In search of global leaders

For all the talk about global organizations and executives, there's no definitive answer to the question of what we really mean by "global." A presence in multiple countries? Cultural adaptability? A multilingual top team? We asked four CEOs and the head of an international recruiting agency--HSBC's Stephen Green, Schering-Plough's Fred Hassan, GE's Jeffrey-lmmelt, Flextronics's Michael Marks, and Egon Zehnder's Daniel Meiland--to tell us what they think. They share some common ground. They all agree, for example, that the shift from a local to a global marketplace is irreversible and gaining momentum. "We're losing sight of the reality of globalization. But we should pay attention, because national barriers are quickly coming down", Daniel Meiland says. "If you look ahead five or ten years, the people with the top jobs in large corporations ... will be those who have lived in several cultures and who can converse in at least two languages." But the CEOs also disagree on many issues--on the importance of overseas assignments, for instance, and on the degree to which you need to adhere to local cultural norms. Some believe strongly that the global leader should, as a prerequisite to the job, live and work in other countries. As Stephen Green put it, "If you look at the executives currently running [HSBC's] largest businesses, all of them have worked in more than one, and nearly all in more than two, major country markets." Others downplay the importance of overseas assignments. "Putting people in foreign settings doesn't automatically imbue new attitudes, and it is attitudes rather than experiences that make a culture global," says Fred Hassan. The executives' essays capture views that are as diverse and multidimensional as the companies they lead.     

全球化工"绿色"盎然

在过去的十年中．人们在改变化学工业发展理念和政府对待污染防治的态度方面获得了巨大进展．而且已经触及“绿色”化工。事实上，由于有“绿色”化工的诱人前景作为发展动力。全球化学工业逐步变“绿”将成为不可阻挡的发展趋势。     

The Impacts of Remittances, Residency Status and Financial Attachment on Housing Tenure for Mexican-Heritage Americans: Inferences from a New Survey

Immigration has and will continue to alter the composition of housing demand in the United Sates. In this article, we analyze results from a new survey of Mexican-heritage households to draw some inferences about tenure choice within that group. Some measures of attachment to the United States—residency status and the amount of money sent to relatives and friends in Mexico—suggest that, among Mexican immigrants, permanence is a key determinant of homeownership in the United States. More specifically, being a citizen increased the probability of ownership, whereas being undocumented reduces the probability. Surprisingly, after controlling for residency status, length of tenure in the United States does not predict tenure status, except that those who refused to report length of tenure were more likely to have higher tenure status. Those who sent remittances home to Mexico were less likely to become homeowners.     

Banks as Interest Rate Managers

Most banks have a two-tier pricing system, offering accounts at market-related interest rates and at posted rates that are changed at discrete intervals. In this paper, I develop a model of bank interest rate management. I consider a bank with two classes of loans and deposits in its balance sheet: One pays a market rate of interest, the other a posted rate. Market rates are exogenous and evolve stochastically over time. Posted rates are altered intermittently by the bank itself. The bank faces imperfect arbitrage by its customers between posted and market rate funds. Under simple assumptions about the stochastic process governing the market rate, I derive optimal decision rules for the adjustment of the posted rate and determine conditions under which these rules are asymmetric. A key prediction of the model is a negative correlation between market loan rates and the gap; this is more consistent with the behavior of British banks than is the contrary prediction of more standard models.     

Choice of Distribution System in the New Zealand Life Insurance Industry

Using 1988–93 panel data drawn from the New Zealand life insurance industry, this paper examines empirically the notion that the choice of distribution system is an efficient contracting solution to incentive conflicts between owners, managers and sales agents in life insurance firms. Consistent with what was hypothesised, the empirical results suggest that choice of distribution system is distinguished by organisational form, firm size, and sales commission. However, contrary to expectations, the variables representing product diversity and asset specificity were found not to be statistically significant. The empirical results thus lend mixed support for prior predictions.     

Understanding the Social Role of Entrepreneurship

There is a need to rethink and redefine the social value added of entrepreneurial activities to society. In this paper we develop five pillars on which the evolving social role of entrepreneurship can rest and have its impact: (1) connecting entrepreneurial activities to other societal efforts aimed at improving the quality of life, achieving progress, and enriching human existence, (2) identifying ways to reduce the dysfunctional effects of entrepreneurial activities on stakeholders, (3) redefining the scope of entrepreneurial activities as a scholarly arena, (4) recognizing entrepreneurship's social multiplier, and (5) pursuing blended value at the organizational level, centring on balancing the creation of financial, social and environmental wealth. In a final section we discuss implications for practices and for further research.     

Venture Capitalists, Business Angels, and Performance of Entrepreneurial IPOs in the UK and France

Abstract:  Using a unique sample of 444 entrepreneurial IPOs in the UK and France, this paper analyses the investment patterns and the stock-market performance effects of two types of early stage investors: venture capitalists (VCs) and business angels (BAs). Extending existing research, we identify important endogeneity and institutional effects. Our findings indicate that UK IPOs have a higher retained ownership and lower participation ratio by BAs, but a lower retained ownership and participation ratio by VCs than in France. BA and VC investments are substitutes, and they are endogenously determined by a number of firm- and founder-related factors, such as founder ownership and external board 'interlocks', and underwriter reputation. UK VCs are effective third-party certifying agents who reduce underpricing in UK IPOs, whereas in French IPOs they increase it by appearing to engage in grandstanding. This certification effect is more significant in UK IPOs involving both high VC and BA ownership. Finally, underpricing increases with VC participation ratio, where the higher exit of VCs seems to increase the risk premium required by outside investors, in particular in the UK.