Social enterprise push or corporate social responsibility pull? The mainstreaming of fair trade

Social enterprise organizations and activities combine market-oriented approaches with social aspirations, whereas corporate social responsibility strategies seek to integrate social aspects into core business strategies. The rise in social enterprise activity at the business end of the spectrum raises questions about how, where, and why social enterprise and corporate social responsibility might overlap. Through a review of literature, we demonstrate how the mainstreaming or corporatization of fair trade activity provides an example of this overlap. The tensions between the push of social aspirations within fair trade and the pull of commercial imperatives are highlighted. From a marketing viewpoint, a social enterprise push strategy is shown as typically undertaken from an organization perspective, whereas pull strategies in marketing are typically customer driven. We demonstrate that influences from both social enterprise and corporate social responsibility are evident in fair trade mainstreaming processes, although the extent to which each “pushes” or “pulls” varies across circumstances and interpretations.     

(Under)Mining local residential property values: A semiparametric spatial quantile autoregression

Rock mining operations, including limestone and gravel production, have considerable adverse effects on residential quality of life due to elevated noise and dust levels resulting from dynamite blasting and increased truck traffic. This paper provides the first estimates of the effects of rock mining—an environmental disamenity—on local residential property values. We focus on the relationship between a house's price and its distance from a nearby rock mine. Our analysis studies Delaware County, Ohio, which, given its unique features, provides a natural environment for the valuation of property‐value‐suppressing effects of rock mines on nearby houses. We improve upon the conventional approach to evaluating adverse effects of environmental disamenities based on hedonic house price functions. Specifically, in the pursuit of robust estimates, we develop a novel (semiparametric) partially linear spatial quantile autoregressive model which accommodates unspecified nonlinearities, distributional heterogeneity, as well as spatial dependence in the data. We derive the consistency and normality limit results for our estimator as well as propose a consistent model specification test. We find statistically and economically significant property‐value‐suppressing effects of being located near an operational rock mine which gradually decline to insignificant near‐zero values at roughly a 10‐mile distance. Our estimates suggest that, all else equal, a house located a mile closer to a rock mine is priced, on average, at about 2.3–5.1% discount, with more expensive properties being subject to larger markdowns.     

Cross‐Functional Integration: Concept Clarification and Scale Development

The centrality of cross‐functional integration (CFI) to supply chain theory and practice has long been recognized. Yet researchers continue to struggle with consistently defining or measuring the CFI construct, thus limiting the utility of CFI research. This research develops (1) a comprehensive definition of CFI that synthesizes previous supply chain research and (2) a valid set of scale items that measure the conceptual domain outlined by this definition. The goal is to build a common foundation for extending knowledge on CFI's antecedents and consequences, and ultimately to improve scholars’ ability to guide a broader practitioner community still struggling to achieve integration in their organizations.     

Retaining and engaging older workers: A solution to worker shortages in the U.S.

Over the next 20 years, many organizations will experience significant shortages of skilled workers. At the same time, because of longer lifespans and a gradual rise in what society has considered the traditional retirement age of 65, older workers will represent a growing proportion of the American workforce. For a variety of reasons, many of these older workers desire to continue working and, if retained and engaged, they constitute a significant labor source for mitigating the emerging shortages of skilled workers. However, many organizations are not prepared to take advantage of this demographic shift; some even generate barriers that impede the retention and engagement of older workers. In this article, we identify a variety of ways in which organizations can retain and engage older workers to meet their staffing needs and enhance organizational performance. We also discuss the relationship of these proposals to prominent theories of motivation in management.     

MANAGERIAL INCENTIVES AND CORPORATE DIVERSIFICATION STRATEGIES

Because the break-up of conglomerates typically produces substantial increases in shareholder wealth, many commentators have argued that the conglomerate form of organization is inefficient. This article reports the findings of a number of recent academic studies, including the authors' own, that examine the causes and consequences of corporate diversification. Although theoretical arguments suggest that corporate diversification can have benefits as well as costs, several studies have documented that diversified firms trade at a significant discount from their single-segment peers. Estimates of this discount range from 10–15% of firm value, and are larger for “unrelated” diversification than for “related” diversification. If corporate diversification has generally been a value-reducing managerial strategy, why do firms remain diversified? One possibility, which the authors label the “agency cost” hypothesis, is that top executives without substantial equity stakes may have incentives to maintain a diversification strategy even if doing so reduces shareholder wealth. But, as top managers' ownership stakes increase, they bear a greater fraction of the costs associated with value-reducing policies and are therefore less likely to take actions that reduce shareholder wealth. Also, to the extent that outside blockholders monitor managerial behavior, the agency cost hypothesis predicts that diversification will be less prevalent in firms with large outside blockholders. Consistent with this argument, the authors find that companies in which managers own a significant fraction of the firm's shares, and in which blockholders own a large fraction of shares, are significantly less likely to be diversified. If agency problems lead managers to maintain value-reducing diversification strategies, what is it that leads some of these same firms to refocus? The agency cost hypothesis predicts that managers will reduce diversification only if pressured to do so by internal or external mechanisms that reduce agency problems. Consistent with this argument, the authors find that decreases in diversification appear to be precipitated by market disciplinary forces such as block purchases, acquisition attempts, and management turnover.     

The history of consumption: A literature review and consumer guide

The history of consumption is fast becoming a vital area of academic research. For the social sciences, in general, this new field promises new insight into the great transformation of Western society. For consumer research, in particular, it promises the opportunity to create new perspectives, sources of data, and theoretical concepts. The purpose of this paper is to review recent literature on the history of consumption, and to offer a consumer guide for those who wish to use it in the study of modern consumer behavior and policy.

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Die Geschichte des Konsums: Ein Literaturüberblick und Leseführer

Zusammenfassung Die Geschichte des Konsums wird immer stärker zu einem wichtigen Gegenstand der akademischen Forschung. Für die Sozialwissenschaften im allgemeinen gilt, daß das neue Feld völlig neue Einsichten in die große Tranformation der westlichen Gesellschaften bietet. Für die Verbraucherforschung insbesondere gilt, daß es neue Perspektiven eröffnet, neues Datenmaterial erschließt und die Bildung neuer theoretischer Konzepte ermöglicht. Der vorliegende Beitrag will über die neuere Literatur über die Geschichte des Verbrauchs orientieren und Einstiegshilfen für denjenigen geben, der diese Literatur bei der Analyse des heutigen Verbraucherverhaltens und der Verbraucherpolitik benutzen möchte. Dabei warnt der Beitrag gleich zu Beginn vor einigen naheliegenden Betrachtungsfehlern, vor allem vor einer allzu gegenwartsbezogenen Betrachtung, die vergangene Perioden vorranging als die Vorwegnahme oder zumindest die Vorbereitung unserer Gegenwart auffaßt, sowie vor der Gefahr einer Projektion der eigenen Sichtweisen und Einstellungen auf eine andere Zeit, also die Erforschung einer vergangenen Zeit ausschließlich mit Denkweisen von heute.Die weiteren Abschnitte behandeln die verschiedenen Zusammenhänge, in denen Konsum gesehen werden kann: den kulturellen, den soziologischen, psychologischen, politischen und intellektuellen Kontext, sowie den Marketing- und den Verbraucherkontext. Diese Überlegungen können — so die Schlußfolgerung des Beitrages — einen entscheidenden Beitrag zu der Frage beitragen, weshalb sich in den westlichen Gesellschaften so große Veränderungen ergeben haben, die sich nicht nur in einer industriellen Revolution, sondern auch in einer Konsumrevolution niedergeschlagen haben.

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Grant McCracken is Assistant Professor, Department of Consumer Studies, University of Guelph, Guelph, Ontario, N1G 2W1, Canada. He wishes to thank Russell Belk, Victor Roth, Montrose Sommers, Richard Vosburgh, and anonymous referees for their comments on this paper.     

THE DETERMINANTS OF THE INTER-INDUSTRY PATTERN OF DIVERSIFICATION BY U.K. MANUFACTURING ENTERPRISES*

Evidence of the diversity of output of larger U.K. manufacturing enterprises’in 1958, 1963 and 1968 is provided in the Reports on the Census of Production. The Censuses show that between 1958 and 1968 diversification was a significant and general trend in manufacturing industries and an important element in the growth of firms during the period. Moreover diversification seems to be part of a longer term trend in U.K. industry and part of the typical development pattern of the large firm. A theory of the firm's diversification decision is proposed and from this theory predictions are made of the structural features both of a firm's primary industry and of outside industries which are likely to encourage diversification from the one industry to the other. The power of the model in explaining the pattern of diversification between SIC manufacturing orders in the period 1963–68 is weak, due in part to the wide variety of factors influencing diversification and to the aggregated form of the data. Nevertheless, the results show the importance of research and development effort in encouraging diversification and the stimulus to diversification given by profitability and risk in firms’primary industries and high rates of output growth in outside industries. While the findings offer no clear conclusions regarding the impact of diversification upon economic performance, the results are consistent with the propositions that (i) diversification encourages technical progress in industry and (ii) diversification increases the efficiency with which resources are allocated between industries.     

Finance, Politics, and the Accounting for Stock Options

The politics of option accounting crosses party lines, reflecting both the interests of the affected constituencies and the desire for power over standard setting. House Bill HR-3574, which mandates an assumption of zero stock price volatility, runs counter to the recently passed Financial Accounting Standards Board (FASB) rule requiring fair-value expensing of stock options. For any option issued at or out of the money, where strike prices are normally set, expense recognition is zero under this bill's mandated assumption.
Besides excessive use of stock options, the lack of a "final peace" in the option accounting war appears to have encouraged another questionable corporate practice. This article examines a sample of "six-and-one restructurings," exchanges of options in which expensing of re-priced (deep out-of-the-money) options can be avoided if employees wait at least six months and one day before receiving new options. The authors found that market-adjusted stock prices tend to decrease during the six-month period before the strike price is reset. This result provides one more reason why companies should be required to use fair-value option pricing models to expense options.