The employee brand: Is yours an all-star?

In this article, a typology is presented which will help organizations better reflect the brand image they desire. The assisting typology is based on the extent to which employees know and understand the organization's mission, values, and desired brand image, and the degree to which they perceive their psychological contracts with the organization as being honored. Organizations can be classified as all-stars, rookies, injured reserves, or strike-out kings, based on the characteristics of a preponderance of their employees. As categorized, rookie organizations cannot deliver the desired brand image because most of their employees lack the knowledge and understanding to do so. Injured reserve organizations, on the other hand, cannot achieve the same because firm employees perceive their psychological contracts with the organization as having been violated, which renders the individuals unwilling and unmotivated. For their part, strike-out king organizations share rookie and injured reserve organizations' worst characteristics. Finally, and conversely, all-star organizations consistently deliver the desired brand image to others because their employees are both able and motivated to do so. To help firms attain this highly desired status, specific guidelines are presented herein which may help organizations become “all-stars” in their own right.     

"Is It Commercially Irresponsible to Trust?"

This paper considers a recent U.K. legal dispute where a supplier sued a large organization, which had been a long-term customer, for breach of implied contract. It uses this case to discuss aspects of the nature of trust between organizations. The discussion encompasses a consideration of the distinction between trust and reliability; and, why the concept of blanket trust is not helpful. In conclusion, by contrasting business-to-business and personal relationships, the paper suggests that firms in their relationships with other institutions should never follow an unquestioning form of strong trust.     

Procurement auctions with entry of bidders

In procurement auctions with a fixed number of bidders there is a tradeoff between cost efficiency and rent extraction. An optimal mechanism, therefore, entails distortions of effort (Laffont and Tirole, 1987). If potential suppliers must sink an entry investment before they can participate in the auction, then decreasing the firms' rent may imply reduced entry. We show that if potential bidders are uninformed before entry, commitment to a plain, nondistortive auction is optimal. In contrast, if potential bidders learn all their private information before entry, the optimal mechanism entails the same distortions as in Laffont and Tirole's static model.     

Do formal contracts and relational governance function as substitutes or complements?

Relational exchange arrangements supported by trust are commonly viewed as substitutes for complex contracts in interorganizational exchanges. Many argue that formal contracts actually undermine trust and thereby encourage the opportunistic behavior they are designed to discourage. In this paper, we develop and test an alternative perspective: that formal contracts and relational governance function as complements. Using data from a sample of information service exchanges, we find empirical support for this proposition of complementarity. Managers appear to couple their increasingly customized contracts with high levels of relational governance (and vice versa). Moreover, this interdependence underlies their ability to generate improvements in exchange performance. Our results concerning the determinants of these governance choices show their distinct origins, which further augments their complementarity in practice. Copyright © 2002 John Wiley & Sons, Ltd.     

The role of stock ownership by US members of Congress on the market for political favors

I examine whether stock ownership by politicians helps to enforce noncontractible quid pro quo relations with firms. The ownership by US Congress members in firms contributing to their election campaigns is higher than in noncontributors. This bias toward contributors depends on the financial incentives of politicians and the relation's value. Firms with a stronger ownership–contribution association receive more government contracts. The financial gains from these contracts are economically large. When politicians divest stocks, firms discontinue contributions to the politicians, lose future contracts, and perform poorly. Politicians divest the stocks in contributors, but not in noncontributors, in anticipation of retirement.     

Moral economics

An adequate normative economics – one that is consistent with recent developments in our discipline (and in philosophy and psychology) and that resonates with widely held moral intuitions – will have to address the following challenges. First, utility cannot be both the basis of our predictions of economic behaviour and the evaluation of the outcomes of this behaviour. Second, we need to conceive of individual well-being and other desiderata in ways that are interpersonally comparable and that go beyond efficiency and fairness. Third, the representation of the economy as a ‘morality-free zone’ (requiring that contracts, including employment contracts, are complete) must give way to a recognition of the unaccountable exercise of power by private actors, even in a perfectly competitive equilibrium, and the way that this may violate democratic principles and limit the freedom and compromise the dignity of other actors. Fourth, the commitment to ‘liberal neutrality’ (thereby sidestepping the evaluation of preferences) and the related assumption of ‘unrestricted preferences’ in mechanism design and public policy must be abandoned, making room for a concern about the nature of our preferences and the ways that institutions shape our values.     

Chief Audit Executive as Supervisory Board Member and Executive Compensation Contracts

This paper studies a unique phenomenon in China's corporate governance—that chief audit executives (CAEs) sit on supervisory boards (CAE duality)—and examines its effects on executive compensation contracts. Using a sample of listed firms between 2010 and 2018, we find a significant positive relation between CAE duality and pay-for-performance sensitivity, which suggests that the dual position helps integrate monitoring resources and reduces agency costs. This positive relation is more pronounced when companies face a stricter monitoring environment and in non-state-owned enterprises (non-SOEs) than in SOEs. In addition, we find that the recent reforms on compensation strengthen the role of CAE duality in SOEs. Further analysis identifies the reliability of performance information (i.e., earnings quality) and reduced executive self-interested behaviours (i.e., perquisite consumption) as the influencing mechanisms that increase the demand for performance-based compensation and thus improve pay-for-performance sensitivity.     

Breaking the letter vs. spirit of the law: How the interpretation of contract violations affects trust and the management of relationships

Contract violations are ubiquitous. There has been little attention, however, dedicated to understanding the mechanisms involved in making sense of and addressing such occurrences. Two experimental studies investigated how people interpret contract violations and how these interpretations affect trust and the management of relationships. By drawing on the distinction between violations of the letter versus spirit of the law, we show that letter violations are more difficult to overcome than spirit violations, due to higher perceived intentionality. These effects generalized across different populations, levels of contracting experience, types of contracting contexts, levels of ambiguity within the contract, and degrees of contract complexity. The results yield important implications for understanding contract violations, trust, and organizational responses as a relationship management capability. Copyright © 2014 John Wiley & Sons, Ltd.     

企业边界的多种变化及其原因

企业边界普遍发生着显著变化。探索企业边界变化的原因有助于对企业性质的进一步理解。企业边界可以由企业内运用知识的规模决定，也可以由交易效率与生产效率的相对比较决定。信息技术节约交易费用，因而强化了企业间按照生产效率的分工，而知识交易效率的低下，导致越来越具有知识经验仓库性质的现代企业扩大着边界。交易费用论作为分析方法，对解释企业性质仍是有效的。     

薪酬合约的激励有效性研究:一个理论综述

薪酬激励是组织中最常用的激励手段之一，薪酬合约的激励效果直接影响组织效率。本文尝试用激励理论系统阐述各类薪酬合约的激励有效性条件，为这方面研究梳理出一个统一的理论框架。