Decomposing World Income Distribution: Does The World Have A Middle Class?

Using the national income/expenditure distribution data from 111 countries, we decompose total inequality between the individuals in the world, by continents and regions. We use Yitzhaki's Gini decomposition which allows for an exact breakdown of the Gini. We find that Asia is the most heterogeneous continent; between-country inequality is much more important than inequality in incomes within countries. At the other extreme is Latin America where differences between the countries are small, but inequalities within the countries are large. Western Europe/North America is fairly homogeneous both in terms of countries' mean incomes and income differences between individuals. If we divide the world population into three groups: the rich (those with incomes greater than Italy's mean income), the poor (those with incomes less than Western countries' poverty line), and the middle class, we find that there are only 11 percent of people who are "world middle class"; 78 percent are poor, and 11 percent are rich.     

LINKED RECURSIVE PREFERENCES AND OPTIMALITY

We study a class of optimization problems involving linked recursive preferences in a continuous‐time Brownian setting. Such links can arise when preferences depend directly on the level or volatility of wealth, in principal–agent (optimal compensation) problems with moral hazard, and when the impact of social influences on preferences is modeled via utility (and utility diffusion) externalities. We characterize the necessary first‐order conditions, which are also sufficient under additional conditions ensuring concavity. We also examine applications to optimal consumption and portfolio choice, and applications to Pareto optimal allocations.     

Quality Management: A Key Process in the Service Industries

Project management is a developing area in the service industry, as more unique and customer-tailored services are being developed. This paper presents a benchmarking research study, aimed at improving project planning capabilities in the service industry. Based on data collected from 275 project managers from several industries, including 79 from the service sector, project management strengths and weaknesses within the service industry were investigated. It was found that project managers from the service sector excel in cost and procurement planning processes, compared to project managers from other industries. On the other hand, project managers from the service sector achieve the worst score in quality management processes. Moreover, in the service industry quality management was found to have the most significant impact on project success. Hence, managers in the service sector would benefit from acquiring proper knowledge and techniques relating to quality management in the planning phase of projects. It was also found that the success level of projects performed in the service sector depends most on the qualifications of the project manager. A project manager in the service sector gets very little support from the organisation itself. Support processes should focus on the main weaknesses of the service industry, mainly ‘developing project management procedures’ and ‘increasing the extent of training of their project managers’. The paper presents and analyses strengths and weaknesses of the service industry in project planning and suggests a detailed roadmap for improvement.     

A longitudinal micro-foundational investigation into ambidextrous practices in an international alliance context–A case of a biopharma EMNE

This paper explores the development of an ambidextrous context in a rapidly growing emerging market multinational (EMNE), thus unbundling cultural and structural complexities. We use the micro-foundational lens of ambidexterity to explore and identify different processes, structures and mechanisms that underpin the development of ambidextrous practices in the EMNE. We adopt a longitudinal case study design to trace the evolution of the EMNE, which during the initial phases of its existence focused on supplying industrial enzymes and refined its technical base. In subsequent years, it exploited its technical base to emerge as a full-fledged biopharmaceutical EMNE and adopted strategic partnerships with international companies to explore new knowledge. Our novel and rich research context also provides us with insights on how this EMNE exploited its technological knowledge, whilst utilizing strategic alliances to simultaneously engage in exploratory activities. Through the micro-foundational lens of ambidexterity, we uncover the critical role played by its leadership in addressing paradoxical tensions for simultaneously managing exploitation and exploration in an international strategic alliance context.     

Is higher variance necessarily bad for investment?

We consider decision-making under risk in which random events affect the value of the portfolio multiplicatively, rather than additively. In this case, a higher variability in the rate of return not only is associated with a higher risk, a bad property, but also engenders a higher expected return, a good property. As a result, certain expected utility maximizing investors, namely those with the lowest risk aversion, will prefer some portfolios with higher variances in the rate of return over others with lower ones. This is demonstrated, and implications are considered.     

The role of HRM practices in product development: Contextual ambidexterity in a US MNC’s subsidiary in India

Abstract

Recent studies have started exploring the linkages between organisational ambidexterity (OA) and HRM practices. OA is noted as a critical resource in achieving product, process, and business model innovations. By adopting an inductive case study of a US MNC subsidiary in India, we found empowerment-focused HRM practices were being used for exploration of new ideas and efficiency-focused HRM practices were adopted for the exploitation of the organisation’s existing strengths. Empowerment-focused HRM practices created a culture of openness and risk-taking, which facilitated the creation of an ambidextrous context. Further, ambidextrous learning was moderated by the adoption of a managerial/leadership style that focused on ‘mirroring competencies’ between the parent operation and its subsidiary. HRM practices were aimed at developing behaviours that valued the team-based co-development of graphic processor designs by means of a ‘parallel processing’ approach to product development. Additionally, the HRM practice of offering intrinsic employee rewards and both informal and formal training facilitated OA in delivering product innovation. This study represents a pioneering exploration of multiple levels of analysis (individual, functional, and organisational) for product innovation through the lenses of ambidexterity, innovation, and HRM practices. The implications for both theory and practice are also discussed.     

Human resource practices and performance of mergers and acquisitions in Israel

An extensive body of literature has investigated financial and strategic variables as predictors of mergers and acquisitions (M&A) performance without finding clear relationships. This paper proposes a knowledge-based view of acquisitions and suggests that to enhance M&A performance acquirers must use human resources (HR) practices that develop integration capabilities during post-merger integration. The paper explains the specific effects of HR practices in M&A in Israel, a country that serves as a microcosm for developed Western countries.     

The effect of leadership style on talent retention during Merger and Acquisition integration: evidence from China

Leadership and talent retention are critical HR-related components in post-merger and acquisition (M&A) integration, but the extent to which these factors interact with each other and eventually contribute to the success of post-M&A integration is under-explored. The present study investigates the effect of leadership styles on talent retention strategies and on the effectiveness of post-M&A integration in a Chinese context. Based on in-depth examination of an M&A case study, we propose that an authoritative, coaching, task-focused and relationship-focused approach has a positive influence on talent retention and effective post-M&A integration in a Chinese context. As far as talent retention strategies are concerned, authoritative leaders use communication, whereas leaders adopting a coaching style use an incentive structure to positively influence talent retention. Furthermore, task-focused leaders use position and performance in order to identify and retain talented employees. By contrast, relationship-focused leaders emphasize the guanxi network, communication and an incentive structure in their strategies of talent retention.     

GROWTH AND CONVERGENCE: A SOCIAL WELFARE FRAMEWORK

This paper proposes a social welfare framework in which to analyze the relationships between growth, trends in inequality, mobility, and social welfare. An application of the framework to worldwide and regional data on per capita GDP suggests a lack of convergence at the world level, opposite trends in convergence in various regions of the world, and a fairly low level of mobility or re-ranking between countries over time.