The Role of Shocks in Employee Turnover*

This paper reports the findings from a recent study of nurse leavers at eight large hospitals in the National Health Service (NHS) of England and Wales. The study develops and extends an influential theory of employee turnover by describing how for some leavers a single, jarring event or shock triggers the decision to quit. By elaborating on the nature of shocks for this sample of 352 nurse leavers, the paper allows for improved understanding of nursing turnover and thus offers an example of relevant management research. The analysis of shock illustrates how conventional research methodologies can lead to a distorted picture of turnover. This has wider implications, both for any organization wishing to manage turnover effectively and for future research. The paper adds to the limited body of empirical analysis on actual leavers, thereby contributing to an ongoing methodological debate concerning the use of proxy variables. By highlighting flaws in the dominant methodology used to study turnover, the paper offers an example of management research that is also rigorous, and thus ‘pragmatic’.     

An Empirical Investigation of Corporate Citizenship in Australia and Turkey *

This paper describes a study of corporate citizenship practices and its relationship to dimensions of internal and external corporate culture, customer loyalty and organizational commitment. Empirical data was collected from a cross‐industry sample in Turkey and Australia using a questionnaire form developed and validated for other cultures. It was shown that Australian and Turkish firms' practices differed significantly on a number of important variables, but also that it is possible to compare corporate citizenship practices in a way that is not culture‐specific.     

A General Formula for Valuing Defaultable Securities

Previous research has shown that under a suitable no‐jump condition, the price of a defaultable security is equal to its risk‐neutral expected discounted cash flows if a modified discount rate is introduced to account for the possibility of default. Below, we generalize this result by demonstrating that one can always value defaultable claims using expected risk‐adjusted discounting provided that the expectation is taken under a slightly modified probability measure. This new probability measure puts zero probability on paths where default occurs prior to the maturity, and is thus only absolutely continuous with respect to the risk‐neutral probability measure. After establishing the general result and discussing its relation with the existing literature, we investigate several examples for which the no‐jump condition fails. Each example illustrates the power of our general formula by providing simple analytic solutions for the prices of defaultable securities.     

Polarization: Concepts,Measurement, Estimation

We develop the measurement theory of polarization for the case in which income distributions can be described using density functions. The main theorem uniquely characterizes a class of polarization measures that fits into what we call the “identity‐alienation” framework, and simultanously satisfies a set of axioms. Second, we provide sample estimators of population polarization indices that can be used to compare polarization across time or entities. Distribution‐free statistical inference results are also used in order to ensure that the orderings of polarization across entities are not simply due to sampling noise. An illustration of the use of these tools using data from 21 countries shows that polarization and inequality orderings can often differ in practice.     

Asymptotic Distributions of Quasi‐Maximum Likelihood Estimators for Spatial Autoregressive Models

This paper investigates asymptotic properties of the maximum likelihood estimator and the quasi‐maximum likelihood estimator for the spatial autoregressive model. The rates of convergence of those estimators may depend on some general features of the spatial weights matrix of the model. It is important to make the distinction with different spatial scenarios. Under the scenario that each unit will be influenced by only a few neighboring units, the estimators may have ‐rate of convergence and be asymptotically normal. When each unit can be influenced by many neighbors, irregularity of the information matrix may occur and various components of the estimators may have different rates of convergence.     

Family Control and Stock Market Reactions to Innovation Announcements

Although family firms are common around the world, studies on family‐controlled business are limited. Prior studies mainly focused on the influences of family ownership on overall firm performance, and the results were mixed. In this study we attempted to explore the impacts of family ownership on innovation by examining the association of family control and stock market reactions to innovation announcements. We found that firms with greater family control experienced significantly more negative stock market reactions to innovation announcements. The results further indicated that divergence of cash flow and voting rights was strongly and negatively correlated with announcement‐period abnormal returns. In addition, the findings suggested a significantly positive moderating effect of institutional ownership. The conclusions were robust under various measures of family control, and remained valid after controlling other influential factors for stock market reactions to innovation announcements.     

A Study of the Role Played by Manufacturing Strategic Objectives and Capabilities in Understanding the Relationship between Porter's Generic Strategies and Business Performance

An appropriate alignment between business strategy, manufacturing strategic objectives and manufacturing capabilities reportedly influences business performance positively. However, few papers empirically analyse this proposition for the case of Porter's generic strategies of cost leadership and differentiation, and none jointly considers all four elements. This paper integrates strategies, capabilities and performance in a single model and proposes that both manufacturing competitive priorities and capabilities, articulated in terms of cost and flexibility, are essential for explaining the link between generic business strategies and business commercial and financial performance. Within this analytic framework, we test whether companies that emphasize one business strategy rather than another achieve a better alignment and superior performance. The analyses conducted with a sample of 148 Spanish manufacturers provide general support for these propositions and contribute to a deeper understanding of the role played by functional strategies in understanding the outcomes of business strategy.     

Contingencies versus External Pressure: Professionalization in Boards of Firms Affiliated to Family Business Groups in Late‐Industrializing Countries

We examine the antecedents of professionalization in boards of firms affiliated to family business groups, increasingly recognized in the literature as the dominant form of big business organization in many late‐industrializing countries. Dimensions of board professionalization that we include in our study are board size, ratio of salaried executives and outsider presence. We compare predictions on board composition derived from contingency, institutional and power perspectives. Turkish family business groups, considered as an archetypal example of this form of organization, provide the empirical setting for the study, with data on 299 firms affiliated to ten different family business groups. Our results provide greater support for institutional and power perspectives, showing that, relative to internal and external complexity facing affiliate firms, institutional pressures and the presence of joint venture partners better predict board professionalization.     

Robustness of Risk Maps and Survey Networks to Knowledge Gaps About a New Invasive Pest

In pest risk assessment it is frequently necessary to make management decisions regarding emerging threats under severe uncertainty. Although risk maps provide useful decision support for invasive alien species, they rarely address knowledge gaps associated with the underlying risk model or how they may change the risk estimates. Failure to recognize uncertainty leads to risk‐ignorant decisions and miscalculation of expected impacts as well as the costs required to minimize these impacts. Here we use the information gap concept to evaluate the robustness of risk maps to uncertainties in key assumptions about an invading organism. We generate risk maps with a spatial model of invasion that simulates potential entries of an invasive pest via international marine shipments, their spread through a landscape, and establishment on a susceptible host. In particular, we focus on the question of how much uncertainty in risk model assumptions can be tolerated before the risk map loses its value. We outline this approach with an example of a forest pest recently detected in North America, Sirex noctilio Fabricius. The results provide a spatial representation of the robustness of predictions of S. noctilio invasion risk to uncertainty and show major geographic hotspots where the consideration of uncertainty in model parameters may change management decisions about a new invasive pest. We then illustrate how the dependency between the extent of uncertainties and the degree of robustness of a risk map can be used to select a surveillance network design that is most robust to knowledge gaps about the pest.