Managing Uncertainty through Profit Sharing Contracts from Medieval Italy to Silicon Valley

Organizational innovation is essential to economic development. But, the way successful societies have organized new ventures has been remarkably similar in both past and present. The commenda organizations of medieval Italy shared many characteristics with modern startups that are financed by venture capital. Profit share contracts; limited liability and periodic reevaluations are cases in point. Agency contracts in both types of ventures are designed to absorb the high uncertainty inherent to these enterprises through risk sharing. Uncertainty prohibits a unique ex ante ranking order of investment projects and prompts investors to look for hidden human capital. Equity finance is better equipped to even out unexpected losses and gains that are inherent to uncertainty than debt finance.     

Effort Observability,Incentive Systems,and Organizational Forms

This paper analyses the choice between a centralized and a decentralized organizational structure focusing on the relationship existing between the allocation of decision rights, the degree of observability of effort and the use of different compensation systems. Profitable production is realized thanks to good information being available during the project selection stage and hard work being performed in the implementation stage. Selection of projects may be made by the principal (hierarchy) or by the agent (delegation). Under the hierarchical system, the principal's participation in the design of projects allows her to gather useful information for the design of a more accurate compensation system. Therefore, we analyse the trade‐off between optimal use of available information and accuracy of incentive systems, which emerges in the choice of organizational form.     

Special issue on “The role of intellectual capital and integrated reporting in management and governance: a performative perspective”

Journal of Management and Governance -     

M&A and diversification strategies: what effect on quality of inventive activity?

Journal of Management and Governance - The aim of this paper is to examine how an acquirer’s diversification strategy shapes the multiple dimensions of inventive activity. Differing from...     

On the relationship between compliance with recommendations on the audit committee of codes of good practices and financial reporting quality

Codes of good practices provide a soft alternative to the hard legislation approach to corporate governance. These codes include a set of recommendations that companies are expected to follow in order to enhance governance structures and practices. Some of these recommendations specifically aim to improve the effectiveness of the audit committee. We investigate the relationship between the level of compliance with recommendations on the audit committee of the Spanish Unified Code and financial reporting quality, as measured by discretionary accruals and by the opinion of the audit report. We use a sample of companies listed in the Spanish stock market for the years between 2007 and 2013. Results show a strong and positive relationship between the level of compliance with recommendations and the quality of financial reporting. We also report significant results for some specific recommendations. These results are robust to various checks. Therefore, the level of compliance with recommendations on the audit committee might provide a feasible and reliable indicator of the quality of financial reports released by the company.     

International coopetition for innovation: Are the benefits worth the challenges?

International coopetition has rarely been studied in relation to innovation. Further exploration of effects of international coopetition, i.e. the pursuit of simultaneous cooperation and competition, on a firm’s innovation performance is especially important as such a relationship is challenging with a high propensity to fail. This observation formed the point of departure for this study, which aims to increase the understanding of the effects of international coopetition on firm innovativeness and how these effects are conditioned on the magnitude of the organizational adjustments a firm introduces. We use an unbalanced panel of 9839 firms that participated in four waves of the Swedish Community Innovation Survey between 2008 and 2014 as our empirical base. We illustrate that firms that cooperate with competitors internationally are more likely to exhibit higher propensity to introduce radical innovations, yet this effect is conditioned upon the magnitude of organizational adjustments. Overall, our study contributes to the understanding of the implications of international coopetition and what a firm needs to benefit from it.     

The densest <Emphasis Type="Italic">k</Emphasis>-subgraph problem on clique graphs

The Densest k-Subgraph (DkS) problem asks for a k-vertex subgraph of a given graph with the maximum number of edges. The problem is strongly NP-hard, as a generalization of the well known Clique problem and we also know that it does not admit a Polynomial Time Approximation Scheme (PTAS). In this paper we focus on special cases of the problem, with respect to the class of the input graph. Especially, towards the elucidation of the open questions concerning the complexity of the problem for interval graphs as well as its approximability for chordal graphs, we consider graphs having special clique graphs. We present a PTAS for stars of cliques and a dynamic programming algorithm for trees of cliques. M.L. is co-financed within Op. Education by the ESF (European Social Fund) and National Resources. V.Z. is partially supported by the Special Research Grants Account of the University of Athens under Grant 70/4/5821.     

Models of Neurotoxicity: Extrapolation of Benchmark Doses in Vitro

In risk assessment, no observed exposure level (NOAEL) and benchmark dose (BMD) are usually derived either from epidemiological studies in humans or from animal experiments. In many in vitro studies, concentration-effect/response curves have been analyzed using different mathematical models finalized to the identification of EC50. In the present article, we propose a model to fit dose-response curves in vitro. The BMD approach has been used to compare the cell viability (MIT assay) of different rat (C6 and PC12, glial and neuronal, respectively) and human cell lines (D384 and SK-N-MC, glial and neuronal, respectively) after 24-hour exposure to the following neurotoxic substances: manganese chloride (MnCl2), methyl-mercury (Me-Hg), and the enantiomers of styrene oxide (SO). For all rat and human cell lines, the potency of the examined compounds was: MnCl2 < S-SO < R-SO < Me-Hg. A preliminary comparison with in vivo toxicity data for these substances gave rise to consistent results. Whereas a reasonable agreement between in vitro and in vivo data has been found for Mn and styrene oxide, a wide scatter of LOAEL has been reported for Me-Hg and these appear to be either much higher or lower than the BMD for the MIT assay we observed in vitro.     

Employee voice on social media — An affordance lens

Voice mechanisms in organizations provide an opportunity for employees to have a say about their work. As new digital mechanisms, such as social media (SM), are being increasingly adopted by organizations for knowledge sharing, employee engagement and general communication, it is important to consider the extent to which SM may facilitate employee voice. The limited attempts to examine SM and employee voice have mostly focused on identifying the contextual factors that could promote constructive voice on SM. The extant literature does not explore how SM features may (or may not) facilitate all types of voice, such as those which promote employee interests. Adopting an affordance lens, this paper answers the call of voice scholars to explore the potential of SM as a voice mechanism by discussing the perceived value of different SM features for different types of employee voice content. The paper brings together SM and voice literature and explores how different SM affordances may potentially facilitate certain voice content more so over others. In doing so, future directions for research of voice on SM are also discussed.