João Amaro de Matos

Towards an Organizational Model of Attitude Change

Building on the growing literature that views organizations as complex adaptive systems, this paper proposes a general model to analyze the relationship between organizational context and attitudes. In particular, we focus on how the system of formal and informal communication channels that characterize an organization and the timing of information flows affect the dynamic process of attitude change. We also use a stylized version of the model to illustrate how the general framework is able to generate insights that are relevant to particular situations.

Sustainability and Organizational Change

There is no bigger challenge for organizational change management in the contemporary world than achieving greater sustainability. Challenges associated with sustainable development are multifaceted, including criteria pertaining to the delivery of environmental, social, ethical and economic results. Creating sustainable value requires companies to address issues that relate to pollution and waste, created by industrialization, to respond in a transparent manner to the challenges increasingly raised by civil society, namely NGOs, to invest in emerging technologies that provide innovative solutions to many of today’s environmental problems and to respond effectively to the challenges of increased poverty and inequality around the globe. On the other hand, to create shareholder value, managers must focus not only on cost reduction and risk control but also on fostering innovation, enhancing corporate reputation within external stakeholders and establishing a credible growth path for the future. The need for sustainable development is the major organizational change that contemporary businesses face. For almost the entire trajectory of industrial organizations its material basis has been dependent on the exploitation of nature with consequent external effects, such as the despoliation of nature. Only in recent times has this major organizational change begun to percolate into business organizations’ strategies and those of governments. That such organizational change is recognized to be both major and transcendent can be seen in the increased attention several different institutions, such as the European Union (EU), now pay to issues of sustainability. The EU developed the strategy for ‘Europe 2020’, Journal of Change Management, 2013 Vol. 13, No. 4, 382–386, http://dx.doi.org/10.1080/14697017.2013.851912

On the value of European options on a stock paying a discrete dividend

Purpose – The purpose of this paper is to present an arbitrarily accurate approximation for the value of European options written on a Black‐Scholes stock paying a discrete dividend.Design/methodology/approach – The proposed method is a computational method for the analytical solution of the problem.Findings – It was found that the proposed method is computationally faster than any other exact computational available method, including Monte‐Carlo simulations.Research limitations/implications – The method is applied for a single dividend payment, but can be extended for several payments. The exact amount of the dividend must be known ex‐ante, as well as the precise date of payment.Practical implications – The paper provides the most efficient way to compute with absolute precision the value of European options on dividend‐paying assets, under the Black‐Scholes assumption.Originality/value – The computing time in the approach is several orders of magnitude faster than with traditional Monte Carlo methods, f...

The Manager as Change Agent : Communication Channels, Timing of Information, and Attitude Change

To the extent that attitudes influence behavior, the object of aligning organizational goals and individual behavior translates into a problem of alignment of attitudes. This article proposes a deductive model to analyze how the organizational context affects a top managers ability to disseminate a given attitude through the organization. We consider two elements of organizational context: (1) the system of formal and informal communication channels that characterize an organization, and (2) the timing of information flows. More specifically, this article focuses on the situations where the top manager is a strong change agent, whose attitude does not change as a result of the interaction with other organization members. Our results suggest that the organizational structure, the timing of information flows, and the prevailing configuration of attitudes are all intervening variables when it comes to the selection of the best approach to organizational change.

MARKET POWER AND FEEDBACK EFFECTS FROM HEDGING DERIVATIVES

In this paper we model how the transaction of derivatives affects the price process of the underlying asset, considering the existence of a few agents with market power and a population of liquidity traders. This setting generates an equilibrium bid-ask spread for the underlying asset. The resulting feedback effect of hedging strategies is shown to depend on what type of agent more actively hedges. We also characterize how the feedback effect is lessened as the number of market-makers increases.

MSM Estimators of European Options on Assets with Jumps

This paper shows that, under some regularity conditions, the method of simulated moments estimator of European option pricing models developed by Bossaerts and Hillion (1993) can be extended to the case where the prices of the underlying asset follow Levy processes, which allow for jumps, with no losses on their asymptotic properties, still allowing for the joint test of the model.

Debt, Information Asymmetry and Bankers on Board

We provide evidence that the presence of bankers in the board of directors reduce information asymmetry between credit markets and firms. We show that the impact of the presence of bankers on leverage is driven by firms with low level of debt. This effect is amplified the more connected the bankers are to the corporate world. Additionally the results are more pronounced for less transparent firms. Our findings suggest that the connectedness of bankers play a key role in reducing information asymmetry.

Conflicts of Interest in the Underwriting of IPOs and Price Stabilization

Banks that supply capital and simultaneously underwrite securities for the same clients may benefit themselves or their clients at the expenses of investors by overpricing securities. We investigate this issue by analyzing price stabilization and short-term returns of IPOs. Our analysis suggests that equity-conflicted underwriters overprice IPOs and use price stabilization to disguise overpricing. The same does not happen with loan-conflicted underwriters. We also show that the partial adjustment phenomenon may result from price stabilization, since it disappears after the stabilization is over. JEL codes: G24

Conflict of Interest in Universal Banking and Price Stabilization in IPOs

We investigate the effect of conflict of interest in universal banking on the price stabilization in IPOs and their short-term returns. We find that loan-based conflict increases the probability of the issue being stabilized but not on the intensity of the stabilization. We do not find evidence that loan based conflict do not bear consequences on pricing. Equity-based conflict increases the probability of the issue being fully overalloted and being stabilized, and increases the intensity of the stabilization. Equity-conflicted IPOs do not underperform non-stabilized ones during the stabilization period. For the post-stabilization period, returns on equity-conflicted IPOs are 8-9% lower than on non-conflicted ones. Evidence suggests that underwriters use price stabilization to disguise such overpricing. This has policy implication because it shows that universal banks can behave opportunistically and harm investors when there is opportunity for it. We also contribute to the price stabilization literature by showing that the three decisions involved in price stabilization (overallotment, repurchase of share and intensity of repurchase) has distinct determinants.

Investment in Education and Strategic Asset Allocation

This work analyzes the optimal allocation of assets over the life cycle of an investor who has the option to invest in his education. We characterize the optimal spending rule for education, and compare the optimal asset allocation of such investors with the optimal portfolios of investors with no extra education. In particular, we are able to describe how the criteria for investing in risky assets change through time as investors acquire additional education. Our main findings are as follows. Investors undergoing the educational process tend to invest proportionally more in risky assets during that period than other investors. After the educational period investments in the risky asset usually decrease. In the working period after the investment in education a negative covariance between the working income and the returns of the risky asset induces the proportional investment of educated agents in the risky asset to be larger than the proportional investment of non-educated agents. For positive covariance, as it increases, the proportion of wealth invested in the risky asset decreases for both agents. Finally, in the retirement period the investments of people who invested in education earlier are not distinguishable from those of non-educated.