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Article
Publication date: 4 May 2018

Padma Rao Sahib, Gerwin Van der Laan and Hans Van Ees

The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay…

Abstract

Purpose

The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members.

Design/methodology/approach

Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity.

Findings

The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity.

Practical implications

The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members.

Originality/value

This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components.

Details

Management Decision, vol. 56 no. 9
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 18 May 2010

Gerwin Van der Laan

Previous empirical research interprets results from pay‐performance studies in the light of either agency theory or managerial power theory. This paper aims to directly…

Abstract

Purpose

Previous empirical research interprets results from pay‐performance studies in the light of either agency theory or managerial power theory. This paper aims to directly estimate the relationship between CEO power, and compensation structure, level, and performance‐sensitivity. In doing so, it seeks to test the crucial assumption in managerial power theory according to which more powerful CEOs are able to enjoy higher and less performance‐sensitive compensation.

Design/methodology/approach

The hypotheses are tested on a detailed dataset, covering compensation for CEOs in virtually all Dutch stock‐listed companies, for the period 2002‐2006. The paper tests whether the findings are robust against different lag structures and firm size classes.

Findings

In general, most of the multi‐dimensional measures of power do not appear to have a strong effect on compensation, with one exception: non‐Dutch CEOs receive more variable compensation, and receive higher and less performance‐sensitive pay than their Dutch colleagues.

Originality/value

This paper contributes to the extant CEO compensation literature, which to date relies on interpretations of findings in pay‐for‐performance studies to argue for either agency or managerial power theory. The direct test of the relationship between power and compensation emphasises the importance of one dimension of a multidimensional power construct. As strong effects of performance of compensation are not found either, the paper suggests that the bipolar debate be extended to include other explanations of compensation arrangements.

Details

Journal of Strategy and Management, vol. 3 no. 2
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 5 February 2018

Annette van den Berg, Arjen van Witteloostuijn, Christophe Boone and Olivier Van der Brempt

The purpose of this paper is to move beyond the usual analysis of the effects of worker representation. Instead of estimating the impact of the mere presence of works…

Abstract

Purpose

The purpose of this paper is to move beyond the usual analysis of the effects of worker representation. Instead of estimating the impact of the mere presence of works councils on business achievements, the focus is on the performance effects of managerial attitudes vis-à-vis worker representation. More precisely, the authors study whether managerial willingness to cooperate with employee representatives and giving them a (timely) say in company policies translates into better company performance.

Design/methodology/approach

After an introduction of the typical Belgian workplace representation, the authors briefly discuss the relevant literature and the sample, leading to several hypotheses. The data are from a survey in Belgium complemented with annual report information. Hypotheses are tested with hierarchical OLS regression. Special attention is given to moderating and mediating effects.

Findings

The authors find that especially the timing of involving worker representatives in company decision making has a significant impact on labor productivity. More broadly, the authors reveal that these managerial attitudes matter more in larger establishments.

Research limitations/implications

Although nationwide, representative, and statistically valid, the data set is quite small (142 usable observations), which obstructs the application of refined estimation techniques.

Practical implications

Practical advice should be conditional on country context and size class. In Belgium, smaller enterprises can boost their performance by involving the works council rather late in the process. Probably, this has to do with the powerful position of Belgian unions in works councils. The managerial implications for larger Belgian establishments are very different, however. In these cases, earlier involvement of the works council is advised, as this will enhance the establishment’s performance.

Originality/value

Belgian works councils reflect a specific employee representation system that is rarely studied. More broadly, attitudinal effects are under-researched. The data set is unique, combining subjective with objective data, so reducing the risk of respondents’ bias.

Details

Personnel Review, vol. 47 no. 1
Type: Research Article
ISSN: 0048-3486

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Article
Publication date: 2 May 2017

Annette van den Berg, Arjen van Witteloostuijn and Olivier Van der Brempt

The purpose of this paper is to examine whether works councils (WCs) in Belgium have a positive effect on firm performance, notably productivity and profitability, while…

Abstract

Purpose

The purpose of this paper is to examine whether works councils (WCs) in Belgium have a positive effect on firm performance, notably productivity and profitability, while taking the role of trade unions into account.

Design/methodology/approach

The authors first introduce the typical Belgian industrial relations system, discussing the similarities and differences with neighboring countries. This is followed by a brief overview of the relevant literature. Subsequently, the impact of Belgian employee representation on firm performance is estimated by means of OLS, using a newly developed questionnaire administered among Belgian CEOs. Special attention is given to moderating and mediating effects.

Findings

The authors find that Belgian WCs have a small (direct) significantly positive effect on labor productivity, but not on profitability. The additional results of the mediation test show tentatively that WCs might affect profitability indirectly, through their impact on productivity. Despite trade unions’ dominance in practice, the findings reveal that their impact is insignificant.

Research limitations/implications

Although nationwide, rich and representative, as well as statistically valid, the data set is rather small (196 usable observations). The data set offers ample opportunities to further explore what makes effective Belgian WCs different from their non-effective counterparts.

Originality/value

The data set is unique, and combines subjective CEO with objective performance data. The data offer the opportunity to do a first study into the special case of Belgium, which has a distinct union-dominated IR regime. In this study, the focus is furthermore on the rarely studied WC-trade union interaction. In addition, subtle moderation and mediation effects are estimated.

Details

International Journal of Manpower, vol. 38 no. 2
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 1 August 2016

Arjen van Witteloostuijn

Current publication practices in the scholarly (International) Business and Management community are overwhelmingly anti-Popperian, which fundamentally frustrates the…

Abstract

Purpose

Current publication practices in the scholarly (International) Business and Management community are overwhelmingly anti-Popperian, which fundamentally frustrates the production of scientific progress. This is the result of at least five related biases: the verification, novelty, normal science, evidence, and market biases. As a result, no one is really interested in replicating anything. In this essay, the author extensively argues what he believes is wrong, why that is so, and what we might do about this. The paper aims to discuss these issues.

Design/methodology/approach

This is an essay, combining a literature review with polemic argumentation.

Findings

Only a tiny fraction of published studies involve a replication effort. Moreover, journal authors, editors, reviewers and readers are not interested in seeing nulls and negatives in print. This replication crisis implies that Popper’s critical falsification principle is actually thrown into the scientific community’s dustbin. Behind the façade of all these so-called new discoveries, false positives abound, as do questionable research practices meant to produce all this allegedly cutting-edge and groundbreaking significant findings. If this dismal state of affairs does not change for the good, (International) Business and Management research is ending up in a deadlock.

Research limitations/implications

A radical cultural change in the scientific community, including (International) Business and Management, is badly needed. It should be in the community’s DNA to engage in the quest for the “truth” – nothing more, nothing less. Such a change must involve all stakeholders: scholars, editors, reviewers, and students, but also funding agencies, research institutes, university presidents, faculty deans, department chairs, journalists, policymakers, and publishers. In the words of Ioannidis (2012, p. 647): “Safeguarding scientific principles is not something to be done once and for all. It is a challenge that needs to be met successfully on a daily basis both by single scientists and the whole scientific establishment.”

Practical implications

Publication practices have to change radically. For instance, editorial policies should dispose of their current overly dominant pro-novelty and pro-positives biases, and explicitly encourage the publication of replication studies, including failed and unsuccessful ones that report null and negative findings.

Originality/value

This is an explicit plea to change the way the scientific research community operates, offering a series of concrete recommendations what to do before it is too late.

Details

Cross Cultural & Strategic Management, vol. 23 no. 3
Type: Research Article
ISSN: 2059-5794

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Article
Publication date: 19 January 2015

Pingying Zhang, Paul Fadil and Chris Baynard

The purpose of this paper is to better understand dependency issues between the CEO and the board as well as the between the board and CEO through Emerson’s power…

Abstract

Purpose

The purpose of this paper is to better understand dependency issues between the CEO and the board as well as the between the board and CEO through Emerson’s power dependency framework.

Design/methodology/approach

A symbolic management approach is integrated with a board-CEO power dependency model to study the dependency issues.

Findings

According to the symbolic management perspective, uncertainty increases the likelihood of symbolic actions. A high level of uncertainty in CEO dependency issues suggests a high likelihood that board power over the CEO is manifested on a symbolic level, whereas a low level of uncertainty in board dependency issues suggests otherwise for CEO power over the board. The core of board-dependency issues is information provision.

Practical implications

A focus on improving board control over CEO performance, compensation and strategic proposals is likely to generate symbolic actions without an effective result.

Originality/value

The paper advocates that an effective approach to enhance board power is through reducing board information dependency on the CEO.

Details

Competitiveness Review, vol. 25 no. 1
Type: Research Article
ISSN: 1059-5422

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Article
Publication date: 30 July 2021

Sharfuddin Ahmed Khan, Simonov Kusi-Sarpong, Iram Naim, Hadi Badri Ahmadi and Adegboyega Oyedijo

The purpose of paper is to develop a performance evaluation framework for manufacturing industry to evaluate overall manufacturing performance.

Abstract

Purpose

The purpose of paper is to develop a performance evaluation framework for manufacturing industry to evaluate overall manufacturing performance.

Design/methodology/approach

The best-worst method (BWM) is used to aid in developing a performance evaluation framework for manufacturing industry to evaluate their overall performance.

Findings

The proposed BWM-based manufacturing performance evaluation framework is implemented in an Indian steel manufacturing company to evaluate their overall manufacturing performance. Operational performance of the organization is very consistent and range between 60% and 70% throughout the year. Management performance can be seen high in the 1st and 2nd quarter of the financial year ranging from 70% to 80%, whereas a slight decrease in the management performance is observed in the 3rd and 4th quarter ranging from 60% to 70%. The social stakeholder performance has a peak in first quarter ranging from 80% to 100% as at start of financial year.

Originality/value

This paper utilized BWM, a MCDM method in developing a performance evaluation index that integrates several categories of manufacturing and evaluates overall manufacturing performance. This is a novel contribution to BWM decision-making application.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

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