Correlates and consequences of high involvement work practices: the role of competitive strategy

Illustrative of world-wide trends, New Zealand has undergone drastic product and labour market reforms in an attempt to stimulate economic growth and national competitiveness. Towards this goal, firms have been urged to emphasize differentiation strategies in their approach to their markets and also to become more progressive in their management of human resources. This study finds that whereas more intensive use of high involvement work practices promotes firm effectiveness, this effect depends on the competitive strategy being pursued. The use of high involvement work practices is positively associated with performance in firms competing on the basis of differentiation and shows no relationship in firms pursuing a strategy of cost leadership.     

The importance of small differences: the effects of research design on the comparative study of industrial relations reform in Australia and New Zealand

The aim of this paper is to explore the limitations associated with a most similar case research design. It argues that by adopting a most similar case research design, comparative work on industrial relations reform in Australia and New Zealand during the 1980s and 1990s has systematically ignored important historical differences between the two countries, underestimated the similarities in recent reforms and privileged organizational and institutional explanations for changes in industrial relations systems, at the expense of those which are based on systemic factors and material interests. More generally, this paper argues that methodological choices have significant consequences for the types of explanations generated by comparative research and that more serious attention needs be given to the epistemological assumptions embedded in research designs that are taken up by industrial relations researchers.     

Implementing the third way

This article examines the transfer of NPM strategies by comparing Service Charter initiatives in the United Kingdom, United States and Australia. These three countries, together with Canada and New Zealand,are partofwhathas beendescribedas the ‘core’ new public management (NPM) policy community (Common 1998). Service Charters are an NPM strategy intended to change the culture of public service delivery to focus on the needs of the users, identified as ‘clients’ or ‘customers’. The objectives are to make service providers more responsive to users by guaranteeing specific standards for service delivery, providing a substitute for competition and a benchmark for measuring service quality. The first section examines the historical and political context of the development of the Citizen's Charter and Service First programmes in the UK, customer service plans in the USA and Government Service Charters in Australia. The second section explores the similarities and differences between these charter initiatives based on analysis of public documents. There is evidence of convergence at the ideological level as managerial values underpin the service charter frameworks in all three jurisdictions (Walsh 1994; Pollitt 1995; Kettl 1997). Despite drawing from a similar toolkit influenced by private sector techniques, significant differences between the country contextshaveresultedindivergent strategies. Timing in the three countries examined suggests that national politics rather than global policy convergence is more significant in explaining the development of service charters. This case study provides evidence of policy transfer rather than policy convergence (Common 1998). The final section considers the limitations of the customer service model. Monitoring quality iscentral to theprogrammes in all three countries. Performance monitoring is essentially a quantitative methodology that requires criteria and indicators for measuring the quality of service delivery and programme outcomes. Two problems are considered. The first is the difficulty of specifying and measuring service quality. The second is that quality indicators derived from services marketing and management research do not take into account the characteristics of public services.     

State employees' unions and administrative reforms: comparisons between Sweden,Norway, Australia and New Zealand

This paper discusses how methodological challenges and problems were handled in a study of how state employees' unions responded to, had an impact on and were affected by new public management reforms in Sweden, Norway, Australia and New Zealand. In the study, particular emphasis was put on institutional characteristics of the unions. The paper clarifies the operational measures of this concept (construct validity) and their causal relationship to the actions and outcomes of the reform processes (internal validity). Two other aspects of research design (external validity and reliability) are also discussed. Finally, some more general lessons learned from the study are indicated.     

Intra‐Sectoral Differences in Climate Change Strategies: Evidence from the Global Automotive Industry

Companies are increasingly challenged for action on climate change. Most studies on business responses to climate change focus on cross‐sector comparisons and neglect intra‐sectoral dynamics. This paper investigates the influence of supply chain position and regional affiliation on climate change strategies within a particular industry. We present a generic framework integrating both market and non‐market responses to climate change. We argue that climate change strategies comprise several corporate activities that have different foci of interaction and four main objectives: governance, innovation, compensation and legitimation. Using a global sample of 116 automotive companies, we conduct a cluster analysis and identify four types of strategy. We find that the sophistication of automobile manufacturers' strategies significantly differs from that of suppliers. Regional affiliation and firm size prove to be determinants of the strategy type pursued. We cannot find evidence for a relationship between financial performance and a company's strategic approach to climate change. © 2017 The Authors. Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd     

‘The Institutions and Governance of Economic Reform'1

This articls uses the reform of New Zealand's state-owned enterprises from 1984–1995 to highlight two lessons for public sector reform from New Institutional Economics. First, failure to apply agency, property rights and transaction cost theory in tandem can lead to time-consuming pauses and policy shifts in a reform programme. Second, a discriminating alignment between the institutional environment and the regulatory governance structure chosen is crucial for successful privatization in industries characterized by economies of scale, large non-redeployable investments and extremely political output such as telecommunications and electricity.     

Corporate governance crisis down under: Post-Enron accounting education and research inertia

Abstract

Australian and New Zealand accounting academic responses to corporate governance and reporting failures is a story not simply told in the context of high profile international corporate failures such as Enron and WorldCom. This study notes a sequence of major Australian corporate failures that predate Enron and WorldCom. Through research into professional, business and research literature, profession and governmental/regulatory websites, and interviews with senior accounting academics across Australia and New Zealand, it also highlights a tale of limited response by Australian and New Zealand accounting academics and investigates the manifest and latent drivers of this inertia. The corporatisation and commercialisation of universities and related governance processes emerge as root causes of accounting academics' general failure to address recent major breakdowns in corporate governance and reporting in the business world. The paper closes by reviewing opportunities for change in an otherwise embattled environment.     

The Carbon Neutral Public Sector

Abstract

This paper argues for research into the effectiveness of government strategies for a ‘carbon neutral public sector’. We review initiatives in three OECD countries: New Zealand, Australia and the UK. In all jurisdictions, government agencies have consistently stressed ‘leading by example’ as a rationale for adoption. ‘Direct mandate’ by the Prime Minister (NZ); ‘organic development’ from wider central government sustainability initiatives (UK); and a more ‘laissez faire’ approach by Australian Federal and State Governments, were identified as the general pathways leading to implementation. Our assessment indicates: a lack of understanding of the implementation process for carbon neutrality; a need to identify and critically examine the ‘offset threshold’ at which mitigation efforts cease and offsetting is adopted; an absence of any evaluation of the ‘leading by example’ rationale; a lack of inter-country comparisons; a gap in understanding the relationship with economic and social aspects of sustainability; and a need to evaluate the utility of core government departments as the focus of carbon accounting. We urge colleagues to consider research in this area with a view to contributing to the interdisciplinary solutions which we believe are required.     

Extending beyond borders: Multinational companies and the international management of labour

The paper investigates the potential consequences of MNCs' globalizing strategies for the management of labour, drawing on findings from a survey of employee management among MNCs operating in the UK. It finds clear evidence of transnational forms of management organization, including in the personnel sphere. But it also underlines that moves to globalism are uneven. Structures and policies to develop international management teams were found primarily among certain types of MNC. Most striking was the extent to which MNCs are actively engaged in the management of non-managerial employees at international level. Seven out of every ten companies monitored labour performance across sites in different countries. The broader significance of this finding lies in the business decisions which flow from the use of such information. As MNCs develop continental production strategies, pressures on local workforces, keen to attract future investment, for performance improvements are likely to intensify. These developments pose considerable challenges for labour which remains primarily local and national in its organizational focus.     

Managerial markets in transition in Central and Eastern Europe: a field study and implications

In this paper, we report findings from the first comprehensive study of managerial labour markets in Central and Eastern Europe, drawing on field data from 157 firms in six countries. Results indicated widespread and deep changes occurring in the region’s managerial markets. Despite differences among countries in reform and economic performance, we found these particular changes to be surprisingly common across the countries studied. They included rapid rises in salary and benefit levels, narrowing of some skill gaps, shifts to more sophisticated methods of recruitment and an overall move towards Western management practices. The study also revealed severe shortages of qualified managers in all the countries studied. The resulting tightness in the managerial labour markets was reducing only modestly, despite other improvements. Foreign and joint-venture firms were relying disproportionately on expatriate managers, and may not have been sufficiently developing locals. We argue that, partly because of this, the distortions in pay, promotions and performance resulting from these tight markets are likely to persist for some time.     

Accounting Insights from the Healthcare Sector

Over the last decade, significant accounting reforms have been considered by a wide range of state and local governments throughout the world. Few countries have undertaken such extensive reform of their public sector, or of their public sector accounting practices as an integral part of those reforms, as New Zealand. While the central government accounting reforms are more well known, the reforms at local government have been equally dramatic, the most recent being the introduction in 1998 of a long-term financial planning regime under the Local Government Amendment (No. 3) Act 1996. This paper examines the factors leading up to the legislation, describes the requirements of the new regime, identifies the accounting and related issues which have arisen and concludes with some lessons which other countries may wish to consider in their own quest for transparency and accountability.     

Reshaping Community Mental Health Services in a Restructured State: New Zealand 1984-97

The concept of the hollow state has been proposed as a general framework for public sector restructuring, with New Zealand seen as a leader in reforming social and welfare services, including mental health. This article reports on documentary and interview research into the provision of community-based mental health services in terms of hollow state characteristics: privatization, decentralization and flexibilization. The evidence suggests that privatization occurred only at the margins, that decentralization led to significant regional differences in contractual arrangements and services and that flexibilization brought mixed blessings to the agencies involved. Consistent with findings from elsewhere related to hollow state mechanisms, performance assessment and accountability became more difficult. It is concluded that such frameworks are not appropriate for sectors such as mental health where there is high uncertainty and vulnerable service recipients. Recent policy changes suggest a retreat from privatization and flexibilization, and the emergence of a new balance between centralized and decentralized decision making.     

Corporate governance and the returns to acquiring firms' shareholders: an international comparison

We examine the effects of mergers on the returns to acquiring companies' shareholders for a large sample of companies from both Anglo‐Saxon and non‐Anglo‐Saxon countries over the 1980s and 1990s. With the important exception of Japan, we find similar patterns of returns across both types of countries. For a sample of 9733 acquiring companies the mean percentage gain over a short window of 21 days is 0.6%. This picture changes dramatically as the market has more time to evaluate the mergers and/or the acquiring firms. After three years, acquirers' shareholders in the United States and continental Europe lost on average 19% of their market value compared to a portfolio of non‐merging firms in their size deciles and their two‐digit industry, in Canada, Australia and New Zealand roughly 16%, and in the four Scandinavian countries almost 15%. Further analysis indicates that some mergers are consistent with the hypothesis that mergers generate synergies, but that a majority of mergers in Continental Europe are explained by the managerial discretion and/or hubris hypothesis. Our findings also suggest that corporate governance institutions in the United States and the other Anglo‐Saxon countries lead to better investment performance than in continental Europe, when one confines one's attention to mergers. Copyright © 2007 John Wiley & Sons, Ltd.     

Responses to public sector reform policy

Abstract

The article compares the ways in which different public sector organizations respond to similar federal government demands for public sector reform. The empirical basis of the article is a comparison of public sector reform in three agencies managing road systems in three Australian states. There are two constants in the research; namely, the nature of the responsibilities of the agencies with respect to the road network, and the demands of federal government policy for road reform throughout Australia. Yet within the ambit of these two constants, there is a distinctive contrast in the way the agencies have approached and implemented both policy and reforms. The article uses Hood's framework for viable organizational design options for variables relating to grid and group as an explanatory model for the results obtained from the research. Furthermore, it examines the utility of Hood's four styles of public sector organizations in order to explain different change outcomes in the three agencies studied.     

Microeconomic Reform and the Third Sector

Microeconomic reform has put the relationship between government and the third sector in Australia on a course of inevitable change. This article examines the key government reports that have been influential in shaping the microeconomic reform agenda in Australia. The objectives driving this agenda are greater accountability, increased effectiveness, improved efficiency and preventing the capture of programme funding by sectional interests. In the process, a new relationship between government and the third sector based on mechanisms to separate funding and service provision is becoming apparent. It is characterized by an increasingly contractual nature, frequent review, contestability, performance management requirements and an emphasis on competition rather than collaboration. As a consequence, there has been a shift in strategic control from third sector agencies to the funding agencies within government. A case study of the Department of Human Services in Victoria illustrates the implications of this shift for third sector agencies and reveals the future directions of government-third sector relations in Australia.     

Modernising pay in the UK public services: trends and implications

The emerging character of the UK government's public sector pay reforms during the second and third (New) Labour terms of office is reviewed and contextualised. Three settings are examined where pay reform has been actively employed – with the accent on harmonisation, simplification and devolution of practice, with the express intention of restoring public service workforce morale, while improving services to clients – namely, local government, the National Health Service and the Higher Education sector. The evidence is interpreted as illustrating undoubted change, but also significant areas where progress has been less than intended, measured against the government's original programme goals. Equal pay considerations appear to have dominated all three projects reviewed: the failure to date of public sector managements to capitalise on opportunities the new pay architecture affords them to change local working practices may be attributed to a combination of factors discussed in the article. These have given rise to tensions as efforts have been pursued to transplant private sector pay techniques, somewhat hastily in some cases, without due consideration of the institutional context within which public services and proximal institutions function.     

Incentives to work? The impact of a ‘Cash-for-Care’ benefit for immigrant and native mothers labour market participation

To what extent is labour market participation of mothers sensitive to economic incentives? We answer this question by studying the effect on labour market participation of a Norwegian family policy programme that clearly has affected the incentives to participate in the labour market of mothers with small children. From January 1999, all parents with one- and two-year-old children who did not use publicly subsidised day-care became entitled to a benefit, ‘Cash-for-Care’ (‘CFC’). The CFC reform has increased the price of publicly subsidised day-care relative to the price of own care. Economic theory of labour market participation postulates that the CFC reform would have a negative effect on labour market participation for the person most involved in childcare. The results show that the CFC reform has affected mothers' labour market participation negatively. The effects are much stronger for non-western immigrant mothers' than for native mothers. The results support the hypothesis that non-western immigrant mothers do react to changes in the relative prices of childcare and suggests that non-western female immigrants are quite responsive to changes in economic incentives.     

The Labour Market Effects of Increases in Social Insurance Premium: Evidence from Japan

Exploiting heterogeneous variations in labour cost increases due to Japan's 2003 social insurance premium reform as a natural experiment, we estimate the impacts of the increased social insurance premiums on employment, working hours and payroll costs. Using the difference‐in‐differences method with establishment fixed effects, we find that firms reduce the number of employees and increase average annual earnings from longer working hours in response to an exogenous increase in labour costs without productivity gains. Firms manage to pay for this increase in the average wage paid to the remaining workers by reducing the number of employees to keep total payroll costs unchanged. In contrast, since social insurance premiums are shared equally between employees and employers, firms pay the remaining half premiums that they are imposed with. Sub‐sample analyses show that firms adhering to a labour hoarding policy did fire many workers taking advantage of the 2003 reform. This may indicate that the reform provided a good excuse to cut employment in firms that had been forced to comply with a labour hoarding policy even in an over‐employment situation, which is more likely in sectors and countries where dismissals are rigorously regulated.     

Expatriate management practices of New Zealand business

In this paper data are presented from one of the first studies of expatriate management practices in New Zealand. The results reveal a number of consistencies with research reported from other countries as well as a number of apparent anomalies. In particular, New Zealand companies, like those in a number of other countries, appear to place a low value on those expatriate management practices which are linked with success (e.g., technical skills, period of incumbency and track record). Moreover, there was a low incidence of pre-departure training. However, negligible expatriate failure rates are recorded and most are attributed to ‘relational difficulties'.