Communication Flows in International Product Innovation Teams

Recently, we have witnessed a strong growth in the internationalization of many firms' product development activities. However, the lack of attention devoted by scientific research to the management of international innovation contrasts sharply with the importance attached to it as a cornerstone of international business success. Although several empirical studies and normative theories have specified the communication requirements in innovation teams, an empirically based insight is definitely needed on the communication requirements and requirements that prevail in the complex context of international innovation teams, in which the participants are located in different company units, countries, and cultures. This article addresses the following research question: viewing international innovation as an interfunctional activity, what are the communication requirements an international innovation team is facing, and what are the communication capabilities (interface mechanisms) that may be adopted to initiate, develop, and launch the new product effectively and efficiently? An extensive case study research project was designed to develop a comprehensive theoretical framework. Over a two year time period, the research team has investigated selected innovation projects in four European multinational corporations. The analysis of the case study data suggests five requirements that determine the effectiveness and efficiency of communication in international product development teams: network transparency, knowledge codification, knowledge credibility, communication cost, secrecy. To cope with these communication requirements, organizations may create firm level capabilities (parallel structures, cross‐functional and inter‐unit climate, communication infrastructure, goal congruence) and team level capabilities (core team, team leadership, formalization, procedural justice). The evidence from the in‐depth case study research indicates that these mechanisms provide a parsimonious and powerful approach to address the communication requirements in international product innovation teams. After the information processing framework proposed by Tushman and Nadler [124], the adoption of these mechanisms is expected to improve innovation effectiveness. This holds important consequences for the management of international product innovation projects. First, the innovating firm must balance centralization and decentralization, employ formal as well as informal strategies, and integrate ad‐hoc and permanent strategies. Second, it highlights the critical role of the project leader. Given the fact that companies often select the most available person, rather than the best person for the job, the allocation of light weight project leaders may create heavyweight problems in international teams. Third, following the argument in favor of procedural justice, the absence of involvement may severely hinder cross‐functional commitment to international innovation projects. Fourth, the innovating firm must also actively manage the communication flows with external parties. Failure to do so may result in flawed specifications, and a limited understanding about product design and market strategies.     

The effect of temporary help jobs on employment volatility

This study investigates the impact of temporary agency employment on employment volatility outside the sector. Making use of econometric volatility models, we find that enhancing numerical flexibility by temporary agency employment decreases employment volatility of incumbent workers. However, not all subgroups are benefitting equally. While prime‐age permanent workers gain considerably from higher flexibility, young workers, migrants and low‐skilled workers not only are overrepresented among the temps but also do not gain when employed outside the sector.     

The global threat of deflation calls for swift interest rate cuts in Europe

Conclusions Given the serious crisis in Asia and evidence of its spreading to other developing and transition countries, the attempt by German economic policymakers to achieve faster economic growth and higher employment almost exclusively by means of successes on export markets appears likely to fail sooner than had been expected by the DIW⁵. The significance of domestic demand has been systematically underestimated in recent years. With the help of extremely low pay settlements, the D-Mark was devalued in real terms; this promoted exports, but at the same time led to growth losses in private consumption and investment that more than offset the gains in exports. On top of this German fiscal policy—as documented in the following report in this issue—has weakened domestic demand and investment activity. This strategy might have worked if a symmetrically oriented monetary policy had reacted to the deflationary trend inherent in pay settlements and the fiscal-policy stance by swiftly and significantly reducing interest rates. This did not happen. It was therefore inevitable that the crisis in sales markets made its full effects felt on economic growth. More seriously still, if cost deflation in Germany is not brought to an end in the coming year by a return to productivity-oriented wage settlements, it will pose a major threat to the European Monetary Union.⁶ If Germany pursues a beggar-thyneighbour policy in a Europe without exchange rates, this can only result in deflation and a downward economic spiral.⁷     

Birds,Birds, Birds: Co-Worker Similarity,Workplace Diversity and Job Switches

We investigate how the demographic composition of the workforce along the sex, nationality, education, age and tenure dimensions affects job switches. Fitting duration models for workers’ job-to-job turnover rate that control for workplace fixed effects in a representative sample of large manufacturing plants in Germany during 1975–2016, we find that larger co-worker similarity in all five dimensions substantially depresses job-to-job moves, whereas workplace diversity is of limited importance. In line with conventional wisdom, which has that birds of a feather flock together, our interpretation of the results is that workers prefer having co-workers of their kind and place less value on diverse workplaces.     

Reassessing the foreign ownership wage premium in Germany

This paper evaluates the effect of foreign takeover on wages of workers in German establishments, using rich linked employer–employee data from 2003 to 2014. To identify a causal effect of foreign takeover, we combine propensity-score matching with a difference-in-difference estimator. We find that a takeover by a foreign investor leads to a wage premium of 4.0 log points in the year after ownership change, which further increases to 6.3 log points 3 years after acquisition. The wage premium is largest for high-skilled workers, which is consistent with three theoretical arguments, namely rent appropriation by managers, technology protection and training on new technology. We also show that the wage premium does not pick up an exporter effect due to a platform investment of the foreign owner, that it takes about 4 years before it fully develops, that it does not vanish after foreign divestment and that the wage increase is specific to foreign acquisition instead of ownership change per se.     

Erneuerbare Energien in W?rmenetzen – eine realistische Perspektive?

The heating sector holds high potentials for cutting CO₂ emissions by using renewable energy. These potentials can be tapped either by substituting fossil fuels in individual heating units or by using renewable energy in district heating networks, which may be more efficient. This paper asks for the options to increase the share of renewable energy in Germany??s district heating infrastructure and for the restrictions that are hampering further development in this field. It critically discusses the relevant technical, political and economic challenges and determinants. District heating networks fuelled by renewable energy are not only competing with fossil fuels in individual heating units. They are also facing the more fundamental question regarding the preconditions for a profitable and worthwhile operation of grid-bound heat supply. The economic viability of heat grids has to be analyzed on a case-by-case basis, since it depends predominantly on individual framework conditions. Those include a decreasing heat demand due to improving energy performance of buildings, competing gas grids already in place and the complex interest structures of the actors involved. The growth rates that were observed in the last years were predominantly achieved in small renewably fuelled district heating networks. Even under favourable framework conditions, there is a need for additional supportive measures to increase the share of renewable energy in district heating grids. This mix of policy instruments should encompass measures to increase the implementation rates of municipal heat utilization concepts, measures to decrease the initial investments needed, as well as public relations to improve the user perception of grid-bound heat supply. However, the options to increase the share of renewable heat in existing large-scale grids are considered to be rather limited.     

Subject pool effects in price competition games: students versus professionals

Questioning the external validity of experiments that rely on student participants is an evergreen theme in experimental economics. Yet, there is ambiguous evidence of potential subject-pool bias. We add to the subject-pool debate by enlarging the set of experiments for which subject-pool differences have been studied. In a duopolistic Bertrand market setup designed to test for collusive behaviour, we test two treatments. The first is a baseline treatment, where participants cannot communicate with each other, while the second is a communication treatment in which participants are allowed to communicate. Each treatment is first conducted with students and then replicated with professionals. Our results show that student subjects and professionals differ significantly. However, these differences manifest themselves in quantitative rather than qualitative terms. Professionals do collude more, but their behavioural difference between treatments is similar. Students are thus a valid surrogate, if the research question is qualitative, but results generated by student samples should be handled with caution, if quantitative differences matter.