Using Frontier Analysis to Evaluate Company Performance

The measurement of performance is critical to nearly all managerial disciplines. Yet little is known about the aggregation characteristics of the components of performance and how our notion of a ‘good performing firm’ relates to what we use as a dependent variable. In this paper we propose an approach to the measurement of performance that uses the logic of frontier analysis and the technique of data envelopment analysis. The approach is shown to be a reasonable representation of the multidimensional nature of performance and is shown to replicate, effectively, the components that strategic management scholars typically consider when discussing performance. It is also shown to be superior to the simpler alternatives based on traditional approaches to performance measurement.     

Developing a Broadly Applicable Measure of Risk Perception

Decades of research identify risk perception as a largely intuitive and affective construct, in contrast to the more deliberative assessments of probability and consequences that form the foundation of risk assessment. However, a review of the literature reveals that many of the risk perception measures employed in survey research with human subjects are either generic in nature, not capturing any particular affective, probabilistic, or consequential dimension of risk; or focused solely on judgments of probability. The goal of this research was to assess a multidimensional measure of risk perception across multiple hazards to identify a measure that will be broadly useful for assessing perceived risk moving forward. Our results support the idea of risk perception being multidimensional, but largely a function of individual affective reactions to the hazard. We also find that our measure of risk perception holds across multiple types of hazards, ranging from those that are behavioral in nature (e.g., health and safety behaviors), to those that are technological (e.g., pollution), or natural (e.g., extreme weather). We suggest that a general, unidimensional measure of risk may accurately capture one's perception of the severity of the consequences, and the discrete emotions that are felt in response to those potential consequences. However, such a measure is not likely to capture the perceived probability of experiencing the outcomes, nor will it be as useful at understanding one's motivation to take mitigation action.     

Reproductive and Developmental Risks from Ethylene Oxide: A Probabilistic Characterization of Possible Regulatory Thresholds

Ethylene oxide is a gas produced in large quantities in the United States that is used primarily as a chemical intermediate in the production of ethylene glycol, propylene glycol, non-ionic surfactants, ethanolamines, glycol ethers, and other chemicals. It has been well established that ethylene oxide can induce cancer, genetic, reproductive and developmental, and acute health effects in animals. The U.S. Environmental Protection Agency is currently developing both a cancer potency factor and a reference concentration (RfC) for ethylene oxide. This study used the rich database on the reproductive and developmental effects of ethylene oxide to develop a probabilistic characterization of possible regulatory thresholds for ethylene oxide. This analysis was based on the standard regulatory approach for noncancer risk assessment, but involved several innovative elements, such as: (1) the use of advanced statistical methods to account for correlations in developmental outcomes among littermates and allow for simultaneous control of covariates (such as litter size); (2) the application of a probabilistic approach for characterizing the uncertainty in extrapolating the animal results to humans; and (3) the use of a quantitative approach to account for the variation in heterogeneity among the human population. This article presents several classes of results, including: (1) probabilistic characterizations of ED10s for two quantal reproductive outcomes-resorption and fetal death, (2) probabilistic characterizations of one developmental outcome-the dose expected to yield a 5% reduction in fetal (or pup) weight, (3) estimates of the RfCs that would result from using these values in the standard regulatory approach for noncancer risk assessment, and (4) a probabilistic characterization of the level of ethylene oxide exposure that would be expected to yield a 1/1,000 increase in the risk of reproductive or developmental outcomes in exposed human populations.     

Risk Estimation and Value-of-Information Analysis for Three Proposed Genetic Screening Programs for Chronic Beryllium Disease Prevention

Genetic differences (polymorphisms) among members of a population are thought to influence susceptibility to various environmental exposures. In practice, however, this information is rarely incorporated into quantitative risk assessment and risk management. We describe an analytic framework for predicting the risk reduction and value-of-information (VOI) resulting from specific risk management applications of genetic biomarkers, and we apply the framework to the example of occupational chronic beryllium disease (CBD), an immune-mediated pulmonary granulomatous disease. One described Human Leukocyte Antigen gene variant, HLA-DP beta 1*0201, contains a substitution of glutamate for lysine at position 69 that appears to have high sensitivity (approximately 94%) but low specificity (approximately 70%) with respect to CBD among individuals occupationally exposed to respirable beryllium. The expected postintervention CBD prevalence rates for using the genetic variant (1) as a required job placement screen, (2) as a medical screen for semiannual in place of annual lymphocyte proliferation testing, or (3) as a voluntary job placement screen are 0.08%, 0.8%, and 0.6%, respectively, in a hypothetical cohort with 1% baseline CBD prevalence. VOI analysis is used to examine the reduction in total social cost, calculated as the net value of disease reduction and financial expenditures, expected for proposed CBD intervention programs based on the genetic susceptibility test. For the example cohort, the expected net VOI per beryllium worker for genetically based testing and intervention is $13,000, $1,800, and $5,100, respectively, based on a health valuation of $1.45 million per CBD case avoided. VOI results for alternative CBD evaluations are also presented. Despite large parameter uncertainty, probabilistic analysis predicts generally positive utility for each of the three evaluated programs when avoidance of a CBD case is valued at $1 million or higher. Although the utility of a proposed risk management program may be evaluated solely in terms of risk reduction and financial costs, decisions about genetic testing and program implementation must also consider serious social, legal, and ethical factors.     

Don't Screw the Crew: Exploring the Rules of Engagement in Organizational Romance

Thirty years ago sociological research began to discover what workplace romance might mean for the participants. Since then management research has tended to adopt a functionalist approach, using survey methods, or third‐party approaches to ask about company policy and negative consequences of workplace romance, warning of the dangers and consequences of romance and offering solutions for managers on how to deal with this potential problem. Drawing on the sexuality of organization and critical literature, and adopting a position of constructivist structuralism with a qualitative research method, this research looks at how the concept of workplace romance is defined and negotiated within a public‐house setting. It examines the ‘rules of engagement’, the personal experiences and views of both managers and workers, as well as first‐hand stories of workplace romance. Romance was conceptualized as ‘natural’ and something that could not be legislated for, where unwritten rules were defined but often ignored. However, the ‘rules of engagement’ emerged as favouring particular groups depending on gender, position in the hierarchy and sexual identity. Subjective value judgements are made, often resting on gendered assumptions of male and female behaviour.     

Bank Loan Officers' Perceptions of Business Owners: The Role of Gender

There is a widely held belief that banks may be discriminating against female business owners. This study was designed to explore the perceptions held by bank loan officers of male and female business owners, using Bourdieu's theory of practice and Kelly's personal construct methodology. The research literature might lead to an expectation that the characteristics of the business owners would be relatively homogenous but that men and women business owners would be construed differently (for example women might be seen to lack drive). However, the results demonstrate heterogeneity in the constructs held by bank loan officers, and a particular concern with the character of the business owner. Significant gender differences were observed in only 20 of the 325 constructs elicited from 35 bank loan officers. Female bank loan officers were as likely as male bank loan officers to draw gender distinctions between business owners. Detailed multivariate analyses confirmed no evidence of systematic gender differences in the constructs held by bank loan officers of business owners.     

Effects of Alternative Policies on Income Redistribution: Evidence from Brazil

Despite recent successes, Brazilian income (cash) transfer policies remain controversial, and alternative approaches to income redistribution are being actively considered. This article contributes to this debate, analysing the effects of several alternative policies for income redistribution in the Brazilian economy using a computable general equilibrium model. Simulations were conducted consistent with the following policies: direct transfer of income, reduction of taxes, and incentives to agricultural exports. The results suggest that transfer of income is the most effective in promoting redistribution of income, with a positive impact on the level of welfare of the poorest households.     

Comparing Expressed and Revealed Preferences for Risk Reduction: Different Hazards and Question Frames

Studies often note the wide differences that exist in costs per death avoided across U.S. federal programs and regulatory contexts. This paper explores two new, related explanations for these differences. First, it argues that the patterns of revealed preferences (public allocations) may be related to public values, which are measured here through subjects' expressed preference responses to a contingent valuation survey regarding risk reduction. Subjects' expressed values are compared to actual (and proposed) costs of safety regulations for a similar set of hazards. We discover strong congruence in the ranking of expressed values and actual values. Second, the paper presents the results of a subsequent survey that investigates why the patterns observed in the first survey might occur. It suggests that one reason for the observed similarities between revealed and expressed preferences may be in how choices are framed. The paper hypothesizes that both subjects and decision makers may frame valuation decisions in the same way: as percentage changes from the reference point provided by the base rate of deaths for that hazard.     

Towards more productive industrial relations

The author suggests that a critical factor in bringing about an overall improvement in the UK's economic performance is an improvement in Industrial Relations—with the aim of achieving levels of productivity which match the best in the world. The article asks how this is to be done; what has gone wrong; and, more importantly, what can be done to improve the situation in the future.