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This study seeks to improve the understanding of physician leaders' leadership work challenges.

The subjects of the empirical study were physician leaders (n = 23) in the largest central hospital in Finland.

A total of five largely identity-related, partially paradoxical dilemmas appeared regarding why working as “just a leader” is challenging for physician leaders. First, the dilemma of identity ambiguity between being a physician and a leader. Second, the dilemma of balancing the expected commitment to clinical patient work by various stakeholders and that of physician leadership work. Third, the dilemma of being able to compensate for leadership skill shortcomings by excelling in clinical skills, encouraging physician leaders to commit to patient work. Fourth, the dilemma of “medic discourse”, that is, downplaying leadership work as “non-patient work”, making it inferior to patient work. Fifth, the dilemma of a perceived ethical obligation to commit to patient work even if the physician leadership work would be a full-time job. The first two issues support the findings of earlier research, while the remaining three emerging from the authors’ analysis are novel.

The authors list some of the practical implications that follow from this study and which could help solve some of the challenges.

This study explores physician leaders' leadership work challenges using authentic physician leader data in a context where no prior empirical research has been carried out.

This study aims to validate the link between production manipulation and a firm’s performance variability (fundamentals and stock returns). It explores whether executives' risk-taking incentives encourage production deviations around the normal level during uncertainty.

Utilizing panel data of manufacturing firms from Compustat over three decades, the study investigates production management practices during economic uncertainty. The Economic Policy Uncertainty Index (EPU) is employed as a key metric. The empirical strategy involves documenting the effect of economic uncertainty on overproduction and underproduction, examining the role of executive compensation and assessing the impact on risk.

The research finds that risk-taking incentives increase over/underproduction, particularly amplifying the extent of underproduction during uncertainty. Production deviation rises, indicating that firms take greater risk by engaging in abnormal business operations. The study’s results are robust against various econometric methods, emphasizing the influence of risk-taking incentives on corporate production decisions.

While providing valuable insights, the study acknowledges inherent limitations, including factors influencing production decisions beyond risk-taking incentives. Further research could explore additional determinants for a comprehensive understanding.

The findings highlight the potential dark side of executive compensation that motivates suboptimal risk-taking decisions, impacting risk, cost of capital and firm performance. Policymakers and compensation committees can use these insights to design efficient systems that mitigate moral hazard problems associated with productivity changes.

The study emphasizes the broader social implications of production manipulation under uncertainty. It prompts discussions on the ethical considerations of managerial opportunism, its potential consequences for stakeholders and market dynamics.

This study contributes to the literature by examining the role of economic uncertainty on production manipulation and the influence of risk-taking incentives. It extends the earnings management literature by considering real activity manipulation and emphasizing the importance of decomposing production deviation into positive and negative values.