Selecting future colleagues – morality on your CV

How do people make decisions? Traditionally, scholars would agree that decision-makers go through three steps in the decision-making process: (i) gathering information, (ii) evaluating such information, and (iii) deciding. Scholars have unveiled several important mechanisms and details about how information asymmetry influences the information gathering step or how social factors can shape the evaluation step in decision-making. Yet, little is known about how information asymmetry during the information gathering step of decision-making influences which social factors focal actors use in the evaluation step. My dissertation integrates the research streams on information asymmetry and social evaluations in the decision-making process. Specifically, in the three studies in this dissertation, I advance the decision-making field by theorising more comprehensively about the actors’ decision-making process.  

Theoretically, I draw from the literature on information asymmetry, stigma, the director labor market, and careers to enhance knowledge in the decision-making process with a simultaneous focus on both the information gathering step and the evaluation step. The first study highlights the interplay between the actors’ decision-making processes. The systematic review of the information asymmetry concept in this study focuses on the antecedents to information asymmetry, the different conceptualisations and roles that it has in theorising, the intent that focal actors have from their interaction, and the resolutions that they can use to reduce or exploit the informational imbalance. The findings from this study underscore that, due to the informational imbalance with other actors, focal actors can rely on different evaluation types, such as social evaluations or biases, to fill in the missing information. The second and third studies in this dissertation build on the insights from the first one to further investigate the intersection of information asymmetry and social evaluations in the director labor market. The second study highlights that in settings with high information asymmetry levels, such as the director labor market, actors are especially likely to rely on social evaluations. Specifically, we theorise and find that hiring firms’ boards negatively evaluate candidate directors with stigmatized affiliations as such affiliations are perceived as a signal of the candidate directors’ dubious morality. Beyond pointing out that stigma is an important social evaluation in the director selection process, this study also shows that boards’ characteristics greatly shape how they evaluate the stigmatized affiliations. In the third study, I investigate the role of the other actors’ evaluations as the key mechanism behind the interrelatedness between the focal actors’ career choices and their future career opportunities. The theorising and findings of this study show that having a stigmatised affiliation can prevent focal directors from obtaining new directorships, especially non-stigmatised directorships, and that, despite the positive effect that social connections can have on one’s career success, directors can only occasionally successfully leverage their social connections to reduce the stigma penalty on their reputation as directors. 

Overall, the studies in this dissertation contribute to the literature on decision-making by showing that it is important to study the interplay between information asymmetry and social evaluations to better understand how individuals make decisions. My broad intent with these studies is to urge decision-making scholars to embrace the complexity behind how individuals, and especially individuals at the top of organizations, make decisions. I also aspire with these studies to broaden our collective understanding of how individuals make decisions by leveraging the informational, social, and cognitive nuances via the integration of different theoretical insights. Beyond having scholarly implications, these three studies also carry practical implications for decision-makers, especially for individuals who are already directors and those aspiring to sit on boards in the future. My dissertation research as a whole not only warns decision-makers that they consciously or unconsciously frequently rely on social evaluations to fill in informational gaps but also that when several social evaluations are used in the decisionmaking process, negative ones tend to prevail, leading to penalties for individuals' career prospects.