Cross Sectoral Variation in the Volatility of Plant Level Idiosyncratic Shocks

We estimate the volatility of plant–level idiosyncratic shocks in U.S. manufacturing. We measure the variation in Revenue Total Factor Productivity not explained by either industry or economy–wide factors, or by establishments’ characteristics. We find that idiosyncratic shocks are much larger than aggregate shocks, accounting for about 80% of the overall uncertainty faced by plants. Plants in the most volatile sector are subject to about six times as much idiosyncratic uncertainty as plants in the least volatile. We provide evidence suggesting that idiosyncratic risk is higher in industries where the extent of creative destruction is likely to be greater.     

Are All the Potential Entrepreneurs So Good?

While the vast economic literature on entry has been recently accompanied by a growing literature on the post-entry performance of newborn firms, still few studies propose a connection between the two phenomena.Exploiting the opportunity of using data concerning potential entrepreneurs, this study attempts to relate ex-ante economic, individual and environmental features to both the decision to start a new firm and – in the case of actual foundation – to the post-entry performance exhibited by the newborn firm.Empirical results based on 365 Italian potential founders show that entrepreneurial projects based on a rich information set, a first-best choice and on self commitment are more likely to develop into actual startups and better post-entry performances.     

Who Controls the Controller? People Reaction to Social Control Agent's Decisions about Organizational Misconduct

Social control agents (SCAs) discipline organizations and draw the line between appropriate organizational behaviour and misconduct. While prior research focuses on the SCA-organization relationship, we theorize how a key audience (people) interacts with an SCA depending on its decisions to sanction or not organizational misconduct. Building on sociological and organizational research on social norms and their enforcement, we expect that people are more likely to agree with an SCA that sanctions a behaviour that violates rule-based as opposed to value-based norms. Violations of rule-based norms generate more agreement because such norms are less ambiguous and ascertaining when they are violated is easier to establish. As people agree more with SCA decisions to sanction rule-based violations, we expect that the propensity of people to resort to the SCA increases. We find support for our hypotheses with a survey, a series of experiments, and the analysis of complete data on complaints by UK citizens to the Advertising Standards Authority – the UK SCA on advertising – over the period 2007–10. Our paper contributes to research in organizational misconduct by showing how SCAs are both an evaluating entity and an evaluated one and by shedding light on how people co-determine what an acceptable or unacceptable behaviour is. Our paper uniquely links macro- and micro-level studies on corporate misconduct, putting centre stage that SCA's authority essentially depends on a key audience's agreement with the SCAs' underlying norms that underpin their decisions.     

Why bad feelings predict good behaviours: The role of positive and negative anticipated emotions on consumer ethical decision making

Research suggests that emotions can greatly influence consumer decision making and behaviours. Notwithstanding, our understanding of the role of anticipated emotions in what is an inherently complex deliberation process—that of consumer ethics—is still quite limited. The present study thus aims to address this gap, in two key ways: first, by measuring the influence of positive and negative anticipated emotions at each stage of the consumer ethical decision making process; and second by describing the specific emotions that most affect each component of the consumer ethical deliberation process and assessing their relative weight in predicting decisions involving ethical issues. Through the examination of 603 ethical situations and using multiple regression analysis, the findings indicate that anticipated emotions can account for up to 59% of the variance in consumer decisions involving ethics. Anticipating the experience of negative emotions as a result of carrying out an unethical behaviour was the affective component found to most influence consumer ethical deliberation process; and anticipated guilt was the discrete emotion exerting the greatest effect on consumer decision making in ethical situations. The findings indicate that more than feeling good, consumers avoid feeling bad; such that ethically favourable decisions emerge to prevent experiencing negative emotions in the future.     

Implementing radical innovation in the business: the role of transition modes in large firms

Extensive research has emphasized the relevance and importance of separating explorative from exploitative activities within firms. Recently, several scholars have argued that, in order to be successful, the outcomes of such structurally separated explorative activities need to be integrated in the operational business units of the firm. Nevertheless, detailed research on how such integration can be realized is lacking. Based on in‐depth case studies of seven large multinational, technology intensive companies, we find five transition modes on how interfaces between radical innovation units and operational business are managed effectively as a means to implement radical innovation on a company level: (1) external validating; (2) liaison channeling; (3) showcasing innovation; (4) network building; and (5) integrative innovation planning.     

Anomalous waiting times in high-frequency financial data

In high-frequency financial data not only returns, but also waiting times between consecutive trades are random variables. Therefore, it is possible to apply continuous-time random walks (CTRWs) as phenomenological models of the high-frequency price dynamics. An empirical analysis performed on the 30 DJIA stocks shows that the waiting-time survival probability for high-frequency data is non-exponential. This fact imposes constraints on agent-based models of financial markets.     

Diversity is strategy: the effect of R&D team diversity on innovative performance

Diversity in the workplace has attracted significant interest in organisations that want to attract and retain talented employees. Breakthrough innovation requires a wider knowledge base, and organisations increasingly rely on multidisciplinary R&D teams to identify scientific developments that bridge gaps and reduce time to market. However, research on the performance implications of R&D team diversity remains limited and the empirical evidence inconsistent. This paper investigates the impact of surface and deep-level diversity on R&D teams’ innovative performance and how diversity dimensions interact to drive innovation. We find supportive evidence that R&D team characteristics influence innovation outcomes, confirming our hypothesising that diversity is a valuable strategy for an organisation to pursue as it provides greater cognitive ability. Each diversity facet however has its own distinct effects depending on the novelty of innovation and industry. Yet, diversity is not solely positive and excessive heterogeneity could be detrimental to R&D team performance. Our findings suggest that high diversity in gender or skills in cognitively diverse teams might be negative attributes to take into consideration. Senior managers and organisations should therefore consider the appropriate mix of capabilities to benefit from creativity in diverse R&D teams and avoid possible conflict and distrust associated with diversity.     

Future-oriented higher education: Which key competencies should be fostered through university teaching and learning?

Universities play an important role in shaping the future of the world society in terms of sustainable development by generating new knowledge as well as contributing to the development of appropriate competencies and raising sustainability awareness. During the last years, many universities have undertaken activities for implementing Higher Education for Sustainable Development (HESD). Many have asked which key competencies are most relevant for sustainable development and hence should be developed in future-oriented higher education. Different approaches for the selection of sustainability key competencies have been developed, but there is little international agreement in the debate around the most important key competencies. Consequently, this paper asks which individual key competencies are crucial for understanding central challenges facing the world society and for facilitating its development towards a more sustainable future, and thus identifies those competencies which should be fostered through university teaching and learning. The empirical design of the study is related to a Delphi study in which ‘sustainability key competencies’ are defined by selected experts from Europe (Germany, Great Britain) and Latin America (Chile, Ecuador, Mexico). The results show that twelve key competencies crucial for sustainable development can be identified; the most relevant ones are those for systemic thinking, anticipatory thinking and critical thinking.