Is evil rewarded with evil? The market penalty effect of corporate environmentally irresponsible events

The negative response of the capital market to environmentally irresponsible events is an important governance mechanism that motivates enterprises to assume environmental responsibility. Based on the theory of effective markets and organizational legitimacy, this paper takes corporate environmentally irresponsible events in Chinese environmentally sensitive industries during the period of 2014–2018 as a research sample, and our work uses the event study methodology to explore the penalty effect of the capital market from a mathematical empirical and case empirical dimension. Furthermore, this research discusses the spillover effect of corporate environmentally irresponsible events in the capital markets. The empirical results show that once an irresponsible event is exposed, it causes a significant negative cumulative abnormal return (CAR) in the short term, and the difference between the industry and the ownership type leads to a significant difference in the duration and impact of the penalty effect. More interestingly, the capital market's penalty for corporate environmentally irresponsible events may have a notable industry spillover effect, but there are differences between the penalty effect and the spillover effect in different markets. This paper confirms that the penalty mechanism of the capital market related to an environmentally irresponsible event can effectively restrain the behaviour of the company involved and the industry to which it belongs, and it may also provide a new way for the government to build an eco‐environmental protection system of multisubject “co‐governance” and bring the punitive “forced” mechanism of the capital market to bear on corporate environmentally responsible behaviour.     

STRATEGY UNDER THE MICROSCOPE: STRATEGIC MANAGEMENT AND IT IN FINANCIAL SERVICES*

This article subjects the organizational theory literature on corporate strategy to critical scrutiny, arguing that both the ‘rational’and ‘processual’approaches to strategy generate analyses that are ahistorical and theoretically undeveloped. In their place, but focusing specifically on the financial services, we offer an alternative genealogically informed analysis. This indicates how the historical development of strategy discourses and practices are discontinuous and uneven across countries, sectors, companies and specialist spheres. In addition it suggests that corporate strategy has considerable impact on inter-organizational relations and both ‘internal’(i.e. management and employees) and ‘external’(i.e. consumers) members of the organization. the article seeks to illustrate its arguments both at the sectoral level by examining the development of strategic discourse in banks and insurance companies and at the organizational level by providing some case study material on IT strategy in a life insurance company.     

Metaphor and the Dynamics of Knowledge in Organization Theory: A Case Study of the Organizational Identity Metaphor*

abstract Despite the increased salience of metaphor in organization theory, there is still very little conceptual machinery for capturing and explaining how metaphor creates and/or reorders knowledge within organization theory. Moreover, prior work on metaphor has insufficiently accounted for the context of interpreting a metaphor. Many metaphors in organization theory, including the ‘organizational identity’ metaphor, have often been treated in singular and monolithic terms; seen to offer a similar or largely synonymous interpretation to theorists and researchers working along the entire spectrum of disciplines (e.g. organizational behaviour, organizational psychology) in organization theory. We argue in this paper that contextual variation however exists in the interpretation of metaphors in organization theory. This argument is developed by proposing and elaborating on a so‐called image‐schematic model of metaphor, which suggests that the image‐schemata (abstract imaginative structures) that are triggered by the metaphorical comparison of concepts may vary among individuals. Accordingly, once different schemata are triggered the completion and interpretation of a metaphor may equally vary among different individuals or, indeed, research communities. These points associated with the image‐schematic model of metaphor are illustrated with a case study of the ‘organizational identity’ metaphor. The case study shows that this particular metaphor has spiralled out into different research communities and has been comprehended in very different ways as different communities work from very different conceptions, or image‐schemata, of ‘organization’ and ‘identity’, and use different theoretical frameworks and constructs as a result. The implications of the image‐schematic view of metaphor for knowledge development and theoretical progress in organization theory are discussed.     

Climate Change and Reorganizing Land Use: Flood Control Areas as a Network Effect

Although climate change appears to be a relatively new public issue, it has not emerged onto a tabula rasa; it affects ‘traditional’ policy sectors. How, then, does this ‘new issue’ interact with established organizational processes, and how is climate change ‘operationalized’ in local practice? Since major events linked to climate change include such things as desertification, climatic migrations, floods and landslides, one might assume that one of its main implications would be a substantial change in land use, or at least a transformation in land organization and management. This article explores the implementation of a ‘flood control area’ as an adaptation practice in the face of climate change. What theoretical and empirical tools should analysis adopt to account for the multiple actors, types of knowledge, artefacts, socio‐technical systems and governance configurations engaged in developing such practices? In other words, to what extent does climate change become a reorganizing category? This article adopts a theoretical approach inspired by actor‐network theory and considers adaptation practice not as a standardized top‐down solution, but as the result of specific local connections among actors, materials and discourses. The analysis suggests that climate change is indeed a reorganizing category, but one that depends on the specific local materializations of the adaptation measure.     

Multinational Companies and Human Resource Management: an Overview of Research Issues1

Anthony Ferner, who is Principal Research Fellow in the Industrial Relations Research Unit at the University of Warwick, uses a wide range of literature and recent empirical research to examine the consequences for HRM of central facets of multinational companies – corporate structure and strategy, country of operation and country of origin. How, for example, do they impact on the degree of cross-national coordination of human resource policies? Are there distinct ‘national’ cultures that infuse these policies? How does ‘corporate culture’ interact with national management cultures of ‘host’ countries? In considering the implications of the discussion for a future research agenda, he emphasises the need to redress the overwhelming concentration in the existing literature on US and Japanese companies.     

Stage models of corporate ‘greening’: a critical evaluation

Corporate ‘greening’, i.e. the process by which companies can become more environmentally responsible in their operations, has attracted considerable interest lately. Largely born out of hands-on consultancy experience, various models have been proposed which describe a series of ‘stages’ by which companies become progressively more environmentally conscious and reduce their impact on the natural environment. The present article critically analyses some of these ‘stage’ models of corporate ‘greening’ from both an empirical and a management theoretical point of view. The empirical analysis is based on four case studies of the ‘greening’ efforts of companies in the UK water and electricity industries. Environmental strategy and management in these companies is found to fit poorly into the stage models of corporate ‘greening’. The article concludes that more comprehensive and interpretative explanations of organizational ‘greening’ are needed, including contextual and process oriented analysis. © 1998 John Wiley & Sons, Ltd and ERP Environment.     

The RBV theory foundation of strategic HRM: critical flaws,problems for research and practice,and an alternative economics paradigm

The resource‐based view (RBV) of the firm is a guiding paradigm for strategic HRM research. This article explores the RBV–strategic HRM intersection, identifies and critiques RBV weaknesses and problem areas, develops new implications for RBV–strategic HRM theory and empirical work, and develops an alternative economics‐based decision model for making HRM choices. The article focuses on four RBV–strategic HRM dimensions: HRM performance and the ‘no rules for riches’ proposition; alternative definitions of value and competitive advantage and implications for strategic HRM's dependent variable; neglect of marginal decision rules and consequent misprediction of optimal HRM adoption; and the impact on employee relations of RBV‐guided rent‐capture practices. Numerous implications for theory and practice are developed; also suggested is a new paradigm approach for strategic HRM theory.     

Private Politics, Corporate Social Responsibility, and Integrated Strategy

This paper provides a theory of private politics in which an activist seeks to change the production practices of a firm for the purpose of redistribution to those whose interests it supports. The source of the activist's influence is the possibility of support for its cause by the public. The paper also addresses the issue of corporate social responsibility by distinguishing among corporate redistribution as motivated by profit maximization, altruism, and threats by the activist. Private politics and corporate social responsibility not only have a direct effect on the costs of the firm, but also have a strategic effect by altering the competitive positions affirms in an industry. From an integrated-strategy perspective the paper investigates the strategic implications of private politics and corporate social responsibility for the strategies of rival firms when one or both are targets of an activist campaign. Implications for empirical analysis are derived from the theory.     

Visualising Africa at diaspora expense? How and why humanitarian organisations ignore diaspora audiences in their ‘ethical’ communications

Critical commentaries on visual constructions of distant suffering within humanitarian communication research have critiqued and problematised how International non-governmental organisations (INGOs) frame Black and Brown distant ‘Others.’ However, much focus has been on the implications of these mediated imageries for overseas communities, while African diaspora have received much less attention. African diaspora is critical in current debates around representation, especially given increased criticisms around the ethicality of INGO fundraising communications for UK-situated Black racialised publics. This article thus complicates existing debates by repositioning the empirical preoccupation with distant Others ‘over there,’ towards UK-situated African diaspora ‘over here.’ Using interview evidence with UK-based INGO professionals involved in the production and dissemination of imageries of humanitarian issues, it explores how INGOs construe African diaspora populations in considerations around, and implications of, the ethicality of their communications. Revealing that African diaspora are largely absent or ‘afterthoughts’ in INGO consciousness and practices for three central reasons. (1) They are not considered distinct and differentiated donor audiences worthy of strategic prioritisation, (2) Implicit professional/organisational ‘whiteness’ limits reflexive foresight of potential implications (negative or positive) of communications for diaspora and, (3) INGOs temporise over the (im)practicalities of ‘diaspora inclusive’ agendas for ethical communication.     

HRM-performance research: under-theorized and lacking explanatory power

The search for a measurable link between HR practices and organizational performance is currently preoccupying HR professionals, consultants, government and academics. Empirical research on this human resource management-performance (HRM-P) link is, however, marred by a serious problem: it is under-theorized. While some (but by no means all) researchers on the HRM-P link are aware of the problem, none are prepared to face up to the scale of the implications. Without theory, research on the HRM-P link lacks explanatory power. The only ‘solution’ on offer (the assertion that theory will develop via more and/or better empirical work) has been less than successful: empirical research has multiplied with little or no theoretical development. Nor can it. The under-theorization and lack of explanatory power is rooted in the ‘scientific’ perspective that underpins empirical research. The paper draws upon critical realist philosophy to reveal exactly why the ‘scientific’ approach encourages under-theorization and lack of explanatory power and, furthermore, why the ‘solution’ on offer cannot solve the problem. The conclusion notes why the HR community should not avoid philosophical issues.     

Positively negative: the impact of negativity upon the political consumer

• For years there has been an ongoing debate as to the role and impact that ‘marketing’ has had on politics. Yet, it is the case that many of the concepts associated with the field of marketing have real relevance and have, in fact, been employed within the field of political campaigning for many decades. This is an empirical paper that focuses upon the concept of political brands and the impact that current trends in campaign strategy, and in particular the growth and continued use of negative campaigning, have upon them. Using a constructivist grounded theory approach, the implications associated with such activity are examined and, in particular, its effect upon the consumer/brand relationship.
• Within the consideration of the results, it becomes clear that political brands' use of negative campaigning is somewhat shortsighted; offering short‐term gains but at the cost of long‐term damage not only to their brand image but also to the wider democratic system as it stands. In a search for political ‘brands’ that more effectively meet their needs, there appears a tendency for political consumers to now look outside of the conventional political sector. The emergent concept of the ‘negative brand’ is explored together with the implications for political consumers, political brands and the wider field of conventional party politics.

Copyright © 2007 John Wiley & Sons, Ltd.     

Is there a bigger and better future for employer branding? Facing up to innovation,corporate reputations and wicked problems in SHRM

Employer branding is becoming an increasingly important topic for research and practice in multinational enterprises (MNEs) because it plays directly into their corporate reputation, talent management and employee engagement agendas. In this paper, we argue that the potential effects of employer branding have yet to be fully understood because current theory and practice have failed to connect this internal application of marketing and branding to the key reputational and innovation agendas of MNEs, both of which are at the heart of another strategic agenda – effective corporate governance. However, these agendas are characterised by ‘wicked problems’ in MNEs, which have their origins in competing logics in strategic human resource management (SHRM). These problems need to be articulated and understood before they can be addressed. This paper proceeds by (1) setting out a definition and model of employer branding and how it potentially articulates with corporate governance, innovation and organisational reputations, (2) discussing and analysing the ‘wicked problems’ resulting from the sometimes contradictory logics underpinning innovation and corporate reputations and SHRM in MNEs and (3) evaluating the potential of employer branding as a contribution to the third SHRM approach – HR strategy-in-action – as a way of resolving three particularly wicked problems in MNEs. We conclude with some ideas for research and practice on the future for employer branding.     

Household migration: theoretical and empirical results

A consumption theory of migration is developed which supplements the traditional job search models. Migration, seen as an equilibrating reaction to an initially non-optimal location, is analyzed using standard demand theory. When one groups goods into those that are traded between areas and those that are not (weather, racial discrimination, crime rates, etc.) it is clear that only changing demands for the non-traded goods will result in changing optimal locations (assuming supplies are fixed). Illustrating, an increase in family income might lead to an increased demand for the non-traded good “personal safety.” This might result, for example, in the substitution (through migration) of a lower crime suburban neighborhood for a higher crime central city neighborhood.An empirically testable implication of the model is that the probability of migration should be positively related to changes in the absolute value of those exogenous variables which lead to altered demands for non-traded goods. This and other hypotheses were examined using cross-sectional data in a nonlinear maximum likelihood (probit) regression analysis. The results strongly support the model and its implications.     

A ‘PARTNERSHIP’ ROUTE TO HUMAN RESOURCE MANAGEMENT?*

Collaborative relationships between firms have been growing in importance, including ‘partnerships’ between customers and suppliers. Institutional economists and sociologists have different views on the origins, character and consequences of partnership, and the nature of this debate is outlined, as well as the implications for the reality of ‘partnership’ and its role in the diffusion of business practice. Against this background we use case study and survey evidence to explore the transition within the supply chain relationship, from a customer ‘demands’ model and hence to ‘supplier development’. Supplier development can be seen as an aid to risk reduction, particularly where it involves management control system development in the supply organization. The partnership implications for the human resource management (HRM) function are explored. Supply-side partners are likely to be involved increasingly with activities that will underpin the alliance (for example, training, cultural change and removal of industrial relations obstacles to change). These indirect effects may be supplemented by direct involvement by the HRM specialists in the customer organization, especially where partnership development places strong reliance on the human resource dimensions of the two organizations. Examples of this form of development are discussed. This evidence is assessed in terms of the different disciplinary approaches discussed at the outset. What emerges most strongly is that although ‘partnership’ is used to describe many inter-firm relationships, many of these are very unequal and are recognized to be so, but in other cases evolutionary steps can be taken to reduce the risks involved and lead to apparently equitable alliances. Within this risk reduction process, the role of human resources appears to be of varying importance.     

TAX COMPETITION AS A CAUSE OF FALLING CORPORATE INCOME TAX RATES: A SURVEY OF EMPIRICAL LITERATURE

Abstract Since the mid 1980s, tax rates on corporate income have declined in most industrialized countries. Tax competition between countries for mobile capital has frequently been mentioned as an explanation for this development. A vast empirical literature dealing with tax competition for mobile capital has emerged. This paper categorizes and summarizes the existing empirical studies on this issue. Particular focus is placed on the isolation of the substantive implications the quantitative study outcomes convey. Given the empirical evidence surveyed, it appears that tax rates indeed decline due to tax competition between countries, and in particular due to competition for profits. In addition to summarizing the substantive implications of the existing empirical literature, the paper addresses the question of whether the existing studies can convincingly isolate tax competition as a driver of falling corporate income tax rates.     

Microeconomic foundations of corporate strategy

This paper examines several approaches to corporate strategic planning in the context of their relationship to the microeconomic theory of the firm, and discusses the implications of that theory for corporate strategy in general. Specifically, three types of analytical tools are discussed: (1) analytical portfolio models; (2) business simulation models; and (3) optimization models. Examples of how the three types of tools are used in corporate decision-making are given, and certain limitations are cited. The limitations include, for example, the inability of some of the models to deal with interdependencies across business units in production resources or output demand. Finally, the paper examines the approach to strategic planning known as the ‘strategy matrix’, which explicitly allows for interdependices across business units. The use of the strategy matrix by a major petroleum company is discussed in some detail.     

The role of corporate governance in forecasting bankruptcy: Pre- and post-SOX enactment

This paper contributes to the literature by documenting the improved performance of bankruptcy prediction models after including corporate governance variables. The empirical results demonstrate better predictive power for financial bankruptcy than previous bankruptcy prediction models, particularly in the post-SOX period. Our theoretical argument emphasizes the urgent need for such improvements to the bankruptcy prediction model following the introduction of the SOX Act, with the empirical results providing intuitive economic meaning for all relevant market participants. Policymakers may consider enacting laws to include designs for corporate governance monitoring mechanisms, entrepreneurs may use this model to improve their own governance structures and compensation mechanisms to avoid financial bankruptcy, and investors may refer to it to ensure that ‘losers’ are excluded from their investment portfolios.     

Changing consumer behaviour through eco-efficient services: an empirical study of car sharing in the Netherlands

In this paper ‘innovation’ is discussed as a strategy to change consumer behaviour to reduce the environmental impact of consumption. Innovation aims to improve the ‘production process’ of certain end results or ‘units of service’ for the consumer, which is defined as the ‘consumption technology’. This concept includes the entire organization of how these units of service are produced. ‘Eco-efficient services’ are introduced as an innovation strategy, based on theoretical considerations through which more eco-efficient consumption technologies and less environmentally damaging consumption behaviour could be realized. This strategy is explored through an empirical consumer behaviour study on commercial car sharing services in the Netherlands. Based on an inventory of the environmental effects of this approach, as exemplified by the car sharing schemes, it can tentatively be concluded that the eco-efficient services concept offers an interesting framework for reconsidering the current consumption practice and for generating innovative activities in industry. © 1998 John Wiley & Sons, Ltd and ERP Environment.     

The ‘old’ and ‘new’ competition and Malaysian manufacturing firms: a case study

The majority of empirical studies dealing with production processes, work organization and industrial relations practices have been conducted in advanced industrial nations. This article reports on a study of the changing nature of work organization and industrial relations policies in the developing economy of Malaysia. It explores the broad patterns of change in human resource management, technology and work organization among Malaysian manufacturing firms in the context of Best's ‘old’ and ‘new’ competition. The question that arises is: does the evidence reveal that Malaysia is embracing elements of the ‘new competition’, or is it still locked into a regime of mass production, or both? The article argues that the ‘old’ and the ‘new’ competition should not be treated as a simple, straightforward duality model of development. The distinction between the two approaches is sometimes blurred and not so clear-cut. The case study observes that both systems could be operating side by side at the same time within an organization. Since the Malaysian manufacturing sector is expected to shift from simple assembly and process-type operations using labour-intensive techniques to the more advanced and higher value-added industries, greater investment in HRD to upgrade the skills of the work-force and the adoption of appropriate industrial relations policies that emphasize decentralization, greater employee involvement and continuous innovation will become crucial. To be able to compete successfully in the global economy would require a change in focus in the adoption of industrial relations and human resource development policies. For Malaysia to realize its aspiration to become an industrialized and developed nation by the year 2020 would require radical changes in those policies within the context of an integrated approach to economic and industrial planning.