When do Non‐Family CEOs Outperform in Family Firms? Agency and Behavioural Agency Perspectives

Family firms represent a globally dominant form of organization, yet they confront a steep challenge of finding and managing competent leaders. Sometimes, these leaders cannot be found within the owning family. To date we know little about the governance contexts under which non‐family leaders thrive or founder. Guided by concepts from agency theory and behavioural agency theory, we examine the conditions of ownership and leadership that promote superior performance among non‐family CEOs of family firms. Our analysis of 893 Italian family firms demonstrates that these leaders outperform when they are monitored by multiple major family owners as opposed to a single owner; they also outperform when they are not required to share power with co‐CEOs who are family members, and who may be motivated by parochial family socioemotional priorities.     

Entrepreneurial Boldness and Excessive Investment

We analyze investment by a population of hyperbolic discounting entrepreneurs. In order to avoid inefficient procrastination, agents with good prospects about their chances of success may choose to forego free information and to invest boldly. This explains an excessive level of investment in the economy. Building on this observation, we show that low risk-free interest rates favor bold entrepreneurship and entry mistakes. Furthermore, public intervention can be socially desirable: Forcing agents to acquire information before deciding whether to invest may reduce competitive interest rates and may be beneficial for all individuals in the economy .

And thus the native hue of resolution Is sicklied o'er with the pale cast of thought, And enterprises of great pith and moment With this regard their currents turn awry, And lose the name of action.                      Hamlet , Act 3: Scene 1.

     

French multinational companies’ strategies and co-ordination mechanisms: the role of human resource management in Europe and Nigeria

The everchanging European context may well lead to the evolution of MNCs’ strategies in Europe and to the evolution of the control mechanisms within their subsidiaries. The author analyses the issue from the angle of human resources management, considered as an informal control tool that is widely recognized by both scholars and managers. This research therefore aims at analysing whether or not and how HRM systems embody a possible integration process in the European economic space. The methodology is based on a case study from a French multinational company belonging to the automobile industry while the investigation, a comparative analysis of the headquarters-subsidiaries relationships in England, Spain and Nigeria, points out the specificity of the European context regarding corporate strategy orientations, subsidiary roles and personnel transfer policies. The major conclusions from such an analysis suggest a framework that gives prominence to the differentiation of the management process between Europe and Nigeria.

These results confirm previous literature on co-ordination mechanisms in complex business organizations.     

Influence through ignorance

An individual (the leader) with free access to information decides how much public evidence to collect. Conditional on this information, another individual with conflicting preferences (the follower) undertakes an action that affects the payoff of both players. In this game of incomplete but symmetric information, we characterize the rents obtained by the leader as a result of his control of the generation of public information. These rents capture the degree of influence exerted by a chairman on a committee from his capacity to keep discussions alive or call a vote. Similar insights are obtained if the leader decides first how much private information he collects, and then how much verifiable information he transmits to the follower.     

Beyond a Livable and Green Neighborhood: Asserting Control,Sovereignty and Transgression in the Casc Antic of Barcelona

During the past 15 years, the Casc Antic, a traditionally low‐income and immigrant neighborhood in Barcelona, has been the site of community‐based mobilization to revitalize abandoned areas and improve local environmental conditions. The organization of residents and their supporters is situated within a broader context of urban political and socioeconomic change — the transformation of the urban economy into a decentralized, global and technology‐ and service‐focused system, accompanied by rising socioeconomic inequality and displacement in inner‐city areas. To date, few studies in the urban environmental arena have been placed within processes of urban change and offer specificity on the purposes, intents and goals that poor and minority residents develop as they understand, resist and challenge their marginality. Why do residents of marginalized neighborhoods and their supporters organize to proactively improve livability and environmental quality? To what extent do the environmental struggles of marginalized communities serve as means to advance more complex political agendas in the city? Through the examination of neighborhood organization for livability in the Casc Antic, I analyze how activists use their environmental endeavors as tools to address stigmas attached to their place, control the land and its boundaries, and build a more transgressive form of democracy.     

Competition and Price Discrimination: Evidence from the Parking Garage Industry

We study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry. We find that the degree of price schedule curvature decreases with competition, implying a greater proportionate drop in low‐end prices than in high‐end prices when competition intensifies. Our findings suggest that competition constrains a firm's capacity to exercise price discrimination, confirming the classic textbook theory. We also offer possible explanations for our findings, including a search cost explanation, for which we find some support in the data.     

Decision making for business model development: a process study of effectuation and causation in new technology-based ventures

This study investigates the decision-making logics used by new ventures to develop their business models. In particular, they focussed on the logics of effectuation and causation and how their dynamics shape the development of business models over time. They found that the effectual decision-making logic was used dominantly to generate a viable value proposition for a specific customer segment. Causal logic is then used dominantly to define the other business model components in relation to the value proposition and customer segment. When a shortage of resources emerges, causal logic is replaced by an increase in effectual decision-making again. They concluded that before investing significant resources in a business model it was crucial for firms to reduce, as far as possible, technological and market uncertainty through effectual strategies to avoid high re-configuration costs later.     

Herding behaviour in the Australian loan market and its impact on bank loan quality

We examine the effect of herding behaviour on the credit quality of bank loans in Australia. We find that bank herding varies with different types of loans. It tends to be more prevalent in owner‐occupied housing loans and credit cards than other types of loans. During the global financial crisis period, herding in owner‐occupied housing loans was most pronounced due to the flight‐to‐quality phenomenon in the housing sector. Furthermore, we find that the big four banks tend to herd more than smaller and regional banks. Bank herding behaviour is countercyclical, as it is negatively related to real GDP growth and the cost of funding but is positively related to market risk. Regulatory capital requirements may also encourage herding as banks are required to hold less risk‐weighted capital for residential loans. Most importantly, bank herding is related to higher impaired assets and therefore lower loan quality. Our findings may have implications for policymakers and bank regulators.     

An alternative proof of the nonemptiness of the private core

Summary. We focus on the private core [19] of an economy with a finite number of agents with differential information, a continuum of states and an infinite number of commodities. We state a nonemptiness result for the private core and provide a proof based on a fixed-point argument. Received: October 4, 1999; revised version: June 7, 2000