Information Management and Incentives

We ask how the incentives of an agent are affected by an information management system that lets the agent receive information about the performance of a colleague before (“transparent firm”) rather than after he provides effort (“nontransparent firm”). Transparency is detrimental for incentives if the performance of the colleague provides information on the relative impact of the agent’s effort on his success probability. The findings imply that firms in which comparisons between employees play a minor role for compensation are transparent. Firms in which they play a major role sometimes choose to be nontransparent despite the flexibility gains transparency provides.     

Hotel Employees' Perception of the Statutory Minimum Wage Policy in Hong Kong

Employee compensation is one of the largest expenses for businesses. Given the labor-intensive nature of the hotel industry, hotel employees' perceptions of the statutory minimum wage (SMW) policy have become a major concern for hotel operators since the introduction of the policy in Hong Kong. This exploratory study examines these perceptions, together with hotel employees' job and compensation satisfaction and intention to leave, since the introduction of the SMW policy. A survey of 161 hotel employees in Hong Kong was carried out. Respondents demonstrated high awareness of the SMW policy but viewed its effect on the hotel industry as limited. The largest gap between the perceived importance of, and satisfaction with, a factor related to job satisfaction was found for the benefits package. As well as making a contribution to the academic literature, this study provides practical implications of the SMW policy for the hotel industry in Hong Kong and other countries considering adopting a similar measure.     

Family Members' Projections of Each Other's Preference and Influence: A Two-Stage Conjoint Approach

Two important sources of error that may limit the accuracy of individual family members' projections of joint family preferences are: (i) misperceptions of other members' preferences, and (ii) misperceptions of other members' influence in joint family evaluations. We propose a two-stage conjoint approach to study these potential errors. Stage one compares family members' projections of each other's preferences to members' self-reported preferences. Stage two compares family members' projections of each other's influence to observed influence in joint family preferences. An empirical illustration shows that family members are relatively poor predictors of preference, but fairly accurate predictors of influence, in the area of family holiday preferences.     

Adapting to climate change: perceptions of vulnerability of down-hill ski area operators in Southern and Middle Finland

Climate change is likely to affect the tourism sector, particularly areas, such as snow-based tourism, that are directly dependent on climate and weather conditions. Especially vulnerable are low-lying ski areas. This study identifies the climatic factors that are crucial for economically successful operation of low-lying ski areas in Southern and Middle Finland and contemplates how these factors are seen to change with climate change. The study then analyses the preferences for and perceptions of adaptation strategies of downhill ski operators in terms of the adaptation measures they can implement or are willing to take. The findings indicate that climatic conditions set preconditions for the operation of the ski areas, but short-term operational prospects and inter-annual variability in weather conditions rather than foreseen changes in climatic conditions guide the operational decisions of the ski area operators. A key adaptation strategy to respond to uncertain snow conditions is artificial snowmaking, which lowers the vulnerability of the areas to the impacts of climate change too.     

Home in Balance

Abstract

OBJECTIVE For market control to be successful, two conditions have to be fulfilled. The first is that the authorities succeed in collecting sufficient data on the products and their safety hazards. The second condition is that, after finding a hazardous product on the market, the authorities have sufficient means and methods available to make the manufacturer or importer repair the product or withdraw it from the market. In Finland, the product safety authorities have organized market control in practice through local control authorities, aiming to reach a common goal by means of cooperation. The aim is to clear up and further develop the control of the products placed on the market. The ‘field control’ and testing of the products should form a well-functioning whole. Market control activities must be escalated. There is a need for a common control practice.

METHODS The guidance and training of local authorities is the key element. In order for market control to function efficiently, the local control bodies should be given detailed guidance on all aspects of the products to be controlled, the methods of control and the reporting, feed-back and exchange of information. The motivation of the control bodies is also important. The method used in Finland is to choose a few product groups at a time, each of them being subjected to a short-term control according to the instructions of the leading control authority.

RESULTS In 1992 five product groups were inspected. These were chocolate eggs containing a surprise toy, the fire safety of upholstered sitting furniture, markings on toys, the amount of formaldehyde in textiles and markings on heat candles and lanterns. The number of inspected market places totalled 1268 and that of inspected samples 1919. The control measures used were oral remarks, written demands for changes, product specific instructions and others, which amounted to 1093. In the spring of 1993 four product groups were inspected, namely the markings on jacks, chocolate eggs containing a suprise toy, the markings on cosmetic products (shampoo, hair care, and shower gel) and the markings on toys. In total, 2370 market places

CONCLUSIONS Market control has had a favorable reception at the local level, perhaps because the need for this kind of guidance and training has been so evident. This has helped the authorities to chart the various problems of market control, which is assumed to increase the efficiency of the control. In addition, the local authorities have gained much valuable experience, which will be of great assistance when developing market control into a uniform and commensurable system. The leading control authority must know the results of the control in order to be able to set priorities for its activities and to have a truthful picture of the market situation. What is the best way of organizing continuous collection of control data at the local level is a question that must also be solved.     

Corporate Social Responsibility–Oriented Compliances and SMEs Access to Global Market: Evidence from Bangladesh

The convergence of corporate social responsibility (CSR) and corporate governance has immense impact on the participants in global supply chains. The global buyers and retailers tend to incorporate CSR in all stages of product manufacturing within their supply chains. The incorporated CSR thus creates the difficulty to small- and medium-sized manufacturing enterprises (SMEs). Incompetence in standardized CSR practices is an important issue that causes SMEs either losing their scope to access global market directly or serving as subcontractors to large enterprises. This article explores this issue by focusing on Bangladeshi SMEs under the CSR requirement of the important global buyer.     

Managing cross-country skiing destinations under the conditions of climate change - Scenarios for destinations in Austria and Finland

Winter sports resorts in general, and cross-country skiing destinations in particular, will need to address the impacts of climate change in the near future. This study uses the results of a discrete choice experiment to investigate likely skier responses to various destination scenarios under possible adaptation strategies to climate change. The heterogeneity of skiers is accounted for in a latent class model resulting in three segments of Austrian and Finnish skiers respectively. The results show that it is less risky for Austrian destinations to introduce technical adaptation, as well as to expand into additional offers, compared to Finland. The main reasons seem to be the strong tradition of cross-country skiing in Finland combined with a clear aversion toward user fees. The study serves as an example for using results of a stated choice survey to evaluate future destination scenarios and provide market intelligence for management and target marketing.     

A note on work-related values, budget emphasis and managers’ organisational commitment

Managers’ work-related values (WRVs) have important implications for designing appropriate management accounting systems (MAS) in organisations. This paper examines the effect of the interaction between managers’ WRV for innovation and budget emphasis (an integral part of MAS) on their organisational commitment. The sample consisted of 109 managers from production, marketing and support departments within Australian manufacturing firms. Hypotheses were tested using both quantitative and qualitative data collected by a questionnaire survey and post-survey interviews. The results indicate that the adoption of low budget emphasis led to high organisational commitment when managers’ WRV for innovation was high, but not when managers’ WRV for innovation was low. The results also indicate that marketing managers held higher WRV for innovation than production managers. The post-survey interviews provide further insight into how a more customer- and competitor-focused subculture of marketing managers and a more technical- and efficiency-focused subculture of production managers may promote the difference in their WRV for innovation, and affect their attitudes towards budget emphasis. The findings of the study have implications for design of performance evaluation systems for managers in functionally differentiated organisations.     

A game of thrones—Dynamics of internal CEO succession and outcome

We examine the implications of chief executive officer (CEO) succession methods for firm outcomes and executive incentives. Focusing on internal CEO successions, we find that the largest U.S. firms typically rely on two types of succession methods, namely, heir apparent and horse race successions. Although heir apparent and horse race CEO candidates have similar qualifications, the consequences of these two succession methods differ significantly. We find that horse race successions induce conflict and are detrimental to firm performance but not necessarily to the newly appointed CEOs. Our findings suggest succession method influences firm performance, executive incentives and CEO labour markets.