Balancing corporate power: a new Federalist paper

In an effort to govern their increasingly complex organizations, chief executives in some of today's largest corporations are turning to one of the world's oldest political philosophies-federalism. Given that organizations are seen more and more as minisocieties, the prospect of applying political principles to management makes a great deal of sense. Federalism is particularly appropriate because it offers a well-recognized system for dealing with paradoxes of power and control: the need to make things big by keeping them small; to encourage autonomy but within bounds; and to combine variety and shared purpose, individuality and partnership, local and global. As London Business School professor Charles Handy explains it, federalism responds to these paradoxes by balancing power among those in the center of the organization, those in the centers of expertise, and those in the center of the action--the operating businesses. The centers of federal organizations meet regularly, but they do not need to live together. Doing so would concentrate too much power in one place, whereas federalism gets its strength and energy from spreading responsibility across many decision points. Guided by five principles, federalism avoids the risks of autocracy and the overcontrol of a central bureaucracy. It ensures a measure of democracy and creates a "dispersed center" that is more a network than a place. That's why Asea Brown Boveri CEO Percy Barnevik calls his sprawling "multi-domestic" enterprise of 1,100 separate companies and 210,000 employees a federation. It succeeds because the independent bits, be they individuals, clusters, or business units, know they are part of the greater whole.     

A Theoretical Model of the Effects of Public Funding on Saving Decisions by Charitable Nonprofit Service Providers

Why do charitable nonprofit, service‐providing organizations save? What are the tradeoffs between using income to build up cash reserves and serving more clients? Saving may generate income, protect the organization against a drop in donations, and increase the organization's chances of survival. Saving, though, may affect the likelihood that nonprofits receive private and public funding. We model the relationship among private and public income, economic conditions, and nonprofit savings. We find that anticipation of government help during difficult times tends to reduce the amount of saving done by the nonprofit. This effect is strengthened if government officials view unspent donations as indicative of a lack of need. Both these effects provide a strong incentive for nonprofits to spend on current consumption rather than to save for the future, and thus to increase the burden on the public purse.     

Gendered giving: the influence of social norms on the donation behavior of men and women

• We study if men and women are subject to different influences when determining their level of charitable giving. In particular, we examine differential sensitivities to social norms among donors to a public radio station. Our survey of 975 donors finds that male donors are more likely than female donors to use social norms to inform their own behavior. We conduct a laboratory experiment to investigate the influence of social information on social norm formation and giving. Our results suggest that temporarily created social norms influence giving by men significantly more than by women. This result replicates and establishes the causal relationship between social norms and donations suggested by our field findings. We conclude with a discussion of theoretical and practical implications of these results.

Copyright © 2009 John Wiley & Sons, Ltd.     

Travel behavior of immigrants: An analysis of the 2001 National Household Transportation Survey

The purpose of this paper is to examine the relationships between travel behavior and immigrant status. The National Household Travel Survey (NHTS) allows us to explore the relationships between travel behavior and characteristics that are usually hard to discern in surveys with smaller samples. The correlation between travel behavior and immigrant characteristics such as place of birth and year of immigration in the US was tested while controlling for spatial and socio-demographic variables. The effects of place of birth and year of arriving to the US were found to be significant for some places of birth and for immigrants who entered the US in recent years. Understanding the differences in travel behavior and the possible explanations for these differences can help in modeling travel demand, finding policies best suited to meeting the travel needs of foreign-born communities, and addressing environmental justice concerns.     

The Emergence of the Black Economic Research Center and The Review of Black Political Economy: 1969–1972

This essay discusses the legacy of Robert Browne in the founding of the Black Economic Research Center (BERC), The Review of Black Political Economy, and the Caucus of Black Economists and its evolvement into the National Economic Association. The launching of BERC occurred within a period of far-reaching social change and the Vietnam War era. During this time, Robert Browne also was a national leader of the Vietnam anti-war movement and one of the first public intellectuals to establish a link between the civil rights movement and the peace movement. An argument is developed that this background provided as much impetus to Robert Browne for the creation of BERC and The Review as did the black nationalist programs and conferences of that era. During his eleven year tenure as Director at BERC, he pioneered ground-breaking research on the status of black-owned land in the south; consulted with community development corporations, black-owned businesses and banks; and prompted innovations in modern black philanthropy through the establishment of the Twenty-First Century Foundation. The origin and justification for The Review of Black Political Economy and the early activities and meetings of the Caucus and NEA are emphasized. In addition, an effort is made to include an enumeration of the earliest contributors to BERC, the NEA, and The Review — many of whom have not been mentioned in previous retrospectives.     

William E. Simon's contribution to tax policy

This paper analyzes the role of William E. Simon in shaping tax policy during his tenure as Treasury Secretary from 1974 to 1977. Simon believed in supply-side economics. Therefore, the tax policy changes that occurred during his time as Secretary involved reductions in tax rates as well as simplification of rules. A far-reaching effect of the 1975 Tax Act was the introduction of the Earned Income Tax Credit, which retains popular support today. Although these changes did not immediately increase growth and curb inflation, Simon's attempts to reduce marginal tax rates in the 1970s resulted in two decades of legislation to reduce the influence of government on the economy, which resulted in budget surpluses in the 1990s.He was an extraordinarily effective Treasury Secretary in a time of very difficult economic and political transition.[Alan Greenspan, Tribute to William E. Simon, p. 22]     

Tocqueville revisited. The meaning of American prosperity

Why is business so admired in the United States and so often denigrated in Europe? How has America created 30 million new jobs in the last 20 years while the European Union, with a bigger population, only managed 5 million? What is feeding America's apparently inexhaustible appetite for growth and its recent dramatic improvements in productivity? In 1831, French philosopher Alexis de Tocqueville came to America to examine its prison system and returned with a vision of democracy so profound it has become part of our cultural heritage. More than a century and a half later, renowned British business philosopher Charles Handy retraces Tocqueville's intellectual journey, this time focusing not on democracy but on capitalism. The result is an eye-opening look at some of the fundamental assumptions underpinning business in America today. It is America's optimism that Handy finds most striking, the unquestioned belief that tomorrow can--and should--be made better than today. He contrasts this with the Spaniards when they came to the New World: No haya novedades, those Spaniards would say, "Let nothing new arise." The energy engendered by American optimism, coupled with the Puritan belief in work and in the nobility of earned wealth (as opposed to Europe's furtive attitude toward its nobility's inherited wealth) lies, in Handy's view, at the heart of America's success. Will American capitalism, born as it was from a property-owning democracy, now adapt to a dematerialized world, where property is intellectual rather than physical? Handy draws no absolute conclusions, but rather lays out the challenges that must be overcome for tomorrow to indeed continue to be better than today in this still-young country.