Recent Issues

Vol.22/2 (2016, December)
Testing Human Relations Hypothesis of the Hawthorne Studies
Author JEONG-YEON LEE
Keywords Hawthorne studies, social facilitation, social learning process, human relations, time series analysis
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Employing the method of time series analysis, this paper analyzes data obtained from the Hawthorne experiment from the perspective of human relations. Although previous studies adopted statistical tools to analyze the “first relay” experiments, direct inclusion of “human relations” variables was absent. The study includes “human relations” variables that suggest social facilitation and social learning process in the statistical analysis. Unlike previous studies, the direct inclusion of such variables resulted in the support for the human relations hypothesis.
Vol.22/2 (2016, December)
Which Performance Feedback Triggers Problemistic and Institutional Search in the Semiconductor Industry? Profit vs. Growth
Author SOO YON HAN, KYUNG MIN PARK
Keywords R&D intensity; performance aspiration; problemistic search; institutional search
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This paper investigates; first, the impact of profit and growth aspirations in triggering problemistic search; second, the existence of institutional or imitational search; and third, the influence of performance aspirations on institutional search in the global semiconductor industry. The empirical results show that the growth aspiration is a more significant performance measure affecting R&D intensity and the strong institutional search behavior is also evident in our research setting. The institutional search behavior is found to be strengthened by poor growth but weakened by low profit, suggesting a shift of attention between aspiration and survival when imitating others in R&D investment.
Vol.22/1 (2016, June)
Leader’s Role in Fostering Creativity:The Creativity Creation Model at KT AIT
Author SEONGWUK MOON, JAEHO SHIN, HONGSUK YANG, JAMES WON-KI HONG
Keywords creativity creation model, leadership, innovation performance
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To achieve innovation, constraints that block the effect of a company’s creative culture on innovation and creativity in the organization have to be removed. We propose the creativity creation model that takes account of these constraints and suggest that, to cultivate an innovative climate,
Vol.22/1 (2016, June)
Top Managers’ Political Conservatism and External Governance Choices
Author JONGSUB LEE, KWANG J. LEE
Keywords CEO political conservatism, corporate governance conservatism, external governance choices, entrenchment discount, G Index, E Index, staggered board, limits to amend bylaws, supermajority JEL Classification: G34
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We develop a theory of corporate governance conservatism that reflects the preference of politically conservative chief executive officers (CEOs) for stability and continuity in corporate governance provisions without managerial entrenchment. Our theory suggests that conservative CEOs tend to prefer corporate governance provisions against hostile takeover and drastic board turnover, but their emphasis on hard work and self-discipline are likely to lead them to run their firms more efficiently with less debt. Using a sample of 2,339 U.S. corporations in the 1996-2006 period, we find strong empirical support for this new theory. Firms with Republican CEOs, who are known to be politically conservative, are more likely to stagger the terms and elections of directors, limit shareholders’ ability to amend corporate bylaws and require supermajority for approval of mergers, but those CEOs are not associated with a significant impairment in shareholders’ value. Rather, we find firms run by Republican CEOs tend to have higher return on assets and lower leverage, consistent with the results documented by Hutton, Jiang, and Kumar (2014). Overall, our theory and empirical results highlight an important spillover effect of top managers’
Vol.22/1 (2016, June)
Why Do Some Asset Pricing Models Perform Poorly? Evidence from Irrationality, Transaction Costs, and Missing Factors
Author JOON CHAE, CHEOL-WON YANG
Keywords Asset Pricing Model; Transaction Cost; Investor irrationality; Missing Risk Factor; Fama and MacBeth (1973) Regression.
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We identify and horse race three causes for the underperformance of some asset pricing models: investor irrationality, transaction costs, and missing risk factors. Specifically, we regress the difference of realized over expected returns (pricing error) per various asset pricing models onto proxies for the reasons for explanatory breakdown. First, for the capital asset pricing model (CAPM) and six other models we find that both investor irrationality and transaction costs are significantly related to the pricing error controlling for firm size and valuation. Second, models with more risk factors than the CAPM cannot overcome the shortcoming of the CAPM due to investor irrationality and transaction costs. In conclusion, transaction costs and investor irrationality are shown to be impediments to enhancing
Vol.21/2 (2015, December)
The Hierarchy Myopia of Organizational Learning
Author NAMGYOO K. PARK, KIRA CHOI, JINJU LEE
Keywords myopia of learning, hierarchy, organizational learning performance
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Previous studies have been interested in how to maximize both the efficiency and the effectiveness of organizational learning. On the flipside, some studies have investigated the critical barriers to learning. We suggest organizational hierarchy as another cause and theoretically explore how it can deter learning performance. Specifically, we argue that the configuration of structure determines a prevalent form of learning method in an organization to consequently affect its learning performance. Using simulation modeling, we show that non-hierarchical organizations may be a better learning environment than hierarchical organizations. We also show that the contextual factors, such as problem complexity and member regrouping, may affect the base-line result. This study subsequently calls for further attention be paid to the key issues concerning the hierarchy and organization learning performance.
Vol.21/2 (2015, December)
Does Emotional Intelligence Matter in Interpersonal Processes? The Mediating Role of Emotion Management
Author JIN NAM CHOI, GOO HYEOK CHUNG, SUN YOUNG SUNG, ARIF NAZIR BUTT, MOATAZ SOLIMAN, JIN WOOK CHANG
Keywords emotional intelligence, emotion management, interpersonal behavior, negotiation
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Researchers have identified emotional intelligence (EI) as an important individual characteristic that predicts interpersonal effectiveness. In this study, we identified three potential areas of emotion management (emotion expression, emotion recognition, and shaping counterpart emotion) that may be promoted by intrapersonal and interpersonal EI, and may mediate the effects of EI on interpersonal process and outcomes. Our analysis of data from a dyadic negotiation simulation indicates that EI predicts one aspect of emotion management (shaping counterpart emotion). Intrapersonal EI (but not interpersonal EI) increased counterpart positive emotion and decreased counterpart negative emotion during the negotiation simulation. Nevertheless, the overall relationship between EI and emotion management was weak. The present study highlighted the need for clearly conceptualizing and investigating emotional management through which individuals accrue interpersonal and performance benefits.
Vol.21/2 (2015, December)
Impact of Controlling Shareholders on Corporate Social Responsibility under External Financial Constraints
Author HEE SUB BYUN, JI HYE LEE, KYUNG SUH PARK
Keywords controlling shareholders, conflict of interest, corporate social responsibility, external financial constraints, Korea
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This study examines the relationship between the ownership of controlling shareholders and corporate social responsibility in Korea under external financial constraints. Empirical results show that a negative relationship is observed only in firms with fewer external financial constraints, while it is weaker or disappears for firms with more financial constraints. We obtain similar results when we use the level of environmental management as a proxy for corporate social responsibility. These results confirm that external financial constraints act as a monitoring mechanism and mitigate the agency problem of controlling shareholders.
Vol.21/1 (2015, June)
The Chicken Game and the Amplified Semiconductor Cycle: The Evolution of the DRAM Industry from 2006 to 2014
Author JEHO LEE
Keywords Cycle, DRAM, Technology, Innovation
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Industry fluctuations in the supply of DRAM chips relative to demand have been characterized by what is called “the silicon cycle.” In the period between 2006 and 2008, the DRAM industry experienced an unusually sharp transition from a shortage of DRAM products to an extreme oversupply, culminating with the crash of DRAM prices in 2008. The industry’s overcapacity was preceded by a mad race to expand capacity; this race has been dubbed as the “chicken game” in the media. Even in the time of plunging DRAM prices, players preferred not to reduce their output. The amplified industry cycle accelerated the exit of financially vulnerable firms. I argue that the combination of the amplification of cycle and rising entry barriers fosters the transition of an industry to an oligopoly, in which cyclicality is curbed and the positions of market leaders are solidified.
Vol.21/1 (2015, June)
Costing Rule and Cost Behavior in the Korean Defense Industry
Author HONG-JUNG YONG, TAE-SIK AHN, HYUNG-ROK JUNG, JIN-HA PARK
Keywords cost stickiness, labor costs, defense industry, commercial sector, defense sector
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This paper investigates the cost behavior in the Korean defense industry. Managers in the defense industry tend to have motivation to manage earnings because the costs incurring in the production process of defense articles are reimbursed based on cost plus contracts. Results are as follows. First, in the sample of the defense sector, SG&A costs and total manufacturing costs exhibited anti-stickiness whereas labor costs exhibited cost stickiness. Other cost components displayed symmetric cost behavior. Next, in the commercial sector, material costs, direct material costs, total manufacturing costs, cost of goods sold, and total costs exhibited antistickiness. Labor costs showed cost stickiness whereas SG&A costs, overhead costs, and indirect production costs had symmetric cost behavior. Overall, the results reveals that the change rate of labor costs of the defense sector exhibits more cost stickiness to changes in sales than the commercial sector.
Seoul Journal of Business
ISSN 1226-9816 (Print)
ISSN 2713-6213 (Online)