From promise to performance

Book reviewed in this article:
Bauman, Robert P., Jackson, Peter and Lawrence, Joanne T. From Promise to Performance: A Journey of Transformation at SmithKline Beecham     

The European Union’s Constitutional Crisis—Causes and Consequences

The rejection of the treaty establishing a European constitution by French and Dutch voters has thrown the EU into a deep crisis. What developments in the EU contributed to these referenda results? What consequences are to be drawn for the continuation of integration and the integration goal, the governance of the EU-25 and the further planned enlargements? What flaws are there in the present draft constitution and how can these be dealt with?     

The Human Face of Self-Interest

Moralists tend to have a low opinion of self-interest. It is seen as force that has to be controlled or transcended. This essay tries to get beyond the bifurcation of human motivations into self-interest (which is seen as vicious or non-moral) and concern for others (which is virtuous). It argues that there are some surprising affinities between self-interest and morality. Notably the principal force that checks self-interest is self-interest itself. Consequently, self-interest often coincides with and reinforces the commands of morality and promotes civility and consideration for others. Therefore it provides us with resources for constructing a more humane and civil society.     

Social media? Get serious! Understanding the functional building blocks of social media

Traditionally, consumers used the Internet to simply expend content: they read it, they watched it, and they used it to buy products and services. Increasingly, however, consumers are utilizing platforms—such as content sharing sites, blogs, social networking, and wikis—to create, modify, share, and discuss Internet content. This represents the social media phenomenon, which can now significantly impact a firm's reputation, sales, and even survival. Yet, many executives eschew or ignore this form of media because they don’t understand what it is, the various forms it can take, and how to engage with it and learn. In response, we present a framework that defines social media by using seven functional building blocks: identity, conversations, sharing, presence, relationships, reputation, and groups. As different social media activities are defined by the extent to which they focus on some or all of these blocks, we explain the implications that each block can have for how firms should engage with social media. To conclude, we present a number of recommendations regarding how firms should develop strategies for monitoring, understanding, and responding to different social media activities.     

WHO REALLY WANTS TO BE A MILLIONAIRE? ESTIMATES OF RISK AVERSION FROM GAMESHOW DATA

This paper estimates the degree of risk aversion from one of the most popular TV gameshows ever. The format of the show is straightforward; it involves no strategic decision making; we have a large number of observations; and the prizes are cash, which is paid immediately and covers a large range: from £100 up to £1 million. We provide non‐parametric estimates of the utility function and then we test some parametric restrictions. We find that, although the restriction to CRRA utility is statistically rejected, a log function approximates the utility function quite well over a large range of potential winnings. Copyright © 2013 John Wiley & Sons, Ltd.     

HRM practices and organizational commitment profiles

In this study, we examined how employee perceptions of development-oriented, stability-oriented, and reward-oriented human resource management (HRM) practices affected the likelihood of affective and continuance commitment profile membership. Our focus on profiles of combined commitment components is a departure from a literature dominated by studies of the separate forms of employee commitment. Drawing from self-determination theory (Deci and Ryan 2000) we described the nature of the psychological states believed to underlie the specific profiles under investigation, then tested a series of theoretical predictions concerning the link between HRM practices and the likelihood of profile membership. Predictor and criterion data for this study were collected from 317 respondents working in a variety of Canadian-based organizations. Our findings suggest ways that organizations can use HRM practices strategically to help shape the nature of overall employee commitment.     

Restrictions on outward portfolio investment and domestic equity markets

Governments sometimes impose restrictions on local investors which effectively prevent them from purchasing overseas equities. Reasons for doing this, from the government's point of view, would include increasing the availability of risk capital to local companies and lowering its costs. The paper analyses this argument in terms of modern portfolio theory. It is shown that, under certain circumstances, domestic equities and overseas equities may be complements rather than substitutes. In this case the effect of the restrictions would be to lower prices on the domestic stock exchange and to raise the cost of risk capital to local companies. Indications are given of the circumstances in which this effect is likely to occur. Policy makers who are not aware of the risk-spreading motives which underly much international portfolio investment in equities are likely to overstimate the benefits to local industry from forcing local equity investors to keep their funds at home.     

New Business Development: A Challenge for Transformational Leadership

This article analyzes how the behavior of CEOs of major divisions of corporations who are successful at new business development differ in behavior from those who attempted new business development programs and failed. Successful top managers affected organization transformation via three major differences in leadership behavior. Successful CEOs inspired pervasive commitment throughout their division. They built confidence in their subordinates' ability to develop new business. Finally, they found ways of applying appropriate disciplines to the process, particularly in the ara of management of failure. Challenges for the HRM function in terms of orchestrating these CEO behaviors are discussed.