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.

Financial implications for companies running standby generators in support of a smart grid

Integrating renewable energy into built environments requires additional attention to the balancing of supply and demand due to their intermittent nature. Demand Side Response (DSR) has the potential to make money for organisations as well as support the System Operator as the generation mix changes. There is an opportunity to increase the use of existing technologies in order to manage demand. Company-owned standby generators are a rarely used resource; their maintenance schedule often accounts for a majority of their running hours. DSR encompasses a range of technologies and organisations; Sustainability First (2012) suggest that the System Operator (SO), energy supply companies, Distribution Network Operators (DNOs), Aggregators and Customers all stand to benefit from DSR. It is therefore important to consider impact of DSR measures to each of these stakeholders. This paper assesses the financial implications of organisations using existing standby generation equipment for DSR in order to avoid peak electricity charges. It concludes that under the current GB electricity pricing structure, there are several regions where running diesel generators at peak times is financially beneficial to organisations. Issues such as fuel costs, Carbon Reduction Commitment (CRC) charges, maintenance costs and electricity prices are discussed.

Is there a gold social seal? The financial effects of additions to and deletions from social stock indices

This study investigates the financial effects of additions to and deletions from the most well-known social stock index: the MSCI KLD 400. Our study makes use of the unique setting that index reconstitution provides and allows us to bypass possible issues of endogeneity that commonly plague empirical studies of the link between corporate social and financial performance. By examining not only short-term returns but also trading activity, earnings per share, and long-term performance of stocks that are involved in these events, we bring forward evidence of a ‘social index effect’ where unethical transgressions are penalized more heavily than responsibility is rewarded. We find that the addition of a stock to the index does not lead to material changes in its market price, whereas deletions are accompanied by negative cumulative abnormal returns. Trading volumes for deleted stocks are significantly increased on the event date, while the operational performances of the respective firms deteriorate after their deletion from the social index.

The determinants and effects of board nomination committees

This article assesses the corporate governance-related antecedents of nomination committee adoption, and the impact of nomination committees’ existence and their composition on board independence and board demographic diversity. We conducted a longitudinal study of board composition amongst 210 Swiss public companies from January 2001 through December 2003, a period during which the Swiss (Stock) Exchange (SWX) introduced new corporate governance-related disclosure guidelines. We find firms with nomination committees are more likely to have a higher number of independent and foreign directors, but not more likely to have a higher number of female board members. Further, the existence of nomination committees is associated with a higher degree of nationality diversity but is not related to board educational diversity. We also find that nomination committee composition matters in the nomination of independent and foreign, but not of female directors. Our results suggest that understanding different board roles and composition require a multi-theoretical approach, and that agency theory, resource-dependence theory and group effectiveness theory help to explain different aspects of board composition and effectiveness. Finally, the article discusses the concept of diversity and appropriate ways to study diversity in a boardroom context.

Speculative bubbles and the cross-sectional variation in stock returns

Evidence suggests that rational, periodically collapsing speculative bubbles may be pervasive in stock markets globally, but there is no research that considers them at the individual stock level. In this study we develop and test an empirical asset pricing model that allows for speculative bubbles to affect stock returns. We show that stocks incorporating larger bubbles yield higher returns. The bubble deviation, at the stock level as opposed to the industry or market level, is a priced source of risk that is separate from the standard market risk, size and value factors. We demonstrate that much of the common variation in stock returns that can be attributable to market risk is due to the co-movement of bubbles rather than being driven by fundamentals.

The long-run performance of IPOs: the case of the Stock Exchange of Mauritius

This study examines the long-run performance of initial public offerings on the Stock Exchange of Mauritius (SEM). The results show that the 3-year equally weighted cumulative adjusted returns average −16.5%. The magnitude of this underperformance is consistent with most reported studies in different developed and emerging markets. Based on multivariate regression models, firms with small issues and higher ex ante financial strength seem on average to experience greater long-run underperformance, supporting the divergence of opinion and overreaction hypotheses. On the other hand, Mauritian firms do not on average time their offerings to lower cost of capital and as such, there seems to be limited support for the windows of opportunity hypothesis.

Multinational companies and productivity spillovers: is there a specification error?

Recent empirical works on the within-sector impact of inward investments on domestic firms’ productivity have found rather robust evidence of no (or even negative) effects. We suggest that, among other reasons, a specification error might explain some of these results. A more general specification, which includes the usual one as a special case, is proposed. Using data on Italian manufacturing firms in 1992–2000, we find positive externalities only once we allow for the more flexible specification.

Do investors care about corporate tax?

This paper conducts a comprehensive examination of the link between corporation tax payment and financial performance in the UK. We find no discernible link between tax rates and stock returns for the UK, no matter how tax payment is measured. This is true throughout the sample period and for both customer-facing and non-customer-facing companies. However, allowing for industry norms and a host of firm characteristics, companies with lower effective tax rates have significantly higher levels of stock market risk. Firms that are reported in the newspapers in a negative way in relation to their level of corporation tax payment experience small negative stock returns, which are partially reversed within a month. However, the initial negative effects and subsequent rebound are both more pronounced for smaller companies. News announcements of the potential involvement of a firm in a corporate inversion (expatriation) result in steeper and much longer-lasting falls in share prices, whereas news stories of a more general nature relating to a firm's tax avoidance or tax payments have little noticeable effect.

Reining in excessive risk-taking by executives: the effect of accountability

Performance-contingent compensation by means of stock options may induce risk-taking in agents that is excessive from the point of view of the company or the shareholders. We test whether increasing shareholder control may be an effective checking mechanism to rein in such excessive risk-taking. We thus tell one group of experimental CEOs that they may have to justify their decision-making processes in front of their shareholders. This indeed reduces risk-taking and increases the performance of the companies they manage. Implications are discussed.

Institutional investors: arbitrageurs or rational trend chasers?

This paper studies the relationship between institutional investor holdings and stock misvaluation in the U.S. between 1980 and 2010. I find that institutional investors overweigh overvalued and underweigh undervalued stocks in their portfolio, taking the market portfolio as a benchmark. Cross-sectionally, institutional investors hold more overvalued stocks than undervalued stocks. The time-series studies also show that institutional ownership of overvalued portfolios increases as the portfolios' degree of overvaluation. As an investment strategy, institutional investors' ride of stock misvaluation is neither driven by the fund flows from individual investors into institutions, nor industry-specific. Consistent with the agency problem explanation, investment companies and independent investment advisors have a higher tendency to ride stock misvaluation than other institutions. There is weak evidence that institutional investors make positive profit by riding stock misvaluation. My findings challenge the models that view individual investors as noise traders and disregard the role of institutional investors in stock market misvaluation.