labor unions and the adoption of new technology the paper examines whether unionization by workers discourages the adoption of labor saving techniques this is done in the context of an oligopolistic industry with a small number of firms some of which are unionized we find that unionization can actually encourage the adoption of labor saving technology provided that the technological improvement is mild and that demand is sufficiently high or demand elasticity sufficiently low if there is an effective threat of entry that causes the union to moderate its wage demands then unionization may encourage the adoption of new technology even at low levels of demand

attitudes toward risk and the risk return paradox prospect theory explanations this study attempted to explain bowman s risk return paradox in terms of recent research in behavioral decision theory and prospect theory the research emphasized the role of reference or target

unionisation structures and innovation incentives this paper examines how dierent unionisation structures aect rms innovation incen tives and industry employment we distinguish three modes of unionisation with increasing degree of centralisation 1 decentralisation where wages are determined independently at the rm level 2 coordination where one industry union sets individual wages for all rms and 3 centralisation where an industry union sets a uniform wage rate for all rms while rms investment incentives are largest under centralisation investment in centives are non monotone in the degree of centralisation decentralisation carries higher investment incentives than coordination labour market policy can spur innovation by decentralising unionisation structures or through non discrimination rules

a behavioral theory of r d expenditures and innovations evidence from shipbuilding i base an integrated model of innovation development and launch on the behavioral theory of the firm this model specifies that research and development expenses are increased when low performance causes problemistic search and when excess resources cause slack search innovations generated by search are launched if low performance gives managers high risk tolerance using data from shipbuilding firms i show that high performance reduces r d intensity and innovation launches and high slack increases r d intensity as predicted

strategic group formation and performance the case of the u s pharmaceutical industry 1963 1982 the focus of this paper is on three major questions 1 what is the theoretical rationale for the strategic group concept 2 does strategic group membership have performance implications and 3 are strategic groups and membership in strategic groups stable characteristics of industries a statistical procedure is proposed to longitudinally identify strategic groups the empirical setting is the u s pharmaceutical industry over the period 1963 82 while performance differences are found in terms of market share profitability differences between groups are not observed neither are differences found in terms of risk and risk adjusted performance these results are attributed to the existence of performance variation within each strategic group a dynamic model of competitive repositioning is proposed which helps integrate the findings from the study

multifirm unions and the incentive to adopt pattern bargaining in oligopoly abstract this paper develops a model of wage bargaining between an industry wide trade union and firms in an oligopoly and considers the circumstances under which the union prefers pattern bargaining that is negotiating contracts in a sequential manner to simultaneous bargaining with the firms the paper goes on to consider the importance of the bargaining order in pattern bargaining when the firms are asymmetric the analysis shows that the union gains by first targeting a firm which is in a relatively weak bargaining position i e impatient to settle or a firm with relatively large profits

union structure and firms incentives for cooperative r d investments we examine how different unionisation structures and the spillovers of r d activities affect r d investments and fi rms incentives to form ar esearch joint venture we find that whenever firms invest non cooperatively an industry union increases r d investments if industry specific spillovers are low in case of a research joint venture investments are always higher under firm level unions we also find that firms incentives to form a research joint venture are stronger when they face an industry union if spillovers are low rigidities in the labour market such as high unemployment benefits or and a central union have negative effects on employment output and profits and hinder the diffusion of the efficiency created by a rjv to consumers and employees integrated labour market and r d policies are also discussed

what can we learn from the grand policy experiment lessons from so2 allowance trading stable url http links jstor org sici sici 0895 3309 28199822 2912 3a3 3c69 3awcwlft 3e2 0 co 3b2 tthe journal of economic perspectives is currently published by american economic association your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals aea html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgtue jun 26 16 25 17 2007

unionised labour market and strategic production decision of a multinational i show that a foreign firm may sell the same product through both foreign direct investment fdi and export and this decision depends on the size of the product market it happens irrespective of whether the labour market in the domestic country or in the foreign country is unionised unlike the existing works focusing on risk diversification in presence of demand or cost uncertainty i explain the co existence of fdi and export in a world with certainty the endogenous determination of the wage rate plays an important role for my results my analysis shows the effects of the fixed cost of fdi and competition in the product market on the production strategy of the foreign firm

green trade unions structure wages and environmental technology this paper investigates the effect of trade union structure on firms technological choices when unions care about environmental protection we compare a decentralized with a centralized union structure in a cournot duopoly our results suggest that a decentralized structure provides higher incentives for the investment in cleaner technologies although emissions may be lower under a centralized structure the effect of the environmental damage parameter on wages and output may be non monotonic

prospect theory and the risk return association an empirical examination in 85 industries a new sample of 85 industries about 3 300 firms defined in terms of homogenous products provides strong evidence that prospect theory can explain the tradeoff between two of the most researched parameters in evaluating organizations namely risk and return in particular organizations below their target level are found to be risk takers hl while organizations above their target level are risk averters h2 moreover the below target tradeofl was generally steeper than the above target with a median below to above slope ratio of about 3 l h3 risk and return are probably the two single parameters most researched by the various and related disciplines of economics finance and management although each one of them has looked at these two parameters from different aspects and for different purposes they have provided a wide understanding of these two factors in the contest of the theory of the firm the purpose of this study is to look closely at the relationship between these two important parameters in order to understand firm s competitive behavior using the recent development in behavioral decision theory namely prospect theory kahneman and tversky 1979 although march 1988 has criticized the discipline of management for its later adaptation in considering risk elements for evaluating organization performance and decision making processes recent studies e g bettis 1981 rumelt 1974 singh 1986 jemison 1987 and baird and thomas 1986 have paid considerable attention to risk aspects in evaluating the performance of firms in general these studies have concluded that the characteristics of the firms environment strategy and implementation processes have significant and important influence on the firm s risk level and its associated rate of return bowman 1980 has looked closely at 85 u s industries and explored the

toward a model of risk in declining organizations an empirical examination of risk performance and decline scholars who study organizational decline have argued that declining organizations reduce or eliminate their riskier activities such as innovation further they cite reduced risk taking as a primary contributor to further decline scholars with an interest in risk per se come to the opposite conclusion low performing firms often take more risks than other firms and such risks reduce subsequent performance this study attempts to resolve these conflicting views by examining the risk of firms in decline our model based on cyert march s cyert r m j g march 1963 a behavioral theory of the firm prentice hall englewood cliffs nj behavioral theory of the firm includes six basic variables 1 performance 2 slack 3 aspirations 4 expectations 5 risk income stream uncertainty and 6 organization size as a measure of decline the estimated model includes prior levels of risk and performance in the risk and performance equations respectively as controls this study uses data on 34

strategic reference point theory how can executives achieve a match between expected external environmental conditions and internal organizational capabilities that facilitates improved performance this paper argues that a firm s choice of reference points can help achieve strategic alignment capable of yielding improved performance and potentially even a sustainable competitive advantage building upon prospect theory and other relevant theoretical perspectives the strategic reference point srp matrix is developed a firm s srp consists of three dimensions internal capability external conditions and time a theory is developed which posits an optimal srp structure and propositions are offered which articulate the expected relationships between the srp strategic choice behavior and firm performance the paper closes with some suggestions for using strategic reference points in both research and practice

efficient wage bargaining as a repeated game this paper builds a bridge between the two existing approaches for wage and employment determination in a unionized market the monopoly union model and the efficient bargaining model both fail to capture the dynamic aspects of wage bargaining when the repeated nature of the wage bargaining process is considered the equilibria are neither as inefficient as the monopoly union model predicts nor as fully efficient rather the two models can be regarded as particular cases with certain discount rates we apply our model to issues such as the endgame interpretation of the u s steel industry wage concessions and featherbedding

learning about environmental damage implications for emissions trading in this paper the impact of adjusting the supply of tradeable emission permits on incentives for cleaner technology adoption is examined two policy rules for adjusting the supply of permits are considered open market operations and a proportional adjustment rule under which the regulator expropriates permits from individual firms in proportion to their existing permit holdings adjustment via open market operations is neutral with respect to cleaner technology investment decisions but may be politically difficult to implement the proportional adjustment rule is also neutral with respect to investment decisions and at the same time allows more flexibility from a political perspective

hypercompetition in a multimarket environment the role of strategic similarity and multimarket contact in competitive de escalation the effect of intra industry heterogeneity on hypercompetitive escalation and de escalation in a multimarket environment is examined the authors study two critical dimensions of intra industry heterogeneity strategic similarity which captures similarity in competitive orientation and multimarket contact which captures the degree of overlap between rivals in the multiple markets of the industry theory predicts that both variables influence the intensity of rivalry and competitive disruption the predictions in the literature about the effect of strategic similarity on the intensity of rivalry are mixed while strategic group theory proposes that strategic similarity may lead to lower rivalry other theories focusing on product differentiation the resource based view of the firm and hypercompetitive escalation predict that strategic similarity may actually increase rivalry those diametrically opposed propositions are captured as alternative hypotheses of the effect of strategic similarity with r

to be different or to be the same it s a question and theory of strategic balance this paper addresses the performance consequences of firm level strategic similarity past research observed that firms face pressures to be different and to be the same by differentiating firms reduce competition by conforming firms demonstrate their legitimacy both reduced competition and legitimacy improve performance this paper begins building a theory of strategic balance by synthesizing the differentiation and conformity perspectives the theory directs attention to intermediate levels of strategic similarity where firms balance the pressures of competition and legitimation empirical support for the theory is found in a longitudinal study of commercial banks several suggestions for developing a theory of strategic balance conclude the paper the theory s major implication is that firms should be as different as legitimately possible copyright 1999 john wiley sons ltd

comparison of s s and s nq inventory control rules with respect to planning stability abstract the application of a rolling horizon planning framework in inventory control causes different order release decisions in successive planning cycles these lead to the so called planning system nervousness in this paper for a single stage inventory system with arbitrary stochastic demand it is shown analytically how the setup oriented planning stability concerning deviations of planned orders in all periods of a given stability horizon is influenced by the use of s s and s nq control rules it turns out that the reorder point s does not affect stability whereas the lot size determining parameters s s and q as well as the level of uncertainty have a considerable impact the paper is concluded with directions for further research

the relative impact of actual and potential rivalry on firm profitability in the pharmaceutical industry this paper estimates the effects of actual and potential rivalry on profitability of firms in the u s pharmaceutical industry during the 20 year period 1963 82 the results show that during the 1960s actual rivalry among the sampled firms did not materially affect firm profitability but that during the 1970s competition among incumbents had an increasingly adverse effect on their profitability the results also show that potential competition significantly reduced drug firms profitability during the entire 20 year period copyright 1999 john wiley sons ltd

antecedents of convergence and divergence in strategic positioning the effects of performance and aspiration on the direction of strategic change this paper investigates drivers of convergence and divergence in strategic positioning in terms of resource allocation decisions the study based on the behavioral theory of the firm suggests two unexplored kinked curve relationships between performance gaps and strategic convergence divergence first the study suggests a negative relationship between a focal firm s performance relative to aspiration levels and strategic convergence divergence where the slope is steeper when performance is above the aspiration level second it suggests a positive relationship between a target firm s performance relative to a focal firm s performance and strategic convergence divergence where the slope is steeper when a target firm s performance is below a focal firm s performance empirical analysis of dyad level data in the u s food processing industry reveals that the direction of a firm s strategic change is shaped by its aspiration level its performance level and the performance gap between it and the firm it selects as a model this study contributes to the current literature by offering preliminary indications of when and how a firm moves closer to or further away from other competing firms in its strategic position

competition and incentives with motivated agents a unifying theme in the literature on organizations such as public bureaucracies and private nonprofits is the importance of mission as opposed to profit as an organizational goal such mission oriented organizations are frequently staffed by motivated agents who subscribe to the mission this paper studies incentives in such contexts and emphasizes the role of matching the mission preferences of principals and agents in increasing organizational efficiency matching economizes on the need for high powered incentives it can also however entrench bureaucratic conservatism and resistance to innovations the framework developed in this paper is applied to school competition incentives in the public sector and in private nonprofits and the interdependence of incentives and productivity between the private for profit sector and the mission oriented sector through occupational choice jel d23 d73 h41 l31 the late twentieth century witnessed a historic high in the march of market capitalism with unbridled optimism in the role of the profit motive in promoting welfare in the production of private goods moreover this generated a broad consensus on the optimal organization of private good production through privately owned competitive firms when it comes to the provision of collective goods no such consensus has emerged debates about the relative merits of public and private provision still dominate this paper suggests a contracting approach to the provision of collective goods it focuses on two key issues how to structure incentives and the role of competition between providers at its heart is the idea that organizations that provide collective goods cohere around a mission 2 thus production of collective goods can be viewed as mission oriented

determinants of firms backward and forward looking r d search behavior this study develops and operationalizes a behavioral forward looking search model by incorporating prospect theory organizational risk literature and the logic of the behavioral theory of the firm with recognition of the bounded rationality of decision makers and the goal directed rule based nature of organizations this model suggests that a comparison between firms performance expectation and performance target translates the cognitive representation of the firms future into their subsequent actions by examining the research and development r d expenditures of u s manufacturing firms from 1980 to 2001 this study explores how performance aspirations expectations and slack affect decision making about firms r d search investments the findings show that both performance feedback and performance prospect are important determinants of firms search behavior after controlling for firm industry and time effects in addition backward and forward looking determinants have interactive effects on search behavior firms problem driven search activity further increases when firms feel unlikely to achieve the performance target for another year in contrast search intensity is reduced when firms expect to improve their performance from an underperforming situation to an outperforming situation the findings suggest that future research on performance feedback and experiential learning should also consider the effect of forward looking prospects on firm behavior

the determination of r d empirical evidence on the role of unions abstract this paper examines the empirical evidence of the role of union bargaining on innovation we review the existing empirical evidence and emphasis some of the problems with the theoretical assumptions we outline a simple model of strategic rd b the union bargains only over wages

labour markets and innovation ex post bargaining abstract there is considerable interest in how labour market conditions affect innovation lying behind much of the existing work on this question is a simple model of a single union bargaining with a single firm in which in the absence of binding contracts the union reduces the returns to innovation without bearing any of the costs this misses an important feature of some rd with efficient contracts there are cases where being faced with a stronger union will help a firm to win a patent race it would otherwise have lost

variable organizational risk preferences tests of the march shapira model march and shapira s 1987 1992 model of managers risk preferences allows for shifts in attention between survival and aspiration levels our study provides initial empirical tests of their model

dynamic incentives by environmental policy instruments a survey abstract in this paper i survey and discuss recent developments on the incentives provided by environmental policy instruments for both adoption and development of advanced abatement technology a main conclusion to be drawn from the literature is that under competitive conditions market based instruments usually perform better than command and control moreover taxes may provide stronger long term incentives than tradable permits if the regulator is myopic if the government can anticipate new technology or is able to react on it optimally regulatory policies by virtue of administered prices taxes and policies by setting quantities issuing tradable permits are almost equivalent the literature also shows that under competitive conditions there is no difference between auctioning permits and grandfathering moreover timing and commitment of environmental policy is not crucial for adoption under competitive conditions commitment has positive incentive effects however if an r d sector has market power in the presence of market imperfections the ranking of the different policy instruments is ambiguous

a behavioral theory of market expansion based on the opportunity prospects rule what explains organizational search and choice when multiple opportunities are available to the decision makers drawing on the behavioral view of the firm and on the attention based view this study proposes a theoretical model centered on the opportunity prospects rule to explain market expansion defined as the extent how many and the selection which of multiple available opportunities that are actually pursued by competing firms we test our model using longitudinal fine grained data on commercial banks undertaking more than 1 300 opportunity choices the findings show that firms do use the opportunity prospects rule when exercising market expansion choices and that slack and performance feedback moderate the effects of opportunity prospects this paper contributes to organizational decision making research and to the behavioral view of the firm by showing the importance of considering an opportunity driven approach by demonstrating the relevance of simplifying rules to explain the search for the consequences of alternatives by extending recent efforts to provide a more forward looking perspective to model organization behavior and by showing when slack and performance feedback moderate the effects on market expansion of the opportunity prospects rule

strategic group dynamics a longitudinal study was conducted of strategic group dynamics over periods of economic stability growth and decline in international offshore oil drilling some changes in group strategy were ob

labour markets bargaining and innovation much of the recent empirical work on the impact of unions on rd ii under some circumstances an increase in union strength can make both firms and unions worse off we survey a more recent theoretical literature which takes account of the fact that r d is often undertaken for strategic reasons by firms that are in competition with one another we show that in this framework the prevailing theoretical paradigm may be overturned thus when firms and unions can enter into long term bargains then an increase in union strength will increase decrease r d spending if successful innovation causes employment to rise respectively fall however when r d falls then this increase in union strength can cause both firms and unions to be better off when firms and unions engage in short term bargaining then an increase in union bargaining strength will cause r d to fall when bargaining is over wages alone however when bargaining takes place over wages and employment then if unions care a lot about employment the relationship between union strength and r d is inverse u shaped

testing a causal model of corporate risk taking and performance the determinants of organizational risk taking and its impact on economic performance are critical issues in strategic management using a model that included risk performance performance expecta

an investigation of setup instability in non stationary stochastic inventory systems in stochastic inventory systems unfolding uncertainties in demand lead to the revision of earlier replenishment plans which in turn results in an instability or so called system nervousness in this paper we provide the grounds for measuring system nervousness in non stationary demand environments and gauge the stability and the cost performances of r s and s s inventory policies our results reveal that both the stability and the cost performance of inventory policies are affected by the demand pattern as well as the cost parameters and the r s policy has the potential to replace the cost optimal s s policy for systems with limited flexibility