Below-aspiration performance and risk-taking behaviour in the context of Taiwanese electronic firms: a contingency analysis

ABSTRACT

This study combines the behavioural theory and the behavioural agency theory of the firm to investigate managerial risk-taking behaviour at times of below-aspiration performance and the influence of CEO structural power and earnings pressure on subsequent managerial behaviour. By employing the data of publicly listed Taiwanese electronic firms from the period of 2010–2018, this study found that firms tend to make risky choices when their performance is under the aspiration threshold. However, after this relationship was examined with contextual conditions, the study found that CEO structural power and earnings pressure moderate a firm’s risk-taking positively and negatively, respectively. The configurational effect of the two moderators sheds further light on the interactive contextual settings, indicating that CEO structural power outweighs the moderating effect of earnings pressure.

KEYWORDS:

• Behavioural theory of the firm
• below-aspiration performance
• CEO structural power
• earnings pressure
• risk-taking behaviour
• Taiwan

Acknowledgements

The authors are grateful to the editor and two reviewers for their helpful comments and acknowledge financial supports from the Ministry of Science and Technology, Taiwan (MOST-109-2410-H-218-004-MY2).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Ministry of Science and Technology, Taiwan; [MOST-109-2410-H-218-004-MY2].

Notes on contributors

Quang-Anh Le

Quang-Anh Le is a Ph.D. candidate at the Southern Taiwan University of Science and Technology, Taiwan. His interest includes technology innovation management and innovation strategy. His work has been published in the Management Research Review.

Cheng-Yu Lee

Cheng-Yu Lee is a Professor at the Department of Industrial Management and Information, Southern Taiwan University of Science and Technology, Taiwan. He received his Doctorate in Business Administration from National Cheng Kung University. Currently an Educator and a Researcher in technology and innovation management field, he is interested in innovation strategy. His publications have appeared in the Asia Pacific Journal of Management, IEEE Transactions on Engineering Management, International Journal of Technology Management, Journal of Engineering and Technology Management, Management Review, R&D Management, Technovation and other journals.