Financial Constraints: Routine Versus Cutting Edge R&D Investment

We analyze financial constraints on R&D, where we account for heterogeneity among investments that has been neglected in previous literature. According to economic theory, investments should be distinguished by their degree of uncertainty, e.g. routine R&D versus cutting‐edge R&D. Financial constraints should be more binding for cutting‐edge R&D than for routine R&D. Using panel data we find that R&D spending of firms devoting a significant fraction of R&D to cutting‐edge projects is curtailed by credit constraints while routine R&D investments are not. This has important policy implications with respect to the distribution of R&D subsidies in the economy.     

Ethics,Corporations, and Governance

Corporate governance has resurfaced as a topic in the ongoing financial crises. This article frames the debate on corporate governance within the ongoing concerns about the corporate role in wider societal governance. It then maps out the context of the six scholarly contributions in this special issue by highlighting how the current debate moves towards a closer integration of governance at corporate and societal level.     

Changes in foreign operation modes: Stimuli for increases versus reductions

This article explores the reasons leading executives to change foreign operation modes by contrasting mode increases and reductions. Our study is grounded on stimuli identified through in-depth interviews by a former IBR study which we employ through two different measures in the course of analyzing data from 265 German firms on 320 mode changes. The results show that executives recognize a wide range of reasons for mode change, but the importance and magnitude of those stimuli differ for mode increases and reductions. While performance and external environment increase the likelihood of mode reductions, internal environment and managerial attitudes induce mode increases. Moreover, stimuli for incremental and radical mode changes differ as well.     

When affective well-being is empowered: the joint role of leader-member exchange and the employment relationship

HRM and the leader are often assumed to play a joint role in affecting employee reactions. In a multilevel, time-lagged study, we examined the joint role of the employment relationship and leader-member exchange (LMX). We tested whether this joint role is essential to when LMX leads to affective well-being via psychological empowerment. We build on HRM literature to expect that the relationship of LMX with psychological empowerment is stronger when the employment relationship is consistent with LMX quality. Results indicated that psychological empowerment mediates the relationship between LMX and affective well-being. This mediation is stronger for employees in a mutual investment employment relationship. The findings point at the importance of consistency of resources from the employment relationship and LMX. Nevertheless, the findings also suggest that resources from LMX compensate for employment relationships with low resources. Our findings contribute to scholars’ understanding of the joint role of HRM systems and leader behaviors.     

Redesigning the supply of gasses in a hospital

Developing buyer–supplier relationships has been relatively ignored in the literature. This paper proposes a practical approach to evaluate and plan improvements in a supply relation, consisting of two parts. Firstly, a supply chain concept is proposed that consists of four areas: physical supply, planning and control, organisation and relation, and flow of information. This concept is useful in describing and analysing a supply relation. Secondly, a method based on scenario planning is used to generate alternative designs of a supply relation and to stimulate discussion. The approach is applied for a hospital and its supplier of gasses. The application helped considerably in gaining knowledge about the actual working of the supply relation of both organisations. The alternative scenarios stimulate discussion and development of their relation. The paper also contributes to the knowledge of applying supply chain management concepts in a hospital.     

The anatomy of performance appraisals in Germany

We investigate the use of performance appraisal (PA) in German firms. First, we derive hypotheses on individual and job-based determinants of PA usage. Based on a representative German data set on individual employees, we test these hypotheses and also explore the impact of PA on performance pay and further career prospects. The results include that PA is positively linked to an individual's willingness to take risks. The performance of older employees and woman is evaluated less often. Furthermore, larger firms evaluate the performance of their employees more. We find evidence for a non-monotonic relation between the hierarchical level and usage of performance appraisal: The performance of employees with very high or very low responsibilities is assessed less often.     

Worldwide willingness to delegate and country labor quality

The purpose of this article is to examine how country workforce characteristics shape the willingness of managers to delegate authority to subordinates. Using data from worldwide surveys, we tested to what extent country-specific factors, such as workforce competence, motivation, and probity, shape the willingness of managers to grant decisional power to subordinates. The results show that the willingness to delegate across the 47 countries might be explained by a combined effect of workforce competence, motivation, and probity, labeled quality of country labor. It is argued that in countries where managers perceive that the labor quality is lower (lack of competence, motivation, and probity), the managerial willingness to hand over power to subordinates decreases. The findings of this study have both theoretical and practical implications for the managerial practice of firms doing business internationally. These findings will assist companies and managers to better understand why delegation might not work as expected in one country, whereas the same practice is both effective and indicated in other countries.     

Situational Contracting as a Mode of Governance

Abstract

This article introduces the option to make individual access to excludable public benefits conditional on ascertainable efforts to limit claims. Contracts are situational when front-line staff are mandated to allow for differences in the ability to perform of their counterparts and to offer customized enabling facilities to improve capabilities. Degrees of freedom and transaction costs are controlled through political guidance in protocols, on the basis of apply-or-explain. Situational contracting reveals individual preference, reduces opportunism, furthers trust and induces open innovation. The article presents results of an early application in The Netherlands.     

Ethical reasoning in business‐to‐business negotiations: evidence from relationships in the chemical industry in Germany

This article explores managers’ ethical reasoning for behaviors in price negotiations using evidence from 15 in‐depth interviews conducted with sales and purchasing representatives in the chemical industry in Germany. Applying transaction cost economics, we find that negotiators in commoditized market‐like exchanges either refer to deontological norms such as not to lie, or they neglect a role for ethics, arguing that distributive negotiation is per se opportunistic. In contrast, exchanges of products with higher asset specificity lead to stronger informational integration which is supported with teleological justifications. Some negotiators use teleological justification to build business on trust rather than on economic safeguards as their firm norms would require. For negotiators, our results suggest considering institutional context and adjusting ethical reasoning to the negotiation situation. Firms need to recognize and find ways to address the potential conflicts of their internal norms with their frontline managers’ attempts to act in the firms’ best economic and ethical interests.     

Price discovery in bitcoin spot or futures?

In December 2017, both the Chicago Board Options Exchange and the Chicago Mercantile Exchange introduced futures contracts on bitcoin. We investigate to what extent they provide useful information for the price discovery of bitcoin. We rely on the information share methodology of Hasbrouck (1995, J Finance, 50, pp. 1175–1199) and Gonzalo and Granger (1995, J Bus Econ Stat, 13, pp. 27–35) and find that the spot price leads the futures price. We attribute this result to the higher trading volume and the longer trading hours of the globally distributed bitcoin spot market, compared to the relatively restricted access to the US-based futures markets.