Cranfield Management Research Paper Series
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Item Open Access Is there a North-South divide in self-employment in England?(2007-07-01T00:00:00Z) Burke, Andrew; FitzRoy, Felix R; Nolan, Michael AUsing decomposition analysis, the paper investigates why Northern England has fewer but higher performing self-employed individuals than the South. We find the causes are mainly structural differences rather than regional variation in individual characteristics. There are more self employed individuals in the South, but on average they create fewer jobs. Post compulsory education has a strong negative effect on the probability of self employment in the South, probably due to better employment opportunities there, but little influence in the North. Education has some positive effects on job creation by entrepreneurs in both regions. Aggregate studies may thus give misleading results.Item Open Access Tension management in logistics service innovation projects(2006-11-01T00:00:00Z) Kohler, Thomas; Harrison, AlanInnovation projects create tensions, which may be envisaged as conflicts between different perspectives on how such projects should be managed. Such tensions have been described in such terms as autonomy versus standardisation. By tracking the origins and life cycle of tensions as they arose in an innovation project in practice, we sought to understand the nature of tensions and to gain insights into how they could be managed. The findings of an exploratory longitudinal case study were used to develop an optimised process model as well as to propose seven ways in which tensions could be managed pro-actively in innovation projects. In a second longitudinal case study, we tested these propositions by means of action research. In both cases, one of us was both project manager and researcher. This provided detailed operational access to the people and processes involved in two systems innovation projects at DHL Express in Germany.Item Open Access Onwards and upwards: why companies change their executive remuneration schemes, and why this leads to increases in pay(Blackwell Publishing Ltd, 2006-10-01T00:00:00Z) Bender, RuthMuch has been written about the phenomenon of ever-increasing executive pay in listed companies. This paper examines some of the underlying reasons for this continued increase in executive directors’ remuneration. It reports the results of 40 interviews with protagonists in the remuneration debate in FTSE 350 companies, exploring the types of change made and the reasons given for these changes. This issue has not specifically been addressed by previous studies. Reasons given for making changes included: increases due to being below market; changing performance-related schemes that did not pay out or paid less than the anticipated amount; changes in the company's culture or strategy; changes to senior personnel (executive and non-executive); compliance with good human resources practice; and a perceived need to comply with best practice in corporate governance. The results are analysed through two theoretical lenses. An agency theory explanation provides insight into the structure of executive remuneration contracts, and expectancy theory suggests why schemes might be changed to motivate the executives. The expectancy theory explanation tempers the agency theory explanation, showing why changes are made even though this may lead to moral hazarItem Open Access Muslim voices: The British Muslim response to Islamic video-polemic - An exploratory study(2006-12-01T00:00:00Z) Baines, Paul R.; O'Shaughnessy, Nicholas J.; Moloney, Kevin; Richards, Barry; Butler, Sara; Gill, MarkThis paper represents an attempt to deconstruct how Muslims living in Britain might respond to militant Islamist propaganda, as typified by elected ‘Jihadist’ video-clips obtained from the Internet, using a discussion group format. The article discusses the methodological difficulties of conducting research in the propaganda field using a conventional advertising-evaluation type approach, and provides a series of testable propositions to guide further research in the field. The central thesis is that ‘Jihadist’ communications focus around a meta- narrative of Muslims as a unitary grouping selfdefined as victim to Western aggression. While early indicators are that some genres of propaganda may be more effective than others (e.g. cartoons) in introducing this notion and some groupings more susceptible than others, we conclude that in general most Muslim respondents were unsympathetic to the messages contained in the propaganda clips. This paper will be of particular interest to managers of government social and market research programmes and media/PR practiItem Open Access Infrastructure regulation and poverty reduction in developing countries: a review of the evidence and a research agenda(Cranfield University School of Management, 2007-02) Parker, David; Kirkpatrick, Colin; Figueira, CatarinaPoverty reduction is a primary goal of development policy. In large parts of the World people have to live on meagre incomes and have limited access to infrastructure services, such as mains water, safe sanitation, mains power supplies, maintained roads and telephones. In response, more and more infrastructure provision has been opened up to private investment over the last two decades and regulatory institutions have been introduced to protect the public interest in the absence of state ownership. In this paper the role of infrastructure regulation in poverty reduction is investigated drawing on the published evidence. The conclusion is that the evidence is both patchy and sometimes contradictory. There is mixed knowledge regarding the extent to which regulators address poverty issues and about the results of regulatory decisions. The paper concludes by proposing a future research agenda aimed at improving our understanding of the ways in which infrastructure regulation impacts on poverty, with the objective of improving actual regulatory policy in developing economies.Item Open Access The impact of deregulation on the German and UK life insurance markets: an analysis of efficiency and productivity between 1991-2002(Cranfield University School of Management, 2007-03) Hussels, Stephanie; Ward, Damian R.This paper provides an intra and inter-country assessment of deregulation and industry efficiency in the European insurance industry. The impact of deregulation is expected to be magnified within an analysis of the Continental maximal regulated German industry and the Anglo minimal regulated UK industry. Results suggest that while increased competition in the UK is reflected in higher intra-industry cost efficiency; an inter-industry analysis indicates that the German industry dominates UK cost efficiency both before and after deregulation. These results maybe explained by the efficiency enhancing nature of German regulation.Item Open Access Polish banking industry efficiency: a DEA window analysis approach(Cranfield University School of Management, 2007-08) Kisielewska, Magdalena; Guzowska, Malgorzata; Nellis, Joseph G.; Zarzecki, DariuszThe Polish banking industry has been transformed since the country’s transition to a market economy which began at the end of the 1980s. The industry has now developed and expanded to encompass more than 60 participants and it can thus be described today as a relatively competitive market. Against this background, this paper evaluates the financial performance of the industry over time, based on the ten largest Polish banks that represent around 80 percent of the total sector in terms of assets. In particular, cost efficiency of the banks is analyzed on the basis of six production models. Efficiency scores are obtained using Data Envelopment Window Analysis between 1995-2003 period, using intertemporal and locally intertemporal data. Productivity changes within the sector are investigated using the Malmquist Index approach.Item Open Access The relationship between economic development and business ownership revisited(Cranfield University School of Management, 2007-08) Carree, Martin; van Stel, André; Thurik, A. Roy; Wennekers, SanderThis paper revisits the two-equation model of Carree, van Stel, Thurik and Wennekers (2002) where deviations from the ‘equilibrium’ rate of business ownership play a central role determining both the growth of business ownership and that of economic development. Two extensions of the original setup are addressed: using longer time series of averaged data of 23 OECD countries (up to 2004) we can discriminate between different functional forms of the ‘equilibrium’ rate and we allow for different penalties for being above or under the ‘equilibrium’ rate. The additional data do not provide evidence of a superior statistical fit of a U-shaped ‘equilibrium’ relationship when compared to an L-shaped one. There appears to be a growth penalty for having too few business owners but not so for having too many.Item Open Access The impact of intellectual property right regimes on self employed entrepreneurship: an international analysis(Cranfield University School of Management, 2007-10) Burke, Andrew; Fraser, StuartThe importance of IPR regimes for large firm innovation is well documented but less is known about their impact on self-employed entrepreneurship which is typically less innovative. The paper sets out to estimate the net effect of the various elements that comprise an IPR regime including the political system, the laws, and institutions as well as a general familiarity with and respect for IPR related products. Cumulatively, the analysis indicates that a well developed IPR regime has a net positive effect on the selfemployment activity. Since the self-employed sector is possibly the only segment of the enterprise base where IPRs may be expected to have a negative effect it provides a useful contribution to our empirical understanding of the welfare effects of IPRs on the entrepreneurial economy and economic development more widely. Contrary to some of the most vocal objections to the TRIPS Agreement we find that rather than undermine the self-employed enterprise base it actually boosts it. We find that half-hearted IPR conventions, in this case the Phonograms Convention, designed to accommodate countries with a weak desire to support IPRS undermines this positive effect. We do not find any evidence to suggest that the organizations which tend to be associated with the enforcement of IPR laws such as Interpol, ISO, PCA, UNCTAD, UNESCO, WIPO and the WTO had any effect over and above WIPO and the WTO helping to create TRIPS in the first place. The evidence in the paper indicates that the standard practice of international economic development aid where recipient countries have been encouraged to embrace democracy and IPRs (in particular, the TRIPS Agreement) seems to have been prudent. Most likely these initiatives would act to boost the self-employed enterprise base in developing and transition economies.Item Open Access Does the balance scorecard work: an empirical investigation(Cranfield University School of Management, 2008-01) Neely, AndrewCommentators suggest that between 30 and 60% of large US firms have adopted the Balanced Scorecard, first described by Bob Kaplan and David Norton in their seminal Harvard Business Review paper of 1992 (Kaplan and Norton, 1992; Marr et al, 2004). Empirical evidence that explores the performance impact of the balanced scorecard, however, is extremely rare and much that is available is anecdotal at best. This paper reports a study that set out to explore the performance impact of the balanced scorecard by employing a quasi-experimental design. Up to three years worth of financial data were collected from two sister divisions of an electrical wholesale chain based in the UK, one of which had implemented the balanced scorecard and one of which had not. The relative performance improvements of geographically matched pairs of branches were compared to establish what, if any, performance differentials existed between the branches that had implemented the balanced scorecard and those that had not. The key findings of the study are that while the Electrical division – the division that implemented the balanced scorecard – sees improvements in sales and gross profit; similar performance improvements are also observed in the sister division. Hence the performance impact of the balanced scorecard has to be questioned. Clearly further work on this important topic is required in similar settings where natural experiments occur.Item Open Access The UK code of corporate governance: link between compliance and firm performance(Cranfield University School of Management, 2008-02) Shabbir, Amama; Padgett, CarolWe investigate the relation between a detailed index of non-compliance with the UK corporate governance code, and firm performance for a panel of FTSE 350 companies from 2000 to 2003. The inverse relation between the Index and total shareholder returns (TSR) implies more compliant firms enjoy higher TSR in our sample. We also find the Index to be exogenous, implying that causality runs from the Index to performance. Our economically significant results suggest that compliance matters- not just as a box ticking exercise, but as a real change in the governance of large listed companies in the UK.Item Open Access UK farming post reform: the key marketing challenges(Cranfield University School of Management, 2008-03) Rickard, Sean; Roberts, DeborahThe 2003 reform of the Common Agricultural Policy largely replaced the European Union’s production orientated system of price support with a decoupled, single farm payment (SFP) system that freed farmers to choose what to do with their land, be it crops, livestock or withdrawal from farming. The outcome is reductions in the levels of farm–gate prices and greater exposure to the vicissitudes of market forces. In justifying the reform, the authorities argued inter alia that a positive outcome would be the encouragement of a more market orientated and competitive farming industry. In this paper we examine the likelihood of this outcome for UK agriculture and how it might be achieved. We find the arguments that the reform will encourage extensive farming techniques and this will serve as the basis of a more market orientated industry unconvincing. We argue that the reform is more likely to achieve its objective of a more market orientated industry if the reform encourages farmers to collaborate in horizontal networks as user members of Farmer Controlled Businesses. Such businesses operate as vertical integrators and are particularly suited to developing a market orientation. We conclude by listing areas of research that can aid an understanding of the marketing functions of Farmer Controlled Businesses and their influence on the economic returns to their user members.Item Open Access The impact of foreign equity investment flows on integration of Asian emerging equity markets(Cranfield University School of Management, 2009-01) Poshakwale, Sunil S.; Thapa, ChandraThe paper investigates the impact of foreign equity investment flows on the integration process of emerging markets with the global markets. Daily net foreign equity investment flow and return data for the four Asian emerging markets of India, Korea, Taiwan, and Thailand for 2001-2007 is used in examining the long and short-run relationship with the global markets. The findings show that despite the instability of the correlation structure, there is a general trend towards greater integration. The cointegration analysis results suggest that the four Asian emerging markets are getting integrated with the global markets and the integration process is driven by the activities of the foreign investors. Findings confirm that the global markets have significant causal impact on returns of all four emerging markets and the foreign equity investment flows play a significant role in correcting the short-term deviations in the convergence process. Whilst the results are consistent with previous research, we find stronger evidence for the positive feedback hypothesis for all four markets. The results support the widely held view that foreign investors are high return chasers and extract information from recent returns. Our results also confirm the price pressure hypothesis which suggests that foreign equity investors are mainly responsible for the increase in the stock market valuations in the four Asian emerging markets. If this were to be true, the emerging markets may become increasingly vulnerable to the shocks in the volume of foreign equity investment flows and turn more volatile in future.Item Open Access Making business schools relevant: Impacting management practice through appropriate modes of learning(Cranfield University School of Management, 2008-04) James, Kim Turnbull; Denyer, DavidThis paper suggests that the traditional mode of knowledge production in academic institutions finds its way unquestioningly into executive education practice. By exploring alternative modes of knowledge production and their relationship to learning designs, we offer a framework for understanding what makes executive education relevant to practice. The aim is to offer faculty, business schools, clients and learners a framework for considering practical and strategic implications arising from the learning modes identified in this analysis.Item Open Access To Comply or not to Comply: Evidence on Changes and Factors associated with the Changes in Compliance with the UK Code of Corporate Governance(Cranfield University School of Management, 2008-03) Shabbir, AmamaIn the UK, listed companies are required to comply or explain reasons for non-compliance with the UK code of corporate governance. In this paper, using detailed compliance data for a panel of FTSE 350 companies, I first investigate how firms change their compliance practices over time. I then investigate the factors associated with these changes. The period covered in this study, that is 2000 to 2003, was marked by a sharp decline in the UK stock market, followed by intensive merger/acquisition and restructuring activity. It therefore offered a particularly good context for studying how firms’ compliance practices change in response to changing business conditions. I find that firms tend to behave in an opportunistic manner so far as their compliance is concerned – becoming more compliant when their prior period stock market performance declines and less so with improvements in their operating performance. Moreover, I find that mergers and acquisitions (which may be viewed as a somewhat aggressive response to a business shock) tend to decrease compliance, whereas reorganizations/restructuring (a rather defensive response) tends to increase compliance. These findings provide a useful insight about the behaviour of the firms. After all, the code was a response to the corporate scandals of the late 1980s and early 1990s that shook investor confidence in the UK. In some ways it is not surprising then to find that companies tend to `ride the waves` becoming more compliant when the going gets tough, and less so as performance improves. Both for companies and their investors these findings have important implications. For companies, the message is clear – it is consistency in compliance that matters. For investors, to separate the sheep from goat in terms of their compliance, it is important to look at governance arrangements beyond a mere year or two.Item Open Access Incentives and Managerial Experience in Multi-task Teams: Evidence from within a Firm(Cranfield School of Management, 2008-02) Griffith, Rachel; Neely, AndrewThis paper exploits a quasi-experimental setting to estimate the impact that a multi-dimensional group incentive scheme had on branch performance in a large distribution firm. The scheme, which is based on the Balanced Scorecard, was implemented in all branches in one division, but not in another. Branches from the second division are used as a control group. Our results suggest that the balanced scorecard had some impact, but that it varied with branch characteristics, and in particular, branches with more experienced managers were better able to respond to the new incentives.