Effecting change in colleges and universities

Institutional leaders often try to use theories to rethink or resolve organizational challenges. Bolman and Deal (2003) describe four organizational frames (structural, human resource, political, and symbolic) to understand and diagnose problems within any organization. A classic organizational challenge in higher education is the status quo or conservatism relating to change of faculty involvement in institutional decision making. Leaders in higher education recognize the need for change but are often uncertain how to facilitate it or lack an understanding of how to implement it. The use of multiple theoretical frameworks can assist leaders in diagnosing dilemmas and instigating change.     

Correction to: The impact of a U.S.–U.K. free trade agreement on workers: a CGE model with worker displacement

Business Economics -     

M(Art)Worlds: Consumer Perceptions of How Luxury Brand Stores Become Art Institutions

Through an ethnographic study of how consumers perceive and experience Louis Vuitton flagship stores, we show that luxury stores are becoming hybrid institutions, embodying elements of both art galleries and museums, within a context of exclusivity emblematic of luxury. We create the term “M(Art)World” to capture the essence of this aesthetically oriented strategy. Participants take note of the company's sleekly elegant architecture, interior design, and adroit use of lighting that are modelled after those of museums housing world-class exhibits. The store's merchandize is artisanal, often produced in collaboration with artists. Objects for sale are displayed alongside actual art, rendering both products equivalent. Employees function as curators, offering guidance and knowledge, as well as goods for sale. We analyze how luxury consumers experience and evaluate the ways in which luxury stores operate as contemporary art institutions, and extrapolate those insights into managerial implications for other retail venues.     

Long memory in volatility and trading volume

We use fractionally-integrated time-series models to investigate the joint dynamics of equity trading volume and volatility. Bollerslev and Jubinski (1999) show that volume and volatility have a similar degree of fractional integration, and they argue that this evidence supports a long-run view of the mixture-of-distributions hypothesis. We examine this issue using more precise volatility estimates obtained using high-frequency returns (i.e., realized volatilities). Our results indicate that volume and volatility both display long memory, but we can reject the hypothesis that the two series share a common order of fractional integration for a fifth of the firms in our sample. Moreover, we find a strong correlation between the innovations to volume and volatility, which suggests that trading volume can be used to obtain more precise estimates of daily volatility for cases in which high-frequency returns are unavailable.     

Performance following ESOP formations by publicly-held corporations

The study assesses the stock performance of publicly-traded firms following ESOP formations. The results show that ESOPs contributing common stock elicit a more favorable market response than ESOPs contributing convertible preferred stock. This result is consistent with the argument that the convertible preferred contribution reduces the regularity of the repurchase of common shares in the market. Also, ESOPs intended to defend against takeovers elicited no market reaction while other ESOPs elicited a favorable market response. This result supports the hypothesis that ESOPs intended to prevent takeovers may eliminate external market discipline. The study also assesses the long-term performance of firms following ESOP formations to determine whether some hypothesized effects of ESOPs are realized. Results of the analysis suggest that firms experienced favorable long-term valuation effects following the creation of new ESOPs. However, the expansion of existing ESOPs was not as favorable. Differences in the effect can be attributed to the loss of external discipline when an expanded ESOP leads to an increase in proportional ownership. *** DIRECT SUPPORT *** A00HA012 00006     

Crafting a Human Resource Strategy to Foster Organizational Agility: A Case Study

A decade ago, the Chief Executive Officer of Albert Einstein Healthcare Network (AEHN), anticipating a tumultuous and largely unpredictable period in its industry, undertook to convert this organization from one that was basically stable and complacent to one that was agile, “nimble, and change‐hardy”. This case study, while briefly addressing AEHN's approaches to business strategy and organization design, focuses primarily on the human resource strategy that emerged over time to foster the successful attainment of organizational agility. Although exploratory, the study suggests a number of lessons for those who are—or will be—studying or trying to create and sustain this promising new organizational paradigm. © 2001 John Wiley & Sons, Inc.     

Is ‘benchmark beating’ by Australian firms evidence of earnings management?

We investigate the extent to which Australian firms that report small profits and/or small increases in earnings (i.e. benchmark beaters) have done so by the upward manipulation of these earnings. Although evidence of an unusually large number of firms managing to just beat such earnings benchmarks has been interpreted as evidence of earnings management, this approach fails to identify those firms that are the manipulators from those where unbiased earnings fall naturally into the benchmark beating group. Our results suggest that caution is required in interpreting benchmark beating as an indicator of the extent of earnings management. Using several methods for estimating the unexpected accrual component of earnings, we show that although benchmark beaters have larger positive unexpected accruals than other firms, a similar result holds when firms with small losses or earnings declines (i.e. ‘just miss’ firms) are compared with other firms. Moreover, there is no statistically significant difference between unexpected accruals for the benchmark beating and just miss groups. At a minimum, we reject the joint hypothesis that unexpected accruals capture earnings management and that an unusual kink around zero in the distribution of earnings levels or earnings changes is caused by earnings management.     

What Drives Stock Price Behavior Following Extreme One-Day Returns

We identify samples of losers and winners by selecting daily stock price returns in excess of 10% (sign ignored) and determine whether these samples over‐ or underreact. We then identify “informed” events, which correspond to announcements in the Wall Street Journal(WSJ), and “uninformed” events, which are not explained in the WSJ. For winners, there is overreaction in response to uninformed events but no overreaction on average in response to informed events. This finding suggests the degree of overreaction to new information depends on whether the cause of the extreme stock price change is publicly released.