On measuring the utilization rate of employed labour

This paper deals with the factors that influence plans to retire from the labour force. We use a theoretical model to explain the empirical findings from a bivariate probit model relating economic, demographic, and social characteristics to retirement plans for over 7000 women and men between the ages of 40 and 64. The results of the analysis concerning retirement intentions suggest that personal, economic and household characteristics are more important determinants of retirement plans for women than men.     

Risk Management,Corporate Governance,and the Search for Long-Term Investors

This discussion explores a number of ways that more effective risk management, corporate governance, and communication with investors can help companies increase their effciency and long-run value. According to one of the panelists, recent surveys of corporate directors suggest that companies should devote more time and attention to three issues—strategy, risk management, and succession planning—and that strategy and risk are the “flipsides of the same coin.” As the panelist argues, “You can't talk about strategy without talking about what risks you're going to take—and what risks you decide to take has to depend on the core competencies that drive the corporate strategy.” In addition to making risk management a critical part of corporate strategy, another notable recommendation is to communicate a company's strategy and business plan as clearly as possible to investors, with the aim of attracting more sophisticated, long-term shareholders. Contrary to popular belief, such a group may well include some hedge funds and other activist shareholders. According to a newly released report on shareholder activism (produced and cited by another panelist), corporate boards should work harder to identify and engage the “largest 10 shareholders in the organization,” with the ultimate goal of cultivating a shareholder base that buys into the company's strategy.     

Planning in the Dark: Why Major Engineering Projects Fail to Achieve Key Goals

The arguments, analysis and observations in this paper are based on 10 years of research with partners in the European and US aerospace and defence industries. During this period, the authors were part of a team of researchers who were seeking to develop a new methodology and tool set for project management, particularly aimed at large aerospace projects. The research was motivated by the seemingly ubiquitous reality of project failure, with large engineering projects apparently always late and over budget. Here the authors focus on aerospace and defence, but the problems are generic across all branches of engineering. In their view, aerospace and defence have more excuses than most, because not only are the projects huge, but also they are globally distributed and highly complex. As work progressed, a fundamental conundrum emerged. Through discussions with project managers and assessment of the teams that were undertaking the projects, it became obvious that they were well educated, intelligent, highly motivated and very capable people. So why were so many projects going wrong? And it was not just aerospace and defence, as projects were failing in many different sectors and in numerous geographic locations. Obviously the problems were not to do with incompetence, as they were clearly so generic. As a result, the authors focused their analysis on factors inherent in the way all major projects are undertaken. The ultimate finding has been that the very technology available for managing projects today is inadequate. As argued within the paper, modern, complex projects cannot be planned and executed using 50-year-old project management tools. The paper tells the story of what is wrong with the current technology and how and why it needs to change. The authors are well aware that there are also cultural problems in project management, but many of these are exacerbated by the use of inadequate tools.     

When it comes to the crunch: What are the drivers of the US banking crisis?

This article considers how permissive regulatory conditions helped change the size and scope of the US mortgage market. Asset backed securitization facilitated an expansion of the US mortgage market and modified the structure of the value chain within which financial assets, risk and liquidity were managed. New sophisticated mortgage products, indulgent lending practices, loose credit assessment and flimsy documentation increased the probability of mortgage default in an economic downturn. US banks were not in a position to absorb mark-to-market losses on mortgage assets and goodwill impairment resulting from a credit crunch because they operate with narrow profit margins and a limited equity cushion in the balance sheet. This article questions the viability and sustainability of this banking business model.     

The Relationship between Output and Unemployment with Efficiency Wages

Abstract. We construct a stylised model of the supply side with goods and labour market imperfections to show that an economy can rationally operate at a low-effort state in which the relationship between output and unemployment is positive. We examine data from the G7 countries over 1960–2001 and find that only German data strongly favour a persistent negative relationship between the level of output and rate of unemployment. The consequence of this is that circumstances exist in which market imperfections could pose serious obstacles to the smooth working of expansionary and/or stabilisation policies and a positive demand shock might have adverse effects on employment.     

The judicious use and management of humor in the workplace

Everybody loves humor. In the workplace, it can provide such benefits as stress relief, team unification, employee motivation, idea generation, and frustration diffusion through venting. Despite these positives, it should be stressed that humor in this context has downsides, as well. For example, humor can distract us from the job at hand, hurt our credibility, or cause offense in increasingly diverse work settings. In the midst of this complicated situation stand managers, who occupy a position of responsibility for both the good and bad effects of humor in the workplace. It is the intention of this article to use existing humor theory and a simple model to generate a more analytical understanding of humorous interaction. Suggestions are then offered as to how to use humor and manage the use of humor in such a way as to maximize its benefits, while minimizing its dangers.     

The political economy of participation in IMF programs: a disaggregated empirical analysis

What factors determine whether or not countries have programs with the International Monetary Fund (IMF)? The existing literature suggests that a number of economic and political variables are important, but there is disagreement about their relative significance. Moreover, the fit of general participation models is not particularly good. An increasingly popular view in the recent literature is that the pattern of IMF lending is politically driven and that it reflects the interests of the Fund’s leading shareholders; the US is seen as exerting a powerful influence. Using both quantitative and qualitative techniques, and based on an informal analytical framework, we examine in detail the factors that may be at work. We cover the period from 1984 to 2008. We discover considerable variation across the nature of programs (concessional and non-concessional), income levels, geographic regions, and time periods. The degree of observed variation means that it is unsafe to use one general participation model as the basis for evaluating the effects of IMF programs. It also means that the design of policy needs to reflect the nuances that the data reveal.     

Inducements,Impediments, and Immediacy: Exploring the Cognitive Drivers of Small Business Managers' Intentions to Adopt Business Model Change

Small business managers rely on judgment and heuristics when making critical strategic decisions. We explore this phenomenon, expanding the theory on cognition and strategy to explain the cognitive determinants of strategic decisions leading to small firm business model change. We integrate existing theories (entrepreneurial opportunity exploitation, cognitive resilience, prospect theory, behavioral theory of the firm, threat‐rigidity) into a framework explaining strategic intentions, based on managers' perception of business opportunity interacting with assessment of the external environment, current performance, and prior experience. The framework is empirically tested in the context of Canadian real estate brokerage industry, facing potentially major disruptive change.