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This article examines two issues regarding the formation and effects of qualitative perceptions offirm performance: First, do firm quantitative measures of performance influence perceptions offirm management quality? Second, do perceived firm qualities affect measures of firm financial performance? We examined data from Fortune magazine's survey of corporate reputations as a source for measures of perceivedfirm quality. The results suggest thatfinancial measures of both risk and return influenced perceptions offirm quality. Moreover, perceptions offirm quality, though correlated with the subsequent performance of specific financial performance measures, were generally more closely related to priorfinancial performance than to subsequent financial performance.

The authors review management research drawing on prospect theory, focusing primarily on studies in strategic management and organizational behavior/human resource management. These studies have made valuable contributions to several prominent research streams. However, they commonly underutilize or misconstrue central arguments from prospect theory. Furthermore, they illustrate that applying prospect theory in organizational settings poses several theoretical and methodological challenges. Thus, the authors review these studies, critically analyze them, and make suggestions to enrich future work.

International audienceThis article proposes that legitimating agencies such as accreditation organizations face selection pressures to both maintain their legitimacy among their constituents, but also to expand the domain of their activities. We argue that domain expansion raises three important research questions: first, the factors that lead legitimating agencies to expand their domain; second, the need to maintain legitimacy among existing constituents; and third, the establishment of legitimacy in the new domain. We use the domain expansion of the AACSB to develop propositions relevant to these three research issues. Quality concerns, process vs. content strategy, and institutional entrepreneurship are the main factors that impact the legitimation of legitimating agencies

T o address the convergence-divergence debate in corporate governance, we conduct a multiple-case, multiple-level study to analyze the diffusion of governance innovation in Japan. We argue that Japanese systems of corporate governance neither fully converge to, nor completely diverge from, the Anglo-American model. Rather, Sony-the pioneer of corporate governance reforms-and its followers selectively adopted features from this model, decoupled them from the original context, and tailored them to fit to their own situations to generate governance innovation. However, we find that the spread of innovation across firms and institutional levels is far from linear and straightforward, and that other well-regarded firms raised strong opposition to the institutionalization of corporate governance reforms. Eventually, the Ministry of Justice revised the Commercial Code to legitimize different systems, which led to the emergence of diverse corporate governance practices.Based on the results of our study, we construct an analytical framework to examine innovation diffusion in light of conflicting institutional pressures for change and continuity. Our analysis adds complexity to the convergence-divergence debate by identifying the creation of hybrid corporate governance systems and the nonlinear evolution of such systems as a result of interactions across multiple levels. We show the various degrees of decoupling from the Anglo-American model and identify the antecedents. We then extend the conventional focus of innovation research on diffusion across firms to examine diffusion across institutional levels. We also contribute to institutional theory by offering insights into organizational field formation and the conceptualization of the state in shaping institutional change and continuity.