Quotation Cerar, Jelena, Decreton, Benoit, Nell, Phillip C. 2022. What’s in a Name? How Senior Managers use Name-Based Heuristics to Allocate Financial Resources in Multinational Corporations. Journal of Management Studies (JMS).


RIS


BibTeX

Abstract

The allocation of financial resources to entrepreneurial initiatives in subsidiaries of multinational corporations is crucial to their realization. When allocating resources to these initiatives, senior headquarters managers face uncertainty that they attempt to address using various heuristics, which may bias allocation. Name-based heuristics—cognitive shortcuts based on names associated with a decision-making situation—have been shown to influence financial decisions ranging from food purchase to stock investment. Yet little is known about name-based heuristics in the allocation of financial resources to entrepreneurial initiatives. We analyze 1308 resource allocation decisions made by 109 senior managers in an experiment in which we vary subsidiary country and subsidiary manager names. We find that psychic distance to the subsidiary country is negatively related to resource allocation when subsidiary managers’ names express a potential expatriate status. In contrast, this relationship is positive when subsidiary managers’ names express a potential local status. We contextualize our results by interviewing senior managers and discuss how reliance on name-based heuristics to infer the context of an initiative or the interests and competences of subsidiary managers can lead to biased decisions.

Tags

Press 'enter' for creating the tag

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Management Studies (JMS)
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, MAN-A+, STRAT-A, WH-A
Language English
Title What’s in a Name? How Senior Managers use Name-Based Heuristics to Allocate Financial Resources in Multinational Corporations
Year 2022
Reviewed? Y
DOI 0.1111/joms.12842
Open Access Y
Open Access Link https://onlinelibrary.wiley.com/doi/10.1111/joms.12842

Associations

People
Cerar, Jelena (Details)
Nell, Phillip C. (Details)
External
Decreton, Benoit (Nova School of Business and Economics, Universidade Nova de Lisboa, Portugal)
Organization
Department of Global Business and Trade DP (Details)
Institute for International Business IN (Details)
Institute for International Business (Nell) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5307 Business and management economics (Details)
5324 Organizational research (Details)
5333 Business management (Details)
Google Scholar: Search