Forum - The Stern review: implications for construction

The SternReview(2006) on the economics of climate change has changed the ground onwhich arguments over climate change are fought. In making the economic case for mitigation over adaptation, Stern has sought to undermine one of the primary arguments against decisive early action - that the immediate costs outweigh the long-term benefits. While this argument is made at the global level, it is appropriate to ask what implications Stern's arguments might have at the construction sectoral level. The implications of the Stern Review for construction can be divided into three main questions. How construction would be different if Stern's economics were applied? How would construction companies act differently if Stern's ethics were adopted? How will the political response to the Stern Review change construction's policy and regulatory landscape? The impact of the Review has shifted the debate from the natural science community into the public policy domain and onto an economic rationale. There seems to have been a pronounced shift away from the debate over the science and towards the economics of mitigation versus adaptation. In this context, the academic debate over Stern's methods is irrelevant - it is his findings, authority and use of the hegemonic power of economic argument that carry the day. This is likely to be Stern's true legacy, and through this will come his greatest impact on construction.

Local development companies and the regeneration of Britain's cities

Efforts to decentralise the pursuit of economic and social development have increased in recent years. The authors examine the rationale for establishing local development companies in areas of high unemployment and deprivation. The broad purpose is to establish a new style of organisation that combines attributes of the public and private sectors-to adapt and integrate economic and social services to meet local needs, to champion local interests in external arenas, and to act as enabling agents to promote local investment and development. These arguments are elaborated and illustrated with reference to one of Britain's most successful local development companies, Govan Initiative. The analysis reveals important strengths of the Initiative, including its action orientation, commitment to quality, and a local leadership role, but also certain weaknesses including its limited leverage over wider policies and resource flows. Local development companies need meaningful commitment from regional and national public organisations to fulfil their potential.

Explaining deviations from NAV in UK property companies: rationality and sentimentality

One of the most vexing issues for analysts and managers of property companies across Europe has been the existence and persistence of deviations of Net Asset Values of property companies from their market capitalisation. The issue has clear links to similar discounts and premiums in closed-end funds. The closed end fund puzzle is regarded as an important unsolved problem in financial economics undermining theories of market efficiency and the Law of One Price. Consequently, it has generated a huge body of research. Although it can be tempting to focus on the particular inefficiencies of real estate markets in attempting to explain deviations from NAV, the closed end fund discount puzzle indicates that divergences between underlying asset values and market capitalisation are not a ‘pure’ real estate phenomenon. When examining potential explanations, two recurring factors stand out in the closed end fund literature as often undermining the economic rationale for a discount – the existence of premiums and cross-sectional and periodic fluctuations in the level of discount/premium. These need to be borne in mind when considering potential explanations for real estate markets. There are two approaches to investigating the discount to net asset value in closed-end funds: the ‘rational’ approach and the ‘noise trader’ or ‘sentiment’ approach. The ‘rational’ approach hypothesizes the discount to net asset value as being the result of company specific factors relating to such factors as management quality, tax liability and the type of stocks held by the fund. Despite the intuitive appeal of the ‘rational’ approach to closed-end fund discounts the studies have not successfully explained the variance in closed-end fund discounts or why the discount to net asset value in closed-end funds varies so much over time. The variation over time in the average sector discount is not only a feature of closed-end funds but also property companies. This paper analyses changes in the deviations from NAV for UK property companies between 2000 and 2003. The paper present a new way to study the phenomenon ‘cleaning’ the gearing effect by introducing a new way of calculating the discount itself. We call it “ungeared discount”. It is calculated by assuming that a firm issues new equity to repurchase outstanding debt without any variation on asset side. In this way discount does not depend on an accounting effect and the analysis should better explain the effect of other independent variables.

Climate change policy and business climate strategies: EU cement companies' response to climate change and barriers against action

The paper provides a descriptive analysis of the carbon management activities of the cement industry in Europe based on a study involving the four largest producers of cement in the world. Based on this analysis, the paper explores the relationship between managerial perception and strategy with particular focus on the impact of government regulation and competitive dynamics. The research is based on extensive documentary analysis and in-depth interviews with senior managers from the four companies who have been responsible for and/or involved in the development of climate change strategies. We find that whilst the cement industry has embraced climate change and the need for action, their remains much scope for action in their carbon management activities with current effort concentration on hedging practices and win-win efficiency programs. Managers perceive that inadequate and unfavourable regulatory structure is the key barrier against more action to achieve emission reduction within the industry. EU Cement companies are also shifting their CO2 emissions to less developed countries of the South.

The roles and competencies of HR managers in Slovenian multinational companies

Purpose – The HRM literature provides various typologies of the HR managers’ roles in organizations. The purpose of this paper is to examine how the roles and required competencies of HR managers in Slovenian multinational companies change when these companies enter the international arena. Design/methodology/approach – The authors explored the total population of 25 Slovenian multinational companies (MNCs) operating in Serbia. In these companies the authors conducted interviews with 16 expatriates working in branches in Serbia, sent questionnaires to the CEOs, and conducted a survey of 50 HR managers and interviews with 15 of them. The authors used a triangulation approach and analyzed the results by multivariate methods and content analysis. Findings – The authors found that the complexity of HR managers’ roles, and expectations of their competencies, increases with an increasing level of internationalization of companies. Orientation to people and conflict resolution are seen as elementary competencies needed in all stages of internationalization. The key competence is seen to be strategic thinking that, according to CEOs and expatriates, goes hand in hand with cultural sensitivity, openness to change and a comprehensive understanding of the international environment and business processes. Practical implications – These results can potentially be used for assessing the HRM roles and competencies in different stages of company internationalization, especially MNCs operating in the ex-communist states of Europe, and will help HR managers to support expatriates, CEOs and other employees working in branches abroad more efficiently. Originality/value – This study contributes to the review and evaluation of the quite limited research on HR managers’ roles and competencies in MNCs. It focuses on MNCs and outward internationalization in the Central and Eastern European region. It contributes to studies of the HR managers’ roles and competencies and is the first study to establish a set of roles and competencies for HR managers in Slovenian MNCs.