Managers’ dispositions toward formal contracts: A cross-country examination

A. Stefanidis; M. Banai; W. Newburry; S. Fainshmidt; U.H. Richter; U. Schinzel; Y. Kong; A. Erkus; S. Shakirova; M.F. Ozbek; H. Goelzner; A. Shetach; U. Sigri

doi:10.1016/j.jbusres.2023.114231

Managers’ dispositions toward formal contracts: A cross-country examination

A. Stefanidis
, M. Banai
, W. Newburry
, S. Fainshmidt
, U.H. Richter
, U. Schinzel
, Y. Kong
, A. Erkus
, S. Shakirova
, M.F. Ozbek
, H. Goelzner
, A. Shetach
, U. Sigri

The Peter J. Tobin College of Business, St. John’s University
Baruch College, City University of New York
College of Business, Florida International University
Hong Kong University of Science and Technology
UNICAF University
Shandong University of Science and Technology
Bahcesehir University
Kazakh National Women's Teacher Training University
Gumushane University
Max Stern Academic College of Emek Yezreel
OSTİM Technical University

Research output: Contribution to journal › Article › peer-review

Abstract

This study integrates institutional and dispositional theories to develop a multilevel model predicting that managers’ endorsement of formal contracts increases with the quality of formal institutions. This effect is contingent upon managerial dispositions of ethical idealism and interpersonal trust, which provide a morally driven override of uncertainty and a substitute source of certainty in business practices, respectively. We test our arguments on hand-collected data from 3,652 manager-negotiators in 16 countries. We find that managers endorse formal contracts when they are embedded in contexts with high quality contract enforcement institutions, but this effect diminishes substantially among ethically idealistic managers. These results suggest that an understanding of managers’ reliance on formal contracts requires multilevel theory informed by how managerial dispositions interact with the formal institutional context.

Original language	English
Journal	J. Bus. Res.
Volume	168
DOIs	https://doi.org/10.1016/j.jbusres.2023.114231
Publication status	Published - 1 Nov 2023

Keywords

Ethics
Formal contracts
Institutional quality
Legal institutions
Multilevel modeling
Trust

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10.1016/j.jbusres.2023.114231

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@article{2516a55b9ebc4a82a19dd06d3e629a78,

title = "Managers{\textquoteright} dispositions toward formal contracts: A cross-country examination",

abstract = "This study integrates institutional and dispositional theories to develop a multilevel model predicting that managers{\textquoteright} endorsement of formal contracts increases with the quality of formal institutions. This effect is contingent upon managerial dispositions of ethical idealism and interpersonal trust, which provide a morally driven override of uncertainty and a substitute source of certainty in business practices, respectively. We test our arguments on hand-collected data from 3,652 manager-negotiators in 16 countries. We find that managers endorse formal contracts when they are embedded in contexts with high quality contract enforcement institutions, but this effect diminishes substantially among ethically idealistic managers. These results suggest that an understanding of managers{\textquoteright} reliance on formal contracts requires multilevel theory informed by how managerial dispositions interact with the formal institutional context.",

keywords = "Ethics, Formal contracts, Institutional quality, Legal institutions, Multilevel modeling, Trust",

author = "A. Stefanidis and M. Banai and W. Newburry and S. Fainshmidt and U.H. Richter and U. Schinzel and Y. Kong and A. Erkus and S. Shakirova and M.F. Ozbek and H. Goelzner and A. Shetach and U. Sigri",

note = "Export Date: 14 December 2023 CODEN: JBRED Correspondence Address: Stefanidis, A.; The Peter J. Tobin College of Business, United States; email: [email protected] Funding text 1: The authors would like to thank Mr. Petros Katsounotos ([email protected]), President of P. Katsounotos Trading Ltd. Professor Philip Tulimieri ([email protected]), and Dr. Dewi Jayanti (dewi\[email protected]) for their support in our data collection efforts in Cyprus, the USA and Indonesia, respectively. 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year = "2023",

month = nov,

day = "1",

doi = "10.1016/j.jbusres.2023.114231",

language = "English",

volume = "168",

journal = "J. Bus. Res.",

issn = "0148-2963",

publisher = "Elsevier Inc.",

}

TY - JOUR

T1 - Managers’ dispositions toward formal contracts: A cross-country examination

AU - Stefanidis, A.

AU - Banai, M.

AU - Newburry, W.

AU - Fainshmidt, S.

AU - Richter, U.H.

AU - Schinzel, U.

AU - Kong, Y.

AU - Erkus, A.

AU - Shakirova, S.

AU - Ozbek, M.F.

AU - Goelzner, H.

AU - Shetach, A.

AU - Sigri, U.

N1 - Export Date: 14 December 2023 CODEN: JBRED Correspondence Address: Stefanidis, A.; The Peter J. Tobin College of Business, United States; email: [email protected] Funding text 1: The authors would like to thank Mr. Petros Katsounotos ([email protected]), President of P. Katsounotos Trading Ltd. Professor Philip Tulimieri ([email protected]), and Dr. Dewi Jayanti ([email protected]) for their support in our data collection efforts in Cyprus, the USA and Indonesia, respectively. 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PY - 2023/11/1

Y1 - 2023/11/1

N2 - This study integrates institutional and dispositional theories to develop a multilevel model predicting that managers’ endorsement of formal contracts increases with the quality of formal institutions. This effect is contingent upon managerial dispositions of ethical idealism and interpersonal trust, which provide a morally driven override of uncertainty and a substitute source of certainty in business practices, respectively. We test our arguments on hand-collected data from 3,652 manager-negotiators in 16 countries. We find that managers endorse formal contracts when they are embedded in contexts with high quality contract enforcement institutions, but this effect diminishes substantially among ethically idealistic managers. These results suggest that an understanding of managers’ reliance on formal contracts requires multilevel theory informed by how managerial dispositions interact with the formal institutional context.

AB - This study integrates institutional and dispositional theories to develop a multilevel model predicting that managers’ endorsement of formal contracts increases with the quality of formal institutions. This effect is contingent upon managerial dispositions of ethical idealism and interpersonal trust, which provide a morally driven override of uncertainty and a substitute source of certainty in business practices, respectively. We test our arguments on hand-collected data from 3,652 manager-negotiators in 16 countries. We find that managers endorse formal contracts when they are embedded in contexts with high quality contract enforcement institutions, but this effect diminishes substantially among ethically idealistic managers. These results suggest that an understanding of managers’ reliance on formal contracts requires multilevel theory informed by how managerial dispositions interact with the formal institutional context.

KW - Ethics

KW - Formal contracts

KW - Institutional quality

KW - Legal institutions

KW - Multilevel modeling

KW - Trust

UR - https://www.mendeley.com/catalogue/ce41d0d3-3fa3-3f99-9fe6-4a4ee35320a1/

U2 - 10.1016/j.jbusres.2023.114231

DO - 10.1016/j.jbusres.2023.114231

M3 - Article

SN - 0148-2963

VL - 168

JO - J. Bus. Res.

JF - J. Bus. Res.

ER -

Managers’ dispositions toward formal contracts: A cross-country examination

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