Showing papers in "Journal of Managerial Issues in 2003"

Work-family conflict: A model of linkages between work and family domain variables and turnover intentions.

Abstract: Researchers have studied many outcome variables of work-family conflict (WFC) and family-work conflict (FWC), such as depression (Frone et al., 1992a), family satisfaction (Beutell and Wittig-Berman, 1999), heavy alcohol use (Frone et al., 1996), and job satisfaction (Netemeyer et al., 1996). However, relatively few have specifically examined withdrawal. While intention to quit (Burke, 1988; Netemeyer et al., 1996) and absenteeism (Goff et al., 1990) have been linked to WFC, there is some question about the generalizability of current findings. For instance, Burke (1988) used a global measure of work-family conflict and Netemeyer et al. (1996) only considered correlations. The purpose of this study is to address these issues by testing a model of work and family variables leading to conflict and, ultimately, turnover intentions. Gaps in the Research Work-family conflict is a form of interrole conflict that occurs when pressures associated with membership in one role interferes with membership in another (Kahn et al., 1964). It is defined as "a form of interrole conflict in which the role pressures from the work and family domains are mutually incompatible in some respect" (Greenhaus and Beutell, 1985: 77). Research in the area of work-family conflict, while informative, still has shortcomings that have yet to be addressed. In order to advance this stream of research, more consistency in the literature is needed. Comparisons between studies are still limited because some researchers continue to use a global measure of work-family conflict rather than two separate variables. The following section details important gaps in the literature that will be addressed in the current study. First, researchers have shown that WFC and FWC are distinct constructs with discriminant validity (e.g., Gutek et al., 1991; Kossek and Ozeki, 1998; Netemeyer et al., 1996). While some researchers have adopted the use of two independent measures to capture work interfering with family conflict (WFC) and family interfering with work conflict (FWC) (e.g., Carlson et al., 2000; Frone et al., 1992a; Frone et al., 1996; Gutek et al., 1991; Netemeyer et al., 1996), recently published research continues to use a global measure of work-family conflict (e.g., Carlson and Perrewe, 1999; Greenhaus et al., 1997; Parasuraman and Simmers, 2001; Yang et al., 2000). By measuring WFC and FWC separately, we have the opportunity to see how work domain variables influence WFC and how family domain variables influence FWC (Frone et al., 1996; Gutek et al., 1991; Kossek and Ozeki, 1998). Second, few studies examine full measurement models. Work-family conflict studies using structural equation modeling often consider a structural model and use summated scales (see Carlson and Kacmar, 2000). These methods only estimate error; they do not model all of the theorized relationships (i.e., observed and latent). By creating an average of the latent construct, they are creating a single manifest indicator. Using a full measurement model and structural model is more rigorous and accounts for measurement error above and beyond a structural model and is the recommended approach (Anderson and Gerbing, 1988). Further, simultaneously assessing the measurement and structural models provides a more thorough assessment of construct validity (Bentler, 1978). It also allows for the opportunity to use the preferred two-step modeling approach (Anderson and Gerbing, 1988). By first confirming the measurement model in evaluating a priori relationships, theory can be tested and confirmed in the second step (Anderson and Gerbing, 1988). We estimate and fix the measurement and test the structural model in the interest of using this two-step approach. Third, a large number of studies have followed the suggestions of researchers (i.e., Frone et al., 1992a; Kopelman et al., 1983) to consider only a subgroup (e.g., those married or having children) of the population of workers (Greenhaus et al. …

Employee Turnover and Tacit Knowledge Diffusion: A Network Perspective

Abstract: An enormous amount of information and knowledge resides in the minds of key people, but this material is rarely organized in a fashion that allows for its transmission to others (Powell, 1998: 237) Just as the apprentice learns the tools of the trade from a master, businesses gain from the knowledge shared by mentors, supervisors, coworkers, project team members, and long-tenured employees Yet the business world is in the midst of an era characterized by the boundaryless career (Arthur and Rousseau, 1996)-- one where median employment tenure is just four and a half years, new job creation accounts for only one tenth of all career moves, and large firm decentralization is a regular occurrence "I know I can't stop people from walking out the door--but how do I stop them from taking their knowledge with them?" (Labarre, 1998:48) That is, when employees leave, companies lose not only human capital, but also accumulated knowledge This is a common problem firms face in the knowledge economy and the central issue addressed in this article As consulting, research, and information technology firms are realizing, their "whole business is pretty much locked away in the minds of employees" (Koudsi, 2000: 233), yet this knowledge is rarely shared, swapped, traced, and fertilized to ensure that it remains, at least in part, with the firm when employees leave The problem's significance is shown by the fact that many businesses are spending millions of dollars each to develop and purchase solutions to combat knowledge exodus (Koudsi, 2000; McCune, 1999) Companies, recognizing knowledge as a valuable asset, are busily devising ways to capture it, from narrative re-creations of past triumphs to rewards for in formation gleaned in exit interviews (Branch, 1998) Organizational knowledge and employee turnover have been studied extensively Our contribution is a link between the two, whereby social networks explicate the connection between employee turnover and tacit knowledge loss Closely related to social networks is the concept of social capital We adapt the meaning suggested by Tsai and Ghoshal (1998) in defining social capital as resources embedded in social relationships as well as the norms and values inherent in such relationships Others (eg, Dess and Shaw, 2001) have suggested that employee turnover can negatively affect firm performance through loss of social capital We expand this by taking into account the tacit knowledge that firms lose when employees leave In light of employee turnover, we focus on social network structures likely to lead to retention of the tacit knowledge embedded in employees' minds We offer propositions concerning the problem of tacit knowledge loss and encourage the development of solutions that take into account the social n etwork structure of organizations Specifically, we posit that 1) tacit knowledge can be preserved, in part, when firms promote employee interaction, collaboration, and diffusion of non-redundant tacit knowledge, and 2) characteristics of a firm's social network, including density and an optimal mix of weak and strong ties, promote interaction, collaboration, and non-redundant tacit knowledge diffusion This paper is divided into three major sections First, we introduce the general theoretical background, followed by more specific theoretical discussions of the tacit knowledge, knowledge-based view of the firm, and employee turnover literature Second, we frame our propositions in the context of a firm's social structure, highlighting the interplay among diffusion, interaction and collaboration, and non-redundant information Third, we provide a summary, implications, and future research directions BACKGROUND A major challenge facing organizations is uncovering the most effective methods of gathering and applying knowledge en route to economic value creation (Miles et al, 1998) In our technological, global society, this need for knowledge is more salient than ever before …

Balanced scorecard, activity-based costing and company performance: An empirical analysis

Abstract: Innovative techniques such as balanced scorecard (BSC) (Kaplan and Norton, 1992, 1993, 1996) and activity-based costing (ABC) (Kennedy and Affleck-Graves, 2001; Krumwiede, 1998; Shields, 1995; Shields and Young, 1994) are being implemented by management in response to the new global competitive environment. The importance to managers of having a "balanced" measurement system has led companies to develop a variety of corporate scorecards suggesting a process approach to innovations in performance measurements (Epstein and Birchard, 2000; Hoque and James, 1997). The BSC has gained prominence in accounting research as a way of integrating financial and non-financial performance measures into an overall control system (Atkinson et at., 1997; Hoque and James, 2000; Malina and Selto, 2001; Ruhl, 1997; Shields, 1997; Simons, 2000). ABC is an innovation aimed toward an increase in the accuracy of cost measures and also is often viewed as a supportive measurement system for successful implementation of the balanced scorecard. Advocates of ABC cite many benefits of such a system (Anderson, 1995; Banker and Johnson, 1993; Kaplan, 1992) and identify factors associated with ABC success (Foster and Swenson, 1997; Krumwiede, 1998; McGowan and Klammer, 1997; Shields, 1995). Previous research on ABC and BSC has added to our knowledge of how ABC implementation can help support process improvement (Turney, 1991) and develop cost-effective product design (Cooper and Turney, 1989), and how BSC can provide managers with an integrative framework to manage organizational activities. This study attempts to contribute to the body of knowledge in this area by investigating the complementarity effect of BSC and ABC on organizational performance. Our focus is the manufacturing unit because manufacturing performance is controlled by the business practices and tools in place at the business unit level (1), and competitive advantage is ultimately won or lost primarily at the business unit level rather than the corporate level (Porter, 1980). Measurements for this study are questionnaire responses from a random sample of manufacturing business units located in the United States. The article is organized as follows. First, the literature review is discussed and propositions are developed. Next, a discussion of the research methods is conducted. After the empirical results are reported, a conclusion, discussion and suggestions for future research are presented. LITERATURE REVIEW Balanced Scorecard (BSC) Many firms are implementing BSC systems that supplement traditional financial accounting measures with non-financial measures focused on at least three other perspectives--customers, internal business processes, and learning and growth (Kaplan and Norton, 1992, 1996). Proponents of BSC (e.g., Chow, 1997; Cravens, 2000; Kaplan, 1992) contend that this approach provides a powerful means for translating a firm's vision and strategy into a tool that effectively communicates strategic intent and motivates performance against established strategic goals. The value of the BSC is that it assists the development of a consensus around the firm's vision and strategy, allowing managers to communicate the firm's strategy throughout the organization and forces managers to focus on the handful of measures that are most critical. This communication ensures that employees understand the long-term strategy, the relations among the various strategic objectives, and the association between the employees' actions and the chosen strategic goals. The balanced scorecard is also expected to help firms allocate resources and set priorities based on the initiatives' contribution to long-term strategic objectives, and to provide strategic feedback and promote learning through the monitoring of short-term strategic results (Kaplan and Norton, 1996). However, empirical support for these claims is limited and not conclusive. …

TQM Workforce Factors and Employee Involvement: The Pivotal Role of Teamwork

Abstract: According to Cotton, EI is "a participative process to use the entire capacity of workers, designed to encourage employee commitment to organizational success" (1993: 3). In EI, employees are drawn into the work process through suggestions, increased communication, and/or incentives. In addition, EI initiatives often attempt to locate decisions at the lowest level in an organization. Thus, a well-implemented EI program may help organizations achieve a flatter structure, eliminate substantial amounts of staff and support work, and improve productivity, quality, and employee attitudes--issues critical for companies to keep a strong position in a highly competitive marketplace (Cotton, 1993; Lawler, 1994). TQM is a holistic management system that seeks to integrate functional areas across an organization to increase customer satisfaction and achieve continuous improvement (Crosby, 1979; Deming, 1986; Feigenbaum, 1991; Ishikawa, 1985; Juran, 1988; Juran and Gryna, 1993). TQM theory, as developed by the quality gurus, is an integrated management philosophy and set of practices that has an organization-wide focus on quality. It combines quality-oriented culture with intensive use of management and statistical tools to design and deliver quality products to customers (Aguayo, 1990; Berry, 1991; Crosby, 1979, 1984, 1989; Deming, 1986, 1994; Feigenbaum, 1991; Juran, 1988). TQM emphasizes customer satisfaction, employee involvement, and continuous quality improvement. Each of these must be used together in order for the application to work effectively (Crosby, 1979, 1984, 1989; Deming, 1986, 1994; Feigenbaum, 1991;Juran, 1988). Thus, EI efforts may be apart of a TQM system or may stand alone. However, the concepts are not interchangeable. According to Mohrman et al.: although both [EI and TQM] stress employee involvement as well as training and skills development, there are some key differences between them: The TQM literature attends more to work process and customer outcomes. The employee involvement literature emphasizes design of the work and business units for fuller business involvement and employee motivation. In addition, employee involvement emphasizes making the employee a stakeholder in business performance through rewards systems such as gain-sharing and through business education (1996: 6). Therefore, while EI may stand-alone, an organization may have a more fully developed quality system if it implements a TQM program that expressly incorporates a complete EI effort (Hua et al., 2000). Hence, it is important to determine what factors within a TQM program affect developing EI. Research suggests that four key elements of TQM programs affect EI. First, management support has been repeatedly stressed as essential to the development of all aspects of TQM (Deming, 1986; Flynn et at., 1994; Juran, 1988; Saraph et al., 1989) and in particular to the development of EI (Fenton-O'Creevy, 1998; Silos, 1999). Second, training stands out in both the TQM literature (Cartin, 1993; Hunt, 1992; Osland, 1997) and EI literature as crucial in the skill building necessary for participative workers (Leitch et al., 1995; Silos, 1999). Third, the research suggests teamwork may play a pivotal role in establishing quality (Harris, 1992; Magjuka and Baldwin, 1991) and developing EI (Leitch et al., 1995; Silos, 1999). It appears teamwork acts as a platform supported by management and training (Cohen and Bailey, 1997; Orsburn et al., 1990) from which employees interact and enhance EI performance (Leitch et at., 1995; Silos, 1999; Vanriper et al., 1995). Fourth, rewards have been cited as essential to TQM programs (Bowen and Lawler, 1992; Deadrick and Gardner, 2000) and, as stated earlier, are a key component of EI (Fenton-O'Creevy, 1998; Mohrman et al.; 1996). Interestingly, recent research confirms that these four elements are critical factors in EI development within a TQM framework. …

Strategy-Performance Relationships in Service Firms: A Test for Equifinality

Abstract: In the process of using the open systems model to legitimize organizational studies, Katz and Kahn (1966) discussed the properties of open systems and included the notion of equifinality. The systems paradigm peaked in 1972 and eventually went out of fashion by 1976 (Ashmos and Huber, 1987). However, in the strategic management and strategic marketing literature, many statements have been made that within a certain strategic typology, no one strategy is neither inferior nor superior to that of another strategy (Kald et al., 2000; Deshpande and Farley, 1998). In fact, Miles and Snow (1978) and Porter (1980) argue that the strategies described in their respective typologies are neither inferior nor superior. Certain researchers have posited that the notion of equifinality may offer insights into this superiority-inferiority argument (Gresov and Drazin, 1997; Jennings and Seaman, 1994; Matsuno and Mentzer, 2000). Interestingly, within the strategic management and marketing literature, the notion of equifinality has been studied and has taken on two theoretical perspectives. One such perspective (the strategy approach) is that an organization can achieve an outcome by a variety of strategic actions or strategies (Miles et al., 1978). The other perspective (the strategy-structure fit perspective) is that a feasible set of equally effective, internally consistent patterns of strategy and structure exist (Van de Ven and Drazin, 1985). In essence, proponents from both schools make the same argument--a desired outcome can be reached by the use of different approaches. The "strategy approach" school argues that different strategies can yield the same outcome. This is the rationale used by Miles and Snow (1978) and by Porter (1980) in stating that the strategies described in their respective typologies are neither inferior nor superior. However, advocates of the "strategy-structure fit" school add an extra dimension to their argument in that the firm's strategy must be aligned with its structure and that a variety of strategy-structure matches can be used to acquire the same outcome. While most of the research on equifinality within strategic management and marketing has been theoretical in nature, two empirical studies of equifinality have been conducted (Doty et al., 1993; Jennings and Seaman, 1994). Both of these studies have supported the notion of equifinality in that a variety of strategic approaches can achieve the same outcome. The purpose of this study is to extend research on equifinality by examining the strategy-performance relationship across a variety of service firms. First, the literature on contingency theory and business strategy is reviewed to present a theoretical framework and to develop hypotheses. Next, the methodology used in the study is presented, and then the findings are reported and discussed. THEORETICAL FRAMEWORK AND HYPOTHESES Contingency Theory Two sets of pervasive arguments exist among contingency theorists with respect to how fit affects performance. One such argument suggests that a one-best strategy-structure arrangement exists to fit a given industry environment (Dill, 1958; Hage and Aiken, 1970; Lawrence and Lorsch, 1969; Lorsch and Morse, 1974). The other argument is that organizational effectiveness results from fitting certain organizational characteristics to contingencies that reflect the situation of the organization (Burns and Stalker, 1961; Galbraith, 1973; Hage and Aiken, 1969; Pugh et al., 1969). These contingencies include the environment (Burns and Stalker, 1961), organizational size (Child, 1975), and strategy (Chandler, 1962). Proponents of the contingency school of organizational behavior (Donaldson, 2001; Pennings, 1975; Pfeffer, 1997; Schoonhoven, 1981; Scott, 1992) argue that a variety of strategic approaches can be equally effective. Donaldson (2001) argues that those scholars who assert there is one best way to organize belong in the universalistic theory of organization thought rather than to the contingency theory school. …

The Competitive Environment and Strategy of Target Costing Implementers: Evidence from the Field

Abstract: Researchers investigating Target Costing (TC) frequently have identified a link to firm strategy as a defining factor of this cost management tool (e.g., Cooper and Slagmulder, 1997; Ansari and Bell, 1997). Ansari and Bell state that TC is intimately linked to an organization's competitive strategy. However, the nature of the relationship between TC and firm strategy has not been empirically investigated. This study evaluates the competitive environment and strategy of firms that have been identified as implementers of TC to determine whether specific environmental forces coupled with firm strategy can be traced to a firm's decision to adopt the tool. Strategy may moderate the relationship between competitive environment and the decision to adopt TC. That is, given the competitive environment of the firm, the decision whether to adopt TC may depend on its strategy. The competitive strategy (1) a corporation chooses to pursue identifies the manner with which management intends to compete successfully in its product markets and provide superior value to customers (Thompson and Strickland, 1996). The firm's competitive environment influences its ability to successfully carry out a chosen strategy. For example, a low-cost provider strategy works best when price competition among rival firms is especially intense and when the industry's product is standardized. Alternative competitive forces allow a product differentiation strategy to be effective. Examples include diverse needs or uses for the item or service, or relatively few competitors pursuing a similar differentiation approach (Thompson and Strickland, 1996). The firm's strategic vision is put into action through various tools, techniques, and corporate policies. One such tool that is being adopted by firms worldwide is the cost management system of TC. As Ansari and Bell (1997) explain, the link between a firm's comp etitive strategy and use of TC exists primarily because TC provides the means for achieving the firm's goals of satisfying market demands at an acceptable level of profitability. A TC system provides a means for managing a company's future profits by integrating strategic variables to simultaneously plan how to satisfy customers, capture market share, generate profits, and plan and control costs (Ansari and Bell, 1997). Several large international corporations have been identified as TC adopters, including Boeing, Daimler Chrysler, Caterpillar, Rockwell, Eastman Kodak, Texas Instruments (Ansari and Bell, 1997), Mercedes Benz (Albright, 1998), and leading Japanese companies such as Toyota (Kato, 1993), Nissan, Sony, Matsushita, Daihatsu, Canon, Olympus Optical, and Komatsu (Ansari and Bell, 1997). In Japan, over eighty percent of all assembly-type industries use TC (Ansari and Bell, 1997; Kato, 1993); however, U.S. companies have been slower to adopt the technique. Reasons for this include TC being "not well known in Corporate America" and the existence of both cultural and organizational barriers to developing a broad team-oriented strategy TC requires (Banham, 2000: 130). Using a sample of firms identified as TC adopters, we interviewed managers to collect data about the competitive environment faced by the firm and the strategy the firm pursues. Managers' responses are analyzed to determine a relationship between competitive forces and strategy choice for the adopters. Finding determinant factors of implementation will lead to greater insight into the adoption and use of TC systems, and to the nature of the tool itself While this research is descriptive in nature, it provides the first step for determining the successful utilization of TC. The remainder of the article is organized into four sections. The next section presents the propositions. We then discuss the research method used to collect data from adopting firms, present results, and conclude with limitations and opportunities for further research. Development of Research Propositions The concept of TC ("Genkakikaku" in Japanese) originated in Japan at Toyota Motor Corporation in the 1960s. …

The Performance Impact of Interlocking Directorates: The Case of Singapore

Abstract: The board of directors has increasingly become the focus of corporate governance research and policy making in emerging economies following the Mexican Peso crisis in 1990, the Asian economic crisis in 1997, the Russian Ruble collapse in 1998, the Brazilian Real crisis in 1998, and the Argentine Peso collapse in 2002, among other financial crises. Observers have noted that the lack of corporate governance standards and the weak enforcement of existing laws in emerging economies are partly responsible for such crises and for the inability of companies to recover from them. At issue are some unique features of corporate governance in emerging economies. The lack of dear and strongly enforced property rights attenuate the depth of public capital markets, forcing many firms into private equity arrangements for financing. Private equity from friends and family, coupled with family control, engender opaque boardroom practices between related companies. Emerging economies are also characterized by extensive governmental involvement in private enterprises, ostensibly to encourage economic development and risk-taking, but instead discourage the accumulation of private capital in favor of de facto taxed-based public financing. One result of these features is the pervasiveness of interlocking directorates between corporations and the government in emerging economies. In its most basic form, an interlocking directorate occurs when a person from one organization sits on the board of directors of another company (Mizruchi, 1996). Hence, an interlock may take several forms. It occurs when an individual from a focal organization sits on the board of another or when an individual from another organization sits on the board of the focal company. Interlocks also occur when there is a simultaneous exchange of individuals on the boards between two companies. They also occur when two individuals, A and B, from two different companies sit on the board of a third company, X. The companies of A and B have an indirect interlock while company X is interlocked with the companies of A and B. For the purposes of this study, we chose the most stringent definition of interlock which occurs when current senior managers and/or directors of two companies simultaneously serve on each others' boards. Since it is unclear if existing theories of interlocking directorates are generalizable outside of the non-Anglo-American context, this study seeks to understand the phenomenon of board interlocks and their relationship to firm performance in an emerging Asian economy, namely Singapore. In the next section, theories of board interlocks are reviewed, followed by the development of research hypotheses. Next, the methodology for this study is described, followed by a presentation of the results and a discussion of the implications. THEORIES OF INTERLOCKING DIRECTORATES Interlocking Directorates for Class Integration One theory of board interlocks proposes that they exist for class integration, defined as the mutual protection of the interests of a social class by its members (Koenig and Gogel, 1981; Useem, 1982). This process is driven by the identification and appointment of director candidates with similar backgrounds, characteristics, and political beliefs from within the personal networks of incumbent board members. The result of this "class hegemony" is an elite class of directors whose primary interactions in the boardroom serve the purpose of protecting class welfare (1) and, by extension, the welfare of the individual who belongs to the class (Koenig and Gogel, 1981; Koenig a al, 1979; Useem, 1982). For example, Useem's (1982) interviews with 1,307 U.S. and British executives and directors uncovered an elite network of directors in private and public corporations, financial institutions, and government agencies, loosely held together by the common goal of preserving their individual and collective positions in society. …

Team Knowledge Structures: Matching Task to Information Environment

Abstract: Businesses increasingly use teams as tools for successfully negotiating their knowledge-based environments (Guzzo and Dickson, 1996). Such teams perform tasks ranging from localized assignments (e.g., developing a new packaging design) to those with organization-wide impact (e.g., new product development, strategic decision malting). An increased understanding of knowledge processing in teams could improve their ability to meet a wide variety of organizational demands (Cohen and Bailey, 1997). Until recently, attention to knowledge management in teams has chiefly focused on information management (e.g., Denison et al, 1996; Stasser and Titus, 1987) and information technology (e.g., Boland et at., 1994), rather than broader knowledge processing. Newer models imply that the knowledge structure of the team--how knowledge is distributed among members--significantly influences the team's knowledge-processing ability (e.g. Hinsz et at., 1997; Hollenbeck et al., 1995; Stasser et al., 1995). Knowledge structures can affect the team's ability to perform specific types of knowledge processing. In this article, we identify knowledge processes in teams, define aspects of a team's knowledge distribution, and then match team knowledge structures to the tasks to which they are most suited. KNOWLEDGE AND KNOWLEDGE PROCESSES The knowledge possessed by an organization and its members can be classified as explicit or tacit (Polyani, 1966). Explicit knowledge can be codified and communicated without much difficulty. Tacit knowledge--such as the manner of operating sensitive equipment, decision-making judgment in the absence of data, or interpersonal skills--is not so easily articulated. Logically, this division applies to knowledge in teams as well as to larger collectives. Within an organization, knowledge is distributed among employees--there is rarely any one individual who possesses all that is known to that collective entity. In addition, this knowledge is dynamic--it loses its relevance over time when environmental conditions change, or it may just be forgotten. Given these characteristics, teams performing key organizational tasks must perform three basic knowledge-processing activities: knowledge acquisition, knowledge integration, and knowledge creation. These activities involve either knowledge that is held by individual team members (knowledge integration and creation) or knowledge acquired from external sources (knowledge acquisition) (Huber, 1991). Teams acquire knowledge from external sources when members recognize that they are deficient in a particular area and when at least one member acts to fill the gap from outside the team. Using such external knowledge typically improves team performance (Ancona, 1990; Denison et al., 1996). Acquiring such external knowledge requires that one or more team members interact with the team's environment. However, mere desire to obtain specific knowledge is not sufficient to ensure acquisition. The team, through at least one of its members, must possess an adequate amount of prior knowledge to understand the relevance and key elements of the desired knowledge--the 'absorptive capacity'--to acquire the new knowledge (Cohen and Levinthal, 1990). In addition to acquiring external sources of knowledge, teams generate knowledge internally through integration and creation. Knowledge integration occurs when complementary knowledge separately held by members is combined to form new knowledge (Grant, 1996). Complex knowledge integration tasks are generally performed through the use of cross-functional teams (Denison et al., 1996). For example, when developing a new product, a design engineer's knowledge of how the product should function can be integrated with a manufacturing technician's knowledge of how to actually produce it. In many cases, knowledge integration may not just be an important activity; it may be the very reason to form the team. Finally, teams are one of the most common and efficient means to create knowledge (Nonaka and Takeuchi, 1995). …

An Examination of Whether Incentive Compensation and Stock Ownership Affect Internal Auditor Objectivity

Abstract: Recent events in the corporate sector have increased the prominence of internal auditing. The bankruptcies, financial reporting irregularities, and fraudulent activities that took place in Enron, WorldCom and other firms have greatly increased scrutiny on corporate monitoring. Especially in light of the external audit failures associated with these events, internal audit's role in corporate monitoring is sure to be expanded. While external auditors are concerned primarily with financial reporting, internal auditors typically do not spend most of their time dealing with financial reporting. A survey by Barrett et al. (1985) found that, on average, internal auditors spend 32 percent of their time on financial audits. Interestingly, though, a survey by KPMG Peat Marwick (1999) found that internal auditors were more likely to discover fraud than external auditors. The Treadway Commission points out, however, that internal auditors' full potential "often is not realized, in part because the role the internal auditors have in the audit of financial statements at the consolidated level is often limited ... internal auditors often concentrate on the review of controls at the division, subsidiary, or other business component level, rather than at the corporate level. Independent public accountants, on the other hand, generally are responsible for the audit examination at the corporate level" (1987: 39). In recent years, internal auditors have received incentive compensation in the form of bonuses tied to overall company performance (Stapp, 1991; DeZoort et al., 2000). Internal auditors are seen as adding value to the firm because of their role as business consultants in areas such as internal controls, effectiveness and efficiency of operations, and compliance with organizational policies and procedures. Hence, many organizations believe that internal auditors should be rewarded for the successes of the firm. Moreover, many believe that rewarding internal auditors with incentive compensation will increase their productivity and effectiveness as well as improve their morale and motivation (DeZoort et al., 2000). According to a recent survey (Stewart, 1997), 51 percent of auditing department heads received incentive-based compensation. In a survey of 179 internal auditors, DeZoort et al. (2000) report that almost half of the respondents indicated that incentive compensation was available to internal auditors in their organizations. Of those reporting the availability of incentive compensation, 70 percent indicated that this compensation was based on overall company financial performance. A majority of these performance measures were related to reported earnings, such as net income, earnings per share, return on equity, and return on assets. Internal auditors also sometimes own stock in the companies in which they are employed (Simpson, 1999). In fact, the DeZoort et al. (2000) study reports that 23 percent of the internal auditors who received incentive compensation were awarded stock options. (1) These types of situations could raise concerns about conflicts of interest (Heaston et al., 1993). For both situations, internal auditors would benefit when their company's earnings are high. Whether the incentive compensation is based on the company's earnings or on the company's stock price, the internal auditors might tend to overlook management actions that overstate earnings. Indeed, 56 percent of the internal auditors in the DeZoort et al. (2000) study felt that incentive compensation based on overall company performance potentially impairs internal auditor objectivity and independence. Also, since higher company earnings generally affect the company's stock price in a positive manner, internal auditors who own compaW stock might tend to overlook management actions that overstate earnings. Objectivity is a key element in the effectiveness of an internal audit function. The Panel of Audit Effectiveness asserted that "internal auditors must be objective with respect to the activity being audited" (2000: 62). …

Underreporting of Chargeable Time: The Impact of Gender and Characteristics of Underreporters

Abstract: While prior research has examined the dysfunctional effects of time pressure and the underreporting of chargeable hours (e.g., Rhode, 1978; Lightner et al., 1982; McDaniel, 1990; Ponemon, 1992, Akers and Eaton, 1999), the purpose of this study is to expand the literature on underreporting chargeable hours. We contribute to the existing literature in two specific ways. First, the impact of gender is examined. Prior research has not examined this issue. Second, a discriminant model, which has never been used before, is used to compare characteristics of those individuals who underreport time with those individuals who do not. Based on the responses of over two hundred practicing accountants we find significant differences between males and females in their perceptions regarding the underreporting of time. Utilizing variables from prior research, we test a model to predict the propensity to underreport time. While the model was statistically significant, it did not predict underreporting any better than chance. This finding suggests that additional research is needed in this area to identify other factors that could be important in explaining an individual's propensity to underreport time. The first section of the paper provides a literature review and the resulting hypotheses. Specifically, research related to time pressure, gender and characteristics or factors that could lead to underreporting are examined. Next, we examined the research methodology and then present and discuss the results. Concluding comments and limitations of the study are presented in the final section. REVIEW OF PRIOR LITERATURE Time Pressure Time pressure is present when the information-processing demands of a decision exceed a decision-maker's information-processing capabilities (Newell and Simon, 1972). Auditors are subjected to substantial time pressure in audit and tax engagements. Such time pressures often impact accountants' behaviors. Budgeted time on an audit/tax engagement is often influenced by the actual time spent during the previous engagement. When accountants underreport time on a current engagement, the amount of time budgeted on that same engagement in the future might not be adequate. If during the future engagement, an accountant feels pressured to perform the task in the budgeted time, he/she will do one of three things: (1) perform the necessary work and report the actual time, thus going over budget and face the consequences, (2) perform the necessary work but not report the actual time, thus underreporting again, or (3) not perform the necessary work but claim he/she did (i.e., a premature sign-aft). There is evidence in the accounting literature that the underreporting of chargeable time is an issue that the profession has struggled with for the past twenty years. Lightner et aL (1983) found that 67% of the accountants responding to their survey admitted to underreporting time. More recent studies show that underreporting continues within public accounting firms. Kelley and Margheim (1990) surveyed staff auditors from a national firm. Their results showed an inverted-U shaped relationship between pressure and underreporting. Ponemon (1992) found that subjects participating in his experiment underreported time an average of more than 12 percent. Smith et aL (1996) found that 89% of the CPA respondents did not report all of their chargeable time while Akers and Eaton (1999) found that 71% of their respondents did not report all chargeable time. As noted above, one of the possible dysfunctional effects of time pressure is substandard audits or tax returns/ planning. Research over the past twenty years illustrates this fact. In 1978 the Cohen Commission reported that time pressure was the most significant cause of substandard audits. Rhode's 1978 survey, commissioned by the American Institute of Certified Public Accountants' (AICPA) to examine the auditing work environment, found over one-half of AICPA members questioned admitted to prematurely signing off on audit procedures due to time pressure. …

Using Hierarchical Linear Modeling to Illustrate Industry and Group Effects on Organizational Commitment in a Sales Context

Abstract: Scholars in the education, sociology and business fields (Klein et al., 1994; Rousseau, 1985) have raised the levels-of-analysis issue. Klein et al. suggested that "by their nature, organizations are multi-level.... No construct is level free. Every construct is fled to one or more organizational levels or entities, that is, individuals, dyads, groups, organizations, industries, markets, and so on" (1994: 198). House et al. (1995) also proposed the development of a new paradigm to foster integration of micro and macro organizational phenomena and to provide a framework in which organizational behavior knowledge can be accumulated in an integrative and coherent way. They argued that "distinctive competence of organizational researchers is the ability to study how organizational settings and organizational members influence each other and are influenced in turn" (1995: 74; italicized by the original authors). Given the significance of the multilevel perspective in research on organizations, the thesis of this study is that adopting the multi-level perspective would facilitate a better understanding of the role that contextual factors play in organizational behavior phenomena. When researchers deal with multilevel variables (e.g., a lower-level outcome and both lower-and higher-level predictors) without considering appropriate multi-level analytic techniques, they are given two options for data analysis. The first option is that they can disaggregate data such that each lower-level unit is assigned a score representing a higher-level unit within which it is nested. The problem with this approach is that lower-level units in one higher-level unit are influenced by a similar effect within the same higher-level unit. Therefore, this violates the independence of cases assumption that underlies ordinary least square (OLS) approach (Bryk and Raudenbush, 1992). The second option is to aggregate lower-level units and examine proposed relationships at the aggregated-level. The shortcoming of this method is that potentially meaningful lower-level variance in outcome measure is not taken into consideration. Hierarchical linear modeling (HLM), as a multi-level technique, is specifically designed to overcome the weaknesses of the disaggregated and aggregated data analysis methods discussed above. First, it explicitly considers that lower-level units within a higher-level unit may be more similar to one another than those in other higher-level units and, thus, may not generate independent cases. Second, HLM examines both lower-level and higher-level variance in outcome measure, while maintaining the proper level of analysis for independent variables. For instance, a researcher can model both individual-and group-level variance in individual outcomes while utilizing individual predictors at the individual-level and group predictors at the group-level. Therefore, HLM overcomes the weaknesses of the two data analysis methods in that people can model explicitly both within- and between-group variance, as well as examine the impact of higher-level units on lower-level outcomes while maintaining the appropriate level of analysis. The purpose of this article is to demonstrate that HLM can be an appropriate statistical technique in dealing with multi-level data, compared to OLS regression, by investigating organizational commitment at both the individual- and group-level using data from sales agents in multiple agencies of a large insurance company. This article is organized as follows. First, a brief description of hierarchical linear modeling and its advantages over OLS approaches is presented. Second, as an application of HLM, testable hypotheses on organizational commitment are developed both at the individual and group level. Then, the empirical results of the two OLS data analysis methods are reported and compared with those of the HLM analysis. Next, the findings from the study are discussed in the context of the insurance industry. …

Employee Perceptions of Stakeholder Focus and Commitment to the Organization

Abstract: Today's increasingly competitive business environment requires that companies find new and improved strategies for achieving superior financial returns In a world in which technology has driven down production costs and made new goods and services easier to imitate, firms must look for less traditional ways of staying ahead of the competition Reichheld (1996) contends that increases in customer, investor and employee loyalty offer enormous potential for enhancing a firm's performance Davis and Landa concur and further point out that "customer loyalty, the outcome of superior customer service, and investor loyalty, the outcome of protected and enhanced shareholder value, are each dependent upon the business gaining the commitment and loyalty of its employees" (2000: 4) Their view of committed employees as key success drivers is supported by Pfeffer (1998), who says strategies that put workers first result in higher productivity, greater flexibility, improved customer service and other outcomes related to financial performance Given its practical significance, it is no surprise that, according to Mowday (1998), employee commitment has been the subject of voluminous academic research He suggests that the topic is of greater importance today than it was in the past, and notes that while employee commitment to an organization is more critical than ever in gaining competitive and financial advantage, organizational commitment to employees is actually declining He cites widespread corporate downsizing and cost cutting as two examples of this phenomenon Baruch (1998) argues that this lack of organizational commitment to employees has, in turn, diminished employee commitment to companies Corporations have long understood the importance of commitment to shareholders and have embraced the concept of shareholder wealth maximization as the purpose of the firm (Serven, 1999) Over the last decade, the concept grew in significance as financial analysts applied mounting pressure on firms to build shareholder value in the short term by increasing quarterly profits and earnings (Fox, 1997), often through cost-cutting measures involving employee dislocation or downsizing Likewise, the importance of the customer has grown among market-driven companies who believe that pursuing relationships--rather than transactions--with buyers can create a source of predictable and valuable revenues (Berry, 2001) Such companies have invested in customer-relationship management, data mining and other sophisticated technologies designed to assist them in determining who their customers are, what they want, how they can be better served, and how they can be prevented from defecting to the competition Regardless of whether corporations put shareholders, customers, employees or some combination of the three at the heart of their business missions, it is the employees themselves who must develop and implement strategies and tactics designed to create value for all the groups (Bowden, 2000) As a result, organizations now routinely claim that people are their greatest asset, but few practice what they preach (Mowday, 1998) According to Guaspari, businesses "suck more and more from people's lives" (1998: 20), engendering a growing sense of dispiritedness as employees are forced to do more for the same or less money Previous research on employee commitment to the organization has examined, among other factors, employee perceptions of how they are treated relative to internal and external peer groups only However, if it is true that organizations are directing more and more attention to customers and shareholders, then it would be worthwhile to examine employee perceptions of the organization's stakeholder focus and the impact of these perceptions on workers' commitment to the organization A focus on shareholders and customers, rather than on employees, might be seen as a lack of organizational commitment to workers, who might then be expected to be less committed to the firm …

Personal Values of Accounting Alumni: An Empirical Examination of Differences by Gender and Age

Abstract: Recent headlines highlight the increased attention placed on the values and ethics of business professionals and accountants. In 2001, the implications of Enron were not limited to the business press and accounting journals. Rather, accounting practitioners and business managers have been brought to the front page of newspapers and have been continuously paraded on the evening news of television networks (e.g., Byrnes, 2002; Liesman, 2002; White, 2002). In 2002, Securities and Exchange Chairman Harvey Pitt as well as Congress expressed the potential need to substantially modify the entire system of financial reporting. In particular, the profession has found itself in a crisis related to the long-standing system of serf-governance through private rather than public organizations. In an attempt to head off some of these concerns, the "Big Five" have preemptively volunteered to change a substantial portion of their business practice. They might no longer provide consulting services to current audit clients. The once envious and untarnished reputation of accountants as independent, objective, reliable, honest watchdogs is being called into question. Considering these events, we believe it is fruitful to study the personal values of accounting graduates and to learn how they might differ by gender and by age. Personal values are important to study because they provide the foundation for behavior. Past research in a variety of disciplines over the last twenty years (Baker, 1976; England, 1975; Finegan, 1994; Fritzsche, 1995; Rokeach, 1973; Singhapakdi and Vitell, 1993) provides evidence that one's personal values influence behavior, including managerial and corporate strategy decisions. Recent research as well as current business trends provide additional support for the positive correlation between values and behavior. Burdett (1998) holds that when the personal values of individuals are matched properly with those of the firm, the organization displays more effective behavior. A similar view is espoused by Erode (1998), which supports an alignment between personal and corporate values. Many businesses are putting these ideas into practice. Even before Enron, most corporations as well as accounting firms had expressed an increased interest in ethical awareness and many have developed codes of conduct (Ahadiat and Smith, 1994; Benson, 1989). Statement on Auditing Standards (SAS) No. 78 has been issued for auditors to gain an understanding of ethical values. Two early studies examined the personal values of accountants. Swindle et al. (1987) found that CPAs were more focused on their own personal goals rather than others. Pinac-Ward et al. (1995) found similar results for accounting educators. However, neither of these studies provided a systematic classification of the value systems of accountants. Examining business students, Eaton and Giacomino (2001, 2000) found that accounting majors were more likely than non-accounting majors to use moral means to accomplish their personal goals. They also found differences between genders. Females were more likely to focus on larger organizational goals compared to individual, personal goals. Other accounting studies have examined gender differences in other contexts and found that women have higher moral development (Sweeney, 1995) and are more likely to view questionable behavior to be unethical (Cohen et al., 1998) than males. But these studies have not addressed personal values. The primary goal of this study is to gather empirical evidence to develop a better understanding of the personal values of accounting graduates. Second, we also explore differences in personal values by gender and age. These demographic variables have changed in recent years. For example, the percentages of females in business and in accounting have increased, as firms have made substantial efforts to recruit and retain women. Third, we want to compare the results of this study with previous studies on personal values of other business professionals and students. …

Stuck in the Middle: A Control-Based Model of Managers' Reactions to Their Subordinates' Layoffs

Abstract: Organizational layoffs continue to be pervasive. Research on layoffs has focused on the reactions of layoff "victims," those who are laid off (Leana and Feldman, 1992; Newman, 1988), and "survivors," those who remain in the organization following the layoff (Armstrong-Stassen, 1994; Brockner et al, 1987, 1990, 1992; Noer, 1993). As a result, we now know a great deal about how members of these groups react to layoffs, particularly their reactions to perceived injustice. However, we know little about managers' reactions as a special group of layoff survivors. Managers may have unique reactions to layoffs for a number of reasons. First, managers are both "agents and recipients of change" (Wiesenfeld et al., 2000: 29). Although they resemble other survivors who are recipients of change, they also consider themselves agents of change as they play a role in making layoff decisions, carrying out the layoff strategy, and managing the post-layoff organization. Managers experiencing a downsizing "have to cope with the double burden of their own emotional reactions and those of the other survivors. They also have to deal with major change while experiencing it" (Kets de Vries and Balazs, 1997: 21). By virtue of their "linking pin" role (Likert, 1961), managers are charged with simultaneously representing the interests of the organization and their subordinates (Likert, 1961; Mintzberg, 1990). Therefore, in layoff situations, they are likely to feel as if they are "stuck in the middle" between the organization and their subordinates. From an organizational perspective, managerial reactions to layoffs are important because they can affect employee attitudes and behaviors. Employees are particularly attentive to their managers' messages and behaviors during significant organizational changes such as layoffs (Wiesenfeld et al., 2000). The layoff survivor literature documents that managerial behaviors, specifically supervisory support (Armstrong-Stassen, 1994) and explanations provided to those who remain (Brockner et al., 1990), influence surviving employees' attitudes and work behavior. Therefore, managers' layoff reactions provide a link to organizational outcomes through the direct and indirect influence they have on their subordinates. Because survivor morale can affect productivity and thus profitability of the post-layoff organization (Cascio, 1993), attention to this link has important organizational implications. While a few researchers have studied managerial reactions and behaviors following layoffs (Folger and Skarlicki, 1998; Kets de Vries and Balazs, 1997; Wiesenfeld et al., 2000), little attempt has been made to understand their unique reactions through a 'managerial lens." We develop a theoretical model of managers' reactions to layoffs that takes into account the managerial role and the fairness issues and reactions that arise as a result. We propose that the fit between managers' preferences for control over layoff decision making and the control they exercise influence their personal reactions and managerial role behavior. Personal reactions include affect and organizational commitment, and managerial role behavior includes explanations to subordinates, supervisory relationships, and decision making. We then conclude with implications of our model for organizational practice, theory, and research. MODEL OF MANAGERIAL REACTIONS TO LAYOFFS We use the term "manager" to refer to a particular organizational role (Kahn et at., 1964). The hallmarks of the managerial role include: 1) responsibility for getting work done through others (cf. Parker, 1984), 2) interpersonal, informational, and decisional roles that are derived from formal authority and status (Mintzberg, 1990), and 3) a "linking pin" role (Likert, 1961) in which managers act simultaneously as superior and subordinate (Graen and Scandura, 1987), order-giver and order-taker (Ghidina, 1993). The model we develop addresses concerns that are unique to layoff survivors who fulfill this role, particularly managers at mid-level and below in the organization. …

Linking Strategy Processes to Performance Outcomes in Dynamic Environments: The Need to Target Multiple Bull's Eyes *

Abstract: One reason for this incomplete understanding of the effectiveness of strategic processes is that many empirical studies focus on strategic processes involving only the top management team (Boyd, 1991; Finkelstein and Hambrick, 1996; Hopkins and Hopkins, 1997; Powell, 1996; Mintzburg, 1994). In addition, these studies usually focus on only one dimension of strategic process such as consensus among the team (e.g., Dess and Priem, 1995) or social integration among the team (e.g., Smith et al., 1994). We investigate a broader range of strategy processes that include participation of other organization members outside the top management team. Another related gap in our understanding is the moderating role environment plays in understanding the link between strategic processes and firm performance. We know that environments can have a significant impact, however the nature of this impact is unresolved (Powell, 1996). Some studies find a stronger association between strategic processes and firm performance in stable environments (Fredrickson and Mitchell, 1984) and others find a stronger association in unstable environments (Miller and Friesen, 1983). Other process variables impacted by dynamic environments (defined as the high rate of change and uncertainty) are top management teams' ability to make fast decisions, the ability to process information (Eisenhardt, 1989), minimize politics, and their history of working together (Bourgeois and Eisenhardt, 1988). Again the focus in these investigations is on the top management team. We also consider the moderating role of dynamism on strategy process performance relationships where a greater participation of organization members is required. Finally, despite the long-standing call to include multiple dimensions of performance, there has been a focus on financial definitions of firm performance. There has been a call for a conceptualization of outcomes other than economic measures (Venkatraman and Ramanujam, 1986). It has been proposed that a broader conceptualization of effectiveness will be more meaningful in the context of strategy process research (Rajagopalan et al., 1993). This study addresses these gaps in previous research by investigating the impact of different strategy processes on different dimensions of firm performance and the role of the environment in these relationships. In the following two sections we first summarize Hart's (1992) integrative framework and subsequently present the logic behind the hypotheses that are tested in this investigation. HART'S INTEGRATIVE FRAMEWORK OF STRATEGY PROCESSES In an attempt to provide a comprehensive framework of strategic processes, Hart (1992) integrates the themes and dimensions used to characterize these processes from previously published typologies. He presents five types of processes that reflect "the complementary roles that top managers and organizational members play in the making of strategy" (1992: 333). The five strategy processes are named Command, Symbolic, Rational, Transactive, and Generative. Two key characteristics of Hart's typology are: the different roles that the top management team and other organizational members play in making strategy, and their relative levels of participation. We will describe each of these processes as they relate to the relative involvement of the top management team and the other organizational members. The two processes that have the most top management team involvement are command processes and symbolic processes. For an organization utilizing command processes, strategy is driven by a leader or small top management team. Top management decides and controls the direction of the firm. Organizational members are not involved in decision making and have little autonomy in their choice of action; their role is to obey. Symbolic processes drive strategy by creating an implicit control system based on shared values, meaning, and identity that become embedded in the social fabric of the organization. …

Message Processing in Realistic Recruitment Practices

Abstract: Job applicants in today's competitive marketplace encounter numerous recruitment messages from many organizations through various media, a multi-input process that may compound an organization's search for effective recruitment. A critical decision an organization must make about its recruitment practices involves the accuracy or realism about the information it provides. Organizations are increasingly and justifiably concerned with the effectiveness of their recruitment messages, an organizational focus which is even more critical in times of low unemployment and significant competition for skilled workers. How organizations disseminate information through selected sources becomes an issue directly related to recruitment success or failure. Message delivery can vary by the nature of the message, nature of the messenger and the timing of its use in the recruitment process. Recruitment messages are designed to influence the job applicants' attitudes and behaviors toward eventual personnel acquisition. For example, one approach is to "sell" the job and the organization by portraying them in the most favorable light, by emphasizing positive features and either minimizing or completely disregarding negative features (Barber, 1998). There is little systematic consideration in recruitment research of the type of information to include, how information affects job applicant's attitudes, and how the information is received and processed by the perspective applicant or candidate. Despite the protracted inquiry into the use and effectiveness of realistic job preview explanations, questions remain unanswered as to why such studies have produced contradictory findings. It is evident that many process issues about the effectiveness and usefulness of engaging in the practice of realistic recruitment remain and thus motivate this study. The purpose of the present study is to simultaneously examine how information is presented by organizations and processed by perspective job applicants, and the effect each has on attitudes towards a target job. We focus on the moderating effect of individual differences in need for cognition (NFC), on the processing of framed recruitment messages and source credibility during realistic job previews (RJPs). First, the RJP literature is reviewed and then the theoretical background of the research will be discussed. An experimental study is then presented which investigates the interactive effects of need for cognition, message framing and source credibility. REALISTIC JOB PREVIEWS Most of the concern with staffing organizations involves getting matches between job candidates' capabilities and organizational requirements on the one hand and the job candidates' wants and needs and organizational climates and culture on the other (Wanous et al, 1992). RJPs have been extensively researched by McEvoy and Casio (1987), Premack and Wanous (1985), Wanous (1977, 1980), Wanous et al. (1992), and Phillips (1998). The primary focus of RJP research is employee retention with a secondary interest in applicant attraction (Rynes, 1992). Researchers interested in retention rates focus on hypotheses concerning serf-selection, while researchers interested in early work adjustment are generally concerned with met expectations. The self-selection hypothesis posits that matching individual needs with organizational climates lowers turnover rates by producing a better fit between individual and organizational characteristics (Wanous, 1980). The met expectations hypothesis posits that individuals are less likely to quit once they have been "inoculated" or given realistic information about the job as employees tend to be less dissatisfied because early job experiences match pre-employment expectations. It is clear, however, that these two hypotheses are not mutually exclusive and their effective integration may promote personnel recruitment that is ultimately more successful. Theories about RJPs share a basic assumption that the message is received and processed by the applicant. …

Do Size and Diversification Type Matter? an Examination of Post-Bankruptcy Outcomes

Abstract: In her sample of 806 firms, Hotchkiss found that only 24% (197) successfully reorganized and 49% (97) of those firms survived for five years after reorganization. Moreover, Hotchkiss found that the five-year post-reorganization performance of these 97 firms was significantly less than their respective industry averages. Additionally, Hotchkiss (1995) found evidence to suggest that retention of pre-bankruptcy management hindered post-bankruptcy performance. We feel that a logical extension in this line of study is to examine the effect of diversification type and organizational size on post-bankruptcy outcomes. This is because strategic type has been found to affect transition performance and recovery times of firms undergoing dramatic reorganization (Dawley et al., 2002; Lamont et al., 1994; Hoskisson, 1987), and that prior research suggests that larger organizations possess larger amounts of "slack" resources that can be drawn upon during difficult times (Flynn and Farid, 1991; Moulton and Thomas, 1993). The current study examines the effect of diversification type and organizational size on probability of recovery and recovery times for firms emerging from bankruptcy protection. In this study, probability of recovery is defined to be the odds (or likelihood) that a bankrupt firm will return to a level of performance on par with its industry, and recovery time is the number of years it takes for a bankrupt firm to return to that level of performance. The effect of organizational size on survival, reorganization, and post-bankruptcy performance seems important given the growing body of literature that suggests greater size (typically measured by a firm's total assets) engenders stakeholder support, community legitimacy, and assorted ecological selection enablers that may help keep the distressed firm afloat (Bantu, 1996). Similarly, choice of diversification type might also enhance the performance of troubled forms (Grant, 1988; Hoskisson, 1987; Lamont et al., 1994). It is important to note that diversification strategy can take several forms, including geographic (e.g., degree of internationalization) and product. This study is concerned with product diversification strategy. Product diversification strategy is often defined as one of two types--related and unrelated (Rumelt, 1974; Hoskisson et al., 1993; Palepu, 1985). Firms employing related diversification strategies typically sell one product line to one industry (often defined by a 2, 3, or 4-digit standard industry classification (SIC) code (e.g., Nike). Firms employing unrelated diversification strategies sell two or more product lines to two or more distinct industries (e.g., General Electric). The performance implications of employing either of these strategies are discussed below. An organization's management has two choices when filing for bankruptcy. First, it can request time to formulate a reorganization plan with the intent of continuing operations known as "Chapter 11, Reorganization." Second, it can turn over control of the organization's assets to a court-appointed trustee. This trustee will then sell the assets and distribute the funds under "Chapter 7, Liquidation." This study concentrates on the Chapter 11 reorganization filings and considers Chapter 7 liquidation filings as organizational death. Thus, unless otherwise specified, bankruptcy will be used in the context of Chapter 11, reorganization filing. Furthermore, a successful reorganization is considered to exist whenever the reorganization plan is approved by the Bankruptcy Court. The existing research in bankruptcy has been examined from the financial and accounting perspective (e.g., Altman et al., 1977), the legal perspective of asset distribution and venue (e.g., Bradley and Rosenzweig, 1992), the environmental perspective of corporate legitimacy and prestige (e.g., Thompson, 1967), and the behavioral perspective of the Board of Directors (BOD) and the Top Management Team (TMT) (e. …

Salaries, Performance, and Owners' Goals in Major League Baseball: A View through Data

Abstract: The quantitative literature on baseball has also been developing rapidly over the years. Most of the current literature deals with baseball as a market phenomenon in which owners are the firms in the business of entertainment while the players are the ones supplying the input to the production process. Examples of such articles are provided by Ferguson et al. (2000) and Richards and Guell (1998). Numerous articles deal with the effects of free agency and arbitration on salary structures (e.g., Miller, 2000; Bodvarsson and King, 1998; Fizel, 1996). The article by Marburger (1994) examines the effect of bargaining power on salaries, and Krautman (1999) discusses the difficulties in using salary as an estimate of a player's marginal revenue product. There are also articles dealing with race as a factor in determining salaries (e.g., Marburger, 1996), or even the market for baseball cards (McGarrity et al., 1999). There have also been several studies dealing with fan attendance in baseball. Kahane and Shmanske (1997) consider the relationship between team roster turnover and attendance. Knowles et al. (1992) study the relationship of demand for tickets to the uncertainty of the outcome of the game, and Domazlicky and Kerr (1990) consider the relationship between baseball attendance and the designated hitter. Whitney (1988) investigates fan interest (attendance) and team performance (winning games versus winning championships). At the aggregate level, Schmidt and Berri (2001) found that there is a significant relationship between competitive balance and attendance in Major League Baseball. The study by Horowitz and Zappe (1998) examines the determinants of baseball veterans' end-of-career salaries as a function of past performance and other criteria, and it is akin to the spirit of our study, but with a more specialized focus. In this study, we consider player salaries and performance at the individual as well as the team level using recent data. Our purpose is to see if individual and team performance measures that are associated with player compensation are different or similar to those associated with team owners' objectives. Research related to this question has not been reported in the literature. Thus, our main contribution is the examination of game performance characteristics that is of economic interest to both the players and team owners. Although the scope of this study is limited to players other than pitchers, we found some interesting results in terms of the underlying variables of performance from the perspectives of players and the owners. Most firms view compensation as a means of motivating as well as retaining employees. If compensation is closely tied to key performance measures, then it is reasonable to expect that employees work to maximize those measures in order to maximize their compensation. Further, if performance measures are chosen which maximize the firm's performance and are most likely to help the firm attain its goals, then the objectives of employees and the firm are aligned. In many organizations, achieving "performance-based pay" may be difficult to implement, and in others, selecting the correct measures may be a problem. Sales representatives are often compensated in accordance with the sales volume or revenue they generate. In many cases, sales are made at a loss near the end of an accounting period, and representatives can "make their numbers." In such cases, the employees have responded predictably to their compensation plans, but not necessarily in the best interest of the firm. The measurement of performance is less of a problem in professional sports than in most other industries. In particular, Major League Baseball (MLB) offers a wealth of measures pertaining to a player's performance on the playing field. In this study, we considered the relationship of individual performance to salaries and to the performance of teams. We examined the important characteristics of player performance as they may influence the compensation received by the player. …

A Proposed Model of Between-Group Helping: An Identity-Based Approach

Abstract: Researchers have taken note of Katz and Kahn's (1978) argument that performance is multidimensional and includes "innovative and spontaneous" behaviors that transcend formal role requirements (Borman and Motowidlo, 1993; Brief and Motowidlo, 1986; Organ, 1997; Smith et al., 1983). Whereas previous authors have examined extra-role behaviors performed by individuals, we develop a new, group-level construct called between-group helping (BGH), defined broadly as helping behaviors that work groups display toward other groups. The growing popularity, frequency of use, and potential benefits associated with work teams (1) suggest that applying helping behavior concepts to groups could be useful. Such an application not only acknowledges the importance of discretionary behavior for organizational success, but also addresses the fact that teams have become more important in organizations and do not operate in a vacuum, but instead coexist with other teams. As groups and teams become increasingly common in our organizations, we should try to learn how to elicit beneficial outcomes such as teams working together to achieve organizational effectiveness. Considering helping behavior as a group-level phenomenon heeds the argument made by meso-level theorists to consider whether phenomena that are typically examined at the individual level of analysis have isomorphic or discontinuous counterparts at the group level (e.g., House et al., 1995; Kozlowski and Klein, 2000; Rousseau, 1985). For example, individual-level mental models have been studied as shared or team mental models (Klimoski and Mohammed, 1994) and the application of individual self-efficacy has been broadened to include a team's collective efficacy (e.g., Bandura, 1982; Pescosolido, 2001). Like other constructs that are functionally different across levels, group-level BGH is not merely the sum of individual members' helping behavior. Although previous researchers have studied the topic of intergroup helping, we conceptualize the phenomenon differently and place it specifically in the context of team-based organizations. For example, scholars have investigated factors related to conflict and cooperation between groups of children (Sherif et al., 1961), high school students (e.g., Gaertner et al., 1994), ad hoc laboratory groups (Dovidio et al., 1995; Dovidio et al., 1998; Gaertner et al., 1990) and managers (Blake and Mouton, 1961). We build on the theoretical principles contained within this body of research and focus on how group identity works with intragroup and organizational-level factors to predict BGH. Consequently, the addition of BGH to the extra-role performance literature complements previous work and builds upon it by enlarging the work performance domain. A MODEL OF BETWEEN-GROUP HELPING (BGH) Definitions and Boundary Conditions We define BGH as intentional, discretionary acts of helping group members perform in order to assist one or more other groups. The range of relevant behaviors that teams could display can fall into one of two broad categories: information sharing (e.g., communicating about work strategies, suggesting how to avoid pitfalls) and assistance with task completion (e.g., providing materials, directly helping another group meet its goals). A key element of BGH is that work group members direct time and energy away from their own activities and apply them toward helping another team accomplish its tasks. Such an investment can be small (e.g., making a suggestion about task strategy), moderate (e.g., taking on a portion of another group's workload) or require considerable effort (e.g., helping a group redefine its operating procedures). Whatever the scope of the behavior, BGH is extra-role, meaning that it is not an explicit part of a team's assigned goals and is performed without the expectation of explicit compensation by the organization or reciprocation by other teams. We argue that the actual helping will be carried out by one or more members of the group. …

An Exploratory Investigation into the Effects of Team Composition on Moral Orientation

Abstract: In the past two decades, there have been a number of significant events! trends which have had a great impact on the ways organizations operate and make decisions. Some of these changes, such as the increasing use of technology and the Internet, are well documented and well known by the general population. Other trends! events, which in some respects may be just as significant, may be less well studied and understood. Some of these are the increase in the use of teams/groups in organizational decision making, the increase in females into middle- and upper-level management positions, and the pressure for organizations to use socially responsive practices with their stakeholders (Koretz, 2000; Schminke, 1997; Eisenhardt et al., 1997). Both managers and the academic press have increasingly emphasized the importance of teams for achieving organizational success in the changing modem economy (Cohen and Bailey, 1997). Gordon (1992) states that 82% of companies with 100 or more employees reported they used teams. Sixty-eight percent of Fortune 1000 companies reported they used self-managing work teams and 91% reported that they used employee participation groups in 1994 compared to 28% and 70%, respectively, in 1987 (Lawler et aL, 1995). These teams have been used to enhance the product development process, better manage the production or sales function, and aid in the redesign of corporate policies and/or structure (Katzenbach, 1997). The importance of teams has been recognized by Goodman et aL (1986) who have stated teams are the central building block for getting work done in the organization. Traditionally the gender makeup of these teams, especially at upperand middle-levels of the organization, has been primarily male. However, as more females attain middle and top-level positions within organizations, this is changing. Gender differences and/or similarities add another important dimension to the study of team interaction and group decision making. As these changes in the ways in which businesses operate have occurred, the ethical orientation and social responsiveness of firms has also undergone increasing scrutiny by various internal and external stakeholders. In response to this, universities, professional and trade associations, and corporations have instituted required coursework, training programs, and ethical codes of conduct as ways of encouraging a higher level of moral orientation and ethical action among their students, members, and employees (Butterfield et at., 2000; Cole and Smith, 1995; Dabholkar and Kellaris, 1992; Ferrell et al., 1989; Fraedrich, 1993; Weaver et at., 1999). Suppo rt for the implementation of programs designed to enhance moral orientation and ethical action can be found in studies that have reported links between corporate ethical behavior and enhanced levels of financial performance (e.g., Cochran and Wood, 1984; Verschoor, 1998; Waddock and Graves, 1994). Furthermore, other studies (Albinger and Freeman, 2000; Waddock and Graves, 1994) show that organizations that act in a more socially responsive manner may be more attractive to certain groups ofjob seekers. In addition, Rust et al. (2001) have proposed that expenditures to improve customers' perceptions of a finn's ethical standards can have a significant impact on what they term "customer equity," which they link to enhancements in firm ROI. Given the increased use of teams and the increase of females in key decision-making roles documented above, it would appear that this research is overdue. While it is true that research investigating both the differences in moral orientation between males and females (Boldizar et at., 1989; Brabeck, 1983; Lifton, 1985; Snarey, 1985; Thoma, 1986; Walker 1984) and the role of groups on ethical decision making (e.g., Ford and Richardson, 1994; Schminke and Wells, 1999; Zey-Ferrell and Ferrell, 1982) have been the subject of a large number of research studies, there has not, to our knowledge, been any studies which have simultaneously investigated the role of gender and teams on ethics and moral development in the firm. …

Assessing the Operations Innovation Bandwagon Effect: A Market Perspective on the Returns

Abstract: The innovation adoption research dealing with the causes of adoption have addressed factors that stimulate innovation and the pro-innovation bias assumption called a bandwagon pressure. Bandwagon pressures are caused by the fear of non-adopters appearing different from adopters and possibly performing at a below-average level if competitors substantially benefit from innovation. Bandwagons are stated to be diffusion processes that innovative organizations go through. This is because organizations are pressured to adopt innovation by the sheer number of adopting organizations in the market even when individual assessments of the merits of innovation adoption are not complete. Top management of publicly-held corporations adopts operations innovation, such as just-in-time (JIT) and total quality management (TQM), based on the belief that the adoption will enhance the market perception of the value of the organization even when it knows the innovation adoption might not produce tangible economic benefits. In the presence of strong bandwagon pressures, innovation adoptions by firms would not produce higher firm value since there are no real economic benefits to the adopting firms. Thus, a test of innovation adoption, involving JIT and TQM, would allow us to examine whether top management adopts innovation based on the promised enhancement of the organization's value in the market. In this view, we empirically test the relationship between innovation adoption and the market's (capital market's) perception of the value of the adopting organization. Assuming top management makes a rational choice, it will decide to adopt operational innovation if it expects the stock price effect to be positive, ex ante. We test the hypothesis that innovation adoption will produce a positive change in innovation adopters' stock prices, ex post. INNOVATION ADOPTION AND BANDWAGON CLAIM Innovation adoption decisions have long been the concern of innovation researchers (Drucker, 1985; Lewis and Siebold, 1993; Lind and Zmud, 1991; Tornatzky et al., 1983). Precedents and correlates to formal adoption decisions were the initial focus of innovation adoption research. The research has also seen theoretical advances in understanding the dynamics of intraorganizational adoption processes (Meyer and Goes, 1988; Pelz, 1983; Rogers, 1988) and the changes in interrelationships among key factors of organizational innovation (Van de Ven and Poole, 1990). Further developments have also been made in the way the outcomes of the innovation process are conceptualized. Moving beyond the traditional diffusion literature, innovation adoption researchers have found a lack of uniformity in technological innovation adoption (Child et al., 1987; Leonard-Barton, 1988). The innovation adoption research dealing with the causes of adoption have addressed factors that stimulate innovation (Brophy and Shulman, 1993) and bandwagon pressures, both institutional and competitive (Abrahamson, 1991; Kimberly, 1981; Van de Ven, 1986). Bandwagon pressures are caused by the fear of non-adopters appearing different from adopters and possibly performing at a below-average level if competitors substantially benefit from innovation. Bandwagons are stated to be diffusion processes that innovative organizations go through. This is because organizations are pressured to adopt innovation by the sheer number of adopting organizations in the market even when individual assessments of the merits of innovation adoption are not complete (Abrahamson and Rosenkopf, 1990; Tolbert and Zucker, 1983). In this article, we examine bandwagon pressure from a different perspective. Based on the bandwagon pressure argument, top management of publicly-held corporations adopts innovation based on the belief that the adoption will enhance the market perception of the value of the organization even when it knows the innovation adoption might not produce real tangible economic benefits. …

Productivity Increases Due to the Use of Teams in Service Garages

Abstract: This study examines the implementation of self-directed work teams in multiple organizations within one industry. This overcomes some limitations of prior studies, which looked only at one organization (e.g., Wall et al., 1986) or compared the use of teams across multiple industries (e.g., Applebaum and Batt, 1994). We propose that using self-directed work teams increases productivity, but that these increases are moderated by the self-directed work team's leadership and the firm's compensation system. We test these propositions using data from automobile service garages. While, traditionally, automobile service garages have not used self-directed work teams, many service garages now do so. To determine whether self-directed work teams actually increase productivity, it is important to understand the ways in which self-directed teams could improve productivity. Gittleman et al. (1998) state that three criteria must be met for any team to improve performance. First, team members must have knowledge and skills that management lacks. Second, team members must be motivated to apply their knowledge and skill via discretionary effort. And third, the organization structure must allow this discretionary effort to be successfully applied. Repair technicians in automobile service garages meet the first of these criteria. They have training and experience that is not easily obtained. Self-directed work teams can also enhance its members knowledge and skills by raising its members' learning rates. Since inexperienced team members can learn from more experienced team members, teams can raise the average member's expertise close to that of its most expert member (Gordon, 1992; Larson and LaFasto, 1989). As the expertise of each member on the team increases, the team is then able to improve its production processes, thus increasing productivity (Stewart, 1989). This increased expertise of the team members also allows them to be competently cross-trained for all the tasks, so that the team is able to respond to variations in demand faster, again increasing its productivity (Hackman, 1990). Self-directed work teams can motivate members to make discretionary efforts by increasing task variety, autonomy, task identity, task significance, and feedback (Hackman and Oldham, 1975; Yeatts and Hyten, 1998). Self-directed work teams increase task variety by cross training members to perform all tasks necessary to produce a complete product/component or service (Mohrman and Mohrman, 1997; Gibson and Kirkman, 1999; Cohen and Bailey, 1997). Self-directed work teams increase autonomy and accountability of their members, since teams make decisions formerly made by supervisors (Mohrman and Mohrman, 1997; Gibson and Kirkman, 1999; Cohen and Bailey, 1997; Lawler, 1986; Hackman, 1987). Self-directed work teams increase their members' task identity since the team has responsibility for the complete product or service (Mohrman and Mohrman, 1997; Gibson and Kirkman, 1999). Self-directed work teams increase the task significance for their members since they are involved in work planning (Gupta and Ash, 1994), which increases the members' understanding of the importance of the team's performance. Finally, collaborative teamwork creates inter-dependent behavior which increases feedback between members (Fandt, 1991) and increases recognition of each member's contribution (Bandura, 1986). Self-directed work teams in service garages also meet the third criteria, that their discretionary effort can be successfully applied. Self-directed work teams in service garages can increase productivity by decreasing the amount of rework (Field, 2001) and decreasing the amount of time a car sits in a queue. In a traditional service garage, individual technicians specialize in a specific type of repair and work independently in their own work service bays (typically two). In a traditional service garage, the dispatcher controls the flow of work to the technicians by distributing one job at a time. …

Investigating Internet Channel Opportunities and Challenges: Managers' Experiences Across Five Industries

Abstract: The development and execution of business models is a complex process to begin with, and it becomes even more complex when we factor in the Internet. The purpose of our study is to understand how organizations, in an effort to transform business practices, incorporate the Internet and integrate it with their existing marketing channels. This exploratory investigation uncovers the opportunities and challenges facing five organizations in their efforts to transform their existing channel strategies to incorporate the Internet. The study reveals the intricate manner with which strategies are applied in order to balance the opportunities afforded by the Internet with the challenges of channel strategy transformation. In the tradition of other qualitative approaches used in previous business research (e.g., Bendapudi and Leone, 2002; Noble and Mokwa, 1999; Workman, 1993), we conducted a series of in depth-interviews with senior executives from five nationally recognized firms in order to build a grounded understanding of Internet channel transformation. This study discusses the results and implications of this investigation. Our article is organized in five sections. We begin by briefly reviewing literature that identifies advantages to adding the Internet channel. This is followed by a review of our study methodology. Next we discuss the findings from the in-depth interviews organized by the opportunities and challenges that accompany Internet use. Then we discuss the managerial implications of this study and offer conclusions and directions for future research. PERSPECTIVES ON FIRMS' INTERNET USE In this section, to place our data within proper context, we review three important perspectives on firms' use of the Internet discussed in the literature that were prominently mentioned in our interviews with marketing executives: leveraging information, direct-to- consumer marketing, and value-chain efficiency. Leveraging Information Leveraging information is the process in which firms collect, process, and use information to add value to their business processes and outcomes. The degree to which firms leverage information using technology in ways that benefit the firm as well as its customer is a factor critical to business success (Glazer, 1991). Rayport and Sviokla (1995) point to the importance of creating value through physical product as well as informational offerings. Additionally, marketers are often interested in how interfirm communication practices help firms to manage business outcomes (Mohr et al., 1996; Anderson and Narus, 1990). The Internet enables the direct provision of multimedia information from firms to consumers, independent of location. In the business-to-business context, the Internet can facilitate the flow of information between firms. One method by which firms are able to leverage incoming or outgoing information involves interactivity. Interactivity signals a shift from broadcast marketing to firm-customer conversations (Deighton, 1996) and is defined as the two-way communication and provision of hypermedia content between individuals and firms (Alba et al., 1997; Hoffman and Novak, 1996). Of particular importance to our research is how the Internet has influenced the two-way flow of communication between firms and their customers, resulting in strengthened customer-firm relationships. Firms are moving from traditional mass marketing practices to strategies based upon leveraging information and developing interactive relationships with consumers. Established business models may give way to new approaches that use information technology to transform existing business processes and strategies (Day, 1998). Direct-to-Consumer Marketing Direct-to-consumer marketing takes place when the manufacturer communicates and engages in selling activities directly to the end consumer. In so doing, the manufacturer often disintermediates the retailer and takes on new channel functions. …

The Human Side of Group Support Systems: Influences on Satisfaction and Effectiveness

Abstract: The American workforce spends a substantial amount of their workday in meetings. One recent estimate suggests that approximately 11 million meetings take place each day in the United States alone (Hanke, 1998). These meetings account for approximately 100 million hours of professional and executive productivity. Meetings are deemed to be important because they result in discussion of issues, generation of ideas, dissemination of information, and attainment of decisions. Employees spend anywhere from 25 to 80% of their time in meetings, yet they perceive 53% of this time as unproductive, which if true results in billions of dollars in lost time each year (Clawson and Bostrom, 1996). This stark realization of the need for more efficient and effective group meetings has sparked increased research on tools and processes that may improve meetings. One particular area of interest has been the use of Group Support Systems (GSS). GSS software facilitates the work of groups by expediting the processes of communication, coordination, problem solving, and negotiations. GSS speeds up the communication process by enabling participants to contribute ideas simultaneously without suffering from production blocking effects (e.g., they don't lose their train of thought because teammates are offering ideas verbally; Diehl and Stroebe, 1987). GSS encourages involvement from all members by allowing anonymity under certain conditions (Sosik, 1997). GSS software also allows participants to anonymously vote for their decision preferences as the group progresses through the meeting. GSS meetings are beneficial when speedy follow-up is needed became decisions and action items are recorded electronically (Nunamaker et al, 1997). The initial wave of GSS research focused on several areas: (a) comparing GSS meetings to face-to-face meetings, (b) comparing the effectiveness of different decision-making tools within GSS, and (c) examining physical aspects of the meeting room that were influencing GSS effectiveness. The results of comparing the performance of GSS and non-GSS groups have been inconclusive. GSS has demonstrated both desirable effects (greater participation, better quality decisions) and undesirable effects (reduced consensus and confidence) in previous research (Fjermestad and Hiltz, 1999; Benbasat and Lim, 1993). One common misperception is that GSS replaces the interpersonal aspects of meetings. Research has shown that to maximize the potential advantages of electronic meetings, GSS should not replace verbal interaction, but rather supplement it (Nunamaker et al, 1997). A facilitator typically leads GSS meetings. Because interpersonal processes influence the success of GSS, the GSS facilitator should play a pivotal role. Initial studies of facilitators have concentrated on: (a) the importance of proper facilitator preparation prior to a GSS session, and (b) the value of being able to explain how the Groupware will assist the group in achieving its goals (e.g., George et al., 1992). Comparatively little attention has been devoted to the influence of facilitator style (during the meeting) on GSS outcomes (for exceptions, see: Kahai el al., 1997; Sosik, 1997). A logical next step in this line of research is a systematic investigation of the human (i.e., interpersonal) side of GSS-mediated meetings. The first purpose of this study is to examine how facilitator style affects participants' perceptions of the processes and outcomes that occur within a GSS meeting. By facilitator style, we are referring to the extent to which the facilitator's behaviors are representative of a leader who places a priority on managing the relationships present within a group setting or of a leader who concentrates on the task at hand. Participants also influence the interpersonal processes and outcomes that occur within a GSS environment. We expect participants' moods as they enter a GSS setting to impact how receptive they are to the meeting itself as well as the non-traditional format of the meeting, and consequently their satisfaction with what transpires in that meeting. …

Survival in the Korean Furniture Industry: Value-Chain Networking

Abstract: The sudden disappearance of funding threatened many firms in the Korean furniture industry. Almost overnight, many of these firms went out of business. Even large furniture manufacturers were at risk. Accustomed to the easy market conditions of the early 1990s, large manufacturers created vertically integrated enterprises that were supplied by a number of smaller firms. Korean collectivism and a desire to create long-term relationships were partially responsible for retention of inefficient suppliers and maintenance of inefficient businesses within these companies' structures. Nevertheless, the severe economic conditions brought into sharp focus the economic risks of either operating or conducting business with inefficient organizations. Many large manufacturers went out of business, leaving a multitude of suppliers without an outlet for the components they produced. Ultimately, many of these firms also went out of business. Remaining firms quickly realized that they could not survive independently. Four large firms, with skills for coordinating activities with a large number of external players, divested their inefficient internal operations and substituted the resources and skills of specialized smaller firms. Within eighteen months, four distinct value chains composed of a centrally located hub firm surrounded by a number of smaller specialist firms were formed. These specialist firms conducted value chain activities that could not be efficiently done by the hub firm. Our research studies the development and performance of value chain firms in the Korean furniture industry. In particular, it employs a core competence/network organization lens to answer the question: What factors determine profitability in network firms? The remainder of this article is organized in the following manner. The next section discusses the core competence concept and explains how it might be used to identify appropriate partners for a hub firm. Then an examination of network theory explores determinants of profitability among network firms, and develops corresponding hypotheses. The next section addresses research methods and tests hypotheses. The final section presents conclusions and future extensions of this research. Core Competencies Core competencies are those rare skills/capabilities that lead to superior competitive advantage for the firms possessing them. In this study Korean furniture producers managed their core competencies in two ways. First, they conducted a strategic audit (either explicitly or implicitly) to differentiate necessary from marginal skills and the underlying resources leveraged by these skills. This was done in order to facilitate the ability of these firms to transverse the new highly turbulent environment through a focus on the most important skills they possess (core competencies). Second, they established value chains with other firms that gave them access to the core competencies of these firms. Awareness of these other firms' core competencies came about through long experience with them in competitive/cooperative contexts. It should be noted that this in no way implies that simple awareness alone allows for the imitation of the core competencies of others. We do assert, however, that some firms are better able than others to assess the existence and nature of the competencies of others. The management of core competencies is one of the most important strategic challenges facing a firm given their crucial relationship to superior profitability. Once created, core competencies cannot be simply stockpiled for use when needed. Rather, these core competencies require constant use to maintain corporate fitness (Teece, 1990). Thus, firms, regardless of geographic position and competitive circumstances, must view the management of core competencies as a strategic issue. Here, we introduce the idea of also accessing the core competencies of fellow value chain members. The maintenance of corporate fitness not only requires investment in existing competencies but also the acquisition and development of new ones. …

Exchanges between Healthcare Providers and Insurers: A Case Study

Abstract: Generally, distribution channel analysis and research emphasizes the product flow from the manufacturer to the distributor (Rosenbloom, 2000). Manufacturers use a distributor or distributor network to provide marketing and distribution services more effectively and efficiently than they can develop themselves. The distributor may represent several manufacturers simultaneously, which provides retailers with a simple mechanism for stocking inventory as opposed to buying from each manufacturer individually. However, as the tradesman-bus driver alliance illustrated, distribution channels are inherent in organizations beyond the manufacturing setting. In this article, we contend that the characteristics present in traditional distribution channel relationships are also applicable to the healthcare funding system. Consistent with prior research on distribution channels (Frazier, 1999), we focus our investigation on one dyad within the distribution channel: the relationship between physician practices and insurance providers. The problems in healthcare funding are many, but one commonly cited problem is the relationship with insurance companies (Sharpe, 1998a, 1998b). The evolution of this arrangement has created a patchwork of practices; some are efficient, others impede the delivery of quality healthcare to the patients. There is scant empirical investigation related to the characteristics and the mechanisms by which the physician-insurance company relationship functions. Once we demonstrate that the distribution channel is a framework that can be extended to exchanges within healthcare then the extensive research foundation based on the manufacturer-distributor channel structure provides opportunities to develop a deeper understanding of the issues and variables inherent in the physician-insurance provider relationships. The remainder of this article is organized as follows. The next section provides background on the healthcare funding system as well as the traditional distribution channel framework. We then demonstrate applicability of the distribution channel framework to the healthcare payment system using two complementary methods. First, we rely upon the distribution channel literature and interviews with healthcare administrators to establish the correspondence between individual variables studied in the channel literature to the physician-insurance provider relationship. Second, we draw upon the assertions from transaction cost analysis (Williamson, 1985; Rindfleisch and Heide, 1997; Frazier, 1999) to describe the environmental characteristics that typify most distribution channel partnerships. The presence of asset specificity and environmental uncertainty, two primary characteristics derived from transaction cost analysis, are measured within the healthcare-insurance provider relationship at one representative physician practice. The paper concludes with a discussion of the findings and implications for future research. Conceptual Foundation The Healthcare Funding System Currently in the United States, the majority of healthcare is funded through employer-provided health insurance. (2) Employers contract with insurance companies to provide coverage to their employees. The employees choose an insurance company from the employer's list and then, generally, the employee's insurance choice dictates their physician option. Healthcare is provided to the employee and physicians receive payment from the insurance company. Conflicting goals among constituents have emerged where employers seek low cost insurance coverage, insurance providers seek profitability within a highly competitive market, employees seek high quality coverage, and physicians seek the autonomy to provide quality healthcare. These conflicting goals, compounded by escalating healthcare costs, have created frustration and mounting protests in public, political, and professional arenas. Even in this environment, this system has substantial advantages for physicians, primarily by creating a demand for physician services while concurrently reducing fee collection risks. …

Toward a General Theoretical Model of Computer-Based Factors That Affect Managerial Decision Making

Abstract: Graphics and interactive visualization components are being used to display complex structures and relationships (Gershon et al., 1998), facilitate comparative analysis (Goddard, 2000; Sauter, 1999), assist in manufacturing production and project scheduling (Zhang, 1998), find information (Ahlberg et al., 1992), recognize patterns or organize data by geographic region (Smelcer and Carmel, 1997; Swink and Speier, 1999), sequence events (Pack, 1998), portray uncertainty (Lamberti and Wallace, 1987), and visualize large amounts of data (Gershon et al., 1998; Lohse et al., 1995; Zhang, 1996). Since these capabilities are directly related to the management task being performed, it is important to understand the applicability and effectiveness of the various presentation formats on decision making in order to further enhance the efficacy of software systems that support management activities. A multitude of formats including bar charts, pie charts, scatter plots, control charts, time series charts, maps, PERT charts, and others have been used to present information graphically (Dix et al., 1998; Preece et al., 1994; Shneiderman, 1998). All of these have the potential for increasing managerial understanding of information, provided that managers are appropriately trained in reading and using these formats (Elikai et al., 1999; Lucas 1981). Unfortunately, the various information formats have not been used consistently for management decision making and, in fact, some managers may select an inappropriate format in a particular decision-making situation. Efforts to associate particular tasks with presentation formats have been shown to be inconclusive (Carey and White, 1991; DeSanctis, 1984; Dickson et al., 1986; Jarvenpaa and Dickson, 1988; Levy et al., 1996; Montazemi and Wang, 1988; Vessey, 1991). For example, some studies report that line graphs are more easily interpreted and improve decision making (Zmud, 1978), while other studies report that bar charts are more effective (Dickson et al., 1986). Jarvenpaa and Dickson (1988) and Dickson et al. (1986) initiated changes in research methodology such that characteristics of the task being performed were factored into experimental designs. In other words, the cognitive fit between characteristics of the task and how information is presented was shown to affect decision-making performance (Umanath and Vessey, 1994; Vessey, 1991). On the other hand, factors other than task and cognitive fit, such as social influence (Tractinsky and Meyer, 1999), were not generally considered in experiments, even though these too were shown to be important factors on decision making. We at tribute these omissions to the lack of a general theoretical model regarding task and presentation format on decision making. Hence, an integrative model that encompasses the various factors from previous research is needed in order to serve as a framework for conducting future work. Therefore, the goals of this article are twofold: (1) to develop a theoretical model of managerial decision making based on characteristics of the individual, the task being performed, and how information is presented; and (2) to demonstrate the application of the model within the context of a decision-making experiment. The remaining sections of this article are organized as follows: the next section discusses previous research in terms of a general model that defines the impact of presentation format on decision making. This is followed by the development of an enhanced model that introduces new factors and relationships that affect decision making. Selected elements of the new model, specifically those elements that have not previously been considered involving complex decision-making tasks, are tested in an empirical study to demonstrate the applicability of the new model. The article concludes by presenting the results of the study and discussing implications of the model for future research. …

Spending Behavior Patterns and Compensation System Preferences: An Individual Difference Perspective

Abstract: Compensation practices are believed to relate to a variety of outcomes at the individual (e.g., performance, turnover, and satisfaction; Heneman, 1992; Jenkins et al., 1998) and organizational (e.g., productivity and turnover rates; Gerhart et al., 1996; Shaw et al., 1998) levels. Despite the perceived importance of compensation, Ehrenberg and Milkovich concluded that "speculation is rife, research rare" (1987: 89), and while progress was made in the last decade, many areas of compensation research are still "barely touched upon" (Lawler and Jenkins, 1992: 1049). The gaps seem especially pronounced with respect to pay system preferences that may influence individual and organizational outcomes of pay systems (Krefting et al., 1987; Mitchell and Mickel, 1999). Several authors have noted the lack of theory and research about individual differences with regard to money (e.g., Doyle, 1992). In this article, we specify the conceptual space of an individual difference variable--sensitivity of consumption to current income. Our purposes are to describe this conceptual variable, distinguish it conceptually from related constructs, and outline a theoretical framework that links the construct to pay preferences and reactions to different types of pay schemes. Sensitivity of consumption to current income, discussed previously in the economics literature, is the extent to which individuals spend in proportion to their current income rather than their expected income. Individual consumption behavior is likely related to preferences for certain compensation packages, and the fit between preferences and the actual system influences many outcomes (e.g., satisfaction and performance; Krefting et al., 1987). Moreover, this construct may influence pay administration because the mix of pay mix should match not only the organization's design and strategy, but individual preferences as well (Cable and Judge, 1994). In a recent review of the individual difference and compensation literature, Barber and Bretz (2000) described the literature as fragmented and scattered. They argued for research and theory from new perspectives that will move the literature forward. We aim to broaden and extend this literature by elaborating on the sensitivity of consumption to current income variable and placing it conceptually within a nomological network related to compensation administration. First, we describe the importance of sensitivity of consumption to current income, drawing on economics and related historical perspectives. Second, we review related concepts previously studied in the area of individual differences and reactions to pay, outlining similarities and distinctions between these constructs. Third, we outline some preliminary, testable propositions about sensitivity of consumption to current income and pay system preferences. Fourth, we delineate the theoretical boundaries of the construct. Finally, we discuss implications of this construct for theory, empirical research, and practical compensation administration. SENSITIVITY OF CONSUMPTION TO CURRENT INCOME. The development of the sensitivity of consumption to current income construct can be traced to two influential economic theories, life cycle theory, for which Franco Modigliani received the Nobel Prize in economics, and Friedman's (1957) "permanent income hypothesis." Both theories propose that spending is relatively constant over the course of life because an individual will spend as a constant proportion of average expected income. That is, while actual income levels vary considerably throughout a person's lifetime, consumption is a smoother function because it is based on average expected, rather than actual current, income. To illustrate, receiving a $500 windfall gain will not entice an individual to immediately purchase a $500 consumption good. Rather, after receipt the individual's annual spending is predicted to increase by a fixed proportion of the long-term value of $500, such that the value will he completely consumed by the time of death. …