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I begin this paper by describing several methods that can be used to analyze count data. Starting with relatively familiar maximum likelihood methods-Poisson and negative binomial regression-I then introduce the less well known (and less well understood) quasi-likelihood approach. This method (like negative binomial regression) allows one to model overdispersion, but it can also be generalized to deal with autocorrelation. I then investigate the small-sample properties of these estimators in the presence of overdispersion and autocorrelation by means of Monte Carlo simulations. Finally, I apply these methods to the analysis of data on the foundings of labor unions in the U.S. Quasi-likelihood methods are found to have some advantages over Poisson and negative binomial regression, especially in the presence of autocorrelation.
A Q model of investment is estimated using data for an unbalanced panel of UK companies over the period 1975-86. Correlated firm-specific effects and the endogeneity of Q are allowed for using a Generalised Method of Moments estimator. In the calculation of Q we estimate the tax incentives available to individual companies. Q is found to be a significant factor in the explanation of company investment, although its effect is small and a careful treatment of the dynamic structure of Q models appears critical. In addition to Q, both cash flow and output variables are found to play an independent and significant role.
Considers the social and economic arrangements that would be necessary for rational mechanisms of exchange and distribution to emerge, function, and remain viable if extreme conditions produced an absence or the severe destruction of an institutional infrastructure and resource endowments.
Eastern Europe's enterprises are undergoing fundamental reform. This paper evaluates alternative forms of corporate restructuring, emphasizing different sequences in which reforms can be organized. In some countries, restructuring is undertaken by the state prior to privatization; in some, restructuring is delegated to private sector institutions before shares are offered to the public at large; and in some, public share offerings are preceding restructuring. The paper develops a general framework for evaluating sequencing, drawing on recent literature on corporate ownership and vertical integration. It points to market failures that are particularly acute during the initial stages of transition. These discourage privatization through wide share ownership and explain why privatization has in practice progressed slowly. The paper examines in some detail restructuring in the one country in which reform has been rapid -- East Germany. The paper discusses the role of the government, the Treuhandanstalt, the banks, the incumbent management and Western firms in the reform process. It uses the theoretical framework to explain the contributions of public and private sector institutions and considers whether any lessons can be drawn for the design of institutions elsewhere.
The Ruding Committee began work in January 1991 on three questions posed by the European Commission: (1) Do differences in business taxation among Member States cause major distortions in the functioning of the internal market, particularly with respect to investment decisions and competition? (2) In so far as such distortions do arise, are they likely to be alleviated or eliminated simply through the interplay of market forces and competition between national tax regimes, or is action at the Community level required? (3) What specific measures are required at the Comminity level to remove or mitigate these distortions?
The impact of structural change is being substantially felt in middle management, with many commentators prepared to write off this tier of management. The changing role of middle managers and the implications for human resource management (HRM) are explored by drawing on research from 2 research projects. The first is a study commissioned by the European Foundation for the Improvement of Living and Working Conditions which examined the nature of the changes affecting middle management jobs and careers, and middle managers' reactions to these changes in 6 European countries - the UK, Germany, Italy, France, Denmark, and the Netherlands. The 2nd is fieldwork undertaken in a number of organizations in Europe as part of Project GAMMA, a study of global changes in middle managment. The implications of these changes for HRM are discussed and it is suggested that middle management is pivotal to HRM.
The article examines the changing role of the middle manager in Great Britain, including the changes affecting middle managers and of their reactions to the changes. Middle managers were defined very broadly in the six-country study to include all those below the small group of top strategic managers and above first-level supervision. The British legal tradition, which relies heavily on precedent, has no legal definition of management, let alone lower and middle management, that satisfactorily describes their status and responsibilities. The absence of a definition of what constitutes management in the country has in part, led to blurred management categories. Despite the many drawbacks of definition and on the assumption that a middle-management category can only logically exist in larger organizations, quantitative data are available from the 1981 official census figures concerning managers in central and local government, industry and commerce, who generally plan and supervise in non-agricultural enterprises employing 25 persons or over. Approximately 82 percent of the managers in large establishments at the time of the census were male, and approximately 18 percent were female, with females being more concentrated at the junior and lower-middle levels.
In addition to being characterized by the consistency of employment decisions one with another and their alignment with business strategy, human resource management (HRM) has also been deeply involved in the reshaping of organization structures in the 1980s, under conditions of increased external and internal complexity, and in managing other aspects of strategic change. These have contributed to the distinctive character of HRM and the shift away from a style of personnel management focused on administration and industrial relations. This evolution is explored through the concept of life-cycle change in a sample of ten firms that underwent major transformation during the 1980s.
Uses data from a postal survey and case studies of organisations seeking in-depth advisory assistance from ACAS to evaluate the effectiveness of joint problem solving techniques. It finds strong support from both managers and employee representatives for the use of joint working parties in the management of change in employment relations. ACAS's unique role as an independent and impartial third party is seen as critical in helping the parties develop jointness as a means of handling problems. The problem, it is suggested, is to find ways of developing employee representative systems in non-union firms in order to utilise joint problem solving methods.
Examines how R&D can learn to market itself. Draws on four intensive case studies of in-house and independent laboratories to argue that developing this capability requires pervasive organizational change, which goes beyond the introduction of marketing specialists and the creation of marketing departments. At least as important are: the development of the managerial process at all levels of the organization; the evolution of new organizational structures; more sophisticated financial management systems; and a decentralized approach to marketing, within which professional technologists act as “part-time marketers”. Problems can arise owing to: personal conflicts which some technologists experience, whilst simultaneously attempting to satisfy client demands and their own professional standards and values; internal competition, which may adversely affect the activities of market intelligence generation, dissemination and responsiveness; and poor relationships between marketing specialists and professional technologists.
A firm must decide what security to sell to raise external capital to finance a profitable investment opportunity. There is ex ante asymmetry of information regarding the probability distribution of cashflow generated by the investment. In this setting, we derive necessary and sufficient conditions for a security to be optimal (uniquely optimal), that is, for pooling at this security to be an (the unique) equilibrium outcome. Using these conditions we show that the debt contract is (uniquely) optimal if and only if cash flows are ordered by (strict) conditional stochastic dominance. Finally, we derive an equivalence relationship between optimal security designs and designs that minimize mispricing.
This article compares the predictions of finite-shareholder models of conditional and unconditional takeover offers with the outcomes of laboratory experiments. In addition to differentiating between types of offers, the experimental designs span small and large firms as well as different levels of offer premiums. It is found that in unconditional offers to large groups of subjects (28--40), the symmetric Nash equilibrium predicts observed tendering frequencies quite accurately. For other experimental designs, the results are mixed. The analysis of shareholder tendering strategies from the experiment yields insights into (i) the effects of takeover offer designs, (ii) the appropriateness of finite-shareholder models for research, and (iii) the costs of free riding when shareholders are nonatomistic.
It is shown that, in large parametric rational expectations models, even when investors receive private signals about different subsets of assets, all investors hold diversified portfolios.
We examine the design of compensation contracts and determination of investment policies when a manager has private information regarding the effect of investment on both the firm's cash flows and the private benefits she is able to extract from employment. We show that, in general, the optimal mechanism is characterized by a menu of salary and option contracts. When the manager's private information relates only to the firm's cash flows, the firm overinvests relative to the Pareto optimal level. On the other hand, if the private information relates only to private benefits, the firm will underinvest.
This essay discusses the character and significance of strategy process research. Process research in strategic management is paradigmatically diverse and empirically complex. Strategy process research has been narrow in its focus and its undoubted contribution has sometimes been obscured by the lack of explicit discourse about its analytical foundations. The essay draws on a wide range of social science ideas to lay out a set of internally consistent insights and assumptions to guide thinking and empirical inquiry about the analysis of process issues in strategic management. The essay also provides a guide to the eight papers contained in this special issue.
The study of managerial elites is one of the most important, yet neglected areas of social science research. This paper synthesizes and critically reviews three intellectual traditions in the study of managerial elites. These are: interlocking directorates and the study of institutional and societal power, the study of boards and directors, and the composition and correlates of top management teams. The paper concludes by arguing for the development of a complementary research tradition which combines a contextual and processual analysis of managerial elites.
This article explores the question of why the management of change has become an issue in the National Health Service (NHS). It reports the results of a study which explored reasons for variability in the observed rate and pace of strategic service change in the NHS. The metaphor of ‘receptive’ and ‘non‐receptive’ contexts for change is introduced and eight ‘signs and symptoms’ of receptivity outlined. Some examples are presented. These results give us a logic and language which may enable us to understand processes of change in the NHS.
In explaining financial performance variance, strategic management researchers and industrial organization economists have emphasized industry factors, market share, generic strategy, and strategic group membership, whereas organizational contingency theorists have emphasized alignments involving environment and internal structure. This study integrates these perspectives, testing the financial performance consequences of organizational alignments, in context with the effects of industry, market share, and strategy. In an empirical study in two manufacturing industries, it is shown that some organizational alignments do produce supernormal profits, independent of the profits produced by traditional industry and strategy variables. The results are consistent with the resource view of the firm: to the extent that alignments result from skill rather than luck, it is reasonable to regard alignment skill as a strategic resource capable of generating economic rents. The article suggests that, by focusing on industry and competitive strategy variables, contemporary industrial organization and strategy research has understated the role of organizational factors in producing sustainable competitive advantage.
Since 1970, over forty empirical studies have examined the performance consequences of formal strategic planning. This line of research has drawn heavy criticism from reviewers on methodological grounds, and has produced confusing, apparently contradicatory results. This article reevaluates the planning-performance relationship from a resource perspective, arguing that strategic planning does not satisfy the criteria for sustainable competitve advantage-- although it may produce economic value, it is easily imitated and may be substitutable. The article suggests that previous studies produced inconsistent results because they did not account for the dissemination of strategic planning over time, or for industry differences in strategic planning factor markets. An empirical test in two industries funds that formal strategic planning and financial performance are unrelated in a 'planning equilibrium' industry, but positively related in an industry with strategic planning factor market imperfections.
The broad characteristics of integrated shopping center development across Europe are examined. A wide variation in the distribution, composition, and locations of these forms of retail development can be discerned. Two peculiarly European developments are notable. The first is the growth of the French centres intercommunaux. Anchored by a hypermarket and possessing a range of specialist units, such developments have appeared in Spain, Portugal, and Italy as French hypermarket operators have extended their sphere of influence into these nations. The 2nd peculiarly European development has been the growth of the retail warehouse park, which accounted for much of the out-of-town growth in the UK during the late 1980s. There are estimated to be over 2,000 retail warehouses in the UK. The number of retail parks, planned clusterings of stores, increased from one in 1982 to 90 six years later. The bulk of the largest UK center development has occurred in town center locations.
The need for UK retailers and other consumer service companies to be taking better informed decisions within an increasingly uncertain market environment and in response to a series of other key drivers has had a number of consequences for the management processes within these organizations. Not least, it has served to formalize processes having to do with the geographical aspect of the market environment, a perspective of particular importance to the consumer services sector. This paper reviews the combination of pressures which has led to the introduction of more sophisticated techniques of local market profiling and segmentation within UK organizations, and in which information technology and the management of information has begun to play a significant role.
We utilize the strategic market game approach to analyze the role and function of a mutual bank with variable fractional reserves, redemption in gold, and endogenous interest rate formation. We specify the conditions of enough money and its distribution. Using the continuum of traders model, we show existence and optimality for the case ofno bankruptcy as well as for the case in which there exists the potentiality of bankruptcy. Finally, we analyze the relationship of the gearing ratio and the bankruptcy penalty with respect to the resulting equilibrium allocations.
I show how to design a welfare-improving tax system for a Diamond-Dybvig (DD) related economy. In addition to its relevance to the DD literature, the paper constructs a nice example for a Pareto-improving intervention when markets are incomplete, and provides a welfare analysis of the market for liquidity.
Japanese financial institutions' willingness to sell put options on the Nikkei Stock Average provides investment banks with the raw material from which to create a security that would allow U.S. investors to bet on falls in the Japanese Stock Market. The investment bank that seeks to create this new product must decide how to design, produce (hedge), and price the options (Nikkei Put Warrants). Highlights the global nature of new product development in the securities market and provides opportunities for students to make and critique the key decisions involved in creating this new product. Students must consider the costs of production, the preferences of consumers, competitive dynamics, and the pricing of substitutes for the new product.
An investment manager notices a large apparent discrepancy in the prices of two nearly-identical bonds issued in conjunction with a major leveraged buyout. The manager must figure out whether the instruments are mispriced relative to one another, and if so, how to capture arbitrage profits from the temporary anomaly. The case introduces students to a wide variety of instruments ranging from very simple treasury strips to P-I-K debentures. Encourages students to devise "arbitrage" positions and understand the degree to which these positions are riskless.
This paper describes a structure for distributed manufacturing system control, in which the product may progressively learn about the system which makes it. The strategic motivation for the work is presented along with a selection of research results exploring the general applicability of distributed methods for manufacturing system orchestration.
The problem of cutting tool management has been brought to the forefront with the emergence of computer-integrated manufacturing (CIM) and, in particular, flexible manufacturing systems (FMSs). The financial and operational ramifications of effective tool management has spurred considerable research in this area during the past decade and many researchers are proposing sound solutions to various facets of this broad-ranging and difficult problem. This paper identifies critical areas of research for the development of tool management systems in CIM. To develop a framework for this, the paper examines and categorizes work in academia and in industry on the management of cutting-tools in CIM and describes some key implementations, particularly in the metal-cutting industry. The solution of manufacturing problems generally demands an eclectic approach, and for this reason, we have tried to taxonomize, describe, and critique the various research thrusts in an attempt to provide a synthesis of use in more unified approaches.
This article examines the influence of Anthony Giddens on recent work in management studies, especially the contribution of his structurationist pers- pective to understanding managerial agency. A citation analysis and discussion of prominent exponents such as Ranson et al. (1980), Andrew Pettigrew and Hugh Willmott, concludes that Giddens' influence is substantial but lopsided. Giddens' concern for the intersection and tension between different social systems has been particularly neglected. Drawing on the insights of current 'institutionalist' studies of societal influences on organizations, the article builds a structurationist account of managerial agency that is founded on the contradictions within and between different social systems. The article ends by considering the implications of this structurationist account for current concerns with managerial leadership, organizational symbolism and strategic choice.
Argues that the widespread weakness of marketing implementation stems from the marketing discipline's neglect of ideology in the organizational change process. By contrast with accountancy, marketing has failed to appreciate and develop its own “professional ideology”. Two short case studies demonstrate the various ways in which the mobilization of ideology can be important to achieving marketing-led change. Concludes by suggesting some directions for the marketing profession's development, especially for strengthening the credibility and exclusivity of its ideological claims.