A recent paper showed that, whereas we expect pain to rise with age due to accumulated injury, physical wear and tear, and disease, the elderly in America report less pain than those in midlife. Further exploration revealed this pattern was confined to the less educated. The authors called this the ‘mystery of American pain’ since pain appears to rise with age in other countries irrespective of education. Revisiting this issue with the same cross-sectional data we show that what matters in explaining pain through to age 65 is whether one is working or not. The incidence of pain across the life-course is nearly identical for workers in America and elsewhere, but it is greater for non-working Americans than it is for non-workers elsewhere. As in other countries, pain is hump-shaped in age among those Americans out of work but rises a little over the life-course for those in work. Furthermore, these patterns are apparent within educational groups. We show that, if one ascribes age-specific employment rates from other OECD countries to Americans, the age profile of pain in the United States is more similar to that found elsewhere in the OECD. This is because employment rates are lower in the United States than elsewhere between ages 30 and 60: the simulation reduces the pain contribution of these non-workers to overall pain in America, so it looks somewhat similar to pain elsewhere. We conclude that what matters in explaining pain over the life-course is whether one is working or not and once that is accounted for, the patterns are consistent across the United States and the rest of the OECD.

https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0261891&type=printable

Further decoding the mystery of American pain: The importance of work

This special issue was developed to extend the boundaries of strategic leadership research, to help bridge the micro-macro divide regarding theories of strategic leadership, and to bring together theories that have emerged independently. In this introductory editorial, we provide an overview of the research on strategic leadership and emphasize the need for further integration of research from the organizational behavior, industrial and organizational psychology, organizational economics, behavioral strategy, and strategic management fields. We then introduce and summarize the eleven articles we accepted for this special issue by classifying them into two broad themes: (a) Chief executive officer (CEO) characteristics and (b) the dynamics of interactions among the CEO, the top management team, and the board. Finally, we propose recent theoretical and empirical foci for advancing strategic leadership research and offer a research agenda for future research highlighting several important research questions related to extending the dialogue among scholars across the different leadership and strategy domains. 

Extending the boundaries of strategic leadership research


 Important types of contractual relationships—among them those between integrated product manufacturers and their suppliers—are neither fully transactional nor fully relational. The agreements that govern these relationships incorporate highly detailed written terms that focus not only on what is promised but also on the details of how it is to be achieved and how suppliers’ actions will be monitored and responded to over the life of the agreement. Together with the implicit relational contracts that support their operation, these provisions create an economic hybrid that lies between markets and hierarchies, a set of relatively standard institutional arrangements that give buyers the right (but not the obligation) to exercise a package of quasi-integration rights that enables them to obtain many of the most important benefits of vertical integration while simultaneously reaping most of the core benefits of outsourcing. The contract provisions used to govern these relationships are termed here “managerial provisions” because they employ the techniques of intra-firm hierarchy that managers use to organize relationships and increase productivity within firms. This article focuses on a subset of these provisions, namely those that are analogous to the eighteen management practices that the World Management Survey (WMS) reveals are closely associated with persistent performance differences across similarly situated enterprises. After documenting the convergence between these practices and the terms of procurement contracts, the article suggests that the contract governance regime these practices create is well designed to support the creation and maintenance of cooperative relationships, strengthen the force of network governance, and scaffold the emergence of the type of inter-firm process-based trust that is associated with better supplier performance. More generally, this article concludes that in the modern economy, where the value of so many types of contracts—from research and development alliances to business process outsourcing agreements and beyond—depends on employees of the contracting entities working together much as if they worked for a single firm, lawyers would be well advised to look to the broad array of managerial techniques successfully used within firms (not only those based on WMS practices) to develop new ways to better govern transactions between firms.

Managerial Contracting: A Preliminary Study

Remunicipalization, corporatization, and outsourcing: the performance of public-sector firms after reorganization

To answer the question whether managers are paid for market power, we propose a theory of executive compensation in a macroeconomic environment where firms have market power, and the market for managers is competitive. We identify two distinct channels that contribute to manager pay in the model: market power and firm size. Both increase the profitability of the firm, which makes managers more valuable as it increases their marginal product. Using data on executive compensation from Compustat, we quantitatively analyze how market power affects manager pay and how it changes over time. We attribute on average 45.8% of manager pay to market power, from 38.0% in 1994 to 48.8% in 2019. There is also a lot of heterogeneity within the distribution of managers. For the top managers, 80.3% of their pay in 2019 is due to market power. Top managers are hired disproportionately by firms with market power, and they get rewarded for it, increasingly so.

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Are Managers Paid for Market Power?

Are some management practices akin to a technology that can explain company and national productivity, or are do they simply reflect alternative styles? We collect panel data on core management practices in over 10,000 firms in 30 countries. We find large cross country differences, with the US having the highest size-weighted average management score. About one fifth of these cross-country management differences are due to stronger reallocation effects which rewards better managed firms with greater market share. We present a formal model of management and structurally estimate it on our panel data to recover parameters including the adjustment costs of managerial capital (which are twice those of tangible capital). Our model also predicts (i) a positive effect of management on firm performance; (ii) a positive effect of product market competition on average management quality and its covariance with firm size; and (iii) a rise (fall) in the level (dispersion) of management with firm age. These are not moments we use in the structural estimation and we find empirical support for these predictions in new data. Finally, building on our model we find that differences in management practices explain about one quarter of cross-country productivity differences. JEL No. L2, M2, O32, O33.

L.A. Lefebvre

Papers

Management of Technology