Failures to enact the future—A social practice perspective

To be successful, organisational foresight requires a multitude of perspectives and faculties. We have adopted a social practice perspective, which we base within an interpretative world view, to better understand how organisational foresight is enacted. This offers a reading of the phenomena, of which the essential contribution is that organisational foresight is more than an organisational property; it is something that reflective people do as they engage with various inputs from the outside and as a result of the continuous interaction between activity systems and their constituting elements. A longitudinal case study illustrates the importance of understanding the construction of collective and individual meaning in working with organisational foresight. The study shows how the inherent rigidity of the existing activity system and the weak ties between these diverse subsets of the organisation may block the interaction between emerging social practices and organisational intentions resulting in ongoing failures of understanding and enactment. A model is developed to include these parameters in an augmented activity systems model. Based on this we have identified the linking of organisational levels as one of the key dimensions to be considered for which the social practice perspective holds significant explanatory strength.     

Plant-level employment development before collective displacements: comparing mass layoffs,plant closures and bankruptcies

This article analyzes the development of employment levels and worker flows before bankruptcies, plant closure without bankruptcies and mass layoffs. Utilizing administrative plant-level data for Germany, we find no systematic employment reductions prior to mass layoffs, a strong and long-lasting reduction prior to closures, and a much shorter shadow of death preceding bankruptcies. Employment reductions in closing plants, in contrast to bankruptcies and mass layoffs, do not come along with increased worker flows. These patterns point to an intended and controlled shrinking strategy for closures without bankruptcy and to an unintended collapse for bankruptcies and mass layoffs.     

Comprehension in risk elicitation experiments

Economic experiments are increasingly conducted with field populations for whom comprehension of instructions may be more difficult to achieve. We investigate how framing experimental instructions in a familiar context and incentivizing the experimental task may affect comprehension. Based on an experiment with 146 German farmers, we compare four different versions of a Holt-and-Laury multiple price list. We find that incentives have a small positive effect on comprehension, as measured by the probability of making inconsistent choices and subjects’ self-assessment. In the absence of incentives, framing negatively affects comprehension. Comprehension is enhanced for farmers who score high on a numeracy test. We conclude that contextual framing might confuse subjects, whereas incentives can help to facilitate comprehension of experimental instructions.     

Reputation concerns and herd behavior of audit committees - A corporate governance problem

This paper offers an explanation for audit committee failures within a corporate governance context. The management of a firm sets up financial statements that are possibly biased. These statements are audited/reviewed by an external auditor and by an audit committee. Both agents report the result of their work, the auditor acting first. Both use an imperfect technology that results in a privately observed signal regarding the quality of financial statements. The audit committee as well as the auditor are anxious to build up reputation in the labor market. Given this predominant goal they report on the signal in order to maximize the market’s assessment of their ability. At the end of the game the true character of the financial statements is revealed to the public with some positive probability. The market uses this information along with the agents’ reports to update beliefs about the agents’ abilities. We show that a herding equilibrium exists in which the audit committee “herds” and follows the auditor’s judgement no matter what its own insights suggest. This result holds even if the audit committee members are held liable for detected failure. However, performance based bonus payments induce truthful reporting at least in some cases.     

Agriculture as a provider of public goods: a case study for Norway

A valid argument for support is that subsidies are remedies for market failures. Agriculture contributes positively to public goods as food security, landscape preservation and maintenance of population in remote areas. Using a numerical model we simulate what Norwegian agriculture would look like if the only purpose of supporting agriculture was to provide such public goods. This is compared to the consequences of the Uruguay round in GATT and possible future EU membership for Norwegian agriculture. Although the GATT agreement will change agriculture in the desirable direction, the agreement puts no substantial pressure on the current agricultural policy. EU membership on the lines laid down by the accession treaty between EU and Norway prior to the referendum in 1994 would have given a stronger impetus towards the optimal solution.     

Economic versus environmental improvement potentials of Danish pig farms

This article demonstrates how economic and environmental improvement potentials of Danish pig farms can be estimated using Data envelopment analysis (DEA). To avoid some of the problems associated with the definition of undesirable outputs, environmental variables are included as nutrients applied with manure and nutrients removed with the crops. These environmental variables are combined with a series of economic variables, including the costs of fertilizer. Furthermore, subvector efficiency and a two‐step analysis are used in order to consider economic and environmental (technical) efficiency separately. The empirical results show considerable improvement potentials, especially on the environmental variables. Sensitivity studies validate that these results are robust to possible uncertainties in the measurement of the environmental variables.     

Multiple objectives and perceptions of optimal management: The Danish industrial fishery in the North Sea

Fisheries management involves many stakeholders with differentopinions about how the fishery should be optimally managed.This paper presents a multi-objective bio-economic model, whichis able to incorporate the preferences of managers and otherstakeholders. The model is a weighted goal programme coveringthe Danish industrial fishery. Economic, political and biologicalconcerns are considered simultaneously and, by applying thepreference structures of different stakeholders, it shows howthe optimally managed fishery would look from the perspectiveof managers and various interest groups. Managers, in this casethe Danish Ministry of Food, Agriculture and Fisheries, areprovided with a management tool that shows the consequencesof their preferences towards the objectives, and can be comparedwith optimal solutions as perceived by other stakeholders.     

Nonconvex n-person bargaining: efficient maxmin solutions

Summary. This paper provides an axiomatic characterization of a family of so-called efficient maxmin solutions which can be seen as generalizations of the Kalai-Smorodinsky solution to nonconvex n-person bargaining problems. Moreover, it is shown that even though there are several efficient maxmin solutions for some bargaining problems, there is typically a unique efficient maxmin solution. Received: February 15, 2001; revised version: November 14, 2001