Reconceptualizing professional service firm innovation capability: Scale development

Building on capability theory, this paper presents a reconceptualization of the innovation capability construct within a knowledge-intensive service context, specifically, professional service firms (PSFs). Employing a rigorous multi-stage scale development process we interviewed 37 participants and surveyed 463 respondents across a wide range of PSFs including lawyers, accountants, consulting engineers and management consultants. The results of exploratory and confirmatory factor analyses highlight the multi-dimensional nature of innovation capability within this context. Three dimensions were identified: client-focused, marketing-focused, and technology-focused innovation capability. We provide evidence of face validity, content validity, convergent and discriminant validity, nomological validity and reliability of our scale. Our scale offers a new way to measure innovation capability within PSFs and highlights the need to move beyond the narrow manufacturing mind-set focus of prior innovation research. Implications for theory and practice are discussed.     

Growth,Industrialization, and the Intergenerational Correlation of Advantage

The shift from feudalism to industrial capitalism was generally accompanied by an increase in social mobility. We ask whether such an increase has occurred in a developing nation currently undergoing rapid industrialization, Indonesia. It has, at least as measured by a declining intergenerational correlation of education. To highlight the effects of economic growth on intergenerational mobility, we contrast Indonesia's experience with that of Bangladesh, where industrialization has proceeded more slowly and the correlation between parents’ and children's education has been roughly stable. We also examine potential causal channels for the rising educational mobility we find in Indonesia, but cannot identify specific pathways related to above‐average school building or rapid industrialization in a region.     

The management of cross-disciplinary research

This paper is based on a critical review of the proceedings of the Second International Conference on Interdisciplinary Research held in 1981 in Manchester, England. Two sets of issues important for the management of collaborative research are identified. One is the need to remove ambiguities from the meanings of commonly used terminology, for which more precise definitions are proposed. Cross-disciplinary is used to describe only the nature of the task; multi- and inter-disciplinary are seen as describing alternative organizational ways of executing it. Which way should be used depends objectively on the circumstances.
The other set of issues is concerned with the effect institutional setting could have on the possibility of carrying out effective cross-disciplinary activity. Six different settings are identified and broad concepts of group dynamics are used to identify theoretical and practical problems and their possible solutions. The paper concludes with a survey of the practical implications for those managing cross-disciplinary research.     

Going short‐term or long‐term? CEO stock options and temporal orientation in the presence of slack

Research summary: We draw on behavioral agency theory to explain how decision heuristics associated with CEO stock options interact with firm slack to shape the CEO's preference for short‐ or long‐term strategies (temporal orientation). Our findings suggest CEO current option wealth substitutes for the influence of slack resources in encouraging a long‐term orientation, while prospective option wealth enhances the positive effect of slack on temporal orientation. Our theory offers explanations for non‐findings in previous analysis of the relationship between CEO equity based pay and temporal orientation and provides the insights that CEO incentives created by stock options (1) enhance the effect of available slack upon temporal orientation and (2) can both incentivize and de‐incentivize destructive short‐termism, depending upon the values of current and prospective option wealth. Managerial summary: We explore how compensation design can play a role in affecting the CEO's preference for short‐ or long‐term strategic projects. When the CEOs have accumulated option wealth, they are more likely to invest in the long term. Yet when they have a large number of recently granted options with the potential to generate significant wealth in the event of successful risk taking, the CEO is more likely to prefer the short term in order to achieve personal wealth gains more quickly. The more liquid assets the firm holds, the weaker both of the aforementioned effects. An implication for boards is that they should anticipate CEO short‐termism if the CEO has been granted new options, underlining the potential negative consequences of option compensation. Copyright © 2015 John Wiley & Sons, Ltd.