Business Exit and Strategic Change: Sticking to the Knitting or Striking a New Path?

The purpose of this study is to examine the potential of business exit for initiating strategic change in divesting parent firms. In contrast to prior literature that mainly investigates the impact of different antecedents on the likelihood of business exit in general, this study additionally tests the influence of these antecedents on the choice between two exit types with a cross‐industry sample of divesting firms listed in the German CDAX over the time period 1999–2004. A divestiture involving strategic change is a strategic business exit; otherwise it is denoted as status quo preserving. The findings reveal that a relatively highly dissipated focus does not automatically enhance the likelihood of business exit in general and status‐quo‐preserving business exit in particular. CEO turnover and pressures exerted by institutional investors predict neither strategic nor status‐quo‐preserving business exit. Low firm performance does not nurture the likelihood of business exit per se but especially promotes status‐quo‐preserving business exit.     

Liability of foreignness as a barrier to knowledge spillovers: Lost in translation?

Multinational corporations (MNC) search increasingly for lead market knowledge and technological expertise around the globe. We investigate whether their subsidiaries gain access to these valuable sources of host country knowledge to the same degree as domestic rivals. We develop a theoretical framework for “why” and “how” a lack of embeddedness and legitimacy (liability of foreignness) may translate into additional obstacles for foreign subsidiaries. We test these hypotheses empirically using a broad dataset of more than 1100 firms in Germany. We find that MNCs can compete on an equal footing with host country competitors when it comes to generating impulses for innovations from universities. They are significantly challenged by liabilities of foreignness, though, when host country customers are involved. The disadvantages are especially pronounced when the host country industry is at the technological forefront. We suggest that the disadvantages arising from liability of foreignness in the host country are especially relevant when promising lead customers have to be identified and their tacit and often unarticulated impulses have to be transferred, understood and prioritized. Management recommendations are developed on the basis of these results.     

Time for a revival? Public policy implementation: a review of the literature and an agenda for future research

This paper argues that there is not a vigorous contemporary literature in the UK which addresses implementation studies as part of the public policy process, whereas this is not the case in the USA. A review of the literature is presented, and a critique of the more traditional thematic groupings used to review the literature is given. A revised thematic review of the literature is presented based on the four themes of: (1) the role of knowledge and learning in policy implementation; (2) the processes of policy implementation; (3) the role of actors and agents in implementation; and (4) the role of bureaucratic discretion. The paper argues for a revival of research into public policy implementation and suggests a research agenda for the future which can use the aforementioned themes from the literature.     

Do exits proxy a liability of foreignness?: The case of Japanese exits from the US

Progress in understanding the liability of foreignness requires accurate measurement of this concept. This paper investigates whether exits of foreign affiliates from a given host market provide a reliable measure. We tackle this question by investigating 32 exits of Japanese manufacturing affiliates from the US. Our goal is to assess the extent to which exits are driven by a liability of foreignness and thus whether exits can serve as a reliable measurement of this liability. We find that less than half of our exits are attributable to a liability of foreignness. We conclude that while the data confirm a liability of foreignness for Japanese early entrants into the US, the presence of many other motives for exit suggests caution when inferring such a liability from exits, especially when exit costs are low.     

The Performance of MNE Subsidiaries in China: Does It Matter to Be Close to the Political or Business Hub?

This study examines the impact of distance on financial performance of multinational enterprise (MNE) subsidiaries in China. We hypothesized and found that MNE subsidiaries performed better when located closer to the country's business hub, but performed less well when located closer to the political hub. We also hypothesized that distance effects are moderated by subsidiary size, subsidiary network, and state capital contribution to subsidiary. Our findings were based upon 45,248 MNE subsidiaries with location and geographic distance measured at the prefectural level in China.     

Energy Choices and Risk Beliefs: Is It Just Global Warming and Fear of a Nuclear Power Plant Accident?

A survey of 3,200 U.S. residents focused on two issues associated with the use of nuclear and coal fuels to produce electrical energy. The first was the association between risk beliefs and preferences for coal and nuclear energy. As expected, concern about nuclear power plant accidents led to decreased support for nuclear power, and those who believed that coal causes global warming preferred less coal use. Yet other risk beliefs about the coal and nuclear energy fuel cycles were stronger or equal correlates of public preferences. The second issue is the existence of what we call acknowledged risk takers, respondents who favored increased reliance on nuclear energy, although also noting that there could be a serious nuclear plant accident, and those who favored greater coal use, despite acknowledging a link to global warming. The pro‐nuclear group disproportionately was affluent educated white males, and the pro‐coal group was relatively poor less educated African‐American and Latino females. Yet both shared four similarities: older age, trust in management, belief that the energy facilities help the local economy, and individualistic personal values. These findings show that there is no single public with regard to energy preferences and risk beliefs. Rather, there are multiple populations with different viewpoints that surely would benefit by hearing a clear and comprehensive national energy life cycle policy from the national government.     

The illusion of independence: Spun-off firms’ risk-taking as a function of status and attachment to the parent firm

This paper examines the post-divestiture behavior of spun-off firms. Drawing on the spin-off literature and middle-status conformity theory, we argue that spun-off firms—as newly independent and publicly traded firms—tend to limit their risk-taking behavior to match the expectations of a crucial audience, i.e., security analysts. Following the logic of middle-status conformity theory, we hypothesize that firms with mid-level status are particularly susceptible to analysts' pressures, whereas high- and low-status firms are free to take greater risks. Crucially, however, we propose that this relationship is less pronounced for spun-off firms that are more attached to their parent firms, as formal and informal linkages between these two types of firms can endure beyond the separation and limit spun-off firms' independence. Using a dataset of 102 spin-off transactions occurring between 1995 and 2010, we find empirical support for a U-shaped relationship between spun-off firms' status and risk-taking. This relationship is attenuated when spun-off firms are more attached to their parents. We contribute to the spin-off literature by demonstrating that a spun-off firm's post-divestiture behavior is determined by the capital market audience's expectations and the attachment to the parent firm. In so doing, we also contribute to the literature on middle-status conformity theory by identifying a boundary condition of the theory. Additionally, we make a methodological contribution by combining ideas from the spin-off and institutional theory literature to develop a particularly comprehensive measure of attachment.     

Is the Preference for Children so Low,or is the Price of Time so High? A simultaneous model of fertility and participation in Italy with cohort effects

ABSTRACT: This paper presents a simultaneous model of fertility and female participation in Italy, estimated with a sequence of cross-sections of micro data. Cohort dummies are used to capture permanent effects, including cohort changes in preferences. The cohort effects turn out to be not very significant, the point estimates suggesting a decreasing trend in participation and an increasing trend in fertility. The wage effects are instead rather strong and significant. The model produces simulations which are close to actual trends, which would seem largely explained by wage incentives. The explanation for a particularly high elasticity of fertility with respect to female wage should ultimately be searched for in the specific differences which characterize the Italian social and institutional environment.     

Testing Herzberg’s Two-Factor Theory of Motivation in the Public Sector: Is it Applicable to Public Managers?

Given the limitations in providing monetary rewards as an incentive in the public sector, Herzberg’s Two-Factor Theory of Motivation can be promising if it is applicable to public employees. This study identifies the effects of motivators and hygiene factors on public managers’ job satisfaction, and finds out if there is difference, compared to how private-sector employees are motivated. According to the findings, a majority of identified motivators in the previous research showed positive effects on job satisfaction among public managers, and public managers’ job satisfaction was not affected by hygiene factor as predicted in Herzberg’s study. Managerial implications are discussed.     

‘Physicians to a dying planet’: Helen Caldicott,Randall Forsberg,and the anti-nuclear weapons movement of the early 1980s

This article profiles two important leaders of the anti-nuclear weapons movement in the United States during the early 1980s. Helen Caldicott and Randall Forsberg were visionary, transformational leaders who crossed a variety of boundaries for the common good, and as such are prime exemplars of integrative leadership in action. Caldicott was a charismatic figure who used her status as physician and mother to rally a worldwide movement opposed to the ongoing proliferation of nuclear weapons and talk of “winnable” nuclear war. Forsberg was the main architect of the nuclear “Freeze” campaign whose humanitarian vision and common-sense approach to political action helped unite diverse segments of the American public around the Freeze proposal and push the Reagan administration towards disarmament talks with the Soviet Union. The article analyzes the leadership of both women in historical and social–scientific context, shedding light on two relatively unknown — yet important — social movement leaders whose stories have much to tell us about integrative public leadership, the challenges faced by women leaders, and the strengths and pitfalls of charismatic leadership.     

Is there such a thing as leadership skill? – A replication and extension of the relationship between high school leadership positions and later-life earnings

This paper replicates and extends Kuhn and Weinberger's (2005) “Leadership Skills and Wages”. The original article found that those white males who were club presidents and team captains in high school earned significantly more eleven years later. As the empirical relationship between leadership positions and subsequent earnings includes those characteristics that predate high school and those that are developed because of leadership activity participation in high school, the original study cannot differentiate between leadership skills developed earlier and those developed in high school. We employ propensity score matching on leadership exposure in high school to control for potential endogenous observable selection and provide estimates from instrumental variable regressions to assess the robustness of the original effects to other omitted causes. To investigate the generalizability of the original findings, we also extend the sample by including females and non-white males. Lastly, we investigate how an extension of the initial (11-year) time horizon to almost 50 years affects the coefficient estimates. We can corroborate the original effect that those who occupied leadership positions as captains and presidents earn more 11 years after high school and report higher income some 50 years after high school. We fail, however, to find effects for those who occupied only a role as captain or president solely. Moreover, the findings do not generalize to the samples of females and non-white males. Our findings provide important insights into later-life benefits of early leadership exposure and have implications for those designing leadership training programs and those taking on (or refraining from) leadership positions in early life.     

Ghosts of Policing Strategies Past: Is the New Zealand Police ‘Prevention First’ Strategy Historic,Contemporary or the Future?

Since the 1990s the New Zealand Police have introduced three extensive change management programs to improve the efficiency and effectiveness of their core services; Policing 2000, Policing Excellence and Prevention First. Each program has been fundamentally different, with the more modern programs influencing the way that New Zealand Police deliver services. Policing 2000 evolved from implementation of the first strategic plan, while Policing Excellence and Prevention First were introduced in response to the 2007 fiscal crisis. The programs are compared to identify the differences, and whether these later programs can increase service delivery efficiency and effectiveness.     

What’s in a name? Decomposing corporate reputation to assess the relative impact of temporal, firm and industry level factors

While the perceptual nature of corporate reputation is rarely contested, the role of governance and firm financial performance does not have the same consensus. As reputation is an embedded capability that cannot be distinctly valued or traded, the ambiguity in reputation generation clouds researchers’ attempts to understand the relative importance of the underlying causal factors, particularly firm-specific attributes like board characteristics, governance and ownership—independent of the firm’s financial performance over time. Utilizing a resource—based view, we develop a theoretically grounded framework that enables us to deconstruct corporate reputation and parse out the impact at multiple levels and the factors therein. We decompose reputation into time, firm and industry level factors, offer hypotheses on the relative importance of the factors at each level, and thereafter we simultaneously assess within and across the temporal, firm and industry levels to quantify the impact of the causal factors. We find that 49.65 % of the variation in corporate reputation is firm-specific, independent of financial performance, while industry-specific variables account for just 5.04 %. The temporal factors including the multi-level interaction terms explain 46.06 % of reputational variation, of which financial performance accounts for only 18.53 % and the “halo effect” of prior financial performance is short-lived. Furthermore, the commonly accepted factors explain only 26.44 % of the total variation in corporate reputation, and some of the governance and ownership indicators contradict generally accepted agency expectations.     

How can we ascertain,understand and interpret the performance level of a production system? A visual method: 'The plan of preferences'

The general context of this study is the parameterizing of the production system. The aim is to regulate the physical flow according to objectives, usually expressed in terms of performance indicator values. Performance control requires mastery of the consequences of the choices made. It then becomes essential to be able to articulate the potential effects of the various decisions. The existing approaches to solving this problem all imply the use of means of simulation capable of assessing the value of the performance indicators for each configuration of the action parameters. Taking this assumption as a basis, and focusing on the user, a multiple criteria approach is developed towards the understanding and schematization of the behaviour of a given system. The particularity of this approach lies in combining both data analysis and user expertise. The instrumentation approach uses tools for data analysis and assistance in decision making to achieve an original visualization of the structure of performance levels in a plan, called the plan of preferences .