On the theory of macroeconomic policy

Summary Jan Tinbergen originated the theory of policy in the 1950s. Here I apply it to contemporary macroeconomics. The two standard instruments of short-run demand management cannot achieve the two usual targets, full employment and price stability. With respect to those goals, these two instruments are collinear, except for small and transient effects on foreign exchange rates. But the mix of fiscal and monetary policies, relative to one another, does have important effects on the composition of national output, as between investment and consumption.I point out that policy-makers, like portfolio managers, should diversify the instruments they use when they are uncertain of their effects. I discuss some pitfalls in the empirical estimation of policy effects, especially possible misinterpretations of simple correlations, and I note that policy rules cannot be invariant to changes in macroeconomic structure. I argue that policy rules should involve responses to new information and in practice allow discretion. Finally, I suggest that Tinbergen's theory of policy needs to be extended to policy coordination among nations.Third Tinbergen Lecture delivered on October 20, 1989, in Utrecht for the Royal Netherlands Economic Association.     

Creating Shopper Value: Co-Creation Roles,In-Store Self-Service Technology Use,and Value Differentiation

This study examines how retailers can use self-service technologies (SST) to increase shopper satisfaction. Using a survey of 188 consumers of a new self-service kiosk launch within a convenience-store (c-store) setting, we examine how such retailers might influence shopper's perceptions of value by better involving customers in the service delivery experience. Our proposed model links classic service operations and marketing design insights to the service-dominant logic perspective of service value co-creation. We find that shoppers perceive enhanced value creation from the new SST when they feel comfortable in their roles and the surrounding service design supports those roles.     

The Role of Media Coverage in Explaining Stock Market Fluctuations: Insights for Strategic Financial Communication

This study investigates the reciprocal relationships between the fluctuation of the closing prices of three companies listed on the Amsterdam exchange index, namely ING, Philips and Shell and online media coverage related to these firms for a period of two years (2014–2015). Automated content analysis methods were employed to analyze sentiment and emotionality and to identify corporate topics related to the companies. A positive relation of the amount of coverage and emotionality with the fluctuation of stock prices was detected for Shell and Philips. In addition, corporate topics were found to positively Granger cause stock price fluctuation, particularly for Philips. The study advances past research in showing that the prediction of stock price fluctuation based on media coverage can be improved by including sentiment, emotionality, and corporate topics. The findings inform strategic communication, and particularly investor relations, in suggesting that media attention, sentiment, and certain corporate topics are crucial when managing media relations and with regard to securing a fair evaluation of listed companies. Furthermore, the innovative research methods are useful for researchers and practitioners alike in showcasing how media coverage related to firms and their stock fluctuations can be identified and analyzed in a reproducible, hands-on and efficient manner.     

The problem with pay flexibility: changing pay practices in the UK health sector

This paper critically assesses models and policies of pay flexibility as applied to the public sector. Examination of the arguments for greater pay flexibility across three dimensions - external labour market flexibility, organizational flexibility, and macroeconomic flexibility - reveals a number of weaknesses, rooted in a failure to problematize the conflicting motives for greater pay flexibility in the context of pressures internal and external to the organization. An alternative 'model' of changing pay systems is developed and applied to the case of the UK health sector where there have been attempts to introduce various forms of flexible local pay arrangements. Drawing on interviews conducted during the mid-1990s with personnel and HRM managers at fifteen NHS Trusts, a number of issues are examined, such as: the impact of differential external labour market conditions of workers on the development of strategies designed to tie local pay to improved performance; the introduction of performance-related pay as a means to institutionalize wider earnings differentials within the organization; and the potential conflict between pressures to link local pay structures with local labour market conditions, on the one hand, and customary employee-held norms that link pay to occupational skills and professional status, on the other.     

The Politics of Standards in Modern Management: Making ‘The Project’ a Reality*

abstract In this paper, we explore the standardization of contemporary management knowledge, focusing in particular upon the role of ‘standards’ in creating and reifying ‘organizational objects’, with powerful consequences and with often unrecognized ethical implications. It is our argument that modernist beliefs in ‘general, abstract and timeless ideas’ ( Brunsson et al., 2000 , p. 173), enshrined in a universal and abstract rationality, results in the marginalization of more reflexive forms of rationality and the suppression of autonomy, creativity and discretion in organizations. To investigate the consequences of standardization, we take as the focus of our analysis a specific management model which has a significant and growing impact on many sectors of contemporary industry; that of project management. Drawing on the work of Timmermans and Berg (1997) , Bowker and Star (1999) and Brunsson et al. (2000) , we draw attention to the reification of the object of management; in this case, the project itself, as a transhistorical, ‘real world’ object. By tracing efforts to establish and institutionalize ‘standards’ in this and other fields of management, in particular through the creation and dissemination of a universal ‘body of knowledge’ for this field, we draw attention to the political and moral significance of the ‘blackboxing’ of knowledge. It is our broader intention here to help to denaturalize this organizational object, to legitimize other modes of knowledge and practice in the field, and thereby to reopen debate in this and other arenas of standardization.     

Measuring the Value of Product Characteristics in the Presence of Price Dispersion

Modeling the price of multi‐attribute products generally requires an assessment of each attributes' market value. In the presence of price dispersion, when similar products are sold at different prices, hedonic pricing models provide users with biased estimates of attribute value. This paper develops the hedonic pricing literature by proposing data envelopment analysis as a prior means of identifying a sub‐sample of products which, after adjusting for attribute provision, display no price dispersion. These products then display a homogenous link between attributes and price, which can be modeled using hedonic pricing. This paper implements and evaluates this two‐stage approach using 1000 observations from the UK mortgage market. Copyright © 2014 John Wiley & Sons, Ltd.     

Minimum Wages and Collective Bargaining: What Types of Pay Bargaining Can Foster Positive Pay Equity Outcomes?

Using data from interviews and collective agreements in five European countries, this article analyses the relationship between collective bargaining and the minimum wage. In a context of changing minimum wage policy and competing government objectives, the findings illuminate how pay bargaining strategies of trade unions and employers shape the pay equity effects of minimum wage policy. Two general forms are identified: direct responses to a changing national minimum wage, and responses to the absence or weakness of a national minimum wage. The article explains how particular intersections of minimum wage policy and collective bargaining, together with country and sector contingencies, shape the form of pay bargaining and pay equity outcomes.     

Dilemmas in the management of temporary work agency staff

Temporary jobs account for an increasing proportion of new engagements in the UK labour market, with temporary work agencies or 'labour market intermediaries' occupying a central role in the regulation of entry into some organisations. Such evolving arrangements have been found to have their contradictions, even for the host organisation. This article explores the internal and external pressures to use a temporary work agency as a means of recruiting labour at host organisations. It considers some of the HRM issues that stem from the use of such workers, including the tendency to devolve HRM to the managers of such agencies operating within the host organisation. Central to this article is a consideration of the potential sustainability of organisations' use of temporary agency workers, engaging with this concern from the perspective of organisational cost‐effectiveness.