Abstract Research Summary We provide evidence that investors in U.S. public markets are increasingly discounting firms' expected future cash flows during 1980–2013. This trend is shown not only on average across firms, but also within firms over time after alternative explanations are accounted for. To corroborate a link with firm time horizons, we estimate the relationship between an implied discount rate (“IDR”) and factors relevant to firm long‐term strategy. We find that IDR is correlated in expected ways with firm investments, management incentives, financial health, ownership, and external pressures—measures that have been argued to correlate with firm time horizons. This article represents one of the first attempts to document market‐wide evidence of shortening firm time horizons. These changing horizons bear important implications for firm strategy. Managerial Summary Whether U.S. firms have become more short‐term oriented remains an active debate among managers, investors, researchers, and policymakers. In this study, we report that investors have been increasingly discounting the expected future returns of public firms over the last three decades. We find that a firm's discounting rate is explained by signals of its long‐term strategy, including investment decisions, ownership structure, financial health, executive compensation scheme, and short‐term pressures from the external environment. Our findings indicate a market‐wide contraction of firm time horizons, highlighting firm characteristics that suggest how and why firms differ in their time horizons. These demonstrated relationships may help guide firms in devising investment strategies as well as external communications to attract investors that share a firm's preferred time horizon.

Abstract Research Summary Seeking causal evidence on biases in idea evaluation, we conducted a field experiment in a large multinational company with two conditions: (a) blind evaluation, in which managers received no proposer information, and (b) non‐blind evaluation, in which they received the proposer's name, unit, and location. To our surprise—and in contrast to the preregistered hypotheses—we found no biases against women and proposers from different units and locations, which blinding could ameliorate. Addressing challenges that remained intractable in the field experiment, we conducted an online experiment, which replicated the null findings. A final vignette study showed that people overestimated the magnitude of the biases. The studies suggest that idea evaluation can be less prone to biases than previously assumed and that evaluators separate ideas from proposers. Managerial Summary We wanted to find out if there were biases in the way managers evaluate ideas from their employees. We did a field experiment in a large multinational technology company where we tested two different ways of evaluating ideas: one where managers did not know anything about the person who came up with the idea and one where they did know the person's name, which unit they worked for, and where they were located. The results were surprising. We did not find any bias against women and employees that did not work in the same location and unit as the evaluator. Managers are advised that hiding the identity of idea proposers (from idea evaluators) may not be a silver bullet to improving idea evaluation.

Abstract Research Summary Solving non‐routine problems—problems for which current organizational, recurrent action patterns do not offer a predetermined, effective solution—can be an important source of value creation. When these problems occur in subsidiaries of multinational corporations, senior headquarters managers can potentially help solve them. However, whether their involvement is beneficial rests upon the assumptions that they know which knowledge is appropriate and that their involvement does not negatively influence the problem solving process. We challenge these assumptions and theorize that the involvement of senior headquarters managers is negatively related to solution effectiveness, unless senior subsidiary managers are also involved, and especially if problems have an external locus (i.e., primarily relate to the firm's products and services). Our robust results are consistent with our theory. Managerial Summary Companies are often faced with new problems, which represent an opportunity for organizational improvements. But how different types of senior managers influence problem solving effectiveness has remained unclear. Studying problems occurring in foreign subsidiaries of multinational corporations, we find that the involvement of senior headquarters managers is negatively related to problem solving effectiveness. Two reasons explain this result: senior headquarters managers often lack necessary understanding of their subsidiaries' contexts; and their involvement diminishes active participation of subsidiary employees. The negative relationship is especially strong when problems relate to products and services (as opposed to internal processes). Furthermore, we find that senior subsidiary managers can mitigate the negative consequences related to senior headquarters managers' involvement.