La hubris manageriale quale fonte della irresponsabilità d’impresa: uno studio esplorativo (The managerial hubris as a source of corporate irresponsibility: an exploratory study)
DOI:
https://doi.org/10.7433/s95.2014.10Keywords:
hubris, overconfidence, corporate social irresponsibility, fraudAbstract
Purpose of the paper: The large number of scandals which have rocked the corporate world since the end of the twentieth century have fueled a considerable body of research regarding the factors which drive firms to adopt socially irresponsible behaviors and the development of mechanisms which may prevent the recurring occurrence of such episodes. We explore thoroughly the relationship between managerial hubris and corporate social irresponsibility.
Methodology: Empirical evidences from the in-depth qualitative longitudinal scrutiny of a specifically intriguing case; i.e., the Parmalat case under the four decade leadership of its founder Calisto Tanzi (1961-2003). Our case-based narrative approach follows the scientific criteria of theoretical sampling justification and multiple sources of evidence in order triangulate sources of data and facts.
Findings: Common wisdom argues that corporate governance weaknesses and ethical problems are the key antecedents of firm fraudulent cases. This article offers an alternative insight: managerial hubris may reveal one of the key determinants underlying the emergence of corporate social irresponsibility.
Research limits: Necessity of extending the investigation to a more comprehensive ammount of business cases to elaborate a base with which to generate more generalizable propositions.
Practical implications: Necessity to overcome the “silo view” of strategic decision making processes by involving experts in firm decision making processes different from the ones already present in the Board of Directors; to acknowledge that the formula of past successes is all but an unconstrained one since it does not usually work in future times.
Originality of the paper: We contribute to strategy and organization studies by applying a general concept, such as the hubris hypothesis, to a specific context, such as corporate social irresponsibility. In addition, transcending mere factual information, the study of Parmalat corporate social irresponsibility can help executives to discover the reasons why they select irrational strategies and why they do not usually work. Likewise, through the analysis of the Parmalat case, executives may acquire awareness about hubris dangers so as to avoid it in the future.
References
BEN-DAVID I., GRAHAM J.R., HARVEY C.R. (2007), “Managerial overconfidence and corporate policies”, National Bureau of Economic Research, n. w13711, pp. 1-55.
BOLLAERT H., PETIT V. (2010), “Beyond the Dark Side of Executive Psychology: Current Research and New Directions”, European Management Journal, vol. 28, n. 5, pp. 362-376.
CLAYMAN S.E., REISNER A. (1998). “Gatekeeping in action: Editorial conferences and assessments of newsworthiness”, American Sociological Review, vol. 63, n. 2, pp. 178-199.
DAGNINO G.B., MINÀ A., PICONE P.M. (2013). “The hubris hypothesis of corporate social irresponsibility: evidence from the Parmalat case”, in Amann W., Stachowicz-Stanusch A., Integrity in organizations - Building the foundations for humanistic management, Palgrave MacMillan, New York.
DOUKAS J. A., PETMEZAS D. (2007), Acquisitions, overconfident managers and self-attribution bias, European Financial Management, vol. 13, n. 3, pp. 531-577.
EISENHARDT K.M. (1989), “Building Theories from Case Study Research”, Academy of Management Review, vol. 14, n. 4, pp. 532-550.
EISENHARDT K.M., GRAEBNER M.E. (2007), “Theory Building from Cases: Opportunities and Challenges”, Academy of Management Journal, vol. 50, n. 1, pp. 25-32.
FINKELSTEIN S., HAMBRICK D.C., CANNELLA A. (2009), Strategic Leadership, Oxford University Press, New York.
FRANZINI G. (2004), Il crack Parmalat - Storia del crollo dell’impero del latte, Editori Riuniti, Roma.
GALASSO A., SIMCOE T.S. (2011),“CEO Overconfidence and innovation”, Management Science, vol. 57, n. 8, pp. 1469-1484.
GERRING J. (2007), Case Study Research, Cambridge University Press, Cambridge, MA.
GERVAIS S., ODEAN T. (2001), “Learning to be overconfident”, Review of Financial Studies, vol. 14, n. 1, pp. 1-27.
GERVAIS S., HEATON J. B., ODEAN T. (2011),“Overconfidence, compensation contracts, and capital budgeting”, Journal of Finance, vol. 66, n. 5, pp. 1735-1777.
GIBBERT M., RUIGROK W., WICKI B. (2008), “What Passes as a Rigorous Study?”, Strategic Management Journal, vol. 29, n. 13, pp. 1465-1474.
GRANT R.M., VISCONTI M. (2006), “The Strategic Background to Corporate Accounting Scandals”, Long Range Planning, vol. 39, n. 4, pp. 361-383.
GUMBEL P. (2004), “Parmalat scandal - Italy: The land of bilk and money”, Fortune, vol. 149, n. 2, p. 32.
HAMILTON S., MOSS I. (2005), “ParmalatSpA: An Impressive Milking System”, IMD case study ,1-2015, pp. 1-35
HAYWARD M.L.A., HAMBRICK D.C. (1997), “Explaining the Premiums Paid for Large Acquisition: Evidence for CEO Hubris”, Administrative Science Quarterly, vol. 42, n. 1, pp. 103-127.
HAYWARD M.L.A., RINDOVA V.P., POLLOCK T.G. (2004), “Believing one’s own press: The causes and consequences of CEO celebrity”, Strategic Management Journal, vol. 25, n. 7, pp. 637-653.
HAYWARD M.L.A., SHEPHERD A., GRIFFIN D. (2006), “A Hubris Theory of Entrepreneurship”, Management Science, vol. 52, n. 2, pp. 160-172.
HILLER N.J., HAMBRICK D.C. (2005), “Conceptualizing Executive Hubris: The Role of (Hyper-) core Self Evaluations in Strategic Decision-Making”, Strategic Management Journal, vol. 26, n. 4, pp. 297-319.
HIRSHLEIFER D., LOW A., TEOH S.H. (2012), “Are overconfident CEOs better innovators?”, The Journal of Finance, vol. 67, n. 4, pp. 1457-1498.
JICK T.D. (1979), “Mixing Qualitative and Quantitative Methods: Triangulation in Action”, Administrative Science Quarterly, vol. 24, n. 4, pp. 602-611.
KROLL M.J., TOOMBS L.A., WRIGHT P. (2000), “Napoleon’s Tragic March Home from Moscow: Lesson in Hubris”, Academy of Management Executive, vol. 14, n. 1, pp. 117-128.
LANGE D., WASHBURN N.T. (2012), “Understanding attributions of Corporate social irresponsibility”, Academy of Management Review, vol. 37, n. 2, pp. 300-326.
LI J., TANG Y. (2010), “CEO hubris and firm risk taking in China: The moderating role of managerial discretion”, Academy of Management Journal, vol. 53, n. 1, pp. 45-68.
LIN Y.H., HU S.Y., CHEN M.S. (2005), “Managerial Optimism and Corporate Investment: Some Empirical Evidence from Taiwan”, Pacific-Basin Finance Journal, vol. 13, n. 5, pp. 523-546.
LONG S. (2008), The Perverse Organization and its Deadly Sins, Karnac, London.
MAGNANELLI B.S. (2013), I sistemi di governance e le frodi contabili. Un’analisi empirica, RIREA, Roma.
MALAGUTTI V. (2004), Buconero Spa, dentro il crack Parmalat, Laterza Editori, Roma.
MALMENDIER U., TATE G. (2005). “CEO overconfidence and corporate investment”, The Journal of Finance, vol. 60, n. 6, pp. 2661-2700.
MALMENDIER U., TATE G. (2008), “Who makes acquisition? CEO Overconfidence and the Market’s Reaction”, Journal of Financial Economics, vol. 89, n. 1, pp. 20-43.
MELIS A. (2005), “Corporate Governance Failures: to what extent is Parmalat a Particularly Italian Case?”, Corporate Governance: An International Review, vol. 13, n. 4, pp. 478-488.
MOCCIARO LI DESTRI A., PICONE P.M. (2009), “La valutazione delle sinergie nelle operazioni di M&A”, in Capasso A., Meglio O. (a cura di) Fusioni e acquisizioni. Teorie, metodi, esperienze, Franco Angeli, Milano.
MOCCIARO LI DESTRI A. (2013), Managerial irresponsibility and firm survival. Pivoting the company in the aftermath of a social scandal, Franco Angeli, Milano.
NICITA A. (2004), “Parmalat: Italian genes in a global fraud”, Ponte, vol. 60, n. 4, pp. 103-106.
OWEN D., DAVIDSON J. (2009), “Hubris syndrome: An acquired personality disorder? A study of US Presidents and UK Prime Ministers over the last 100 years”, Brain, vol. 132, n. 5, pp. 1396-1406.
PICONE P.M., DAGNINO G.B., MINÀ A. (2014), “The origin of failure: A multidisciplinary appraisal of the hubris hypothesis and proposed research agenda”, Academy of Management Perspectives, in press.
PETIT V., BOLLAERT H. (2011), “Flying Too Close to the Sun? Hubris Among CEOs and How to Prevent it”, Journal Business Ethics, DOI 10.1007/s10551-011-1097-1.
RAJAN M.V., TAYAN B. (2008), “Financial Restatements: Methods Companies Use to Distort Financial Performance”, Stanford Graduate School of Business, A198, pp. 6-7.
RAU P.R., VERMAELEN T. (1998), “Glamour, Value and the Post-acquisition Performance of Acquiring Firms”, Journal of Financial Economics, vol. 49, n. 2, pp. 223-253.
ROLL R. (1986), “The Hubris Hypothesis of Corporate Takeovers”, Journal of Business, vol. 59, n. 2, pp. 197-216.
SHEIN J., HAINES N., HORSTMANN M., KAULFUSS T., KOESTER C., KOO W., LANDIN, J.L. (2008), “Parmalat USA Turnaround”, Kellogg School of Management, KEL356.
SCHUDSON M. (2002), “The news media as political institutions”, Annual review of political science, vol. 5, n. 1, pp. 249-269.
SIGGELKOW N. (2007), “Persuasion with Case Studies”, Academy of Management Journal, vol. 50, n. 1, pp. 20-24.
SIMON M., HOUGHTON S.M. (2003), “The Relationship between Overconfidence and the Introduction of Risky Products: Evidence from a Field Study”, Academy of Management Journal, vol. 46, n. 2, pp. 13-149.
SKAŁA D. (2008), “Overconfidence in Psychology and Finance - an Interdisciplinary Literature Review”, Financial Markets and Institutions, vol. April, n. 4, pp. 33-50.
TAPIES J., TONINATO F. (2005), “Milking Money out of Parmalat”, IESE Business School case study, DG-1478-E 0-305-041, pp. 1-35.
VAN DE VEN A.H., HUBER G.P. (1990), “Longitudinal Field Research Methods for Studying Processes of Organizational Change”, Organization Science, vol. 1, n. 3, pp. 213-219.
YIN R.K. (2003), Case Study Research: Design and Methods, Sage publication, Thousand Oaks, CA.
ZACHARAKIS A.L., SHEPHERD D.A. (2001), “The Nature of Information and Overconfidence on Venture Capitalists’ Decision Making”, Journal of Business Venturing, vol. 16, n. 4, pp. 311-332.
