Editorial
It is my pleasure to bring you Volume 34, Issue 3, September 2022, of the journal, and to update you on the recent developments. To bring all readers up to speed, IIMB Management Review (IMR) is now a Gold Open Access journal, with the article processing charges (APC) borne by the Indian Institute of Management Bangalore (IIMB), on behalf of the authors. The digital version of the journal can be read and downloaded from ScienceDirect® - https://www.sciencedirect.com/journal/iimb-management-review - and is available free of cost. The print issue of the journal is being phased out and as of calendar year 2023, the journal will be brought out only in digital form, with free reader access to all published articles from ScienceDirect®. The print issue, however, will be available for subscription for the year 2022. Please visit https://www.journals.elsevier.com/iimb-management-review/ for more information about the journal.
Following is a brief introduction to the contents of this issue.
Akanksha Jaiswal, Lata Dyaram, and Naresh Khatri preface their paper with the social categorisation theory according to which demographic diversity is known to create social categories based on certain surface-level salient characteristics such as age and gender. Workforce diversity literature highlights adverse effects of surface diversity on employee affect, the adverse effects often being attributed to low levels of inclusion. Defining perceived surface diversity as employee’s perceived dissimilarity with others on demographic attributes, in “Interplay of diversity, inclusion, and politics: Impact on employee well-being”, the authors aim to address how the interplay of diversity and organisational politics influences employee inclusion and well-being. They focus on affect-related diversity effects, specifically, employee well-being, in the complex Indian social milieu. In their study, 617 employees were surveyed from organisations representing six industries in India. After ascertaining the measurement model fit using AMOS 22, PROCESS macro was used to test for moderated-mediation effects.
The study found that perception of organisational politics moderated the surface diversity–inclusion–well-being link such that inclusion was found to be weaker for employees who perceived high politics. The authors note that contemporary firms in India are embracing diversity actively and they mark the role of leadership in creating an environment of inclusion. The study findings underscore the importance of inclusion and well-being, and point out that leaders must demonstrate that the firm believes in enhancement of inclusion and not prevention of exclusion, in order to influence positive perception of inclusion. Further, organisations can harness value-in-diversity if they curtail organisational politics and promote inclusion and well-being towards upholding employee interests and organisational productivity. The study presents important implications for indigenous diversity research and practice.
Debolina Dutta, Sushanta Kumar Mishra, and Pawan Budhwar draw attention to employees’ ethical standards and competency and underscore the importance of a properly enforced code of conduct that could shape behaviour and have a powerful influence on organisations’ ethical choices. In this context, a competency framework that includes ethical behaviour as a competency could further reinforce and resolve ethical dilemmas and guide individuals on desired behaviours beyond the individuals’ core morals. Noting the absence of ethical competency in organisations’ competency models, they propose a framework that fosters ethical behaviour among the employees in their paper, “Ethics in competency models: A framework towards developing ethical behaviour in organisations”.
The authors conducted two separate studies with the heads of HR in Indian and South-East Asian organisations, adopting an explorative-qualitative empirical approach, involving in-depth and focus group interviews. They assessed the heads of HR functions’ views towards competency models, the role of ethics in organisations, ethical competency models (and their absence), and practices followed in their organisations to develop their employees’ ethical competency. Based on the analysis, the study found three broad challenges that hinder the assessment of ethical competency in organisations, these being the ideation challenge, the conceptual challenge, and implementation challenges. The proposed framework highlights the interactive and changing nature of organisational practices. According to this, an organisation’s stated values help attract the right applicant pool and help the recruitment and selection process factor in ethics. Leaders play a significant role in impacting the employees’ belief in the organisation’s stated values, thus providing the necessary push for implementing different processes. The practices, when followed, lead to the emergence of ethical context and subsequent ethical behaviour. Employees’ ethical behaviour, in turn, reinforces the organisational practices, and consequently, the organisation becomes ethical. Leadership is critical in fostering ethics in organisations as it can influence the processes and their alignment. The findings also argue in favour of bringing the employees back into the equation of HRM to foster ethical competence.
In “Impact of employment on newcomer’s values: Role of supervisor’s transformational leadership”, Zubin R. Mulla and Venkat R. Krishnan investigate the nature of changes in individual values, over time, with the individual joining an organisation during the start of his or her career. They conduct a series of three longitudinal studies, collecting data from three organisations. In the first study (at an engineering company), they considered the change in values as individuals made the transition from campus life to organisational life in a matter of just one month. In the second study (at a bank), they considered the change in values of individuals over a period of 18 months of on-the-job experience in their first job. In the third study (at an automobile manufacturer), they reviewed the impact of the immediate supervisor's transformational leadership on the newcomer's value system and newcomer–supervisor value system congruence.
The authors observe that during initial socialisation in an organisation, a newcomer’s values change such that the individual becomes more concerned with his or her own achievements and power rather than those of team members or the rest of the world. This process is reversed in case an individual has a reporting manager (supervisor) who displays transformational leadership. They find that transformational leaders change the values of their followers such that followers become more sympathetic of others' needs and less concerned with their own achievement or power. Also, when managers display transformational leadership, newcomers' values get more closely aligned to their manager's values. Normative as well as ipsative measures of values were used in the study.
The study demonstrates two important outcomes of transformational leadership: first, that transformational leadership leads to the moral development of followers; and second, that the purposes of leaders and followers become fused over time. Another important implication of this study is the role of the immediate supervisor in impacting the values of the newcomer. Thus, it follows that organisations must take care to allot newcomers under the supervision of those managers who embody the values of the organisation. Moreover, those managers must be trained in transformational leadership, so that they can effectively inspire and influence the newcomers.
In “Performance of volatility asset as hedge for investor’s portfolio against stress events: COVID-19 and the 2008 Financial Crisis”, Chinnaraja Chendurpandian and Piyush Pandey explore volatility as an asset class and focus on its hedging performance under stress events in the context of two black swan effects, i.e., the COVID-19 pandemic and the 2008 Financial Crisis. In their study, the authors explore the performance of different assets particularly during the stress events. The analysis evaluates the performance of different combinations of portfolio, with and without including the volatility asset. This would facilitate the investor in deciding on the minimal proportion of exposure to the volatility asset class as an insurance against extreme downside events.
Empirical results of the study indicate that with allocation of 5% of portfolio to volatility asset class, investors with different risk appetites were able to achieve a 10% expected return with reduced uncertainty. Moreover, the performance of a portfolio of equity, debt, commodity, and bitcoin can be matched or outperformed by a portfolio of equity, debt, and volatility asset class and with a smaller number of stocks under each category. Results of the performance of the volatility index, VIX, in stabilising portfolio returns under stress events indicates the effectiveness and importance of holding volatility as an asset class in avoiding market shortfalls by hedging downside risk. This conveys that a combination of equity, bond, and volatility asset class is sufficient to hedge against stress events. The empirical results of the study have implications for investors, traders, policymakers, and academia.
Ashutosh Ranjan, Sujit Gujar, and Vinay Ramani highlight the prevailing campus placement process which generally works on the principle that when a student gets a job, the student withdraws from the pool of remaining students who are unplaced and is no longer eligible to participate in the job market. To maximise the number of placements, colleges typically allow a student to appear for interviews only until he/she obtains a job offer. Under this mechanism, which the authors refer to as company-driven random serial dictatorship (CRSD), a student may get placed with a firm which may not be a highly preferred outcome for that student. In “Dynamic matching in campus placements: The benefits and affordability of the dream option”, the authors propose a new approach to improving student outcomes. They introduce the dream option that allows a student with a job offer to participate in the placement process again, and they analyse its impact on three different degrees of competition in the job market and compare it with the CRSD.
The idea is that with the use of the dream option, the student may be able to improve on his or her current placement and get a better match. The authors prescribe an algorithm that yields matched outcomes for the CRSD mechanism, with and without the dream option. The algorithm also computes the four measures of stability, rank efficiency, happiness index, and company dissatisfaction. The results show that under the various degrees of competitiveness of the job market and different student preferences, the dream option always improves stability, an important criterion for a match to be robust. However, the dream option under certain preferences and a high degree of job market competitiveness may negatively impact students’ happiness index and the rank efficiency. Nevertheless, imposing a particular structure on student preferences, namely the sequential preference condition, improves both student happiness and rank efficiency, regardless of job market competitiveness. The analysis recommends when to use the dream option and when not to use it.
In “An aggregate modelling approach to examine the role of technology in operant and operand resources for value creation”, Ming-Hsiung Hsiao investigates the dual role of technology in bridging the two different types of resources, operant resources (e.g., knowledge and competences) and operand resources (e.g., goods and services) from the service-dominant (S-D) logic. S-D logic argues that all actors, actor-to-actor, including firms and customers, integrate resources for service exchange. To distinguish the S-D logic from goods-dominant (G-D) logic, the study makes a comparison between the two with respect to economic science and market conceptualisation and then builds a research model for the impacting path of resources on value, based primarily on S-D logic. The study uses the structural equation modelling technique to capture the relationships between operant resources, operand resources, and technology. To test and verify the research model, aggregate data were collected by using proxy or substitute variables as observable variables (for instance real GDP in the primary sector) in representing latent or unobservable variables (e.g., operand resources). Each endogenous and exogenous variable was modelled by a system of equations that represented possible substitutions in terms of observable variables. The dataset was developed by gathering data from Taiwan’s national data sources, on a yearly basis, the span of data on the variables continuing from 1981 to 2018.
The estimation results show that operant resources have an effect on technology which in turn has an effect on operand resources, validating a dual role of technology for operant and operand resources in creating value for actors. In a sense, technology serves as a mediator in producing operand resources derived from the operant resources. Actors cannot gain value by using technology alone; however, if they can utilise operand resources with the aid of technology, they can derive the value created.
In “Identifying market power of retailers and processors: Evidence from coffee supply chain in India”, Tanushree Haldar and A. Damodaran address the subject of market power of intermediaries in the agriculture supply chain. The study identifies the presence or absence of market power of retailers and processors in the coffee industry in India using time-series data. The authors develop an imperfect competition model that allows for the potential oligopoly and/or oligopsony power of retailers and processors vis-á-vis adjacent stakeholders in the supply chain. They consider a vertical coffee supply chain where processors purchase the raw coffee beans from planters, process them to convert them into green coffee beans, and sell them to firms or retailers who in turn sell the roasted or powdered coffee to consumers. They use the auto regressive distributed lag approach to estimate the empirical model using monthly price data at the farm-gate, processor, and retail end for the period ranging from 2002 to 2019 for the two most commonly grown varieties of coffee, Arabica and Robusta.
The empirical results suggest that processors and retailers exercise oligopsony and oligopoly powers vis-á-vis farmers and consumers, respectively, for both the Arabica and Robusta varieties. The results support the existence of bilateral oligopoly power between processors and retailers of the Arabica variety of coffee, but no such market power was found to exist between processors and retailers in the case of Robusta variety. The paper highlights the existence of market power with processors in the coffee industry and this plays an important role in imperfect price transmission. Policymakers are continuously striving to bring competitiveness in the market and protect both producers and consumers from exploitation by various stakeholders in the supply chain. A crucial factor in introducing competitiveness is identification of market power. The paper provides a framework for identifying market power with various stakeholders in the supply chain.
The IMR Doctoral Conference 2023 is scheduled to be held on 3 & 4 February 2023 and we anticipate two days of paper presentations by doctoral scholars from leading institutions, and talks by eminent researchers, academics and practitioners. The conference will be held in physical mode at IIMB; we are also considering a limited hybrid model in order to facilitate the online participation of invited speakers, doctoral students, and delegates. We look forward to your participation in IMRDC 2023. For more details about IMRDC 2023 please visit: https://www.iimb.ac.in/imr-doctoral-conference
With best wishes,
Jishnu Hazra
Editor-in-Chief
IIMB Management Review
E-mail address: eic@iimb.ac.in