Exploring necessary conditions in HRM research: Fundamental issues and methodological implications

Although the notion that HRM activities are necessary conditions for achieving certain outcomes is widespread in HRM research, most empirical studies follow an additive sufficiency logic. That is, they analyse whether HRM activities increase an outcome, assuming that they can compensate for one another. However, this does not correspond to the idea of necessity where single HRM activities are required for an outcome to occur and cannot be compensated when absent. We discuss the differences between sufficiency and necessity logics in terms of theory, methodology, and practical relevance. Also, we suggest using a new approach and analysis technique in HRM research: necessary condition analysis. We illustrate the application of the method by analysing data on the relationship between ability‐, motivation‐, and opportunity‐enhancing HRM practices (i.e., high‐performance work practices) and employee performance. This illustrative example highlights that necessary conditions require particular theoretical attention and suitable empirical methods. The paper concludes by showing the value of studying necessary conditions, because such analyses allow straightforward recommendations to be given of high relevance for HRM practice, which differ from and add to recommendations based on additive sufficiency logic and analyses.     

Definition-consistent measurement of exchange market pressure

Currencies can be under severe pressure, but in a managed exchange rate regime that is not fully visible via the change in the exchange rate. The literature has proposed a way to measure such exchange market pressure (EMP) indirectly, by adding interest rate changes and forex interventions to the exchange rate change. We demonstrate that this measure is not consistent with the definition of EMP and develop a new measure that is consistent. This is first derived within the commonly used monetary exchange rate model. Then we generalize the analysis by avoiding the use of an exchange rate model. We find that the interest rate should not be taken in the first-difference form used so far, but rather in level form and relative to the interest rate chosen if the country had no exchange rate objective. Applications on the European Monetary System and East Asian crises confirm that this improvement is highly relevant in practice.     

How trade and investment agreements affect bilateral foreign direct investment: Results from a structural gravity model

We employ a structural gravity approach to analyse the impact of preferential trade agreements (PTAs), bilateral investment treaties (BITs) and other policies on bilateral foreign direct investment (FDI). We use the UNCTAD global database on bilateral FDI stocks and flows. To control for the heterogeneous nature of PTAs, we employ two different indicators of PTA depth. We find that on average signing a PTA increases bilateral FDI stocks by around 30%. Nevertheless, we also find that ‘deeper’ or comprehensive PTAs (e.g., including provisions on investment, public procurement and intellectual property rights provisions) do not have a significantly different impact than signing regular PTAs. Belonging to the EU single market, on the other hand, has a strong impact and increases bilateral FDI by around 135%, and signing a BIT has an effect that is comparable to signing a PTA.     

RECENT AND FUTURE MANAGEMENT CHANGES IN LOCAL GOVERNMENT: CONTINUING FOCUS ON RATIONALITY AND EFFICIENCY?

Dutch municipalities and provinces have recently introduced many changes relating to management control. This paper explores the role of economic and social rationality in the introduction of reforms, and the nature of possible future reforms. Based on interviews with politicians and professional managers and on documents, the paper examines experiences with recent management changes. In addition, it discusses ‘change initiating factors’. Budget cuts and trends seem to be such change initiating factors. However, particularly more demanding citizens, increases in voters' volatility and politicians' uncertainty seemed to initiate changes. The paper speculates that in the near future, too, it could be a rational survival strategy for politicians and managers to focus on initiatives that are intended to enhance performance and efficiency.     

Performance auditing: Improving the quality of political and democratic processes?

In an attempt to improve the quality of political and democratic processes, governmental organisations could decide to introduce performance auditing. However, earlier studies suggest that performance auditing can actually damage the quality of these processes, especially when it leads to information about the inputs, outputs and efficiency of programmes or activities. This raises the question of whether performance audits that lead to other types of information have similar effects. This paper analyses the effects of two local government audit committees in the Netherlands, both of which conduct performance audits that produce a broad set of information. It concludes that the lack of success of performance auditing, in terms of its contribution to the quality of political and democratic processes, cannot fully be explained by the type of information that is produced. In order to strengthen their role, audit bodies must find a balance between maintaining an independent position and responding to the expectations and requirements of their key stakeholders, which include the elected body, the Executive and the official organisation.     

Brussels is Speaking: The Adverse Speech Geo-Politics of the European Union Towards its Neighbours

The European Neighbourhood Policy (ENP) was presented as the EU's strategic response in order to deal with the new situation following the enlargement of the European Union in 2004. According to the EU, these changing circumstances have led to new rationales: 1) coping with its new external borders and neighbours and 2), finding a solution for a further enlargement problem. Both rationales are drawn out of strategic interest avoiding potentially damaging consequences on stability and development. Moreover, new inducements for multilevel cooperation were seen as necessary in order to ‘include’ the neighbouring states and create a prosperous and stable ‘Ring of friends’. The ENP has the objective to contribute to internal transformation and to further the process of ‘Europeanisation’. Europeanisation is explained by the EU as a normative process of sharing European values made concrete through policies of conditionality and socialisation of neighbouring states. This process of expanding ‘Europeanisation’ beyond the EU borders is inspired by an ambiguous and conflicting geopolitics that the EU applies as a strategic instrument. Most notably, this is emphasised by the fact that the ENP on the one hand creates an image of an inferior neighbour that urgently needs to move towards European standards and on the other hand produces a speech politics of mutuality and dialogue.

Through the study of EU speeches, communications and documents, we will argue that the rationales behind the ENP suggest a closure of the European Union and allow for neo-colonial interpretations by which pre-defined policies are to be accepted and pre-defined European values are seen as superior to neighbouring local values. This development is both undesirable and harmful. Europe is increasingly re-created as a bounded political entity institutionalised through hierarchical treaties and acts with friends, special friends, and reluctant, unwilling neighbours. In doing so, the EU faces a significant chance of alienating its neighbours and damaging cultures and societies by asymmetrical imperial power-policies based on self-created values. Paradoxically then, ENP that was set up to create good neighbours, risks producing what it wishes to protect from, angry neighbours.     

Dominant design or multiple designs: the flash memory card case

Literature suggests that in battles between competing designs, ultimately one design will emerge as dominant to the detriment of the others. Various factors and forces have been identified to explain this phenomenon. Yet, sometimes no dominant design emerges at all and multiple competing designs coexist in the market. The flash memory card industry provides an example of this. In this study, we use this example as a case to investigate the circumstances under which an industry has a tendency toward multiple designs. The case shows that a combination of factors may result in multiple designs and we argue that such a combination of factors will increasingly also apply in other cases.     

Project selection based on intellectual capital scorecards

In this paper we present a tool for the selection of a project portfolio in knowledge intensive organizations. Standard methods mostly focus on project selection on the basis of expected returns. In many cases other strategic factors are important such as customer satisfaction, innovation capacity, and development of best practices. These factors should be considered in their interdependence during the process of project selection. Here the point of departure is the intellectual capital scorecard in which the indicators are periodically measured against a target. The scores constitute the input of a programming model. From the optimal portfolio computed, clear objectives for management can be derived. The method is illustrated in an industrial case study. Copyright © 2005 John Wiley & Sons, Ltd.     

Entrepreneurial Orientation and Firm Performance: Drawing Attention to the Senior Team

Prior studies have argued entrepreneurial orientation (EO) plays an important role in explaining firm performance. This study aims to assess how senior team attributes moderate the relationship between EO and firm performance. For this purpose, an attention‐based perspective is adopted, focusing on attention scope as well as distributed and situated attention. By considering the role of senior team heterogeneity in broadening the attention scope of senior teams and the role of senior team shared vision in aligning distributed attention across organizational functions, this research investigates how senior teams may enhance the value‐creating potential of EO. In addition, we assess situated attention by including the notion of environmental dynamism and examining whether the role of the senior team attributes is contingent upon environmental conditions. Using a time‐lagged sample of 346 firms operating in various industries, we find that senior team heterogeneity helps firms to leverage their EO and improve their performance. Moreover, once environmental conditions are taken into account, results indicate that the absence of heterogeneity at senior team level may be particularly detrimental for firms operating in stable environments. The direct moderating effect of shared vision on the relationship between EO and performance is not substantiated. However, senior team shared vision has a positive impact for firms operating in dynamic environments, providing a premium for firms aiming to realize the inherent value of EO. Our research provides important implications for senior teams aiming to leverage their EO into increased firm performance. Evidence shows that while a heterogeneous team composition and senior team shared vision may provide several benefits, these advantages may fluctuate across environmental conditions.