The effects of demand,competitive, and technological uncertainty on board monitoring and institutional ownership of IPO firms

This paper considers industry-specific contingencies that may account for some of the inter-firm heterogeneity in the deployment of specific corporate governance mechanisms in IPO firms. We examine how differences in demand, competitive, and technological uncertainty in the industry influence the levels of IPO firm monitoring by board outsiders and institutional investors. We test our theory using a sample of U.S. firms that completed an IPO in 24 manufacturing industries. The results indicate that industry uncertainty is, indeed, significantly related to the use of corporate governance mechanisms. In particular, the empirical results indicate that industry effects on IPO firm board monitoring and institutional investor ownership are the strongest and most consistent for demand uncertainty and competitive uncertainty.

Autonomy and Regulation of State Agencies: Reinforcement,Indifference or Compensation?

This paper analyses the relationships between the autonomy and regulation of state agencies in Norway, Ireland and Flanders (Belgium). The empirical basis is provided by broad surveys of public sector organizations carried out in 2002–2004. Three hypotheses on these relationships are formulated and examined, indicating different patterns. The reinforcement hypothesis, stating a negative relationship does not get any support. On the other hand, the compensation hypothesis, stating a positive relationship gets some support. In general, however, the indifference hypothesis, stating low or no correlations seems to be the most adequate. The hypotheses are also linked to prevalent administrative doctrines, and the empirical findings indicate how relevant they are.

A BRIDGE FOR TWO CULTURES C. JACKSON GRAYSON,JR., CHAIRMAN,PRICE COMMISSION

C. Jackson Grayson, Jr. was the invited speaker at the President's Luncheon of the Fourth Annual Meeting of the American Institute for Decision Sciences. His remarks dwelt on the relation of his experience as a scientist and academician to the tasks he faced in his assignment with the Price Commission. Dr. Grayson is currently on leave from his post as Dean of the School of Business Administration at Southern Methodist University.     

A Cross-national Analysis of Global E-government

To explore the determinants of global e-government performance, this paper examines the aggregate data of 163 different countries by conducting multivariate statistical analysis. The results of multivariate regression analysis indicate that the performance of digital government is likely to be determined by economic wealth, education, urbanization, civil liberties, government effectiveness, and the interaction between Internet usage and economic wealth, while the extent of internet penetration alone does not determine e-government performance. More importantly, this study indicates that government effectiveness is much more important than any other factors in determining global e-government performance. The countries with high e-government performance are likely to be the wealthy, developed, and Western countries or the rapidly developing Asian countries.

Emerging credits

Fifty years ago Edwin Hollander argued that to emerge as a credible leader, a group member must first develop credits with potential followers before followers can be led in a new direction. His idiosyncrasy credit theory of leadership emerged in the 1950s, gathered support in the 1960s, was questioned in the 1970s, stagnated since the 1980s and has now become a passing reference. We reexamine the theory and argue that it should be revived to span a gap in current thinking about leadership. We identify its key constructs, examine the mixed support, describe a revised model, suggest some testable research propositions and illustrate its application to the life of one prominent transformational leader.     

Bob Hayes: Forty Years of Leading Operations Management Into Uncharted Waters

The enormous contributions of Bob Hayes to Operations Management (OM) are reviewed. His early work made innovative contributions to probability theory and utility estimation that enabled existing Operations Research theory to be applicable to real problems. Later, inspired by field trips to Japanese and German manufacturers, he joined Kim Clark to conduct an ambitious study of 12 plants in three companies, establishing the impact on productivity of factors such as reject rate, work‐in‐process, and production rate variation. In the 1980s, when adoption of advanced manufacturing automation was in vogue, Bob joined Jai Jaikumar to offer a caution, that new manufacturing technologies required new ways of managing and that advanced technology coupled with obsolete management would produce poorer, not better, results. Perhaps Bob's greatest contribution was to raise OM to a more strategic level. With numerous coauthors, notably Steve Wheelwright, he provided a framework for corporate and manufacturing strategy and showed how to achieve alignment between the two, particularly in the choice of production processes. Recent papers articulated a vision for OM in which a focus on the issues of operating managers provides a consistent framework, but enables our research agenda to evolve as the world's economy changes.     

Complexity,simplicity, simplexity

“In the midst of order, there is chaos; but in the midst of chaos, there is order”, John Gribbin wrote in his book Deep Simplicity (p. 76). In this dialectical spirit, we discuss the generative tension between complexity and simplicity in the theory and practice of management and organization. Complexity theory suggests that the relationship between complex environments and complex organizations advanced by the well-known Ashby’s law, may be reconsidered: only simple organization provides enough space for individual agency to match environmental turbulence in the form of complex organizational responses. We suggest that complex organizing may be paradoxically facilitated by a simple infrastructure, and that the theory of organizations may be viewed as resulting from the dialectical interplay between simplicity and complexity.     

Using Economic Freedom Indexes as Policy Indicators: An Intercontinental Example

We use time-series cross-section analysis to provide empirical validation for the existence of a specific American ethos and a specific European ethos with respect to economic policy. In our innovation, economic policy is proxied by “economic freedom” from the Fraser Institute database and constitutional “political institutions” are proxied by variables from the Database of Political Institutions (from the World Bank). Our results suggest that, once we control for political and institutional differences, the United States and Europe still pursue different economic policies.

Client acceptance decisions of Dutch auditing partners

A vignette study of 567 client acceptance decisions by 67 Dutch auditors showed that the prospect of acquiring additional assignments significantly increases the likelihood that auditing partners accept an audit assignment from a new client, thereby violating a rule of the auditing profession. Audit firm strategy was found to moderate the effect of the acquisition of additional assignments: partners working in audit firms emphasizing a professional orientation are less likely to accept such risky assignments, whereas a commercial orientation of audit firms was found to exacerbate the effect of acquiring additional services. Contrary to expectations, punishment severity for professional mistakes increases the likelihood of client acceptance.

CEO burnout,managerial discretion,and firm performance: The role of CEO locus of control,structural power,and organizational factors

Despite the possibility of burnout resulting from dynamics in firms' upper echelons, little if any work has focused on chief executive officer's (CEO's) burnout and firm performance. Drawing on managerial discretion theory, this article analyzes the influence of CEO burnout on firm performance and the moderating roles of the individual (CEO locus of control), structural power (CEO duality and CEO tenure), and organizational characteristics (size, age, and resource availability) related to managerial discretion. Using a sample of 156 CEOs in Swedish firms, we find a negative association between CEOs who report higher burnout and firm performance. Our results confirm that CEO duality and resource availability ameliorate and firm size exacerbates the negative association between CEO burnout and firm performance. Contrary to our expectations, CEO locus of control, CEO tenure, and firm age do not influence this relationship. We discuss the implications of our research for upper echelons theory and strategic leadership theory.     

Corporate Profit,Social Welfare,and the Logic of Capitalism

Business ethics scholars have proposed strategies for mitigating the ill effects brought on by a wealth maximization business strategy by urging managers to either embrace corporate social responsibility (CSR) or to manage according to stakeholder theory. In this article I argue that these strategies are often ineffective in bringing about the behavior they promote because it is antithetical to the nature and logic of capitalism. I examine the organizing principles of capitalism and the role it assigns to capitalists, and juxtapose these with the behavior prescribed by three normative frameworks: strategic management theory (SMT), the CSR initiative, and stakeholder theory. Unlike the behaviors prescribed by the CSR initiative and stakeholder management theory, the behavior prescribed by SMT is consistent with the role of capitalists as defined by the organizing principles of capitalism, and SMT's “rules” have instilled habits that have, in turn, been able to mold managers’ aspirations and purposes. CSR and stakeholder theory must not only combat the habits instilled by the entrenched SMT, they must also find some way of instilling habits that run contrary to those defined by the nature and logic of capitalism itself.     

John A. Buzacott and His Pioneering Contributions to Manufacturing and Service Systems

John A. Buzacott is a pioneering and premier contributor to the field of production and operations management. He has been a principal architect of the development of a unified framework and a rigorous engineering foundation for many of the major approaches currently used in the design, planning, and control of manufacturing and service systems. His innovative use of stochastic models to explain many phenomena occurring in manufacturing and service organizations has distinguished him not only as a great researcher but also as a great teacher. His contributions have inspired scholars throughout the world. We provide an overview of John's research works and accomplishments.     

Implications of Success and Persistence for Public Sector Performance

Public sector organizations collect vast amounts of information that often goes unused. Information may serve a symbolic role to imply that decision makers are using rational decision processes, or it may be collected to rationalize a preconceived decision and develop or maintain public support. Over-collection of irrelevant information or under-analysis of existing information for decision implications leads to excessive public information costs with limited public benefit. The study discusses the role systematic information misalignment plays in the public sector and considers its implications for public agency performance. The concept is evaluated using examples from the National Aeronautics and Space Administration.

Is the German system of corporate governance converging towards the Anglo-American model?

This paper analyses whether the German corporate governance is converging towards Anglo-American practices. We summarise the extant empirical evidence on the various governance mechanisms that economic theory suggests ensure efficiency and describe recent legal developments. We find no clear signs of convergence in form, i.e. the main distinctive features of the German system have remained largely unaltered. However, changes occurred over the last decade (specially in the legal framework) suggest a certain convergence in function, i.e. some governance mechanisms have effectively incorporated aims and/or goals generally associated with the Anglo-American model.

All Things Great and Small: Organizational Size,Boundaries of the Firm,and a Changing Environment

Abstract

Research findings have established a relationship between organizational size and a substantial set of organizational outcomes, resulting in size's distinction as “perhaps the most powerful explanatory organizational covariate in strategic analysis”. We draw on the theory of the firm to provide a theory-driven definition of firm size and as a framework to organize the diverse research on firm size. We examine studies over the last 20 plus years since the last review of research on organizational size that have expanded our understanding of the advantages and disadvantages of larger firms, the environmental factors that have changed the merits of firms relative to markets, the managerial bias to pursue growth, and the most recent findings on the performance implications of organizational size. In doing so, the review provides extensions to our understanding of the theory of the firm, by integrating contingency theory, the resource-based theory of the firm, leadership theories, and the knowledge-based view of the firm. In addition, based on an extensive review of the measurement methodologies for the most common control variable employed by strategy scholars, this review outlines a rich and robust set of opportunities for future research to explore the nature of organizational size and its effects.     

A longitudinal analysis of the impact of firm resources and industry characteristics on firm-specific profitability

Using a dynamic heterogeneous panel data model, we examine the relationship between firm-specific resources (corporate management capabilities, employee value-added and technological competence) and firm-specific profitability and the potential moderating effects of industry characteristics on this relationship. We find that firm-specific resources enhance both accounting-based measures (return on assets and return on sales) and market-based measure (Tobin’s q) of firm-specific performance. Moreover, industry characteristics moderate the relationship between firm-specific resources and firm-specific profitability. Managerial implications are discussed.

Culture, Cosmopolitanism, and Risk Management

Most cultural approaches to risk management deal with the connections between the forms of social relations within groups and the risk concerns of those groups. According to these theories, a certain limited set of different relational forms (usually three, four, or five) lead to specific, different and conflicting, risk concerns. In contrast to these theories, cosmopolitanism is an approach to culture that focuses, not on forms of sociality, but on changes among forms—expansions and contractions in the inclusivity of forms and movement by persons from one form of sociality to another. Relative to other cultural theories, cosmopolitanism thus is much more concerned with the solution of risk management problems than with their origins. Cosmopolitanism can be thought of as a cultural continuum, with cosmopolitanism at one end and pluralism at the other. Cosmopolitan persons are more open to cultural change—and thus the solution of risk management problems. In this article, we outline our new theory of cosmopolitanism, describe a method for measuring it and present an experimental study that tests some implications of the theory. Results from the study support the theory by showing that, compared to pluralistic respondents, cosmopolitan respondents are more inclusive in their risk management judgments—that is, they express equal concern for a local and a national issue, whereas the pluralistic respondents express greater concern in the local case. We discuss the risk management implications of a cosmopolitan approach to culture.     

Commitment,Flexibility, and Optimal Screening of Time Inconsistency

This paper develops a theory of optimal provision of commitment devices to people who value both commitment and flexibility and whose preferences differ in the degree of time inconsistency. If time inconsistency is observable, both a planner and a monopolist provide devices that help each person commit to the efficient level of flexibility. However, the combination of unobservable time inconsistency and preference for flexibility causes an adverse‐selection problem. To solve this problem, the monopolist and (possibly) the planner curtail flexibility in the device for a more inconsistent person at both ends of the efficient choice range; moreover, they may have to add unused options to the device for a less inconsistent person and also distort his actual choices. This theory has normative and positive implications for private and public provision of commitment devices.