Fixed‐Term Contracts: Short‐Term Blessings or Long‐Term Scars? Empirical Findings from the Netherlands 1980–2000

Using a comprehensive longitudinal dataset of prime‐age Dutch workers over the period 1980–2000, we examine how a previously held job with a fixed‐term contract influences both the likelihood and the duration of a future spell of unemployment. Analyses show that Dutch workers with fixed‐term contracts experience higher risks of future unemployment and have no shorter spells of unemployment compared to workers with regular contracts. Results also reveal that swifter employment re‐entries among men with fixed‐term contracts can be explained by their job search efforts before unemployment. Our study (partly) invalidates theoretical positions that claim that fixed‐term contracts foster employment security by shortening unemployment durations; suggesting that fixed‐term contracts are a short‐term blessing that could end, for some workers, in a recurrent unemployment trap.     

Karl Sigmund,Exact Thinking in Demented Times: The Vienna Circle and the Epic Quest for the Foundations of Science

The Review of Austrian Economics -     

Keeping the Wheels Turning: The Dynamics of Managing Networks of Practice

Intra‐organizational networks of practice (NOPs) confront managers with a dilemma: they must manage NOPs to reap benefits from integrating geographically dispersed knowledge, but the inherently emergent nature of NOPs implies that management control may frustrate practice‐related knowledge to be shared. Based on a case study of 22 NOPs in a geographically dispersed development organization (‘TDO’), we develop a model that disentangles the dynamics underlying this dilemma, helping to better understand it. Specifically, four dynamic relationships are interrelated and involve four kinds of embeddedness (organizational, in practice, relational, and structural) that relate dynamically to knowledge sharing in NOPs. Interventions in both the content shared in the network and the connections among network members can influence each of these relations. This study contributes to theoretical and practical understanding of how to manage NOPs without killing them.     

Asking Questions: A Sine Qua Non of Facilitation in Decision Support?

This paper reflects our ongoing interest in discovering essential elements of facilitation in decision support for groups with members having different perspectives on a strategic problem. We investigated questioning behaviour, a critical aspect of microlevel behaviour, of the facilitator in a classroom experiment with five-person groups (N?=?26). The supported groups used a facilitated modelling approach, that is, group model building, which is based on system dynamics. In the control condition, one of the participants led the group discussion in the role of chairperson. As expected, we found that the facilitator asked more questions than the chairperson. Subsequently, based on proposed functions of questions by discussion leaders in group decision making, we distinguished three categories of questions; related to (a) rational and social validation, (b) reflection, and (c) information management. Analysis of question type frequencies revealed that facilitators mainly ask questions from the rational and social validation category, and that this question type declines over the course of the discussion process. Questions prompting reflection increased over time. Information management questions were mostly used in the beginning and middle part of the session. In the groups led by a chairperson, a less clear picture emerged. There was a great variety between groups with respect to type of questions and sequence in which the chairperson asked questions. The only consistent result for unsupported meetings is that information management primarily took place at the end of the sessions.     

Estimating obsolescence risk from demand data to enhance inventory control—A case study

In this paper obsolescence of service parts is analyzed in a practical environment. Based on the analysis, we propose a method that can be used to estimate the risk of obsolescence of service parts, which is subsequently used to enhance inventory control for those parts. The method distinguishes groups of service parts. For these groups, the risk of obsolescence is estimated using the behavior of similar groups of service parts in the past. The method uses demand data as main information source, and can therefore be applied without the use of an expert's opinion. We will give numerical values for the risk of obsolescence obtained with the method, and the effects of these values on inventory control will be examined.     

Coevolution of Institutions and Corporations in Emerging Economies: How the Salim Group Morphed into an Institution of Suharto's Crony Regime

abstract We investigate whether large family groups in emerging economies can proactively change their environment. We use a coevolutionary approach, which accounts for the influence of context on the entrepreneur and for the freedom of the latter to modify it. We find that entrepreneurs can shape institutions to their advantage, illustrated by the Salim Group, which achieved growth by aligning with and influencing politicians, eventually ‘morphing into an institution’. We unravel unique coevolutionary patterns, which we use to extend existing theories. Our first contribution is to initiate a new line of inquiry in coevolution theory, focusing on individual companies coevolving with institutions. Secondly, we document factors that increase and decrease strategic choice for family groups in emerging economies. Thirdly, we find that the Salim Group became part of the crony Suharto regime. The group became both an institutional entrepreneur and an entrepreneurial institution, demonstrating that companies and institutions are not necessarily mutually exclusive.     

Audit Standards and Auditor Liability: A Theoretical Model

The business of auditing is heavily regulated. Auditor regulation exists through licensing, professional standards and liability. The auditor's liability for losses to financial statement users from audit failure is subject to a test of negligence. What constitutes due audit care is, however, not generally well-specified. Furthermore, reviews of litigation against auditors conclude that compliance with professional audit standards does not always act as a complete defence to allegations of negligence. The current situation can be described as one where (ex ante)—from the point of view of the auditor—uncertainty exists about the ‘legal’ standard of due audit quality (as seen by the courts in the event of litigation). This uncertainty about legal standards fundamentally affects audit behaviour in ways that are not immediately intuitive. This paper draws on insights from the economics and law literature (e.g., Kolstad et al., 1990; Shavell, 1984a, 1984b and 1987; Calfee and Craswell, 1984 and 1986) and provides an analysis of the effects of uncertainty about auditor negligence on the produced level of audit quality and on audit fees. The auditor subject to a negligence rule will produce too low or too high an audit quality level, as compared to the socially optimal level. It is shown that uncertainty about the legal standard of ‘due audit quality’ is fundamental to understanding audit quality supplied. This uncertainty is the explicator of an insurance component in audit fees. A surprising insight is that a large uncertainty about the legal standard of care can reduce rather than increase the quality of audit work supplied and increase the insurance component. Relying on insurance premiums can be more effective than direct expenditure in reducing risk. The effect of the imposition of ex ante precise audit quality standards, in combination with an uncertain negligence rule, is discussed. Since the influence of ex ante standards is indirect through its effect on ex post liability, auditing standards cannot be analysed independently of ‘legal’ standards. If the legal standard of care were clear, there would be no role for audit standards. Audit standards only affect audit behaviour if legal standards of care are unclear, and they help to clarify the legal standard. An effective combination is for ex ante standards to be set below the ex post standards of care so that they provide a lower bound on acceptable work. Under a lowest common denominator approach set too far below legal standards, audit standards would be irrelevant as far as operational decisions were concerned. As the level of standards are raised, so costs are first imposed on the lowest quality providers.     

Learning and stakeholder participation in transition processes towards sustainability: Methodological considerations

Global environmental change problems due to their unstructured characteristics, being marked by great uncertainties and a big number of stakeholders, prove to be too difficult to solve in a traditional way alone. They call for a more proactive approach. One of them advocates systems change driven by technological innovations accompanied by institutional and sociocultural transformations. Transition management is a new policy strategy based on this philosophy. It has recently emerged in the Netherlands and has been adopted by the Dutch government as a relevant framework for shaping its policy towards sustainability. The transition management writings emphasise the importance of ‘learning’ in the process of induced change towards sustainability. Although this can indeed be quite a significant means for inducing change, the literature on transition management is not explicit enough about the methodological organisation of the learning process. Since transition management has become an important approach in the Netherlands, we consider it relevant to deploy some learning insights and experience gained in the Dutch Climate OptiOns for the Long-term (COOL) project to analyse and improve the process of transition management. In particular, we look into the first two steps of transition management, i.e., organising a transition arena and making visions.