The compensation of top managers and the performance of Italian firms

This paper examines one of the most studied aspects regarding the compensation of top managers: the relationship between remuneration and corporate performance. The principle research objective is to find evidence of this correlation in Italian companies. Based on a sample of 145 Italian companies listed on the Milan Stock Exchange, as analysed during the period between 2004 and 2009, the research findings do not demonstrate a link between company performance and the pay of top managers. Another empirical result that should be highlighted is the presence of a greater correlation between rate of pay and company size, in terms of stock turnover, which demonstrates the likely presence, at least in certain situations, of a dimensional premium that is to the benefit of the managers of larger companies. This research project evidences empirical results in the Italian context that support the findings of the most important international literature on the subject, as regards the absence of a connection between the compensation of managers and the performance of their firms.     

Czech female managers and their wages

This paper examines gender gaps in employment and wages among top- and lower-level managerial employees in the Czech Republic at the time of its accession to the EU. Using both least-squares and matching-based decomposition techniques, we find the wage gap among comparable men and women to be sizeable, but quite similar across firm hierarchy levels. The key reason why the average relative wage position of female top managers is worse compared to lower-ranking female employees is that women tend not to be at the helm of the highest-paying companies. Overall, the representation of women at the top of Czech firms as well as the structure of the gender wage gap there appears quite similar to those in the US.     

Firm-specific wage growth and changes in the labor market for managers

This paper analyzes recent changes in the employment relationships between managers and firms. In both Becker's and Lazear's models of firm-specific wage growth, compensation is deferred from early in an employee's tenure with a firm until later in the contract. The deferred compensation bonds the worker to the firm. Based on cross-sectional data from Current Population Surveys, rates of firm-specific wage growth are estimated for the managerial labor market. The findings show that the rate of wage growth that is firm-specific for managers in manufacturing industries declined significantly during the early 1980s. It is estimated, for example, that a manager with 12 years of tenure in a manufacturing firm enjoyed, on average, a 25% wage premium in 1979 over an otherwise similar manager who was a new hire in a firm. By 1983 the firm-specific wage premium for a manager with 12 years of tenure was only 5%. These changes represent a significant reduction in the strength of the employment bond between firms and managers, and a reduction in the incentive effects previously enjoyed by firms from the use of deferred-compensation schemes. This change is consistent with the significant increases in the displacement rates of managers that occurred during the 1980s.     

Trapped in the hierarchy: the craft of Dutch city managers

The position of top public managers implies management in three directions: up (political office holders), down (creating organizational capacity), and out (boundary spanning). We know however, little about what these managers do. I present a close-up analysis of city managers using diary analysis, shadowing, and interviews with stakeholders. The analysis interprets their craft as managing up, down, and out. It finds that despite the contemporary emphasis on collaborative public management, the prevalence of boundary spanning activities in top managers’ activity patterns is easily overestimated. Working in the governmental hierarchy consumes most of the managers’ attention.     

Attitudes towards different sources of executive appraisal: a comparison of Hong Kong Chinese and American managers in Hong Kong

This study examines the attitudes of three groups of managers in Hong Kong, namely, Hong Kong Chinese managers in local Chinese firms (HK/HK), Hong Kong Chinese managers in US firms (HK/US) and American managers in US firms (US/US), towards supervisory, peer, subordinate and multi-source appraisal of executive performance. The more recent perspective of crossvergence, within the convergence-divergence debate, provides the theoretical foundation for formulating the hypotheses. The findings indicate support for this new perspective of crossvergence. There is also evidence of the coexistence of all the three perspectives of convergence, divergence and crossvergence. The study found that the practice of supervisory appraisal is supported more by HK/US and US/US managers than by HK/HK managers. Furthermore, both HK/US and US/US managers are more supportive of subordinate evaluation than peer evaluation. Overall, the findings indicate that the traditional Chinese values may be more congruent with the notion of supervisory appraisal than with peer and subordinate evaluation. The study thus points out the importance of the compatibility of norms and beliefs regarding a management practice such as performance appraisal with the local national cultures in determining the acceptance and hence the transferability of that practice across countries.     

Change from below: the role of middle managers in mediating paradoxical change

This article examines the role of middle managers in creating change in the Irish health service from interviews conducted with middle and senior level managers. The research examines the interface between top‐down and bottom‐up approaches to change and contributes to showing how ambivalence towards change by middle managers can at the same time contribute to the dismantling of structures and systems that are a necessary precondition for successful change to take place. However, the additional workload and tensions created by dealing with the interface between top‐down and bottom‐up changes may result in considerable additional workload and stress for the managers themselves.     

Line managers and the management of workplace conflict: evidence from Ireland

In an effort to improve understanding of the role played by line managers in firms, this article examines the role of line managers and supervisors in the management of workplace conflict in firms in the Republic of Ireland. The article finds that while line managers are commonly seen as playing a significant role, they are also seen to do so often without organisational supports in areas such as training and performance monitoring and are seen often to lack the confidence to act independently. Line and supervisory ‘engagement’ in conflict management is found to be positively associated with a series of organisational outcomes, including relative labour productivity, relative absence rates and the capacity to handle change compared with other firms in the same industry. Line and supervisory management engagement in conflict management is found in turn to be associated with the use of commitment‐oriented HR practices and with the adoption by firms of a proactive approach to conflict resolution.     

Do analysts follow firms with able managers?

Although previous studies suggest that management quality impacts analyst behavior, there is a dearth in direct empirical evidence that proves this. A sample of listed Chinese firms over the period 2008–2016 proves that a firm with highly skilled managers draws more analysts. We use an instrumental variable approach to mitigate endogeneity issues. Tests show that the positive impact of managerial ability on analyst following is more salient in firms with no political connections and firms located in regions with developed formal institutions. Firms with high-capability managers help analysts improve their forecast accuracy and lower the dispersion of their opinions.     

Commitment in R&D tournaments via strategic delegation to overoptimistic managers

This paper shows that it is profitable for a firm to hire an overoptimistic manager to commit to a certain investment strategy in an R&D tournament situation. In the unique symmetric equilibrium, all firms delegate to overoptimistic managers, where the optimal degree of overoptimism depends on the riskiness of the tournament. In these situations a manager's type may serve as a substitute for delegation via contracts. By delegating to overoptimistic managers, firms can escape the rat race nature of R&D tournaments. Copyright © 2010 John Wiley & Sons, Ltd.     

Organizational Causes and Strategic Consequences of the Extent of Top Management Team Replacement During Turnaround Attempts

Researchers have argued that top management team changes are an important force spurring change at declining firms. Yet, studies find that top executives at some firms are able to avoid being replaced even though their firms perform poorly. Also, despite support from numerous case analyses, there is little systematic evidence that replacing top managers leads to substantial organizational change at declining firms. In this study, we examine these issues by looking at levels of top management team replacement at a sample of declining firms attempting turnarounds. We find that top management team replacement levels vary with the presence of inertial or change-creating forces within firms. In particular, reduced levels of top management team replacement occur during turnaround attempts at large firms and those that have followed the same strategic orientation for a long period of time. Meanwhile, increases in outsider control of the board are associated with increased levels of replacement. We further find that higher levels of top management team replacement are associated with greater changes in firm competitive strategy and firm structure and controls during turnaround attempts. Overall, our findings show that organizational-level forces play an important role in top management and strategic change processes at declining firms.     

When do threats mobilize managers for organizational change toward sustainability? An environmental belief model

In pursuit of counteracting today's environmental problems, corporate management will have to implement organizational changes factoring in sustainability, which is why it is important to understand exactly what leads managers to initiate these changes. It has been established that managers' personal values are critical for their behavior and that threats to these values can mobilize managers to change their actions. However, when confronted with environment-related threats, managers may face value conflicts and various tensions between their aim to implement sustainable changes and their desire to fulfill business requirements of their job positions. Only recently have researchers begun to investigate the underlying beliefs that may lead managers to initiate organizational change toward sustainability. Borrowing theoretical assumptions from the domain of health psychology (from the well-established health belief model), the present conceptual article develops an environmental belief model that specifies when exactly threats lead managers to initiate organizational change. The environmental belief model proposes that environment-related threats trigger change (i) when managers believe that their firms are susceptible to these threats, (ii) the threats are considered as serious for the company, (iii) the perceived benefits of the change outperform (iv) the perceived barriers, and when there is (v) an external cue (e.g., an information campaign). All these propositions are supported with empirical findings from business contexts. Besides theoretical advancement on the role of environmental threats as precipitators of organizational change, the model provides guidance on how to frame environment-related threats that will mobilize managers for organizational change toward sustainability.     

The emergence of career boundaries in unbounded industries: career odysseys in the Italian New Economy

The main objective of this research1 was to study boundaries to the ‘boundaryless career’ in a novel context. Our empirical study focused on career paths leading top managers to enter emergent firms. We collected data on professional histories of a sample of top managers who operated in firms listed at the ‘Nuovo Mercato’ (New Market), the Italian equivalent of the NASDAQ. We demonstrate the existence of two major kinds of boundaries: competence-based (in the form of industry boundaries) and relation-based (in the form of professional network boundaries). A second objective of our research was to identify dominant individual career logics and to connect different career logics to the boundaryless career concept. Our data reveal the dominance of the evolutionary career logic.     

Combining the Fuzzy Analytic Hierarchy Process and the fuzzy Delphi method for developing critical competences of electronic commerce professional managers

This study proposes a novel approach that integrates the qualitative approach, the quantitative approach, and fuzzy set theory for developing a framework of critical managerial competences of electronic commerce (EC) professional managers. The approach combines a focus group, a fuzzy Delphi method and the Fuzzy Analytic Hierarchy Process (Fuzzy AHP) for identifying competences via experts’ opinions and questionnaires for developing the framework of managerial EC professional managers. Comparing the competences of traditional managers and EC managers reveals main differences in the emphasis on EC manager professional skills. Furthermore, competency weights for EC managers lie particularly in domain knowledge and information management skills. Research results reveal that our proposed EC competence framework not only help firms in selecting/hiring high quality EC professional managers more objectively, but also in evaluating the performance of EC managers.     

Managers and Wage Policies

Do individual top managers matter for wages and wage policies? Are there general differences in “style” among managers with respect to worker compensation? To shed light on these questions, we exploit a large panel dataset from Portugal that allows us to match workers, firms, and managers, and follow the movements of the latter across different firms over time. While accounting for the effect of worker and firm heterogeneity, we estimate the role of top manager fixed effects in determining wages and wage policies. The estimates suggest that (i) top managers have a significant influence on wages and wage policies; (ii) there exists different managerial “styles”; and (iii) managers’ (observable) attributes matter for worker compensation.     

Celebrate the legacy of traditional firms

The whole notion of digital disruption, however insightful and informative, has simply been blown out of proportion. Too much emphasis has been placed on the potential threat and the disruptive side, causing many traditional business firms to unnecessarily worry and panic, engaging in either excessive reactions or inappropriate responses. In fact, to many traditional business firms, digital transformation might not be disruptive at all. The unique characteristics of many traditional firms enable them to better withstand the onslaught brought by digital transformation, which, on the other hand, may well be substantively and significantly enhancing their value propositions. Traditional firms should ask themselves two fundamental questions in dealing with digital transformation. First, what makes our business robust and resilient enough to withstand digital disruption? Second, what could we do to enhance our value proposition facing digital transformation? This article aims to help firms address these two questions. First, through a series of four tests (Product, Presence, Participation, and Privilege), it dissects the profile of the firms that will most likely withstand the disruption of digital transformation. Second, it outlines the courses of action (Conserve, Co-opt, Contrast, and Celebrate) through which the firms’ value could be enhanced.     

Farewell to the salaryman? The changing roles and work of middle managers in Japan

The 1990s and 2000s witnessed significant organizational change in Japanese firms and accompanying readjustments to the employment system. Such changes potentially have major implications for middle managers, or salarymen, in Japanese corporations. A survey of human resource managers and middle managers in eight medium sized Japanese organizations pointed to fairly significant, if not radical, change. This did, indeed, impact upon middle managers in those organizations. While the middle managers felt reasonably secure in their jobs, the nature of their jobs had reportedly changed, with a greater range of tasks, work intensification, longer hours, greater stress, more accountability, and a worsening work–life balance.     

The perceived importance of HR duties to Danish line managers

Today, HR scholars widely acknowledge that realising HRM requires the involvement of all managers and that the personal motivation of line managers plays an important role in their successful involvement. Yet, previous research has neglected to study how line managers rate the importance of particular HR duties and how the importance assigned to HR duties varies across managers. Based on a survey of 1,500 Danish managers, we find that ‘motivating others’ is considered the most important HR duty whereas ‘team building’, ‘handling conflicts’ and ‘coaching’ are considered the least important HR duties. Female top managers in the public sector exhibit the greatest interest in HR whereas men at lower managerial levels in the private sector give lowest priority to HR work. We conclude with possible explanations for the observed differences in a Danish context and beyond and provide suggestions for facilitating managerial involvement in HRM. In doing so we are well aware that the Scandinavian model of HRM in general and the Danish implementation in particular may represent a unique frame for the results.     

Digital transformation and power relations. Interpretative repertoires of digitalization in the Swedish steel industry

This study focuses on how ideas of ‘digitalization’ are discursively constructed in the Swedish steel industry. Using a discursive psychology approach, we identify seven interpretative repertoires in the discursive practicing of digitalization: everyone-else, speed, competition, job loss, control, safety, and equality. Examining their functions and effects, we show that not only is digital transformation constructed as more productive, efficient, competitive, technologically advanced, safe, and equal, it also involves a shift towards the blue-collar worker being more vulnerable; a construction where she is able-minded but lonely, physically fragile, obtuse and unreliable, and a victim of a development beyond her control, forcing of her to acquire new competence. We conclude that this reproduces asymmetrical power relations between workers and companies, pushing the challenges of digital transformation to the workers. At the same time, we also see how these local discourses hold a possibility of tempering this asymmetry through the construct of togetherness of different contexts, bodies, and hierarchal levels, thus connecting steel industry workers of the future through the use of digital technology.     

Using a competency approach to understand host-country national managers in Asia

This study empirically explored host-country nationals (HCNs) in multinational enterprises (MNEs) using a competency approach. Participants consisted of 500 managers working for a leading Japanese retail MNE, with 100 each from Japan, China, Hong Kong, Malaysia and Thailand. The study highlighted three competency variables for 12 skills of those managers: (1) the level of competency demands, (2) the level of developed competencies and (3) the level of competency improvement needs as assessed by the difference between the levels of developed competencies and the levels of corresponding competency demands. Three conclusions were drawn: First, relationship skills are the most demanded and developed competency of HCN managers in Asia, while their levels tend to vary with Asian countries. Second, goal-setting skills are also very important competency demands but are insufficiently developed by HCN managers. Therefore, HCN managers need to improve their goal-setting skills to a great degree as a top priority. Third, interpersonal and behavioral competency areas of the 12 skills are more important demands for HCN managers than analytical and perceptual competency areas. Based on the empirical evidence obtained from this study, theoretical and practical implications were discussed.     

Job involvement and performance among middle managers in Sri Lanka

This paper examines performance evaluation outcomes for middle managers in the garment sector in Sri Lanka and seeks to explain variations in levels of job involvement and perceptions of organizational support. Some 155 middle managers across three firms were segregated into high- and low-performing groups. High-performing managers tended to have higher perceptions of organizational support, resulting in a social exchange relationship with their employer, and expressed higher job satisfaction and lower turnover intentions. Managers assessed as low performers experienced more negative perceptions of organizational support, lower job satisfaction and an economic exchange relationship with their employer. Significantly, for both high and low performers these outcomes were moderated by job involvement. These findings highlight the need for organizations to pay careful attention to the factors influencing job involvement and perceived organizational support. The paper concludes with a discussion on the practical implications of the findings for human resource managers.