Managerial Professional Experience And Enterprise Cost Stickiness

At present,China’s economy is generally faced with a serious problem of excess capacity,and the Covid-19 worldwide outbreak in 2020 aggravates this situation,a large number of inventory overstock and serious shortage of funds make some enterprises once into trouble,or even on the verge of bankruptcy.One of the main manifestations of overcapacity is the inelasticity of the operating costs of enterprises,which cannot be adjusted in a timely and effective manner when the operating revenue drops.With the comprehensive deepening of supply-side structural reform,the significance and importance of "reducing capacity" and "reducing cost" have been highlighted continuously.Among them,the proposal of "reducing cost" task and the implementation of relevant measures can also well eliminate the invalid or backward capacity of enterprises.In the operation and management of enterprises,the lack of cost elasticity is bound to lead to high cost stickiness,which is specifically manifested as the asymmetry in the direction of revenue and cost change,that is,when sales revenue declines,the rate of cost decline is smaller than that of cost increase when sales revenue increases.In the fierce market competition,"cost reduction" is the key link in the operation and management of enterprises,especially manufacturing enterprises,if enterprises want to continue to develop healthily.In the process of enterprise operation and management,the existence of cost stickiness directly affects the efficiency of enterprise resource allocation and the level of profit growth,which is not conducive to the sustainable development of enterprises.According to the existing literature,the causes of cost stickiness are mainly explained from three aspects:adjustment cost,optimistic management expectation and agency problem.However,fundamentally,the emergence of cost stickiness is the result of management decisions.As the core human resource of a company,senior executives play an extremely important role in making important decisions such as corporate strategy.Although there have been studies on the drivers and governance of cost stickiness from the perspective of statistical features such as senior executives’ gender,age,education level,and professional background,these observable surface features cannot explain the substantive reasons behind the differentiated decisions of senior executives.However,in the actual work of enterprises,Senior executives’ past work experience has a profound impact on their personality,the shaping of cognitive foundation and values,as well as the cultivation of their working ability,and will have a lasting impact on their behavioral preferences.Therefore,this paper will study the enterprise cost stickiness from the perspective of senior executives’ different career experiences.Specific academic experience,this article selects the executive financial experience and serving three aspects of professional experience to study the influence on enterprise cost stickiness,including academic experience executives has a solid theoretical foundation,financial executives have abundant practical working experience,military experience executives have good conduct and strong law-abiding consciousness,Talents with solid theoretical skills,rich practical experience and good codes of conduct are all needed for the better survival and development of enterprises.Therefore,based on the logical line of "theoretical research--practical experience--codes of conduct",this paper takes China’s A-share manufacturing listed companies in Shanghai and Shenzhen Stock Exchange from2008 to 2019 as the research samples.The relationship between the three aspects of executive career experience and enterprise cost stickiness is theoretically analyzed and empirically tested by using normative and empirical research methods.Finally,the following research conclusions are drawn:(1)Compared with no academic experience executives in the enterprise,has the academic experience of executives in enterprise cost lower viscosity degree,and compared with the academic experience with research association executives of enterprises,scientific research institutions and university academic experience executives of enterprise the cost lower viscosity degree,and the mechanism of inspection found that academic experience in a management executives optimism and path to reduce the enterprise cost of viscous agent problem.In addition,after distinguishing cost factors,the further study found that the negative impact of executive academic experience on material resource cost stickiness was significantly greater than that of human resource cost stickiness.Combined with the process of regional marketization,this paper analyzes the impact of executive academic experience on firm cost stickiness.It is found that the faster the process of regional marketization,the more significant the negative impact of executive academic experience on firm cost stickiness.Finally combining with enterprise internal control environment study senior academic experience negative influence to the enterprise cost of sticky in the low quality of internal control of enterprise is more apparent,suggesting that executives academic experience and the enterprise internal control has a trade-off,executives,to a certain extent academic experience can make up for the lack of internal governance mechanism,play a role in corporate governance.(2)Compared with those without financial experience,the degree of cost stickiness of those with financial experience is lower,and the mechanism test results show that the financial experience of senior executives reduces the cost stickiness of enterprises by reducing the deviation of optimistic expectations of management and alleviating agency conflicts.In addition,further research shows that the negative impact of financial experience on material resource cost stickiness is significantly greater than that of human resource cost stickiness.Compared with the low level of marketization,the negative impact of executive financial experience on the cost stickiness of enterprises in the high level of marketization is stronger,that is,executive financial experience and marketization process have a complementary relationship.Finally studied the internal control quality for senior financial experience,and costs of the relationship between viscosity,it is concluded that compared with the high quality of enterprise internal control,financial executive experience to lower the cost of enterprise internal control quality viscous negative effect is stronger,the resulting financial executive experience and enterprise internal control has a certain alternative relations,can play a role in corporate governance.(3)Compared with the enterprises without military experience,the enterprises with military experience have higher cost stickiness.The mechanism test results show that the military experience of senior executives affects the cost stickiness of enterprises by enhancing the optimistic expectations of the management.In addition,after distinguishing the cost factors,the further study concluded that the positive impact of senior executives’ military experience on the cost stickiness of material resources was significantly greater than that of human resources.Combined with the process of marketization in the region where the firm is located,the paper analyzes the impact of the senior executives’ military experience on the cost stickiness of the firm,and concludes that the positive impact of the senior executives’ military experience on the cost stickiness of the firm is more significant in the regions with high marketization level.Finally studied the internal quality control on executive military experience and the influence of enterprise cost old-brother relation,it is concluded that executives military experience positive impact on the enterprise cost stickiness is more obvious in the low quality of internal control of enterprise,thus a good internal control environment can weaken the military experience executives sticky positive influence to the enterprise cost.In conclusion,this paper studies the impact of senior executives’ career experience on enterprise cost stickiness,and hopes to make the following innovations:First,this study deepens the theory of high echelon.Since the senior echelon theory was put forward,scholars have focused more on the impact of demographic characteristics such as senior executives’ age,gender and educational background on managers’ decision-making.However,this paper focuses on a senior executive’s professional experience and analyzes its differentiated impact on their psychological and behavioral preferences.Second,this study provides a useful supplement to the relevant research literature on the economic consequences of executive career experience.Taking different career experiences of senior executives as the perspective to study their impact on enterprise cost stickiness,it provides some reference for enterprises to select senior executives in the future,and makes enterprises more aware of the potential behavior tendency of senior executives with different career experiences in the process of enterprise cost management.Thirdly,the research in this paper provides new evidence for the research on the influencing factors and governance of enterprise cost stickiness,and expands the relevant literature on the research of enterprise cost stickiness.Finally,it provides new evidence for improving the level of corporate governance,better realizing the goal of "cost reduction" in the supply-side structural reform,and facilitating the healthy development of enterprises,which has certain practical value.