FLSA Working Hours Reform: Worker Well‐Being Effects in an Economic Framework

This article discusses a model developed to predict the effects of recently proposed amendments to the FLSA workweek and overtime provisions. The model contrasts allowing compensatory time for overtime pay for private nonexempt employees to “rights to request” reduced hours. Hours demanded are likely to rise for workers who request comp time, undermining the intention of family‐friendliness and alleviating overemployment, unless accompanied by offsetting policies that would prevent the denied use or forced use of comp time and that resurrect some monetary deterrent effect. A unique survey shows that the preference for time over money and comp time is relatively more prevalent among exempt, long hours and women workers; thus, worker welfare is likely better served if comp time were incorporated into an individualized, employee‐initiated right to request.     

How Internet technologies impact information flows in R&D: reconsidering the technological gatekeeper

Previous studies have firmly established the technological gatekeeper to be a key node in the innovation process – acquiring, translating, and disseminating external information throughout the R&D unit. However, the gatekeeper concept has received modest attention in recent times. We argue that the concept needs to be re‐examined in light of the recent advances in Internet technologies that have dramatically altered how knowledge workers source and share their information. Drawing on social network analysis and interview evidence from a medical devices R&D group, we find that the gatekeeper role is still vital, but no longer needs to be performed by a single individual. Instead, the modern R&D group can keep abreast of the latest technological advances through a combination of Internet‐enabled internal and external communication specialists. This study makes a number of important contributions. The gatekeeper theory is extended through the development of an updated conceptual framework. We also discuss the practical implications of our findings and advise R&D managers on how to organise resources to maximise optimal information flows.     

A Brief History of Long Work Time and the Contemporary Sources of Overwork

What are some of the key historical trends in hours of work per worker in US? What economic, social-psychological, organizational and institutional forces determine the length of individuals’ working hours? How much of the trend toward longer working hours among so many workers may be attributable to workers’ preferences, workplace incentives or employers’ constraints? When can work become overwork or workaholism – an unforced addiction to incessant work activity which risk harm to workers, families or even economies? The first part of this article traces the history of the length of working hours and its recent polarization. The second part develops a multi-disciplinary model to identify motivations behind working longer hours. Individuals' desired work hours will stem from the weighted contribution of five sources: (1) current real wage rates; (2) forward-looking, wage trajectories; (3) relative status associated with hours of labor; (4) intrinsic rewards, process benefits or amenities acquired through work; (5) hours demanded by the employer and other structural constraints, to which workers may adapt. Employers and their established conditions of work have influenced the course of long run trends labor supply and in work time structures. The final section suggests policies that might address the persistence of long hours.     

Estimating elasticities with frontier and other regressions in evaluating two advertising strategies for US Army recruiting

To help resolve a long-standing debate in the US Government on advertising strategies for military recruitment, this study applies ordinary least squares (OLS), which here includes (1) stochastic frontier analysis (SFA) and (2) frontierized least squares (FLS), to evaluate two distinct advertising strategies: Service Specific vs. Joint. Thus, in contrast to the customary use of a single central tendency method, such as OLS, on different models, we here use multiple methods on a single model to cross check and validate results. In addition to serving as cross checks, the methods can be used to identify classic problems, including biases in the data and shortcomings in one or more of the methodologies employed. To avoid dealing with problems on identifying motives underlying various patterns in advertising expenditure, data are drawn from a statistically designed experiment where the expenditures were controlled as part of the experiment to resolve the issue of a choice between the two advertising strategies of interest. In contrast to earlier studies, the current paper finds that all methods used lead to the same conclusion: Service Specific is more efficient than Joint, at least for the US Army—which is, by far, the largest military advertiser. Finally, the paper introduces a new method for reallocating advertising budgets between the Uniformed Services which (a) is simpler than the customary use of cross partial derivatives, (b) avoids the need for the ceteris paribus assumptions for each such allocation, as in customary reallocation methods and (c) simplifies matters so that, for instance, it is not necessary to introduce an entirely new organization to administer the desired coordinating activities.     

SBU strategy and performance: The moderating effects of the corporate-SBU relationship

This study suggests that the link between an SBU strategy and performance is moderated by the SBU's relationship with corporate management. Information processing arguments suggest that this relationship, typically characterized by general measures of centralization, has been inappropriately conceptualized in prior research. An alternative view, one that considers which decisions and activities should be controlled by the individual SBU, is proposed and tested. The results of a study of 496 SBUs indicate that SBU performance is enhanced when: (1) SBUs with an external strategic orientation control environmental monitoring activities and strategic decision analysis, and (2) SBUs with an intraorganizational orientation control those activities relating to operations. Weaker SBU performance is associated with SBU control over those functions and activities not central to the SBU's business strategy. Therefore, it is suggested that the corporate-SBU relationship can either facilitate or inhibit the implementation of the SBU's intended strategy.     

When will boards influence strategy? inclination × power = strategic change

While boards of directors are usually recognized as having the potential to affect strategic change in organizations, there is considerable debate as to whether such potential is typically realized. We seek to reconcile the debate on whether boards are typically passive vs. active players in the strategy realm by developing a model that specifies when boards are likely to influence organizational strategy and whether such an influence is likely to impel vs. impede change. Specifically, we develop arguments as to when certain demographic and processual features of boards imply a greater inclination for strategic change, when these features imply a greater preference for the status quo, and how differences in such inclinations will influence strategic change. We then also propose that a board's inclination for strategic change interacts with a board's power to affect change, generating a multiplicative effect on strategic change. These ideas are tested using survey and archival data from a national sample of over 3000 hospitals. The supportive findings suggest that strategic change is significantly affected by board demography and board processes, and that these governance effects manifest themselves most strongly in situations where boards are more powerful. We discuss these findings in terms of their relevance for theories of demography, agency, and power. Copyright © 2001 John Wiley & Sons, Ltd.     

Handling Weather Related Risks Through the Financial Markets: Considerations of Credit Risk, Basis Risk, and Hedging

The profits of many businesses are strongly affected by weather related events, and insurance against weather related risks (acts of God) has been a traditional domain for transfer of (certain) of these risks. Recent innovations in the capital market have now provided financial instruments to transfer and hedge some of these risks. Unlike insurance solutions, however, using these financial derivative instruments creates a situation in which the return to the purchaser of the instrument is no longer perfectly correlated with the loss experienced. Such a mismatch creates new risks which must be examined and evaluated as part of ascertaining cost effective risk management plans. Two newly engendered risks, basis risk (the risk created by the fact that the return from the financial derivative is a function of weather at a prespecified geographical location which may not be identical to the location of the firm) and credit risk (the risk that the counterparty to the derivative contract may not perform), are analyzed in this article. Using custom tailored derivatives from the over the counter market can decrease basis risk, but increases credit risk. Using standardized exchange traded derivatives decreases credit risk but increases basis risk. Here also the effectiveness of using hedging methods involving forwards and futures having linear payoffs (linear hedging) and methods using derivatives having nonlinear payoffs such as those involving options (nonlinear hedging) for the purpose of hedging basis risk are examined jointly with credit risk.     

Kidnap and ransom insurance: A strategically useful,often undiscussed,marketplace tool for international operations

With kidnaping rates rising, the disruptive forces of kidnaping threaten the stability and success of corporate investment projects and put stress on appropriate corporate governance response methodologies. While kidnaping targets vary considerably among countries where it frequently occurs, most often the goal of kidnapers is money from ransom payments. Financial consequences of a kidnap ransom payment can be severe for companies, and psychological damage can be lasting to employees and their families. Given the increasingly global nature of business and increasing expansion into less politically and legally stable emerging markets, kidnap, ransom, and extortion pose a problem for management of corporations wishing to take advantage of emerging market opportunities. Kidnap and Ransom (K&R) Insurance is a risk control technique used by about 75% of Fortune 500 companies, nongovernmental organizations, and an increasing percentage of small to medium sized companies. It is a bundled package policy that includes the purchase of an insurance policy to indemnify the company for the costs of kidnap, ransom, and extortion. Such policies can also provide protective consulting beforehand, provide crisis response and negotiation assistance, as well as psychological support services after the fact. In this paper, we describe the K&R policy, its history, other nonfinancial corporate benefits provided by K&R policies, and discuss its use by corporate managers for the benefit of corporate, financial, and personnel stability. It can also be used in course on managing international risk.     

How Should the Graduate Economics Core be Changed?

The authors present suggestions by graduate students from a range of economics departments for improving the first-year core sequence in economics. The students identified a number of elements that should be added to the core: more training in building microeconomic models, a discussion of the methodological foundations of model-building, more emphasis on institutions to motivate and contextualize macroeconomic models, and greater focus on econometric practice rather than theory. The authors hope that these suggestions will encourage departments to take a fresh look at the content of the first-year core.