Managing the Trade‐off between Ambiguity and Volatility in New Product Development

Uncertainty is widely recognized to be a key contingency influencing optimal new product development processes. However, extant new product research treats uncertainty in a largely unidimensional manner. Even in studies where multiple dimensions of uncertainty are measured, they are hypothesized to behave in a similar manner. This paper advances a theory describing how ambiguity and volatility place different and conflicting demands on new product development processes. Drawing on ideas from the organization theory and learning literatures, the theory suggests that more ambiguous environments favor slower development processes based on larger samples of data and interpretations whereas more volatile environments favor faster and more flexible development processes. Five hypotheses are advanced suggesting that as the level of ambiguity increases (decreases) relative to the level of volatility, firms should respond by decreasing (increasing) the role of top management in new product development, increasing (decreasing) front‐end and back‐end participation, allocating more (less) time and effort to ideation, and using more (less) aggressive screening processes. Some of these hypotheses are highly intuitive (participation and screening) while others are counterintuitive (top management involvement and screening aggressiveness). The theory is tested using primary data on the development of 120 new products and their subsequent performance collected from firms in U.S. manufacturing industries. The data largely confirm the hypotheses and provide strong evidence of a trade‐off between ambiguity and volatility that can be managed to improve new product performance. The exception is back‐end participation, which should be lower in relatively more ambiguous environments, in contrast to the hypothesis. A comparison with three alternative models shows that ambiguity generally has a larger impact on appropriate new product development processes and success than either the level of volatility or the overall level of environmental uncertainty. A detailed examination of the estimated relationships shows that for ideation and screening, the relative level of ambiguity and volatility determines optimal new product development processes, whereas for top management involvement and participation, processes can be designed based primarily on the level of ambiguity alone, with less concern over the degree of volatility. The study highlights the importance of considering the composition of uncertainty in addition to its overall level in contingent approaches to new product development. Real‐world examples of highly ambiguous and highly volatile new product development contexts are discussed.     

The Impact of Wage‐Setting Institutions on the Incidence of Public Employment in the OECD: 1960–1998

Using data on seventeen Organization for Economic Cooperation and Development (OECD) countries for 1960–1998, this paper studies the impact of unions on public employment incidence, using macro‐ and microdata. Macrodata show that greater coverage by centralized collective bargaining institutions raises the public employment share, controlling for country effects and country‐specific trends. Microdata show that this effect is more positive for outsiders: women, and younger and older men. Thus, government jobs may in effect partially counteract the employment problems these groups face in highly unionized societies.     

Product Choice and the Importance of Aesthetic Design Given the Emotion‐laden Trade‐off between Sustainability and Functional Performance

This paper investigates the trade‐off decision that consumers face when choosing between a product that is perceived to be more sustainable (i.e., more socially and environmentally responsible) and another product that instead is perceived to offer superior functional performance. Prior research has demonstrated that consumers often believe that there is a trade‐off between sustainability and performance, and in some cases, this trade‐off may be real and not just perceived. The objectives of the current research are to understand the mediators and moderators of this trade‐off choice and to illustrate one specific way in which to use this understanding to promote the consumption of relatively more sustainable products despite a perceived performance trade‐off. Two separate studies were conducted. The first employed a student‐based sample, whereas the second employed a nationally representative online sample. In both studies, participants were presented with a choice between two consumer products. One product was depicted as having superior sustainability characteristics (and average functional performance), and the other product was depicted as having superior functional performance (and average sustainability characteristics). Participants were asked to imagine that they were leaning toward choosing one product over the other, and then rated the degree to which they were feeling a set of possible emotions. Following these ratings, participants chose one of the products. The results suggest that consumers presented with such a trade‐off will tend to choose the product with superior functional performance over the product with superior sustainability characteristics, due to feelings of distress, until a minimum threshold of functional performance is achieved. The current research also shows that choice given this trade‐off depends upon the degree to which consumers value sustainability that, in turn, is mediated by consumers’ feelings of confidence and guilt. Further, based on an understanding of the emotions mediating choice in this context, the authors demonstrate how the effective use of product aesthetic design can improve the relative choice likelihood of sustainable products. Specifically, the authors demonstrate that superior aesthetic design has a disproportionately positive effect on the choice likelihood of sustainability‐advantaged (versus performance‐advantaged) products due to the effect that superior aesthetic design has on overcoming the potential lack of confidence in sustainable products. These findings highlight the specific value of aesthetic product design in the context of marketing sustainable products and suggest that it is especially important for firms interested in marketing sustainable products to also develop market‐leading product aesthetic design capabilities.     

Unions and Unemployment Insurance Benefits Receipt: Evidence from the Current Population Survey

Using data from the January 1996 Current Population Survey's Displaced Worker Supplement, this article analyzes the effect of union representation on the likelihood that individuals eligible for unemployment insurance (UI) benefits receive UI benefits. For white-collar workers, unions do not have a significant effect on the probability of UI benefit receipt. Eligible blue-collar workers laid off from union jobs are approximately 23 percent more likely than comparable nonunion workers to receive UI benefits.     

The Effects of the EU Equal‐Treatment Directive for Fixed‐Term Workers: Evidence From the UK

In 2002, the UK implemented the EU Directive mandating equal treatment of fixed‐term and permanent workers. This article uses 11 years of data from the Labour Force Survey to assess whether the new legislation has led to a decrease in the average wage gap between fixed‐term and permanent workers. For women, there is no evidence of that. For men, the wage gap appears to have closed after 2002. However, this gap was falling even before 2002, and some evidence of changes in the selection of workers after the implementation of the Directive casts doubts on the extent to which the closing of the gap can be ascribed to the new legislation.     

Minimum Wages,Employer‐Provided Health Insurance,and the Non‐discrimination Law

This article exploits cross‐state variation in minimum wages to investigate the impact of minimum wage changes on employer‐provided health insurance. In contrast to the existing empirical literature, this article considers an environment where some firms are constrained by non‐discrimination laws that govern the provision of health insurance. For these firms, minimum wage changes do not reduce the probability that workers will receive employer‐provided health insurance. For firms not covered by the non‐discrimination law, and free to tailor their fringe benefits, low‐skilled workers experience a disproportionate reduction in the availability and generosity of health insurance after a minimum wage increase.     

Age and Work‐Related Health: Insights from the UK Labour Force Survey

Data from the UK Labour Force Survey (LFS) are used to examine two methodological issues in the analysis of the relationship between age and work‐related health. First, the LFS is unusual in that it asks work‐related health questions to those who are not currently employed. This facilitates a more representative analysis than that which is constrained to focus only on those currently in work. Second, information in the LFS facilitates a comparison of work‐related health problems that stem from current employment to a more encompassing measure that includes those related to a former job. We find that accounting for each of these sources of bias increases the age work‐related health risk gradient, and suggest that ignoring such effects will underestimate the work‐related health implications of current policies to extend working lives.     

Matching and Inverse Propensity Weighting Estimates of the Union Wage Premium: Evidence from Canada, 1997–2014

I estimate the union wage premium for private‐sector workers using Canadian data from Statistics Canada's Labour Force Survey from 1997 to 2014, examining the trend and gender differences in the premium. I obtain my estimates using matching and inverse propensity weighting estimators, which form counterfactuals for union workers. These estimators create better covariate balance and can also be used to address the bias that arises from the log transformation of wages.     

Employee Participation in Health and Safety in the Australian Steel Industry, 1935–2006

Occupational health and safety (OHS) representatives and committees are the principal form of employee participation mandated by legislation in Anglo‐Saxon countries, and therefore have a strong base. However, their existence precedes legislation in some significant cases. This article undertakes a 70‐year historical analysis of the effectiveness and operations of one significant example of pre‐legislative OHS committees in an Australian steelworks. The study finds that effectiveness of the committees as a form of participation depended on a complex complementarity of variables, including relationship with unions, the nature of management commitment, the organizational industrial relations climate and the political and institutional macro environment, consistent with ‘favourable conjunctures’ theory.     

China's intellectual property protection strength and its evaluation – based on the accession to TRIPS Agreement (Agreement On Trade‐related Aspects of Intellectual Property Rights)

This paper builds China's intellectual property protection strength from the aspects of intellectual property legislation protection strength and law enforcement protection strength, and calculates by using the actual data from 1985 to 2010. The results show that China's intellectual property protection strength has always been enhanced, and Chow test shows that the structural breakpoints appeared in China's intellectual property protection strength in 2001(when China joined TRIPS Agreement). The further Granger causality test shows that the economic development level and technological innovation ability are the factors promoting China's intellectual property protection strength, which, however, has not effectively promoted economic development and technological innovation ability due to the impact of the overall economic development level.     

Firm‐Size Wage Gaps along the Formal‐Informal Divide: Theory and Evidence

Observationally equivalent workers are paid higher wages in larger firms. This fact is often called the “firm‐size wage gap” and is regarded as a key empirical puzzle. Using microlevel data from Turkey, we document a new stylized fact: The firm‐size wage gap is more pronounced for informal (unregistered) jobs than for formal (registered) jobs. To explain this fact, we develop a two‐stage wage‐posting game with market imperfections and segmented markets, the solution to which produces wages as a function of firm size in a well‐defined subgame‐perfect equilibrium. The model proposes two explanations. First, taxes on formal employment generate a wedge between formal and informal size wage gaps. Thus, government policy can potentially affect the magnitude of the firm‐size wage gaps. The second explanation features a market‐based framework with strategic interactions. Relative to small firms, large firms typically post higher wages for both formal and informal jobs. A high‐wage formal job attracts a larger pool of applicants than a high‐wage informal job. The larger pool of applicants for the formal job, in turn, allows the firm to somewhat lower the initial wage offer, while this second‐round effect is negligible for informal jobs. As a result, size differentials are lower in formal jobs than informal jobs. We argue that the observed patterns in the use of social connections in job search and heterogeneity in job preferences can be used to justify the validity of this second mechanism.     

From Birth through Transition to Maturation: The Evolution of Technology‐Based Alliance Networks

This article considers the evolution of interfirm networks within a context of technological change. More specifically, it studies the evolution of structural and positional embeddedness in a network of technology‐based alliances when it moves from an early period of invention creation to a subsequent period of new product development and commercialization. Empirically, we study the evolution of technology‐based alliance networks in the biopharmaceutical industry over a period of about 25 years, from 1975 until 1999. Examining interorganizational networks over such an extended time period allows us to move beyond more static approaches that have characterized most network studies until now, and consider network evolution along its various phases of birth, growth, and early maturation instead. Our findings indicate that the evolution of both structural and positional embeddedness does not follow the common idea of a path of linear progression, but instead strongly exhibits nonlinearity by resembling a sigmoid pattern. These findings have a number of implications. First, the break in the process of linear progression contrasts with the standing literature that (implicitly) assumes the informational and resource value of a network structure to remain constant over time or to evolve linearly from carrying low value to progressively higher value. Instead, our finding that the evolution of structural and positional embeddedness is nonlinear echoes the speculative idea, as expressed by Gulati and Garguilo, that network change may possibly be nonlinear when seen over the long run. A second implication concerns the validity of standing insights from the social network literature such as Coleman's theory of social capital and Burt's theory of structural holes. These theories may not apply to the extent that there are strong changes in environmental conditions like environmental uncertainty and/or munificence, such as during a transition phase as considered in this study.     

Labor–Management Partnership and Employee Voice: Evidence from the Healthcare Setting

This paper examines the relationship between labor–management partnership (LMP) and employee voice in the healthcare setting. We argue that the ability of LMP to deliver gains to employees is contingent on the quality of the procedural infrastructure on which it is established. We maintain that the quality of LMP processes influences employee trust in their employer and perceptions of union effectiveness and that these perceptions, in turn, are related to employee patient‐care voice.     

Social Capital and Union Revitalization: A Study of Worker Networks in the UK Audio‐Visual Industries

This article examines Jarley's contention that trade union revitalization is conditional upon the generation of social capital through the systematic creation of networks. It draws on a qualitative study of freelance workers in the UK audio‐visual industry to consider two propositions. The first, that ‘social capital within networks is forged on “bonds” that are conducive to trade union identity’ was not sustained by the data, which instead suggested that social capital is more likely to be generated by networks outside trade union structures. However, the data did support the second proposition that ‘trade unions can harness social capital in order to achieve concrete industrial relations outcomes’ by linking networks to reservoirs of expertise and influence.     

Collective Wage Contracts,Opt‐Out Clauses,and Firm Wage Differentials: Evidence from Linked Employer–Employee Data

Using a large linked employer–employee data set, this article studies whether the existence and use of flexibility provisions within centralized collective wage agreements alter the structure of pay across employers. Using level regressions and first‐difference methods, we find that—compared with contracts without any flexibility—wages under opt‐out clauses are more responsive to local profitability conditions in below‐average‐performing establishments. In contrast, the sensitivity of wages to local profitability is smaller in high‐performance establishments. Our results provide further evidence for a threat potential of the existence of opt‐out clauses whose impact on flexibility is larger than the real application.     

From Coping Strategies to Tactics: London's Low‐Pay Economy and Migrant Labour

This article examines the means by which low‐paid migrant workers survive in a rapidly changing and increasingly unequal labour market. In a departure from the coping strategies literature, it is argued that the difficulties migrant workers face in the London labour market reduces their ability to ‘strategize’. Instead, workers adopt a range of ‘tactics’ that enable them to ‘get by’, if only just, on a day‐to‐day basis. The article explores these tactics with reference to the connections between different workers’ experiences of the workplace, home and community, and demonstrates the role of national, ethnic and gender relations in shaping migrant workers’ experiences of the London labour market and of the city more widely.     

Labor Law and Reaching a First Collective Agreement: Evidence From a Quasi‐Experimental Set of Reforms in Ontario

This paper examines the effects of a major labor law reform package in the Canadian province of Ontario on the negotiation of first agreements for newly certified bargaining units using a quasi‐experimental research design. The findings indicate that first contract success rates were 8–14 percentage points higher under the regime that included automatic first contract arbitration relative to the comparison regime of “no‐fault” first contract arbitration, despite imposition rates being only 2–4 percentage points higher. Further, in the more hostile‐to‐labor regime, only 38 percent of petitions ultimately reached a first agreement despite the presence of quick‐votes, and “no‐fault” first contract arbitration.