Why firms adopt empowerment practices and how such practices affect firm performance? A transaction cost-exchange perspective

Complementing the current management literature's focus on the value-creation side of empowerment practices, this paper offers a transaction cost-exchange perspective to explain why firms adopt empowerment practices and how such practices affect firm performance. Specifically, we theorize how performance ambiguity and human asset specificity, two major characteristics of employee-employer exchange, shape firms' decisions to adopt empowerment practices, both independently and interactively. Our model also develops a contingency perspective of how empowerment practices affect firm performance by delineating the moderating role of empowerment practices in the relationship between employee-employer exchange characteristics and firm performance.     

Why do firms cross-list? International evidence from the US market

Using a modified international asset-pricing model we find strong evidence that publicly quoted firms cross-list when exhibiting strong performance in their domestic market and wish to take advantage of this situation. After cross-listing, this advantage disappears. Our sample consists of daily data for 1165 firms from 47 countries that have cross-listed on the US equity markets over the period 1976–2007. Within the context of this model we provide tests of the validity of the main hypotheses of capital market segmentation and investor protection, which provide explanations for equity cross-listing and investigate whether the nature of the market (regulated or unregulated) and the accompanying legal framework (common or civil law) can account for the impact of cross-listing on returns. Supporting the segmentation hypothesis, we report a decrease in local market risk after cross-listing. However, we find that the magnitude of such a decrease is diminishing over time as international markets become more integrated. On the other hand, we do not find any change in the global market risk after cross-listing, except for firms that cross-listed between 2001 and 2007, where their exposure to international market risk decreases. Furthermore, we find no evidence to support the investor protection hypothesis.     

Why do firms train apprentices? The net cost puzzle reconsidered

This paper analyses the impact of increasing the share of apprentices at the cost of the share of unskilled or semi-skilled employees on establishment performance. We use representative matched employer–employee panel data and correct for estimation biases. We show that an increase of the apprentice share in trade, commercial, craft or construction occupations has a positive impact on establishment performance. Establishments that increase the apprentice share in manufacturing occupations face a negative impact on performance, however. These results shed a new light on the stylised fact that apprenticeship training always leads to net costs during the apprenticeship period in Germany: we argue that establishments only hire apprentices at a cost if their skills are relatively specific, their retention rate is high and skilled employees are hard to hire.     

Why do firms set environmental performance goals?: Some evidence from organizational theory

Organizational goal setting is considered a critical strategic first step for corporations as it provides the basis for developing a roadmap for organizational activity as well as guidance for establishing the metrics to measure progress. Yet despite significant research interest in the environmental performance of corporations, environmental goal setting has received little attention. For example, it is not known why firms set environmental goals. Understanding this goal setting behavior is necessary to develop mechanisms to improve organizations' environmental management and performance. This study uses organizational change models of institutionalism, stakeholder management, natural selection, strategic choice and organizational learning to examine why firms set environmental performance goals. First, propositions related to environmental goal setting are developed from the models. The goal setting propositions use the goals of the US EPA's 33/50 programme, a national voluntary pollution prevention effort which aimed for a 33% reduction in releases by 1993 and a 50% reduction by 1995, as a basis for comparison to individual company goal setting. Next, the toxic release reduction goals of the 118 US corporations who set goals are analysed to determine which organizational change model propositions they support. All five models of organizational change examined here–institutionalism, stakeholder management, natural selection, strategic choice and organizational learning–show some promise in explaining corporate environmental goal setting. The combination of these models leads to the following depiction of the motivation for toxic release reduction. Firms will set goals to reduce toxic releases in an effort to respond to regulators and other factors in the institutional and stakeholder environment. This goal setting is likely to be enhanced if it can be more directly tied to economic benefits such as cost savings or if it is chosen by natural selection. This in turn will promote organizational learning with the end result of better environmental and economic performance. These findings provide some empirical evidence on which to base strategies for improving corporate environmental management. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.     

Empowered to do what? Why?

This article reviews an approach to leverage business process reengineering and employee empowerment for not only cycle time and cost reduction opportunities, but also a more exciting and expanded role for the employee. It promotes the reduction of simple, routine tasks, and refocusing the improved skill level of today's employees on higher value adding activities.     

Why do entrepreneurs open tech startups? A comparative study between Brazilian and foreign enterprises

International Entrepreneurship and Management Journal - This research identifies and compares the reasons that lead entrepreneurs to open a startup in Brazil or abroad along six factors:...     

Why do banks acquire non-banks?

This study focuses on the reasons for and the implications of banks?? decisions to acquire non-bank financial service firms (non-banks). The choice to acquire non-banks is driven by both external forces such as deregulation and regulatory capital and by internal forces such as a diversification strategy and efforts to enhance revenue and return to equity holders. We find that whereas the impact of acquiring non-banks increases their non-interest income, it also increases their non-interest expense. The net effect of choosing non-bank acquisitions lowers their subsequent return on assets, market value, and stock returns, as well as increasing their risk. However, the non-bank acquisitions do significantly increase the acquiring banks top executives?? subsequent compensation. We conclude that non-bank acquisitions are driven by both regulatory and strategic forces within the banking industry. However, such acquisitions manifest into agency problems.     

Where do manufacturing firms locate their headquarters?

Firms often separate headquarters' (HQ) functions physically from their production facilities and construct stand-alone HQs. By locating its HQ in a large, service oriented metro area away from its production facilities, a firm may be better able to outsource service functions in that local metro market and also to gather information about market conditions for their products. However if the firm locates the HQ away from its production activity, the coordination costs in managing plant activities are increased. In this paper, we empirically analyze the trade-off between these two considerations.     

Why do merger premiums vary across industries and over time?

We identify time-varying industry and macroeconomic factors that explain the observed variation in takeover premiums over time. Results support our hypotheses that some industry and economic factors can increase the growth prospects in an industry, which boosts expected synergies and/or demand for the target firm, and therefore increases the merger premiums. Merger premiums are higher when the target's corresponding industry experiences higher growth, has more research and development (a proxy for expected growth), and has less dispersion in performance among firms within the industry. Merger premiums are also positively related to capital liquidity, which can enhance economic growth and competition for target firms, and positively related to volatility in economic growth, which affect merger waves and the demand for target firms over time.     

The nature,consequences, and management of emotions in interfirm paradoxical relationships—A conceptual framework

We develop a theory of emotions in interfirm paradoxical relationships with a focus on coopetition and emotional ambivalence. We suggest that appraisals of paradoxical coopetition situations lead to the arousal of multiple, oppositely valenced emotions of various intensities, combinations of which correspond to different states of emotional ambivalence. We explicate how emotional ambivalence, through managers’ appraisal and emotional contagion processes becomes collective and how it impacts coopetition performance. We further theorize how the negative effect of ambivalence on performance could be minimized and the positive effect could be amplified through emotional capability. Our theory provides a nuanced understanding of the complex nature of emotions, and how they arise, manifest, and impact outcomes in interfirm paradoxical relationships.     

Why do we postpone annuity purchases?

This paper seeks to explain why annuity purchases are postponed to a later age. We consider an overlapping generations model with uncertain lifetime and two types of annuities. It is shown that, if the economy is dynamically inefficient, individuals demand annuities without delay. However, if it is efficient, annuity purchases are postponed. We also show that these results are robust to several extensions.     

Why in the world did they reshore? Examining small to medium-sized manufacturer decisions

Small to medium-sized enterprises (SMEs) are moving their manufacturing operations from low-cost countries back to high-cost countries, reversing earlier offshoring decisions. These reshoring decisions cannot be completely explained by changing location-related costs. To better understand why SMEs are reshoring, we evaluate nine product-line decisions – six to reshore and three to remain offshore – and codify four empirical observations. We then integrate these observations with relevant literature to develop and analyze a system dynamics model of SMEs' offshoring and reshoring decisions. Synthesizing the above, we articulate propositions regarding SMEs’ reshoring decisions. We conclude by discussing these decisions through the lens of the heuristic decision-making literature, providing managerial and policy implications.     

Skill and value perceptions: how do they affect entrepreneurial intentions?

This paper starts from Ajzen’s theory of planned behavior to test the role of different perceptions on the individual’s intention to become an entrepreneur. Support has most often been found for this theory in the field of entrepreneurship. However, little is yet known about the way in which perceptions are formed. It may be argued that social values regarding entrepreneurship, and also personal skill perceptions, would both affect entrepreneurial intentions. Our objective, therefore, is testing the existence and reach of both effects. Empirical analysis has been carried out on a sample of 249 university students. Structural equations models have been used to test our hypotheses. Results generally confirm them, since values and skills do play a significant role in explaining intention. However, the role of perceived skills seems to be more relevant. Implications may be derived in several areas, and especially regarding entrepreneurship education.     

Why adopt now? Multiple case studies and survey studies comparing small,medium and large firms

While a number of factors have been highlighted in the innovation adoption literature, little is known about whether different factors are related to innovation adoption in differently sized firms. We used preliminary case studies of small, medium and large firms to ground our hypotheses, which were then tested using a survey of 94 firms. We found that external stakeholder pressure and non-financial readiness were related to innovation adoption in SMEs; but that for large firms, adoption was related to the opportunity to innovate. It may be that the difficulties of adopting innovations, including both the financial cost and the effort involved, are too great for SMEs to overcome unless there is either a compelling need (external pressure) or enough in-house capability (non-financial readiness). This suggests that SMEs are more likely to have innovation “pushed” onto them while large firms are more likely to “pull” innovations when they have the opportunity.     

Why academics attend conferences? An extended career self-management framework

Academics, like many other professionals, such as accountants, lawyers, and medical doctors, are primarily responsible for their own ongoing professional development. One of the ways academics are expected to pursue their professional development is by attending conferences structured around their professional associations. However, professional development is a broad construct and we lack a framework for understanding the numerous, specific motivations and goals related to why professionals choose to attend these conferences. To address this issue, we extend King's (2004) career self-management framework in three ways: a) we apply and extend the positioning behaviors of King's model for the situation of academics, b) extend the antecedents of these positioning behaviors from a single to a multi-level framework (including individual, university, and national level antecedents), and c) discuss cross-level effects of these antecedents. Implications and guidance for HR practitioners and future research are also discussed.     

Why Cities? A Response

Why do cities exist? Geographers Allen Scott and Michael Storper recently put the question before the field of urban studies and provided a clear and concise answer in terms of economies of agglomeration and the urban land nexus. I argue that two other basic elements must be added to this duo: the spatial concentration of economic surplus by ruling classes and states and the creation of a built environment or urban landscape. In addition, I take issue with Scott and Storper's neglect of the problem of scale in urban theory and their overly tidy sense of what constitutes a scientific approach to complex phenomena like cities.     

Family-supportive organizations and supervisors: how do they influence employee outcomes and for whom?

In the present study, we examine a model which seeks to specify the process through which work-family supportive organizations and supervisors influence important organizational outcomes, including commitment and performance. Findings indicated that family-supportive organization perceptions are best conceptualized as influencing family-supportive supervisor behaviors, which in turn influence subordinate self-efficacy, subordinate affective commitment to the organization and subordinate perceptions of supervisor work effort. Subordinate self-efficacy and affective commitment were also both found to independently mediate the relationship between family-supportive supervisor behaviors and self-rated performance. Interestingly, the model functioned similarly for employees with and without dependent care responsibilities, indicating that work-family policies and support are important for all employees, regardless of their familial status. Theoretical and practical implications, limitations and future research directions are discussed.     

‘Types’ of private family firms: an exploratory conceptual and empirical analysis

Family firms that can leverage entrepreneurial experience and knowledge can shape local economic development. Practitioners concerned with fostering enterprise sustainability need to be aware that family firms cite contrasting goals, resource profiles and requirements. Family firms are not a homogeneous entity. The ‘targeting’ of support to ‘types’ of family firms could enable practitioners to satisfy their wealth creation and social inclusion objectives. To stimulate increased critical reflection, insights from agency and stewardship theories were drawn upon to illustrate six conceptualized ‘types’ of private firms based on company ownership and management structures as well as company objectives. Cross-sectional survey evidence was gathered from key informants in family firms in the UK. An agglomerative hierarchical QUICK CLUSTER analysis identified seven empirical ‘types’ of family firms. Four out of the six conceptualized ‘types’ were validated by the exploratory empirical taxonomy. Implications for policy-makers and practitioners as well as researchers are discussed.     

Why do some combinations perform better than others?

The evidence from the literature on forecast combination shows that combinations generally perform well. We discuss here how the accuracy and diversity of the methods being combined and the robustness of the combination rule can influence performance, and illustrate this by showing that a simple, robust combination of a subset of the nine methods used in the M4 competition’s best combination performs almost as well as that forecast, and is easier to implement. We screened out methods with low accuracy or highly correlated errors and combined the remaining methods using a trimmed mean. We also investigated the accuracy risk (the risk of a bad forecast), proposing two new accuracy measures for this purpose. Our trimmed mean and the trimmed mean of all nine methods both had lower accuracy risk than either the best combination in the M4 competition or the simple mean of the nine methods.