Creating a company‐wide,on‐line,performance management system: A case study at TRW Inc.

When new company leadership took the helm in 2001, TRW sought to create systems that supported what was, in essence, a cultural revolution—a new culture driven by six company‐wide “Behaviors.” Impeding this revolution, however, were the countless systems and methods for evaluating and managing the development of TRW's nearly 100,000 employees. The senior Management Committee challenged TRW's human resources function to create a common, on‐line, company‐wide system that supports performance appraisal, professional development, and succession management. A cross‐disciplinary and cross‐business team led by the Director of Leadership Development created a uniform Web‐based system in four short months. This system is now in place company‐wide in 36 countries on five continents. The approach we took and the success we have enjoyed can be replicated by other organizations seeking a uniform and effective way to evaluate and develop employees. © 2002 Wiley Periodicals, Inc.     

Look before you leap: The Franchise route to self-employment

Aspiring entrepreneurs choosing to become franchisees certainly expect to improve their chances of survival during the turbulent early years of business startup and operation. This study examines survival patterns among franchise and nonfranchise African American-owned small firms started between 1984 and 1987. Survival through late 1991 was tracked for these firms as well as for comparison groups of whiteowned firms. The independent business startups-whether black- or white-owned-were found to have better survival prospects than did the franchises.     

Optimal automobile emission control: A household utility model

Traditionally, benefit-cost studies value mortality changes using equivalent capital approaches. That is, the social benefit of decreased mortality is related to an increased income stream. A utility model which accounts for mortality changes as changes in individual or household risks is proposed, it is then employed to analyze automotive emission control. The utility model selects optimal national emission control levels for individual households by maximizing a combination of risk and consumption. The social optimum is taken as the median levels of all households. The control levels for three pollutants are more stringent than those calculated by a more typical benefit-cost method but less strict than the present statutory standards.

The data has been taken for several sources. The risk data is from an epidemiology study that associates age specific mortality rates with various factors including pollution levels. Economic benefits are derived from several estimates of the association of pollution with vegetation and material damages and soiling. Automobile control costs are from EPA and auto company estimates.     

Interest rates and exchange rates: Some new empirical results

This paper presents indirect evidence on the behavior on the real interest rate by studying the correlations between changes in nominal interest rates and in exchange rates. These correlations are examined both before and after October 6, 1979. The empirical evidence supports the views that monetary shocks affect the real rate and that the change in Fed monetary policy on October 6 led to greater variation in the real rate.     

Observable preferences for public goods

This paper discusses the circumstances under which it is possible to use the market or aggregate demand functions generated from individual utility maximization to obtain consumers' preferences for certain classes of public goods, and thus obtain the information needed to satisfy the Samuelsonian efficiency conditions for these public goods. The restrictions on the preferences of all consumers which are sufficient to use the aggregate demand function are: (i) there exists a price vector such that the level of public good provisiion is valueless, and (ii) the marginal rate of substitution of the private good price for the level of public good provision is independent of income.     

Estimating the Effect of Individual Time Preferences on the Use of Disease Screening

Economists have long been interested in evaluating the role that time preferences play in a wide range of economic decisions. In the health care arena, time preferences may be an especially important determinant of many decisions—particularly the use of preventative health care. One potential barrier to patient adoption of preventative screening regimens is that they impose current costs on consumers with the hope of lower costs in the future. Using data from a national survey, we jointly estimate latent discount rate and preventative service demand models using a limited information maximum likelihood estimator (iterated M‐estimator). The results suggest that discount rates are generally inversely related to the likelihood of most screening tests.     

Why don’t households see the light?: Explaining the diffusion of compact fluorescent lamps

Starting in 2009 the EU ban on the sale of incandescent bulbs will force households to purchase energy-saving compact fluorescent lamps (CFLs). The impact of the ban on consumers will depend on the nature of current barriers to the use of CFLs. This paper employs a Double-Hurdle model to identify distinct barriers to household consideration of CFLs and to the subsequent intensity of adoption using a large survey of German households. Barriers to CFL consideration are found to be low for all households, except those with very low incomes. Barriers to CFL consideration are, however, strongly linked to the residential characteristics of low-income households like small size and to the lack of household knowledge of energy consumption. CFLs use will increase after the ban mainly through a rise in the intensity of adoption. But the ban will be costly to consumers because the range of applications where households chose to employ CFLs is limited, particularly for high income households.     

Do investment banks listen to their own analysts?

To what extent conflicts of interest affect the investment value of sell-side analyst research is an ongoing debate. We approach this issue from a new direction by investigating how asset-management divisions of investment banks use stock recommendations issued by their own analysts. Based on holdings changes around initiations, upgrades, and downgrades from 1993 to 2003, we find that these bank-affiliated investors follow recommendations from sell-side analysts in general, increasing (decreasing) their relative holdings following positive (negative) recommendations. More importantly, these investors respond more strongly to recommendations issued by their own analysts than to those issued by analysts affiliated with other banks, especially for recommendations on small and low-analyst-coverage firms. Thus, we find that investment banks “eat their own cooking,” showing that these presumably sophisticated institutional investors view sell-side recommendations as having investment value, particularly when the recommendations come from their own analysts.