Does Doing Badly Encourage Management Innovation?

Nickell, Stephen; Nicolitsas, Daphne; Patterson, Malcolm

doi:10.1111/1468-0084.00207

Cited by 89 publications

(69 citation statements)

References 7 publications

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“…In contrast, we can conclude that firms offering incentive systems in addition to organizational changes seem to face clear productivity gaps. This finding is in accordance with the results in Nickell, Nicolitsas and Patterson (2001) who show that establishments change their organizational structure thoroughly when they are in economic troubles.…”

supporting

confidence: 92%

“…Dearden, Reed and Van Reenen (2000) and Zwick (2002b) show for example that firms introduce additional training measures when they face a temporary negative demand shock. In addition, Nickell, Nicolitsas and Patterson (2001) conclude that firms introduce organizational changes when they are in economic troubles. The introduction of HWP-measures is therefore no exogenous determinant in the production function (Griliches and Mairesse, 1995).…”

Section: Methodological Remarks On the Empirical Analysis Of Productimentioning

confidence: 94%

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Reassessing the Impact of High Performance Workplaces

Wolf

Zwick

2003

SSRN Journal

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0207.pdf Non-technical summaryInnovative personnel measures that increase involvement, qualification and motivation of (non-managerial) employees (so-called high performance workplaces or just HPW) were extolled as an efficient means to increase firm productivity. The theoretical literature further stresses the complementarities between these measures. In practice, it is however noticeable that some measures, such as profit sharing or employee share ownership have been adopted by a small minority of firms. Despite the supposed complementarities, only very few firms use the full set of measures or combinations of some measures. Some authors point to the fact that extensive organizational changes or incentive contracts may not necessarily provide the expected results, but may even impair employee satisfaction and hence firms' performance. Other reasons for the finding that the incidence of high performance workplaces is smaller than the theoretical literature suggests could be the high implementation costs, employee resistance against innovations and last but not least small and uncertain productivity effects.The empirical evidence on the productivity effects of HPW is not clear either. While a couple of papers find significant and durable positive effects of HPW on productivity, several studies are rather sceptical about the productivity impacts. The differences between the results may be due to measurement problems, limited and deliberately chosen samples of firms, and the fact that most studies analyse different sets of personnel measures. We show that unobserved heterogeneity among firms and endogeneity of the management practices may affect the conclusions substantially. While unobserved heterogeneity is corrected for in several studies, the endogeneity problem is ignored in most analyses. The vast majority of the empirical studies on the productivity effects of HPW refers to Anglo-Saxon countries, whereas the evidence for Germany is very scarce.The original contribution of our paper is that we simultaneously account for both unobserved heterogeneity and endogeneity using representative and very detailed establishment panel data for Germany from 1996 to 2000. We find that firms often introduce specific related bundles of individual HPW measures. One common set of measures includes the reduction of hierarchies and the introduction of team-work and independent work groups (denoted here as "organizational changes"). The other (some...

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supporting

confidence: 92%

Section: Methodological Remarks On the Empirical Analysis Of Productimentioning

confidence: 94%

Reassessing the Impact of High Performance Workplaces

Wolf

Zwick

2003

SSRN Journal

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“…So far, the empirical evidence has been ambiguous. Some scholars find a positive relationship between industry downturns and innovation activities (Nickell et al, 2001, process innovation only), others find non-existent associations (McGahan and Silverman, 2001;Saint-Paul, 1993), while still other researchers argue that positive business or industry fluctuations trigger innovation activities (Geroski and Walters, 1995).…”

Section: Introductionmentioning

confidence: 99%

The influence of industry downturns on the propensity of product versus process innovation

Berchicci¹,

Tucci²,

Zazzara³

2013

Industrial and Corporate Change

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“…Column 3 shows that the implications for innovation can both be positive and negative. With few exceptions (Nickell et al, 2001;Francois and Lloyd-Ellis, 2008), the procyclicality of R&D and innovation has been observed over various business cycles and for a variety of countries (e.g. Griliches, 1990;Broda and Weinstein, 2010;Barlevy, 2002Barlevy, , 2007Comin and Gertler, 2006;Fatas, 2000;Francois and Lloyd-Ellis, 2008;Rafferty, 2003;Walde and Woitek, 2004).…”

Section: What To Expect Of Innovation As a Results Of The Crises?mentioning

confidence: 99%

Innovation in the crisis and beyond

2012

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Innovation in the crisis and beyond This chapter provides an overview of the impact of the global financial and public debt crises on innovation. The global financial crisis negatively affected business innovation and R&D. Enterprise creation seems not to have recovered and business bankruptcies have increased significantly. The chapter shows substantial differences in performance across countries, sectors, businesses and types of innovation. Future trends in innovation in most developed countries are uncertain. In particular, long-term damages to innovation systems occur when long-term skilled unemployment rises and public support of innovation is weakened. Finally, many countries have implemented policies to respond to the crisis that include innovation, although budgetary constraints have put pressure on governmental support of innovation.The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. 2. Emerging countries in Asia, including Korea and China, have used the opportunity to demonstrate their strengths in innovation. They continue to outperform developed countries, relying on structural strengths that helped them face the crisis. The crisis has also rewarded large high-technology innovating firms; markets for these innovations will continue to be strong.3. The crisis revealed the pre-crisis weaknesses of some countries (e.g. Greece and some southern and eastern European countries), sectors (e.g. the automobile sector) and types of innovations (e.g. financial innovations). Future prospects for innovation in these countries and industries will greatly depend on broader economic restructuring, which does not place innovation at the top of the immediate policy agenda although innovation will have to play a role in driving growth in the future. Many OECD countries (northern Europe, Japan and the United States) have recoveredsomewhat. Their future innovation performance remains uncertain; it will depend on macroeconomic conditions but also on their ability to maintain innovation as a policy priority.5. To date there is no evidence of a reallocation of resources towards more innovative businesses. While there have been more bankruptcies than before the crisis, new business entry has also been significantly depressed. Venture capital investment, which can help support entry of innovative firms, has yet to recover to its pre-crisis level.6. Uncertainties over market conditions in the currently unstable global macroeconomic situation have inhibited investment in innovation. Large companies and banks are engaged in a process of deleveraging and hoarding that is detrimental to all types of investment, including innovation. Financing constraints have also increased but are not the main explanation to date for the weakening of innovation activities. Experimenting further with these...

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Does Doing Badly Encourage Management Innovation?

Cited by 89 publications

References 7 publications

Reassessing the Impact of High Performance Workplaces

Reassessing the Impact of High Performance Workplaces

The influence of industry downturns on the propensity of product versus process innovation

Innovation in the crisis and beyond

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