The New Zealand productivity puzzle: A paradox or an issue of 'firm governance'

<p>New Zealand’s productivity under-performance, despite its good quality institutions, has remained a puzzling phenomenon. This topic has generated spirited debates among academia and public policy experts seeking to provide an answer to this age-old paradox. Solving ‘The New Zealand Productivity Puzzle’ is not a straightforward proposition. Previous studies in this area attempted to pin down the main determinants behind the extent to which New Zealand’s actual GDP per capita growth has undershot its predicted rates based on policy settings (Barnes et al., 2013). The recent New Zealand Productivity Commission (2014a) report shows the three key determinants accounting for such a gap are New Zealand’s weak international connections, low innovation and low managerial quality. This paper seeks to go further than merely highlighting the determinants (symptoms) of poor productivity performance in New Zealand, to the cause(s) of the problem by asking ‘why’ these key determinants (symptoms) of poor productivity performance occur. The analytical process of piecing together key results and findings (from available data, literature, and empirical studies) enables one to build a richer picture of New Zealand’s relatively poor productivity performance, to better understand the mechanism behind this puzzling phenomenon. The findings unraveled in this paper verify that this phenomenon is not paradoxical but simply an issue of firm/corporate governance. The sort of issues uncovered here is neither one of poor corporate governance in a conventional manner or an issue of managerial competency alone. Rather problems arise largely as a consequence of inappropriate incentives unintentionally generated by a certain ownership structure. This paper discusses how high ownership concentration associated with lower firm performance in New Zealand negatively affects managerial effectiveness by exacerbating the agency costs associated with managerial entrenchment. The paper shows that together New Zealand’s relatively lower managerial competency and managerial effectiveness associated with lower firm performance, can account for New Zealand’s lack of international connections, low innovation and low managerial quality, and thus potentially explain ‘The New Zealand Productivity Puzzle’.</p>

The New Zealand productivity puzzle: A paradox or an issue of 'firm governance'

<p>New Zealand’s productivity under-performance, despite its good quality institutions, has remained a puzzling phenomenon. This topic has generated spirited debates among academia and public policy experts seeking to provide an answer to this age-old paradox. Solving ‘The New Zealand Productivity Puzzle’ is not a straightforward proposition. Previous studies in this area attempted to pin down the main determinants behind the extent to which New Zealand’s actual GDP per capita growth has undershot its predicted rates based on policy settings (Barnes et al., 2013). The recent New Zealand Productivity Commission (2014a) report shows the three key determinants accounting for such a gap are New Zealand’s weak international connections, low innovation and low managerial quality. This paper seeks to go further than merely highlighting the determinants (symptoms) of poor productivity performance in New Zealand, to the cause(s) of the problem by asking ‘why’ these key determinants (symptoms) of poor productivity performance occur. The analytical process of piecing together key results and findings (from available data, literature, and empirical studies) enables one to build a richer picture of New Zealand’s relatively poor productivity performance, to better understand the mechanism behind this puzzling phenomenon. The findings unraveled in this paper verify that this phenomenon is not paradoxical but simply an issue of firm/corporate governance. The sort of issues uncovered here is neither one of poor corporate governance in a conventional manner or an issue of managerial competency alone. Rather problems arise largely as a consequence of inappropriate incentives unintentionally generated by a certain ownership structure. This paper discusses how high ownership concentration associated with lower firm performance in New Zealand negatively affects managerial effectiveness by exacerbating the agency costs associated with managerial entrenchment. The paper shows that together New Zealand’s relatively lower managerial competency and managerial effectiveness associated with lower firm performance, can account for New Zealand’s lack of international connections, low innovation and low managerial quality, and thus potentially explain ‘The New Zealand Productivity Puzzle’.</p>

Impact of Formal Educational Qualifications on the Assessment by IS Managers of Their Own Effectiveness

<p>This study seeks to contribute to a better understanding of what role, if any, tertiary formal education contributes to the effectiveness of IS managers. The research question guiding this study is ‘How does the possession or otherwise of formal educational qualifications impact on the assessment by IS managers of their own effectiveness?’ This is a qualitative research using an interview method that allows participants to provide contextual information to describe specific outcomes. A non-probability sampling technique is used with a quota sampling size of 12. The inclusion characteristics were to be an IS manager, employed in IS/IT/ICT department and to work in the Wellington region of New Zealand. The significant findings in this study is that all participating IS managers perceived that formal education positively contributed to their managerial effectiveness. They perceived that formal education helped them to improve or gain new skill and provided them with formal tools and frameworks that they utilised in their jobs. Sampling within other industries and larger random samples could be undertaken to see if this research has given results that are representative of the IS industry and its recognition of formal education.</p>

Impact of Formal Educational Qualifications on the Assessment by IS Managers of Their Own Effectiveness

<p>This study seeks to contribute to a better understanding of what role, if any, tertiary formal education contributes to the effectiveness of IS managers. The research question guiding this study is ‘How does the possession or otherwise of formal educational qualifications impact on the assessment by IS managers of their own effectiveness?’ This is a qualitative research using an interview method that allows participants to provide contextual information to describe specific outcomes. A non-probability sampling technique is used with a quota sampling size of 12. The inclusion characteristics were to be an IS manager, employed in IS/IT/ICT department and to work in the Wellington region of New Zealand. The significant findings in this study is that all participating IS managers perceived that formal education positively contributed to their managerial effectiveness. They perceived that formal education helped them to improve or gain new skill and provided them with formal tools and frameworks that they utilised in their jobs. Sampling within other industries and larger random samples could be undertaken to see if this research has given results that are representative of the IS industry and its recognition of formal education.</p>

Aligning organizational culture to enhance managerial effectiveness of academic leaders: an interface for employee engagement and retention

PurposeThe purpose of this paper is to measure the impact of organizational culture on managerial effectiveness of academic leaders to enhance employee engagement and retention in higher educational institutions. This study utilizes “Social Exchange Theory (SET)” as a theoretical lens to clarify the phenomena.Design/methodology/approachThis study uses an exploratory cum descriptive research design. Data collected via a structured questionnaire was analyzed and interpreted through structural equation modeling.FindingsOrganizational culture is found to have a significantly positive impact on managerial effectiveness. The findings also delineate a positive influence of managerial effectiveness on employee engagement and employee retention.Research limitations/implicationsThis study provides insights into the cultural neuances and subtleties of how organizational culture influences managerial effectiveness of institutional leaders. This has a direct bearing upon work engagement and retention of employees. Therefore if leaders focus on organizational culture they will succeed in creating a productive and healthier workplace for their employees. This study is also addressing the strategic concern of sustainability in higher educational institutions through employee engagement and retention.Originality/valueIt is an original work based on primary data to bridge the research gap concerning the prevalent OC shaping ME in Indian higher educational context. It also enriches understanding about alignment of cultural dimensions towards achieving work engagement, and retention of employees through managerial effectiveness of leaders in higher education institutions.

DETERMINANTS OF CREDIT RISK

This study aims to empirically examine the impact of managerial effectiveness on the credit risk of the Indian public and private sector banks. We consider the return on assets as a proxy for managerial effectiveness and gross non-performing assets (GNPA) to total advances as a proxy for credit risk. The study uses fixed effects and dynamic panel data models to examine the impact. The econometric model estimations suggest a negative impact of return on assets on credit risk. Further, we analyze the impact of return on assets by the information of microeconomic and macro-economic variables in dynamic generalized methods of moments (GMM) approach. The results remain the same after using dynamic GMM modelled with lagged credit risk and lagged return on assets. Further, the effect of macroeconomic variables such as repo rate and reverse repo rate confirms the theory. Heterogeneity checks at regions and sector levels substantiate the robustness of results. JEL Classification Codes: G20, G21.