The Arbitration of Labor Disputes in China Today: Definition and Implications

Over the past 12 years China has strongly encouraged the use of a formalized arbitration process to resolve, among other conflict areas, labor disputes. Using a formal resolution process is meant to calm labor unrest by giving employees both individual and collective voices in workplace issues. Ultimately, China recognizes that, as did the United States with passage of the National Labor Relations Act, giving employees voice quells potential social revolution and helps business by making use of employee ideas while attracting the best employees. This paper discusses some history of the Chinese labor dispute resolution process and its specific provisions promulgated in two laws and a set of regulations. Strengths and weaknesses of the process are enumerated and the importance of the process to foreign investors, employers, and employees is laid out.     

Proactive CSR: An Empirical Analysis of the Role of its Economic, Social and Environmental Dimensions on the Association between Capabilities and Performance

Proactive corporate social responsibility (CSR) involves business practices adopted voluntarily by firms that go beyond regulatory requirements in order to actively support sustainable economic, social and environmental development, and thereby contribute broadly and positively to society. This empirical study examines the role of the economic, social and environmental dimensions of proactive CSR on the association between three specific capabilities—shared vision, stakeholder management and strategic proactivity—and financial performance in small and medium enterprises (SMEs). Using quantitative data collected from a sample of 171 Australian SMEs in the machinery and equipment manufacturing sector and employing structural equation modelling, we find that the adoption of practices in each CSR dimension by SMEs is influenced slightly differently by each capability, and affects financial performance differentially. The study also demonstrates the importance of the interaction between the three dimensions of proactive CSR in positively moderating the deployment of each individual CSR dimension to generate financial performance. Paying primary attention to the economic dimension of proactive CSR and selectively focusing on social and environmental elements of proactive CSR that drive and support the economic dimension are of key importance to sustainable long-term financial success for SMEs.     

The Role of Ethical Values in an Expanded Psychological Contract

Social values and beliefs systems are playing an increasingly influential role in shaping the attitudes and behavior of individuals and organizations towards the employment relationship. Many individuals seek a broader meaning in their work that will let them feel that they are contributing to the broader community. For many organizations, a willingness to behave ethically and assume responsibility for social and environmental consequences of their activities has become essential to maintaining their ‹license to operate.’ The appearance of these trends in individual and organizational behavior towards outcomes that are more explicitly congruent with ethical and social values has significant implications for understanding the psychological contracts being created today. In this paper, we examine issues associated with the psychological contract and ethical standards of behavior, focusing on both the individual and organizational levels.     

Beyond the Image of Foreign Direct Investment in China: Where ethics meets public relations

While there had still been an increasing flow of foreign direct investment (FDI) into China during the 2002 downturn in FDI globally, such investments have historically been only sporadically successful. Much writing has detailed and discussed problems associated with China FDI but several costs remain dangerously overlooked. One such cost is that of micro-monitoring plants for work conditions and employee treatment in violation of local Chinese laws and possible home country ethics. Further, a more personal cost is presented – the personal cost associated with maintaining an investment in a facility that violates standards of ethical employee treatment. Background information related to these issues is presented, along with a general overview of FDI in China.     

ON THE DISTRIBUTIONAL CONSEQUENCES OF CHILD LABOR LEGISLATION*

This article studies the effects of child labor legislation on human capital accumulation and the distribution of wealth and welfare. We calibrate our model to U.S. data circa 1880 and find that the consequences of restricting child labor or providing tax‐financed education depend on the main source of individual household income. Households with significant financial assets unambiguously lose from government intervention, whereas high‐wage workers benefit most from a child labor ban, and low‐wage workers benefit most from free education. Introducing free education results in substantial welfare gains, whereas a child labor ban induces small welfare losses.     

Behavior in operations management: Assessing recent findings and revisiting old assumptions

In this paper, we provide a perspective on why behavioral research is critical to the operations management (OM) field, what prior research exists, and what opportunities lie ahead. The use of human experiments in operations management is still fairly novel despite a small stream of publications going back more than 20 years. We develop a framework for identifying the types of behavioral assumptions typically made in analytical OM models. We then use this framework to organize the results of prior behavioral research and identify future research opportunities. Our study of prior research is based on a search of papers published between 1985 and 2005 in six targeted journals including the Journal of Operations Management, Manufacturing and Service Operations Management, Production and Operations Management, Management Science, Decision Sciences, and the Journal of Applied Psychology.     

Capabilities, Proactive CSR and Financial Performance in SMEs: Empirical Evidence from an Australian Manufacturing Industry Sector

Proactive corporate social responsibility (CSR) involves business strategies and practices adopted voluntarily by firms that go beyond regulatory requirements in order to manage their social responsibilities, and thereby contribute broadly and positively to society. Proactive CSR has been less researched in small and medium enterprises (SMEs) compared to large firms; and, whether SMEs are ideally placed to gain competitive advantage through such activity therefore remains a point of debate. This study examines empirically the association between three specified capabilities (shared vision, stakeholder management and strategic proactivity), proactive CSR and financial performance in SMEs. Using quantitative data collected from a sample of 171 SMEs in the machinery and equipment sector of the Australian manufacturing industry, we find that all specified capabilities are positively associated with adoption of proactive CSR by SMEs, and that proactive CSR is, in turn, associated with an improvement in firm financial performance. Evidence of a fully mediating role for proactive CSR on the association between capabilities and financial performance presented in this study aligns with RBV theory that suggests adoption of value-creating strategies that make the most effective use of a firm’s capabilities is essential to financial success. The study contributes to the CSR literature by demonstrating a case for SMEs being able to maximise financial returns whilst proactively making progress towards CSR.     

Decomposing the persistence of international equity flows

The portfolio flows of institutional investors are widely known to be persistent. What is less well-known, however, is the source of this persistence. One possibility is the ‘informed trading hypothesis:’ that persistence arises from autocorrelated trades of individual investors who believe they have information about value and who face an imperfectly liquid market. Another possibility is that there are asynchroneities with respect to investment decisions across funds, across investments, or both. These asynchroneities could be due to wealth effects (across investments for a single fund), investor herding (across funds for a single investment), or generalized contagion (across funds and across investments). We use daily data on institutional flows into 21 developed countries by 471 funds to measure and decompose aggregate flow persistence. We find that the informed trading hypothesis explains about 75% of total persistence, and that the remaining amount is attributable entirely to cross-fund own-country persistence. While asynchroneities across funds investing in the same country are important, asynchroneities across countries, either within a given fund, or across funds, are not important. The cross-fund flow lags we identify might result from different fund investment processes, or from some funds mimicking others' decisions. We reject the hypothesis that wealth effects explain persistence.