Telework: What Does it Mean for Management?

This article develops the first resource-based analysis of telework impacts on large organizations. We adopt an ‘integrative’ approach that goes beyond the immediate and easily quantifiable effects of telework adoption. This approach takes into account both top-down considerations (managerial preoccupations with strengthening the organization’s competences) and bottom-up demands (employee needs). We identify several telework impacts on a variety of resource-domains, including effects on the strategic development and operational functioning of the human capital resource-base, the organization’s broader productive efficiency, the external linkages of the organization, and finally, a number of externalities. We observe that the teleworkers themselves do not experience the negative effects on job satisfaction observed in earlier research, with the exception of a reduction in professional interaction. Broader human resource management practices appear to have adjusted well to the specific requirements of telework adoption.We also observe a strong divergence between the views of adopters and non-adopters, with the latter having less positive expectations across the board, as compared to the former. We thus demonstrate that broader strategic considerations, beyond immediate impacts on the bottom-line, do influence the choice to adopt this practice. The difference in employee perceptions between adopters and non-adopters suggests that the latter lack confidence in their firm’s broader HRM practices to adapt appropriately to the requirements of effective telework implementation.     

Efficient volatility estimation in a two-factor model

We statistically analyze a multivariate Heath-Jarrow-Morton diffusion model with stochastic volatility. The volatility process of the first factor is left totally unspecified while the volatility of the second factor is the product of an unknown process and an exponential function of time to maturity. This exponential term includes some real parameter measuring the rate of increase of the second factor as time goes to maturity. From historical data, we efficiently estimate the time to maturity parameter in the sense of constructing an estimator that achieves an optimal information bound in a semiparametric setting. We also nonparametrically identify the paths of the volatility processes and achieve minimax bounds. We address the problem of degeneracy that occurs when the dimension of the process is greater than two, and give in particular optimal limit theorems under suitable regularity assumptions on the drift process. We consistently analyze the numerical behavior of our estimators on simulated and real datasets of prices of forward contracts on electricity markets.     

Adapting for Innovation: Including Divestitures in the Debate

Existing literature argues that divested units are unwanted and poor performers - yet evidence suggests that companies do divest well performing units, and often retain a relationship with them, especially in the quest for innovation. This article presents an exploratory case study to examine how a company structures the divestiture of an innovative unit and how it can benefit from the innovation the unit generates. The analysis focuses on how an established company can use divestiture as a strategy to enhance the innovation of its units, and capture its value, by structuring, maintaining and nurturing a special relationship with the unbundled unit. Under new organizational arrangement, resources can be transferred from the parent to the unit, while the parent retains access to the innovation developed within the unit. This study proposes a framework that offers corporate change agents and strategists a new perspective on how to integrate innovation and corporate strategy.     

Monetary incentives in the loss domain and behavior toward risk: An experimental comparison of three reward schemes including real losses

In the loss domain, both practical and ethical considerations rule out the systematic use of an incentive-compatible procedure involving real losses. The experimental study presented here aims at investigating whether some easier-to-implement procedure could be adequately used. For that purpose, the subjects’ degree of risk aversion is compared across three payment conditions: a real-losses condition based on a random-lottery (incentive-compatible) system, which serves as a benchmark, and two challengers, namely a “losses-from-an-initial-endowment” procedure and a hypothetical-losses condition. As a by-product, our experimental design also allows us to investigate the impact of monetary incentives in the gain domain. The main result is twofold: no significant difference arises between the three payment conditions in the loss domain, while real and hypothetical choices significantly differ in the gain domain. Our results suggest that the use of monetary incentives may be more crucial in the gain domain than in the loss domain.     

Voting for president in the U.S.-Mexico border region

Reasoning that life in the U.S.-Mexico border region is sufficiently different from life in non-border regions this paper asks whether proximity to the border has a significant impact on presidential voting. County level data from four border states, California, Arizona, New Mexico, and Texas, over five presidential elections, 1992-2008, are examined using a both cross-sectional and panel data analysis. The authors conclude that there is a border effect that favors Democratic candidates and that fades as distance from the border increases.