Why executives won't talk with their people

Three years ago Robert Saltonstall, Jr., Associate Vice President for Operations at Harvard University, faced an increasingly common problem in business and institutions today when he severed 68 long-service, wage employees to solve a problem of low productivity in a particular trade group. He did this using relatively conventional and creative techniques. But now three years later, he asked Nona Lyons of the Harvard Graduate School of Education, who is researching the ethical dimensions of executives' decisions, to assist him in evaluating how these employees felt about the process. The employees' loyalty in spite of everything has caused Saltonstall to rethink the ethics of both his decision and its execution. In this article Saltonstall asks and answers many of the questions executives face when challenged to handle work reduction decisions in a more ethical way. And Lyons assists him with commentary on some of the current research on moral decision-making which will help executives to understand why they find some of their decisions to be moral dilemmas. The article challenges executives to think about reorganization decisions in a participative way and suggests seven central issues executives should consider before commencing a participative approach. The article reaches no specific conclusion, but introduces some new ways to think about lay-off decisions and their ethical implications for those affected.Nona Lyons is a Lecturer at the Harvard Graduate School of Education. Her research interests link moral and developmental psychology with education. A former school administrator, Lyons returned to graduate study in a mid-career professional change. Her doctoral research involved developing a methodology that made possible the first systematic identification of two moral considerations in peoples' thinking about their real-life moral conflicts, that is, traditional considerations of justice and more recently revealed considerations of care. In 1987, Lyons was awarded a Spencer Fellowship to explore and document how teachers come to change their practices as well as the values dimensions of their work. In all, Lyons has been concerned to connect research with new ways to think about the education of professionals.Robert Saltonstall, Jr. is currently Associate Dean for Harvard Medical School Operations. From June, 1981 to November, 1987 he was Associate Vice President of Operations for Harvard University. In that capacity he handled the subject matter for this article. Prior to his university work Saltonstall served in the commercial sector as General Manager of a resort, and President of a boat manufacturing company. He also held various manufacturing positions in the packaged food industry. He holds an MBA from Harvard (1964) and an A.B. in math from Brown (1957).     

At What Age Do You Expect to Retire? Retirement Expectations and Increases in the Statutory Retirement Age

We analyse the extent to which an increase in the statutory retirement age affects individuals' retirement expectations. Understanding how individuals adjust their expectations is crucial to the evaluation of this policy, since retirement expectations directly affect other important decisions such as labour supply, engagement in (further) education and, of course, savings and investments. We consider the 2007 German pension reform that legislated an increase in the statutory retirement age from 65 years to 67. Our analysis is based on a longitudinal study that directly asks respondents at what age they expect to retire. Using a difference‐in‐differences approach, we look at the changes in subjective retirement expectations over time and estimate the extent to which they can be attributed to the 2007 reform. We find that the reform shifted the retirement expectations of the younger cohorts, although there is some heterogeneity in the way individuals adjusted. While there are no significant differences between men and women, lower‐educated individuals failed to revise their expectations. As these individuals usually acquire both lower pension claims and lower private savings, the fact that they have been slower in updating their retirement expectations causes concern regarding their income security after retirement.     

How does the theory of consumption values contribute to place identity and sustainable consumption?

The importance of consumers’ role in sustainable consumption is reflected in the vision of the Sustainable Development Education Panel: To educate consumers to make informed consumption decisions, to take responsibility for their actions and to realize the impact of consumption decisions on future generations. However, educating and informing consumers alone is unlikely to change deeply entrenched unsustainable consumption behaviour. A multi‐faceted approach is required – enforcing sustainable development initiatives through legislation, promoting corporate social responsibility programs on the part of business, and (most importantly), supporting communities that engage in sustainable consumption. This study examines the proposition that individuals who identify with their community (i.e. the residential suburb or a locality where identity is understood geographically) are more likely to engage in sustainable consumption. Specifically, it examines how consumption value (i.e. the perceived value of living in a particular residential suburb) contributes to place identity and to environmental attitudes and sustainable consumption behaviour. Structural equation modelling is used to verify the conceptual model using data from a telephone survey of 561 residents from two inner city suburbs in Auckland, New Zealand. The results support the proposition that environmental attitude and sustainable consumption behaviour is enhanced by consumption values through place identity. Residents who enjoy living in their community, value a clean and healthy environment and believe their suburbs are unique tend to develop a stronger identity with their residential suburb, and are more positive towards sustainable consumption. The results have important implications for social marketers, property marketers and city councils who strive to encourage sustainable consumption among its citizens.     

Revisiting the democracy-private investment nexus: Does inequality matter?

Contrary to the predictions of a large theoretical literature, recent cross-country evidence suggests autocracies can generate statistically indistinguishable levels of private investment compared to democracies. We argue that the previous exclusion of inequality explains part of this puzzle. We model current investment as a function of investors’ beliefs about future tax rates, which are conditioned by the constraints on the Executive in setting tax rates and expropriating tax revenues. In democracies, where tax rates reflect the preferences of the median voter, investment declines with rising inequality. In autocracies, investor beliefs about future tax rates reflect the relative power of Elites compared to the Executive. As inequality rises, the increased resources available to Elites constrains the Executive’s ability to expropriate more tax revenues. The heterogeneous determinants of investor beliefs can explain the observed pattern of investment across regime types. We first test our predictions at the macro-level with cross-country data. We then test the behavioral underpinnings of our model with a novel laboratory experiment showing how inequality affects individual-level investment behavior dependent upon regime type. Results from both types of analyses show that when inequality is taken into account autocracies can generate similar levels of investment to democracies.     

Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology across States in the U.S.

This paper contributes to the sparse literature on inequality convergence by empirically testing convergence across states in the U.S. This sample period encompasses a series of different periods that the existing literature discusses -- the Great Depression (1929–1944), the Great Compression (1945–1979), the Great Divergence (1980-present), the Great Moderation (1982–2007), and the Great Recession (2007–2009). This paper implements the relatively new method of panel convergence testing, recommended by Phillips and Sul (2007). This method examines the club convergence hypothesis, which argues that certain countries, states, sectors, or regions belong to a club that moves from disequilibrium positions to their club-specific steady-state positions. We find strong support for convergence through the late 1970s and early 1980s, and then evidence of divergence. The divergence, however, moves the dispersion of inequality measures across states only a fraction of the way back to their levels in the early part of the twentieth century.     

Testing for UIP-Type Relationships: Nonlinearities,Monetary Announcements and Interest Rate Expectations

Open Economies Review - This paper tests for UIP-type relationships by estimating first a benchmark linear Cointegrated VAR including the nominal exchange rate and the interest rate differential as...