Tweaking the entrepreneurial orientation–performance relationship in family firms: the effect of control mechanisms and family-related goals

Management literature is currently giving growing conceptual and empirical attention to the peculiarity and relevance of entrepreneurial attitudes in family firms, with divergent outcomes. Aiming at concretizing the effects of these attitudes, denoted by the entrepreneurial orientation construct, on family business performance and considering that family dynamics come into play in this relationship, we particularly investigate the impact of control mechanisms and family-related goals. Findings are based on a sample of 180 family firms and show that Proactiveness and Autonomy are particularly relevant to financial performance. Agency-problems avoiding control mechanisms moderate the effect of Innovativeness and Autonomy, while socioemotional wealth (SEW) goals moderate the effect of Risk-Taking, respectively. The usage of these mechanisms and managing SEW goals provide opportunities for a more efficient exploitation of entrepreneurial attitudes.     

Measurement and Pricing of Risk in Insurance Markets

The theory and practice of risk measurement provides a point of intersection between risk management, economic theories of choice under risk, financial economics, and actuarial pricing theory. This article provides a review of these interrelationships, from the perspective of an insurance company seeking to price the risks that it underwrites. We examine three distinct approaches to insurance risk pricing, all being contingent on the concept of risk measures. Risk measures can be interpreted as representations of risk orderings, as well as absolute (monetary) quantifiers of risk. The first approach can be called an "axiomatic" one, whereby the price for risks is calculated according to a functional determined by a set of desirable properties. The price of a risk is directly interpreted as a risk measure and may be induced by an economic theory of price under risk. The second approach consists in contextualizing the considerations of the risk bearer by embedding them in the market where risks are traded. Prices are calculated by equilibrium arguments, where each economic agent's optimization problem follows from the minimization of a risk measure. Finally, in the third approach, weaknesses of the equilibrium approach are addressed by invoking alternative valuation techniques, the leading paradigm among which is arbitrage pricing. Such models move the focus from individual decision takers to abstract market price systems and are thus more parsimonious in the amount of information that they require. In this context, risk measures, instead of characterizing individual agents, are used for determining the set of price systems that would be viable in a market.     

Digitalization in the financial industry: A contingency approach of entrepreneurial orientation and strategic vision on digitalization

Technology is rapidly changing the financial industry. Banks, in particular, are faced with a shift from traditional, interpersonal forms of service to digital financial services. These digital technologies are more and more becoming today’s standard in the banking sector, they challenge traditional business models, and they provide opportunities for banks to capitalize on. Building on the concept of entrepreneurial orientation (EO), this study of banks in Germany, Switzerland, and Liechtenstein aims at developing insights that explain how banks can use the tactics and strategies associated with EO to achieve superior performance in the digitalization age. The results from a survey in 102 banks show that: 1) banks that display high levels of EO report a higher level of performance, and 2) the relationship between a banks’ strategic vision on digitalization, and performance is moderated by EO. These results indicate that the sheer level of the digitalization of a bank does not affect profitability. Instead, in this time of technological change banks should develop a clear vision on digitalization that is characterized by innovation, being ahead of the competition, and a willingness to take risks.     

Changes in the association between job decision latitude and work engagement at different levels of work experience: A 10-year longitudinal study

ABSTRACT

This study set out to explore the effects of accumulating work experience on the association between job decision latitude and its interaction with job demands and work engagement. Our ten-year longitudinal study followed 333 junior physicians in postgraduate training at baseline. We used self-report measures in four assessment waves, and we conducted path analyses to investigate linear and curvilinear regression effects. Results show that high job decision latitude was associated with high work engagement at all levels of work experience, with strongest associations at baseline and after ten years. Only for novices did job decision latitude buffer the negative association between job demands and work engagement. At the stage of high work experience, low levels of job decision latitude were weakly associated with work engagement, whereas with higher levels of job decision latitude, the positive association seemed to strengthen. Our findings indicate that job decision latitude is a key job resource at all stages of work experience, with stronger effects among novices and experts. Organisations’ work design efforts should include job decision latitude to promote work engagement across employees’ different career stages, with consideration to job entrants and experts in order to tailor specific work design solutions.     

Innovation and Sectoral Employment: A Trade–off between Compensation Mechanisms

The question whether technological progress displaces employment or whether technological advance is beneficial for the level of employment has been at the core of economic debate for over two centuries. The beneficial effect might be achieved by several compensation mechanisms within the economic system. In this paper we categorize these compensation mechanisms into two basic categories that reflect the different nature of the ideas ruling the compensation. We discriminate the mechanisms of employment despite innovation from employment via innovation. In the context of new innovation economics we model an artificial industry implementing both compensation mechanisms. Simulation analysis is used to examine both the short–run and long–run properties of the model. There we focus on the influence of wage restraint policy on the functioning of the compensation mechanism.     

Interactive Job Shop Scheduling: An Experiment

An experiment is discussed in which three computer-aided, interactive job shop scheduling approaches are compared using an interactive job shop scheduling simulator (JOB) developed for the project. All three approaches use a combination of computer and human capabilities to develop job shop schedules, but differ in terms of the timing and degree of human involvement required. The three scheduling approaches are (1) the successive approach, (2) the interactive approach, and (3) the semi-interactive approach. The successive approach is characterized by the computer scheduling all work orders without any human intervention. The interactive approach is distinguished by the human scheduling one work order at a time until all work orders are scheduled. The schedule is developed interactively by the person who must simultaneously consider work-order scheduling needs and machine group load capacities. The semi-interactive approach may be viewed as a combination of the successive and interactive approaches. Work orders are automatically scheduled one at a time using the successive approach criteria, but with prespecified machine-group load thresholds. As long as the load threshold is not exceeded, the successive approach is used to schedule work orders. When a threshold is exceeded, the algorithm (successive approach) pauses and human rescheduling (interactive approach) is required to rectify the overload situation. A second (reallocation) phase, identical for all three approaches, is used to overcome any scheduling problems generated in phase one. Experimental results based on nine different performance criteria (including scheduling time, makespan, machine group utilization, and work-in-process inventory) and 45 experimental runs indicate that there are differences between the results produced by the three scheduling approaches. The interactive approach yields the best overall scheduling results, but the other two approaches are clearly better than the interactive approach in some situations. The success of the interactive approach indicates that it is usually best for the human scheduler to become involved early in the computer-based job shop scheduling process.     

A SIMULATION STUDY OF DECENTRALIZED DECISION MAKING*

This study develops a heuristic procedure for decision making coordination in a decentralized organization structure. The procedure consists of simplified rules of iterative communication between decentralized units and a central agent. The central agent assigns budgeted profit levels and adjusts such levels guiding the system toward optimality. The decision making procedure developed in this study is compatible with management by objectives practices and can serve as a prototype for decentralized management.