Risk Management,Corporate Governance,and the Search for Long-Term Investors

This discussion explores a number of ways that more effective risk management, corporate governance, and communication with investors can help companies increase their effciency and long-run value. According to one of the panelists, recent surveys of corporate directors suggest that companies should devote more time and attention to three issues—strategy, risk management, and succession planning—and that strategy and risk are the “flipsides of the same coin.” As the panelist argues, “You can't talk about strategy without talking about what risks you're going to take—and what risks you decide to take has to depend on the core competencies that drive the corporate strategy.” In addition to making risk management a critical part of corporate strategy, another notable recommendation is to communicate a company's strategy and business plan as clearly as possible to investors, with the aim of attracting more sophisticated, long-term shareholders. Contrary to popular belief, such a group may well include some hedge funds and other activist shareholders. According to a newly released report on shareholder activism (produced and cited by another panelist), corporate boards should work harder to identify and engage the “largest 10 shareholders in the organization,” with the ultimate goal of cultivating a shareholder base that buys into the company's strategy.     

Planning in the Dark: Why Major Engineering Projects Fail to Achieve Key Goals

The arguments, analysis and observations in this paper are based on 10 years of research with partners in the European and US aerospace and defence industries. During this period, the authors were part of a team of researchers who were seeking to develop a new methodology and tool set for project management, particularly aimed at large aerospace projects. The research was motivated by the seemingly ubiquitous reality of project failure, with large engineering projects apparently always late and over budget. Here the authors focus on aerospace and defence, but the problems are generic across all branches of engineering. In their view, aerospace and defence have more excuses than most, because not only are the projects huge, but also they are globally distributed and highly complex. As work progressed, a fundamental conundrum emerged. Through discussions with project managers and assessment of the teams that were undertaking the projects, it became obvious that they were well educated, intelligent, highly motivated and very capable people. So why were so many projects going wrong? And it was not just aerospace and defence, as projects were failing in many different sectors and in numerous geographic locations. Obviously the problems were not to do with incompetence, as they were clearly so generic. As a result, the authors focused their analysis on factors inherent in the way all major projects are undertaken. The ultimate finding has been that the very technology available for managing projects today is inadequate. As argued within the paper, modern, complex projects cannot be planned and executed using 50-year-old project management tools. The paper tells the story of what is wrong with the current technology and how and why it needs to change. The authors are well aware that there are also cultural problems in project management, but many of these are exacerbated by the use of inadequate tools.     

Does santa have a great job? Gift shopping value and satisfaction

For good or bad, shopping and gifting are intertwined. This research looks at sources of gratification associated with shopping for gifts. More particularly, the roles played by general and specific shopping orientations in shaping gift shopping value and satisfaction are examined. Results from testing a theoretical model suggest that gift shopping orientations, such as agape, may dominate general shopping orientations, such as price consciousness. Also, the important role played by utilitarian shopping value is consistent with gift shopping more as a job than as a source of leisure. However, the results fall short of suggesting a negative relationship between gift shopping and hedonic shopping value. So gift shopping may be a job, but a job that is not so horrible after all. © 2007 Wiley Periodicals, Inc.     

The Relationship between Output and Unemployment with Efficiency Wages

Abstract. We construct a stylised model of the supply side with goods and labour market imperfections to show that an economy can rationally operate at a low-effort state in which the relationship between output and unemployment is positive. We examine data from the G7 countries over 1960–2001 and find that only German data strongly favour a persistent negative relationship between the level of output and rate of unemployment. The consequence of this is that circumstances exist in which market imperfections could pose serious obstacles to the smooth working of expansionary and/or stabilisation policies and a positive demand shock might have adverse effects on employment.     

The judicious use and management of humor in the workplace

Everybody loves humor. In the workplace, it can provide such benefits as stress relief, team unification, employee motivation, idea generation, and frustration diffusion through venting. Despite these positives, it should be stressed that humor in this context has downsides, as well. For example, humor can distract us from the job at hand, hurt our credibility, or cause offense in increasingly diverse work settings. In the midst of this complicated situation stand managers, who occupy a position of responsibility for both the good and bad effects of humor in the workplace. It is the intention of this article to use existing humor theory and a simple model to generate a more analytical understanding of humorous interaction. Suggestions are then offered as to how to use humor and manage the use of humor in such a way as to maximize its benefits, while minimizing its dangers.     

In Praise of Rising House Prices

The recent rise in the price of houses is highly controversial. Dr Barry Bracewell-Milnes argues that it may have some unexpected advantages.