Goals versus institutions: the development of performance measurement in the Swedish university sector

This paper contrasts goal-directed and institutional approaches to the development of performance measurement (PM) in the Swedish university sector, which has been subject to increasing emphasis on management by objectives since the early 1990s. We adopt a macro perspective, focusing on recent changes in PM related to governmental control of universities and colleges and combine an extensive review of archival data with interviews in our empirical analysis. It is concluded that although the goal-directed model cannot be completely rejected as a heuristic informing recent changes in PM, a process-orientated institutional perspective considerably enriches the analysis by making it less static and more contextually informed. In particular, the latter perspective better explains the evolution of loose couplings between formally stated goals and performance indicators and between different systems for PM by directing attention to the complex interplay between conflicting constituent interests in the evolution of resource and cost allocation practices and quality control procedures. However, our empirical analysis also leads us to reconsider the conceptions of loose coupling as either a “given” feature of institutionalised organizations or an outcome of more pro-active resistance at the micro level prevailing in much earlier work in institutional theory.     

Aspects of the integration of technical functions for efficient product development

It is probably safe to say that today it is universally accepted and often common knowledge that cooperation between product development and the market functions is crucial for the ability of companies to develop market oriented products. Likewise, there are some strong indications that well functioning cooperation between production and product development is crucial for the development of products that are efficient to manufacture. However, no satisfactory solutions have yet been found to the issues of integration and cooperation. Although there is a consensus of opinion among companies that the need for cooperation is very great, a number of issues still remain to be solved. It is, for example, not clear on which issues cooperation should take place, nor which functions should be involved, nor yet how this should be done. This paper tries to answer some of these questions.     

Institutions,Entrepreneurship, and Growth: Biomedicine and Polymers in Sweden and Ohio

This paper examines the role of institutions in explaining the differences in performance with respect to entrepreneurship and growth in two industry clusters in two countries: the biomedical/biotechnology and polymer-based industry clusters in Sweden and Ohio. Both clusters are about twice as large in Ohio as in Sweden, even though the industrial history and the composition of industrial output in general are quite similar in the two regions, and even though the Ohio economy is only about 25% larger than that of Sweden.Four types of institutional factors are examined: The science base and mechanisms of technology transfer; the density of networks and the role of business support services and companies in related industries; the entrepreneurial climate, especially the availability of finance; and the policy environment and other infrastructure.Major findings are that the science base plays a different role in the two clusters and that the regions differ in the absorption of new technology, partly due to the differences in the size and structure of firms, that bridging institutions have contributed significantly to connectivity of networks in Ohio, and that the greater availability of venture capital and entrepreneurial management skills makes the Ohio environment for entrepreneurship more supportive than that in Sweden.     

Strategic trading and learning about liquidity

Many practitioners point out that the speculative profits of institutional traders are eroded by the difficulty in gauging the price impact of their trades. In this paper, we develop a model of strategic trading where speculators face such a dilemma because of incomplete information about time-varying market liquidity. Unlike the competitive market makers that they trade against, informed traders do not know the distribution of liquidity (“noise”) trades. Instead, they have to learn about liquidity from past prices and trading volume. This learning implies that strategic trades and market statistics such as informational efficiency are path-dependent on past market outcomes. Our paper also has normative implications for practitioners.     

Option pricing in the presence of natural boundaries and a quadratic diffusion term

This paper uses a probabilistic change-of-numeraire technique to compute closed-form prices of European options to exchange one asset against another when the relative price of the underlying assets follows a diffusion process with natural boundaries and a quadratic diffusion coefficient. The paper shows in particular how to interpret the option price formula in terms of exercise probabilities which are calculated under the martingale measures associated with two specific numeraire portfolios. An application to the pricing of bond options and certain interest rate derivatives illustrates the main results.     

Whither seniority? Career progression and performance orientation in South Korea

Framed by institutional theory, this study reassesses the influence of seniority on (HRM) in South Korea today. We analyze first the overall influence of seniority in business, second its significance for career progression (i.e. promotion), and third its relation to individual performance orientation. By conducting in-depth interviews among local and expatriate managers, we find that the role of seniority is still pronounced. Seniority-based promotion remains significant, and individual performance evaluation systems, as are typically found in Western countries, hardly fit the cultural environment and tend to be ineffective. By contributing to the extant theories on institutional dynamics and the convergence–divergence–hybridization debate alike, our results strengthen the culturalist approaches, holding that informal institutions persist and do not disappear quickly. Further, rather than moving towards global convergence, we see the Korean HRM system as being in a state of hybridization caused by coercive isomorphism resulting from experimentation with foreign best-practice systems. As a result, some HRM practices are dysfunctional. We recommend that firms should reinterpret their valuation of individual performance towards team achievements and pay more attention to the optimal team composition.     

The Tragedy of the Commons and Inflation Bias in the Euro Area

Central bank credit has expanded dramatically in some of the Euro Area member countries since the beginning of the financial crisis. This paper makes two contributions to understand this stylized fact. First, we discuss a simple model of monetary policy that includes (i) a credit channel and (ii) a common pool problem in a monetary union. We illustrate that the interaction of the two elements leads to an inflation bias that is independent of the standard time-inconsistency bias. Secondly, we present an institutional analysis that is consistent with the view of fragmented monetary policy and empirical evidence that illustrates the heterogeneity of central bank credit expansion.     

False Discoveries und Fehlinterpretationen wissenschaftlicher Ergebnisse

High-quality science communication to the public depends to a large extent on the way research findings are translated into comprehensible language and common speech. In this communicative process, a reasonable evaluation of the trustworthiness of empirical findings, based on an adequate interpretation of statistical analyses, is absolutely crucial. This paper’s authors argue that the credibility of science is jeopardised by two compromising developments within science itself: on the one hand, an inflation of ostensible empirical evidence related to misuses and misinterpretations of the concept of statistical significance, and, on the other, a sensationalist overvaluation of the results of single studies instead of an adequate representation of the available body of evidence in a given scientific field.