After, before and during: returns to education in Hungary (1986–1998)

How valuable are the skills acquired under socialism in a market economy? This paper throws light on this question using unique data covering the years before and during transition (1986–1998) for about 3 million Hungarian wage earners. We find that returns to a year of schooling increased by 75% from 6.4% in 1986 to 11.2% in 1998. We also find that the private sector rewards formal education more than the public and, in terms of gender, although in 1986 women had greater returns to schooling than men, by 1998 this difference had been eliminated.     

The Decision to Persist with Underperforming Alliances: The Role of Trust and Control

abstract We draw on theories of persistence to develop a model of alliance managers' decisions towards persisting in underperforming alliances based on their concomitant consideration of the control and trust in those alliances. We test the model using experimental data based on 2,816 decisions nested within 88 alliance managers. We find that output, behavioural and social control, competence and goodwill trust, and interactions between trust and control variables significantly explain alliance managers' decisions to persist in underperforming alliances. We discuss the implications of these findings for the control, trust and strategic alliance literatures.     

The Dynamics of Chronic Failure: A Longitudinal Study

Over a 25-year period, due to its continued under-performance, repeated efforts were made to reduce the costs and refocus the efforts of a regional office of a national agency. Eventually these efforts resulted in the office being effectively eliminated. This article argues that the processes used during organization change efforts were so flawed that they actually accentuated chronic failure. Even with highly dedicated professional staff and the desire to properly spend public money, an organization can fail in the institutional domain while still protesting and pursuing success in the client domain.     

Multiple State Property Options

Before taking strategic actions in property investments, consider the type and number of expansion, contraction and suspension alternatives and the future profit volatility. The optimal investment strategy for a current or prospective property owner should reflect the expected variability of future profits (rent times occupancy times units available), and current profits relative to threshold trigger profits for a variety of alternative states and actions. These alternatives include remaining idle, building and operating properties, expanding, contracting, suspending, reverting to normal service or reduced service capacity, or abandoning. A valuation model is developed for up to eight different options, each with a distinct trigger. Then numerical solutions show optimal profit triggers and valuations for each of these real options. Generally, increasing the number of options reduces the investment and abandonment triggers, and increases the values of the investment option and total option values, given these alternatives and parameters. The relevant parameters will depend on the investment context and feasible actions, but generally include interest rates, profit volatility, and irrecoverable costs of investment, expansion, contracting, suspension and abandonment. Generally increases in investment costs reduce the value of upward options, and increases the optimal triggers for exercising those options. Increases in expected profit volatility increase the value of all options, increases investment triggers and decreases abandonment triggers. These generic models may be appropriate for many contexts where the costs of changing states are partially irrecoverable, yet where management has some flexibility to alter scale, quality and pricing of assets and services.     

Designer path independent choice functions

Summary. This paper provides an algorithm for the construction of all PICFs on a finite set of alternatives, V, designed by an a priori given set I of initial choices as well as the determination of whether the initial set I is consistent with path independence. The algorithm is based on a new characterization result for path independent choice functions (PICF) on finite domains and uses that characterization as the basis of the algorithm. The characterization result identifies two properties of a partition of the Boolean algebra as necessary and sufficient for a choice function C to be a PICF: (i): For every subset A of V the set is an interval in the Boolean algebra 2 ^V . (ii): If A/B is an interval in the Boolean algebra such that C(A) = C(B) and if M/N is an upper transpose of A/B then C(M) = C(N). The algorithm proceeds by expanding on the implications of these two properties.Received: 5 November 2003, Revised: 20 July 2004, JEL Classification Numbers: D00, D70.     

Resolving ethical conflicts at workthrough cooperative goals and constructive controversy in the People's Republic of China

The idea of constructive controversy and the theory of cooperation and competition together suggest the type of interaction that promotes satisfactory resolution of ethical conflicts and the conditions under which this occurs. A sample of 101 Chinese mainland employees described and rated a critical incident of an ethical conflict at work. Structural equation analyses indicated that when the employees had goals that were cooperatively related with those of other stakeholders in the conflict, rather than competitive or independent goals, this facilitated constructive controversy, i.e., open-minded discussion, which, in turn, led to effective outcomes in terms of substantive ethical impact and interactional justice. Results also indicated that high levels of moral intensity strengthened competitive goals and rendered constructive controversy less likely. Implications are that organizations should make it clear to members that conflict avoidance and moral muteness are inappropriate responses to ethically unsound practices and policies, that it is important to detect ethically questionable behaviours or policies at an early stage, and that wherever possible these should be discussed promptly, before an uncomfortably high level of moral intensity is reached. Constructive controversy is suggested as a process through which corporate codes of conduct may be developed.