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This article assesses the robustness of recent estimates of the effect of density on the founding rates in organizational populations. It reports reanalyses of data on founding rates of six populations of organizations using a generalization of quasi-likelihood estimation that allows specification of autocorrelation processes. Autocorrelation is indeed present in five of the six data sets. However, the main substantive finding of earlier research proves to be robust-a nonmonotonic relationship between density and founding rate-continues to hold in most cases even when autocorrelation is taken into account. In other words, the predicted pattern of nonmonotonic density dependence is robust with respect to the form of autocorrelation investigated.
This Report examines the monetary unification of Europe and the creation of a European Central Bank. It deals first with the macroeconomics of monetary union and highlights four issues. What monetary constitution is required to deliver price stability, and do the draft statutes of the European Central Bank (ECB) meet these conditions? Are fiscal rules a necessary adjunct to such a constitution? Is convergence of inflation rates a precondition for embarking on monetary union? Finally, how should the transition be managed?
Eastern Europe is engaged in a massive programme of financial reform. This paper argues that while this programme has many desirable features, it has failed to address some of the most basic issues. These concern the relationship between the financial system and the enterprise sector, and the association suggests that there is a choice between financial systems that has not as yet been adequately considered and that it is far from evident that Eastern Europe is at present proceeding with the right model.
It is widely agreed that, in the absence of specific corrective aims, the corporate tax system should aim for neutrality. A fully neutral tax would not affect the scale of a company's activities, nor the allocation of investment spending between different assets, nor the method by which this investment is financed. Moreover these properties should also hold under changing economic circumstances, particularly rising prices; in a world where inflation is endemic, for example, it is unrealistic to design a system which only functions well when inflation is zero.
Corporate taxes are now one of the few obstacles to a better international allocation of capital. This arises from the steady removal of barriers to capital flows and the increasing integration of capital markets. This provides, in a common format, the main corporate tax provisions of all 24 OECD Member countries for 1991. It also calculates effective corporate tax rates on domestic as well as on international investment for manufacturing industry in these countries. The report discusses the main relevant tax policy issues with particular emphasis on possible means to reduce tax distortions to international flows of capital.
This paper presents the authors' opinion on claims of Petersen and Koput (PK) regarding a problem in the usual interpretation of tests of the theory of density-dependent legitimation and competition as applied to rates of organizational mortality. PK argue that the negative first-order effect of organizational density on mortality rates is compatible with a simpler and thus preferable alternative explanation that relies on the operation of unobserved heterogeneity instead of legitimation. Their strongly stated assertions of generality fail to acknowledge that the artifactual effect of density occurred in only half of their simulations. Even substantively trivial effects are likely to be statistically significant when so many observations are generated by the simulation. Age of population and density are so highly correlated in the data sets produced by the simulation structure of PK that we could not estimate models including these two variables because we could not invert the Hessian. The most unrealistic feature of the simulation of PK concerns its treatment of founding processes. For unexplained reasons, they chose a deterministic founding process: The same fixed number of foundings occur each year in each frailty class.
The 1980s were a period of profound economic change in the UK. The consensus politics of the post-Second World War period disintegrated in the face of mounting disillusionment with the UK's economic record. It gave way to a radical style of politics that firmly rejected intervention by the state in managing economic activity and promoted the operation of free markets
The range of pressures which has impacted on local government in the 1980s has forced the emergence of dynamic and sophisticated forms of industrial relations at the workplace level. It is clear, however, that with conceptual tools forged to analyse developments in the private manufacturing sector, very few attempts have been made by academics, policy-makers or commentators to discuss the structures and processes which have emerged. The character of the changes at authority level are considered using material from a survey of personnel officers in over a third of authorities in England and Wales and within the context of prevailing analytical and theoretical frameworks. It is argued that the distinctive development of the personnel function in local government has resulted in a managerial process which conforms to key features of the human resource management (HRM) model, in particular the devolution of personnel responsibilities to line managers and the integration of personnel concerns at the strategic level. However, other features of this model are less in evidence. The search for employee commitment and flexibility remains patchy and often appears as a practical response to labour market and competitive pressures. Furthermore, collectivist features of employee relations remain well entrenched with the continued encouragement of both union membership and involvement. This is not to deny change beyond the HRM model. Thus, it is clear that established joint machinery is becoming increasingly unable to deal with ongoing issues while the trade unions are gradually being forced into a consultative rather than a bargaining role.
Of all of the new technologies emerging in the late 20th century, the production of artificial intelligence may provide the most profound impacts on organizational decision making. Because the development of artificial intelligence technologies and models has largely been based on psychological models of human cognition, the effects of their implementation in complex social settings have not been thoroughly examined. This paper is an attempt to generate research which will develop a comprehensive understanding of the impacts of artificial intelligence and its role in complex organizations. A set of 11 hypotheses has been developed which examine the relationships between artificial intelligence technologies and the dimensions of organizational decision making. It is argued here that the implementation of expert systems will lead to less complex and political decision processes, while the implementation of natural language systems will lead to more complex and political decision processes.
A model of firm financial and investment behaviour when there is a possibility of tax exhaustion is used to analyse the incentives for firms to act as lessees or lessors and the determination of the equilibrium rental rate in the leasing market. A number of results emerge which are relevant for public policy. It is shown that: (i) leasing may diminish aggregate investment by comparison with the situation when it does not occur; (ii) rents are likely to be earned on leasing activities; and (iii) a purely tax-induced positive relationship exists between aggregate investment and corporate profits.
Throughout much of the 1980s, a picture of institutional continuity was drawn by many industrial relations researchers from large-scale surveys, which appeared at odds with reports of substantial change that other accounts documented. This paper explores how differences in the research instruments used may contribute to discrepancies in the amount of change which has been recorded, by examining the results of interview material from managers in 15 firms which had also participated in a survey of industrial relations, the Warwick Enterprise Survey. Our findings were broadly similar in the mapping of institutional arrangements, management organization and the distribution of responsibilities at different levels, but certain differences were also noted. The paper discusses whether these differences are reconcilable and to what extent they were a function of the different research instruments. It is argued that the focus of our open-ended interviews tended to differ from that of surveys with scope for more exploration of how managers were innovating around institutions and had changed the way institutions worked, thereby suggesting that greater change was occurring than the survey could document. In researching industrial relations the risk of surveys is that they may bias the argument towards stability if they concentrate on institutional forms and the formal locus of decision-making.
This paper describes a case study concerning the application of simulation to manufacturing capacity planning. Visual interactive models were developed and used to investigate the manufacturing strategy for a particular organization. However, there are several practical difficulties which may arise in using these techniques to support managerial decisions. One of these concerns the meaning of the term 'manu- facturing capacity'. This problem was overcome by using a visual interactive version of an established procedure to complement the use of a simulation model
Investigates futures market efficiency. Anomalies in asset prices; Test for fads in futures markets; Data description; Price effects; Trading rule tests; Volume effects..
We present an economic mechanism and supportive empirical evidence for the transmission of information between equity securities first documented by Lo and MacKinlay (1990). It is argued that the past returns on stocks held by informed institutional traders will be positively correlated with the contemporaneous returns on stocks held by noninstitutional uninformed traders. Evidence consistent with this hypothesis is then presented. We document that the returns on the portfolio of stocks with the highest level of institutional ownership lead the returns of portfolios of stocks with lower levels of institutional ownership. This effect persists even after firm size is controlled for and is apparent at longer lags than the size-related lag effect documented in Lo and MacKinlay (1990).
This paper considers a problem in which an agent is hired to manage a capital investment and subsequently receives private information regarding the productivity of the capital investment. The capital manager must decide whether to invest capital supplied by the firm (the principal), or to divert these investment funds to perquisite consumption. If the manager decides to invest, the manager must then select the level of operating efficiency (productivity) of the capital investment, this latter choice being unobservable and constrained by the (maximal) productivity of the investment. In this setting we demonstrate that the optimal employment contract, from the perspective of the firm hiring the manager, is the contract whichminimizes the dependence of the manager's compensation on firm output. This contract pays the manager a fixed wage whenever output from the investment exceeds the wage and provides the manager with all of the projects rents whenever output falls below this level. Thus, we provide a setting in which fixed wage contracts are the optimal incentive contract even when agents are risk neutral and contracts can be costlessly written on future output.
This paper compares the dutch auction and transferable put rights (TPRs) share repurchase mechanisms to the traditional fixed-price tender offer in terms of efficiency, wealth transfers, and corporate control. Using Monte Carlo simulations, it is shown that both alternative mechanisms reduce the deadweight losses from inefficient tendering by ensuring that shareholders with the lowest reservation prices are bought out first. The TPR mechanism is further distinguished because it provides greater wealth gains to nontendering and smaller gains to exiting shareholders. The dutch auction mechanism has an efficiency advantage over the TPR because it can be designed to eliminate the possibility of undersubscription and, furthermore, is also a more effective takeover deterrent.
We develop a sequential equilibrium model of the common stock authorization process. We provide conditions under which actions that increase the number of slack shares, such as stock authorizations, generate negative announcement effects.
Under asymmetric information regarding the quality of investment opportunities and a tax advantage to debt, it is demonstrated that a separating equilibrium in which higher-quality firms issue equity and lower-quality firms issue debt may exist. Thus, the ‘pecking order’ theory may break down when debt financing enjoys a tax advantage.
Under corporate and personal taxation, we demonstrate that the relation between optimal debt level and business risk is roughly U-shaped. This result follows from the fact that the tax liability is an option portfolio that is long in the corporate tax option and short in the personal tax option. Therefore, the net effect of a change in business risk on the optimal debt level depends upon the relative magnitudes of the resultant marginal changes in the values of these two options. Results of empirical tests offer support for the predicted U-shaped relationship.
The recent health care reforms include major changes to the composition (and, it is hoped, role) of health authorities. The research team at the Centre for Corporate Strategy and Change, Warwick Business School, will be undertaking a major study of these reforms, financed by the National Health Service (NHS) Training Authority. This study will need to come to some assessment of the past performance of District Health Authority members; define what is meant by performance in this context; and delineate the change agenda which will confront the new authorities.
When faced with survival-threatening catastrophic events, organizations are often advised to adopt radical, frame-breaking changes. However, evidence suggests threatened organizations tend to do exactly the reverse: they are rigid and detached, relying on existing strategies, routines and resources to pull them through, and then — if they survive — coping with problems once the threat has passed. This article explores the parallels between organizational crisis behavior and individual behavior in the wake of traumatic events, as described in the clinical theory of "post-traumatic stress disorder" (PTSD). Using Man ville Corporation's asbestos crisis to illustrate the theory, it is proposed that environmental catastrophes produce trauma by contradicting and invalidating strongly held organizational paradigms, or "world views". Although radical changes may be needed to rebuild organizational world views, trauma-related rigidity and detachment preclude such changes, making survival doubly problematic. As an alternative to radical change, the article proposes "behavioral self-blame" as a realistic intermediate solution for threatened organizations, and discusses the implications of this solution for researchers, practitioners and organizational change-agents.
Intense global competition has created a highly demanding customer. To serve his needs for highvariety, low cost, sound quality and easy availability, organisations are looking beyond their own boundaries to the management of their supply chains. In this they have been inspired by the typical Far Eastern, and the very best Western, practice. But supply chain management is still a hope not a reality for many companies. On the one hand there is an array of “panaceas” on offer for our “sick” businesses; new technology, computer integrated manufacturing, the Just-in-Time approach, total quality management, and more besides. On the other hand supply chain management has few specific tools of its own. To the manager busy holding on to his market share it is difficult to see where to start the process of making his operation more competitive. A three-stage approach to help companies see just which actions are likely to get the supply chain into better competitive shape is proposed. Also introduced are two simple graphical tools to help management develop a strategy for enhanced supply chain effectiveness: the pipeline map and the supplier relationship grid.
It was a bright cold day in January, and the clocks were showing third quarter. Fifty million Americans nuzzled in the breasts of their telescreens, staring down into the Super Bowl stadium. They slipped through the afternoon glassily, with their beer and their Winstons and their friends. Suddenly the predictable drone of sportscasters was interrupted by a gritty sixty-second metaphor. A young woman athlete being chased by faceless storm-troopers raced past hundreds of vacant-eyed workers and hurled a sledgehammer into the image of a menacing voice. A transcendent blast. Then a calm, cultivated speaker assured the astonished multitudes that 1984 would not be like 1984. Macintosh had entered the arena.
Balloting has been held to undermine collective decision making within unions. This article, based upon analysis of the rule books of all TUC affiliated unions and case study material, outlines the law on balloting and collective bargaining, and examines the response to legislative changes. The authors argue that although legislation has led to greater formalisation and centralisation in decision-making on collective action, decision-making remains collective.
This paper presents some issues which have arisen during the course of a research project which examines methods for operating large computer-controlled manufacturing systems, with over 50 or so CNC machines. Some issues concerning manufacturing architectures are presented and summarized. The requirement for a CAN-Q style design tool for opportunistic, heterarchical systems is identified, and difficulties in building such a tool described. This involves a discussion of the problems of applying queuing theory to auction-based dispatch rules, along with some initial empirical insights into the behaviour of these systems. Ongoing research on heterarchical systems is described, along with the technological advances on which practical implementation depends.
This study reports that CD-1 strain mice are neuropathologically and biochemically responsive to acute doses of tri-ortho-cresyl phosphate (TOCP). Young (25–30 g) male and female animals were exposed (po) to a single dose of TOCP (580–3480 mg/kg) and sampled for neurotoxic esterase (NTE) activity at 24 and 44 hr postexposure and for neuropathic damage 14 days later. Biochemically, high intragroup variability existed at the lower doses, and at higher levels of TOCP exposure (i.e., ≥ 1160 mg/kg), mean brain NTE inhibition never exceeded 68%. Hen and mouse brain NTE activity, assayed in vitro for sensitivity to inhibition by tolyl saligenin phosphate (TSP), the active neurotoxic metabolite of TOCP, showed similar IC50 values. Histologically, highly variable spinal cord damage was recorded throughout treatment groups and mean damage scores followed a dose-response pattern with no apparent correlation to threshold (i.e., ≥ 65%) inhibition of brain NTE activity. Topographically, axonal degeneration in the mouse spinal cord predominated in the lateral and ventral columns of the upper cervical cord. Unlike the rat, which displays degeneration in the upper cervical cord's dorsal columns (i.e., gracilis fasciculus) in response to TOCP intoxication, treated mice showed minimal damage to this tract. To examine this discrepancy further, ultrastructural morphometric analysis of axon diameters in the cervical cord was performed in control mice and rats. These results indicated that in both species, the largest diameter (≥ 4 μm) axons are housed in the ventral columns of the cervical spinal cord, suggesting that axon length and diameter may not be the only criteria underlying fiber tract vulnerability in OPIDN.
This article reports a comparative study of six in-house and eight independent industrial R&D organisations. These organisations are analysed in terms of three types of control strategy - market control, hierarchical control and professional control. The paper suggests that the professional control strategy, emergent after World War Two, is now being increasingly challenged by market control strategies. R&D organisations under or adopting market control are shown to enjoy marked productivity advantages. The distinctive managerial practices of market controlled R&D are analysed. It is concluded that many in-house laboratories have much to gain by partial adoption of these market control practices.