COVID-19 and business renewal: Lessons and insights from the global airline industry

The emergence of the COVID-19 pandemic has adversely affected the fortunes of multiple companies around the globe. Accordingly, questions are increasingly being asked about how organizations can revitalize during and after a crisis. Yet, we have limited understanding of how organizations renew themselves during crises over time. We explore this question through the lens and examination of two South-Asian airlines: Pakistan International Airlines and Sri Lankan Airlines. The cases offer important insights into the reasons behind underperformance of state-controlled enterprises and renewal activities. We shed light on strategic renewal (SR) in the wake of increasing liberalization and deregulations in the global airline industry. To this end, we propose a four-stage approach towards renewing such underperforming organizations to respond effectively to black swan events and external shocks.     

Competition in taxes and performance requirements for foreign direct investment

Tax incentives offered to attract firms engaged in foreign direct investment are often tied to performance requirements such as domestic content restrictions or adherence to environmental standards. The tax competition literature has repeatedly shown that competition between municipalities for mobile firms tends to drive taxes to low levels. One would expect a comparable result for burdensome performance requirements. Despite this, the evidence suggests that while taxes have indeed been driven down, performance requirements are as popular as ever. We explain this seeming conundrum by showing that in the presence of spillovers, binding performance requirements can act as a coordination device for firms. In equilibrium, municipalities choose performance requirements, which maximize joint surplus from investment. Competition between municipalities then transfers this surplus to firms via tax subsidies.     

Diverse approaches to managing diversity

Against a backdrop of philosophical and political debate, this article reviews the emerging pitfalls of new corporate diversity programs. Three pioneering corporate programs are examined closely, and a discussion of the purpose, the process, and the impact of these programs is offered. Original survey data reported here suggest that exposure to diversity issues affects workplace attitudes. Lessons are drawn that address the role of top leadership, participant mix, instructor quality, and corporate culture.     

The Only Fund in Town? Geographic Segmentation in the US Mutual Fund Industry

We find that mutual funds located in regions with more competing funds charge lower management fees, but higher fees related to sales and distribution (12b‐1 fees), sales loads, and other nonmanagement fee expenses. There is some evidence that funds in more competitive regions have higher total expense ratios than similar funds in less competitive regions. Our results indicate that while increased competition drives down fund profits, it creates a negative externality by way of increased sales expenses. Overall, our results suggest the mutual fund industry is characterized by monopolistic competition determined at the local level.     

INFORMATION AGGREGATION,GROWTH, AND FRANCHISE EXTENSION WITH APPLICATIONS TO FEMALE ENFRANCHISEMENT AND INEQUALITY

We develop a model of voluntary gradual franchise extension and growth based on the idea that voting is an information aggregation mechanism. A larger number of voters means that more correct decisions are made, hence increasing output, but also implies that any incremental output must be shared among more individuals. These conflicting incentives lead to a dynamic model of franchise extensions that is consistent with several real world episodes, including female enfranchisement. The model also predicts that in certain circumstances growth and enfranchisement will be accompanied by Kuznets curve type behaviour in inequality. Contrary to the preceding literature these conclusions do not rest on incentives for strategic delegation.     

The drama of interaction within business networks

We propose a dramaturgical approach to the understanding of business networks with particular reference to IMP research. Our purpose is to focus upon immeasurable processes and practices too often neglected by the tangible, variance modeling of business networks (Colville & Pye, 2010; Rinallo & Golfetto, 2006). This paper follows our call to take language and communication more seriously (Ellis, Lowe & Purchase, 2006). The inventive fluidity of communication, in the form of dramaturgy, when added to the rather more entitative IMP model of Actors, Resources and Activities (Håkansson & Snehota, 1995) creates a more processual, theatrical ‘scenario’ of Actor-Characters, Resource Props and Scripted Activities. We employ the dramaturgical approach of Goffman (1956, 1961) which, in keeping with the approach of the IMP Group is centrally attentive to social interaction. In order to illustrate the potential contribution of this approach, we apply this dramaturgical perspective to the interactions described in a published case study (Helander & Möller, 2007, 2008a, 2008b).     

A Test of the Conditional CAPM with Simultaneous Estimation of the First and Second Conditional Moments

Recent studies of the conditional Capital Asset Pricing Model (CAPM) are extended by modeling the first and second conditional moments separately, but estimating them jointly, allowing the isolation of time-varying influences in the different moments. Results support evidence that both conditional moments and conditional risk parameters are time varying, and help shed light on previous rejections of the conditional CAPM. The GMM test of the over-identifying restrictions fails to reject the null that the CAPM holds through time when a non-linear specification is used, and only weakly rejects the null with a linear specification.