Research highlights A summary of just a few of the research projects being undertaken at Henley Business School

Leadership, Organisations & BehaviourCities, firms, innovation and external partnersDr Maksim Belitski (Lecturer in Entrepreneurship)This study demonstrates that new firm formation and fast growing small and medium-sized enterprises (SMEs) are an important channel of innovation and idea commercialisation in cities. New firm start-ups are efficient in commercialising creativity in “specialised poles” (cities with an important role in the national economy) and “international hubs” (cities with an international reputation), while less efficient in “regional poles” (small to medium-sized cities that have an important place in their region).What is important for innovation in cities? Suppliers, customers, consultants and universities are major sources of innovation for firms. Not all external partners are equally important, e.g. for UK businesses, national and regional partners contribute more than European partners.

Exploring notions of leadership in South Africa and the African continentDr Bernd Vogel (Director, Henley Centre for Engaging Leadership), Dr Ana Graça (Postdoctoral Fellow in Leadership), Lebene Soga (PhD student in Leadership), Professor Jon Foster-Pedley (Dean of Henley Business School Africa) & Dr Adri Drotzki (MBA Director, Henley Business School Africa)Unique local insights into leadership and its practice in South Africa and the African continent are still scarce. This research explores leadership challenges from the perspective of 80 managers across the African continent. A glimpse at findings points to leadership as being multi-directional: a good number of managers see that leadership involves the many. A range of purposes of managers surfaced, but pursuing financial performance stood out. Respondents also called for the need to embrace diversity, maintain fairness and ethicality in leadership. The MBA emerged as a key education-related factor, among others, that promotes leadership learning.

The leadership knowing-doing gap: The fears of being a leader and transferring leadership knowledge into leadership actionDr Amal Ahmadi (Postdoctoral Fellow in Leadership)Organisations invest significantly more on building leadership knowledge than on transferring it into day-to-day leadership practice. As a result, leadership know-how is not always put into real action.This research uncovers the gap between knowing leadership and enacting leadership, i.e. the leadership knowing-doing gap. It finds how the fears of being a leader, e.g. fear of failure, fear of change, and fear of confrontation, may inhibit leadership enactment. It also finds specific conditions of the contexts in which leaders operate that may shape their fears and knowing-doing gaps, providing a wealth of recommendations to support the advancement of leadership capacity toward better performance in organisations.

Energising the squeezed middleProfessor Jane McKenzie (Professor of Management, Knowledge and Learning)No organisation can afford for middle managers to be passive, apathetic or resistant. Rather, they should inject energy and engagement into delivering business as usual at the same time as passion and persuasion in their role as change agents. This research shows that a middle manager’s answers to the question ‘who am I as a middle manager?’ has a direct bearing on levels of energy in their team: when middle managers conceive themselves as ‘leaders, with a voice that is heard’ their teams have significantly more productive energy than when they feel they are simply ‘officers with responsibilities for delivering results’, team players or express ambivalence about their role.

Partnering across silos to drive changeDr Sharon Varney (Director of the Henley Forum for Organisational Learning and Knowledge Strategies)Many organisations have formal hierarchies that allocate authority over resources to specific functions and specialist areas. Yet, in practice, much of the real work to deliver results comes from joined up working across the silos. Joining the dots and engaging others in collaborative responsibility for achieving a goal across authority boundaries is a bit like navigating through a constantly shifting maze. This research, in partnership with knowledge, learning and change practitioners from nine large organisations, distils experience into advice and guidance for finding, forming and performing in partnerships. It also offers practical tools to help you navigate successfully through the maze.

Marketing & ReputationCompulsive internet use and workaholismProfessor Nada Kakabadse (Head of Marketing and Reputation), Dr Cristina Quinonesa (Open University) & Dr Mark D Griffiths (Nottingham Trent University)People who work long hours and use their computers a great deal may look as if they are addicted to IT but in reality many are not. This study on compulsive internet use and workaholism identifies two forms of extreme working, working compulsively (i.e. being addicted to work) and working excessively. Compulsive internet use is only related to working compulsively. Both are self-driven irrespective of circumstances. Working excessively is down to the pressures at work. Continued durations of working excessively do not lead to compulsive work behaviours. Attention needs to be given to know how to deal with such compulsive behaviours.

Strategic behaviour of UK grocery multiples through the financial crisis (2006-2009) – When deadly sins align!Nadeem Khan (Lecturer in Governance, Policy and Leadership), Professor Andrew Kakabadse (Professor of Governance and Leadership) & Professor Nada Kakabadse (Head of Marketing and Reputation)This unique study engages Aristotle’s age-old virtues and vices to examine the strategic behaviour of UK grocery multiple firms within retailing environments. Hermeneutics (the theory and methodology of text interpretation) is applied to interpret multi-level published sources e.g. annual and industry reports. Sainsbury’s emerges as the virtuous firm; aggressive growth is a characteristic of Tesco; Morrison’s is conforming to corporatism; Co-op just survives. The firm that adapts most to governance principles is successful. Vice behaviours dominate the model and where they align crisis occurs. This research calls for stronger ethical underpinnings; broader purpose of the firm; longer term governance design and a shift towards ‘common-good’ above ‘self-interest’.

Building boards that can handle strategic tension: emerging evidence from UK corporate boardsFilipe Morais (PhD student), Professor Andrew Kakabadse (Professor of Governance and Leadership) & Professor Nada Kakabadse (Head of Marketing and Reputation)UK companies increasingly face strategic tensions that fundamentally threaten the company business model and competitive advantage. Interview-based research with FTSE companies’ CEOs and Chairmen reveals five practices that enable improved board effectiveness when handling strategic tensions: build integrative capability by selecting hybrid individuals (with experience and skills to contribute in an integrated manner, e.g. able to deal with growth and restructuring, or retail shops and online business); encourage non-executives to source independent information to uncover tension-generating topics; identify and regularly review strategic tensions and where competitive advantage lies; ensure board agendas overtly reflect strategic tensions facing the business; ensure the board meets informally to discuss current and developing strategic tensions.

Business Informatics, Systems & AccountingCEOs need architects to go digitalProfessor Sharm Manwani (Executive Professor of IT Leadership) & Dr Oliver Bossert (McKinsey & Company)This research explores the role of enterprise architecture (designing your IT infrastructure to ensure a culture of enterprise) in the digital age. Most CEOs know about disruptive digital technologies yet few engage their enterprise architects to redesign their organisations to compete. Going digital is not just adding a front-end web site. It means redesigning processes and IT to deliver new products and great customer experience while ensuring robust operations. The research found evidence that digital transformations can create even more complexity – hence the key role of architects. But how many CEOs know this? It is proposed that CEOs/CIOs raise the profile and business/interpersonal capability of their architects or their businesses will suffer.

The role of big data in governance: a regulatory and legal perspective of analytics in global financial servicesDr Daniel Gozman (Assistant Professor/Lecturer), Professor Wendy Currie (Audencia Nantes School of Management) & Dr Jonathan Seddon (Audencia Nantes School of Management)One feature of the post-crisis environment is an increasing focus on rules and regulations designed to protect a firm’s employees, customers and shareholders, as well as the economic wellbeing of the state in which the organisation resides. Another is the growth of analytics and data pertinent to the enforcement of such rules and laws. Practitioners and policy makers will be interested to learn that compliance analytics are not merely describing or reporting on regulated activities but also helping to shape them.

The invention process of the independent inventorDr Vaughan Michell (Director of the MSc in Business Technology Consulting)Invention research has focused mainly on industrial invention in large businesses with little work conducted on the process and capability required for the individual inventor or the capabilities required for a device to be considered an invention. This research synthesises the results of an empirical survey of ten inventors and their inventions to develop a model of the invention process of the independent inventor. It identifies eight key human capabilities required and the main tasks and skills necessary for successful invention of a new device. It also identifies the key elements of the new invention that characterise it as an invention.

Banking market competition and corporate innovationDr Liang Han (Associate Professor in Accounting and Financial Management)This research aims to examine how banking market competition affects corporate innovation, small business finance and syndicated loans, since the deregulation of banking markets in the 1990s. For example, clear evidence has been found on the favourable effects of banking competition on corporate innovation, such as the number of patents and citations, and small business liquidity. Banking competition is also found to enable innovative firms to adopt more ambitious innovation policies, have more flexibility to experiment with new technologies and have a wider impact with their innovation outputs.

International Business & StrategyResearch and development (R&D) offshoring and the productivity of European regionsProfessor Davide Castellani (Professor of International Business and Strategy)The recent increase in R&D offshoring has raised fears that knowledge and competitiveness in advanced countries may be at risk of ‘hollowing out’. However, research shows a positive correlation emerges between the extent of R&D offshoring and the home region productivity growth, supporting the idea that carrying out R&D abroad strengthens European competitiveness. This is because this process is also likely to allow some learning, access to knowledge located abroad, and reverse technology transfer, thus fostering growth at home.

The complexities of service offshoring Dr Kristin Brandl (Lecturer in International Business)The Indian offshoring service sector has gained an unprecedented interest from foreign firms. Interestingly, alongside standardised services, such as call centres and IT services, knowledge intensive and value-adding services, such as consulting, legal, financial or research related services, are increasingly offshored to India. However, the highly complex services that are strongly dependent on the (tacit) knowledge of highly educated experts, is much more challenging to geographically relocate. Issues regarding the quality of the services, the communication and contact between client and service provider as well as finding experts and securing the best knowledge, challenge these offshoring activities.

The international human resource management (HRM) strategy of multinational enterprises (MNEs) for managing global integration and local responsiveness simultaneouslyDr Chul Chung (Assistant Professor in International Human Resource Management)How do MNEs manage the dual pressures of global integration and local responsiveness simultaneously in their worldwide HR functions? A study of major South Korean and Japanese MNEs reveals that MNEs manage the dual pressures by pursuing multiple modes of integration and adaptation, namely: global cultural integration, global workforce integration, global HR capability integration, localisation of people, and local customisation of HRM practices. The study shows that an international HRM strategy can be best described as a juggling act, managing the seemingly contradictory demands simultaneously.

ICMA Centre (finance)The effects of corporate and country sustainability characteristics on the cost of debt: An international investigationDr Ioannis Oikonomou (Associate Professor of Finance), Dr Andreas Hoepner (Associate Professor of Finance), Bert Scholtens (University of Groningen & University of St Andrews) & Michael Schröder (SEW Mannheim & Frankfurt School of Finance and Management)Sustainability has become an important consideration in the corporate world in the last few years. But are banks influenced by it in determining the interest rates of borrowing firms? This was investigated for a global sample of loan agreements in 28 different countries and findings show that although firm sustainability does not seem to matter for banks, the social and environmental framework of the borrower’s domicile country does make a difference. Specifically, the stronger these frameworks are, the lower the cost of debt. The results demonstrate the importance of laws and regulations regarding the promotion of sustainable development around the world.

Red versus blue - Do political dimensions influence the investment preferences of state pension funds?Dr Andreas Hoepner (Associate Professor of Finance) & Lisa Schopohl (PhD student) What leads US public pension funds to consider non-financial factors like environmental, social and governance (ESG) issues when making investment decisions? Studying the equity holdings of 31 US state pension funds, research finds that funds from states with democratic-leaning members tilt their portfolios more strongly towards ESG companies and this tendency intensifies if the majority of the state government are democrats. As the funds neither under- nor outperform on their politically-motivated ESG holdings, their preferences are unlikely financially-driven. Thus, the political leaning of their members seems to be the main driver of their preference for ESG, with pressures by state politicians having a mediating effect.

Does corporate financial risk management add value? Evidence from cross-border mergers and acquisitions Dr Yeqin Zeng (Assistant Professor in Finance), Zhong Chen (Teaching Assistant in Finance) & Bo Han (Central Washington University)This paper studies the impact of corporate financial hedging on firm performance in cross-border mergers and acquisitions (M&A). Using a sample of 1,369 acquisitions announced by S&P 1500 firms between 2000 and 2014, strong evidence is found that financial derivatives users experience higher announcement returns than non-users, which translates into a $193.7 million shareholder gain for an average-sized acquirer. In addition, acquirers with hedging programmes have higher deal completion probabilities, longer deal completion time, and better long-term post-deal performance. Overall, research results provide new insights into a link between corporate financial hedging and firm performance.

Pension scheme redesign and wealth redistribution between the members and sponsor: The Universities Superannuation Scheme (USS) rule change in October 2011Professor Charles Sutcliffe (Professor of Finance) & Emmanouil Platanakis (Former PhD student)This is the first study to quantify the redistributive effects of a rule change by a real world scheme where the sponsor underwrites the pension promise. In October 2011 USS closed its final salary scheme to new members, opened a career average revalued earnings (CARE) section, and moved to ‘cap and share’ contribution rates. In October 2011 future members of USS lost 65% of their pension wealth

(roughly £100,000 per head), equivalent to a reduction of roughly 11% in their total compensation, while those aged over 57 years lost almost nothing. The sponsor’s wealth increased by about £32.5 billion, equivalent to a reduction of 26% in their pension costs.

Are macroeconomic density forecasts informative?Professor Michael P Clements (Professor of Econometrics)An analysis of a survey of US macro-forecasters casts doubt on whether it is possible to accurately forecast the changing uncertainty about the future as the economy evolves through time. Traditionally most macro-forecasts were of the most likely outcome. Recently the importance of giving an indication of the uncertainty about the central projection has been acknowledged. Density forecasts give a full description of the perceived likelihood of the variable taking on different future values. Density forecasts tell you all you need to know – but are macro-forecasters able to make meaningful statements of this sort about the future?

Real Estate & PlanningDevelopment viability appraisal researchProfessor Pete Wyatt (Professor of Real Estate Appraisal), Professor Neil Crosby (Professor of Real Estate) & Professor Pat McAllister (Professor of Real Estate)Financial viability appraisal of housing development schemes in planning has important implications for the delivery of social “goods” such as infrastructure and affordable housing by landowners. Local planning authorities set planning policies on an area wide basis, but ultimately development proposals require consent on a site specific basis. Using data from a range of national sites, this research demonstrates that development viability appraisal is being practiced within a poorly specified and flawed modelling framework within the UK. This impacts on the delivery of social goods required by communities and, ultimately, government planning policy.

Neighbourhood planning (NP) researchProfessor Gavin Parker (Professor of Planning Studies)Neighbourhood planning can help empower communities to play a stronger role in shaping the areas in which they live and work; it enables them to set out a shared vision for how they wish their communities to develop over time. Recent and ongoing research evaluates the uptake of neighbourhood planning (2011-2016), the aspects that have been working well, as well as defining areas where change is needed. For example, there is a disparity in the types of communities using this tool, and difficulties in producing timely high quality plans within neighbourhoods.

Unravelling liquidity in international commercial real estate marketsDr Steven Devaney (Associate Professor of Real Estate) & Dr Anupam Nanda (Associate Professor in Real Estate Economics)Liquidity is a multidimensional concept and generally defined as the ease of buying or selling an asset. Commercial real estate markets are often seen as “illiquid”. Transaction timing and costs, and the ability to sell without affecting the asset price are examples of how liquidity can impact investment markets. This research has found that internationally, markets do differ in their transaction times, costs and processes. Transaction volumes and indicators of the quality of real estate market institutions are strongly associated with city-specific pricing (relative to a benchmark city). Different transaction methods and brokerage arrangements are used in different markets.