Addressing managerial loss aversion for the corporate value creation process: A critical analysis of the literature and preliminary approaches

To date, the studies on managerial loss aversion have produced contradictory findings, making it impossible to: (i) identify the ultimate impact of managerial loss aversion on the value that organisations create for themselves and for their stakeholders, and (ii) mitigate the effect of managerial lo...

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Veröffentlicht in:Administrative sciences Jg. 14; H. 1; S. 1 - 16
Hauptverfasser: Camilli, Riccardo, Mechelli, Alessandro, Stefanoni, Alessandra, Rossi, Fabrizio
Format: Journal Article
Sprache:Englisch
Veröffentlicht: Basel MDPI 01.01.2024
MDPI AG
Schlagworte:
Bias
Corporate social responsibility
corporate value creation process
Creation process
Decision making
Expenditures
Investments
Kahneman, Daniel
Literary criticism
Literature reviews
loss aversion
managerial loss aversion
Managers
Novels
Research methodology
Social responsibility
systematic literature review
Systematic review
Value creation
ISSN:2076-3387, 2076-3387
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Zusammenfassung:To date, the studies on managerial loss aversion have produced contradictory findings, making it impossible to: (i) identify the ultimate impact of managerial loss aversion on the value that organisations create for themselves and for their stakeholders, and (ii) mitigate the effect of managerial loss aversion to improve corporate value creation. With the aim of filling this gap, the authors of this paper first performed a Systematic Literature Review (SLR), resulting in 65 relevant papers. The 65 papers were then analysed through a Thematic Analysis (TA), which was aimed at isolating and revising the single effects of managerial loss aversion on the corporate value creation process. Once it became clear when and how managerial loss aversion leads to negative impacts on corporate value creation (such as suboptimal investments in corporate social responsibility, short-term-oriented budget expenditures, illegal corporate conduct in favourable contexts, and low demand for audit quality), a novel theoretical framework was built. This framework proposes some preliminary approaches to mitigate these detrimental effects. In particular, future empirical research may operationalise potential debiasing strategies, derived from critical analysis of the literature, to reduce managerial loss aversion in different business settings, thereby improving corporate value creation.
Bibliographie:ObjectType-Article-1
SourceType-Scholarly Journals-1
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content type line 14
ISSN:2076-3387
2076-3387
DOI:10.3390/admsci14010005