Profit-Sharing in OECD Countries: a Review and Some Evidence

This article starts by describing the extent of profit-sharing schemes in OECD countries. It suggests that firms have increasingly introduced profit-sharing schemes not only because of the tax breaks they involve, but also because of accumulating information on the link between profit-sharing and productivity. It concludes with a summary of new research among UK manufacturing companies, which shows a productivity improvement of about 6% in cases where profit-sharing bonuses were of order 5–10% of market wages.     

Market Risk in Demutualized Self-Listed Stock Exchanges: An International Analysis of Selected Time-Varying Betas

Abstract

This article examines market risk in four demutualized and self-listed stock exchanges: the Australian Stock Exchange, the Deutsche Börse, the London Stock Exchange and the Singapore Stock Exchange. Daily company and the Morgan Stanley Capital International (MSCI) Index returns provide the respective asset and market portfolio data. A bivariate GARCH model is used to estimate time-varying betas for each exchange from listing until 7 June 2005. While the results indicate significant beta volatility, unit root tests show the betas to be mean-reverting. These findings are used to suggest that despite concerns that demutualized and self-listed exchanges entail new market risks that merit regulatory intervention, the betas of the exchange companies have not changed significantly since listing. However, market risk does vary considerable across the exchanges, with mean time-varying betas of 0.56 for the Deutsche Börse, 0.66 for the London Stock Exchange, 0.78 for the Singapore Stock Exchange, and 0.95 for the Australian Stock Exchange.     

FRONTIER EFFICIENCY MEASUREMENT IN DEPOSIT-TAKING FINANCIAL MUTUALS: A REVIEW OF TECHNIQUES, APPLICATIONS, AND FUTURE RESEARCH DIRECTIONS

ABSTRACT ** :  Despite the global importance of mutuals in financial services, and the universal need to measure and improve organizational efficiency in all deposit-taking institutions, it is only relatively recently that the most advanced econometric and mathematical programming frontier techniques have been applied. This paper provides a synoptic survey of the comparatively few empirical analyses of frontier efficiency measurement in deposit-taking financial mutuals, comprising savings and loans, building societies and credit unions in Australia, the UK, and the USA. Both estimation and measurement techniques and the determinants of efficiency are examined. Particular focus is placed on how the results of these studies may help inform regulatory policy and managerial behaviour.     

Formal versus informal knowledge networks in R&D: a case study using social network analysis

The existence of informal social networks within organizations has long been recognized as important and the unique working relationships among scientific and technical personnel have been well documented by both academics and practitioners. The growing interest in knowledge management practices has led to increased attention being paid to social network analysis as a tool for mapping the nature and membership of informal networks. However, despite the knowledge-intensive nature of research and development (R&D) activities, social network analyses of the R&D function remain relatively rare. This paper discusses the role of informal networks in the development, exchange and dissemination of knowledge within the R&D function. A case study using social network analysis is used to compare and contrast formal and informal knowledge networks within ICI. Marked differences between the informal organization and ICI's formal structures for knowledge exchange are revealed and a series of insights into the working habits of technical staff are presented. The implications for managers are clear: through a better understanding of the informal organization of R&D staff, they can more successfully capture and exploit new ideas; more efficiently disseminate information throughout the function; and more effectively understand the working habits and activities of employees.     

How Corporate Parents Add Value to The Stand-Alone Performance of Their Businesses

Corporate parents have the potential to add value to their businesses through their influence on the stand-alone performance of the businesses, but for a variety of reasons, including what we call the 10% versus 100% paradox, they more often destroy value instead. This article examines four companies, Dover, BTR, Emerson and RTZ, which succeed in creating value through stand-alone parenting influence, and draws out the conditions necessary to do so. These are that (1) there should be a genuine parenting opportunity to improve the performance of the business, (2) the parent should have skills, management processes, and other characteristics that are suitable for realising the opportunity, and (3) the parent should have sufficient feel for the critical success factors in the business to avoid inadvertently destroying value through inappropriate influences.