Tavassoli et al. (2014): Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less
12 important questions on Tavassoli et al. (2014): Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less
What wants the paper by Tavassoli et al. (2014) to add to existing literature about brand equity?
What kind of framework does the paper by Tavassoli et al. (2014) propose? What does it explain and what is it based on?
- The authors propose an identity-based framework that describes why executives accept lower pay to manage firms that own strong brands
- This framework is based on self-enhancement
Which theory is important in the paper by Tavassoli et al. (2014)?
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How can employee-based brand equity be defined?
Which two aspects have an impact on the executive's willingness to accept lower pay? And what kind of relationship is it (positive/negative)?
- The perceived strength of identification between the individual and the brand
- Potential for uncertainty reduction afforded by the association with the brand
The higher one of the two are, the higher the executive's willingness to accept lower pay (positive relationship)
Do strong or weak brands offer greater possibilities for self-enhancement? And to what should this benefit lead?
- Strong brands offer greater possibilities for self-enhancement to the executives associated with them than do weak brands.
- This benefit should lead to a willingness to accept lower pay
What are the four implications from te paper of Tavassoli et al. (2014)?
- Look for brand value beyond customer-based brand equity
- Brand Equity is a broader construct
- Broaden the scope of marketing metrics
- Not only measure things right, also measure the right things
- Make brand core to human resource practices
- HR department should leverage the strength of the brand just as they leverage the tangible advantages that employees of the firm receive
- Expand the scope of research on the marketing-finance interface
- Compensation committees can use brand equity as an effective bargaining tool when establishing executive pay
Which three hypothesis were stated in the paper by Tavassoli et al. (2014) and were they supported or not?
- H1: Firms with strong brands pay their executives less.
- H2: The negative effect of brand strength on executive pay is the strongest for the CEO compared to other executives.
- The CEO will be most willing to accept lower pay
- H3: The negative effect of brand strength on executive pay is stronger for younger executives compared to older executives.
- Because young executives benefit more from equity transfer and uncertainty avoidance by working for a certain brand
All the hypothesis were supported.
What does the employee-based view of brand equity emphasise?
What does the employee-based view of brand equity emphasise?
Strong brands are the most likely to be effective in negotiations with CEOs. In executive compensation negotiations, the board of a firm with a strong brand should therefore emphasise what?
What are the main conclusions from the paper by Tavassoli et al. (2014)?
- Firms with strong brands pay their executives less than other firms
- This effect is stronger for CEOs and for younger executives.
- Executives value being associated with strong brands and, therefore, accept substantially lower pay at firms that own them.
- This effect is stronger for CEOs compared to other top executives, as well as for younger executives
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