Reaching nirvana with a defaultable asset?

We study the optimal dynamic portfolio exposure to predictable default risk, taking inspiration from the search for yield by means of defaultable assets observed before the 2007–2008 crisis and in its aftermath. Under no arbitrage, default risk is compensated by an ‘yield pickup’ that can strongly attract aggressive investors via an investment-horizon effect in their optimal non-myopic portfolios. We show it by stating the optimal dynamic portfolio problem of Kim and Omberg (Rev Financ Stud 9:141–161, 1996) for a defaultable risky asset and by rigorously proving the existence of nirvana-type solutions. We achieve such a contribution to the portfolio optimization literature by means of a careful, closed-form-yielding adaptation to our defaultable asset setting of the general convex duality approach of Kramkov and Schachermayer (Ann Appl Probab 9(3):904–950, 1999; Ann Appl Probab 13(4):1504–1516, 2003).     

Extending the enterprise evolution contextualisation model

Enterprise engineering (EE) emerged as a new discipline to encourage comprehensive and consistent enterprise design. Since EE is multidisciplinary, various researchers study enterprises from different perspectives, which resulted in a plethora of applicable literature and terminology, but without shared meaning. Previous research specifically focused on the fragmentation of knowledge for designing and aligning the information and communication technology (ICT) subsystem of the enterprise in order to support the business organisation subsystem of the enterprise. As a solution for this fragmented landscape, a business-IT alignment model (BIAM) was developed inductively from existing business-IT alignment approaches. Since most of the existing alignment frameworks addressed the alignment between the ICT subsystem and the business organisation subsystem, BIAM also focused on the alignment between these two subsystems. Yet, the emerging EE discipline intends to address a broader scope of design, evident in the existing approaches that incorporate a broader scope of design/alignment/governance. A need was identified to address the knowledge fragmentation of the EE knowledge base by adapting BIAM to an enterprise evolution contextualisation model (EECM), to contextualise a broader set of approaches, as identified by Lapalme. The main contribution of this article is the incremental development and evaluation of EECM. We also present guiding indicators/prerequisites for applying EECM as a contextualisation tool.     

Integrating Environmental,Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study

Addressing environmental, social and governance (ESG) issues has become a critical part of business strategy. This article explores the extent of ESG reporting of metal and mining sector companies listed in the Australian Securities Exchange to determine the nature of ESG indicators in use in the sector. The current study argues that stakeholder engagement is the key to enhance company environmental policy and sustainable development. According to the results of this study, ESG reporting motives are highly influenced by reporting regulations. Given the diversity in reporting of ESG, comparability of ESG strategic performance is problematic. This study contributes towards developing an ESG disclosure index, which companies could use as a legitimacy tool that external stakeholders could use to reliably measure and compare the ESG performance of companies. It also reveals there is an increased demand for more empirical research on integration of sustainability into strategic planning process. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Career Management in High‐Performing Organizations: A Set‐Theoretic Approach

The aim of this study is to investigate the elements of organizational career management (OCM) that can lead to strong organizational performance. The growing unpredictability of careers requires a different organizational approach of careers. Yet, new career models all focus on the individual as the central actor, leaving the role of the organization rather underdeveloped. Based on a combined perspective integrating insights from the literature on careers, high performance work systems, and idiosyncratic deals (I‐deals), we address four dimensions of OCM: supportive and developmental practices, development I‐deals, individual responsibility, and consensus. We study their relationships with company performance, thereby including the firm's human capital composition. Surveys were administered to the HR directors of 293 organizations. We apply a relatively new method, fsQCA (fuzzy‐set qualitative comparative analysis), and complement this with more conventional structural equation modeling (SEM). The SEM analyses suggest that only supportive and developmental practices are positively associated with high performance. However, based on the fsQCA, three configurations are identified in which OCM is associated with high performance. The most prevalent configuration combined supportive and developmental practices with I‐deals and individual responsibility for career management. We conclude with a discussion of the implications of our findings, and address the utility of adopting a configurational approach in career research. © 2016 Wiley Periodicals, Inc.     

Flexible Working,Individual Performance,and Employee Attitudes: Comparing Formal and Informal Arrangements

In the context of a wider trend to individualize human resource management, this article examines the relationship between flexible working arrangements and individual performance. Drawing on a range of theories, this article also examines potential indirect effects on employee performance via job satisfaction and organizational commitment and analyzes whether these relationships vary according to whether the arrangement was set up through a formal process or negotiated informally between the employee and his or her line manager. Extant research has tended to focus on formal arrangements, however, informal arrangements are widespread and may better accommodate work‐life preferences, thereby potentially fostering more positive attitudes from employees. Survey data from 2,617 employees in four large organizations with well‐established flexible working policies are analyzed. Results from structural equation models show average positive indirect effects from informal flexible working, but also negative direct effects from formal flexible working. When two forms of flexible working amenable to being set up by both formal and informal means are examined separately, formal arrangements for flexibility over working hours are found to be negatively associated with performance, but also a source of greater job satisfaction; informal remote working arrangements have positive indirect effects via organizational commitment and job satisfaction on worker performance. © 2016 Wiley Periodicals, Inc.     

The Visible Hand of corporate entrepreneurship in state-owned enterprises: a longitudinal study of the Spanish National Postal Operator

This study explores how the corporate entrepreneurship (CE) of state-owned enterprises (SOEs) evolves under varying conditions of state ownership and control, laws and norms, and competence in the market. For this purpose, we present a longitudinal case study focused on the Spanish postal operator Correos using qualitative archival data and interviews. Our results indicate that the willingness and capacity of an SOE to act entrepreneurially depends critically on its degree of autonomy from the state and on the extent to which its legal and market environments increase its dynamism, complexity, and hostility. We also show that the development of CE in an SOE may lead to improved service quality, operational efficiency, and business specialization; facilitate its market positioning; and foster its sustainability through the exploration and exploitation of strategic alliances that can increase its business scope.

     

The α-beauty contest: Choosing numbers, thinking intervals

We present a model for the α-beauty contest that explains common patterns in experimental data of one-shot and iterative games. The approach is based on two basic assumptions. First, players iteratively update their recent guesses. Second, players estimate intervals rather than exact numbers to cope with incomplete knowledge of other players' rationality. Under these assumptions we extend the cognitive hierarchy model of Camerer et al. [Camerer, C., Ho, T., Chong, J., 2003b. A cognitive hierarchy model of one-shot games. Quart. J. Econ. 119, 861–898]. The extended model is estimated on experimental data from a newspaper experiment.     

What explains the performance of students in a heterogeneous environment? Conditional efficiency estimation with continuous and discrete environmental variables

Efficiency estimations which do not account for the operational environment where production units are operating in may have only a limited value. This article presents a fully nonparametric framework to estimate relative performance of production units when accounting for continuous and discrete background variables. Using insights from recent developments in nonparametric econometrics, we show how conditional efficiency scores can be estimated using a tailored mixed kernel function with a data-driven bandwidth selection. The methodology is applied to the sample of Dutch pupils from the Organization for Economic Co-operation and Development's Programme for International Student Assessment (OECD PISA) data set. We estimate students' performance and the influence of its background characteristics. The results of our application show that several family- and student-specific characteristics have a statistically significant effect on the educational efficiency, while school-level variables do not have impact on performance.     

Partnership,reciprocity and team design

This paper studies the effect of intention-based reciprocity preferences on the free-riding problem arising in partnerships. Our results suggest a tendency of efficient partnerships to consist of members whose sensitivity to reciprocity is – individually or jointly – sufficiently high. Sufficient conditions for the implementation of the efficient strategy profile require a reciprocity-based sharing rule so that each partner gets a fraction of the output, which is a percentage of his own sensitivity to reciprocity with respect to the overall sensitivity in the team. Finally, we introduce the concept of psychological strong Nash equilibrium and show that it allows for the unique and collusion-proof implementation of the efficient strategy profile.     

Innovation And Inter-Firm Co-Operation: The Case Of The West Midlands

Drawing upon the innovative milieux and industrial districts literature, the paper provides substantial empirical evidence that firms have a greater chance of being innovative if they co-operate with other firms over innovation, albeit undertaking no investment in RLD. This is an important result especially for small firms. In particular, the paper focuses on inter-firm cwperation along the supply chain, using a swey of firms in the West Midlands to investi-gate co-operation over innovation between suppliers and buyers. A probit model is used to test the link between innovation performance and four innovation inputs: R&D expenditure, R&D personnel, networking with suppliers and networking with client firms.