Executive Pay and Legitimacy: Changing Discursive Battles Over the Morality of Excessive Manager Compensation

How is the (il)legitimacy of manager compensation constructed in social interaction? This study investigated discursive processes through which heavily contested executive pay schemes of the Finnish energy giant Fortum were constructed as (il)legitimate in public during 2005–2009. The critical discursive analysis of media texts identified five legitimation strategies through which politicians, journalists, and other social actors contested these schemes and, at the same time, constructed subject positions for managers, politicians, and citizens. The comparison of two debate periods surrounding the 2007–2008 financial crisis revealed significant differences in the discursive strategies and the corresponding moral struggles linked to legitimation of executive compensation. The analysis highlights a change in moral reasoning by social actors as they adapt their justifications to a changing social context. This study has important implications for our understanding of the ethical aspects and socio-political embeddedness of manager compensation. In particular, it adds to our knowledge of organizational legitimacy by showing how discursive strategies and the corresponding morality constructions used to (de)legitimate business activities can shift quickly as a result of a change in the social and political climate surrounding the legitimation struggle.     

Defining the knowledge that an organisation requires to create customer capital from a customer perspective

Consumer capital is a very important asset for an organisation as it is the result of an organisation's relationship with its customers. This paper sets out to confirm that organisations need to create customer capital in SMEs (Small Medium Enterprises). As part of this study, four types of knowledge have been identified (i.e. customer knowledge, individual knowledge, collective knowledge, and machine-readable forms) and this paper investigates the relationships between the different components of knowledge and the process to obtain customer capital from the external perspective of the company. This involved an empirical study of 365 customers. Two structural equation models have been used, resulting in the conclusion that before obtaining customer capital it is necessary to convert individual knowledge, collective knowledge (C_LK), and machine-readable forms into customer knowledge.     

Towards a richer understanding of consumers in social marketing contexts: Revisiting the stage of change model

Abstract

In this paper, we present data from an 18-month-long longitudinal study of a sample of 40 people who received a test for cancer and who were subsequently advised by health professionals on the dietary changes that would lead to improved health. This study investigates the ways that behaviour change is instigated (or not) and how people cope with these changes. We use the Stages of Change model to categorise people by their dominant behavioural response to the test (maintainers, recyclers, no change). From these categorisations, we develop an in-depth understanding of the experience of their behavioural response. By looking at the three possible behavioural responses in this way, we provide insights into the different cognitive, emotional, and behavioural response to the disease trigger. We evaluate the implications for social marketing theory and public policy makers.     

NOTES FOR CONTRIBUTORS

Abstract

This paper reconstructs the academic figure of Sraffa at the University of Cambridge as it emerges from his papers, his correspondence with the economists with whom he had special relations, and the official documents of the University, in particular in connection with his role in the Faculty of Economics and Politics, to which he belonged from 1927 to 1965. It presents a detailed examination of the various posts held by Sraffa at the University as Lecturer, Assistant Director of Research, Member of the Degree Committee, Examiner, Member of the Faculty Board, as co-founder of The Department of Applied Economics, Elector to the Chairs of Political Economy, Industrial Relations and Economics, Member of King's College and finally as Fellow of Trinity College. Moreover, the relationship with his fellow economists in Cambridge, in particular Keynes, Kahn, Kaldor and Joan Robinson is also examined and assessed.

The broad conclusion of the paper is that Sraffa's relationship with Cambridge University was complex, contradictory and intense, and should be seen within the broader context of the ambiguous relations Sraffa had with academia in general.     

Paradigms in English political economy: Interregnum to Glorious Revolution

The paper provides a model for describing how paradigms of political economy were engendered in England, 1647-c.1690. It is submitted that 1 a paradigmatic distinction can be drawn between an atomistic perspective and a corporatist one; 2 the two perspectives were simultaneous, and engendered by alternative theories of sovereignty as presented by political discourse; 3 the connection between economic and political freedom was the opposite of what is commonly assumed. Free trade in any sense was endorsed by champions of absolute royal sovereignty, and state intervention in the economy was a common outcome of the way economic activities were conceptualized by supporters of a free constitution or a mixed monarchy. No historical narration follows the model, but some evidence for its historical plausibility is provided in sections 2 and 3.     

An exploratory analysis of the relationship between absorptive capacity and business strategy

In this study, we argue that a firm's absorptive capacity will vary depending on the strategy it adopts. To examine this, based on the fact that absorptive capacity is developed through the ability to acquire, assimilate, transform and exploit externally-generated knowledge, we look at the importance of each of these dimensions at firms pursuing different business strategies. To reflect business strategy, we draw on Miles and Snow's typology. The information has been obtained based on a sample made up of 81 Spanish small and medium-sized enterprises. Results show that knowledge acquisition capacity is greater at prospectors than at defenders and analysers, and that transformation and exploitation capacities are greater at prospectors than at defenders. No differences in knowledge assimilation capacity are observed.     

Economies in transition and in development: A possible warning from Adam Smith

Abstract

If Adam Smith were asked about transitioning and developing economies today, one may infer, he might suggest introducing small, yet constant, opportunities for wealth accumulation, avoiding the sudden accumulation of riches. Good institutions and the moral rules often needed to comply with them are more likely to be disregarded if there are large, sudden material gains, such as new wealth generated by the sudden opening of markets or government granting monopolies. For Smith, the desire to show off in front of others can inhibit moral behaviour and respect for good institutions, generating perverse incentives that hinder growth. Gradual change is to be preferred.     

An axiomatic characterization of the Theil inequality ordering

We axiomatically characterize the Theil ordering of income inequality. In addition to the uncontroversial axioms of anonymity, homogeneity, replication invariance, strong directedness, and a standard continuity property, we appeal to both an independence and a decomposability axioms. These two axioms are ordinal implications of Theil decomposability, the central axiom in previous characterizations of the Theil index. To the best of our knowledge, the present is the first fully ordinal characterization of this index.     

A new look at the UI effect on transitions from unemployment into wage employment in Spain: the limited duration of the UI benefits entitlement

This article is a new look at the study of the unemployment insurance effect on the transition probability from unemployment into wage employment in Spain. It is found that individuals increase their search effort and reduce their reservation wage as the unemployment insurance benefit entitlement exhaustion approaches, and their exit rate equals that of the unemployed who never got benefits from the exhaustion moment. Financial constraints are not important in Spain. Business cycle affects more to long-term unemployed. And, finally, it is found that the probability of being offered a vacancy decreases with time spent in unemployment, having allowed for unobservable heterogeneity.