Collaboration,motivation, and the size of organizations

We present an analytical model of an organization that offers operational drivers of limits on team size. The model trades off benefits from collaborative problem solving against the disadvantages of diminishing motivation when groups get large. Collaboration is represented as parallel employee activity combined with frequent sharing of partial information, with a resulting superlinear performance increase over team size. Motivation is modeled by team members periodically setting an effort level either to contribute to the best of their ability or to “cruise”; at the minimum level not recognizable as shirking. Each individual decision is limited by bounded rationality based on team rewards, the time horizon of team interaction, and individual expectations about colleagues’ behavior. The decision collapses to a simple “barrier rule”;. Work hard when a certain “barrier percentage”; of team members work hard, and otherwise shirk. The influence of team size on this barrier percentage depends on the extent of benefits from collaboration: As long as performance increases quadratically with team size, the increased benefits resulting from collaboration exactly balance the temptation to shirk, with the barrier percentage approaching a fixed limit for large team sizes. As soon as the performance increase slows to anything less than quadratic, shirking eventually sets in and limits the possible size of the team. This implies that cooperation is sustainable in large organizational units, provided the problem‐solving processes used are powerful enough to ensure sufficient performance increases. Thus, effective problem‐solving methods are of double value, improving direct productivity and mitigating the social dilemma from team production. A manager should enlarge his or her organization up to the minimum of the limit set by the cooperation barrier and the exogenous performance limit.     

Economic crises in the thirties and today

In the context of the ongoing financial and economic crisis reference is frequently made to the Great Depression of the 1930s and fears are voiced that we may have embarked on a similar path. This article looks at the conditions prevailing back then and compares them with the present economic environment. From this some conclusions are drawn as to the likelihood of a recurrence of the disaster.     

Die Liberalisierung des Wohlfahrtsstaates und ihre Herausforderungen für das Pflegemanagement der Zukunft

Heilberufe - Die Liberalisierung des Wohlfahrtsstaates, ausgelöst durch den zunehmend globali sierten Wettbewerb, wird in der Zukunft auch wesentliche Auswirkungen auf die Anforderungen an die...     

Political Risk and Export Promotion: Evidence from Germany

Political risk represents an important hidden transaction cost that reduces international trade. This paper investigates the claim that public export credit guarantees mitigate this friction to trade flows and hence promote exports. We employ an empirical trade gravity model, where we explicitly control for political risk in the importing country in order to evaluate the effect of export guarantees. Using a novel data set on guarantees, we estimate the effect of guarantees in a static and dynamic panel model. We find a statistically and economically significant positive effect of public export guarantees on exports which indicates that export promotion is indeed effective. Furthermore, political risk turns out to be an important obstacle for exports and hence should be taken into account in any empirical model of trade.     

Welfare effects of the euro cash changeover

Using merged data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel (SOEP), this paper applies a parametric difference-in-differences approach to assess the real effects of the introduction of the euro on subjective well-being. A complementary nonparametric approach is also used to analyze the impact of difficulties with the new currency on well-being. The results indicate a loss in well-being associated with the introduction of the new currency, with the predicted probability that a person is contented with his/her household income diminishing by 9.7 percentage points. We calculate a compensating income variation of approximately one-third. That is, an increase in post-government household income of more than 30% is needed to compensate for the clear decline in well-being. The reasons for the negative impact are threefold. First, perceived inflation overestimates the real increase in prices resulting in suboptimal consumption decisions. Second, money illusion causes a false assessment of the budget constraint. Third, individuals have to bear the costs from the conversion and the adjustment to the new currency. Moreover, it is thought that losses are higher for persons who have difficulties with the new currency. However, the impact of difficulties in using and converting the new currency is rather small, and the initial problems were overcome within one year of the introduction of euro cash.     

Energiesparen: Warum wird Beratung gefördert?

Home renovation is generally asserted to be a highly effective means to increase residential energy efficiency and thereby contribute to climate protection from reduced energy consumption. As part of a larger package of measures in the residential sector, the German government is consequently providing financial support for home audits from recognized energy experts who provide advice on retrofitting options. To date, the question concerning the effectiveness these home audits has largely escaped empirical scrutiny. The present paper fills this void by providing evidence for considerable free-rider effects within the home audit program, yielding serious reservations with respect to both the effectiveness of the program and its fiscal costs. Moreover, given the substantial differences between the gross- and net effects of home audits that are revealed by this analysis, the program’s contribution to climate protection and thereby the central justification for the associated government outlays is called into question. The social benefit of the program emerges only from those retrofits that would not have been undertaken in the absence of the home audit.     

Investigating the formation of service supply chains

Existing research on service supply chains assumes the existence of an established and mature chain. Empirical or conceptual insights into service supply chain formation are therefore limited. The initial formation of a service supply chain, however, is suspected to determine its future performance. It is therefore of significant academic and managerial value to understand how and why service supply chains are formed, and how this process is coordinated. Drawing on an exploratory case study set in the management consulting industry, the inductive theory-building process underlying this study culminates in propositions and a conceptual model that provides a distinct understanding of service supply chain formation and the coordination mechanisms utilized within each stage. This study contributes to the service science, service supply chains, and service sourcing literatures; outlines managerial implications; and proposes future research directions.     

Consumer perceptions of higher and lower-level designed store environments

The role and influence of esthetics in the consumption of store environments remains poorly understood. Little is known about how esthetics propose substantial or adjunctive roles in consumers’ store experiences. The aim of this paper is to examine consumer perceptions of store design-architecture in high and low-level design contexts. Building on the esthetics, and environmental psychology literatures, our findings confirm consumers’ determinations of perceptual differences in the esthetic content contained in presented store environmental stimuli. Latent means comparisons confirm consumers’ perceptions of the presence of a high-level design in one fast-fashion store with a low-level design of a second store of the same retailer using a Confirmatory Factor Analysis. The results demonstrate the reliability and validity of the proposed constructs in confirming the presence of higher and low-levels of design. This research, thus, expands on the extant number of store specification and response constructs and prospectively opens up new lines of store environments research.     

On the Relationship of Stewardship and Valuation—An Analytical Viewpoint

Agency theoretical literature in accounting has frequently stressed possible difficulties in pursuing stewardship and valuation usefulness simultaneously. However, recent empirical evidence has revealed a significantly positive correlation between the two objectives. These empirical findings provide support for the IASB/FASB's decision to encompass stewardship in valuation usefulness in their revised conceptual framework. The objective of our paper is to identify factors influencing the stewardship/valuation relationship by using an analytical model. In a Linear Exponential Normal (LEN) setting we focus on the characteristics of an accounting system, in particular relevance, freedom from error and freedom from bias, the latter two according to IASB/FASB being components of representational faithfulness. We show that accounting quality, comprising relevance and freedom from error, has similar effects on valuation and stewardship usefulness. However, we identify conditions under which there is no perfect mapping from stewardship to valuation. Moreover, discretion in the accounting system has different consequences for both objectives as it does not affect valuation usefulness while it entails potentially negative effects on stewardship. Thus, we raise doubts in relation to the standard‐setters' view that stewardship is automatically met by a focus on valuation usefulness.     

Können Fiskalräte die europäische Schuldenkrise lösen?

This article analyses the role of independent fiscal institutions (IFIs) in dealing with the debt crisis in Europe. IFIs take the role of a fiscal watchdog by producing their own (or assessing the government’s) budget and macroeconomic forecast and have recently spread across many industrialized countries. Empirical evidence suggests that IFIs can contribute to solid public finances in conjunction with fiscal rules if these institutions are truly independent, have a clear mandate and access to sufficient resources, as well as a strong media impact.