Trust relations in management of change

Trust is essential for the success of change, but transformational change challenges trust. This paper analyses how trust dynamics develop over time in two Danish manufacturing firms affected by major change programmes. The results show that change creates uncertainty among employees, thereby provoking intense scrutiny of management intentions and a tendency to make interpretations that exaggerate management intentions—with the end result of reduced trust. Management then react similarly with negative interpretations of employee reactions, creating a vicious cycle of reduced trust. The paper proposes a model for how change and trust interact and suggests a managerial strategy for trust repair: Strong management actions that symbolise integrity, competence and benevolence may counteract reduced trust, but if low trust turns into distrust, the result may be a deadlock that both parties find difficult to break.     

The impact of coding time on the estimation of school effects

Multilevel growth curve models are becoming invaluable in educational research because they model changes in student outcomes efficiently. The coding of the time variable in these models plays a crucial role as illustrated in this study for the case of a three-level quadratic growth curve model. This paper shows clearly how the choice of a time coding affects school effects estimates and their interpretation. A new definition for school effects for growth curve models with random intercepts and slopes is proposed. This study recommends that the choice of a time coding should not only be based on the ease of interpretation and model convergence but also on its consequences on the student status and growth parameter estimates. The current application illustrates that in general the school effects for student growth in well-being and language achievement in secondary school, are greater for student growth than for student status.     

Organizing innovation projects under technological turbulence

Research on the organization of innovation projects suggests that increased project flexibility is a common reaction to high levels of technological turbulence. However, existing definitions of project flexibility are inconsistent and sometimes unclear, and empirical evidence is limited. This article makes an important distinction between flexible project planning and flexible project specifications. A negative relationship is found between flexible project planning and innovation project performance, whereas flexible product specifications are found to contribute positively.This article also examines how technological turbulence contributes to the choice of flexible or inflexible strategies. Technological turbulence can be present in the external environment or can be internal to the firm, when radically new products are developed. The findings suggest that when businesses perceive technological turbulence in the environment they are more likely to adopt flexible approaches to innovation in an attempt to adapt to external pressures. In technologically innovative projects, product specifications are likely to remain fixed while project organization is likely to be adapted to the needs of the project.Taken together, the findings suggest that innovation projects should maintain stable organization, schedules and budgets, but stay flexible about product specifications. Vigilance with regards to external and internal conditions of technological turbulence, which may lead organizations to be more flexible in terms of project planning, is needed.     

A quintessential immigrant niche? The non-case of immigrants in the Dutch construction industry

Students of immigrant entrepreneurship show a distinct preference for ethnic concentrations. They focus on small entrepreneurship in sectors with large concentrations of immigrant businesses or on ethnic commercial precincts. This preference stems from practical and theoretical considerations. It seems that the study of such concentrations, or niches, is essential to the theoretical understanding of the structural determinants of small entrepreneurship and the processes of economic incorporation of immigrants. This paper challenges this orthodoxy. It argues that it is important to assess the factors and processes that positively and negatively affect the formation of niches. This argument is corroborated by an analysis of the construction industry in the Netherlands. According to Waldinger (1995: 577), ‘construction represents the quintessential ethnic niche’, but immigrants in the Netherlands did not carve out a niche. This exceptional situation can be attributed to a sector-specific configuration of social, economic and institutional processes.     

Forecasting the US term structure of interest rates using a macroeconomic smooth dynamic factor model

We extend the class of dynamic factor yield curve models in order to include macroeconomic factors. Our work benefits from recent developments in the dynamic factor literature related to the extraction of the common factors from a large panel of macroeconomic series and the estimation of the parameters in the model. We include these factors in a dynamic factor model for the yield curve, in which we model the salient structure of the yield curve by imposing smoothness restrictions on the yield factor loadings via cubic spline functions. We carry out a likelihood-based analysis in which we jointly consider a factor model for the yield curve, a factor model for the macroeconomic series, and their dynamic interactions with the latent dynamic factors. We illustrate the methodology by forecasting the U.S. term structure of interest rates. For this empirical study, we use a monthly time series panel of unsmoothed Fama–Bliss zero yields for treasuries of different maturities between 1970 and 2009, which we combine with a macro panel of 110 series over the same sample period. We show that the relationship between the macroeconomic factors and the yield curve data has an intuitive interpretation, and that there is interdependence between the yield and macroeconomic factors. Finally, we perform an extensive out-of-sample forecasting study. Our main conclusion is that macroeconomic variables can lead to more accurate yield curve forecasts.     

Expatriate or local bosses? HCN subordinates' preferences in leadership behaviour

This article explores host-country national subordinates’ preferences in leadership behaviour comparing expatriate bosses and local bosses. From a sample of 240 middle managers in Hong Kong with experience with both local Chinese bosses and expatriate bosses from a broad spectrum of Western and Asian countries, it was found that the subordinate managers assessed the leadership behaviour of their expatriate bosses to be significantly closer to that of their perceived ideal boss. American leadership behaviour was the most preferred and Japanese leader style was the least preferred, with British leadership style comprising a middle group. Implications of these findings for international business firms and future academic research are discussed.     

Instrumental variable estimation based on grouped data

The paper considers the estimation of the coefficients of a single equation in the presence of dummy intruments. We derive pseudo ML and GMM estimators based on moment restrictions induced either by the structural form or by the reduced form of the model. The performance of the estimators is evaluated for the non-Gaussian case. We allow for heteroscedasticity. The asymptotic distributions are based on parameter sequences where the number of instruments increases at the same rate as the sample size. Relaxing the usual Gaussian assumption is shown to affect the normal asymptotic distributions. As a result also recently suggested new specification tests for the validity of instruments depend on Gaussianity. Monte Carlo simulations confirm the accuracy of the asymptotic approach.     

Investment in Africa's Manufacturing Sector: A Four Country Panel Data Analysis

Firm level data for the manufacturing sector in Africa, presented in this paper, shows very low levels of investment. The importance of profit effects on investment is investigated using a flexible accelerator, a specification based on the Euler equation and a simple generalisation of these specificiations. There are controls for firm fixed effects. It is shown that the profit effect is very similar for both the accelerator and Euler equation specifications. A comparison with other studies shows that, for small firms, the effect is much smaller in Africa than for other countries. Reasons for the relative insensitivity of investment to profits in African firms are suggested. For the most general specification tested there are no significant differences in the size of the profit effect across the four countries in the study.     

Partnerships and the private recruitment industry

This article, based on a postal survey and qualitative interview‐based research, examines the relationship between major private recruitment bureaux and their clients in the UK, with particular attention to the recruitment and selection of temporary workers. The private recruitment industry is growing and large bureaux are seeking closer partnership arrangements with clients. Contracts for labour services are being developed on a 'preferred' supplier basis – similar in type to the approach taken for the purchase or supply of goods or components. However, formal preferred supplier contracts with temporary work bureaux were used by only a minority of clients, usually larger organisations or those having projects or workplaces with high volume demand. While such bureaux seek models of relational contracting or partnering, many clients prefer less fully engaged or 'semi‐distanced' relations facilitated by the informal dimensions of inter‐organisational contacts.     

What makes a good conference? Analysing the preferences of labour economists

Conferences are an important element in the work of researchers, requiring substantial investments in fees, travel expenses and the time spent by the participants. The aim of this paper is to identify the preferences of participants with respect to conference characteristics. Based on a sample of European labour economists, preferences are measured using the vignette approach where participants are asked to choose between hypothetical European Association of Labour Economists (EALE) conferences. We find that the keynote speakers are the most important element in the preference for a conference, followed by the location of the conference. There is substantial heterogeneity in the taste of labour economists especially with respect to location, though the link between preference parameters and measured characteristics like gender, age and seniority is limited. Factor analysis suggests that the variety in preferences can be best described by a latent variable that reflects the weights people put on content versus fun.