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Understanding the process of mid-life career transition may help
employers keep their employees. |
| Considering a job change? You’re not
alone. Gone are the days of working through your entire career with
one organization. Today most Americans will change careers at some
point, and people between ages of 35 and 54 seem especially likely
to express their discontent with their current job by leaving it.
Employers are grappling with ways to keep these valuable workers,
who often have progressed to a mid-point in their careers and have
valuable skills and knowledge.
What drives mid-lifers to jump ship? Smith PhD student Holly Slay
developed a model that relies on a person’s sense of identity and
social networks to explain the thoughts and processes that lead
people to mid-life career transitions.
“A doctor may have a self-identity based on society’s perception
of what a physician should be: competent, concerned, able to help
others. If that physician is in an HMO
situation and feels that she isn’t able to provide good care to her
patients because of the structure of her HMO, then she may
experience an identity discrepancy. She says ‘That’s not who I am,’”
says Slay. At that point the physician may consider a career
transition.
Slay also found that who you know is as important as what you
know when it comes to making a career change. People with a more
diverse social network may consider a wider range of career choices
when it is time to make a change—from physician to chef, for
instance. And a person whose social network affirms their career
choice is less likely to leave the job at all.
Slay’s award-winning paper was co-authored by Ian Williamson,
assistant professor of management and organization, and Susan
Taylor, professor of management. |
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Foreign portfolio investment gives a big boost to small businesses,
at home and abroad. |
| Small firms represent 99 percent of all
businesses, employ half of those Americans who have jobs and create
two-thirds of the job openings in the United States. These
statistics are similar across the globe. Small firms are an
important driving factor for the global economy, but they experience
some significant roadblocks: lack of liquidity, an excessive
sensitivity to government regulation, difficulty in obtaining equity
capital, and size-bias from potential investors. Smith School PhD
candidate April M. Knill found that foreign portfolio investment has
a positive effect on small firms, which benefit from this infusion
of capital directly, through investments, or indirectly, through
bank lending.
“There is more of a trend toward
foreign portfolio investment among investors in developed nations.
As individual investors become savvier, they’re less frightened to
invest overseas,” says Knill. Improvements in a country’s foreign
investment environment in less-developed nations can help alleviate
financial constraints of both large and smaller firms. Knill
believes that easing foreign investment portfolio restrictions on
cash flows, stabilizing these investment cash flows and improving
the treatment of foreign companies and investors could have a
significant, positive influence on the lifetime of smaller firms.
Knill is advised by Vojislav Maksimov, Bank of America Professor
of Finance at Smith. |
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Smith’s PhD program is extremely rigorous,
with an emphasis on quantitative research underlying most
disciplines. One of the program’s benefits is the tremendous amount
of interaction students have with Smith’s world-class faculty.
Together they are producing award-winning research, just some of
which is featured on these pages. |
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Highly
reputable firms set the standard for voluntary disclosure. Many other
firms just follow the crowd.
Within a two-day period in July 2001, UAL Corp., AMR Corp., and
Northwest Airlines all released their capital expenditure plans. This
wave-like pattern of voluntary disclosure, known as “herding,” can also
be seen in companies’ disclosures of their revenue warnings and
accounting misstatements.
Firms are required to disclose information to shareholders,
regulatory agencies and the general public through mandated financial
reports and other regulated filings. But firms can also selectively
disclose information through news releases, shareholder meetings,
analyst presentations, and conference calls. Nerissa Brown, a Smith PhD
candidate in the accounting and information assurance department,
examined how firms in the same industry tend to herd in their timing of
capital expenditure forecasts.
Brown observed that a firm’s decision to release capital budgeting
information is strongly associated with the proportion of firms within
its industry that have already disclosed such information. As more firms
choose to voluntarily release information, the more pressure there is on
other firms in the same industry to follow suit.
A company’s reputation seems to affect the degree to which it chooses
to follow the crowd rather than set the standard. Brown found that less
reputable firms are more likely to herd on other firms’ disclosure
decisions.
Herding is a rational behavior, but it can lead to poor decisions if
a firm infers the wrong information or follows the bad choices made by
others. This may induce managers to disclose even when private signals
indicate that disclosure is not in the best interest of the firm, or it
can lead managers to withhold information even when private signals
suggest that disclosure is beneficial.
Brown is advised by Lawrence A. Gordon, Ernst & Young Alumni
Professor of Managerial Accounting and Russell Wermers, associate
professor of finance. |
