Abstract:
We draw on the behavioral theory of the firm (BTOF) to explore why and how media coverage, conceptualized as “soft” performance feedback, drives firms to make domain-specific strategic changes. By decomposing multifaceted strategic change into short- versus long-term domain, we posit that firms respond to negative media coverage by conducting problemistic search, which increases both short- and long-term strategic change, but to a different degree. While firms respond to positive media coverage by pursuing slack-driven search, which decreases short-term strategic changes, but increases long-term strategic changes that aim to realize future gains. Our analysis of a sample of 2,452 Chinese publicly listed firms from 2012 to 2017 lends support to these hypotheses. Both theoretical and practical implications are discussed.
Presenter Bio:
Dr. Liang Wen is an Assistant Professor in the Department of Strategic Management and Organisations (SMO) at International Business School Suzhou (IBSS), Xi’an Jiaotong-Liverpool University (XJTLU). He completed his Ph.D. in the Discipline of International Business at the University of Sydney. His research focuses on strategic management and international business. He is particularly interested in 1) media influence and firms’ strategies, and 2) time influence and firms’ strategies. His research has appeared in the Journal of World Business, and the Academy of Management Best Paper Proceeding.