By Lidiane Cunha

Employee well-being policies

When it comes to attracting, developing and retaining valuable talent, organizations commit considerable time and resources to strengthening relationships with their employees. By investing in these relationships, many organizations hope to improve employee well-being.

One way of doing so is by developing well-being policies such as contracts with strong retirement benefits programs, financial programs and stock ownership. “Studies have shown that in today’s competitive markets, employee well-being policies enable firms to build viable relationships with their employees,” says Lamia Chourou, Associate Professor at the Telfer School of Management at the University of Ottawa. “Such policies may also give companies a competitive edge and higher financial performance,” she adds.

Connection between debt maturity and employee well-being policies

While research has shown a strong link between a company’s investment in talent and higher financial performance, little is known about the impact of employee well-being policies on debt maturity decisions. Debt maturity decisions are the choices companies make between long-term and short-time debt financing. As companies make important choices regarding debt maturity, does their commitment to employee well-being policies lead these firms to make long-term or short-term debt decisions?

This is one of the questions motivating Chourou and an international group of researchers. The team examined the impact of employee well-being policies on the debt maturity of over 19,000 firms based in the United States from the 1990s to the mid-2010s. The researchers found that:

• The involvement of a firm in employee well-being policies has a strong impact on the firm’s debt maturity. More specifically, firms with higher commitment to strong employee relationships prefer long-term over short-term debt.
• When companies choose long-term over short-term debt, they have access to more available liquid assets. As a result, these companies can be freer to honour their commitment to employee well-being policies.
• There is a stronger link between employee well-being policies and a firm’s debt maturity in human capital-intensive industries such as telecommunications, high tech and health care services.
• This connection may be more prevalent in firms with low employee membership in labour unions.

The authors shared these key results in an article entitled “Does employee welfare affect corporate debt maturity?” published in the European Management Journal.

Policy and practice implications

Chourou’s collaborative study provides new evidence on the role of employment policies and practices and their impact on firms’ debt maturity. As she explains:

“Our results suggest that human capital strategies and corporate finance are inevitably intertwined, and indicate that nonfinancial stakeholders, such as employees, constitute an essential link between the two.”

The connection between debt maturity and employee well-being policies should not be ignored. This is particularly important because, as the study suggests, firms committed to employee well-being policies have an incentive to use long-term debt.

Lamia Chourou is an Associate Professor at the Univeristy of Ottawa's Telfer School of Management. She is also a CPA Ontario Fellow. Her research focuses on capital markets and in particular corporate disclosure, financial reporting quality and analysts’ forecasts. 

By Lidiane Cunha

Digital transformation and the United Nations

Humanitarian and international organizations such as the United Nations (UN) have increasingly turned to digital technologies to innovate, a move that may also help them increase their social impact. In 2018, the UN launched a new strategy to promote the use of artificial intelligence, blockchain, and other digital technologies, hoping to improve the services delivered to millions of organizations and people around the world.

It is expected that by 2020, 40 out of 63 UN agencies will have set up and incorporated some of these digital platforms to rapidly implement the 2030 Sustainable Development Agenda. The agenda is an unprecedented call to action to protect the environment, eradicate poverty, and improve the lives of people across the globe.

However, it can be challenging to accelerate digital transformation in organizations that resist change. Managers and other internal stakeholders who take part of UN agencies often face complex administrative systems and slow decision-making processes. When negotiating the distribution of resources, these UN stakeholders may also experience tensions. Such challenges may have a negative impact on the proposed plans to scale up innovation initiatives at UN agencies. Can UN agencies embrace innovation by going digital like many other organizations have done? How can UN innovators streamline processes in these highly bureaucratic organizations and still manage the tensions that arise? And what can we learn from this transformative experience?

What’s this research about?

Saouré Kouamé, an Assistant Professor at the Telfer School of Management, has received an Insight Development grant from the Social Sciences and Humanities Research Council to answer some of these pressing questions. Kouamé will collaborate with researchers from Switzerland and Singapore. By examining these innovation practices at UN agencies, the research team hopes to:

• fast-track digital transformation in a UN organization that faces significant challenges to innovate
• identify best practices to accelerate digital transformation strategies in the decision-making and resource-allocation processes at humanitarian agencies
• contribute to the scientific discussion about social and inclusive innovation in the international community.

Project Title: In Search of Greater Social Impacts: The Challenge of Innovation in UN Agencies

Potential impact

“We believe this is a unique opportunity to understand the innovation process in a UN agency. Our research findings can also advance knowledge about how these leading organizations adopt digital technologies to address the world’s most pressing social problems,” explains Kouamé.

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Learn more about the Social Sciences and Humanities Research Council Insight Development Grants.

The research team will share their key findings with UN agencies based in Ottawa and Geneva, as well as government officials who collaborate with the UN. In doing so, the researchers will help Ottawa- and Geneva-based UN agencies improve their digital transformation processes. Kouamé’s findings will similarly help government officials better understand and support emerging innovation practices at UN agencies.

By Lidiane Cunha

Imprints

When stories about a company’s culture, strategy, and structure are deeply rooted in the company, they become imprints. As the company develops and grows, these imprints become guiding principles that inform and justify the decisions that managers make.

“We often borrow a term from biology to emphasize the significance of these narratives that become part of the company’s DNA,” explains Peter Jaskiewicz, University of Ottawa Research Chair of Enduing Entrepreneurship at the Telfer School of Management . “These guiding principles are usually introduced by the founder and continue to guide the company beyond the founder’s tenure for years to come,” he adds.

Sticking to one’s imprints can be positive, but what if economic turmoil, a war, or a worldwide pandemic suddenly forces a company to rethink its strategy and actions and, as a result, implement major changes? In many businesses, imprints can make organizational adaptation a big challenge.

Rewriting a Company’s History

When organizational leaders need to manage a company’s guiding principles, they often reinterpret their firm’s history. One way of accomplishing this is through what researchers call rhetorical narratives. In a company, managers may re-interpret the meaning of past decisions and behaviours. “Rhetorical narratives reflect the view that the meaning of a past behaviour can change over time,” says Professor Jaskiewicz. “The meaning of something from the past is not set in stone, but constantly evolves into our narratives or stories,” he adds.

To adjust to a changing reality, organizational leaders may intentionally select a part of the past that best suits their goals and needs in the present, ignore those aspects of the past that were inconvenient or unnecessary, or even completely modify their claims about what was decided in the past.

Perhaps one of the most infamous cases in history is Volkswagen. After World War II, the German automobile giant had to reinvent itself completely in order to survive in a new political and economic reality. This included fabricating a narrative for the company, one that erased its close connection with the Nazi government. Not all companies, however, will have such a dark past to forget.

A Study of Imprints: The Gallagher Group

As businesses change and evolve, the stories that define their culture, structure, and decisions evolve, too. An important question that shouldn’t be ignored is: How do managers adapt to the changing reality without betraying the principles upon which the company was founded? This is one of the questions that motivated Paresha N. Sinha (University of Waikato, New Zealand), Peter Jaskiewicz (University of Ottawa), and other international researchers to write an article titled: “Managing History: How New Zealand’s Gallagher Group Used Rhetorical Narratives to Reprioritize and Modify Imprinted Strategic Guideposts,” published in the Strategic Management Journal.

To understand how founders and subsequent generations of managers adapt their guiding principles in times of drastic change, the authors analyzed the case of New Zealand’s Gallagher Group. Bill Gallagher Senior founded the company in 1938 in Hamilton, New Zealand, to manufacture electric fences and farm machinery. The four imprints that guided the company’s strategic decisions were: pursue engineering ingenuity, take necessary risks, engage with partners, and learn from failure. As an example, the Gallagher Group emphasized their “engage with partners” principle by looking for a partner in every new market.

A Balance between Past and Present

In the 1970s, the company benefited from rapid international expansion and technological advances, and by the 1980s, the Gallagher Group was considered a global leader in electric fencing. Then, in the mid-1980s, the company was hit hard by a global recession. Professor Jaskiewicz explains that the founder retired, and non-family managers were hired to revitalize the business:

“By analysing the company’s history, my co-authors and I found that the new managerial team implemented drastic changes to increase efficiency. This was more aligned with the environmental and competitive pressures of the time. In doing so, however, they implemented strategic changes that violated the company’s guiding principles. These decisions led to tensions with employees, the owning family, and firm stakeholders.”  

In the late 1990s, the leading non-family managers left, and the founder’s son became the new CEO. By then, the company had survived the crisis and was ready to embrace its sidelined principles, which had made it successful before. Familiar with the company’s imprints, the family CEO selectively prioritized some of these principles and modified others to ensure that what the company had stood for could also match client expectations at the time. The company has experienced strong growth in new fields since then. Today, the Gallagher Group is a global leader in airport security systems.

Implications for Businesses Today

Jaskiewicz explains that changing organizational principles can be difficult for businesses, especially to those that face unprecedented challenges and need to act rapidly:

“Sometimes it can take a pandemic to force businesses to adjust to a very different reality, whether that means they need to adapt their decision-making strategies, culture, or structure to survive in a more digital and socially distanced world. During these times, organizational leaders should keep in mind that their guiding principles have been valuable but may not always align with the new reality. This requires them to make important choices, including revising their past principles for an impact in the future.”

Professor Jaskiewicz is a Full Professor and University Research Chair in Enduring Entrepreneurship at the Telfer School of Management. His research focuses on entrepreneurship and family business. Learn more about his work.

By Rania Nasrallah-Massaad

Shared mental models

Teamwork is now recognized as an essential means of improving services. In health care, collaborations among nurses, physicians, social workers, and other therapists working with patients and their families are common. They help optimize the patient experience. While diversity among team members improves decision-making and problem-solving, miscommunication and inefficiency can produce negative outcomes for the patient.

So called “shared mental models” can help teams understand their common goals and tasks and clearly define individual roles, reduce errors, and improve user experience. While interprofessional collaborations are encouraged and more commonly practiced in the health care sector, the extent to which teams make use of shared mental models to improve decision-making and service planning remains unclear. It is also unclear how an organization’s structure, much like its strategy, governance and funding, affects the use of shared mental models.

A better awareness of the benefits of shared mental models in teamwork and the decision-making process, and of the organizational features that favour their use, can result in more widespread model implementation to improve teamwork and services offered.

What is this research about?

Professor Agnes Grudniewicz received a Social Sciences and Humanities Research Council Insight Development Grant to study to what extent interprofessional teams use shared mental models and to what degree the structure of an organization influences their use by interprofessional teams. Her study will compare two types of primary care environments: the community health centre and the family health team. The two differ in their strategic efforts, governance and physician renumeration.

Project Title: Exploring the Relationship between Organizational Structures and Shared Mental Models in Inter­-Professional Teams: A Convergent Mixed Methods Study

Who will benefit from this research?

This work will offer theoretical and methodological insights to researchers on shared mental models in the health care industry, which can also apply to other industries. New knowledge will be gained on the relationship between organizational structures and shared mental models in interprofessional collaboration. The study will also offer practical recommendations for policymakers, managers and health care professionals to improve teamwork, thereby ameliorating the work experience for employees as well as their clients.

Learn more about the Social Sciences and Humanities Research Council Insight Development Grants.