Top management incentive compensation and knowledge sharing in multinational corporations

Growing interest has emerged in viewing the multinational corporation as a knowledge creating and diffusing entity. The importance of sharing knowledge across organizational and national boundaries has been established in previous research. However, the question of which organizational policies lead to knowledge sharing between multinational units is still not fully understood. In particular, the link between compensation mechanisms and knowledge sharing has not received attention in previous studies. By studying 164 foreign‐owned subsidiaries located in Finland and China, this article attempts to identify the relationship between subsidiary bonus pay based on MNC‐wide performance and knowledge sharing between different units of the MNC. In line with the knowledge‐based perspective of the firm, the results suggest that incentive pay based on the collective performance of the MNC leads to greater knowledge sharing. Copyright © 2008 John Wiley & Sons, Ltd.     

Understanding the Opportunistic Approach to Disinflation

One approach to achieving price stability is to undertake a deliberate path to an ultimate goal of low inflation—deliberate disinflation. In contrast an opportunistic strategy for disinflation has gained credence in recent years though on the face of it suboptimal. Our procedure is to seek a set of sufficient conditions under which the opportunistic strategy is optimal for a central bank maximising the preferences of the representative agent. We find that such a sufficient set of conditions consists of adaptiveness in expectations and an asymmetry in the Phillips curve of a specific sort.

     

The impact of financial constraints on firm survival and growth

We propose a new approach for identifying and measuring the degree of financial constraint faced by firms and use it to investigate the effect of financial constraints on firm survival and development. Using panel data on French manufacturing firms over the 1996–2004 period, we find that (1) financial constraints significantly increase the probability of exiting the market, (2) access to external financial resources has a positive effect on the growth of firms in terms of sales, capital stock and employment, (3) financial constraints are positively related with productivity growth in the short-run. We interpret this last result as the sign that constrained firms need to cut costs in order to generate the resources they cannot raise on financial markets.     

Radical HRM innovation and competitive advantage: The Moneyball story

Moneyball (Lewis, 2003), a New York Times bestseller, is a book about baseball. When read through a broader lens, however, Moneyball is also a book about innovation, resistance to change, competitive advantage, achieving excellence, and, of most relevance here, human resource management. While many would agree that the radical innovation described in Moneyball represents a “new vision of management” in baseball, this article describes how Moneyball lessons might contribute to a “new vision of HRM” in various types of organizations. The focus of the article is on what HR executives and scholars can learn from the Moneyball phenomenon. More specifically, the authors address a number questions related to the Moneyball story that have relevance to successfully implementing HRM innovations; these questions have to do with overcoming resistance to the implementation of radical innovation and how HRM innovation can contribute to sustainable competitive advantage. © 2006 Wiley Periodicals, Inc.     

Employee Layoffs, Shareholder Wealth and Firm Performance: Evidence from the UK

Abstract:  We examine the financial performance of UK listed companies surrounding the announcement of permanent employee layoffs. We find that poor operating and stock price performance, increased gearing, and threats from external markets for corporate control precede employee layoffs. Layoff announcements elicit a significantly negative stock price reaction, which is driven by announcements that are reactive to poor financial conditions. We also find that layoffs result in significant increases in employee productivity and corporate focus. We conclude that layoffs represent an efficient response to poor financial conditions, but that their occurrence is strongly dependent on pressure from external control markets.     

Diversification Effects in Insurance Groups — A Regulatory Angle to Efficient Solvency Requirements

The regulatory world is about to test diversification effects in QIS3, taking into account diversification between distinct business lines and legal entities of insurance groups alike. It is to be discussed whether and how these benefits can be (re)allocated between the entities constituting the group. This paper points out the approaches discussed and arguments to be considered. In particular, it takes account of the reasons for adhering to the principle of solo-entity regulation and how it may suffer from the concept of diversified solvency calculation. We intend to contrast the potential benefits of a group focus with its potential inconveniences in order to foster the discussion towards a commensurate regulation and supervision of financial groups within the framework of Solvency II.     

Discourse and Audience: Organizational Change as Multi-Story Process

abstract    This article is critical of monological research accounts that fail to accommodate polyvocal narratives of organizational change, calling for more fully informed case studies that combine elements of a narrative approach with processual/contextual analysis. We illustrate how contrasting versions of the same change event by different stakeholders and by the same stakeholder for different audiences, raise theoretical and methodological issues in the analysis and presentation of data on organizational change. Our argument is that research narratives (that seek to develop understanding of change processes) are necessarily selective and sieved through particular discourses that represent different ways of engaging in research. They are authored in a particular genre and written to influence target audiences who become active co-creators of meaning. Organizational change viewed from this perspective is a multi-story process, in which theoretical accounts and guides to practice are authored consistent with pre-selected narrative styles. These, in turn, are purposefully chosen to influence target audiences, but this subjective crafting is often hidden behind a cloak of putative objectivity in the written and oral presentations of academic research findings.