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Research on the effect of executive equity incentives is equivocal. Based on agency theory, some scholars take the convergence of interest logic to highlight the benefits of executive equity incentives. In contrast, others adopt the entrenchment logic to emphasize the increased agency costs. This study attempts to reconcile the debate on executive equity incentives and integrates the opposing views to unveil how executive equity incentives impact corporate social responsibility (CSR) performance.

Using the panel dataset of Chinese A-share listed firms from 2006 to 2022, this study integrates the convergence of interest and entrenchment logic to examine how executive equity incentives affect CSR performance.

We find that the relationship between executive equity incentives and CSR performance follows an inverted U-shaped form. According to the convergence of interest logic, executive equity incentives reduce agency costs when allocating resources to engage in CSR activities and enable firms to increase their CSR investments, ultimately realizing increased CSR performance. After a threshold, however, the accumulation of extensive equity incentives causes the entrenchment effect, resulting in declined CSR performance. Our empirical results also shed new light on its contingent perspective – the inverted U-shaped relationship is attenuated when firms’ stock liquidity is high.

This study attempts to reconcile the debate on executive equity incentives and integrates the opposing views to unveil the inverted U-shaped relationship between executive equity incentives and CSR performance. Our study opens promising avenues for further research on corporate governance and CSR strategies.

Decision comprehensiveness is an important process in determining the outcomes of strategic decision-making. While recent research began to explore its individual level antecedents, a fundamental aspect of organizational life, heterogeneous goals, have not been investigated for their effects on comprehensiveness. In this study, our purpose is to study the impact of goal heterogeneity on decision comprehensiveness and explore behavioral integration as a potential mediator in this relationship.

To test our hypotheses, we utilize a survey-based study with a sample of teams undertaking a business simulation. Our longitudinal data collection process captures team data across the initial-, mid-, and the ending-stages of the simulation.

Our findings show that goal heterogeneity negatively impacts behavioral integration and decision comprehensiveness. Moreover, the negative impact of goal heterogeneity on decision comprehensiveness is mediated through behavioral integration.

Given that many strategic decisions are undertaken by groups of individuals, it is imperative to understand the factors that impact team-level decision-making processes. Extending the literature, we empirically show the negative effects of goal heterogeneity on decision comprehensiveness. While doing so, we also show that behavioral integration – a team trait that can endure over time, as opposed to a one-time state – can be crucial in dampening this negative effect. Our findings suggest researchers, and managers, to be cautious in assuming decision comprehensiveness may easily be achieved in any given team context.