|
on Business Economics |
| By: | Richard B. Freeman; Douglas Kruse; Joseph Blasi |
| Abstract: | This paper examines cross-country differences in labour policies and practices and employee performance and attitudes toward work from a sample of nearly 30,000 employees in a large multinational manufacturing firm. The analysis shows: 1) large establishment and country differences in work practices, performance, and attitudes toward work across countries; 2) qualitatively similar responses of workers to work practices across countries; 3) a strong link between the establishment average of employee reports on the quality of labour-management relations and establishment average measures of employee performance 4) a positive relation between average employee performance and average employee-management relations at the country level, but no relation between country level performance in the firm and measures of the extent of national labour regulations or practices. |
| JEL: | J0 J00 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13233&r=bec |
| By: | Chen, Kaiji; Song, Zheng |
| Abstract: | In this paper, we show that news on future technological improvement can trigger an immediate economic expansion in a model with financial friction on capital allocation. The arrivial of good news on future technology reduces such frictions and generates significant increase in current Total Factor Productivity via capital reallocation. This triggers an immediate boom in output, consumption, investment and hours worked. Our empirical evidence using firm-level data supports strongly the above mechanisms for news to affect current aggregate productivity. |
| Keywords: | Financial Friction; Capital Reallocation; Business Cycle |
| JEL: | G34 E32 |
| Date: | 2007–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3889&r=bec |
| By: | Sharon Novak; Scott Stern |
| Abstract: | This paper examines the impact of vertical integration on the dynamics of performance over the automobile product development lifecycle. Building on recent work in organizational economics and strategy, we evaluate the relationship between vertical integration and different performance margins. Outsourcing facilitates access to cutting-edge technology and the use of high-powered performance contracts. Vertical integration allows firms to adapt to unforeseen contingencies and customer feedback, maintain more balanced incentives over the lifecycle, and develop firm-specific capabilities over time. Together, these effects highlight a crucial tradeoff: while outsourcing is associated with higher levels of initial performance, vertical integration will be associated with performance improvement over the product lifecycle. We test these ideas using detailed data from the luxury automobile segment, establishing three key results. First, initial performance is declining in the level of vertical integration. Second, the level of performance improvement is significantly increasing in the level of vertical integration. Finally, the impact of vertical integration on alternative performance margins is mediated by the level of pre-existing capabilities, by the salience of opportunities to access external technology leaders, and by the scope for learning over the product lifecycle. Together, the findings highlight a strategic governance tradeoff between short-term performance and the evolution of firm capabilities. |
| JEL: | L24 L25 L62 O32 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13235&r=bec |
| By: | Rao T.V.; Juneja Mohit |
| Abstract: | Both assessment centres and 360 degree feedback have become very popular new era HR tools. With human resources gaining strategic importance combined with raising costs of talented managers and their scarce availability, organizations are left with no alternatives than identifying and grooming talent from within. This has led to the increased use of assessment centres and 360 degree tools for developing leadership competencies. Some times 360 degree feedback is used as tool for career development and succession planning. Sometimes assessment centres are used as predictors of fast track managers. However research on the predictive ability of ACs or 360 degree feedback is scant. This study is based on data gathered from three organizations that have conducted assessment centres as well as 360 degree feedback. In all three organizations ACs and 360 degree feedback were used as development tools. In all these organizations competency mapping was done and common competencies were identified using behaviour indicators. Competencies were assessed by external assessors and by their seniors, juniors, and colleagues on the same competency model. Results showed no definite patterns and lead to the conclusion that past performance as assessed by 360 degree feedback predictor of future potential as assessed by the assessment centres. The findings seem to be valid irrespective of the nature of competencies assessed and across various categories of employees. Given the lack of correlation, caution is necessary while using the data for promotion and succession planning exercises. |
| Date: | 2007–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2007-06-06&r=bec |
| By: | Rouwelaar, Hans ten (Nyenrode Business Universiteit) |
| Abstract: | In the last decades, the position of the business unit controller has grown in importance. This study gives a review of the research behind the two roles, which business unit-controllers can fulfill in business life: the support role and the control role. The support role is associated with involvedness of controllers by supporting managerial decision-making in the business unit; the control role focuses on providing reliable and timely financial accounting information for the corporate level and insuring that the financial function complies with relevant regulations. This paper contributes to the Management Accounting literature by documenting the available literature regarding the roles of controllers and by developing a theoretical framework to study the controller involvement in management. Based upon this framework twelve propositions and a regression model are presented, which can be used in future studies to test empirically which factors influence the controller involvement in management. |
| Keywords: | Contingency theory, Role theory, business unit controllers, support role, and control role |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:nijrep:2007-02&r=bec |
| By: | Lorino, Philippe (ESSEC Business School) |
| Abstract: | The notion of “process”, which describes the cooperation of heterogeneous practices and competences for a given output, has gained a major position in managerial practices for the last twenty years. This paper presents three ideas about organizational dynamics and processes and tests their applicability in the case of work safety improvement in a building company. The first idea is that the success of the process notion shows the central role of “conjoint” (as opposed to “common”) collective activity in organizational learning. Conjoint collective activity is dialogical (“acts speak”) and mediated by the utilization of semiotic systems (languages and technical and managerial tools). The second idea is that organizational learning is neither based on the actors’ individual subjectivity nor on the technological and objective artefacts engaged in the processes, but rather on the reflexive understanding and ongoing redesign of processes by the process actors themselves, in the frame of a reflexive inquiry, a “collective activity about collective activity” which is triggered and kept in motion by axiological judgments (process evaluation). The third idea is that the possibilities to configure processes in a given organization are multiple. The reflexive inquiry enacts a specific social, spatial and time configuration of the process, its “chronotope” in Bakhtin’s vocabulary, which plays a major role in the way actors can make sense of their collective activity and transform it. A longitudinal case study about work safety on the building yards shows that it is difficult to “control out” risk at work once designs have been established, in the frame of the “project execution” process, but it is easier to “design out” risk, when the actors of the process collectively design and redesign their collective activity, from the very first phases of a building project to the end. Therefore a major way to improve safety consists in extending the chronotope of the collective activity under consideration, overcoming the traditional separation between “design / planning” and “execution”. The conclusion summarizes the main theoretical, epistemological and practical issues involved in this research about conjoint collective activity. |
| Keywords: | Business Process; Chronotope; Collective Activity; Collective Sense Making; Dialogism; Inquiry; Process-based Management; Safety Management |
| JEL: | Z00 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-07013&r=bec |
| By: | Sällström, Susanna |
| Abstract: | Professional standards vary across professions and also change over time. One profession which has remained perfectionist is classical music, where the amount of practising is striking compared with other professions. Practising is a matter of increasing the reliability of ones skills rather than relying on a tool or a strike of genius to get it right. Once perfection has been achieved the individual will aim for higher quality since the effort is more likely to be worthwhile. Because the returns from perfection are higher the harder it is, the perfectionist equilibrium only arises in situations where genius is rare and reliability is low. As tools improve, even though perfection has become easier to achieve, professional standards may nonetheless decline. This mechanism is captured in an oligopoly model, where the failure rate and the quality are endogenously determined. It is shown that whilst individuals might be better off not playing a perfectionist equilibrium when reliability is low, welfare is higher in the perfectionist equilibrium than an enthusiastic equilibrium. Furthermore, when reliability is high individuals will play an enthusiastic equilibrium even though welfare and profits would be higher if they were perfectionists. |
| Keywords: | cultural economics; human capital; imperfect competition; learning; patent race; quality; skill; standards; technological change |
| JEL: | D2 D43 J24 L13 L15 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6377&r=bec |
| By: | Ludsteck, Johannes; Haupt, Harry |
| Abstract: | A firm that faces insufficient supply of labor can either increase the wage offer to attract more applicants, or reduce the hiring standard to enlarge the pool of potential employees, or do both. This simultaneous adjustment of wages and hiring standards has been emphasized in a classical contribution by Reder (1955) and implies that wage reactions to employment changes can be expected to be more pronounced for low wage workers than for high wage workers. We test this hypothesis (together with a related hypothesis on firm-specific human capital) by applying a bootstrap-based quantile regression approach to censored panel data from the German employment register. Our findings suggest that market clearing is achieved by a combination of wage and hiring standards adjustment. |
| Keywords: | wage setting; hiring standards; wage structure; efficiency wages; panel quantile regression; censoring |
| JEL: | J31 J41 C24 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:1977&r=bec |
| By: | Stephen Davies (Centre for Competition Policy, University of East Anglia); Matthew Olczak (Centre for Competition Policy, University of East Anglia); Heather Coles |
| Abstract: | The purpose of this paper is to identify empirically the implicit structural model, especially the roles of size asymmetries and concentration, used by the European Commission to identify mergers with coordinated effects (i.e. collective dominance). Apart from its obvious policy-relevance, the paper is designed to shed empirical light on the condition under which tacit collusion is most likely. We construct a database relating to 62 candidate mergers and find that, in the eyes of the Commission, tacit collusion in this context virtually never involves more than two firms and requires close symmetry in the market shares of the two firms. |
| Keywords: | Tacit collusion, collective dominance, coordinated effects, European mergers, asymmetries |
| JEL: | L13 L41 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ccp:wpaper:wp07-07&r=bec |
| By: | Tommaso Proietti (Universita di Roma “Tor Vergata”); Cecilia Frale (Universita di Roma “Tor Vergata”) |
| Abstract: | In this paper we deal with several issues related to the quantification of business surveys. In particular, we propose and compare new ways of scoring the ordinal responses concerning the qualitative assessment of the state of the economy, such as the spectral envelope and cumulative logit unobserved components models, and investigate the nature of seasonality in the series. We conclude with an evaluation of the type of business cycle fluctuations that is captured by the qualitative surveys. |
| Keywords: | Spectral envelope; Seasonality; Deviation cycles; Cumulative Logit Model. |
| Date: | 2007–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:98&r=bec |
| By: | Gaurav Saroliya |
| Abstract: | The New-Keynesian (NK) business cycle model has presented itself as a potential "workhorse" model for business cycle analysis. This paper seeks to assess afresh the performance of the baseline NK model and its various extensions. The main theme of the paper is that although the dynamic NK literature has secured a robust defence to criticism arising, inter alia, on account of lack of microfoundations, it still has a long way to go in terms of providing a fully satisfactory model of the business cycle. In this regard, it is conjectured that explicitly accounting for the role of heterogeneity in business-cycle dynamics could lead towards a viable solution. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:07/20&r=bec |
| By: | Michaels, Guy; Zhi, Xiaojia |
| Abstract: | Do firms choose inputs that minimize their cost of production, ignoring the attitudes of their owners and employees? We examine this question using an episode of worsening relations between the US and France: from February 2002 to March 2003, France's favourability rating in US public opinion polls fell from 83 percent to 35 percent. Very negative attitudes towards France became common even among college educated Americans with high levels of income, so they were likely prevalent among managers. Using data from 1999-2005, we find that the worsening relations reduced US imports from France by about 15 percent and US exports to France by about 8 percent, compared to other Eurozone or OECD countries. This decline was due in large part to a fall in France's share of the quantity of inputs traded between the Eurozone and the US; this decline is significant even after we control for changes in the product composition of trade flows. We also find that the decline in trade was accompanied by a similar drop in both business trips and tourist visitations of US residents to France compared to Western Europe. Taken together, our findings suggest that competition cannot eliminate the effect of attitudes on firms' choice of inputs. |
| Keywords: | Discrimination; Trade |
| JEL: | F14 J15 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6380&r=bec |
| By: | Fabio Canova (Universitat Pompeu Fabra); David López-Salido (Banco de España; Centre for Economic Policy Research (CEPR)); Claudio Michelacci (Centro de Estudios Monetarios y Financieros (CEMFI)) |
| Abstract: | We analyze the effects of neutral and investment-specific technology shocks on hours worked and unemployment. We characterize the response of unemployment in terms of job separation and job finding rates. We find that job separation rates mainly account for the impact response of unemployment while job finding rates for movements along its adjustment path. Neutral shocks increase unemployment and explain a substantial portion of unemployment and output volatility; investment-specific shocks expand employment and hours worked and mostly contribute to hours worked volatility. We show that this evidence is consistent with the view that neutral technological progress prompts Schumpeterian creative destruction, while investment specific technological progress has standard neoclassical features. |
| Keywords: | search frictions, technological progress, creative destruction |
| JEL: | E00 J60 O33 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0719&r=bec |
| By: | Pol Antràs; Ricardo J. Caballero |
| Abstract: | The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes, in the sense that trade integration reduces the incentives for capital to flow to capital-scarce countries. In this paper we show that in a world with heterogeneous financial development, the classic conclusion does not hold. In particular, in less financially developed economies (South), trade and capital mobility are complements. Within a dynamic framework, the complementarity carries over to (financial) capital flows. This interaction implies that deepening trade integration in South raises net capital inflows (or reduces net capital outflows). It also implies that, at the global level, protectionism may backfire if the goal is to rebalance capital flows, when these are already heading from South to North. Our perspective also has implications for the effects of trade integration on factor prices. In contrast to the Heckscher-Ohlin model, trade liberalization always decreases the wage-rental in South: an anti-Stolper-Samuelson result. |
| JEL: | E2 F1 F2 F3 F4 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13241&r=bec |
| By: | Schlicht, Ekkehart |
| Abstract: | The expansion of higher education in the Western countries has been accompanied by a marked widening of wage differentials and increasing overqualification. While the increase in wage differentials has been attributed to skill-biased technological change that made advanced skills scarce, this explanation does not fit well with the observed increase in overqualification which suggests that advanced skills are in excess supply. By "Reder-competition" I refer to the simultaneous adjustment of wage offers and hiring standards in response to changing labor market condition. I present a simple model of Reder competition that reproduces the simultaneous increase in wage differentials and overqualification in response to an increase in education. |
| Keywords: | Hiring standards; employment criteria; selection wages; efficiency wages; mobility; skill-biased technical change; overeducation; wage dispersion; Reder competition |
| JEL: | J31 J63 D43 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:1976&r=bec |
| By: | Demeestère, René (ESSEC Business School) |
| Abstract: | Cost analysis is more implemented in public organizations. Methods and expected uses are quite similar to those encountered in the private sector, but effective uses are more difficult to assess and compare considering the wide variety of organizational context existing in the public sector. |
| Keywords: | Cost Analysis; Cost Management; Public Management |
| JEL: | Z00 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-07010&r=bec |
| By: | Debraj Ray (NYU - New York University - [New York University], IAE - Instituto de Analisis Economico - [Consejo Superior de Investigaciones Cientificas]); Jean-Marie Baland (CRED - Centre de Recherche en Economie du Developpement - [University of Namur]); Olivier Dagnelie (CRED - Centre de Recherche en Economie du Developpement - [University of Namur]) |
| Abstract: | A group of agents voluntarily participates in a joint project, in which efforts are not perfectly substitutable. The output is divided according to some given vector of shares. A share vector is unimprovable if no other share vector yields a higher sum of payoffs. When the elasticity of substitution across efforts is two or lower, only the perfectly equal share vector is unimprovable, and all other vectors can be improved via Lorenz domination. For higher elasticities of substitution, perfect equality is no longer unimprovable. Our results throw light on the connections between inequality and collective action. |
| Keywords: | Inequality, Collective Action, Substitutability |
| Date: | 2007–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00160753_v1&r=bec |
| By: | Margit Molnar; Nigel Pain; Daria Taglioni |
| Abstract: | This paper reviews some of the possible changes that may occur in the national labour markets of many OECD countries as a result of international trade and the internationalisation of production by multinational companies, with a particular focus on the impact of outward foreign direct investment (FDI) from OECD countries on employment in the home country of the investing firms. Existing studies suggest that the overall impact of trade and the internationalisation of production on aggregate labour market outcomes has been comparatively small, although particular skill and occupational groups have been affected more strongly. The empirical findings in the paper suggest that the aggregate employment impact of outward FDI varies across industries and countries. For manufacturing industries with strong commercial links with the non-OECD economies, there is evidence that domestic employment has become more sensitive to movements in domestic labour costs. At the country level, the growth of outward investment is found to have a significant positive effect on domestic employment growth in the United States. In contrast, there is a negative association in Japan, especially from outward investment in China. <P>L’internationalisation de la production, délocalisations et emploi dans les pays de l’OCDE <BR>Ce papier présente quelques uns des changements possibles résultant du commerce international et de l’internationalisation de la production des firmes multinationales, qui ont pu affecter les marchés du travail de plusieurs pays de l’OCDE. Un intérêt particulier est porté sur l’impact des flux d’investissement direct étrangers sortants des pays de l’OCDE sur l’emploi dans le pays d’origine des firmes qui investissent. Les études existantes concluent que l’effet global du commerce et de l’internationalisation de la production sur le marché du travail a été limité. Toutefois, certaines catégories socioprofessionnelles et certains savoirs ont été touchés plus sensiblement. Les résultats empiriques du papier indiquent que l’impact sur l’emploi agrégé des flux d’investissement direct étrangers sortants est différent selon les pays et les industries. Pour les entreprises du secteur manufacturier qui ont des liens commerciaux forts avec les pays non-OCDE, on trouve que l’emploi est devenu plus sensible aux mouvements des coûts salariaux domestiques. Au niveau des pays, on trouve que la croissance des flux d’investissement sortants a un effet significatif positif sur le taux de croissance de l’emploi aux Etats-Unis. En revanche, cet effet est négatif au Japon, notamment pour les flux d’investissement vers la Chine. |
| Keywords: | trade, employment, emploi, foreign direct investment, investissement direct étranger, commerce |
| JEL: | F16 F23 J23 |
| Date: | 2007–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:561-en&r=bec |