Integrating diversity management initiatives with strategic human resource management

Managing diversity is usually viewed in broad conceptual terms as recognising and valuing differences among people; it is directed towards achieving organisational outcomes and reflects management practices adopted to improve the effectiveness of people management in organisations (Kramar 2001; Erwee, Palamara & Maguire 2000). The purpose of the chapter is to examine the debate on how diversity management initiatives can be integrated with strategic human resource management (SHRM), and how SHRM is linked to organisational strategy. Part of this debate considers to what extent processes associated with managing diversity are an integral part of the strategic vision of management. However, there is no consensus on how a corporate strategic plan influences or is influenced by SHRM, and how the latter integrates diversity management as a key component. The first section of the chapter addresses the controversy about organisations as linear, steady state entities or as dynamic, complex and fluid entities. This controversy fuels debate in the subsequent sections about the impact that such paradigms have on approaches to SHRM. The discussion on SHRM in this chapter will explore its links to corporate strategy as well as to diversity management. Subsequent sections propose that managing diversity should address sensitive topics such as gender, race and ethnicity. Finally, attention is given to whether an integrative approach to SHRM can be achieved and how to overcome the obstacles to making this a reality

Professional doctorates and DBAs in Australia: dilemmas and opportunities to innovate

The aims of this paper are to a) share information about the focus, aims, structure and examination criteria of the Doctor of Business Education (DBA) programs in Australian universities, b) clarify current dilemmas in terms of program delivery when instituting and managing such programs and c) identify opportunities to collaborate between Australian and American universities to share insights about best practices in the management of DBA program

Regulating short-sales

Short-selling, the practice of selling a security the seller does not own, is done in an attempt to profit from an expected decline in the price of the security. During the recent financial turmoil, many press accounts blamed short-selling for declines in stock prices and even for the collapse of some firms. In "Regulating Short-Sales," Ronel Elul discusses the issue of short-selling. He notes that research has shown that short-selling plays a valuable role in setting accurate prices for securities but that it can also be used to facilitate market manipulation. This latter consideration may provide justification for restricting short-sales under certain circumstances.

The economics of asset securitization

Ronel Elul explains why asset-backed securities exist and discusses some reasons for their common structure. Elul notes that despite well-developed theories on the what and why of securitization, more research is needed. In particular, additional research could uncover the effect that government regulation and bankruptcy law have on securitization.Asset-backed financing

Securitization and mortgage default

The academic literature, the popular press, and policymakers have all debated securitization's contribution to the poor performance of mortgages originated in the run-up to the recent crisis. Theoretical arguments have been advanced on both sides, but the lack of suitable data has made it difficult to assess them empirically. The author examines this issue by using a loan-level data set from LPS Analytics, covering approximately two-thirds of the mortgages originated in 2005 and 2006, and including both securitized and nonsecuritized loans. ; The author finds evidence that privately securitized loans do indeed perform worse than observably similar, nonsecuritized loans. Moreover, this effect is strongest in prime mortgage markets, which have not been studied in the previous literature. For example, a typical prime loan becomes delinquent at a 20 percent higher rate if it is privately securitized, ceteris paribus. This is consistent with the existence of adverse selection; that is, that lenders used information not available to investors to securitize loans that were riskier than they otherwise appeared. By contrast, for subprime mortgages, the impact of private securitization is concentrated in low or no-documentation loans; this latter result is consistent with previous work such as Keys et al. (2009).Mortgage-backed securities ; Default (Finance)

Liquidity crises

Financial markets have experienced several episodes of “liquidity crises” over the past 20 years. One prominent example is the collapse of the Long Term Capital Management hedge fund in 1998. The recent market disruption brought about by the downturn in subprime mortgages also shares many features with liquidity crises. What is liquidity? Why does it sometimes seem that the market’s supply of it is insufficient? Can anything be done about it? In “Liquidity Crises,” Ronel Elul outlines some theories of market liquidity provision, how it breaks down in times of crisis, and some possible government responses.Liquidity (Economics)

What have we learned about mortgage default?

By the end of 2009, one out of every 11 mortgages was seriously delinquent or in foreclosure. Economists have devoted considerable energy over the past several years to understanding the underlying causes of this increase in defaults. One goal is to provide a guide to dealing with the existing problems. In addition, a better understanding may help avoid future problems. In “What Have We Learned About Mortgage Default?” Ronel Elul reviews recent research that has shed light on two areas: the extent to which securitization is responsible for the increase in default rates; and the relative contributions of negative equity, compared with “liquidity shocks,” in explaining mortgage default.Mortgage loans ; Default (Finance)

Collateral, credit history, and the financial decelerator

The author develops a simple model in which financial imperfections can serve to stabilize aggregate fluctuations and not merely aggravate them as in much of the previous literature; the author terms this a financial decelerator. In the model agents borrow to purchase housing and secure their loans with this long-lived asset. There are two financial imperfections in this model. First, agents are unable to commit to repay their loans — that is, they can strategically default. This limits the amount that lenders are willing to offer. In addition, however, lenders are also imperfectly informed as to a borrower’s propensity to default; that is, there is adverse selection. The latter imperfection implies that default may actually occur in equilibrium, unlike in much of the previous literature. For relatively high house prices the commitment problem ensures that the equilibrium is typically characterized by a standard financial accelerator; that is, the borrowing constraints which prevent default become tighter as falling prices reduce the wealth with which agents can collateralize future loans, thereby exacerbating aggregate fluctuations. However, Elul shows that when prices are very low, agents will default, which serves as a stabilizing force; he terms this a financial decelerator. ; Also issued as Payment Cards Center Discussion Paper No. 05-14Credit ; Default (Finance)

Diversity management in Australian companies: complicance or conviction?

[Abstract]: The perceptions of managers regarding diversity management in a sample of Australian companies was measured by a Diversity Survey adapted from Gardenswartz & Rowe (1993). The survey measures 277 managers’ perceptions on symptoms of diversity related problems; openness to change of a company; the valuing and management of diversity in the companies; organisational barriers to diversity; individual attitudes towards diversity and organisational practices and policies. The majority of companies are primarily in the monocultural phase of evolution towards diversity sensitive workplace and need to be quicker to implement change initiatives such as diversity management. Companies in the multicultural phase and non-discriminatory stages of evolution are more open to change. Many individual managers indicate that they recognise and value diversity and are eager to redesign policies and practices to more effectively harness diversit

Bankruptcy: Is It Enough to Forgive or Must we Also Forget?

In many countries, lenders are not permitted to use information about past defaults after a specified period of time has elapsed. We model this provision and determine conditions under which it is optimal. We develop a model in which entrepreneurs must repeatedly seek external funds to finance a sequence of risky projects under conditions of both adverse selection and moral hazard. We show that forgetting a default makes incentives worse, ex-ante, because it reduces the punishment for failure. However, following a default it is generally good to forget, because by improving an entrepreneur’s reputation, forgetting increases the incentive to exert effort to preserve this reputation. Our key result is that if agents are sufficiently patient, and low effort is not too inefficient, then the optimal law would prescribe some amount of forgetting — that is, it would not permit lenders to fully utilize past information. We also argue that forgetting must be the outcome of a regulatory intervention by the government — no lender would willingly agree to ignore information available to him.Bankruptcy, Information, Incentives, Fresh Start