Absorptive Capacity in a Non-Market Environment

Abstract

Improved performance by public sector organizations is a political imperative in numerous countries. There are particular challenges in turnaround of poorly performing organizations. Theoretical explanations of the performance trajectories of public organizations, and especially the causes of failure, highlight the importance of knowledge processes, often from an organizational learning perspective. Absorptive capacity provides an alternative way of theorizing the relationships between organizational performance and knowledge processes, derived from the resource-based view of the firm and the broader concept of dynamic capabilities. The article reviews the conceptual, theoretical, and methodological implications of applying absorptive capacity to the performance of public organizations. It concludes that the approach has value and presents a number of propositions to be tested through empirical study, alongside some more general challenges for researchers who wish to study the concept further. The high political salience of public organizations' performance, and the costs of failure, mandates a major research effort on these issues.     

Fund Manager Succession in Closed-End Mutual Funds

Managing the succession process by the hiring and firing of key executives is one of the important functions of a board of directors. In this research we study successions of fund managers in the closed‐end mutual fund industry. The agency issues inherent in closed‐end mutual funds makes them a unique laboratory for such a study. Our results suggest that while the overall abnormal returns of these manager changes are statistically insignificant, that the returns are more positive for funds with large expense ratios and for funds trading at a discount. We also find the abnormal returns are negatively related to the percentage of inside director stock ownership. Corporate bond funds and international equity funds react more negatively to these announcements than other types of funds. The abnormal returns do not appear to be related to board composition, but board composition does vary across fund type, and may therefore indirectly influence the results.     

Value-Based Management in Biosciences Research and Development

In industries such as biosciences, the range of uncertainty and managerial flexibility make traditional financial analysis such as discounted cash flow and decision tree analysis largely irrelevant for strategic decision-making. In place of such traditional methods, this article proposes the use of decision options analysis, a real-options-based methodology that holds out the promise of better investment and portfolio decisions with fewer data requirements. Moreover, decision options analysis can be implemented with software tools that allow systematic application of these techniques. This article presents case studies that outline the actual application of real options analysis in licensing transactions and portfolio management in biosciences companies.     

Change,Change or Be Exchanged: The Discourse of Participation and the Manufacture of Identity*

abstract Promoting participation is an accepted and expected component of managerial activity, reflecting current management ideology and practice. This paper explores how one particular group of supervisors, within the same UK manufacturing organization, experience and make sense of participation practices and the role of identity in that process. Our findings show that whilst supervisors may utilize the managerial discourse in formal settings they also draw upon three alternative responses. Thus contrary to much of the literature they do not represent a homogenous or univocal grouping. Our study highlights the importance of the competing bases of identity formation that supervisors draw from, and the complexity and contradiction inherent in both the managerial discourse and in supervisors' responses to it.     

Trade and Turnover: Theory and Evidence

Is the pattern of trade correlated with cross‐sector differences in job turnover? Theoretically, external shocks feed through to changes in domestic employment and cross‐sector differences in turnover give rise to compensating wage differentials, which feed through to output prices. Using two different datasets on turnover, we find strong evidence that normalized US net exports by sector are negatively correlated with job destruction and worker separation rates. Weaker evidence suggests a positive correlation between normalized net exports and job acquisition. Using sector‐specific job destruction data for both Canada and the US, we find confirmation of the theoretical prediction that normalized net exports to Canada are negatively related to the ratio of the US job destruction rate to the Canadian job destruction rate.     

The effects of a financial literacy intervention on the financial and economic knowledge of high school students

The authors taught financial concepts to students in 12th-grade economics classes, where one treatment was intensive in money management (MM) topics and the other was intensive in financial investment (FI) topics. Two control groups, consisting of 11th-grade students with no exposure to economics and 12th-grade economics students, received no treatment. Both treatment groups showed a 13 percentage point increase in test scores from pretest to posttest, while neither control group showed gains. Neither treatment group outperformed the other in the financial literacy test.     

Frameworks for coping with post-normal times: A response to Ziauddin Sardar

This paper is a response to Ziauddin Sardar's “Welcome to postnormal times”. It agrees that times are indeed post normal, and discusses the reasons why this will continue. The paper then suggests three frameworks for helping people (and managers) recognise and deal with these times: a four level complexity hierarchy, scenarios, and the purposeful self-renewing organisation architecture.