CORPORATE CULTURE: THE LAST FRONTIER OF CONTROL?[1]

The purpose of this paper is to examine the present U.S. use of the concept of ‘corporate culture’ using the sociology of Emile Durkheim as a conceptual framework. Durkheim was concerned with understanding where potential sources of morality might reside in a rapidly changing, increasingly differentiated society. Proponents of corporate culture do not rely specifically on Durkheim's work but essentially answer his question by suggesting that the corporation is the appropriate site for moral order. In this paper it is argued that the attempted manipulation of a corporation's culture is simply an addition to other forms of control which companies have tried to implement. More than other forms of control, however, corporate culture elicits sentiment and emotion, and contains possibilities to ensnare workers in a hegemonic system. On the other hand, strengthening corporate cultures in the U.S.A may also lead to increased worker homogenization and activism.     

TRANSACTION COSTS, CLANS AND CORPORATE CULTURE

For a long time it has been recognized that traditional bureaucratic modes of control are not very efficient in many highly uncertain, rapidly changing or otherwise troublesome situations. Inspired by transaction cost thinking different authors have suggested that clan form control or certain types of corporate cultures should do better in these circumstances. Among these, Ouchi (1980) and Wilkins and Ouchi (1983) stand clearly in the foreground and the transaction cost related clan developed by these authors is discussed at length in the article. Further we examine some empirical case studies indicating that other types of mechanisms than suggested by transaction cost reasoning seem to be involved. As a result we propose an extension of the clan concept to include three different kinds of clans: (1) the Economic-co-operative Clan, (2) the Social-integrative Clan, and (3) the Blood-kinship Clan. Next we discuss how clans or local cultures become established, including the possibilities for management to develop these kinds of patterns intentionally. Finally we set up some tentative hypotheses concerning the significance of‘economic’and ‘social’types of clans in ambiguous situations and the limits of the ideas of the transaction cost approach in explaining complex exchange issues in organizations.     

INSTITUTIONALISED JUSTIFICATION OF CORPORATE ACTION: INTERNATIONALISATION AND THE EU IN CORPORATE REPORTS

This paper provides an institutional analysis of the way a set of Finnish firms have used the concept of internationalisation and the EU in justifying major strategic decisions. They have used internationalisation, and in particular the then new possibility of Finland joining the EU, as an argument in support of radical change. An analysis of their annual reports reveals a number of institutional arguments which are strong because they are generally accepted, a priori, as being important not only to firms but indeed to Finland as a whole. In using institutional arguments firms are aligning their own interests with those of the country, and in so doing are able to justify radical changes in most parts of their own organisations. We are not claiming that Finnish firms should not react to the challenges which EU represents. Rather, we suggest that by using institutional arguments they are borrowing legitimacy from a wider public. The arguments used are typically very broad, invoking very general visions of the role of Finland in the EU. We call these arguments “easy rides” because, even if they are only partially explicated, it is generally assumed that they will become accepted without questioning by public and employees alike. Certain specific patterns of “easy rides” can be distinguished: i) The mobilisation of a “national mission”, ii) “Sacrifice now, reap the benefit later”, and iii) “Bigger is better”. The paper concludes with a methodological discussion about the difficulty of distinguishing between the technical/functional and the institutional arguments.     

THE EFFECT OF ORGANIZATIONAL CULTURE ON COMMUNICATION AND INFORMATION*

The aim of this article is to demonstrate the importance and utility of the notion of organizational culture for scholars and practitioners in the field of information studies. It presents a theoretical and empirical examination of the effects of culture on communication and information in organizations. First, the concepts of organizational culture, information and communication are briefly explored. Then a case study of the effects of organizational culture on communication and information is presented. In particular, we make a detailed examination of how attitudes to communication and information that had their roots in a dominant organizational culture were a strong influence on the demise of the company (which was ultimately acquired by a stronger firm).     

NGOS VS CIVIL SOCIETY: REFLECTIONS ON THE ILLIBERAL,THE ILLEGITIMATE AND THE UNACCOUNTABLE

This essay evaluates the nature of non‐governmental organisations and their relation to civil society, and examines appropriate criteria of legitimacy and accountability for NGOs. Unfortunately, many common understandings of NGOs embody fundamental confusions, and obscure the ways in which NGOs are inimical to individual liberty.     

MORALITY, ECONOMICS AND THE MARKET IN THE THOUGHT OF BENEDICT XVI

While not uncritical of aspects of modern capitalism, John Paul II's 1991 social encyclical, Centesimus Annus , directed official Catholic teaching towards more explicit affirmation of the moral potential of free markets, exchange and enterprise. Analysis of the pre-pontifical writings of Pope John Paul's successor, Benedict XVI, suggests that an equally nuanced approach to economics and the market from the most authoritative Catholic teaching authority is likely to continue.     

THE LIMITS TO EMPLOYEE INVOLVEMENT: PROFIT SHARING AND DISCLOSURE OF INFORMATION

This article seeks to exsplore the ways in which profit sharing is used by employers as a means of securing more employoee involvement. Although this is the main reason employeras have gilven for introducing profit sharing, and has been a principal objective of the government's recent initiative over profitrelated pay, the evidence suggests that little so far has been achieved. By examining employers’deeep seated concerns about some of the implications of profit sharing, particularly those that involve disclosure of information, this article argues that employers are reluctant to pursue such a strategy of involvement because of the risk of stimulating employees to demand greater influence in how the enterprise is managed. This prompts a consideration of the conceptual ambiguity surrounding the notion of employee involvement, and the article concludes that the contradicatory implications this entails for employers renders it largely impotent except at the level of rhetoric     

MANAGERIAL AND OWNERSHIP SUCCESSION AND CORPORATE RESTRUCTURING: THE CASE OF MANAGEMENT BUY-INS*

This paper addresses the effects on corporate restructuring of changing management and ownership. First, it synthesises a number of perspectives on corporate restructuring which involve managerial succession, voluntary restructuring, agency theory, incentives and entrepreneurship, to obtain insights into the relative impact of simultaneously changing either, neither or both management and ownership. Second, it uses case study evidence from management buy-ins to examine the effects of changing both management and ownership. the evidence suggests that whilst management may be adequately incentivized, problems may arise in respect of information asymmetries, difficulties in matching entrepreneurs to the context and monitoring by venture capitalists, and implementation of strategies.     

ESTIMATING FISCAL LIMITS: THE CASE OF GREECE

This paper uses Bayesian methods to estimate a real business cycle model that allows for interactions among fiscal policy instruments, the stochastic ‘fiscal limit’ and sovereign default. Using the particle filter to perform likelihood‐based inference, we estimate the full nonlinear model with post‐EMU data until 2010:Q4. We find that (i) the probability of default on Greek debt was in the range of 5–10% in 2010:Q4 and (ii) the 2011 surge in the Greek real interest rate is within model forecast bands. The results suggest that a nonlinear rational expectations environment can account for the Greek interest rate path. Copyright © 2014 John Wiley & Sons, Ltd.     

COMPLEXITY AND RANDOMNESS IN MATHEMATICS: PHILOSOPHICAL REFLECTIONS ON THE RELEVANCE FOR ECONOMIC MODELLING

Abstract Mathematics itself is a complex system. It exemplifies complexity at the level of structure, hierarchy and so on. There is also an interesting notion of complexity present in the meaning of mathematical ‘alphabets’. These are unique writing strategies of mathematics. Yet another marker of complexity lies in the process of applying mathematics to models. Using mathematics in modelling is a process of deciding what kinds of models to construct and what types of mathematics to use. Modelling can be seen as a decision‐making process where the scientists are the agents. However in choosing mathematical structures the scientist is not being optimally rational. In fact, fertile uses of mathematics in the sciences show a complicated use of mathematics that cannot be reduced to a method or to rational principles. This paper argues that the discourse of satisficing and bounded rationality well describes the process of choice and decision inherent in modelling.     

THE CORPORATE PERFORMANCE CONUNDRUM: A SYNTHESIS OF CONTEMPORARY VIEWS AND AN EXTENSION

What characterizes superior organizational performance? The question has always fascinated practitioners and academic researchers, and a string of recent bestsellers attests to the current prominence of performance as an organizational issue. This article brings together recent perspectives on performance and provides some further conclusions of its own based on analysis of a new database. Articles on 74 companies rated by Business Month as being one of the five best-managed companies during each of the 15 years in the 1972–86 timeframe were content analysed in an effort to isolate the key strategic and organizational factors associated with superior corporate performance. Results indicate that superior performance is associated with a broad product line accompanied by geographic diversity, an emphasis on planning coupled with sound financial controls and reporting systems, a high level of commitment to product and process innovation, investments in modernization of manufacturing facilities, a reputation for superior quality and customer service, and progressive human resource management practices. These findings are compared and contrasted with the conclusions of other recent studies and implications of the findings for management are discussed. Far from being the result of applying any particular formula, superior performance is found to require a diverse mix of competencies and values.     

WHEN OWNERSHIP STRUCTURE MATTERS: A REVIEW OF THE EFFECTS OF INVESTOR HORIZON ON CORPORATE POLICIES

This paper surveys the literature on the impact of investor horizon on corporate policies. While the desire to encourage long-term investor ownership is shared among managers, boards and policy makers, how greater long-term investor ownership benefits corporate decisions and ultimately firm performance is still under academic investigation. The contribution of this paper is twofold. The paper's first contribution is providing an up-to-date review of theoretical and empirical findings. This paper introduces the groups of long-term and short-term investors and the related classification methodologies and investor horizon proxies used to form them. It further reviews the determinants of an investor's horizon. Then, this paper organizes the literature on the impact of investor horizon on corporate policies around three main channels: the short-term pressure hypothesis, the monitoring hypothesis, and the catering hypothesis. The paper's second contribution is identifying six major challenges ahead that need to be addressed to improve the understanding of the impact of long-term (short-term) investor ownership on corporates policies. These challenges represent opportunities for further research.     

THE LIMITS OF REGULATORY REFORM IN THE EU

The regulatory impact assessment (RIA) may seem like a good mechanism for holding EU regulators to account as it requires them to compute costs and benefits of regulations before implementing them. However, it is too easy to use the RIAs to justify preconceived opinions. To achieve deregulation in the EU it is necessary to have a commitment to liberal markets and the concept of regulatory competition.     

THE TECHNO-ECONOMIC ECOLOGY OF CORPORATE STRATEGY

Abstract C orporate strategy is viewed as a set of guidelines or policy heuristics developed as a response to the contingencies faced by a firm. If the environment is rich in contingencies, as when it is dynamic, complex, and uncertain, the firm's corporate stratedgy is likely to be comprehensive or multi-faceted. If the environment is not rich in contingencies, as when the environment is stable or predictable, the strategy is likely to be quite limited in scope. Data from seventy-nine firms are consistent with this contingency view of corporate strategy. When the perceived importance of each of several activities is correlated with the perceived magnitudes of different forms of competition and technological change experienced by the firm, it is found that (i) the associations between these techno-economic environmental variables and the importance of these activities are generally positive; and (ii) there are striking differences, as between the techno-economic variables, in their relationships with the importance of four areas of stratedgic import that are secured by classifying these activities by function. The observed relationships are explained in terms of contingencies that the techno-economic variables may create for the firm. Plans for further research are briefly outlined.     

COPENHAGEN,CANCÚN AND THE LIMITS OF GLOBAL WELFARE ECONOMICS

The rise of a global welfare economics directed at the environmental challenges facing our planet represents a new policy phenomenon. This paper examines the most ambitious attempt so far to put such economics into practice via the Kyoto Protocol and more specifically the Clean Development Mechanism of the Protocol. The Copenhagen and Cancún climate change conferences have put an end to hopes of the Protocol serving as an effective tool in the mitigation of global warming. This failure of the new global welfare economics is the result of flawed principles, not just defective implementation.