What Does CEOs’ Pay-for-Performance Reveal About Shareholders’ Attitude Toward Earnings Overstatements?

If overstatements were a symptom of the agency conflict, pay-for-performance sensitivities should have increased in response to the additional penalties for misreporting imposed by SOX. Our finding of their decrease is inconsistent with the view that overstatements were an unintended consequence of incentive pay prior to 2002. To corroborate our interpretation, we show that (i) CEO pay-for-performance sensitivities are higher among firms whose shareholders stand to benefit from overstatements; (ii) this cross-sectional relationship weakens significantly after SOX; and (iii) the within-firm decrease in pay-for-performance sensitivity is most pronounced among firms with high pre-SOX shareholder benefits from overstatements.     

WORK DESIGN：风尚办公,右脑制胜

导刊书香三月品读：别墅洋楼、霓裳丽影、锅碗瓢盘……设计的体味已经渗透到生活的周遭。然而我们生活中的大部分时间都交给了工作,下一站设计天堂：WORK DESIGN,无疑将成为这个时代的重大课题。你是在上班,还是在坐牢？对于一家企业来说,谁能充分开发员工的创造力,谁就抢占了发展先机。而一个以右脑制胜、激发智慧的办公空间将改写既有规则,重新丰富员工对工作的想象,作为企业CEO,你收获的,不仅仅是企业环境的风尚形象,更有领先一步的运营效率。     

Integrated Market-Immersion Approach To Teaching New Product Development In Technologically-Oriented Teams

This article presents a market immersion methodology for teaching NPD in technologically-oriented teams. This methodology was developed during the early 1990s at the Lally School of Management and Technology of Rensselaer Polytechnic Institute. Since then, it has been successfully utilized to train in excess of one hundred MBA-level student teams. The NPD course is taught by a 5-member cross-functional team of faculty with backgrounds in marketing, manufacturing operations, and accounting. The course is modeled on Cooper's stage gate process, and the course is designed to provide a combination of classroom and apprenticeship experiences. The 6-credit, year-long course requires students to work in self-directed teams of approximately 5 to 6 members. Each student team chooses its own industry or technology domain in which to concentrate its efforts, and students undertake intensive market and field research in order to assess any existing market opportunities. Once a specific target market and market need have been identified, students are then required to design a product and an organization to meet that need. In specific, students must produce a detailed marketing, manufacturing, operations, advertising, distribution, and financial plan that can bring their product to market. During the process, students create multiple potential product designs, build mock-ups of their products, and field test the mock-ups. At every phase of the course, the teams are continuously immersed in real customer markets. As a result, teams must struggle to incorporate new market information and learning into their project in a consistent and holistic manner. The following article presents the curriculum content and tools, lessons learned, and student reactions to this original pedagogical approach to teaching NPD. Due to the length of the course, particular attention is paid to the teaming issues that naturally arise when teams work together on long-run projects. © 2002 Elsevier Science Inc. All rights reserved.     

Give Them Something to Smile About: A Marketing Strategy for Recruiting and Retaining Volunteers

Using a marketing perspective, this study investigates whether the issue of “fun at work” would appeal to volunteers as a part of an effort to enhance recruitment and retention. Specifically, we examined volunteers' attitudes toward fun, their perceptions of what kinds of activities are fun and what are not, and the relative importance of workplace fun in what they perceive as an ideal volunteer position. In general, we found that volunteers had positive attitudes towards fun and experiencing fun at work was associated with higher job satisfaction and lower turnover intentions. Although “a fun workplace” was ranked relatively low in importance relative to other reasons why they volunteer, creating such an environment could enhance retention. Some age and gender differences were found in the perceptions of whether certain activities are fun or not. The implications of these results and directions for future research are discussed.     

Monitoring Job Search as an Instrument For Targeting Transfers

Redistribution programs are constrained because those not working may be either unable to work, voluntarily unemployed or involuntarily unemployed. The inability to distinguish among these three cases inhibits the targeting of transfers to those most in need. Enabling the government to monitor whether unemployed individuals are searching for work and accepting any offered jobs increases its ability to redistribute income. We show that these monitoring activities are complementary, and consider how a minimum wage might be a useful adjunct to monitoring contingent tax-transfer policies.     

On large games with bounded essential coalition sizes

We consider games in characteristic function form where the worth of a group of players depends on the numbers of players of each of a finite number of types in the group. The games have bounded essential coalition sizes: all gains to cooperation can be achieved by coalitions bounded in absolute size (although larger coalitions are permitted they cannot realize larger per-capita gains). We show that the utility function of the corresponding "limit" market, introduced in Wooders (1988, 1994a) , is piecewise linear. The piecewise linearity is used to show that for almost all limiting ratios of percentages of player-types, as the games increase in size (numbers of players), asymptotically the games have cores containing only one payoff, and this payoff is symmetric (treats players of the same type identically). We use this result to show that for almost all limiting ratios of percentages of player-types, Shapley values of sequences of growing games converge to the unique limiting payoff.     

Toward global checks and balances

The rapid growth and importance of intergovernmental coordination in the regulation of markets, transportation and communication, the environment, and national security poses numerous challenges for democratic accountability within participating states. Direct public participation in the intergovernmental regulatory bodies is generally modest or absent. Information regarding their deliberations is limited. And the multiple oversight mechanisms and supervisory processes that exist at the domestic level of developed democracies that can scrutinize intergovernmental regulatory decisions tend to be lacking. This lack of accountability raises legitimacy concerns, the most prominent of which is the fear executive branch officials will delegate controversial policy decisions to intergovernmental bodies in order to escape democratic deliberation. In this paper we survey the ways that different review venues (other international institutions and national courts) are attempting to cope with these accountability related issues: we argue that national courts may prove to be the most effective venue for promoting democratic accountability. This is not because they are more reliably representative of their domestic constituency or possess a more cosmopolitan perspective than the bodies whose decisions they are reviewing. Rather their relative advantage lies in: (1) the increasing acceptance on the part of domestic courts that inter-judicial coordination is a prerequisite for their continued ability to fulfill their judicial review function; and (2) the visibility that the decisions of these courts possess. Acting together these two forces have the potential to foster greater transparency and public deliberation than most rival venues.     

The Accuracy of Owner-Provided House Values: The 1978–1991 American Housing Survey

The American Housing Survey (AHS) includes the owner's valuation of the house as a measure of the house's value. If owner-stated values are accurate, the AHS (as well as other survey instruments) can be used by researchers studying a variety of topics. In this study we use the metropolitan version of the AHS for three cities over fourteen years to compare owners' valuations with sales prices of houses that sold in the twelve months prior to an interview. We find that, on average, recent buyers report house values that are 8.4% higher than the stated sales prices. Further analysis indicates that these recent buyers, when compared with owners with longer tenure, overvalue their houses by 3.3%, on average. Thus, we find that the average owner overvalues his house by 5.1%. Also, differences between sales prices and owners' valuations are not related to particular characteristics of the house, occupants (other than length of tenure), or neighborhood. Thus, the use of the owners' valuations will result in accurate estimates of house price indexes and will provide reliable estimates of the prices of house and neighborhood characteristics.