How do I trust thee? The employee‐organization relationship,supervisory support,and middle manager trust in the organization

Given the assumption that most employers would like to gain the trust of their employees, what would initiate this trust? This study explores the joint role of the employee‐organization relationship (EOR) and supervisory support in initiating trust among middle managers. The results from a study of 545 middle managers in China show that both EOR and supervisory support are important in creating trust, with supervisory support having a stronger influence than EOR. Further, supervisors play a synergistic role by accentuating the positive influence of the mutual investment EOR approach and attenuating the negative influence of the quasi‐spot contract EOR with the managers. Results reinforce the importance of both formal structure and social processes in cultivating employee trust in the organization. We discuss implications of these findings for future research and human resource management practices. © 2008 Wiley Periodicals, Inc.     

Polarization Orderings and New Classes of Polarization Indices

This paper explores equivalent formulations of the polarization ordering first proposed by Foster and Wolfson. Motivated by the class of polarization indices proposed by Foster and Wolfson, we have developed a class of generalized Foster-Wolfson indices. In addition, a new class of polarization indices satisfying a set of desirable axioms is also derived.     

Suspicion: Its sources, means of control, and effect on interorganizational relationships

Suspicion in the interorganizational relationship literature has been associated with relationship decay but this literature fails to capture the value of suspicion in maintaining relationships. The authors offer an inventory of propositions, suggesting that the level of suspicion determines whether it has beneficial or harmful effects on channel relationships. Support for many of these propositions is based on a unique attribute of suspicion: Suspicion serves as an antidote to the fundamental attribution error, or the tendency to take behavior at face value without allowing for situational influences. Such an attribute suggests suspicion should have an important influence on interorganizational relationships. Specifically, the authors propose that suspicion can be beneficial at moderate levels, but harmful at very low or high levels. Of particular interest to practitioners, we propose some methods for controlling suspicion.     

A “matching auction” for targets with heterogeneous bidders

When potential bidders for a target firm are heterogeneous, standard auction methods for selling the firm are not optimal, as they treat the bidders symmetrically. In a two-bidder contest, one way to discriminate against the stronger bidder is to impose an order of moves. A simple “matching auction” can achieve this objective, in which the “strong” bidder is asked to make a first and final offer, and the other bidder is asked to match this bid. We consider two sources of bidder heterogeneity in a common-value setting: differences in initial toeholds, and asymmetric effects of the bidders' private signals on value. The matching auction results in a higher expected selling price than the standard auctions when the asymmetry is sufficiently large. Other properties of the matching auction are discussed.     

Market Based Management™*—A Key to Nucor's Success

Ken Iverson, CEO of Nucor Corporation, transformed Nucor from the virtually worthless corporate shell that it was when he took over as president in 1966 into a Fortune 500 giant with current shareholder value in excess of $5 billion. How did Iverson do it? What are the secrets to his outstanding success? This article argues that an important part of the answer is Market Based Management, a relatively new set of management values and practices that aims to bring the power of a free-market society inside companies. Stated in brief, Market Based Management attempts to replace the traditional “command-and-control” management approach with decentralized decision-making that is designed to make full use of employees' “specific knowledge.” Employees' expanded decision-making authority is reinforced by a powerful incentive compensation system that rewards them handsomely for achieving corporate goals. The result, according to the authors, is highly motivated employees who “take ownership” for their role in contributing to the success of the enterprise.     

Extending COLOSSUS to Cover Compensation for Future Economic Loss

COLOSSUS is a mainframe-based expert system jointly developed by Continuum Australia and GIO (General Insurance Organization) for the assessment of third-party claims. COLOSSUS has been in production for over two years and is accessible throughout all GIO regions in New South Wales, Australia. In this paper we describe the extension of COLOSSUS to cater for future economic loss to a claimant. Because of the diversity of knowledge sources in the insurance domain, we have adopted a highly interactive approach that requires successive user confirmations during a consultation. The practicality of our knowledge engineering approach is highlighted by examining several difficult issues. Design issues are also addressed with particular reference to clarity and ease of maintenance. An annotated report of a sample run is enclosed.     

On variable ordination of modified Cholesky decomposition for estimating time-varying covariance matrices

Estimating time-varying covariance matrices of the vector of interest is challenging both computationally and statistically due to a large number of constrained parameters. In this work, we consider an order-averaged Cholesky-log-GARCH (OA-CLGARCH) model for estimating time-varying covariance matrices through the orthogonal transformations of the vector based on the modified Cholesky decomposition. The proposed method is to transform the vector at each time as a linear transformation of uncorrelated latent variables and then to use simple univariate GARCH models to model them separately. But the modified Cholesky decomposition relies on a given order of variables, which is often not available, to sequentially orthogonalize the variables. The proposed method develops an order-averaged strategy for the Cholesky-GARCH method to alleviate the effect of order of variables. The merits of the proposed method are illustrated through simulations and real-data studies.