Friday, April 24, 2015

Modernizing without Weternizing: Social Structure and Economic Action in the Indian Financial Sector

CHEN Guoli, CHITTOOR Raveendra, VISSA Balagopal
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Academy of Management Journal 58, 2 (2015) 511-537

In seeking to understand whether the transition by Asian countries to market economies mirrors the path taken by the West, we ask how embedded network ties between equity analysts and the CEOs of the firms they follow in India influence the accuracy of analysts’ earnings forecasts. We contrast traditional institutions of caste and regional language with contemporary institutions such as universities as the locus for such ties. We posit that CEOs from the post-economic-reform generation in India are more likely to transfer material private information via their school ties while pre-reform generation CEOs favor caste or language ties. We then contrast domestic business groups (BGs) with western MNCs as organizational contexts and argue that BGs legitimate the transfer of private information along particularistic ties, whereas MNCs mitigate such transfers. Our conceptual framework is supported by analyses that draw on a sample of 1,552 earnings forecasts issued from 2001 to 2010 by 296 equity analysts. Our findings suggest that the embeddedness perspective should be broadened to incorporate the influence of larger historical social structures within which economic action is embedded, and to view BGs as carriers and repositories that blend modern management practices with particularistic behavioral patterns among top executives.

Old Age is No Place for Sissies

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INSEAD Working Paper 2015/35/EFE

This article deals with a rather taboo subject: the consequences of prolonging life into extreme old age, now possible with advances in medical procedures. It poses the existential question about the quality of life in the final stage of the human life cycle. I suggest that most of us are more worried about the downsides of aging than about dying. We all want to live for as long as possible but none of us wants to get old. What meaning is left to life once we have completed our main evolutionary task— bringing up our children? I look at a number of issues related to old age, including societal perceptions and the dubious value philosophical and religious traditions have attributed to old age. What is it like to grow old in a youth-oriented culture? How would we prefer to be remembered, as we were when we still had our full capacities, or as doddering invalids who can no longer take care of themselves? Are our efforts to extend life misguided and potentially destructive? What use is better health care if it simply slows the dying process for people who no longer recognize themselves? Why are so many of us prepared to undergo this final indignity? Are we hanging on for ourselves or for others who cannot cope with the anticipated loss and grief? I also examine the socio-economic implications of an aging population. What effect might this have on the work environment and society as a whole? Can we really afford to prolong life?

Corporate Social Initiatives and Employee Retention

BODE Christiane, SINGH Jasjit, ROGAN Michelle
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INSEAD Working Paper 2015/34/STR/EFE 
revised version of 2014/67/STR/EFE

Firms are increasingly launching initiatives with explicit social mandates. Often the business case for these initiatives is justified through one critical aspect of human capital management: employee retention. Although prior empirical studies have demonstrated a link between such corporate social initiatives and intermediate employee-related outcomes like motivation and identification with the firm, the relationship between employee participation in these initiatives and retention outcomes has not been investigated. Our study fills this gap. Using individual-level project participation and retention data for approximately 10,000 employees in a global management consulting firm, we present empirical evidence in support of a positive retention effect associated with participation in an initiative with social impact goals. In addition, we offer arguments for moderating conditions that might weaken this relationship, and present evidence consistent with these arguments. Further econometric analysis based on a stringent matching approach as well as additional analyses based on survey and interview data also point towards there being a retention effect. Overall, by demonstrating a positive association between corporate social engagement and employee retention, this study calls attention to the need for further research into the mechanisms through which social engagement can serve as a tool for strategic human capital management.

Thursday, April 23, 2015

Sociology of Leadership in Organizations

Sociology of Leadership in Organizations in International Encyclopedia of the Social & Behavioral Sciences (Second Edition), James D. Wright (Ed), Elsevier (2015) 664-669
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This article updates an entry made in the first edition of the Encyclopedia (2001). It maintains the same structure by opening with a discussion on the definitional confusion among researchers of leadership – a confusion grounded in the fact that leadership can be looked at either a property (the position of the ‘personalists’) or a process (the position of their opponents, the ‘situationists’). A number of influential leadership theories are examined, including theories that emphasize the importance of traits, behaviors, contingency, attribution, and symbolism. Charismatic and transformational leaderships are reviewed. Attention is given to the importance of the clinical paradigm in leadership research. Finally, we revisit developments in leadership studies since the first edition of the Encyclopedia a decade ago and propose emerging areas of research.

Wednesday, April 22, 2015

Generalized Almost Stochastic Dominance

TSETLIN Ilia, WINKLER Robert, HUANG Rachel J., TZENG Larry Y.
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Operations Research 63, 2 (2015) 363-377

Almost stochastic dominance allows small violations of stochastic dominance rules to avoid situations where most decision makers prefer one alternative to another but stochastic dominance cannot rank them. While the idea behind almost stochastic dominance is quite promising, it has not caught on in practice. Implementation issues and inconsistencies between integral conditions and their associated utility classes contribute to this situation. We develop generalized almost second-degree stochastic dominance and almost second-degree risk in terms of the appropriate utility classes and their corresponding integral conditions, and extend these concepts to higher degrees. We address implementation issues and show that generalized almost stochastic dominance inherits the appealing properties of stochastic dominance. Finally, we define convex generalized almost stochastic dominance to deal with risk-prone preferences. Generalized almost stochastic dominance could be useful in decision analysis, empirical research (e.g., in finance), and theoretical analyses of applied situations.