Does Work Time Flexibility Work? An Empirical Assessment of the Efficiency Effects for German Firms

In this paper we assess the impact of flexible work time schedules on firm efficiency using representative establishment data for Germany. Following the approach by Battese and Coelli (1995), we estimate a stochastic production frontier and the determinants of technical efficiency simultaneously. The innovation of our study is that we draw on technical efficiency instead of productivity to appraise the success of flexible working hours. The results indicate that while the use of work time schedules with moderate flexibility is positively related to technical efficiency, highly flexible work time arrangements seem to be negatively correlated with an efficient organization of the work flow. However, these efficiency losses should not be interpreted as causal effects, because highly flexible work time schedules are most likely to be introduced in struggling firms. --Stochastic production frontier,flexible work hours,efficiency

Problem-Solving Behaviours, Organisational Forms and the Complexity of Tasks

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Knowledge Management What Can Organizational Economics Contribute?

Knowledge management has emerged as a very successful organization practice and has been extensively treated in a large body of academic work. Surprisingly, however, organizational economics (i.e., transaction cost economics, agency theory, team theory and property rights theory) has played no role in the development of knowledge management. We argue that organizational economics insights can further the theory and practice of knowledge management in several ways. Specifically, we apply notions of contracting, team production, complementaries, hold-up, etc. to knowledge management issues (i.e., creating and integration knowledge, rewarding knowledge workers, etc.) , and derive refutable implications that are novel to the knowledge management field from our discussion.Transaction costs, organizational economics

Rural credit in developing countries

Subsidized formal credit to the agricultural sector has been advocated as more efficient, equitable, and easier to implement than, say, land reform. But the record on subsidized credit to farmers is dismal. It shows a significant failure either to achieve an increase of agricultural output cost-effectively or to improve rural income distribution and alleviate poverty. Many of the financial institutions have proven to be inept and to lack accountability. Common features of the success stories are tougher stands on default; strict auditing and accounting procedures and financial control; and some form of joint responsibility or liability by small groups of farmers, whereby default by one member cancels future loans to the whole group.Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,Financial Intermediation,Insurance&Risk Mitigation

Challenges to social cohesion and approaches to policy reform.

Now, at the end of the 20th century, many OECD countries face serious problems in achieving both prosperity and social cohesion. One important - and sadly neglected - source of these problems are the very policy systems that are meant to address them. I will argue that these policy systems - including taxes and transfers, regulations governing employment, welfare services, and many more - are imparting a serious long-term imbalance to their host countries, by making these countries increasingly vulnerable to economic, social and political shocks. Although these policy systems were originally designed with the express aim to cushion citizens from these shocks and to provide security against a variety of uncertainties, their long-term effect is turning out to be the opposite of what was intended. This paper examines how and why this has happened and then turns to some important, recent economic developments that are likely to make this problem more serious in the future. Finally, it examines a strategy for economic policy reform that addresses the problem and thereby provides a means for achieving more favorable economic and social outcomes in the years ahead.Sozialer Wandel; Wirtschaftskrise; Wirtschaftspolitik; OECD-Staaten;

The incentive-compatible design of deposit insurance and bank failure resolution : concepts and country studies

Deposit insurance schemes and bank failure resolution systems are asked to fulfill conflicting public policy objectives: on the one hand, they are supposed to protect small depositors and prevent contagion risks from bank runs; on the other hand, they are supposed to minimize aggressive risk taking by banks. Beck discusses the incentive-compatible design and interaction of both components of the financial safety net and describes and compares three countries with different safety net arrangements-Brazil, Germany, and Russia.Banks&Banking Reform,Insurance&Risk Mitigation,Financial Intermediation,Financial Crisis Management&Restructuring,Payment Systems&Infrastructure,Financial Intermediation,Financial Crisis Management&Restructuring,Insurance&Risk Mitigation,Insurance Law,Banks&Banking Reform

Firm size, managerial practices and innovativeness: some evidence from Finnish manufacturing

In this study we use a survey data on 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between small and large firms, and between those firms that are operating in low-tech and high-tech industries. Our study indicates that there appear to be vast differences in the organizational practices leading to more innovation both between small and large firms, and between the firms that operate in high- and low-tech industries. While innovation in small firms benefits from the practices that enhance employee participation in decision-making, large firms that have more decentralized decision-making patterns do not seem to innovate more than those with a more bureaucratic decision-making structure. The most efficient incentive for innovation among the sampled companies seems to be the ownership of a firm's stocks by employees and/or managers. Performance based wages also relates positively to innovation, but only when it is combined with a systematic monitoring of the firm's performance.Innovation, firm size; organizational practices; HRM practices

Employee Share Ownership Plans: A Review

This paper reviews the main strands of research on employee share ownership over the last forty years. It considers research findings in the literature on types of share ownership, the incidence of share ownership plans, the ‘determinants’ of the use of share plans by companies, influences upon employee participation in share plans, the effect of share ownership on employee attitudes and behaviour, the effect on company performance, and the relationship between share ownership plans and other forms of employee participation. The paper does not provide a comprehensive review of the literature on these topics: instead it highlights the main findings that have emerged in the literature to date, and suggests some avenues for future research. It is suggested that majority worker ownership is different in character and effects from ‘mainstream’ minority employee share plans in large companies but the literature has tended to conflate the two. It is argued that future research needs to distinguish the various forms of employee share ownership if the impact of share ownership is to be more precisely calibrated

Modeling Routines and Organizational Learning. A Discussion of the State-of-the-Art

This paper presents a critical overview of some recent attempts at building formal models of organizations as information-processing and problem-solving entities. We distinguish between two classes of models according to the different objects of analysis. The first class includes models mainly addressing information processing and learning and analyzes the relations between the structure of information flows, learning patterns, and organizational performances. The second class focuses on the relationship between the division of cognitive labor and search processes in some problem-solving space, addressing more directly the notion of organizations as repositories of problem-solving knowledge. Here the objects of analysis are the problem-solving procedures which the organization embodies. The results begin to highlight important comparative properties regarding the impact on problem-solving efficiency and learning of different forms of hierarchical governance, the dangers of lock-in associated with specific forms of adaptive learning, the relative role of “online” vs. “offline” learning, the impact of the “cognitive maps” which organizations embody, the possible trade-offs between accuracy and speed of convergence associated with different “decomposition schemes”. We argue that these are important formal tools towards the development of a comparative institutional analysis addressing the distinct properties of different forms of organization and accumulation of knowledge.Division of labor, Mental models, Problem-solving, Problem decomposition.