Best fit,best practice,or stuck in the middle? The impact of unit ownership on unit HR performance in franchise systems

Franchising is an important form of entrepreneurial wealth creation in many retailing and service industries. Since Human Resource Management (HRM) is a critical factor in such industries, it is important to understand how franchisees—as semi-autonomous entrepreneurs—deal with HRM in their units and how this ultimately affects performance at the unit level. However, the very few studies linking franchisee HRM behaviors to performance have not included multi-unit franchising (MUF) as a type of unit ownership. Given the ever-increasing popularity of MUF and the unique characteristics of MUFs, this represents an important knowledge gap. We aim to fill this gap by building a theoretical framework on how the type of unit ownership affects unit HR performance within franchise systems. Building on agency, resource and entrepreneurship perspectives, we propose that units owned by single-unit franchisees (SUFs) and small MUFs (i.e., franchisees with a very small number of units) adopt a ‘best fit’ system regarding HRM, whereas company-owned units (COs) and units owned by larger MUFs (i.e., franchisees with a large number of units) typically adopt a ‘best practice’ system. Each system has its own advantages and disadvantages, which results in two contrasting propositions regarding their effects on unit performance. Moreover, we expect the units owned by medium-size MUFs to have the lowest performance since they are ‘stuck in the middle’ regarding their HRM system.     

Small talk,big impact – The influence of casual collegial advice on purchasing negotiations

The concept of behavioral supply management has attracted substantial research attention since its introduction about a decade ago. Nevertheless, it is still in a developmental stage, and the supply management field represents a unique and fertile ground for more behavioral research. In this paper, we demonstrate the uncharted potential of behavioral supply management with a special focus on casual advice-giving, which is broadly present in everyday organizational interactions. The study differentiates among three collegial advice types for buyers – to be honest, bluff, or lie – and investigates its influence on subsequent buyer–supplier negotiations. Scenario-based experiments show that advisees are prone to heed advice to be honest and to bluff, but not heed advice to lie in supplier negotiations. Further, we found that, regardless of the advice content, advisees seem to be indifferent to whether the advice is solicited or unsolicited and the advice-giver’s job function. Finding that even small talk can have a big impact, we conclude with a call for more behaviorally-focused empirical research and a broader agenda for behavioral supply management.     

The impact of inventory dynamics on long-term stock returns – An empirical investigation of U.S. manufacturing companies

This paper investigates the relationship between the inventory dynamics and long-term stock returns of a large panel of U.S. manufacturing firms over the time period from 1991 to 2010. We propose two measures of inventory dynamics: one metric to assess the fluctuations of quarterly inventories within the year and a second metric to quantify relative year-over-year inventory growth. Our results indicate that within-year inventory volatility (IV) and abnormal year-over-year inventory growth (ABI) are associated with abnormal stock returns. Both metrics cannot be entirely explained by common risk factors. We find that firms with high IV and low ABI have the best long-term stock returns, and that stock performance decreases monotonically with higher ABI values. Our results are robust to various control variables including size, book-to-market value, industry and prior performance. We therefore conclude that changes in inventory levels provide valuable insights into the risks and opportunities faced by a company.     

Value of design for competitiveness – Introduction to the special issue

Good design is of great value today. However, in the future it will be of even greater value. The commoditization of traditional manufacturing and the increasing influence of 3D printing is driving profit out of manufacturing and into creating or owning the underlying product design. Consequently design in not only an important topic for journals on design, but also in other fields such as technology innovation management – hence this special issue in Technovation. The special issue consists of six papers covering a variety of topics including management and modularity.     

The impact of Chicago’s small high school initiative

This project examines the effects of the introduction of new small high schools on student performance in the Chicago Public School (CPS) district. Specifically, we investigate whether students attending small high schools have better graduation/enrollment rates and achievement than similar students who attend regular CPS high schools. We show that students who choose to attend a small school are more disadvantaged on average, including having prior test scores that are about 0.2 standard deviations lower than their elementary school classmates. To address the selection problem, we use an instrumental variables strategy and compare students who live in the same neighborhoods but differ in their residential proximity to a small school. In this approach, one student is more likely to sign up for a small school than another statistically identical student because the small school is located closer to the student’s house and therefore the “cost” of attending the school is lower. The distance-to-small-school variable has strong predictive power to identify who attends a small school. We find that small schools students are substantially more likely to persist in school and eventually graduate. Nonetheless, there is no positive impact on student achievement as measured by test scores.     

The impact of Greek labour market regulation on temporary employment – evidence from a survey in Thessaly,Greece

This paper uses an original data-set for 186 workplaces in Thessaly (central Greece), to study consequences of Greece's strict employment protection law (EPL) and national minimum wage for temporary employment. We find higher temporary work contract rates among workplaces that pay low wages close to the minimum. We also find that EPL ‘matters’, in particular, managers who prefer temporary contracts because temporary workers are less protected definitely employ more. Our findings thus support the view that a firm's HRM decisions regarding internal versus external allocation of tasks are influenced by labour regulation.     

The impact of the economic cycle on fatal injuries. The case of UK 1971–2007

The aim of this paper is to investigate the effect of the economic cycle on workplace accidents. In particular, the effect of the usual factors of the economic cycle (GDP per capita, Unemployment) is examined along with the effect of working hours (to account for flexible employment) on fatal injuries (to exclude the effect of under-reporting data) for the period 1971?C2007 in UK. Detailed multiple regression analysis is applied, which indicates a controversial and inelastic relation of GDP per capita (negative) and unemployment rate (positive), but also an elastic relation of working hours (positive) to fatal injuries. Further research in data of various countries is proposed before arriving to certain conclusions.     

Capital flows and the boom–bust cycle: The case of Estonia

During 2000–2007, Estonia was among the fastest growing emerging market economies, but in late-2008 entered a deep recession. This paper examines shocks, institutions, and policies that have made Estonia's boom–bust cycle so severe. It finds that an open capital account, the prospect for EU entry, and the currency board facilitated massive capital inflows, which led to credit and real estate booms. In late-2008 a domestic slowdown was greatly amplified by the global financial and economic crisis. To resume sustainable growth, the country will need to regain competitiveness and rebalance resources to exports. Estonia's experience underscores the importance for other emerging market economies to retain some flexibility in their macroeconomic frameworks and approach capital account liberalization cautiously.     

The impact of fertility policy on the actuarial balance of China’s urban employee basic medical insurance fund–The selective two-child policy vs. the universal two-child policy

This study aims to investigate the impact of the change in China’s fertility policy from its selective two-child policy to a universal two-child policy on the balance of its Urban Employee Basic Medical Insurance (UEBMI) fund. This study uses data obtained from the 2013 and 2015 China General Society Survey to estimate the Poisson model, and then adopts a bisexual Leslie matrix, estimated adjusted coefficients, and an actuarial model to forecast the current balance and accumulated balance of the UEBMI fund under each of the selective two-child and universal two-child policies up to the year 2060. The primary finding of this study is that this change in fertility policy results in the current balance of the UEBMI fund registering a lower deficit and eventually a surplus. Although this policy change cannot prevent the UEBMI from facing bankruptcy, the deficit in terms of the accumulated balance of the UEBMI fund will decline.     

The importance of design for firms׳ competitiveness: A review of the literature

Scholars dedicated increasing attention towards appreciating how design has changed individuals? perception of new products, firms? understanding and formulation of strategy, or other relevant actors? approach to innovation and technology management. By emphasising the importance of design for the definition of consumers? needs, the restructuring of firms? organisational structures and strategies, and the evolution of firms? value creation processes, this review paper identifies relevant research gaps and questions that would benefit from future scholarly attention. In particular, it is suggested that such effort should address the analysis of how design consumption can help better comprehend consumers? needs; what are the implications of design thinking on the skill sets of design professionals; the organisational structure of firms, including the reconfiguration of other business functions, and their strategy; and whether and how design thinking can shape firms? value creation processes and contribute to the formalisation of design tasks.     

Does citizenship matter? The economic impact of naturalizations in Germany

This paper analyses whether citizenship acquisition affects the labour market performance of immigrants in Germany. The study uses actual micro data from the employment sample of the Institute for Employment Research, which covers more than 80% of the entire labour force in Germany. The econometric analysis has been carried out using panel data techniques, which allow to disentangle the effects of self-selection and legal impact of citizenship acquisition. Estimates from a pooled OLS specification suggest the existence of a wage premium for naturalized immigrants of both genders. Fixed effects estimates for males show an increased wage growth in the years following naturalization, consistent with the argument that naturalization increases the labour market opportunities of immigrants. Results for female employees indicate that the wage premium of naturalized women is solely the result of a positive self-selection process.     

Communication and transparency – The example of the ECB

Communication by central banks has two goals to fulfill: One is to be accountable and transparent to the public for its policy. The other is to make monetary policy by guiding expectations as effective as possible. Diversity of views inside the bank is instrumental for appropriate monetary policy decisions, but creates a tremendous challenge for communication. Central banks dispose of a variety of communication tools. Forward guidance seen as a revolution in central banks׳ communication raises new questions. Not maximum, but optimal transparency should be the final stage to strive for.     

The impact of organizational and leader–member support on expatriate commitment

Using data from expatriates at MNC subsidiaries in China, this paper investigates the relationships between parent company and local subsidiary perceived organizational support (POS), leader–member exchange (LMX) and affective commitment of expatriates. The study examines the moderating effect of LMX in the relationships between both parent company and local subsidiary POS and affective commitment. Results support the relationships between both parent company and local subsidiary POS, LMX and the expatriate affective commitment, and the moderating effect of LMX in the relationships between parent company POS and affective commitment.     

The impact of appointment-based CEO connectedness on firms’ performance and profitability

This paper investigates whether the performance variables of newly added intangible capital elements give the appointment relationship a deeper impact on the firms’ performance and profitability. We document that after correcting for endogeneity, when considering intangible capital, Total Q is a better proxy than Tobin’s Q for explaining the effect of appointment-based CEO connectedness on firm performance and profitability. Furthermore, we show that the influence of directors on company performance and profitability is more important than that of executives or managers. We also find that the stronger the appointment relationship, the worse the company’s performance and profitability. We further provide a series of alternative interpretations and robustness test evidence showing that intangible capital is more important for high technology and internet firms than industrial firms. Further, we find that the greater the number of executives appointed by the CEO, the better the firm’s research and development, but the worse the firm’s investment policy.     

The impact of opportunity connectedness on innovation in SMEs’ foreign-market relationships

Small and medium-sized enterprises (SMEs) use of business networks has grown significantly during the last decades, partly due to increasingly complex innovation processes. This article investigates how different kinds of networks, depending on location, contextualize innovation in specific foreign market business relationships. Building on internationalization, network, and innovation research we develop a model that views opportunity connectedness in specific host-markets, home-markets, and other international markets as prerequisites to innovative collaboration and innovation outcomes in foreign business relationships. The results of our linear structural relations (LISREL) analysis of Swedish SMEs provide empirical evidence that the effect of opportunity connectedness on innovation outcomes in foreign business relationships is mediated by the level of innovative collaboration. These results indicate that SMEs need a relatively higher level of innovative collaboration in their partnerships with foreign market customers to convert opportunities conceived in home- and international- market networks into innovative outcomes in comparison to opportunities conceived in host-market networks. This finding implies that as opportunities become increasingly contextually remote, the importance of collaborative business relationships increases. By showing these results, the study contributes to research in the international small-business domain that seeks to identify important prerequisites of SME innovation.     

The organizational infrastructure of continuous improvement – an empirical analysis

To pursue constant incremental improvements, firms must develop the dynamic capability of continuous improvement (CI). Research suggests that an organizational infrastructure is necessary to sustain CI capability. Although there have been some attempts to delineate a comprehensive model for CI infrastructure, empirical investigation is still underdeveloped. The present study explores key dimensions of the organizational infrastructure—strategic alignment, teamwork for problem solving, and goals management systems. We analyze their effects on CI capability by using a database of 266 firms. We identify the variables that underlie the organizational infrastructure through exploratory and confirmatory factor analysis of measurement items, and then we perform a structural equation model linking the infrastructure to CI capability. Our findings suggest that strategic alignment and teamwork for problem solving affect CI capability. This study contributes to the operationalization of the organizational infrastructure and to the understanding of how it affects CI capability in operations management contexts.     

How do environmental regulations influence resource misallocation in China? The role of investment flows

In recent years, the Chinese government has implemented numerous regulations to address environmental deterioration. Several studies have examined the effect of environmental regulation policies on China's economic performance. However, whether environmental regulations can alleviate China's resource misallocation problem—a critical issue in transitional economies—remains unclear. This study fills this gap in the literature by employing the difference-in-differences method to examine how environmental regulations affect resource misallocation. We found that stringent environmental regulations have reduced the extent of resource misallocation in China, with resource reallocation being the driving force behind this improvement. The emission reduction mandate reduces investment inflows and hinders firms' entry into regions with low total factor productivity, while directing the flow of resources to highly productive areas.     

The impact of digitalization on the future of the PSM function managing purchasing and innovation in new product development – Evidence from a Delphi study

Bringing innovative products to markets is essential for companies, especially in competitive environments. One of the driving forces for successful new product development (NPD) is the inclusion of the functions that form part of the process such as purchasing and supply management (PSM). While extensive research has been conducted on the role of procurement in promoting innovation, insufficient research on the future of the PSM function in NPD has been conducted. This study addresses this gap, considering increasing digitalization and its effect on the future PSM function managing purchasing and innovation. To explore the future of PSM in NPD, a Delphi survey with 91 experts from industry, academia, and politics or associations was performed. The results reveal that digitalization will influence the PSM function in NPD across different time horizons and forms depending on the subject area. While in many areas, an interplay between digital technologies and human PSM professionals is expected, in certain domains the PSM function is likely to lose added value compared to digital technologies. Furthermore, digitalization is expected to be a potential enabler of a stronger key innovation role for PSM in NPD but to also introduce new requirements such as data science capabilities.     

The impact of innovation training on successful outcomes in public–private partnerships

Public–private partnerships (PPPs) are increasingly seen as a way of innovating the production and management of public services. However, the question of what drives innovation in partnerships has so far received only limited attention. Drawing on network governance and collaborative innovation literature, this article presents the findings from a survey among 260 Danish PPPs. The study shows that while innovation training has a significant effect on achieving innovation in PPPs, factors such as trust and institutional support only affect some innovation types. The findings demonstrate the importance of individual innovation skills and a differentiated understanding of innovation outcomes in PPPs.     

The impact of spirituality at work on workers’ attitudes and individual performance

This research aims to contribute to a better understanding of the concept of spirituality at work, based on Maslow’s writings, introducing a new dimension, emotional balance and inner peace (EBIP) to enrich the traditional conceptualizations and a new mediator, job resourcefulness, in its relationship with performance. The final goal is to investigate how spirituality at work influences workers’ attitudes. The proposed research model was tested using structural equation modeling and 273 valid questionnaires were collected. According to the literature review and to the concept of spirituality, we concluded that there is room for the new dimension (EBIP), and we found that this new dimension influences job resourcefulness and affective commitment. Job resourcefulness has a strong impact on individual performance and receives the impacts of spirituality at work and affective commitment. Job resourcefulness appears to be a better mediator in the relationship between SW and individual performance.