake is associated with stronger performance. Our paper contributes to research on CEOs, human capital, M&As, and microfoundations.

[6] Hedge Fund Investor Activism and Human Capital Loss; Chen, G., Meyer-Doyle, P., and Shi, W.; Strategic Management Journal, 2021, 42(12): 2328-2354.

Abstract: Prior research suggests that hedge fund activism can benefit targeted firms. We explore a potential negative side-effect of hedge fund activism: the unwanted loss of human capital in targeted firms. We find that firms targeted by hedge fund activists experience a greater departure of valuable employees compared with a matched sample of non-targeted firms. Further, the positive effect of hedge fund activism on firm performance is stronger when firms experience a lower departure of valuable employees. These results suggest that hedge fund activism can lead to the unwanted loss of human capital, which may reduce the otherwise positive performance effect on targeted firms. These findings contribute to research on investor activism and human capital.

[7] Client-Related Factors and Collaboration Between Human Assets; Mawdsley, J.K., Meyer-Doyle, P., and Chatain, O.; Organization Science, 2022, 33(2): 518-540.

Abstract: Collaborations between individuals in firms have important implications for the development of relational and human capital. In knowledge-intensive contexts where collaborations are formed to deliver services to clients, collaboration decisions can involve nontrivial tradeoffs between short-term and long-term benefits: individuals and firms must carefully manage the tradeoffs between leveraging existing relational and human capital for the reliable performance of repeat collaboration and creating new relational and human capital through new collaboration. Building from the premise that servicing clients is central to collaboration decisions in human asset–intensive firms, we examine how client-related factors shape collaboration decisions among lawyers (partners) in UK law firms providing M&A legal advisory services. We focus on three key client-related dimensions that we predict govern collaboration decisions: the depth of individual- and firm-level relationships with the focal client, key client attributes that reflect the client’s status and its use of different firms to undertake its outsourced work, and client-driven individual- and firm-level resource constraint. Our empirical findings support our proposition that client-related factors influence the pattern of collaborations between individuals in firms. We also reveal how client-related factors at the individual level can have opposite effects on collaboration decisions from those at the firm level. Overall, our findings contribute to research on relational capital, strategic human capital, team formation, professional service firms, and the microfoundations of strategy.

[8] Institutional Investor Activism and Employee Safety: The Role of Activist and Board Political Ideology; Shi, W., Xia, C., and Meyer-Doyle, P.; Organization Science, 2022, 33(6): 2404-2420.

Abstract: While prior research on shareholder activism has highlighted how such activism can economically benefit the shareholders of targeted firms, recent studies also suggest that shareholder activism can economically disadvantage non-shareholder stakeholders, notably employees. Our study extends this research by exploring whether  shareholder activism by institutional investors (i.e., institutional investor activism) can adversely affect employee health and safety through increased workplace injury and illness. Further, deviating  from the assumption that financially-motivated institutional investor activists are homogeneous in their goals and preferences, we investigate whether the influence of institutional investor activism on employee health and safety hinges on the political ideology of the shareholder activist and of the board of the targeted firm. Using establishment-level data, we find that institutional investor activism adversely influences workplace injury and illness at targeted firms, and that this influence is stronger for non-liberal shareholder activists and for firms with a non-liberal board. Our study contributes to shareholder activism research by highlighting how the political ideology of shareholder activists and boards affects the impact of shareholder activism on stakeholders, and how shareholder activism can adversely affect the health and safety of employees. Further, our paper also contributes to research on workplace safety and the management of employee relations and human capital resources by highlighting the detrimental effect of a firm’s ownership by investor activists on its employees, and how the board’s political ideology may enable a firm to reduce this risk.

[9] Prior Experience of Managers and Maladaptive Responses to Performance Feedback: Evidence from Mutual Funds; Gaba, V., Lee, S., Meyer-Doyle, P., and Zhao-Ding, A.; Organization Science, 2023, 34(2):894-915.

Abstract: In this study, we examine how the prior experiences of decision makers systematically influence their assessment of and responses to negative performance feedback. We posit that, although greater and more specialized experiences enable managers to build relevant knowledge and expertise in specific domains, they also make them overconfident in their abilities and strategies. Such experience-induced overconfidence further leads to distortions in the performance assessment process, hindering a firm’s ability to recognize and respond to poor performance. We empirically test these arguments in the context of U.S. mutual fund managers making investment decisions in response to fund performance below aspirations. As hypothesized, we find that more experienced and more specialized fund managers change their investment decisions less when faced with negative performance feedback than managers who are less experienced and less specialized. In additional analyses, we further show that the lower responsiveness of more experienced (specialized) managers is associated with the fund’s lower future performance, supporting our proposed theoretical mechanism (overconfidence). This study augments existing performance feedback research by showing how decision makers’ prior experience can impede problem-solving behavior in organizations. It also contributes to the literature on human capital and organizational learning by documenting an unintended consequence of accumulated human capital on firm adaptive behavior.

[WP2] Human Capital and Strategic Foresight: Evidence from Insider Trading; Nauman Asghar, Russ Coff, John Mawdsley, Philipp Meyer-Doyle

Abstract: We explore how the nature of human capital of corporate leaders (generalist vs specialist) shapes their strategic foresight. Examining insider trading—an important manifestation of strategic foresight—associated with product introduction announcements, we find that specialists' insider trading is associated with greater strategic foresight than generalists’ insider trading. Yet, generalists can narrow this difference if they hold firm-contextual knowledge, which enhances their accuracy when they apply their broad knowledge to the firm. Yet, despite the apparent advantages of specialist knowledge for strategic foresight, we find that generalists engage in more insider trading before product introduction announcements than specialists, and this effect is stronger when generalists hold firm-contextual knowledge. Our study offers fresh contributions to the strategic human capital literature and research on strategic foresight.

[WP3] Firms’ Responses to Competitors’ Employee-Related Antitrust Litigation; Boshuo Li, Philipp Meyer-Doyle, Wei Shi

Abstract: Firms that engage in no-poaching or wage-fixing agreements to appropriate more value from their employees are increasingly being litigated. We explore non-litigated firms’ responses to competitors’ employee-related antitrust litigation. We find that following such litigation, non-litigated firms’ employee treatment deteriorates. This suggests that non-litigated firms behave opportunistically by reducing their employee-related expenses to appropriate more value from their employees, presumably since it is now easier for them to attract and retain employees. Our finding is robust to different ways of identifying competitors and different measures of employee treatment. We also highlight important boundary conditions of this effect. Our findings advance strategic human capital research by documenting unintended spillover effects of employee-related antitrust litigation. 

[WP4] Successful Collaboration Post Technology Acquisitions; Chris Bingham, Koen Heimeriks, Philipp Meyer-Doyle

Abstract: Post-merger integration in technology acquisitions is important but hard given the integration/autonomy dilemma. Structural integration can be helpful to capture synergies but also hurtful as it can disrupt the target. Extant research suggests that collaboration between acquirer and target might improve acquisition success without the disruption of structural integration. Yet, while useful, this research does not provide granular detail about how successful collaboration is fostered. Using inductive, multiple case methods we address this gap. Our data show how firms institute four novel mechanisms to help overcome fundamental barriers to collaboration. The result is synergy capture without immediate structural integration. Collectively, our findings contribute to the M&A and micro-foundations of strategy literatures.

[WP5] Competitive Externalities and Acquisition Returns; Jay Anand, Philipp Meyer-Doyle, and Benjamin Blunck

Abstract: Prior research has shown that acquisitions are often associated with zero or negative returns for acquirers. Yet, acquisition remain popular among firms. Explanations offered for this paradox have focused on managerial motives. Our study offers a complementary explanation that centers around how competitive externalities in acquisitions (spillover effects of the acquisition to the acquirer’s competitors) affect the bidding strategy and returns to bidders in acquisitions. Our analysis yields several novel and counterintuitive insights. First, if synergies are imitable and bidders are affected by negative competitive externalities, bidders will engage in ‘rational overbidding’, with both the acquirer and rivals destroying value. Second, if synergies are unique to one bidder, that bidder will only achieve positive acquisition returns if the value of their unique synergies is larger than the negative competitive externalities. Third, bidders’ private knowledge about synergies is an important driver of superior acquisition returns and these returns remain unaffected by competitive externalities. Forth, faced with positive competitive externalities, bidders can lack incentives to acquire even if there are synergies to achieve. Overall, our paper refines our understanding of the factors underlying the heterogeneity in acquisition performance and offers a new explanation for the prevalence of low performing acquisitions.