IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v60y2025i3s1090951625000148.html
   My bibliography  Save this article

Inconsistent performance feedback and firm internationalization: Can CEOs remove the haze?

Author

Listed:
  • Kerai, Anita
  • George, Nycil

Abstract

In this paper, we investigate how CEO power moderates the relationship between inconsistent performance feedback and family firm internationalization. We argue that when faced with such ambiguity, internationalization is contingent on the CEOs’ ability derived from their sources of power. We test our hypotheses using a sample of Indian family firms from 2008 to 2015. We find that powerful CEOs choose self-enhancement over problemistic search and are less likely to pursue firm internationalization. Our results also show that when CEOs draw power from formal sources, they are more prone to cognitive biases and, thus, more likely to adopt self-enhancement.

Suggested Citation

  • Kerai, Anita & George, Nycil, 2025. "Inconsistent performance feedback and firm internationalization: Can CEOs remove the haze?," Journal of World Business, Elsevier, vol. 60(3).
    • Handle: RePEc:eee:worbus:v:60:y:2025:i:3:s1090951625000148
    DOI: 10.1016/j.jwb.2025.101625
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951625000148
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jwb.2025.101625?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stefano Elia & Marcus M. Larsen & Lucia Piscitello, 2019. "Entry mode deviation: A behavioral approach to internalization theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1359-1371, October.
    2. Danny Miller, 1991. "Stale in the Saddle: CEO Tenure and the Match Between Organization and Environment," Management Science, INFORMS, vol. 37(1), pages 34-52, January.
    3. Xiao, Shufeng & Tian, Xiaocong, 2023. "Performance feedback and location choice of foreign direct investment," International Business Review, Elsevier, vol. 32(4).
    4. Chari, Murali D.R. & Banalieva, Elitsa R., 2015. "How do pro-market reforms impact firm profitability? The case of India under reform," Journal of World Business, Elsevier, vol. 50(2), pages 357-367.
    5. Luis Filipe Lages & Sandy D Jap & David A Griffith, 2008. "The role of past performance in export ventures: a short-term reactive approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(2), pages 304-325, March.
    6. John Joseph & Vibha Gaba, 2015. "The fog of feedback: Ambiguity and firm responses to multiple aspiration levels," Strategic Management Journal, Wiley Blackwell, vol. 36(13), pages 1960-1978, December.
    7. Elizabeth Maitland & André Sammartino, 2015. "Managerial cognition and internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(7), pages 733-760, September.
    8. Jiang, Guoliang Frank & Holburn, Guy L.F., 2018. "Organizational performance feedback effects and international expansion," Journal of Business Research, Elsevier, vol. 90(C), pages 48-58.
    9. Michael C. Withers & Kevin G. Corley & Amy J. Hillman, 2012. "Stay or Leave: Director Identities and Voluntary Exit from the Board During Organizational Crisis," Organization Science, INFORMS, vol. 23(3), pages 835-850, June.
    10. Lin, Wen-Ting, 2014. "How do managers decide on internationalization processes? The role of organizational slack and performance feedback," Journal of World Business, Elsevier, vol. 49(3), pages 396-408.
    11. Bai, Xiaoou & Tsang, Eric W.K. & Xia, Wei, 2020. "Domestic versus foreign listing: Does a CEO's educational experience matter?," Journal of Business Venturing, Elsevier, vol. 35(1).
    12. Sabina Tasheva & Bo Bernhard Nielsen, 2022. "The role of global dynamic managerial capability in the pursuit of international strategy and superior performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 689-708, June.
    13. Zhensen Yang & Ying Zhou, 2023. "Beggars Cannot be Choosers? How Experiential and Vicarious Learning Direct Problemistic Search at Firm Internationalization," Management International Review, Springer, vol. 63(6), pages 943-978, December.
    14. Jae C. Jung & Pratima Bansal, 2009. "How Firm Performance Affects Internationalization," Management International Review, Springer, vol. 49(6), pages 709-732, December.
    15. Catherine M. Daily & S. Trevis Certo & Dan R. Dalton, 2000. "International experience in the executive suite: the path to prosperity?," Strategic Management Journal, Wiley Blackwell, vol. 21(4), pages 515-523, April.
    16. Yong Yang & Nigel Driffield, 2012. "Multinationality-Performance Relationship," Management International Review, Springer, vol. 52(1), pages 23-47, February.
    17. Debellis, Francesco & Rondi, Emanuela & Plakoyiannaki, Emmanuella & De Massis, Alfredo, 2021. "Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda," Journal of World Business, Elsevier, vol. 56(1).
    18. Arturs Kalnins, 2018. "Multicollinearity: How common factors cause Type 1 errors in multivariate regression," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2362-2385, August.
    19. Igor Filatotchev & Xiaohui Liu & Trevor Buck & Mike Wright, 2009. "The export orientation and export performance of high-technology SMEs in emerging markets: The effects of knowledge transfer by returnee entrepreneurs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(6), pages 1005-1021, August.
    20. Cui, Lin & Meyer, Klaus E. & Hu, Helen Wei, 2014. "What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms," Journal of World Business, Elsevier, vol. 49(4), pages 488-501.
    21. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    22. Jaideep Anand & Gerald McDermott & Ram Mudambi & Rajneesh Narula, 2021. "Innovation in and from emerging economies: New insights and lessons for international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(4), pages 545-559, June.
    23. Jean-Luc Arrègle & Patricio Duran & Michael A. Hitt & Marc van Essen, 2017. "Why Is Family Firms' Internationalization Unique? A Meta-Analysis," Post-Print hal-02311886, HAL.
    24. Laura J. Stanley, 2010. "Emotions and Family Business Creation: An Extension and Implications," Entrepreneurship Theory and Practice, , vol. 34(6), pages 1085-1092, November.
    25. Mondal, Arindam & Ray, Sougata & Lahiri, Somnath, 2022. "Family ownership, family management, and multinationality: Evidence from India," Journal of Business Research, Elsevier, vol. 138(C), pages 347-359.
    26. Thomas M. Zellweger & Robert S. Nason & Mattias Nordqvist & Candida G. Brush, 2013. "Why Do Family Firms Strive for Nonfinancial Goals? An Organizational Identity Perspective," Entrepreneurship Theory and Practice, , vol. 37(2), pages 229-248, March.
    27. Luis R. Gomez‐Mejia & Marianna Makri & Martin Larraza Kintana, 2010. "Diversification Decisions in Family‐Controlled Firms," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 223-252, March.
    28. Narula, Rajneesh & Verbeke, Alain, 2015. "Making internalization theory good for practice: The essence of Alan Rugman's contributions to international business," Journal of World Business, Elsevier, vol. 50(4), pages 612-622.
    29. Edward Bishop Smith & Heewon Chae, 2017. "The Effect of Organizational Atypicality on Reference Group Selection and Performance Evaluation," Organization Science, INFORMS, vol. 28(6), pages 1134-1149, December.
    30. Smith, Anne & Houghton, Susan M. & Hood, Jacqueline N. & Ryman, Joel A., 2006. "Power relationships among top managers: Does top management team power distribution matter for organizational performance?," Journal of Business Research, Elsevier, vol. 59(5), pages 622-629, May.
    31. Dongil D. Keum & J. P. Eggers, 2018. "Setting the Bar: The Evaluative and Allocative Roles of Organizational Aspirations," Organization Science, INFORMS, vol. 29(6), pages 1170-1186, December.
    32. Lorenz Graf-Vlachy & Jonathan Bundy & Donald C. Hambrick, 2020. "Effects of an Advancing Tenure on CEO Cognitive Complexity," Organization Science, INFORMS, vol. 31(4), pages 936-959, July.
    33. Kimberly A Eddleston & Ravi Sarathy & Elitsa R Banalieva, 2019. "When a high-quality niche strategy is not enough to spur family-firm internationalization: The role of external and internal contexts," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(5), pages 783-808, July.
    34. Gao, Ning & Jain, Bharat A., 2012. "Founder management and the market for corporate control for IPO firms: The moderating effect of the power structure of the firm," Journal of Business Venturing, Elsevier, vol. 27(1), pages 112-126.
    35. David L. Deephouse & Peter Jaskiewicz, 2013. "Do Family Firms Have Better Reputations Than Non-Family Firms? An Integration of Socioemotional Wealth and Social Identity Theories," Journal of Management Studies, Wiley Blackwell, vol. 50(3), pages 337-360, May.
    36. Schmid, Stefan & Altfeld, Frederic & Dauth, Tobias, 2018. "Americanization as a driver of CEO pay in Europe: The moderating role of CEO power," Journal of World Business, Elsevier, vol. 53(4), pages 433-451.
    37. Jean–Luc Arregle & Patricio Duran & Michael A. Hitt & Marc van Essen, 2017. "Why is Family Firms’ Internationalization Unique? A Meta–Analysis," Entrepreneurship Theory and Practice, , vol. 41(5), pages 801-831, September.
    38. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563, Decembrie.
    39. Lv, David Diwei & Chen, Weihong & Zhu, Hang & Lan, Hailin, 2019. "How does inconsistent negative performance feedback affect the R&D investments of firms? A study of publicly listed firms," Journal of Business Research, Elsevier, vol. 102(C), pages 151-162.
    40. Meyer, Klaus E. & Su, Yu-Shan, 2015. "Integration and responsiveness in subsidiaries in emerging economies," Journal of World Business, Elsevier, vol. 50(1), pages 149-158.
    41. Jaepil Choi & Heli Wang, 2009. "Stakeholder relations and the persistence of corporate financial performance," Strategic Management Journal, Wiley Blackwell, vol. 30(8), pages 895-907, August.
    42. Pasi Kuusela & Thomas Keil & Markku Maula, 2017. "Driven by aspirations, but in what direction? Performance shortfalls, slack resources, and resource-consuming vs. resource-freeing organizational change," Strategic Management Journal, Wiley Blackwell, vol. 38(5), pages 1101-1120, May.
    43. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 481-498, July.
    44. Elizabeth Lim & Pino G. Audia, 2020. "Problem-Solving or Self-Enhancing? Influences of Diversification and Bright Spot on Corporate Resource Allocation Responses to Performance Shortfalls," Strategy Science, INFORMS, vol. 5(4), pages 348-368, December.
    45. Grazia D Santangelo & Klaus E Meyer, 2017. "Internationalization as an evolutionary process," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(9), pages 1114-1130, December.
    46. Ine Umans & Nadine Lybaert & Tensie Steijvers & Wim Voordeckers & Eddy Laveren, 2024. "Performance below and above aspirations as an antecedent of succession planning in family firms: A socio-emotional wealth mixed gamble approach," Review of Managerial Science, Springer, vol. 18(5), pages 1427-1458, May.
    47. Dutta, Dev K. & Malhotra, Shavin & Zhu, PengCheng, 2016. "Internationalization process, impact of slack resources, and role of the CEO: The duality of structure and agency in evolution of cross-border acquisition decisions," Journal of World Business, Elsevier, vol. 51(2), pages 212-225.
    48. Anne Domurath & Holger Patzelt, 2019. "Founder non-international experience and venture internationalization," Journal of International Entrepreneurship, Springer, vol. 17(4), pages 494-519, December.
    49. Josip Kotlar & Alfredo De Massis & Hanqing Fang & Federico Frattini, 2014. "Strategic reference points in family firms," Small Business Economics, Springer, vol. 43(3), pages 597-619, October.
    50. Richard A. D'Aveni, 1990. "Top Managerial Prestige and Organizational Bankruptcy," Organization Science, INFORMS, vol. 1(2), pages 121-142, May.
    51. Kerai, Anita & Kumar, Vikas & Singla, Chitra, 2023. "Impact of TMT structural power asymmetry on family firm internationalization," International Business Review, Elsevier, vol. 32(4).
    52. Cesinger, Beate & Hughes, Mathew & Mensching, Helge & Bouncken, Ricarda & Fredrich, Viktor & Kraus, Sascha, 2016. "A socioemotional wealth perspective on how collaboration intensity, trust, and international market knowledge affect family firms’ multinationality," Journal of World Business, Elsevier, vol. 51(4), pages 586-599.
    53. Georgakakis, Dimitrios & Dauth, Tobias & Ruigrok, Winfried, 2016. "Too much of a good thing: Does international experience variety accelerate or delay executives’ career advancement?," Journal of World Business, Elsevier, vol. 51(3), pages 425-437.
    54. Dimitrios Georgakakis & Mads E. Wedell-Wedellsborg & Tommaso Vallone & Peder Greve, 2023. "Strategic leaders in multinational enterprises: A role-specific microfoundational view and research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(3), pages 514-537, April.
    55. Irina Surdu & Henrich R. Greve & Gabriel R. G. Benito, 2021. "Back to basics: Behavioral theory and internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(6), pages 1047-1068, August.
    56. Liena Kano & Luciano Ciravegna & Francesco Rattalino, 2021. "The family as a platform for FSA development: Enriching new internalization theory with insights from family firm research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(1), pages 148-160, February.
    57. Shou-Min Tsao & Wei-Hao Lien, 2013. "Family Management and Internationalization: The Impact on Firm Performance and Innovation," Management International Review, Springer, vol. 53(2), pages 189-213, April.
    58. Hamid Boustanifar & Edward J. Zajac & Flladina Zilja, 2022. "Taking chances? The effect of CEO risk propensity on firms’ risky internationalization decisions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(2), pages 302-325, March.
    59. Xie, En & Huang, Yuanyuan & Stevens, Charles E. & Lebedev, Sergey, 2019. "Performance feedback and outward foreign direct investment by emerging economy firms," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    60. Pino G. Audia & Henrich R. Greve, 2006. "Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry," Management Science, INFORMS, vol. 52(1), pages 83-94, January.
    61. Tine Buyl & Christophe Boone & Walter Hendriks & Paul Matthyssens, 2011. "Top Management Team Functional Diversity and Firm Performance: The Moderating Role of CEO Characteristics," Journal of Management Studies, Wiley Blackwell, vol. 48(1), pages 151-177, January.
    62. Ramamurti, Ravi, 2012. "Competing with emerging market multinationals," Business Horizons, Elsevier, vol. 55(3), pages 241-249.
    63. Luca Berchicci & Murat Tarakci, 2022. "Aspiration formation and attention rules," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1575-1601, August.
    64. Ohad Ref & Zur Shapira, 2017. "Entering new markets: The effect of performance feedback near aspiration and well below and above it," Strategic Management Journal, Wiley Blackwell, vol. 38(7), pages 1416-1434, July.
    65. Ref, Ohad & Feldman, Naomi E. & Iyer, Dinesh N & Shapira, Zur, 2021. "Entry into new foreign markets: Performance feedback and opportunity costs," Journal of World Business, Elsevier, vol. 56(6).
    66. Nycil George & Anita Kerai, 2024. "Ordinary capabilities and firm performance: The role of capital market development," Asia Pacific Journal of Management, Springer, vol. 41(1), pages 233-274, March.
    67. Charles Amo Yartey, 2010. "The institutional and macroeconomic determinants of stock market development in emerging economies," Applied Financial Economics, Taylor & Francis Journals, vol. 20(21), pages 1615-1625.
    68. Panicker, Vidya Sukumara & Mitra, Sumit & Upadhyayula, Rajesh Srinivas, 2019. "Institutional investors and international investments in emerging economy firms: A behavioral risk perspective," Journal of World Business, Elsevier, vol. 54(4), pages 322-334.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bai, Tao & Zhou, Abby Jingzi & Zhou, Steven Shijin & Liesch, Peter, 2025. "Negative performance feedback, CEO power and internationalization," Journal of World Business, Elsevier, vol. 60(3).
    2. Kotiloglu, Serhan & Blettner, Daniela & Lechler, Thomas G., 2024. "Integrating national culture into the organizational performance feedback theory," European Management Journal, Elsevier, vol. 42(3), pages 327-347.
    3. Zhensen Yang & Ying Zhou, 2023. "Beggars Cannot be Choosers? How Experiential and Vicarious Learning Direct Problemistic Search at Firm Internationalization," Management International Review, Springer, vol. 63(6), pages 943-978, December.
    4. Hendriks, Guus & Slangen, Arjen H.L. & Heugens, Pursey P.M.A.R., 2024. "Country portfolio diversity and firms’ portfolio adjustment decisions: A behavioral perspective," International Business Review, Elsevier, vol. 33(4).
    5. Xie, En & Huang, Yuanyuan & Stevens, Charles E. & Lebedev, Sergey, 2019. "Performance feedback and outward foreign direct investment by emerging economy firms," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    6. Ref, Ohad & Feldman, Naomi E. & Iyer, Dinesh N & Shapira, Zur, 2021. "Entry into new foreign markets: Performance feedback and opportunity costs," Journal of World Business, Elsevier, vol. 56(6).
    7. Xiao, Shufeng & Yu, Tianjiao, 2024. "Underperformance duration and R&D internationalization: Institutional contingencies in an emerging economy," International Business Review, Elsevier, vol. 33(4).
    8. Fourné, Sebastian P.L. & Zschoche, Miriam & Schwens, Christian & Kotha, Reddi, 2023. "Multinational family firms’ internationalization depth and breadth following the global financial crisis," Journal of World Business, Elsevier, vol. 58(3).
    9. Meng, Can & Sousa, Carlos M.P. & Chen, Jieke, 2024. "Unraveling the relationship between innovation performance feedback and outward FDI: Moderating influence of inward FDI spillovers," Journal of Business Research, Elsevier, vol. 181(C).
    10. Cheng, Lulu & Xie, En & Fang, Junyi & Mei, Nan, 2022. "Performance feedback and firms’ relative strategic emphasis: The moderating effects of board independence and media coverage," Journal of Business Research, Elsevier, vol. 139(C), pages 218-231.
    11. Arindam Mondal & Somnath Lahiri, 2024. "The Role of Inward FDI and Family Firm Heterogeneity on Foreign Location Choice: Evidence from India," Management International Review, Springer, vol. 64(2), pages 245-278, April.
    12. Stefano Elia & Anthony Goerzen & Lucia Piscitello & Alfredo Valentino, 2024. "Re‐Evaluating the Offshoring Decision: A Behavioural Approach to the Role of Performance Discrepancy," Journal of Management Studies, Wiley Blackwell, vol. 61(1), pages 178-229, January.
    13. Danchi Tan & Weichieh Su & Joseph T. Mahoney & Yasemin Kor, 2020. "A review of research on the growth of multinational enterprises: A Penrosean lens," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 498-537, June.
    14. Alayo, Mikel & Maseda, Amaia & Iturralde, Txomin & Calabrò, Andrea, 2023. "We are family! The role of family members’ identification in the internationalization of family firms," European Management Journal, Elsevier, vol. 41(5), pages 792-801.
    15. Xie, En & Fang, Alex Junyi & Chen, Xin & Wu, Zhan & Kumar, Vikas, 2022. "Performance feedback on sales growth goal and OFDI location choices for firms in emerging economies," Journal of World Business, Elsevier, vol. 57(4).
    16. Xiao, Shufeng & Tian, Xiaocong, 2023. "Performance feedback and location choice of foreign direct investment," International Business Review, Elsevier, vol. 32(4).
    17. Debellis, Francesco & Rondi, Emanuela & Plakoyiannaki, Emmanuella & De Massis, Alfredo, 2021. "Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda," Journal of World Business, Elsevier, vol. 56(1).
    18. Dong, Meitong & Wang, Liwen & Yang, Defeng & Zhou, Kevin Zheng, 2022. "Performance feedback and export intensity of Chinese private firms: Moderating roles of institution-related factors," International Business Review, Elsevier, vol. 31(3).
    19. Guo, Jianquan & Cheng, He, 2024. "Performance feedback on sales growth and M&A: Evidence from China," Japan and the World Economy, Elsevier, vol. 69(C).
    20. Ilya R. P. Cuypers & Charmi Patel & Gokhan Ertug & Jiatao Li & Youtha Cuypers, 2022. "Top management teams in international business research: A review and suggestions for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 481-515, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:60:y:2025:i:3:s1090951625000148. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.