QUESTION 4 (20 Marks) Read the information below and answer ALL questions that follow. It is critically important for organisations today to recruit high performing Chief Executive Officers (CEOs). One big question that organisations find hard to answer is how to separate individuals who will perform well from those who will not. The answer may, to some extent, relate to the type of personality that one exhibits. Personality is deemed to play a major role in job performance. High Performers are considered to possess certain personality traits that contribute towards being successful managers. The creation of long-run firm value is a key measure of management's ability to implement its corporate strategy. A number of studies have devoted considerable attention to identifying managerial dispositional characteristics or traits which correlate with firm value (Ibel, 2014 Thompson, 2013). Managerial foresightedness, optimism, and action orientation have been reported as dispositional characteristics that positively correlate with high performance (Singh, 2012 Zweig & Webster, 2004). High Performers are more concerned with the impact of decisions in the long term and they have a high preference for anticipating and imagining alternative scenarios in the future. They tend to take a long-term view and understand the strategic perspective of situations around them. You are part of a team of management researchers currently conducting a study titled: The impact of managerial dispositional characteristics on firm value of Soweto-based small businesses Your team is particularly interested in examining the impact of managerial foresightedness, optimism, and action orientation on firm value. The empirical setting of the study is the small business sector across Soweto. You have recruited 154 CEOs (107 males, 47 females) as participants in this study, all of whom are CEOs of small businesses in the Soweto. Initially, the questionnaire was sent out to 300 CEOs. However, only 154 respondents provided the complete information required for the study. Managerial foresightedness, optimism, and action orientation were each measured at the interval level. Firm value was measured by Tobin's Q ratio (ratio level), which is a measure of a firm's growth opportunities, as reflected in its investment strategies. It compares the market value of the firm with the replacement cost of the firm's assets. Also, it implies the greater the real return on investment the greater the value of Q. The use of Tobin's Q overcomes some of the problems attached to the Book-to-Market (B/M) ratio using the replacement cost of assets when measuring the value created by the firm. Tobin's Q also implicitly adjusts for price changes. Table 4.1 below is the excerpt of the data collected from the 154 respondents.

Table 4.1: Excerpt of the data collected from 154 respondents

Respondent # No. Foresightedness Optimism Action orientation Firm value 1 6 5 4 0.89 2 5 6 5 0.78 3 7 8 6 1.12 4 6 6 5 0.93 5 8 7 6 1.25 6 7 5 6 0.95 7 7 6 7 1.03 8 6 5 5 0.85 9 5 4 4 0.76 154 8 7 7 1.32 The data was analysed using IBM SPSS Statistics version 26. Table I to Table IV, below, depict the output of the statistical analysis. Table I: Test of Normality Firm Value

Tests of Normality Kolmogorov-Smirnova Shapiro-Wilk Statistic df Sig. Statistic df Sig. Firm_Value .068 154 .200* .974 154 .544 *. This is a lower bound of the true significance. a. Lilliefors Significance Correction Table II: Regression model summary Firm Value Model Summary b Model R R Square Adjusted R Square Std. Error of the Estimate 1 .815a .664 .640 .2536 a. Predictors: (Constant), Foresightedness, Optimism, Action_Orientation b. Dependent Variable: Firm_Value Table III: Results of ANOVA for Firm Value model ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 57.068 3 19.023 14.580 .000 b Residual 195.709 150 1.305 Total 252.777 153 a. Dependent Variable: Firm_Value b. Predictors: (Constant), Foresightedness, Optimism, Action_Orientation Table IV: Regression coefficients for Firm value model Coefficientsa Model Unstandardized Coefficients Standardized Coefficients B Std. Error Beta t Sig. 1 (Constant) 2.598 .354 4.803 .000 Foresightedness .573 .168 .453 4.052 .000 Optimism .018 .037 .013 .205 .314 Action_Orientation .343 .068 .259 3.987 .000 a. Dependent Variable: Firm_Value

Required: 4.1. State the aim and significance of this study. (3 marks)

4.2. Identify the independent variables (IV) and the dependent variable (DV) of the study. (4 marks)

4.3. Elaborate on ANY THREE (3) parametric assumptions central to the selection of an appropriate test for the inferential analysis of data collected in this study. (3 marks)

4.4. Interpret Table I and comment on its significance in the data analysis process. (3 marks)

4.5. Comprehensively interpret the output in Table II to Table IV. Include the standard reporting format in your interpretation. (7 marks)