Managing creativity,maintaining control: a study in pharmaceutical research

This paper examines how managers of scientific researchers in a major UK pharmaceutical company attempt to cope with the demands of generating creative research while exercising control over highly-qualified workers. The paper considers some models applicable to HRM in research before turning to research management at Glaxo Research and Development Ltd. Focusing on the management of working time and performance-related pay as control devices, and drawing on labour process perspectives, the authors examine the impact of these on the research process. As there is a high level of indeterminacy in research work, the operation of these controls by line managers is necessarily subjective. This may encourage behaviour which runs counter to the organisational goal of developing new chemical entities. It is suggested, in conclusion, that a fundamental tension between creativity and control characterises the management of commercial research, and is exacerbated by the dynamic nature of the firm's environment.     

Alcohol use and wages of young men: whites vs nonwhites

According to the medical community a host of ills accompanies prolonged alcohol use including memory loss, motor dysfunction, and impaired judgement. While deduction suggests alcohol use would reduce wages, past empirical studies find differently. For example, Berger and Leigh (1988) find a 32% wage premium for drinkers. Our study differs in two ways. First, self-selection is corrected using observed variables and secondly, an adjustment for the income effect is incorporated. Our results suggest drinkers receive a wage penalty the size of which differs across races. Nonwhite drinkers (blacks and hispanics) face a 7.3% penalty while white drinkers receive a 3.2% penalty.     

Diversification,corporate governance and firm value in small markets: evidence from New Zealand

We find that diversified firms in New Zealand are associated with a value discount of 19–42 per cent relative to single‐segment (undiversified) firms. Although several competing explanations have been offered in the literature, we find that the strength of corporate governance explains between 15–21 per cent of this discount. Specifically, board size, busyness of directors, CEO ownership and whether or not compensation of directors includes equity‐based components collectively explain a large part of the reported discount. Our results from companies trading in New Zealand complement recent findings in the US by not only confirming the existence of a diversification discount but also emphasizing the role of poor governance in destroying shareholder wealth by pursuing a value‐destroying corporate strategy. All our results hold after controlling for potential endogeneity in the decision to diversify and the choice of corporate governance structure by employing two‐way fixed‐effects and dynamic‐panel generalized method of moments regression techniques.     

The association between privatisation and voluntary disclosure: Evidence from Jordan

This paper investigates the impact of privatisation on the extent of corporate voluntary disclosure in Jordan.We conduct a longitudinal examination using 243 annual reports of 27 privatised firms in Jordan over a period of nine years from 1996 to 2004. Employing univariate and pooled regression models our results show that privatisation is positively associated with voluntary disclosure. Specifically, we find that accounting regulation reforms and foreign investments accompanying privatisation have a significant impact on the levels of accounting disclosure in Jordan. Our study provides evidence on the role of privatisation in improving the disclosure culture as an important pre‐condition for the development of active capital markets.     

Book Reviews

This paper describes and explains the use of political risk assessment techniques in Jordanian multinational corporations (MNCs). A multi‐method approach to collect data was followed. A self‐report questionnaire was delivered by hand to the general managers of all Jordanian MNCs which were identified as operating internationally. Semi‐structured interviews were used as a means of elaborating on the findings from the questionnaire. The study identified the extensive use of heuristic political risk assessment techniques (due to their flexibility, simplicity and low cost). Scientific techniques, on the other hand, were used by only a minority of MNCs. As has been the case in earlier studies, flexibility, simplicity and cost considerations were all found to be influential in this regard. However, the study also found that key decision‐makers in Jordanian MNCs believe that official data are subject to censorship and are therefore not reliable. This undermines the efficiency of using highly sophisticated scientific techniques. Since there are a number of other countries in the Middle East – and elsewhere – in which these considerations also apply, this finding has important implications for international businesses which operate in these countries, whatever their home country.     

Strategic technology management issues in japanese manufacturing industry

The argument that regulation is a necessary, though controversial, component of technology policy is discussed in detail. Ib addition to the regulation of technology, various other regulatory policies, such as market regulation, affect the development of technology. Various types of direct regulation and their conditions of operation are discussed. It is shown that regulation can afect technological innovation positively by providing a surrogate market. The paper serves as an introduction to this special issue and shows how the different contributions fit into a general framework of regulatory effects on technolgy. Regulation as a factor in competition is discussed, particularly in the context of developing countries.     

Market forces meet behavioral biases: cost misallocation and irrational pricing

Psychological and experimental evidence, as well as a wealth of anecdotal examples, suggests that firms may confound fixed, sunk, and variable costs, leading to distorted pricing decisions. This article investigates the extent to which market forces and learning eventually eliminate these distortions. We envision firms that experiment with cost methodologies that are consistent with real‐world accounting practices, including ones that confuse the relevance of variable, fixed, and sunk costs to pricing decisions. Firms follow “naive” adaptive learning to adjust prices and reinforcement learning to modify their costing methodologies. Costing and pricing practices that increase profits are reinforced. In some market structures, but not in others, this process of reinforcement causes pricing practices of all firms to systematically depart from standard equilibrium predictions.     

How Islamic banks deal with problem business situations: Islamic banking as a potential model for emerging markets

Models of emerging markets often ignore corporate crises and business failure and are based on research in western economic situations, assuming western institutional patterns and attitudes. This study is based on an empirical analysis of companies in the GCC region of companies within the Islamic Banking System. A “sharp‐bending” orientation model is used to review the role of banks and their methods of managing difficult client situations, triggering early problem‐recognition, and the sequence of recovery. As many emerging markets have large Moslem populations and as Islamic banking continues to be a vibrant growth sector, these findings have wider implications. © 2005 Wiley Periodicals, Inc.     

Simulation Analysis of Alternative Mortgage Instruments

The widespread concern over the inadequacies of the standard fixed rate, level payment mortgage instrument, especially in inflationary periods, has prompted a number of proposals for alternative mortgage instruments (AMIs). In this study the individual characteristics and economic implications of a number of AMIs are analyzed by simulating their behavior over different types of economic conditions. Each instrument is evaluated on the basis of its relative efficiency in accomplishing its particular objectives. Most of the instruments appear suitable for certain types of borrowers and lenders. However, this limited analysis suggests that the graduated payment and variable rate mortgages have advantages over the other variants considered. Various forms of each are already in use and appear to be relevant and marketable for many of the country's borrowers and lenders.