Rewarding growth or profit?: Top management team compensation and governance in Japanese MNEs

Japanese multinational enterprises (MNEs) have been popularly characterized as pursuing competitive strategies emphasizing long-term performance, especially growth in sales and market share, rather than shorter term profit performance. Though prior research has emphasized the importance of linking compensation to organizational goals and performance, the relationship between performance and compensation of Japanese executives has received limited empirical attention. This paper provides a preliminary examination of how Japanese top management teams in the 106 largest industrial MNEs were compensated, particularly for performance on sales growth and profitability criteria, over the 1976–1993 time period. The relationships revealed between organizational performance and the bonus compensation of top management teams suggest that the emphasis of Japanese industrial MNEs regarding sales growth versus profitability may not be as simple as suggested by prior studies and popular characterizations.     

Human asset accounting

Human Asset Accounting (‘HAA’) is not an accepted tool of long range planning. Indeed many planners probably look sceptically on the possibility that it will ever become a technique which is important to them in their work. Unlike many other methods which have been successfully developed over the last few years HAA involves concepts which are so new that as yet relatively few people have come into contact with them. The object of this article is to give some indication of the conceptual framework on which HAA theories are based and to describe one of the techniques which is being evolved as a possible management and planning tool.     

The programmable society and the individual as a unit of data

The authors commence this paper with discussion of an extract from H.G. Wells' novel of 1920. They use this extract to remind the reader that social innovation is not a new problem and that imaginative writers may be a source of guidance on such matters. Specifically they deal with the social options created by ‘computer-driven’ information systems. They argue that this aspect of the problem of science and people is one which has a great and seriously under-estimated potential to influence the quality of life in a future society.     

An analysis of vendor innovation capability in the contract electronics manufacturing industry

Limited academic research has been given to analysing the innovation capabilities of vendors in outsourcing contracts. This paper seeks to address this gap in the literature by enhancing our understanding of how the innovation capability of vendors is deployed to win, run and renew outsourcing contracts with their customers. Employing the resource-based view as a theoretical basis and undertaking in-depth case study analysis of three vendors in the electronic manufacturing services industry, the research shows that to achieve the outsourcing objectives of winning, running and renewing the contract, vendors can use different configurations of the competitive priorities of cost, quality, delivery and flexibility. The research aggregates the capabilities that influence the innovative capability of a vendor into the innovation-related capabilities (IRCs) of design, new product introduction and manufacturing. Three strategies are identified for vendors on how to deploy these IRCs, and a number of propositions are developed to indicate the suitability of the three deployment strategies for different operational contexts.     

A Portfolio Approach to Procurement Contracts

The purpose of this paper is to develop a general framework for supply contracts in which portfolios of contracts can be analyzed and optimized. We focus on a multi‐period environment with convex contract, spot market, and inventory holding costs. We specialize the model to the case of a portfolio consisting of option contracts. We characterize the optimal replenishment policy and show that it has a simple structure. Namely, the use of every different option contract and the spot market is dictated by a modified base‐stock policy. In addition, we derive conditions to determine when an option is relatively attractive compared to other options or the spot market. Finally, we present our computational study, where we report the sensitivity of the results to the parameters of the model. Our experiments indicate that portfolio contracts not only increase the manufacturer's expected profit, but can also reduce its financial risk.     

Size,Skill and Sorting

Abstract. The rise in inequality between the 1970s and the 1990s and the persistent gap in pay between large and small employers are two of the most robust findings in the study of labor markets. Mainstream economists focus on differences in observable and unobservable skills to explain both the overall rising inequality and the size–wage gap. In this paper we model how increasing returns to skill can affect the size–wage gap both with constant sorting and with size‐biased, skill‐biased technological change (e.g. if large firms always had access to computers, but small firms gained access to computers with the rise of affordable personal computers). We analyze the Current Population Surveys from 1979 to 1993 to determine whether large and small employers are converging in terms of mean wages (the employer size–wage effect), wage structures by occupation and education, characteristics of employees, and wage structures by region. We find mixed evidence of convergence and no consistent support for any single version of human capital theory.     

The private sector as a sociological laboratory

This article discusses the experiences and obstacles the author encountered while conducting research on dislocated workers from a privately owned inner city printing company that closed in 1993. While these experiences are meant to guide others, the primary issue addressed is the schism between social science academicians, particularly sociologists and members of the business community, and its impact on the relationship between economics and sociology. The possible causes and consequences of the problems sociologists face when using the private sector as a research laboratory, and its effect on the sub-field of economic sociology, are also explored. Recommendations for breaking down these barriers are considered. David A. Reingold received his Ph.D. in sociology from the University of Chicago, and wrote his dissertation on plant closings, worker dislocation, and low-wage labor markets. He has published articles on the employment problem of the urban poor, as well as the effect of inner-city public housing on community participation and work behavior. His work appeared in Urban Studies, Economic Development Quarterly and the journal of Urban Affairs. Currently, he is working on a study of welfare reform’s impact on human service providers.     

Rationalizable solutions to pure population problems

In pure population problems, a single resource is to be distributed equally among the agents in a society, and the social planner chooses population size(s) and per-capita consumption(s) for each resource constraint and set of feasible population sizes within the domain of the solution. This paper shows that a weak condition regarding the possible choice of a zero population is necessary and sufficient for the rationalizability of a solution by a welfarist social ordering. In addition, solutions that are rationalized by critical-level generalized utilitarianism are characterized by means of a homogeneity property. Received: 1 December 1997/Accepted: 26 February 1998