| Balancing Compensation Risk and Context: Risk-Sharing, Discretion, and Executive Pay |
| | Miller, Janice S. | U. of Wisconsin, Milwaukee | jsm@uwm.edu | (414)229-2246 |
| | Gomez-Mejia, Luis R. | Arizona State U., Main | Luis.Gomez-Mejia@asu.edu | (602)-9658221 |
| | This study built on recent integrative work on managerial discretion, contingency theory, and agency theory. It hypothesized:
a) the relationship between pay and performance is stronger and level of risk incurred by a chief executive officer (CEO) is
greater under conditions of moderate managerial discretion and moderate business risk, b) executives receive a compensation
premium as the pay-performance link becomes stronger and risk sharing increases under conditions of moderate managerial
discretion and moderate uncertainty, c) high performing firms are more likely than low performing firms to exhibit these patterns.
In addition, the study proposed moderate board stability or turnover as well as a high degree of director experience on numerous
firms' boards will promote monitoring outcomes such that firms with these board characteristics will be better performers.
The data set included 181 firms and 2,665 directors. All hypotheses were strongly supported. The study extends understanding
of monitoring and risk sharing within the framework of firm contingency factors, specifically managerial discretion and business uncertainty. |
| | Keywords: Executive compensation; Agency theory; Managerial discretion |
| Market Focus and the Hidden Costs of Downsizing |
| | Eplion, David Michael | U. of Pittsburgh | deplion+@pitt.edu | 412-343-9857 |
| | Recently, as competitive pressures on the organization have increased, many firms have adopted a market-focused business orientation. At the same time, downsizings have become a common occurrence. This paper examines the impact that a downsizing has on the firm's ability to maintain its customer focus. After examining available evidence, it appears clear that downsizings do have the potential to negatively impact the firm's ability to be market-focused. This loss of closeness to the customer can represent a significant cost to the firm that may be overlooked when deciding whether to inititate a reduction in the workforce. |
| | Keywords: Market-focus; Downsizing; Performance |
| Building Relational Wealth Through Employment Practices: The Role of Organizational Social Capital |
| | Van Buren III, Harry John | U. of Pittsburgh | HarryVB@aol.com | (203) 777-7709 |
| | Leana, Carrie R. | U. of Pittsburgh | Leana@vms.cis.pitt.edu | (412) 648-1674 |
| | In the past decade, changing employment practices--especially downsizing, outsourcing, and the use of contingent workers--have been the subject of considerable public discussion. Less discussed, however, are the organizational-level costs of particular employment practices that emphasize employer stability and their effects on collective action. What is risked when employees are treated as costs rather than assets is what we call organizational social capital, a resource that reflects the character of social relations within a firm. Organizational social capital is realized through members' collective goal orientation and trust. In this paper, we build on previous organizational social capital work by applying the model to an analysis of employment practices. After summarizing the organizational social capital model, we describe some ways in which organizational social capital can enhance "relational wealth" (defined as the difference between the market value of a firm and the collective value of its fixed assets and individual human capital), and conclude with an analysis of how employment practices can build or destroy organizational social capital (and by extension, relational wealth) in organizations. |
| | Keywords: organizational social capital; employment practices; relational wealth |
| The Power to Deny: The Relationship Between Firm Strength and the Rate of Internal Promotion |
| | Phillips, Damon Jeremy | U. of Chicago | damon.phillips@gsb.uchicago.edu | 773-834-2863 |
| | This paper focuses on how the ecology of competition affects variation across firms in internal promotion
rates. It starts from the suspicion that an organization's competitive position has implications for the career
prospects of its employees. Specifically, it argues that a firm's competitive position shapes the balance
of power between the employer and employee. The balance of power, in turn, shapes the likelihood that
an employer will cede rewards and resources in the form of promotions. Phillips (1998) termed this a
"promotion paradox" and found evidence of its operation in a study of lawyer's careers. Analyses of data
on thirty-five years of commercial television stations and their top managers provide further support for
Phillips's hypothesis. This paper thereby extends Phillips' power dynamics approach from the
idiosyncratic context of up-and-out promotion systems to more traditional, vacancy-based promotion
systems. |
| | Keywords: Firm Strength; Promotion |
| Reconceptualizing the Manufacturing-Versus-Service Dichotomy as a Determinant of the Characteristics of Managerial Work |
| | Mainkar, Avinash V. | U. of Connecticut | avm94001@uconnvm.uconn.edu | (860)-486-2390 |
| | Is management of technical and professional workforce different from that
of non-technical workforce? The studies of managerial work consistently
find that managerial work is different in service and manufacturing
organizations. However, no theory has been proposed to explain this
finding. Although important in the past, the usefulness of the
manufacturing-versus-service distinction is limited in today's context.
Many of today's manufacturing organizations exhibit interaction with the
customer during the production process that has been characteristic of
service organizations.
The purpose of this paper is to provide a theoretical rationale for
explaining managerial work differences across organizations by going
beyond the simple manufacturing-versus-service dichotomy. First, the
variable, manufacturing-versus-service, is replaced with two variables.
The first variable, degree to which an organization can isolate its
technical core activities and boundary spanning activities, is derived
from Thompson (1967) and organizational theory literature. It captures
the phenomenon of interaction with the customer during the production
process. The second variable, tangibility of organization output, is
taken from the services marketing literature. The model posits that
these two variables will have an effect on the role conflict perceived by
organization members (Katz & Kahn, 1978). The perceived role conflict,
in turn, is related to the characteristics of managerial work.
|
| | Keywords: Managerial work; Manufacturing-versus-service; Role conflict |
| Taking Human Resource Management Research to the Next Millennium: Need For An Integrated Framework |
| | Budhwar, Pawan S. | Cardiff Business School | Budhwar@Cardiff.Ac.Uk | 44-1222-975214 |
| | The rapid developments in the field of HRM are now well documented.
Its overall achievement towards organisational
objectives in the present day dynamic business environment is increasingly
acknowledged. With the growth of new markets world-wide, and increased
levels of competition and globalisation and internationalisation of
business, there is a strong need for more cross-national HRM studies.
Managers working in different parts of the world are eager to learn how
their counterparts (in other regions) manage their human resources,
perceive similar concepts and react to different pressures created by
the globalisation of the business. This can help to develop relevant
HRM policies and practices for different nations. All such developments
demand for the conduct of more and more comparative cross-national HRM
research.
Despite of such a dire demand, the present literature shows a scarcity of
cross-national HRM studies. This is primarily due to the absence of an
integrated framework (which can facilitate meaningful comparisons) to
conduct cross-national HRM studies. Currently, debate in the area of
cross-national HRM suggests that both “culture-bound” and “culture-free”
factors and variables are important determinants of HRM policies and
practices and that HRM is context specific. This paper presents an
integrated framework, comprising of national factors (namely, national
culture, different institutions, dynamic business environment and
business sector), contingent variables (such as presence of unions,
training units in organisations, age, life cycle stage of organisation)
and organisational strategies and policies (such as related to
recruitment, compensation, internal labour markets), that may be used
to evaluate cross-national comparative HRM policies and practices.
|
| | Keywords: Cross-National HRM Research; HRM; Determinants of HRM |