Corporate Board Composition, Protocols, and Voting Behavior: Experimental Evidence

We examine voting by a board designed to mitigate conflicts of interest between privately informed insiders and owners. Our model demonstrates that, as argued by researchers and the business press, boards with a majority of trustworthy but uninformed “watchdogs” can implement institutionally preferred policies. Our laboratory experiments strongly support this conclusion. Our model also highlights the necessity of penalties on insiders when there is dissension among board members. However, penalties for dissent appeared to have little impact on the experimental outcomes.     

Should we let employees contract away their rights against arbitrary discharge?

This article argues that the moral right to be discharged only for good cause and like rights can be contracted away by employees in appropriate circumstances. It maintains that the rights in question are not inalienable, and that there is nothing irrational about an employee's wishing to deal them away. It also maintains that inequalities in bargaining power between employers and employees are insufficiently pervasive to justify a flat ban on the alienation of these rights. For a waiver of such rights to be valid, however, employees must have full knowledge of its terms.The question addressed here bears on several legal and policy issues affecting termination of the employment relation. If employees can contract away their right to a goodcause discharge, the American doctrine of employment at willmight find justification in the face of that right. In addition, the alienability of such discharge rights may be necessary to justify express disclaimers of wrongful discharge liability and the waiver provision of the new U.S. Draft Uniform Employment-Termination Act.Michael J. Phillips is Professor of Business Law and Chairman of the Business Law Department of Indiana University's School of Business. He is a former editor-in-chief of theAmerican Business Law Journal, and has authored numerous law journal articles.     

The International Competitiveness of Germany and other European Economies: The Assessment of the Global Competitiveness Report

The Global Competitiveness Report of the World Economic Forum examines the relative competitiveness of economies on a broad basis of microeconomic and macroeconomic indicators. The following discussion uses the results of the Global Competitiveness Report 2004–2005 and investigates how the relative competitiveness of Germany and other European countries has developed over the recent past.     

Construct measurement in strategic management research: illusion or reality?

Strategic management research has been characterized as placing less emphasis on construct measurement than other management subfields. In this work, we document the state of the art of measurement in strategic management research, and discuss the implications for interpreting the results of research in this field. To assess the breadth of measurement issues in the discipline, we conducted a content analysis of empirical strategic management articles published in leading journals in the period of 1998–2000. We found that few studies discuss reliability and validity issues, and empirical research in the field commonly relies on single‐indicator measures. Additionally, studies rarely address the problems of attenuation due to measurement error. We close with a discussion of the implications for future research and for interpreting prior work in strategic management. Copyright © 2004 John Wiley & Sons, Ltd.     

Private ownership form and productive efficiency: Electric cooperatives versus investor-owned utilities

Property rights theory predicts that private firms whose ownership shares are not tradable will not be managed efficiently. This paper tests that theory by comparing the costs of rural electric cooperatives (RECs) and investor-owned electric utilities (IOUs). Separate translog cost functions are estimated for the RECs and the IOUs. The estimated costs of producing several three-product output bundles are then compared across ownership form under the assumption that all firms face identical input prices. The empirical results suggest that the cooperative sector of the electric power industry produces its output in a much less efficient manner than does the investor-owned sector.I would like to thank David Kaserman, Steven Caudill, T. Randolph Beard, Daniel Gropper, and David Laband for their many helpful comments on earlier drafts of this paper. This research was partially funded by the Auburn University Utilities Research Center. The views expressed here are the author's and do not necessarily reflect those of the New York State Public Service Commission.