Should everybody be in services? The effect of servitization on manufacturing firm performance

The servitization of the manufacturing sector refers to the evolution of manufacturers' capabilities to offer services as complements to or substitutes for the goods that they produce. A vast literature has described these strategies and has shown that this phenomenon is widespread and growing in most developed economies. However, very little systematic evidence of the extent or consequences of servitization based on a comprehensive data set of firms exists. In this paper, we provide such evidence using exhaustive data for French manufacturing firms between 1997 and 2007. We find that the vast majority of French manufacturers sell services in addition to producing goods. The shift toward services is growing steadily but at a slow pace. We also estimate the impact of servitization on firm performance. Controlling for various sources of endogeneity bias, our most conservative results show that firms that start selling services increase their profitability by 0.4%, their employment by 2.1%, and their total sales by 0.6%. For small businesses, we also find a positive impact on the production of goods. We also uncover strong heterogeneity across manufacturing industries.     

The influence of organizational context on the managerial turnover–performance relationship

This study performs a comprehensive examination of organizational context in the relationship between managerial turnover and organizational performance. Using theoretical frameworks of human and social capital, we focus on the moderating roles of entity size, employment system, industry brand, and location. To test our hypotheses, we worked with the company records of a multinational fashion retail group with more than 4,000 stores grouped into eight different brands and 100,000 employees in more than 31 countries. To estimate the causal contextual effects of the relationship between voluntary managerial turnover and organizational performance, we designed a quasi-experiment using propensity score matching analysis. Our results show that the dysfunctional side of managerial turnover is significant for stores that are large, for stores managed under a primary employment system, for brands operating with higher levels of service orientation, and for countries with more restrictive employment protection legislation. We discuss the implications of these findings for practice and for future research.     

The roles of implementation and organizational culture in the HR–performance link

This article attempts to (1) explore the process by which a high-performance work system (HPWS) affects firm performance and (2) demonstrate the mediating role of implementation and organizational culture in the HPWS-performance link. The proposed model was tested using a sample of 243 Hong Kong and Taiwanese firms operating in Guangdong, China. The results from the present study supported the hypothesized mediation of implementation and organizational culture on the HR–performance relationship. This study offers important insights into the mediating mechanism of the HPWS-performance research. Implications for research and managerial practices are provided.     

Unhappy working with men? Workplace gender diversity and job-related well-being in Britain

This paper attempts to establish empirically the link between workplace gender diversity and employee job-related well-being in Britain. Using nationally representative linked employer–employee data and accounting for unobserved workplace heterogeneity the paper finds gender diversity to be associated with lower employee well-being for women. Workplace gender equality policies and practices are not found to ameliorate this finding.     

How does justice matter in achieving buyer–supplier relationship performance?

This study presents an analysis exploring how four types of justice (distributive, procedural, interpersonal, and informational) influence dyadic relationship performance in the buyer–supplier context. Underpinned by loose coupling theory, we build a mediating framework in which we propose that a high level of justice (or fairness) as mutually perceived by both parties drives buyer–supplier relationship performance through bolstered coupling links in mutual knowledge sharing, continuous commitment, and relationship investment. Our survey of 216 paired manufacturers (suppliers) and distributors (buyers) in China generally supports this argument, leading to a conclusion that justice is not a direct determinant of buyer–supplier performance but a critical conduit that nourishes mid-range coupling behaviors, which in turn promotes a successful relationship. Based on findings from this study, firms are encouraged to endorse all four kinds of justice in managing supply chain relationships. However, when constrained by resources, the recommendation for managers is to focus on achieving a high level of perceptual convergence on procedural justice and informational justice with the exchange partner, because mutual perceptions of procedural and informational justice have the strongest effects on coupling behaviors and buyer–supplier relationship performance.     

The overlooked variable in managing human resources of Iranian organizations: workforce diversity – some evidence

The primary aim of this paper is to examine the nature and extent of equality of opportunities and diversity policies in employment in the novel context of the Middle East – with a particular focus on Iran. HRM and diversity management specialists argue that equal opportunity practices help organizations capitalize on the benefits of a diverse workforce in terms of reducing turnover and absenteeism, attracting the best workers, increasing sales and marketing efforts, enhancing creativity and innovation, and improving decision making. While such benefits might be true in the context of developed countries, we are critical of their existence in the context of less developed nations. The findings, based on a qualitative study of six cases across two industries, indicate that, in contrast to existing theories, economic evaluations such as cost-minimization of the diverse work groups are the major driving forces behind adopting equal opportunity and diversity practices in employment. Specifically, mutuality of matching the needs of the worker with the needs of the manager is seen to be a major factor influencing the workers' impression towards equality of opportunities and diversity policies.     

Managerial and organizational learning in Hungarian–Western mixed management organizations

The radical changes in Eastern Europe which aim to transform these economies into market economies put the issue of organizational and individual adaptation at the centre of attention. Hungarian-Western mixed management organizations are regarded as effective tools for helping this adaptation process. This paper examines, through the example of five joint ventures, what practices are to be changed and what problems arise in terms of organizational and individual adaptation and learning. For the theoretical framework, the author draws together the insights of four types of learning approaches with structural contingency theory, strategy-structure and strategic choice theories, institutional theory of organizations and organizational change theories. The paper finds that there are changes in the organizational routines and procedures as a response to changes in the contingent factors. Westerners do not, however, necessarily play a positive role as agents of change in introducing strategic thinking among Hungarian managers. This problem relates to the phenomenon of new paternalism which also makes it easier for Westerners to cope with the problems of not being able to change the old philosophies of their Hungarian staff.     

Do external diversity practices boost focal firm performance? The case of supplier diversity

Based on the resource-based view, we propose that external diversity practices such as supplier diversity may affect firm performance. We find that the relationship between supplier diversity and short-term performance (i.e. productivity) is moderated by context such that firms in declining industries experience positive productivity effects while firms in munificent industries witness negative effects. For longer-term profitability (i.e. Tobin's q), we do not find support for a positive relationship between supplier diversity and long-term performance. However, positive supplier diversity effects emerge in munificent environments. Overall, in support of the strategic human resource management approach, we conclude that the effect of external supplier diversity on firm performance is contingent upon environmental munificence, which documented the necessity to include supplier diversity as a relevant component of a comprehensive diversity and equality management system.     

Managerial career success in Canadian organizations: is gender a determinant?

The purpose of this research is to examine which of the following approaches - human capital, family context, socio-economic origin, work investment and reward expectations and structural factors - can eliminate the influence of gender on career success of 3,060 Canadian managers. Taken individually, these different approaches did not counter the effect of gender on career success of managers. However, the use of an overall regression model containing all the approaches countered the effect of gender on the number and speed of promotion, but not on salary and hierarchical level. Finally, the results suggest that the career success of male and female managers is predicted by different variables.     

The relationship between the Beveridge–Nelson decomposition and other permanent–transitory decompositions that are popular in economics

The Beveridge–Nelson (BN) decomposition is a model-based method for decomposing time series into permanent and transitory components. When constructed from an ARIMA model, it is closely related to decompositions based on unobserved components (UC) models with random walk trends and covariance stationary cycles. The decomposition when extended to I(2)$I\left(2\right)$ models can also be related to non-model-based signal extraction filters such as the HP filter. We show that the BN decomposition provides information on the correlation between the permanent and transitory shocks in a certain class of UC models. The correlation between components is known to determine the smoothed estimates of components from UC models. The BN decomposition can also be used to evaluate the efficacy of alternative methods. We also demonstrate, contrary to popular belief, that the BN decomposition can produce smooth cycles if the reduced form forecasting model is appropriately specified.     

The joint effect of leader–member exchange and emotional intelligence on burnout and work performance in call centers in China

We examined the joint effect of LMX and emotional intelligence (EI) on burnout and work performance. Results based on data collected from 493 leader-member dyads in the call center of a large Chinese telecommunication company indicated that LMX was negatively related to burnout, yet was not significantly related to objective work performance. Moreover, we examined the effects of the four dimensions of EI (self-emotion appraisal, other-emotion appraisal, use of emotion, and regulation of emotion) on burnout and performance, and found that burnout mediated the link between use of emotion and work performance. Results also showed that LMX was associated with burnout and work performance more strongly for service workers with lower levels of self-emotion appraisal. More surprisingly, the link between LMX and work performance was stronger for service workers with higher levels of use of emotion.     

The foreign aid–foreign direct investment relationship in Africa: The mediating role of institutional quality and financial development

The interaction of foreign aid and foreign direct investment is an important issue for developing countries in Africa. I probe into the mediating role of institutional quality and financial development using a panel data set of 47 countries over the period 1996–2016. I find that the effectiveness of foreign aid in attracting foreign direct investment is greater in countries with better institutional quality and sound financial development. The implications for policy are outlined.     

Recognizing the benefits of diversity: When and how does diversity increase group performance?

Diversity does not only bring positive consequences. It has often been recognized that heterogeneity in teams can reduce intra-group cohesiveness, and that it can lead to conflicts and misunderstandings which, in turn, can lower employee satisfaction, citizenship behaviors and increase turnover. On the other hand, there is also evidence for performance-increasing effects of diversity because it can improve creativity and innovation through the team members' greater variety of perspectives. Little is known, however, about the conditions and the psychological mechanisms required for increasing group performance under diverse settings. Answers to research questions such as how and when diversity influences performance at work are still limited. The purpose of the paper is to provide theoretical answers to these questions by proposing a model of managing diversity which draws on social psychology theories. The model brings a new perspective by identifying the process of learning from one another's identity within a group. This process underlies two different levels of mechanisms (individual and group level). The model proposes that when these social psychological mechanisms are activated, diversity will lead to an increase in group performance. The model also suggests that collective identity is salient and when psychological safety climate are the psychological conditions that activate these mechanisms.     

Stale in the pulpit? Leader tenure and the relationship between market growth strategy and church performance

• Taking a strategic choice perspective, the current study examines leader tenure and the growth implications of pursuing a market penetration versus market development strategy in a church setting. Using cross-sectional time series regression analyses of 1415 church organizations over a period of 6 years, study findings demonstrate the influence of leader tenure on both financial and non-financial church performance, but provide minimal evidence supporting the argument that the selected market strategy matters to organizational performance outcomes in churches.

Copyright © 2010 John Wiley & Sons, Ltd.     

The evolution of the US family income–schooling relationship and educational selectivity

We estimate a dynamic model of schooling on two cohorts of the National Longitudinal Survey of Youth and find that, contrary to conventional wisdom, the effects of real (as opposed to relative) family income on education have practically vanished between the early 1980s and the early 2000s. After conditioning on a cognitive ability measure (AFQT), family background variables and unobserved heterogeneity (allowed to be correlated with observed characteristics), income effects vary substantially with age and have lost between 30% and 80% of their importance on age-specific grade progression probabilities. After conditioning on observed and unobserved characteristics, a $300,000 differential in family income generated more than 2 years of education in the early 1980s, but only 1 year in the early 2000s. Put differently, a $70,000 differential raised college participation by 10 percentage points in the early 1980s. In the early 2000s, a $330,000 income differential had the same impact. The effects of AFQT scores have lost about 50% of their magnitude but did not vanish. Over the same period, the relative importance of unobserved heterogeneity has expanded significantly, thereby pointing toward the emergence of a new form of educational selectivity reserving an increasing role to noncognitive abilities and/or preferences and a lesser role to cognitive ability and family income.     

Job rotation and employee performance – evidence from a longitudinal study in the financial services industry

Job rotation, i.e. a lateral transfer of an employee between jobs within a company, is frequently used as a means to develop employees, learn about their abilities as well as to motivate them. We investigate the determinants and performance effects of job rotation empirically by analyzing a large panel data-set covering the German banking and financial services sector. In particular, we study (i) how prior individual performance affects the propensity to rotate and (ii) how performance changes after the rotation. We find that while both, low- and high-performers rotate, lateral moves are more frequent among low performers. However, those having been rotated between jobs achieve a higher performance in subsequent years as compared to other non-rotating employees in a comparable position. Interestingly, this effect is driven by high performers, whereas for low performers, we find no significant relationship between job rotation and future performance. The results thus suggest that firms should focus their job rotation programs on high performers and should not expect that low performers achieve performance gains when being rotated to a different function.     

Stress and turnover intents in international organizations: social support and work–life balance as resources

Abstract

This study investigates whether work opportunities have an impact on stress and the related turnover intentions of employees working in intergovernmental international organizations (IOs). It contextualizes the job resources and demands model within IOs’ specific work conditions. The empirical test is based on original data from a survey administered in four major organizations of the United Nations system. Results demonstrate that social work opportunities and work–life balance are organizational levers reducing stress and willingness to quit for employees who are facing red tape or the stresses of being an expatriate. In this context, the relationships between these work opportunities and turnover intention are partially mediated by stress. Contextualized HR management propositions are made to help organizations coping with these management challenges.     

The Beveridge–Nelson decomposition in retrospect and prospect

Beveridge and Nelson [Beveridge, Stephen, Nelson, Charles R., 1981. A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the ‘business cycle’. Journal of Monetary Economics 7, 151–174] proposed that the long-run forecast is a measure of trend for time series such as GDP that do not follow a deterministic path in the long run. They showed that if the series is stationary in first differences, then the estimated trend is a random walk with drift that accounts for growth, and the cycle is stationary. In contrast to linear de-trending, the smoother of Hodrick and Prescott (1981) and Hodrick and Prescott [Hodrick, Robert, Prescott, Edward C., 1997. Post-war US business cycles: An empirical investigation. Journal of Money Credit and Banking 29 (1), 1–16] and the unobserved components model of Harvey, [Harvey, A.C., 1985. Trends and cycles in macroeconomic time series. Journal of Business and Economic Statistics 3, 216–227]. Watson [Watson, Mark W., 1986. Univariate detrending methods with stochastic trends Journal of Monetary Economics 18, 49–75] and Clark [Clark, Peter K., 1987. The cyclical component of US economic activity. The Quarterly Journal of Economics 102 (4), 797–814], the BN decomposition attributes most variation in GDP to trend shocks while the cycles are short and brief. Since each is an estimate of the transitory part of GDP that will die out, it seems natural to compare cycle measures by their ability to forecast future growth. The results presented here suggest that cycle measures contain little if any information beyond the short-term momentum captured by BN.     

Engaged and committed? The relationship between work engagement and commitment in professional service firms

Our study explores the relationship between employee engagement and foci-commitment of employees in professional service firms (PSFs). PSFs compete on the basis of their ability to encourage their employees to generate exceptional knowledge-based services and products, acting within and beyond the organizational boundaries. In order to achieve these outputs, the PSFs need to ensure that their professionals are engaged and committed. Drawing on 375 surveys from the employees of a global PSF, we compare two models to test the relationship between work engagement and multi-foci commitment: the organization, the client, the team and the profession. We first explore an overall positive effect of work engagement on commitment to all four foci. We then compare the overall impact to the independent effects of work engagement dimensions on four commitment foci. Our findings suggest that work engagement with three dimensions is a better-fitting model in the PSFs context.     

The relationship between newcomers’ emotional labor and service performance: the moderating roles of service training and mentoring functions

Abstract

Retaining newcomers and enhancing their service performance are critical issues for the human resource management and hospitality management fields. However, newcomers have just begun to learn the organizational display rules and often encounter more emotional problems than veteran employees. Thus, how organizations help the newcomers to manage their emotions in order to deliver better service is an important issue. Based on the Job Demands-Resources (JD-R) model, this study explores the relationship between newcomers’ emotional labor and service performance, and examines whether human resource practices such as service training and mentoring functions can moderate this association. We collected data from hospitality newcomers and their supervisors from 34 hotels. A total of 244 valid paired questionnaires were collected during two different time phases. The results of hierarchical regression analysis show that newcomers’ deep acting positively relates to service performance and service training can enhance this relationship. In addition, mentoring functions also differentially moderate the relationships between the two emotional labor strategies and service performance.