Stock option compensation: impact of expense recognition on performance indicators of non-domestic companies listed in the U.S.

The IFRS 2, Share-based Payment, requires that companies recognize the fair value of employee stock options as an expense. To ascertain the impact recognition will have on companies domiciled in countries subject to accounting standards issued by the IASB’s liaison standard setting partners, this research examines the pro forma stock option disclosures provided in Form 20-F by Australian, British, Canadian, French, German, Japanese, and Irish companies.The findings indicate the average impact of expense recognition on diluted EPS will be approximately 40% and will be material at a 5% level for the majority of the companies. The impact varies significantly by country. On average the annual expense recognized will be approximately 15% of beginning stockholders equity. For the majority of the companies, the charge will represent less than 1% of beginning equity. Again the impact varies significantly by country.The findings indicate that absent requirements that stock compensation expense be recognized, a material upward bias will be reflected in performance indicators of many non-U.S. companies and cross-border comparability will be impaired. Since our analysis is based solely on data for the year 2000 for companies domiciled in seven countries, future research will be needed to ascertain the impact of expense recognition on a broader range of companies reporting under IFRS 2.     

Models for Spatially Dependent Missing Data

Most hedonic pricing studies using transaction data employ only sold properties. Since the properties sold during any year or even decade represent only a fraction of all properties, this approach ignores the potentially valuable information content of unsold properties which have known characteristics. In fact, explanatory variable information on house characteristics for all properties, sold and unsold, are often available from assessors. We set forth an estimation approach that predicts missing values of the dependent variable when the sample data exhibit spatial dependence. Employing information on the housing characteristics of both sold and unsold properties can improve prediction, increase estimation efficiency for the missing-at-random case, and reduce self-selection bias in the non-missing-at-random case. We demonstrate these advantages with a Monte Carlo experiment as well as with actual housing data.     

How Bell Labs creates star performers

How can managers increase the productivity of professionals when most of their work goes on inside their heads? Robert Kelley and Janet Caplan believe that defining the difference between star performers and average workers is the answer. Many managers assume that top performers are just smarter. But the authors' research at the Bell Laboratories Switching Systems Business Unit (SSBU) has revealed that the real difference between stars and average workers is not IQ but the ways top performers do their jobs. Their study has led to a training program based on the strategies of star performers. The SSBU training program, known as the Productivity Enhancement Group (PEG), uses an expert model to demystify productivity. The star engineers selected to develop the expert model identified and ranked nine work strategies, such as taking initiative, networking, and self-management. Middle performers were also asked what makes for top-quality work, but their definitions and ranking of the strategies differed significantly from those of the top performers. Taking initiative, for example, meant something very different to an average worker than it did to a star. And for the middle performers, the ability to give good presentations was a core strategy, while it was peripheral for the top engineers. Once PEG got underway, respected engineers ran the training sessions, which included case studies, work-related exercises, and frank discussion. The benefits of the program were striking: participants and managers reported substantial productivity increases in both star and average performers. The PEG program may not be a blueprint for other companies, but its message is clear: managers must focus on people, not on technology, to increase productivity in the knowledge economy.     

Classification in automobile insurance using a DEA and discriminant analysis hybrid

In this article, we adopt an efficiency approach to the two-group linear programming method of discriminant analysis (DA), using principles taken from data envelopment analysis (DEA), to predict group membership in an insurance underwriting scheme. Using an empirical insurance data base we illustrate the effectiveness of our model as a decision-making tool to distinguish among automobile insurance applicants by contrasting our hybrid model with both statistical and LP methods of discriminant analysis. We find for this insurance application that our hybrid model significantly outperforms the more traditional methods in separation and misclassification outcomes.     

Evaluating an Environmental Right: Information Disclosure, Public Comment, and Government Decision Making in Ontario

In 1993, the Ontario government enacted the Environmental Bill of Rights (EBR). The EBR guarantees residents of the province, among other things, the right to comment on permit requests to take water and to discharge into the air and a guarantee that these comments are taken into account in the decision to approve or deny a permit. We model the firm's decision to request a permit, a resident's decision to provide public comment, and the government's decision to approve or deny permit requests to use water or air. Our examination of 1,000 government decisions regarding permit requests leads to two key findings: (1) few permit requests receive any public comment; and (2) to the extent that the public does comment, we find no empirical evidence that comments affect the likelihood that the government will deny a permit request. Our theoretical model anticipates the first result: there are few comments observed for permit applications, because each individual has an incentive to undercontribute to the provision of a public good. The second result did not support the theoretical argument we advance: government, acting to maximize social welfare, takes public concern as a signal of environmental damage. En 1993, le gouvernement de l'Ontario a édicté la Charte des droits environnementaux (CDE). La CDE garantit aux résidents de la province, entre autres, le droit de faire des observations sur les demandes de permis pour puiser l'eau et rejeter des quantités limitées de substances polluantes dans l'air, et garantit aussi que ces observations seront prises en considération dans la décision d'accorder ou de refuser un permis. Nous avons modélisé la décision d'une entreprise de déposer une demande de permis, la décision d'un résident de faire des observations et la décision du gouvernement d'accorder ou de refuser les demandes de permis pour l'usage de l'eau ou de l'air. L'examen de 1000 décisions du gouvernement concernant des demandes de permis a menéà deux principaux constats: 1. peu de demandes de permis reçoivent des observations du public; 2. lorsque le public soumet des observations, aucune évidence empirique ne laisse supposer que les observations influent sur la probabilité que le gouvernement rejette une demande de permis. Notre modèle théorique a anticipé le premier constat: les demandes de permis reçoivent peu d'observations parce que chaque individu a un incitatif à sous–contribuer à la fourniture d'un bien collectif. Le deuxième constat n'a pas appuyé notre argument théorique voulant que le gouvernement, qui agit afin de maximiser le bien–être collectif, tienne compte des préoccupations du public comme un signal de dommage environnemental.     

Adaptation and Organizational Connectedness in Corporate Radical Innovation Programs*

This research examines how established companies organize programs for fostering technology‐based radical innovation. It addresses conflicts revealed in the innovation literature concerning the appropriate design of the strategic, structural, and process components of these programs. In developing innovation strategies, managers must balance the desire for strategic clarity with the need to allow for creativity and exploration. They must structure programs that ensure innovations benefit from the organization's resources while minimizing the numerous constraints that can impede these unconventional activities. Additionally, though they may favor management processes that provide accountability and effective resource allocation, managers must also ensure these do not restrict the flexibility required for successful innovation. The study is a longitudinal, comparative case analysis of interviews with managers involved in innovation programs in 12 industry‐leading multinational corporations. Site visits at each company were followed by biannual interviews with key managers in each company. A total of 81 follow‐up interviews were conducted over a three‐year period. These interviews were aimed at identifying the changes and progress in the programs over time and internal and external impacts on the organization's innovation activity. The analysis reveals (1) distinct but evolving objectives that maintain a logical strategic connection, (2) adaptive structures that shift and transform but preserve relationships with the broader organization, and (3) flexible processes that are understandable beyond the innovation program and are modifiable, both for the context and in response to learning over time. This suggests that programs introducing high uncertainty and risk into mature corporate environments are highly flexible systems that maintain organizational connectedness as they evolve. For academics, this implies a need to understand the evolution of innovation programs as an adaptive learning process that, regardless of form and purpose, preserves its connection to the traditional organization. For practitioners, it highlights the importance of considering the process, strategic, and structural connections to the broader organization when designing innovation programs and suggests the need for feedback mechanisms to help adapt these elements over time.     

Competitiveness in information technology service exports

The US service export base is expanding rapidly as firms seek to penetrate international markets in search of growth opportunities. This article explores mechanisms that a sample of 67 US-based information technology (IT) firms use to export their services to one selected market, Mexico. A correlation analysis revealed that most firms adapt and extend existing IT services for the Mexican market, and consider cultural understanding imperative to successful operations in Mexico. The results also found that firms use a variety of business arrangements (joint ventures, licensing) and a wide array of contract vehicles (time and materials, firm fixed price). © 1995 John Wiley & Sons, Inc.     

Nonparametric methods with applications to hedonic models

Current real estate statistical valuation involves the estimation of parameters within a posited specification. Suchparametric estimation requires judgment concerning model (1) variables; and (2) functional form. In contrast,nonparametric regression estimation requires attention to (1) but permits greatly reduced attention to (2). Parametric estimators functionally model the parameters and variables affectingE(y¦x) while nonparametric estimators directly modelpdf(y, x) and henceE(y¦x).This article applies the kernel nonparametric regression estimator to two different data sets and specifications. The article shows the nonparametric estimator outperforms the standard parametric estimator (OLS) across variable transformations and across data subsets differing in quality. In addition, the article reviews properties of nonparametric estimators, presents the history of nonparametric estimators in real estate, and discusses a representation of the kernel estimator as a nonparametric grid method.     

人力资本管理“分析论”的力量

将来，人力资源部将像财务部、市场部和营运部那样捅有强有力的数据、框架和分析方法。     

Assessing skills and autonomy: the job holder versus the line manager

Managers and their employees may have different perceptions of the skills used in jobs. We carried out a survey aimed at explaining such differences, in respect of verbal, physical, problem‐solving and planning skills, the qualifications required to get the job and indicators of workplace autonomy. First, for most skills there is a reasonably good match between the perceptions of the line manager and those of the employee. But in the case of the contested skills associated with autonomy there is little agreement. Secondly, for most skills there is a small ‘perceptions bias’, in the sense that employees rate required skills at a higher level than their line managers. Thirdly, consistent with the hypothesis that skills are socially constructed, when the manager is male and the worker female there is a tendency for the boss to underestimate and/or the worker to overestimate their skill level by comparison with other gender combinations.