Martin Larraza-Kintana

Socioemotional Wealth and Corporate Responses to Institutional Pressures: Do Family-Controlled Firms Pollute Less?

This paper compares the environmental performance of family and nonfamily public corporations between 1998 and 2002, using a sample of 194 U.S. firms required to report their emissions. We found that family-controlled public firms protect their socioemotional wealth by having a better environmental performance than their nonfamily counterparts, particularly at the local level, and that for the nonfamily firms, stock ownership by the chief executive officer (CEO) has a negative environmental impact. We also found that the positive effect of family ownership on environmental performance persists independently of whether the CEO is a family member or serves both as CEO and board chair.

THE DETERMINANTS OF EXECUTIVE COMPENSATION IN FAMILY-CONTROLLED PUBLIC CORPORATIONS

Little previous research has focused on the CEOs salary in family-controlled public firms. This lack is addressed by comparing and contrasting the executive compensation contracts of family-member CEOs and non-family CEOs. Data gathered during the years 1995 through 1998 from 253 randomly selected family-controlled public firms was analyzed. Professional managers with no family ties to firm owners were found to be compensated at a higher rate than executives with family ties. This relative pay disadvantage increases as the family ownership position improves (which depresses the pay of the family CEO) and R&D investments increase (which improve the pay of the professional CEO but not the family CEO). On the other hand, family ties protect a CEO from bearing excessive personal risk, as indicated by a greater compensation premium, as uncontrollable (systematic) business risk increases. These findings point to a complex company dynamic: when family-member CEOs are in charge, altruistic motives exist that often result in risk protection for the CEOs personal income rather than in higher pay for these executives. (SFL)

Are Family Firms Really More Socially Responsible

This paper conducts an empirical study as to whether family firms are more socially responsible than their nonfamily counterparts and explores the conditions in which this difference in social behavior occurs. We argue that family firms, given their socioemotional wealth bias, have a positive effect on social dimensions linked to external stakeholders, yet have a negative impact on internal social dimensions. Thus, family firms can be socially responsible and irresponsible at the same time. We also suggest that institutional and organizational conditions act as catalysts in the relationship between firm type and corporate social responsibility (CSR). General support for our thesis that family firms neglect internal social dimensions came from the study of a sample of 598 listed European firms over a period of 4 years. Moreover, while national standards and industry conditions influence the degree of CSR in nonfamily firms, these factors do not affect family firms. However, family firms’ social activities are more sensitive to declining organizational performance.

Manufacturing flexibility and advanced human resource management practices

This article analyses the connection between the use of advanced human resource management (HRM) practices, individually and as a system, with manufacturing flexibility. The results show a positive relationship between the implementation of advanced HRM practices and manufacturing flexibility. While most of the advanced HRM practices analysed show higher levels of implementation in flexible firms, no differences are observed in training efforts. Flexible firms are more prone to implement systems of advanced HRM practices.

The Relationship between New Work Practices and Employee Effort

In the context of the debate about the effectiveness of implementing new work practices, such as job rotation, teamwork and enhancing job autonomy, this article analyses their relationship with different dimensions of workers’ effort. Using two different but complementary data sets, our study reveals that in general these new work practices are associated to greater voluntary and involuntary mental effort, with a weaker link with involuntary physical effort. Besides this general trend our study also shows that different practices play different roles in different dimensions of employee effort.

Human and organizational capital: typologies among Spanish firms

This paper uses survey data on 965 Spanish manufacturing firms to examine the implementation of innovative management practices and the relationship of this with the organization of work and human resource management. The paper takes into account transformations in technology, quality management and the organization of work. Using cluster analysis, we identify the different paths that firms are following in order to improve their performance, finding that simultaneous transformations in several dimensions lead to greater success than partial transformation, or none at all.

Do Entrepreneurial Role Models Influence the Nascent Entrepreneurial Activity of Immigrants

This paper examines how the influence of entrepreneurial role models in the individuals decision to become a nascent entrepreneur is moderated by their sociocultural fit. By looking at the entrepreneurial activity of immigrants, the paper proposes that, because of their lower sociocultural fit, immigrants are less likely to be influenced in their entrepreneurial activity by past and present entrepreneurs in the region where they live compared with the native population. Using a large database of 28,306 individuals in 50 panish provinces, the results confirm our hypothesis. The moderating effect of cultural distance and time of residence is also analyzed.

Publicly Funded Prestart Support for New Firms: Who Demands it and How it Affects Their Employment Growth

We examine prestart determinants of the demand for publicly funded external support to new ventures. We also investigate the effects of different types of such support on subsequent firm growth. Adopting resource-based and information asymmetry approaches, we argue that the entrepreneurs who ask for publicly funded prestart support are more likely to face information asymmetries with regard to resource providers, which in turn depend on their level of human and social capital. We also suggest that intangible support oriented towards knowledge generation would be the most beneficial. A series of two-stage treatment effects models applied to a representative sample of new firms in Navarra (Spain) offer considerable support to our predictions. Implications for research and policy are discussed.

Compensation framing and the risk‐taking behavior of the CEO: Testing the influence of alternative reference points

Purpose – This paper seeks to analyze how compensation framing influences the risk‐taking behavior of the firms chief executive officer (CEO), and the mediating role played by risk bearing.Design/methodology/approach – The study employs a sample of 108 US firms that issued an initial public offering in 1993, 1994 and 1995. Data from a survey filled out by the CEO of the firm are completed with secondary information. A structural equation model is estimated which explicitly considers the mediating effect of risk bearing on the compensation framing‐risk taking relationship.Findings – The analyses indicate that while the performance targets included in the CEOs compensation contract indirectly influence the riskiness of the CEOs strategic decisions through its influence on the employment risk component of executive risk bearing, the level of compensation relative to peers does not. It shows that not all reference points are equally relevant in determining the CEOs willingness to take risk, nor do all the...

Disentangling the relationship between high-involvement-work-systems and job satisfaction

Purpose – The purpose of this paper is to study how high-involvement work systems (HIWS) affect job satisfaction, and tries to disentangle the mechanisms through which the effect occurs. Design/methodology/approach – The authors use data for a representative sample of 10,112 Spanish employees. In order to test the mediation mechanism implied by the hypotheses, the authors follow the procedure outlined in Baron and Kenny (1986). Given the nature of the dependent variables, ordered probit models were estimated to study the effect of HIWS on the mediating variables (job interest, effort and wages), and regression models were estimated to analyze the effect of HIWS on the final attitudinal variable (job satisfaction). Findings – Empirical results show that HIWS results in higher levels of effort, higher wages and perceptions of a more interesting job. Moreover, greater involuntary physical effort reduces job satisfaction while higher wages, greater voluntary effort, involuntary mental effort and having an int...