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Most firms have a number of unprofitable customer relationships that drain the firms' resources. However, firms in general and sales representatives in particular hesitate to address this problem and, ultimately, to terminate business relationships. This paper therefore aims to investigate the antecedents and consequences of sales representatives' relationship termination competence.

A model of antecedents of sales representatives' relationship termination competence is developed and tested using a cross-sectional survey of more than 800 sales representatives. The impact of the constructs “termination acceptance”, “definition of non-customer”, “termination routines” and “termination incentives” on termination competence are analyzed using PLS.

A sales representative's termination competence is positively influenced by greater clarity and wider dissemination of the definition of a “non-customer”, higher prevalence of termination routines, and increasing degrees of termination incentives. Acceptance of relationship termination at the firm level does not appear to have a significant impact on sales representatives' relationship termination competence. In addition, termination competence significantly affects the value of customer portfolios.

The findings suggest that managers should more actively consider relationship termination as a legitimate option in customer relationship management. In order to increase the value of a firm's customer portfolio, managers must not only provide a clear definition of the types of customers the organization does not want to serve, but must also implement termination routines within the organization. Managers also need to establish incentives for sales representatives to terminate relationships with unprofitable customers.

This paper contributes to the currently scarce research on relationship termination by documenting results from a large-scale analysis of relationship termination.

Terminations of overfunded pension plans may strengthen a financially‐weak firm. When manager's interests are aligned with shareholder's, either through high levels of stock ownership, or through labor and takeover market discipline at low levels of ownership, termination strengthens the firm and the stock price should react positively. In contrast, managers at middle levels of ownership hold enough stock to be entrenched, but not enough to be aligned with shareholder interests. Terminations may then be for reasons other than strengthening a financially‐weak firm and may not generate a positive stock price reaction. We find that the financial incentives for terminations differ significantly between terminators and nonterminators at high and low levels of managerial ownership, but not at intermediate levels. Our stock return analysis indicates that terminations by high and low ownership firms are consistent with shareholder welfare. Concern has been expressed that terminations of defined benefit pension plans transfer wealth from plan participants to plan sponsors. Plan terminations can have a value‐maximizing motive when the reversions are used as a source of financing, thereby helping firms avoid bankruptcy and liquidation. The empirical evidence (e.g., Alderson and VanDerhei (1992), VanDerhei (1987), and Hsieh, Ferris, and Chen (1990)) showing favorable stock price reactions to terminations by financially‐weak firms are consistent with the value‐maximizing justification for plan terminations. Prior studies (e.g., Agrawal and Mandelker (1987), Kim and Sorensen (1986), Sicherman and Pettway (1987), Hill and Snell (1989), Benston (1985), Morck, Shleifer, and Vishny (1988), Carter and Stover (1991) and Hermalin and Weisbach (1991)) have also documented that management's ownership interest in the firm has an important effect on the incentive to maximize firm value. This paper examines the effect of managerial ownership on financial termination. Specifically, we address whether or not financial motivation to terminate plans exists at all levels of managerial ownership. Our results suggest that the terminating firms, when compared to the nonterminating firms, are financially weak at high and low levels of managerial ownership. In contrast, there is no significant difference in financial weakness between the terminators and the nonterminators at the middle ownership levels. Also, stockholders reactions to terminations are higher at high and low levels of managerial ownership.

The decline of inter‐firm relationships remains an important, although little studied, topic within the channel management literature. Existing research on the topic tends to be fragmentary and largely occupied with the cataloguing of switching incentives and deterrents. This aim of this paper is to articulate a more comprehensive explanation of the process of decline.

With special emphasis on those channels spanning international borders, this paper outlines a mediational model of termination propensity which exploits the tension between the switching and opportunity costs of maintaining the status quo. Specifically, the study examines how switching motivators and deterrents interact to tip the balance towards, or away from, the inclination to terminate.

Two significant outcomes are achieved. First, it is proposed that the switching motivators identified in the literature are mediated through clients' satisfaction with their intermediary's current and anticipated performance. Significantly, it is shown that changes in the market, organisational and relational contexts can alter clients' perceptions independently of any changes in actual intermediary performance. Second, and in contrast with the direct links espoused in previous studies, switching costs are predicted to moderate the link between client satisfaction and termination propensity.

In contrast with past approaches examining a single cause of decline, this study develops propositions outlining a comprehensive, mediational explanation of termination propensity.

In this chapter, we examine the impact of pay-for-performance incentives on learning-by-doing. We exploit personnel data on fruit pickers paid under two distinct compensation contracts: a standard piece rate plan and one with an extra one-time bonus tied to output. Under the latter, we observe bunching of performance just above the bonus threshold, suggesting workers distort their behavior in response to the discrete bonus. Such bunching behavior increases as workers gain experience. At the same time, the bonus contract induces considerable learning-by-doing for workers throughout the productivity distribution who presumably hope to one day hit the target, and these improvements significantly outweigh the losses to the firm from the bunching. In contrast, under the standard piece rate contract, we find minimal evidence of bunching and only small performance improvements at the bottom of the productivity distribution. Our results suggest that contract design can help foster learning on the job, underscoring the importance of dynamic considerations in principle-agent models.

This paper seeks to examine the critical role fiscal incentives have played in urban regeneration in Ireland since 1986, focusing on the role of such incentives, their impact on development and implications for the market of their termination.

The paper is structured as a periodised chronology where real time is divided into analytically defined phases linked to policy shifts. In this way features of urban regeneration policy can be discussed within the economic context and policy constraints within which their decisions were shaped. Policies have evolved from blanket subsidisation of development in designated areas towards a more selective approach. The paper reflects the results of structured interviews of policymaking, planning and development interests on the operation and effectiveness of the schemes. Quantitative analysis of the costs and benefits of a selected number of property developments in Dublin is included and can be compared with similar schemes internationally.

The findings of this paper are that urban regeneration policies as operated over the period have had a significant role in the physical rejuvenation of previously derelict areas and that the role of incentive based policies requires continual monitoring to avoid market distortion effects and to achieve wider regeneration objectives in terms of social and economic aims.

Despite the importance of the subject there has been a noticeable lack of evidence‐based research in the area and this paper provides quantitative and qualitative evidence based material upon which further research on the costs and effectiveness of the schemes can be based.

This paper investigates CEO turnover and the usefulness of relative performance evaluation (RPE) as a management incentive in an emerging economy lacking market-based competition.

In a sample of China’s listed state-owned enterprises (SOEs) from the period 2001 to 2005, we manually collect the data where a CEO has gone after being removed by reading the annual reports of the firms and searching the major news and business publications, and run OLS regressions to examine how various incentives provided by different CEO turnovers such as promotion, demotion, and rotation affect the firm performance.

We find that 41% of departing CEOs in SOEs is being promoted. The promotion is positively associated with preceding firm performance relative to peers in the same region and this association is more significant than that between the promotion and firm’s specific performance. Furthermore, the promotion outperforms other incentive schemes such as CEO demotions by 5–8% in terms of subsequent Tobin’s q in three years. These consequences persist in undeveloped regions where there are fewer firms listed on the stock market, a lower stock market capitalization, or a higher regional Herfindahl–Hirschman Index ( HHI ).

The findings imply that promotion based on RPE provides an important incentive by creating competitions.

This article explores the effects of downsizing and the subsequent emergence of self‐managed work teams. Continuous and accelerated change has resulted in massive downsizing activities by organizations. A classical model for the planning ‐ implementing ‐ and design of the downsizing process is presented. Group structure and typology is presented in terms of formal versus informal groups. The impact of groups and group dynamics, the stages of group development, and impact upon effectiveness, environment, design and learning processes will be included. Attention is given to the survivors of downsizing who form the foundation of the self‐managed team. Leadership demands are presented in terms of leading the survivors, ensuring commitment and managing the future. The emergence of the SMT in terms of productivity, expectations and the management of conflict complete this exhaustive review of empirical data required for action‐driven organizations in a turbulent environment.

The purpose of this paper is to examine if the structure and design of CEO compensation has any effect on firm innovation. It further investigates the effectiveness of each component of portfolio of compensation incentives in encouraging innovation.

This study uses systems of simultaneous equations to model the interdependence between compensation incentives and measures of firm innovation.

Results indicate that the pay‐performance sensitivity of the CEO portfolio of compensation incentives is positively related to investment in R&D expenditures, number of patents and citations. Options in general are more effective than stocks. However, within the options portfolio, recently awarded and unvested options are more effective than previously awarded and vested options. Restricted stock is more effective than unrestricted stock.

Measuring innovation output is difficult as innovation could take different forms, including business model innovation, which does not appear in the patent data.

Stock options encourage investment in value‐increasing innovations and should remain a significant part of managerial compensation. If the firm awards stock, it should only award restricted stock.

This study uses comprehensive measures of compensation incentives and firm innovation. It views incentives as a portfolio of stock and options and uses incentives in their entirety. It examines the effectiveness of each component of the portfolio in encouraging innovation. It measures innovation as investment into the innovation process (R&D expenditures) and the resulting success of that investment (patents and citations).

The issue explored is whether incentive regulation of local exchange carriers in the USA has resulted in an increase in efficiency. After providing an overview of the nature of incentive regulation, the methodology for measuring the effects of incentive regulation on efficiency is reviewed. This methodology is data envelopment analysis and allows for the measurement of both technical efficiency and allocative efficiency of individual local exchange carriers. The results of empirically implementing the data envelopment approach (DEA) approach indicate that there is little change in technical efficiency. In fact average technical efficiency in 1988 was the same as in 2001. Next, while outputs continued to grow at about their historical rate across LECs, the sizeable increase in the two types of capital increased inputs well above their historical average rates for some LECs leading to short run allocative inefficiency. On average, however, allocative efficiency shows no identifiable trend between 1988 and 2001. Finally, in the aggregate, total economic efficiency does not demonstrate any trend between 1988 and 2001.