Structural and relational influences on the role of reward interdependence in product innovation

This study examines the relationship between reward interdependence, or the extent to which managers' rewards are tied to the performance of colleagues in other functions, and product innovation. It also considers how structural and relational features of the organizational context might moderate this relationship. Our analysis of a sample of Canadian‐based firms reveals a positive relationship between reward interdependence and product innovation that is invigorated at higher levels of job rotation, social interaction, and interactional fairness, but we find no evidence of a moderating effect of decision autonomy. Consistent with a systems approach to organizational contingencies, we also find that the reward interdependence–product innovation relationship is stronger when the organization's context comes closer to an ‘ideal’ holistic configuration that is most conducive to knowledge exchange within the organization, with a more prominent role played by the relational sub‐context (social interaction and interactional fairness) than the structural sub‐context (job rotation and decision autonomy). The findings have important implications for innovation research as they shed light on how the extent to which individual rewards are tied to collective performance can be channeled to enhance innovation pursuits.     

Suspending Group Debate and Developing Concepts

The ability of new product development (NPD) teams to generate ideas and develop high‐quality concepts for new products is a crucial determinant of NPD success. Although prior research in this area has developed various interventions to enhance the ability of teams to generate ideas, such interventions have limited impact on innovation management theory and practice. Partly, this is because of practical reasons: The interventions are often costly and impractical. However, there are also more fundamental, theoretical issues regarding these interventions: Knowledge of which interventions are effective in what situations is lacking. Even more importantly, there is no theory (or empirical evidence) about the effects of these interventions on the success of developing initial ideas into concepts. Together, this has caused the usefulness of these interventions for NPD teams to be uncertain at best. To remedy this situation, this study focuses on a costless and easy‐to‐implement intervention: suspending group debate. Suspending group debate refers to a team idea generation and concept development process in which groups debate a problem, ideas for solutions are generated individually, and these ideas are debated and developed into concepts collectively. The authors developed a new theory about the impact of suspending group debate on idea generation and on further concept development. Specifically, they argue that suspending group debate causes groups to generate a higher number of ideas, a higher number of original ideas, and a more diverse set of ideas, but that only the number of original ideas and the diversity of the set of ideas will translate into higher concept quality. The authors also developed new theory about when suspending group debate is especially effective. Specifically, they argue that suspending group debate is especially effective when at least one group member is low on extraversion. This theory is tested using an experimental design in which groups generated ideas and developed concepts for a specific organizational problem. Some groups suspend group debate, while others do not. Results show that suspending group debate indeed causes groups to generate a higher number of ideas, a higher number of original ideas, and a more diverse set of ideas. Importantly, results demonstrate that the effects of suspending group debate are more pronounced for groups with one or more group members that are low on extraversion. Furthermore, suspending group debate also affects concept quality, mediated by the number of original ideas and the diversity of ideas that groups generate (and thus not by the sheer number of ideas generated). Specifically, results show that both the diversity of the idea set as well as the number of original ideas positively influence the innovativeness of the final concept, while only the diversity of the idea set influences the comprehensiveness of the final concept.     

The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs

We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts that are known to have primarily private costs. Using a reduced-form difference-in-difference approach as well as the nonparametric estimation technique that was proposed by Racine and Li (J Econom 119(1):99–130, 2004) we find that bidding is more aggressive in a sequential multi-round setting than in a simultaneous single-round format. We explore potential causes for the bidding difference across formats that are related to synergies and the level of bidder participation.     

Sanac Inc.: From ABC to time-driven ABC (TDABC) – An instructional case

This case deals with the decision of Sanac Inc., a Belgian wholesale company, on whether to proceed with the implementation of an activity-based costing (ABC) system or switch to time-driven activity-based costing (TDABC). As a business consultant, you are hired to decide about the appropriate costing method. Your task is to decide which system the company should implement, given the desire of the president of the company to calculate profitability at the order and the customer level.     

Improved approximations for the aggregate claims distribution of a life insurance portfolio

Abstract

In an earlier paper the author derived a recursion formula which permits the exact computation of the aggregrate claims distribution in the individual life model. This exact procedure requires of course more computing time than approximative methods such as Kornya's algorithm, which seemed to be the best compromise between accuracy and computational effort. In the present paper it is shown that, to save time, the exact formula can be used in an approximative way and that the corresponding error bound is smaller than the one of the Kornya-type approximations.     

Monetary policy and financial (in)stability: An integrated micro–macro approach

Evidence on central banks’ twin objective, monetary and financial stability, is scarce. We suggest an integrated micro–macro approach with two core virtues. First, we measure financial stability directly at the bank level as the probability of distress. Second, we integrate a microeconomic hazard model for bank distress and a standard macroeconomic model. The advantage of this approach is to incorporate micro information, to allow for non-linearities and to permit general feedback effects between financial distress and the real economy. We base the analysis on German bank and macro data between 1995 and 2004. Our results confirm the existence of a trade-off between monetary and financial stability. An unexpected tightening of monetary policy increases the probability of distress. This effect disappears when neglecting microeffects and non-linearities, underlining their importance. Distress responses are largest for small cooperative banks, weak distress events, and at times when capitalization is low. An important policy implication is that the separation of financial supervision and monetary policy requires close collaboration among members in the European System of Central Banks and national bank supervisors.     

Three decades of research on corporate governance and R&D investments: a systematic review and research agenda

This paper reviews and systematizes the empirical research on the nexus between corporate governance (CG) and investments in research and development (R&D) published in leading business, management, economics and finance journals over the past 30 years. We find that CG is key in shaping R&D investments. Moreover, the effects of both firm- and country-level CG are important for both internal and external R&D investments. Drawing on our review, we welcome future studies to examine the effect of the interplay between various CG mechanisms and different types of R&D investments, and possibly identify mediating variables besides the moderating ones. Moreover, we highlight the need for future interdisciplinary studies, as well as investigations of private companies and across developing countries. Whenever causal interpretations are attempted, both sample selection and endogeneity problems should be addressed, along with testing the CG-R&D investment nexus for nonlinear dynamics. The implications of the study for both theory and practice are also discussed.