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.     

Managerial perceptions of corporate environmentalism: interpretations from industry and strategic implications for organizations

Environmental issues are becoming increasingly important in organization theory and practice. Corporate environmentalism is emerging as a process of addressing environmental issues facing business firms. In this paper I examine managerial perceptions of corporate environmentalism and describes how key organizational members interpret the relationship between their firm and the biophysical environment. Corporate environmental orientation and environmental strategy focus are two themes of corporate environmentalism that emerge from the study. I discuss managerial perceptions of regulatory forces, public environmental concern, top management commitment and need for competitive advantage, and how perceptions of these factors might translate into environmental strategies. I conclude by discussing implications of corporate environmentalism for organizational theory and practice.     

Avoiding the loss of a gain: Retaining top managers in an acquisition

The turnover of management following a merger or acquisition is a significant, yet understudied, human resource issue. We propose that the relevant HR question is not merely how to retain top managers, but of equal importance, whether or not top management retention should be an objective. We present a model that integrates the retention process with the overall integration strategy being pursued by the acquiring firm. The model prompts a discussion of those factors that influence the decision as to whether the top management of the acquired firm should be retained. We conclude by identifying appropriate HR tactics for managing the retention process.     

论组织内中层管理者的角色困惑与定位

中层管理者作为组织管理的重要环节,担负着承上启下的重任,是组织高层、联系基层的工作纽带。不管是处于经济的繁荣期还是衰退期,他们都负责执行组织战略,推动组织变革,并且推动基层员工积极参与组织建设,因此,组织内中层管理者必须准确定位。本文就新形势下中层管理者面临的角色困惑与定位,提出中层管理者应该成为组织决策坚定的执行者、有效引领下属的管理者、组织文化建设积极的参与者、卓有成效的自我治理者。最后提出了中层管理者管理能力提高的三大要点。     

Rivalry Restraint as Equilibrium Behavior

Rivalry restraint has received a lot of attention as a theory of profits in recent research on business strategy. Its economic rationale is explained as the consequences of either exogenous or endogenous anticompetitive forces present in different industries. In this paper, we use a dynamic oligopolistic industry model and show that rivalry restraint emerges as equilibrium behavior among firm owners who delegate decisions to managers. In the corresponding two‐stage game, managers choose optimal production rates in a dynamic Cournot market and owners set incentives for managers, acting sequentially rational. Equilibrium incentives correspond to rivalry restraint, that is, managers are less aggressive in the product market with lower outputs and increasing profits for all firms in the industry.     

Carbon disclosure and financial performance: UK environmental policy

The outcome of carbon disclosure, the importance of which has grown remarkably in recent years to become a strategic decision‐making issue for organisations in today's competitive environment, is a subject of lively debate but remains under‐researched in the environmental accounting literature. This study is motivated by this research gap and the growing interest in assessing the financial consequences of corporate involvement in climate change beyond regulatory compliance, as evidenced by firms' voluntary participation in the Carbon Disclosure Project. Using the resource‐based view of the firm as a theoretical framework and linking it to carbon disclosure through Carbon Disclosure Project, we conceptualise and empirically investigate the impact of adopting proactive carbon management policies and communicating them to stakeholders, focusing on the financial performance of the top FTSE350 companies between 2007 and 2015. By developing a comprehensive financial performance index and controlling for several firm characteristics, we find strong evidence that voluntary carbon disclosure is positively associated with firm financial performance. The findings in this paper provide new insights and policy implications for managers, financial stakeholders, and regulators.     

Agency-Theory and Internal-Labor-Market Explanations of Bonus Payments: Empirical Evidence from Spanish Firms

This paper combines agency theory and internal-labor-market theories to explain the determinants of bonus payments among a large sample of top and middle managers from Spanish firms. A distinction is made between the decision whether to pay bonus or not and the size of the bonus. The empirical evidence confirms that the two decisions are determined by different factors. The results of the analysis show a trade-off between short-term and long-term incentives (bonuses and promotion opportunities) as well as differences in the pattern of compensation policies across economic sectors and functional areas inside the firm.     

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.     

What a Diverse Top Management Team Means: Testing an Integrated Model

Prior research has produced inconsistent results on the relationship between top management team (TMT) diversity and firm performance. Drawing on the information–social categorization framework, this study is designed to investigate both the mechanism and the contextual factors underlying the relationship between TMT cognitive diversity and firm performance by examining them in a unified model so as to better understand how a diverse TMT works. Based on a multi‐sourced survey of top managers from 118 Chinese firms, this study finds that team interdependence and team cohesion moderate in the linkage between TMT cognitive diversity and elaboration of task‐related information. In addition, TMT's elaboration of task‐related information mediates the interactive effects of TMT cognitive diversity and team interdependence on firm performance as well as the interactive effects of TMT cognitive diversity and team cohesion on firm performance.     

The gap between the environmental attitudes and the environmental behaviour of small firms

Small firms are facing serious difficulties responding to environmental pressures. Due to their unique characteristics, small firms cannot be expected to employ scaled down solutions that have been developed by, and for, larger organizations. The indications are that the typical owner–managers of manufacturing and service small firms are struggling to bridge the gap between their environmental attitudes (aspirations) and their environmental behaviour (practices). Part of the problem would appear to be the domination of an outmoded paradigm that has created a set of values, personal and corporate, that is unable to cope with the environmental problems of today. However, the prognosis need not be pessimistic. There is evidence to suggest there are driving forces promoting change toward a more sustainable small firms sector. A number of emerging solutions offer ways to tackle the problem at the level of the firm, such as industrial ecology, and at the level of the institution, such as ecological modernization. The message remains that support for more extensive environmental education and training programmes and a much stronger regulatory framework would help to counteract the imbalance between the resistant forces and driving force that are presently widening the gap between small firm environmental attitudes and behaviour. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.     

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.     

Organizational commitment in MNC subsidiary top managers: antecedents and consequences

This article studies, first, how affective and continuance commitments affect MNC subsidiary top managers' intent to leave either their current post or the firm itself, and second, which variables influence these managers' affective and continuance commitments. The analysis uses a sample of MNC subsidiary top managers in Spain, and the results confirm that these managers' intent to leave the subsidiary and the multinational is determined by affective and continuance commitments in its two dimensions (high-sacrifice and low-alternatives), and that these commitments, in turn, are determined by the managers' personal cultural values and company bonding variables.     

How Does Executive Strategic Human Resource Management Link to Organizational Ambidexterity? An Empirical Examination of Manufacturing Firms in China

Despite a plethora of studies that demonstrate the positive impact of strategic human resource management on firm performance, existing knowledge of the processes through which such gains can be achieved remains limited. This study aims to extend our knowledge by investigating the mechanism through which a teamwork‐oriented executive strategic human resource management system impacts organizational ambidexterity. Specifically, by integrating the resource‐based view and information‐processing theory, we examine the mediating role of top management team effectiveness and the moderating role of knowledge–sharing intensity from middle managers to top management teams. Drawing on a multiple‐source and multiple‐respondent survey from 144 manufacturing firms in China, we show that top management team effectiveness partially mediates the effect of the executive strategic human resource management system on organizational ambidexterity. Moreover, knowledge‐sharing intensity from middle managers to top management teams strengthens the effect of the executive strategic human resource management system on organizational ambidexterity. © 2016 Wiley Periodicals, Inc.     

Do firms with different levels of environmental regulatory pressure behave differently regarding complementarity among innovation practices?

This study explores the complementary effects among environmental innovation, organizational innovation, and training for innovation and their effect on firm productivity, within a supermodularity framework. Furthermore, it attempts to understand whether different innovation practices are complements or substitutes for firm profitability according to the industrial environmental regulation context by distinguishing between clean and dirty industries. Using a Spanish technological innovation panel survey over the period 2008–2015, our findings indicate that the interrelationship between different innovation practices is complementary rather than substitutive, and the pattern of complementarity among innovation practices differs according to the environmental regulation under which an industry operates. Engaging in a broad range of innovation practices such as environmental and organizational innovations, clean industry can strengthen productivity. For dirty industries, our results indicate a greater affinity between training activities and environmental innovation than between environmental innovation and organizational innovation on firm productivity achievement. Taken all together, these results provide managers with considerable insights in terms of how to adapt the various combinatorial practices to the industrial environment in which they are embedded, taking market and regulatory pressure into account.     

Human resource involvement,job-related factors,and their relation with firm performance: experiences from Greece

A great deal of debate exists regarding the relationship between human resource (HR) practices and firm performance. The purpose of this paper is to examine the relationship between HR involvement in firm's strategic planning, job-related constructs (job characteristics, workplace characteristics, and satisfaction), and their impact on firm performance. A new research model is proposed exploring the above-mentioned relationships. The validity of this model is tested using data from 106 chief executive officers (CEOs), top managers, and managing directors of Greek small medium enterprises (SMEs)), using the structural equation modeling approach. The results indicate that job characteristics and workplace characteristics directly affect satisfaction and firm performance, while HR involvement has a direct impact on job characteristics and workplace characteristics and an indirect effect on satisfaction and firm performance. It is suggested that managers should emphasize on the HR involvement in the process of strategic planning which actually affects the job-related constructs, in order to improve employees' satisfaction and achieve higher firm performance levels.     

The Impact of Horizontal Mergers on Rivals: Gains to Being Left Outside a Merger

It is commonly perceived that firms do not want to be outsiders to a merger between competitor firms. We instead argue that it is beneficial to be a non-merging rival firm to a large horizontal merger. Using a sample of mergers with expert identification of relevant rivals and the event-study methodology, we find rivals generally experience positive abnormal returns at the merger announcement date. We also find that the stock reaction of rivals to merger events is not sensitive to merger waves; hence, 'future acquisition probability' does not drive the positive abnormal returns of rivals. Further, we find the positive (or non-negative) abnormal returns of rivals to be robust when considering heterogeneity in merger and rival characteristics.     

Estimation of cost inefficiency in panel data models with firm specific and sub-company specific effects

This paper proposes a dual-level inefficiency model for analysing datasets with a sub-company structure, which permits firm inefficiency to be decomposed into two parts: a component that varies across different sub-companies within a firm (internal inefficiency); and a persistent component that applies across all sub-companies in the same firm (external inefficiency). We adapt the models developed by Kumbhakar and Hjalmarsson (J Appl Econom 10:33–47, 1995) and Kumbhakar and Heshmati (Am J Agric Econ 77:660–674, 1995), making the same distinction between persistent and residual inefficiency, but in our case across sub-companies comprising a firm, rather than over time. The proposed model is important in a regulatory context, where datasets with a sub-company structure are commonplace, and regulators are interested in identifying and eliminating both persistent and sub-company varying inefficiency. Further, as regulators often have to work with small cross-sections, the utilisation of sub-company data can be seen as an additional means of expanding cross-sectional datasets for efficiency estimation. Using an international dataset of rail infrastructure managers we demonstrate the possibility of separating firm inefficiency into its persistent and sub-company varying components. The empirical illustration highlights the danger that failure to allow for the dual-level nature of inefficiency may cause overall firm inefficiency to be underestimated.     

Effective teamwork at the top: the evidence from China

Effective teamwork is an important topic of human resource management, and how top-level managers work effectively as a team is critical to business success. Prior research indicates that the diverse background of top managers influences the effectiveness of their teamwork, and the effects of top management team (TMT) diversity on organizational innovation varies. In this study, we propose that functional team dynamics plays a crucial role in facilitating TMT effectiveness. On the basis of a sample of Chinese firms, our findings support the distinction between demographic and network diversities and the moderating effect of functional team dynamics on TMT diversity–firm innovation relationships.     

Corporate Governance and the Environment: What Type of Governance Creates Greener Companies?

We build on a stakeholder–agency theoretical perspective to explore the impact of particular corporate governance mechanisms on firm environmental performance. Our empirical evidence shows that several important corporate governance mechanisms such as the board of directors, managerial incentives, the market for corporate control, and the legal and regulatory system determine firms' environmental performance levels. These results suggest that these different governance mechanisms resolve, to some extent, the existing divergence of interests between stakeholders and managers with respect to environmental activities.     

Managerial style and the strategic choice of executive incentives

This paper analyzes a two-stage duopoly model where owners provide incentives to managers who then select output levels. Unlike the previous Cournot models on the strategic use of incentives (e.g. Fershtman and Judd, 1987; Sklivas, 1987), managers hold different beliefs about their rivals. Managers and executives are classified by ‘management style’ based on the aggressiveness of their beliefs. It is shown that many of the standard results of the strategic managerial incentive literature no longer hold when executives have differing managerial styles. For example, owners may ‘penalize’ their managers for sales, or they may optimally instruct their managers to maximize profits, in contrast to the standard Cournot findings. Indeed, the model yields a necessary and sufficient condition for compensation contracts to specify pure profit-maximizing behavior when managers have differing managerial styles. Thus, the analysis suggests that when ownership and control are separated, owners must carefully assess the belief structure (management style) of their executives before designing the compensation package.