Fixed fee licensing for cost-reducing technologies: Should innovators reveal their private information?

In the process of licensing their technology to downstream firms, innovators often get some information on the firms’ cost reductions. Revealing this information to the market influences the market game, and thereby the licensees’ willingness to pay. We analyze the innovator’s optimal information provision with fixed fee licensing. Our main result is that the innovator should reveal the number of licenses, but should keep silent on the cost reductions of licensees. The intuition is that the innovator’s profit depends only on the willingness to pay of the critical firm which only just buys a license, and this firm benefits if the number of firms is revealed, but nothing is learned on the actual cost distribution.     

Public–private versus public ownership and economic performance: evidence from Italian local utilities

In the last century local public services have often been reformed. The declared outcome of the most recent reforms is the privatization and liberalization of the sector. However, in almost all European countries, the privatization of local public services has been only partial, because local governments have sought to privatise a minority stake in the public owned-companies, while remaining committed to retaining public ownership and control over the longer-term as a means of protecting public interest. The phenomenon of mixed public–private companies emerged as a result of this process. In this context, the article investigates whether differences in financial performance can be found between public–private companies and totally public-owned enterprises. Empirical quantitative studies on this particular topic are quite lacking at the moment. The present study tries to fill this gap through an empirical analysis on a sample of 623 Italian local utilities. The results of the study suggest that there are differences in economic performance between local utility companies with varying degrees of public ownership. In particular, public–private utilities show better economic performance than publicly owned firms, especially in terms of profitability. The results also seem to suggest that the majority private ownership is not necessary for better performance. In other terms, public–private partnership—and not private majority ownership—seems to be the key point for good performance.     

Taxes and the choice between risky and risk-free debt: on the neutrality of credit default taxation

Shareholders can decide if their corporation issues risky or risk-free debt. We identify tax systems in which the choice between risky and risk-free debt is not distorted by taxes. These credit default neutral tax systems make it possible to make capital structure decisions and firm valuations neglecting credit default risk, even after taxes. Thus credit default neutrality is a characteristic of a tax system that helps to reduce planning costs. Moreover, credit default neutrality is a necessary condition for financial neutrality of taxation. We find one class of credit default neutral taxes that preserves and another class that modifies the expected tax distribution between creditors and debtor firm. Finally, we show the influence of personal taxation on credit default neutrality.

Safety culture: under-specified and overrated?

Is the measurement of ‘safety culture’ a valid management tool in the effort to reduce accident rate and improve safety performance, or is it a fuzzy academic concept, lacking empirical validation? The answer to this question seems to depend on whom one asks. The UK Health and Safety Commission has encouraged companies to improve their safety performance through the development of a ‘positive safety culture’. However, academic discussions in this area suggest that the concept remains vague, lacks empirical validation and is used as an ‘umbrella term’ for all the social and organizational factors that affect accident rate. This paper reviews the existing literature on safety culture and provides some clarification in terms of definition, empirical evidence and theoretical development. A theoretical framework of the mechanisms by which safety culture affects safety behaviours in organizations is proposed. The implications for practical management issues are discussed and future challenges and areas for further research are identified.     

Safety culture: under-specified and overrated?

Is the measurement of 'safety culture' a valid management tool in the effort to reduce accident rate and improve safety performance, or is it a fuzzy academic concept, lacking empirical validation? The answer to this question seems to depend on whom one asks. The UK Health and Safety Commission has encouraged companies to improve their safety performance through the development of a 'positive safety culture'. However, academic discussions in this area suggest that the concept remains vague, lacks empirical validation and is used as an 'umbrella term' for all the social and organizational factors that affect accident rate. This paper reviews the existing literature on safety culture and provides some clarification in terms of definition, empirical evidence and theoretical development. A theoretical framework of the mechanisms by which safety culture affects safety behaviours in organizations is proposed. The implications for practical management issues are discussed and future challenges and areas for further research are identified.     

Accountability and value for money: a theoretical framework for the relationship in public–private partnerships

There is an implicit assumption in the UK Treasury’s publications on public-private partnerships (PPP)—also more commonly known in the United Kingdom as private finance initiative (PFI)—that accountability and value for money (VFM) are related concepts. While recent academic studies on PPP/PFI (from now on as PFI) have focused on VFM, there is a notable absence of studies exploring the ‘presumed’ relationships between accountability and VFM. Drawing on Dubnick’s (Dubnick and Romzek in American public administration, politics and the management of expectations. Macmillan, New York, 1991, Research in public administration. JAI, Greenwich, 1993; Dubnick in Public service ethics and the cultures of blame, 1996, Public sector ethics: finding and implementing values. Routledge, London, 1998, Int J Org Theory Behav 6(3):405–441, 2003, Public Perform Manage Rev 28(3):376–417, 2005; Dubnick and Justice in But can you trust them to be ethical, 2002) framework for accountability and PFI literature, we develop a research framework for exploring potential relationships between accountability and VFM in PFI projects by proposing alternative accountability cultures, processes and mechanisms for PFI. The PFI accountability model is then exposed to four criteria—warrantability, tractability, measurability and feasibility. Our preliminary interviews provide us guidance in identifying some of the cultures, processes and mechanisms indicated in our model which should enable future researchers to test not only the UK Government’s claimed relationships between accountability and VFM using more specific PFI empirical data, but also a potential relationship between accountability and performance in general.     

Agencification and Location: Does Agency Site Matter?

Two decades of New Public Management have placed agencifiction high on the agenda of administrative policy-makers. However, agencification (and de-agencification) has been one of the enduring themes of public administration. Agencies organized at arm’s length from ministerial departments have fairly often been located outside of the capital or political centre. Although practitioners tend to assign some weight to central versus peripheral location as regards political-administrative behavior, this relationship has been almost totally ignored by scholars in the field. In this paper, based on a large-N elite survey, we show that agency autonomy, agency influence and inter-institutional coordination seem to be relatively unaffected by agency site. This study also specifies some conditions under which this finding is valid.     

Shareholders and managers: Who care more about corporate diversity and employee benefits?

We test two competing theories that explain a firm’s engagement in corporate diversity and employee benefits: socially responsible investment theory and management overinvestment theory. We find that publicly-traded companies with strong shareholder rights are more likely to promote women and/or minorities to the positions of CEO and board of directors in their organizations, conduct business with women- and/or minority-owned operations, and provide better family benefits to their employees than firms with strong management power. These findings indicate that the companies with strong shareholder rights engage more actively in internal aspects of CSR activities, which supports the socially responsible investment theory rather than the management overinvestment theory. Shareholders (i.e. institutional investors) tend to integrate their social goals (i.e. internal CSR issues) and financial goals into their investments. In response to these changes, managers should engage in the internal aspects of corporate social issues more aggressively as the agents of shareholders.     

ABMT and breast cancer: what have we learned?

The debate regarding the efficacy of and insurance coverage for ABMT for breast cancer has been raging since the widespread dissemination of ABMT in the early 1990s. Underlying the debate was the expectation that the results of randomized clinical trials would finally provide scientific data to resolve the frequently emotional controversy. Unfortunately, the results of these eagerly awaited trials failed to show a significant impact in patients with either metastatic breast cancer or those at high risk for metastatic disease. ABMT, as it is now offered, will not provide the breakthrough that was anticipated or a substantial benefit to the majority of patients. Research on ABMT may have evolved from the initial expectation that the trials would confirm a positive to more modest expectations that trials will disprove a negative. The promising results of early trials still require confirmation through randomized controlled trials, and participation in such clinical trials is vitally important.     

Emotional labor and leadership: A threat to authenticity?

Building on the emotional labor and authentic leadership literatures, we advance a conceptual model of leader emotional displays. Three categories of leader emotional displays are identified: surface acting, deep acting and genuine emotions. The consistency of expressed leader emotions with affective display rules, together with the type of display chosen, combines to impact the leader's felt authenticity, the favorability of follower impressions, and the perceived authenticity of the leader by the followers. Emotional intelligence, self-monitoring ability, and political skill are proposed as individual differences that moderate leader emotional display responses to affective events. We also look at followers' trust in the leader and leader well-being as key outcomes. Finally, we explore the influence on leader emotional labor of contextual dimensions of the environment, including the omnibus (national and organizational culture, industry and occupation, organizational structure, time) and discrete (situational) context. Directions for future research are discussed.     

Looks and Labor: Do Attractive People Work More?

Using the German General Social Survey (ALLBUS) 2008, I investigate how looks affect an individual's labor supply decision. My results are, by and large, in line with predictions derived from the neoclassical model of labor supply. Applying regular probit, bivariate probit, Tobit and Heckman selection regression models, I find that good looks go hand in hand with higher employment probabilities and more hours of market work. Furthermore, physical attractiveness is positively associated with spousal income and spousal employment. Hence, beauty appears to affect labor supply decisions both directly and through the marriage market.     

Residential Mortgages and Public Policy: What to do with Fannie and Freddie?

The current debate on U.S. housing policy focuses on the role of the government in supporting the mortgage market. Existing organizations (Fannie Mae/Freddie Mac) are in conservatorship status, and Congress is considering alternative structures and guarantees including the Johnson‐Crapo bill, to provide catastrophic insurance in support of the coverage from private companies. The resolution of this issue is complicated by the various activities involved in the issue—investment securities, public policy, macroeconomics, accounting, and insurance. This article reviews the impact of these activities on U.S. housing, with a discussion of the feasibility of creating a catastrophic insurance program similar to that of the Federal Deposit Insurance Corporation. The federal government has successfully operated catastrophic insurance programs in support of private sector initiatives, and this experience—while certainly not perfect—may be a reasonable approach to the current Fannie/Freddie dilemma.     

Academic Autonomy and Freedom under Pressure: Severely Limited,or Alive and Kicking?

Academic freedom and the autonomy of academic institutions (their freedom from outside interference) are core values in contemporary academic life. This article outlines changes that have taken place in the last few decades that impact academic freedom and autonomy to at least some degree. These include the increasing catering by universities to stake-holders in the environment, increasing professionalization of university administrations, an evolving pattern of broadening authority over internal university decision-making, and an increasing attention to student (i.e. customer) needs. Two case studies -- one of recent decisions in the University of California system and the other at the University of Oslo -- illustrate the theoretical points in the article and point to the need to know a lot more about academic autonomy and academic freedom, especially in an environment of changing management practices and scarce resource bases for many institutions. The cases were selected because of the authors’ familiarity with them and are examples meant to illuminate some of the challenges and complexities inherent in the phenomena and to inspire further research on academic freedom and autonomy utilizing the instrumental and institutional perspectives from organization theory that are the core of our theoretical analysis.     

Equator Principles: Bridging the Gap between Economics and Ethics?

The hypothetical conflict between self‐interest, corporate interest, and the common good is one of the hottest debated issues in business ethics. This article focuses on a particular corporate social responsibility approach within the field of sustainable (project) finance, which has the potential—given that certain reform measures are adopted—to overcome the alleged trade‐off between self‐interest and the common good. The approach is labeled as the Equator Principles (EPs) framework, which celebrated its tenth anniversary and the formal launch of the third generation of the EPs (EP III) in 2013. The article shows how companies can theoretically be both profitable and socio‐environmentally responsible by adhering to the EPs. The article proceeds as follows: Before moving on to the EPs, section 2 defines the key terms self‐interest and common good. Section 3 then analyzes the EPs from a business ethics perspective. Section 4 shows how the EPs can help in solving the potential trade‐off between self‐interest and the common good—provided that the EPs are substantially revised. These required reform steps are discussed in section 5. The article ends with a summary of the main findings.     

Organizational Environments and Performance: A Linear or Nonlinear Relationship?

The external circumstances that organizations confront are an important influence upon their prospects of success. The resources available within the environment, the multiplicity of stakeholder demands to be addressed and the rates of change in these, each have serious implications for organizational functioning. Nevertheless, it remains conceivable that the effects of different dimensions of the environment are not straightforwardly positive or negative, but may follow nonlinear patterns posing very different challenges at different levels. To draw lessons for public organizations seeking to understand how best to respond the circumstances that they face, this paper examines linear and nonlinear effects of different dimensions of the organizational environment on the performance of over 500 organizations using both objective and subjective measures of the environment. Strong support is found for the presence of linear relationships between each environmental dimension and type of measure and performance, but no evidence of statistically significant nonlinear environmental effects. The theoretical and practical implications of the findings are discussed.     

Accountability in Voluntary Partnerships: To Whom and for What?

This paper contributes to the understanding of accountability in collaborative governance by presenting views of practitioners from partnerships formed between K-12 public schools and private and nonprofit organizations in the United States. It focuses on two questions: what do partnership practitioners see the partnerships as being accountable for? And to whom do they see the partnerships as being accountable? The findings suggest that partnership participants reveal more of client-based and results-oriented views of accountability. They are more directly concerned about professional accountability and accountability to the partners. A concentric-circles model is then developed to illustrate the accountability relationships in partnerships.     

Empathy wages?: Gratitude and gift exchange in employment relationships

Economists have argued that employers sometimes pay above-market premiums (efficiency wages) in order to attract, motivate, and/or retain valued personnel. Drawing on recent work examining reciprocity and gift exchange, this paper proposes the notion of “empathy wages,” in which the effect of the premium paid depends on the extent to which it elicits gratitude from recipients. We argue that a particular gift (monetary or otherwise) offered by an employer is likely to elicit more gratitude among “non-stars”: workers who are relatively disadvantaged and in the lower part of the performance distribution. In contrast to “stars,” “non-stars” are likely to compare the treatment they receive to the inferior opportunities or treatment they (might) have received outside of their present employment situation. Star workers, in contrast, are likely to believe that they are worth whatever they can command. The economic viability of such “empathy wages” thus depends on how much star versus non-star workers vary in gratitude, relative to how they differ in output and compensation. We explore a variety of data bearing on how much stars differ from non-stars in their respective output and earnings (in star contexts such as professional sports and real estate sales). We then review or reanalyze some prior studies on gift exchange, documenting that those who are relatively disadvantaged and/or low performers do appear more grateful (or inclined to reciprocate gifts) than stars. Indeed, the magnitude of the difference is sufficiently large that it could offset quite marked differences in productivity or quite small differences in compensation (both of which would make stars relatively more attractive to employers). We suggest some conditions under which gratitude-based employment systems are more likely to flourish in real-world settings, as well as some fruitful lines for future research on these topics.