TARGET PAYOUT AND THE ASSOCIATION BETWEEN DIVIDENDS AND SHARE PRICES*

The hypothesis that share prices react differently to unexpected dividend changes conditional upon firm target payouts is examined empirically. The cumulative abnormal return metric is used to measure price reactions for firms in various combinations of target payout class and dividend change. Two models are used as surrogates for expected dividends: the Fama-Babiak model and one using analyst dividend forecasts. In general, the information hypothesis is not supported in the case of unexpected dividend decrease, but target payout is found to be a significant explanatory variable of share price behaviour in the case of unexpected dividend increase.     

A defense of employee rights

Recent trends in business ethics along with growing attacks upon unions, suggest that employee rights will be a major social concern for business managers during the next decade. However, in most of the discussions of employee rights to date, the very meaning and legitimacy of such rights are often uncritically taken for granted. In this paper, we develop an account of employee rights and defend this conception against what we take to be the strongest in-principle objections to it. Joseph R. Des Jardins is Assistant Professor at the Department of Philosophy of Villanova University. He is co-editor, with John McCall, ofContemporary Issues in Business Ethics (1984) and An Introduction to Ethics (forthcoming, both published by Wadsworth. John J. McCall is Assistant Professor at the Department of Philosophy of St. Joseph's University and formerly at Iowa State University.     

Choosing between discrete marketing policy alternatives under uncertain market response conditions

Models for decisions under uncertainty are reviewed and the use of expected utility is recommended. A general framework for choosing between discrete marketing policy alternatives is developed, allowing for different non-Gaussian probability distributions of market response functions to be assumed. An example of an actual application is presented.     

Learning in the thick of it

The U.S. Army's Opposing Force (OPFOR) is a 2,500-member brigade whose job is to help prepare soldiers for combat. Created to be the meanest, toughest foe that soldiers will ever face, OPFOR engages units-in-training in a variety of mock campaigns under a wide range of conditions. Every month, a fresh brigade of more than 4,000 soldiers takes on this standing enemy. OPFOR, which is stationed in the California desert, always has the home-court advantage. But the force being trained--called BLU FOR--is numerically and technologically superior. It possesses more resources and better, more available data. It is made up of experienced soldiers. And it knows just what to expect, because OPFOR shares its methods from previous campaigns with BLUFOR's commanders. In short, each BLUFOR brigade is given practically every edge. Yet OPFOR almost always wins. Underlying OPFOR's consistent success is the way it uses the after-action review (AAR), a method for extracting lessons from one event or project and applying them to others. AAR meetings became a popular business tool after Shell Oil began experimenting with them in 1998. Most corporate AARs, however, are faint echoes of the rigorous reviews performed by OPFOR. Companies tend to treat the process as a pro-forma wrap-up, drawing lessons from an action but rarely learning them. OPFOR's AARs, by contrast, generate raw material that is fed back into the execution cycle. And while OPFOR's reviews extract numerous lessons, the brigade does not consider a lesson to be learned until it is successfully applied and validated. It might not make sense for companies to adopt OPFOR's AAR processes in their entirety, but four fundamentals are mandatory: Lessons must benefit the team that extracts them. The AAR process must start atthe beginning of the activity. Lessons must link explicitly to future actions. And leaders must hold everyone, especially themselves, accountable for learning.     

Workplace violence and corporate policy for health care settings

Incidents of workplace violence have been of significant concern to health care employers and the public at large. Many employers now find themselves confronted with sentinel events in the workplace, such as assault; property damage; racially, ethnically, or religiously motivated violence; sexual assault; employee suicide; or homicide. Regardless of a health care agency's size or mission, when employees are unexpectedly confronted with workplace violence, they are typically overwhelmed with shock and multiple questions surrounding how the event could have occurred in the safety of the workplace. It is difficult to imagine returning to work only minutes after hearing such news and, yet, in this modern era of corporate health care, this is what usually happens. Awareness of the dynamics and issues related to workplace violence can guide policy development and related interventions to promote safety, stability, and provide a platform for adapting to the devastation of such a disturbing event.     

Investment and Uncertainty in the G7

Empirical work on uncertainty and investment generally focuses on one country or one indicator of uncertainty. We extend the literature by assessing the impact of a comprehensive range of potential sources of uncertainty on aggregate business investment across the G7 using Pooled Mean Group Estimation (PMGE) and GARCH methods to model uncertainty. A significant negative long-run effect from exchange rate volatility is found for the G7 and in poolable subgroups including all four larger EU countries. Volatility of long-term interest rates has additionally influenced investment in recent years. For most estimates, a one standard deviation rise in conditional volatility leads to a 2–4 per cent fall in investment although some samples give greater declines. The results suggest inter alia that EMU is beneficial to aggregate investment. JEL no. E22, F31     

The nonatomic assignment model

Summary We formulate a model with a continuum of individuals to be assigned to a continuum of different positions which is an extension of the finite housing market version due to Shapley and Shubik. We show that optimal solutions to such a model exist and have properties similar to those established for finite models, namely, an equivalence among the following: (i) optimal solutions to the linear programming problem (and its dual) associated with the assignment model; (ii) the core of the associated market game; (iii) the Walrasian equilibria of the associated market economy.