Survey of recent developments

The Indonesian economy is maintaining its momentum at a time of ongoing uncertainty in the global economy and slowing economic growth in China. Strong domestic demand saw output grow by 6.4% over the year to June, despite a steep fall in net exports. Inflation is safely within Bank Indonesia's target range, although food prices have increased relatively quickly. The current account deficit widened to 3.1% of GDP in the June quarter due to continued growth in imports and falling prices for commodity exports. The trade environment has deteriorated in 2012, and new divestment and domestic processing requirements are likely to further reduce investor interest in the mining sector.

President Yudhoyono has recently made several speeches calling for a ‘green growth agenda’. Some progress has been seen in slowing deforestation and in establishing mechanisms for facilitating payments to reduce emissions from deforestation, but loss of natural forests remains rapid. Carbon dioxide emissions from energy are growing quickly, stoked by increasing use of coal. The proposed 2013 budget continues to be heavily burdened by energy subsidies, which encourage over-consumption of fossil fuels. In most respects, therefore, the business-asusual trajectory of the Indonesian economy is unlikely to be particularly green.

A barrier to subsidy reform is its perceived unpopularity, including the threat of public protests such as those witnessed in March. To gauge current opinion we carried out a survey of Jakarta-based university students. The results indicated majority support for the removal of fuel subsidies, but some respondents said they would protest against fuel subsidy reductions, highlighting the politically sensitive nature of the issue.

Indonesia has witnessed booms in the coal and palm oil sectors in recent years, becoming the world's largest exporter of both commodities. We review the benefits from these two booms and the tensions between the development of these sectors and environmental goals. We also review the tourism sector, which remains relatively under-developed outside Bali. Tourism is a potential source of long-run growth that may be aligned with a green economy. The development of the sector would be aided by infrastructure improvements and a renewed focus on the conservation of natural assets.     

Reassessing Moral Legitimacy in Times of Instability

The presence of conflicting cues about what is legitimate provided by various stakeholders, begs the question of how the legitimacy of contested institutionalized practices is justified. Recent critique of tax minimization strategies exemplifies this difficulty: on one hand, practitioners need to increase shareholders' profits; on the other, a growing number of stakeholders push for ‘fairer’ corporate tax payments. Conducted during a time of public criticism of Australian corporate tax strategies, our study draws on justifications of corporate tax minimization strategies by senior tax practitioners and corporate submissions to a Senate Inquiry on corporate tax avoidance. The study explores how legitimacy judgements come under pressure by conflicting cues. Through the application of Boltanski and Thévenot's (2006) Economies of Worth (EW) framework, we advance legitimacy scholarship by clarifying what constitutes situated judgements in times of instability. Our work puts forward the concept of perceived forecasted consensus as a guide for individuals in making situated legitimacy judgements in times of instability.     

The relationship between perceptions of HR practices and employee outcomes: examining the role of person–organisation and person–job fit

Human resource management (HRM) practices can play an important role in matching people with the organisations and the jobs they work in. However, little is known about how employees perceive and interpret HR practices and whether or how these perceptions relate to perceptions of person–organisation (P–O) and person–job (P–J) fit. This study aims to bridge strategic HRM and person–environment fit literature by examining possible mediating and moderating roles of P–O and P–J fit in the relationship between employee perceptions of a broad set of HR practices and employee attitudes and behaviours. Results from a sample of 412 employees support direct relationships as well as a mediating and moderating role of P–O and P–J fit in the relationship between perceived HR practices and employee outcomes.     

Managing the duality of IHRM: unravelling the strategy and perceptions of key actors in South Korean MNCs

This research aims to extend our understanding of the duality between global integration and local responsiveness in multinational corporations (MNCs) by exploring the perceptions of corporate HR actors regarding the intra-organisational factors that alter the balance between these pressures. It examines the perceptions and actions of key actors in the context of two Korean MNCs. The study shows the importance attributed to a range of socio-procedural factors by corporate actors and which, therefore, inform the practical management of the dual forces, notably: HR expertise, social ties, trustworthy relationships and co-involvement in decision processes.     

Rules,rogues, and risk assessors: Academic responses to Enron and other accounting scandals

Abstract

The recent accounting scandals in the USA and the resulting regulation of the US profession via the Sarbanes–Oxley Act have led to the resurrection of an old debate: principles vs. rules. We argue that such a debate is jejune and serves as little more than a diversion from discussing more substantive issues raised by events like Enron and Andersen. Accounting is not confronted by a choice of principles to the exclusion of rules or vice versa. Principles underlie any set of rules, and any implementation of principles will inevitably involve adopting some rules. We take issue with various analyses of the accounting scandals that rely too exclusively on the principles of neo-classical economics. We conclude by identifying four major obstacles impeding meaningful academic and educational treatment of the maladies of which Enron is merely a symptom.     

Is there a bigger and better future for employer branding? Facing up to innovation,corporate reputations and wicked problems in SHRM

Employer branding is becoming an increasingly important topic for research and practice in multinational enterprises (MNEs) because it plays directly into their corporate reputation, talent management and employee engagement agendas. In this paper, we argue that the potential effects of employer branding have yet to be fully understood because current theory and practice have failed to connect this internal application of marketing and branding to the key reputational and innovation agendas of MNEs, both of which are at the heart of another strategic agenda – effective corporate governance. However, these agendas are characterised by ‘wicked problems’ in MNEs, which have their origins in competing logics in strategic human resource management (SHRM). These problems need to be articulated and understood before they can be addressed. This paper proceeds by (1) setting out a definition and model of employer branding and how it potentially articulates with corporate governance, innovation and organisational reputations, (2) discussing and analysing the ‘wicked problems’ resulting from the sometimes contradictory logics underpinning innovation and corporate reputations and SHRM in MNEs and (3) evaluating the potential of employer branding as a contribution to the third SHRM approach – HR strategy-in-action – as a way of resolving three particularly wicked problems in MNEs. We conclude with some ideas for research and practice on the future for employer branding.     

Knowledge,diversity and entrepreneurship: a spatial analysis of new firm formation in Great Britain

This paper argues that the diversity of a region's knowledge stock and its balance between knowledge-based manufacturing and services are both important determinants of variations in the rate of new business formation across spatial areas. An empirical study of new firm formation across 408 local unitary authorities and districts in Great Britain over the period 2001–2007 is presented, taking explicit account of the interactions amongst spatial units through an econometric modelling procedure involving maximum likelihood spatial models and alternative spatial weighing matrices. The results indicate that both related and unrelated knowledge diversity have a positive impact on the rate of business formation, whilst aggregate local economy-wide industrial and ethnic diversity has no impact; the division of the knowledge stock between services and manufacturing is also significant, with services having a positive impact on new business formation in contrast to a negative impact for high-technology manufacturing. There is also some support for the view that low wages and economic inactivity constrain new business formation, whilst a competitive regional environment has a positive impact. The results imply that polices should be aimed at creating a diverse set of knowledge-based industries rather than specialization in a narrow range.     

Knowledge diversity and entrepreneurship following an economic crisis: an empirical study of regional resilience in Great Britain

ABSTRACT

This article argues that the ability of entrepreneurs to facilitate regional adaptation to economic crises is mediated by the size and diversity of local knowledge stocks. The specific research question addressed is the hypothesis that, in the aftermath of a crisis, the birth rate of new firms will recover more rapidly in regions with a strong and diverse knowledge stock. It is theorised that unrelated knowledge diversity is of particular importance in stimulating new entrepreneurial opportunities and structural change, whilst the incentive to exploit opportunities differs according to region-specific factors. In addition to this theoretical contribution, the article develops spatial econometric models to test these research hypotheses using data on sub-regions of Great Britain for 2004–2014. The results support the central theoretical hypotheses and emphasise the positive significance of unrelated knowledge diversity and employment in knowledge intensive services to regional recovery from an economic shock. A key implication for policy-makers wishing to facilitate regional adaptation to crises is that it is important to focus on fostering entrepreneurship by developing a region’s stock of knowledge intensive services and the diversity of the knowledge creating sector, rather than relying on specialised clusters of firms.     

Innovation and HRM: Absences and politics

This article analyses the role of HRM practices in the implementation of an innovative cross-functional approach to new product development (concurrent engineering, CE) in Eurotech Industries. Contrary to CE methodology stipulations, and despite supportive conditions, HRM received scant attention in the implementation process. Organizational power and politics were clearly involved in this situation, and this article explores how their play created such HRM ‘absences’. The article builds on a four-dimensional view of power in order to provide a deeper understanding of the embedded, interdependent and political nature of HRM practice and innovation.