Showing papers by "HEC Paris published in 1998"

From Organizational Learning to the Learning Organization

Abstract: This article reviews theories of organizational learning and presents a framework with which to organize the literature. We argue that unit of analysis provides one critical distinction in the organizational learning literature and research objective provides another. The resulting two-by-two matrix contains four categories of research, which we have called: (1) residues (organizations as residues of past learning); (2) communities (organizations as collections of individuals who can learn and develop); (3) participation (organizational improvement gained through intelligent activity of individual members), and (4) accountability (organizational improvement gained through developing individuals' mental models). We also propose a distinction between the terms organizational learning and the learning organization. Our subsequent analysis identifies relationships between disparate parts of the literature and shows that these relationships point to individual mental models as a critical source of leverage for...

Order Flow Composition and Trading Costs in Dynamic Limit Order Markets

Abstract: This paper provides a game theoretic model of price formation and order placement decisions in a dynamic limit order market. Investors can choose to post limit orders or to submit market orders. Limit orders result in better execution prices but face a risk of non-execution and a winner's curse problem. The execution probability of a limit order trader is endogenous and depends on the order placement decisions of the other traders. Solving for the equilibrium of this dynamic game, closed form solutions for the order placement strategies are obtained. Thus, testable implications for the cross-sectional behaviour of the mix between market and limit orders and trading costs in limit order markets are derived. It is also shown that the winner's curse problem has a negative impact on the allocative efficiency of these markets.

Why Higher Takeover Premia Protect Minority Shareholders

Abstract: Posttakeover moral hazard by the acquirer and free-riding by the target shareholders lead the former to acquire as few shares as necessary to gain control. As moral hazard is most severe under such low ownership concentration, inefficiencies arise in successful takeovers. Moreover, share supply is shown to be upward-sloping. Rules promoting ownership concentration limit both agency costs and the occurrence of takeovers. Furthermore, higher takeover premia induced by competition translate into higher ownership concentration and are thus beneficial. Finally, one share one vote and simple majority are generally not optimal, and socially optimal rules need not emerge through private contracting.

Global Asset Management

Abstract: Management in France. n d the early nineties, most of the largest investors in the world, such as U.S. and U.K. pension funds, did not currencyU hedge their international portfolios. Several explanations can be found for this policy. International assets, mostly stocks, represented only a tiny portion of the global portfolio of U.S. pension funds; the impact of currency risk was thus very limited, and even beneficial, as it provided an element of &versification for domestic monetary risks. In terms of return, the U.S. dollar and U.K. pound were weak currencies in the seventies and eighties, so holding strong currencies such as the yen or the deutschemark provided additional return to the international portfolio. Finally, most investors &d not feel at ease with derivatives, or were even precluded from using them. Why then go through the burden of a systematic hedging policy when currencies did not add risks to the global portfolio and contributed positively to its performance? The picture has recently changed. Both the U.S. dollar and the U.K. pound have been strong currencies relative to the yen or to other European currencies. In the U.K., where pension funds have traditionally devoted a significant proportion of their assets to foreign stocks, pension regulations have changed, leading to an increased focus on volatdity. In the US., pension funds have drastically increased the proportion of their international assets (up to more than 20% of the total fund for some of them), so that currency risk can no longer be treated as a negligible component. All ths is lea&ng

Market Structure, Informed Trading, and Analysts' Recommendations

Abstract: We examine stock price behavior in response to initial coverage, buy recommendations that are pre-released to important clients before the stock market opens, and find a strong positive valuation effect at the open. On average, it takes five minutes of trading for NYSE/AMEX stocks and 15 minutes for NASDAQ stocks to reflect the private information contained in these analyst recommendations, so when informational asymmetry is high, the centralized call market is more efficient than a competitive, but fragmented dealer market. Public news release leaves share prices unaltered. Overall, competition among informed traders causes private information to be rapidly incorporated into stock prices.

International accounting education in Western Europe

Abstract: Based on a questionnaire sent to European institutions, the objective of this study is to determine how international accounting is taught in Europe. The results focus on the number of courses, the topics covered and the textbooks recommended. An agglomerative hierarchical clustering technique enabled us to define four groups of institutions, corresponding to different approaches to international accounting education. Discriminant topics were identified, making it possible to define a true ‘strategy’ for the preparation of a course syllabus. Our survey also provides information relating to two matters of debate. First, although some differences do exist between countries, the majority of courses are specific, as opposed to general courses integrating certain international accounting aspects. Second, a material number of institutions succeed in covering both comparative aspects and accounting dimensions of multinational enterprises.

Block Premia in Transfers of Corporate Control

Abstract: This paper studies block trades and tender offers as alternative means for transferring corporate control in firms with a dominant minority blockholder and an otherwise dispersed ownership structure. Incumbent and new controlling parties strictly prefer to trade the controlling block. From a social point of view, however, this method is inferior to tender offers, because it preserves a low level of ownership concentration which induces more inefficient extraction of private control benefits. This discrepancy is caused by the free-riding behaviour of small shareholders. Moreover, the controlling block trades at a premium which reflects, in part, the surplus that the incumbent and the acquirer realize by avoiding a tender offer and the consequent transfer to small shareholders. Therefore, factors that alter the pay-offs of small shareholders in a tender offer (e.g. supermajority rules, disclosure rules and non-voting shares) also alter the block premium. Finally, the paper argues that greenmail, like block trading, enables the controlling parties to preserve low levels of ownership concentration and large private control benefits.

Le temps en contrôle de gestion : Evolution des conceptions temporelles dans une discipline

Abstract: Adoptant une approche constructiviste du role du discours, nous considerons que ce dernier est susceptible de creer chez ceux qui le recoivent une realite. Ainsi, tout dire, tout ecrit que je produis peut contribuer a la construction du monde d'autrui. En particulier, lorsqu'en gestion, je parle du " temps ", ou encore quandje recommande des attitudes qui ont trait a cette notion, je distille - sans necessairement en etre conscient - des conceptions du temps dans lesquelles les membres de l'organisation, les etudiants, peuvent se placer. Ce travail porte d'abord sur les conceptions du temps portees par la litterature francaise de controle de gestion parue dans les vingt dernieres annees. Par " conception du temps ", il faut d'abord entendre les idees que placent les auteurs de la discipline derriere le terme de "temps ". Une premiere etape de cette recherche a consiste a identifier ces dernieres, qui se revelent en fait reifiantes et reductrices, donc particulierement rassurantes, au regard de l'idee que nous pouvons nous faire d'un temps destructeur. Une deuxieme phase - la principale de notre recherche - est concentree sur les conceptions implicites du temps portees par des manuels representatifs de cette meme litterature, c'est a dire celles qui, sans etre exprimees directement dans les textes, fondent la plupart des outils et methodes proposes en controle de gestion. Lors de notre etape d'exploration, nous avons mis en evidence le role essentiel que jouent quatre attitudes recommandees par la discipline dans l'expression de ces approches. Il s'agit de ce que nous avons appele la retrospection, la prospective, la reaction et la proaction. Nous avons cherche a articuler ces concepts dans un modele croisant deux debats relatifs a la question du temps, a savoir l'orientation vers le passe ou le futur, et le rapport a l'incertitude. C'est ce modele theorique solidement etaye de references internes et externes a la gestion qui a fonde la suite de ces travaux. L'essentiel de notre tâche a consiste a suivre dans la duree l'importance relative de ces quatre attitudes dans la litterature de controle de gestion. Pour ce faire, nous avons adopte une demarche lexicometrique associee a une analyse qualitative conventionnelle de dix manuels en langue francaise parus dans le domaine depuis la fin des annees 1970 a la fin des annees 1990. Cette etude a mis en evidence l'emergence - dans le vocabulaire comme dans les ideesd'un discours promouvant la reaction et la proaction, c'est a dire des attitudes plus actives et moins orientees vers la connaissance. Considere au second degre, ce resultat souligne le passage d'une negation de l'incertitude a une acceptation active de cette derniere. Les conceptions identifiees dans cette recherche ne sont pas neutres : elles induisent par nature des comportements precis chez ceux qui les ont adoptees. La prospective et la retrospection placent l'individu dans une situation de confiance par rapport a hier et a demain: il se livrera a l'acquisition d'information, parfois a l'immobilisme. La reaction et la proaction se posent plutot comme les seuls palliatifs a l'incertain; ils engendrent ainsi une activite constante, voire un certain activisme, censes assurer l'entreprise contre l'imprevu. Produire du temps, c'est donc, indirectement et souvent inconsciemment, produire du controle. C'est ce que pratique, avant meme les entreprises, la discipline de controle de gestion, telle que les manuels etudies la concoivent.

Analyse de la survie des firmes : le cas des imprimeurs offset à Paris de 1950 à 1985

Abstract: Cet article etudie la probabilite de survie des firmes appartenant a la population des imprimeurs offset de 1950 a 1985 a Paris. L'analyse des facteurs explicatifs de la duree de vie de ces firmes, a l'aide d'un modele de survie, illustre l'importance des variations relatives des variables sectorielles. En outre, des variables propres a la population etudiee jouent egalement un role, mais parfois neglige, dans l'explication de la probabilite de survie des entreprises. La significativite de ces variables met en lumiere, au niveau micro-economique, les pressions complexes exercees par la concurrence et la legitimite sur la duree de vie des entreprises entrantes dans la population.

Business strategies for economies in transition of Central and Eastern Europe

Abstract: Since the fall of the Berlin Wall in 1989, Central Europe has seen the radical political and economic status of 15 nations representing 135 million inhabitants moving away from authoritarian regimes and planned economy towards political democracy, market economy and integration into international trade. This new political and economic environment has been the theatre of new corporate strategies of both local companies and foreign corporations. The context and speed of transformation specifically gives to the first and fast movers the opportunity to increase significantly their competitive advantage.

Cross-Cultural Language Teaching with Multimedia Tools

Abstract: As language teachers and trainers we cannot ignore the definite need to reform our teaching strategies and methods if we are to listen to our prime source of employment: our students. And it is high time we listen to what our students have been screaming out in their own way (i.e., by being largely silent in the classroom) because, with one voice, those students are saying: “We want something new, something different”.

Order flow composition and trading costs in a dynamic limit order market

Abstract: This paper provides a game theoretic model of price formation and order placement decisions in a dynamic limit order market. Investors can choose to post limit orders or to submit market orders. Limit orders result in better execution prices but face a risk of non-execution and a winner’s curse problem. The execution probability of a limit order trader is endogenous and depends on the order placement decisions of the other traders. Solving for the equilibrium of this dynamic game, closed form solutions for the order placement strategies are obtained. Thus, testable implications for the cross-sectional behaviour of the mix between market and limit orders and trading costs in limit order markets are derived. It is also shown that the winner’s curse problem has a negative impact on the allocative efficiency of these markets.

Aggregation of Coarse Preferences

Abstract: We consider weak preference orderings over a set An of n alternatives. An individual preference is of refinement l

The Enlargement Challenge

Abstract: The present enlargement of the European Union to Eastern Europe is a new step in a lasting historical process. The gap existing between Western Europe and Eastern European applicants is wider than the gap existing between the original member states and Mediterranean countries integrated in the late eighties. The lack of public support for integration (even in some of the applicant countries), the lack of political consensus on the method, the scarcity of resources likely to be allocated to the process have created a difficult challenge for European governance. The answer has been a cheap assistance scheme (most of the funds for transition will be available after accession) and a bureaucratic approach to the enlargement in which the Commission will play a decisive role. The enlargement is conditional — conditions are clearly stated in accession partnerships — but no clear deadlines have been set up in the medium term and the consequences of delays and lack of co-operation have not been made very clear. This unpredictable conditionality creates in turn challenges for corporate governance: dramatic changes are going to be introduced by the enlargement process but the agenda remains unclear and strategies have to be adapted to uncertainty and risks difficult to measure.