Career Change and the Iron Cage: Organizations and the Early Labour Market Experience of Professional Managers

Although it is often acknowledged that organizational structure and career outcomes are related, developed theory on how formal features of the design affect inter‐firm job mobility is incomplete. I focus on organizational size and structural differentiation and relate them to ideas about internal labour markets, organizational senescence, bureaucratic complexity, and resource endowments. Analysing data on the early career histories of professional managers, I find that the negative effect of organizational size on quits weakens with organizational age while a firm's elaborate hierarchy monotonically increases quits in all but very large firms. I interpret these effects as potential mechanisms for linking demographic processes between and within organizations and as a basis for integrating research in corporate demography and career mobility.     

Learning remotely: R&D satellites,intra‐firm linkages,and knowledge sourcing

Firms venture abroad not only to access resources and markets but also to learn. Yet there remains limited empirical evidence that headquarters can access geographically remote knowledge by establishing a presence in the remote location. Using U.S. patent data, I show that firm headquarters disproportionately source knowledge from third parties in remote locations where they have an R&D satellite. This “satellite effect” on knowledge flow is economically significant, representing up to 60% of the knowledge‐flow premium associated with collocation. Furthermore, the effect seems to be stronger for recent knowledge, as well as in areas of satellite technological specialization, suggesting that firms can target cutting‐edge knowledge in specific sectors. In addition, the results show that firms with stronger internal linkages between headquarters and satellites, and those that staff satellites with inventors that previously patented while at other local firms, experience a larger satellite effect on knowledge acquisition.     

CAREER ORIENTATIONS IN DIFFERENT COUNTRIES AND COMPANIES: AN EMPIRICAL INVESTIGATION OF WEST GERMAN,BRITISH AND US INDUSTRIAL R&D PROFESSIONALS[1]

This study examined dimensions and levels of career orientations and their correlation with work-related outcome criteria among industrial R&D professionals. Questionnaire data were obtained in 11 West German, 4 British, and 2 US R&D units of large industrial companies. Respondents were 729 West German, 217 British, and 124 US scientists and engineers. Managerial career orientation and professional/scientific career orientation emerged from factor and scale analyses as two independent orientation dimensions with similar meaning across the three countries and the 17 R&D organizations. Results indicated significant cross-country differences in levels of professional/scientific career orientation, but not in levels of managerial career orientation. Significant differences in levels of both orientation dimensions were detected between R&D units within countries. Distinctive characteristics of West German firms employing R&D staff with particularly strong professional/scientific or managerial career orientations are suggested. Managerial and professional/scientific career orientations were found to be differentially related to objective indicators and self-ratings of research performance. Directions for future research and managerial implications for selecting and rewarding R&D employees with different patterns of career orientations are discussed.     

Relative CEO Underpayment and CEO Behaviour Towards R&D Spending

abstract Arguments based on labour market theory suggest that there may be CEO behavioural issues related to pay deviations from the labour market rate for CEO pay; however, few studies examine this phenomenon. This study attempts to address such behavioural issues by examining the influence of relative CEO underpayment on reductions in R&D spending, the differences in this relationship between firms in high R&D intensive versus low R&D intensive industries, and the moderating affect of ownership structure on the CEO underpayment and R&D spending relationship. Results suggest that relative CEO underpayment is associated with reductions in R&D spending in low R&D intensive industries and increases in R&D spending in high R&D intensive industries. Also, greater relative CEO underpayment leads to greater reductions in R&D spending in manager‐controlled organizations as compared to owner‐controlled organizations. This study provides evidence that pay deviations may, in fact, affect certain CEO behaviours, specifically relating to innovation.     

Strategic R&D Location by Multinational Firms: Spillovers, Technology Sourcing, and Competition

This paper develops a model of strategic interaction in R&D internationalization decisions between two multinational firms, competing both abroad and in their home markets. It examines different incentives for foreign R&D faced by a technology leader and a technology laggard. The model takes into account the impact of local inter firm R&D spillovers, (noncostless) international intra firm transfer of knowledge, and the notion that internal R&D increases the effectiveness of incoming spillovers. Analytical results suggest that greater efficiency of intra firm transfers and greater R&D spillovers increase the attractiveness of domestic R&D for the technology leader if the technology gap with the laggard is large. The lagging firm, in contrast, increases the share of foreign R&D as foreign technology sourcing becomes more effective. Competition encourages the leading firm to engage in foreign R&D to capture a larger share of profits on the foreign market, whereas the laggard concentrates more R&D at home to defend its home market position.     

Making sense of innovation by R&D and non-R&D innovators in low technology contexts: A forgotten lesson for policymakers

This paper attempts to use an integrated theory based on the framework of a firm's internal and external sources of knowledge to analyze how R&D activities differ in innovation from non-R&D activities, especially in the context of low and medium-low tech (LMT) sectors where most of the firms are SMEs. Simultaneously, the paper also explores the key differences between R&D and non-R&D innovators. The empirical analysis is based on a representative panel of 2023 Spanish manufacturing firms from the Spanish Ministry of Industry for 2005 and 2006. Innovation in product and process is explained using non-R&D variables such as marketing, design or the hiring of tertiary degree employees. Only innovation in product is explained by R&D expenditures. Regarding innovation in process, the R&D variables work in a few specific cases. Therefore, innovation can be explained using non-R&D variables. The firms with more internal resources, those which conduct R&D activities, present a better absorptive capacity (AC) and this leads them to engage in cooperation agreements and to access external flows of knowledge. The paper has important implications for policymakers due to the fact that most policies for R&D are based just on R&D programmes.     

The Productivity Effects of Internal and External R&D: Evidence from a Dynamic Panel Data Model*

We examine the impact of internal and external R&D on labour productivity in a 6‐year panel of Dutch manufacturing firms. We apply a dynamic panel data model that allows for decreasing or increasing returns to scale in internal and external R&D and for economies of scope. We find complementarity between internal and external R&D, with a positive impact of external R&D only evident in case of sufficient internal R&D. These findings confirm the role of internal R&D in enhancing absorptive capacity. The scope economies are accompanied by decreasing returns to scale at high levels of internal and external R&D. The analysis indicates that productivity grows by increasing the share of external R&D in total R&D.     

‘My Brilliant Career’? New Organizational Forms and Changing Managerial Careers in Japan,the UK,and USA

The end of the traditional management career has been heralded with supporting, albeit largely anecdotal, data. The ‘old’ career was set within internal labour markets in large organizations and characterized by long‐term stability. The ‘new’ arrangements have apparently shifted responsibility from employer to employee, with careers being developed across organizations. Such change is premised on new organizational forms and is often associated with a growing sense of employee insecurity. We explore the reality of this ‘new’ scenario through interpretation of in‐depth semi‐structured interviews conducted with middle and senior human resources managers in large firms in Japan, the UK, and USA. The data indicate that most of our case study organizations had downsized and delayered, with hybrid structural forms emerging. Career prospects were diminished, with fewer vertical promotions and a greater emphasis on lateral ‘development’; middle managers were generally resentful of such factors and forces. Although not directly reflective of ‘Anglo‐American’ business practice, similar changes to career trajectories were witnessed in Japan as in the UK and USA.     

How does knowledge depth moderate the performance of internal and external knowledge sourcing strategies?

Management literature has consistently shown that knowledge is the most important source of competitive advantage for a firm. However, it is still not clear how knowledge can lead to competitive advantage, and how firms can find strategies to leverage their knowledge bases. This study considers the strategic implications of knowledge depth and three knowledge-sourcing strategies: R&D, strategic alliances and acquisitions. The main and interaction effects of these factors were tested in the context of the US technology firms. The results confirmed the strategic role of knowledge and external leveraging strategies. We also found that technology firms with weak knowledge depth should focus on internal R&D to accumulate knowledge in core technology areas, while those with strong knowledge depth should lower internal R&D intensity and shift their strategic resources to inter-firm alliances and acquisitions.     

Decentralization, Integration and the Post-Bureaucratic Organization: The Case of R&d

We assess the relevance of theories of increased decentralization in post-bureaucratic organizations for understanding changes in the organization of the research and development (R&D) function. Analysis of a sample of companies shows that R&D is less decentralized than contemporary accounts suggest, and there are few signs of it becoming more decentralized. We present evidence on the organization of R&D in two sectors (mechanical engineering, and food and drink), which suggests: (1) most firms remain centralized in their approach to R&D, relative to other functions; (2) firms that adopt a more decentralized approach to R&D do so for more complex reasons than have been recognized; (3) inter-functional integration remains a critical issue, for centralized and decentralized organizations alike; (4) introducing market principles into R&D brings risks of market failure.     

Pay determination in small firms in the UK: the case of the response to the National Minimum Wage

Pay determination in small firms is widely expected to follow the dictates of the market. Research on 81 firms in three competitive sectors finds, instead, loosely defined and variable pay structures. This variability is explained in terms of the interplay between labour and product markets, firms’ own choices, and ‘shocks’ such as the National Minimum Wage. This analysis thus contributes to developing institutional theories of labour markets and pay systems.     

Human resource management in the Canadian manufacturing sector

Using a sample of 356 Canadian manufacturing organizations, this study examines the pattern of implementation of a wide range of HRM practices including external recruitment procedures, internal job posting systems, performance appraisal methods, job evaluation methods and pay-for-performance systems. A comparison of the adopted HRM practices between large and small firms and between union and non-union firms is also made. The results show that the main difference between large and small firms lies in the recruitment procedure and the job evaluation process. The difference between the union and non-union firms is associated with the greater emphasis placed on performance by the latter.

This study also presents some evidence regarding the perceived importance of twenty HRM activities. The evidence suggests that the three most important activities include health and safety compliance, employee/labour relations and disciplinary issues. On the other hand, the three least important ones are conducting attitudinal surveys, public relations activities and career planning development.     

The Japanisation of British industry? Instances from a high growth area

Here the authors make two arguments, Japanese industry is characterised by distinctive practices, but these predominate in only certain ‘leading edge’ sectors and were introduced mainly to ensure labour supply. Second, Britain's managers are increasingly outside the internal labour markets of large corporations. In this respect British firms are not becoming ‘Japanese’.     

Innovating Beyond the Horizon: CEO Career Horizon,Top Management Composition,and R&D Intensity

Decreasing research and development (R&D) can impair the ability of firms to remain innovative in the long run. CEOs have been accused of curtailing R&D investments as they approach expected retirement, yet received findings on R&D investment behaviors of late‐career CEOs are mixed. We argue that one reason for these inconsistent findings could be that traditional approaches overlook the fact that CEOs are not isolated agents in making R&D decisions. We build on the premise that CEOs interact with their top management team (TMT) when shaping R&D strategy and advance a contextualized view of CEO dispositions in their late career stages as being constrained or enabled by their TMT. We hypothesize that some TMT attributes (e.g., tenure and age) may amplify, whereas others (e.g., functional experience and education) may mitigate inclinations to reduce R&D. Our findings, based on a longitudinal sample of 100 US manufacturing firms from 1998 to 2008, provide nuanced insights into how different TMT characteristics influence CEO‐TMT dynamics, with TMT age and TMT tenure playing particularly pronounced roles. We discuss implications of our CEO‐TMT interface approach for theory and practice. © 2015 Wiley Periodicals, Inc.     

Product Differentiation and Upstream-Downstream Relations

This paper examines the relationship between a differentiated downstream market and a specialized upstream market. We analyze three different types of vertical relation between the upstream and downstream sectors when the upstream market supplies specialized and complementary inputs to a downstream product-differentiated market. The first is the benchmark case of decentralized markets, the second is a network of alliances among upstream suppliers, and the third is partial vertical integration. We identify the perfect equilibrium for a symmetric model in each case and show that there is no simple relationship between the degree of connection between upstream and downstream firms and profitability. The key factor affecting prices and the relative profitability of the different market organizations is the degree of product differentiation among the downstream firms, because it affects the intensity of competition among upstream suppliers. We show that vertical foreclosure is not an equilibrium strategy.     

Cooperative R&D ventures: Strategic behavior versus transactional efficiency

This paper examines a sample of 48 cooperative R&D ventures announced in the period 1983–1990 to determine their impact on the stock price of the announcing firms. It finds that the venturing firms earn statistically significant positive abnormal returns over periods surrounding the announcement date. These gains are greater than those that result from announcements of increases in expenditures on in-house R&D. The cross-sectional analysis reveals that abnormal returns to the venturing firms are independent of industry concentration, larger in international ventures than in domestic ventures, and equal in cooperative agreements and equity joint ventures. These results support the transactional efficiency perspective of cooperative R&D ventures and suggest that the relaxation of antitrust laws as they apply to cooperative R&D ventures in 1984 is a welfare-improving policy.     

Segmented Labour Markets: Theory and Evidence

This paper examines the possibility of accepting the labour market segmentation approach as a valid alternative to the classical and neo-classical analysis of labour markets. It consists of three main parts. The first part contains a historical analysis of both the distant and recent origins of the labour market segmentation hypothesis. Part two outlines the central ideas of both segmentationalists and radical theorists who attempted to explain the fragmented nature of labour markets and the importance of institutional and social influences upon pay, employment and mobility of individual workers between different labour market sectors. The third part examines the case for labour market segmentation using four alternative techniques and discusses the issue of mobility among different labour market segments. It is thereby concluded that the lack of agreement among the segmented labour market theorists on both theoretical and methodological issues has prevented them from developing a consistent and convincing argument based on verifiable empirical evidence to validate their thesis.     

Entrepreneurial innovativeness and growth ambitions in thick vs. thin regional innovation systems

Research in economic geography has paid increasing attention to regional innovation systems (RISs) as a potential vehicle for growth and development. Yet despite an increasing amount of research studying RISs in particular and economic regions in general, we have limited knowledge about their influence on entrepreneurs and entrepreneurship. We respond to this knowledge gap and study if entrepreneurs’ localization in thick vs. thin RISs affects their innovativeness and growth ambitions. Thick RISs are predominately urbanized spaces that include organizations of higher-level education, R&D intensive milieus, and an ample industry sector, while thin RISs to a lesser degree encompass these features. Empirically, we analyse 870–917 entrepreneurial firms in Agder of Southern Norway. Based on trade and labour markets, as defined by the EU’s classification of local administrative units (LAU1), we identify two thick and six thin RISs in Agder. Econometric analyses show that entrepreneurs located in thick RISs are more innovative than entrepreneurs located in thin RISs, but there are no significant differences concerning entrepreneurs’ growth ambitions. In light of our findings, we discuss the potential agency role played by entrepreneurial firms at a micro level on path dependent features of RISs at a macro level.     

Intellectual Capital Profiles: An Examination of Investments and Returns*

ABSTRACT Using data collected from executives in 208 organizations, this study takes a configurational approach to examine how human, social, and organizational capital coexist to form distinct intellectual capital profiles across organizations. We then examine how investments in human resource management (HRM), information technology (IT), and research and development (R&D) differ across these intellectual capital profiles and investigate differences in financial returns and Tobin's q between the profiles. Results indicate that a relatively small group of superior performing organizations exhibit high levels of human, social, and organizational capital. Most firms, however, tend to focus primarily on only one form of intellectual capital, and a small group of underperforming organizations have very low levels of all three types of intellectual capital. At a general level, HRM and IT investments appear to influence intellectual capital development more than R&D investments. More specifically, HRM investments tend to be higher in firms with profiles high in human and social capital, while IT investments are stronger in firms with profiles high in social capital. Further, HRM, IT, and R&D investments are all very high in the group of superior performing organizations that have high levels of human, social, and organizational capital.     

Favorable strategies for the success of entry into new technological areas: an entrepreneurial perspective

This study considers the act of entering into new technological domains for R&D purposes as one of the most intense entrepreneurial activities within large established firms, referring to it as R&D entrepreneurship. Attempting to detect factors that could strengthen (or weaken) the impact of R&D entrepreneurship on innovation performance, I examine the moderating role of three important R&D strategies, namely the knowledge plurality, internal focus, and R&D collaboration. I empirically test the hypotheses developed in this study on secondary, longitudinal economic and patent data from a sample of 139 firms from the industries of pharmaceuticals, biotechnology, and chemicals for a 7-year period, using fixed-effects negative binomial regression models. Findings support that the relationship between R&D entrepreneurship and innovation performance is positively moderated by knowledge plurality but negatively by internal focus and R&D collaboration.