The Use of Regression on Dummy Variables in Management Research

Searle, S. R.; Udell, Jon G.

doi:10.1287/mnsc.16.6.b397

Cited by 23 publications

(10 citation statements)

References 4 publications

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“…The decision to dichotomize should not be taken lightly (Cohen, ). Within management, dummy variables were perhaps first introduced by Searle and Udell () for the specific purpose of serving as coarse‐grained classification within a statistical model until such time as more refined measurement could be established. Dichotomization of a concept results in a reduction in information‐carrying capacity compared to a continuous variable (MacCallum et al, ).…”

Section: Discussion and Concluding Recommendationsmentioning

confidence: 99%

“…Attempting to quantify CEO duality in the Intel, Alcoa, and Hewlett‐Packard examples helps illustrate the important, yet at times unacknowledged, differences between dichotomous variables and dichotomous concepts. Dichotomous variables (0, 1) have long been an important part of management research, but were introduced to serve as temporary variables, to be utilized until concepts were better elaborated and measures developed (Searle & Udell, ). Dichotomous concepts are those which can be classified into two truly discrete groups without loss of informative power.…”

Section: How Do You Measure the Concept Of Ceo Duality?mentioning

confidence: 99%

“…We find that within-firm instability varies across national contexts and is sufficient to be a concern for governance scholars. We then compare this finding to the measurement of CEO (Searle & Udell, 1970). Dichotomous concepts are those which can be classified into two truly discrete groups without loss of informative power.…”

Section: Introductionmentioning

confidence: 99%

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Reexamining CEO duality: The surprisingly problematic issues of conceptualization and measurement

Gove

Junkunc

Bruyaka

et al. 2017

Corporate Governance

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Manuscript Type: EmpiricalResearch Question/Issue: While corporate governance research is the beneficiary of advances in research methodologies and statistical techniques, less attention has been placed on variable measurement. This paper draws into question the conceptualization and measurement of CEO duality by highlighting its largely unrecognized instability and the challenges instability imposes on measuring dichotomous variables. CEO duality is widely used in corporate governance research and frequently operationalized dichotomously as a dummy variable. We present examples of the frequent changes in duality within organizations which challenge our current view of CEO duality.Research Findings/Insights: We find that the instability of CEO duality in practice varies considerably at both the national and within-firm levels. We find that a mismatch exists between the current conceptualization of CEO duality, actual patterns of data, and the measures used by governance researchers. The paper draws attention to the limits of conceptualizing and measuring what is seemingly dichotomous data, reviews these in research and in practice, and provides examples, recommendations and assessments of alternate ways existing data can be used.Theoretical/Academic Implications: Our results draw into question the reliance on a simple dichotomous conceptualization and operationalization of CEO duality in governance research.Data limitations of corporate governance research may be alleviated by directly assessing stability of duality within firms and reimagining concepts in ways that can be measured using existing data.Practitioner/Policy Implications: CEO duality, a legal but discouraged governance structure, may be changed intentionally or result from a variety of temporary firm-level factors.Assessing the longitudinal patterns in duality and underlying causes for temporary changes in duality should be incorporated into evaluations of firm governance structures.

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Section: Discussion and Concluding Recommendationsmentioning

confidence: 99%

Section: How Do You Measure the Concept Of Ceo Duality?mentioning

confidence: 99%

See 1 more Smart Citation

Reexamining CEO duality: The surprisingly problematic issues of conceptualization and measurement

Gove

Junkunc

Bruyaka

et al. 2017

Corporate Governance

View full text Add to dashboard Cite

show abstract

“…To analyze how this moderating effect varies when firms follow a concrete SHRM orientation, three dummy variables (Searle and Udell 1970;Craig and Henry 1975) were created, with the following values. orient1: 1 -if the firm follows an ''individualistic control'' pattern 0 -any other case orient2: 1 -if the firm follows a ''group development'' pattern 0 -any other case orient3: 1 -if the firm follows a ''group management'' pattern 0 -any other case By multiplying these variables with the interaction terms, it is possible to isolate the moderating effect of each of the SHRM configurations.…”

Section: The Moderating Effect Of Hrmsmentioning

confidence: 99%

Transforming Human Resource Management Systems to Cope with Diversity

2011

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The purpose of this study is to examine how workgroup diversity can be managed through specific strategic human resource management systems. Our review shows that 'affirmative action' and traditional 'diversity management' approaches have failed to simultaneously achieve business and social justice outcomes of diversity. As previous literature has shown, the benefits of diversity cannot be achieved with isolated interventions. To the contrary, a complete organizational culture change is required, in order to promote appreciation of individual differences. The paper contributes to this discussion by exploring the implications of this change for human resource management, and explaining how the systems of practices should be changed when they are directed to diverse groups. The model designed to test this notion includes: (1) demographic and human capital diversity as independent variables, (2) group performance (measured as innovation outcomes) as the dependent variable and, (3) the orientation of the strategic human resource management system as a potential moderator of this relationship. The main conclusion of the empirical analysis developed is that different patterns of human resource management practices can be used, depending on the type of diversity that the organization faces, and the specific effects that it wishes to manage. Concretely, three alternative management systems are identified in this paper, with different moderating effects. This result has interesting implications for human resource management professionals, explained in the last section. The limitations of this study are also discussed, as well as some issues that future research in this field should address.

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“…This measurement simplification is not without costs, as the severity of errors in measuring constructs is inversely proportional to the number and sophistication of indicators used. While dummy variables may be effectively used to represent temporally stable and truly dichotomous factors and as a proxy for early stage constructs (Searle & Udell, 1970), their widespread use in strategic management research is problematic. Dummy variables represent the extreme in their reliance on temporal stability as variability within and across time cannot be incorporated.…”

mentioning

confidence: 99%

Dummy Constructs? Binomial Categorical Variables as Representations of Constructs

Gove

Junkunc

2013

Organizational Research Methods

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CEO duality describes the governance structure when a firm’s chief executive officer also holds the position of chairman of the board. Duality is central to theoretical perspectives on corporate governance and top management, yet duality’s relationship with numerous outcomes is characterized by nonsignificant coefficients and bivariate correlations hovering near zero. We argue and present evidence that CEO duality represents a “dummy construct”—an intentionally pejorative assessment on the widespread use of binomial categorical “dummy” variables to represent complex constructs. While we highlight CEO duality, the use of dummy variables as constructs is common in research. We review CEO duality as a construct and assess typical approaches to its measurement. When compared to actual patterns of duality within organizations, we find that current operationalizations are lacking due to a lack of attention to temporal considerations. This raises questions about the construct validity of current conceptualizations of CEO duality. Actual patterns suggest constructs and theoretical perspectives not previously considered. We present a taxonomy of CEO duality archetypes and offer suggestions on the incorporation of time for studies using dummy variables.

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The Use of Regression on Dummy Variables in Management Research

Cited by 23 publications

References 4 publications

Reexamining CEO duality: The surprisingly problematic issues of conceptualization and measurement

Reexamining CEO duality: The surprisingly problematic issues of conceptualization and measurement

Transforming Human Resource Management Systems to Cope with Diversity

Dummy Constructs? Binomial Categorical Variables as Representations of Constructs

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