Generating Solutions for Society
Public Pension Contract Minimalism
American Business Law Journal, November 2024
The national pension debt and COVID crises have collided. Post-pandemic economic decline has escalated existing financial strains on state and local pension plans, impacting workers and the public welfare. With unfunded obligations exceeding one trillion dollars, many of these plans are in jeopardy. But the movement to reform government pension contracts has yet to adopt an anchoring idea, leaving judicial decisions in disarray and policymakers without guidance about how to shore up troubled retirement systems. The crux of the problem is the many meanings of contract under state and U.S. Contract Clauses that prevent pension reform. This Essay endorses a promising path forward—contract minimalism. “Contract minimalism” concentrates on the duration of government pension contracts. It posits that public and private employment law should be treated the same. Like its private law counterpart, public sector employment at-will ought to consist of a daily contract interval. A contract-a-day concept entitles employers to change the plan prospectively, with employees receiving a proportionate share of benefits for work performed. Just as several agreements safeguard salaries for labor, they should also mirror the protection afforded to deferred benefits like pensions. Contract minimalism additionally puts public and private sector employers on the same legal footing as to the authority to change pension plan terms. Thus, it aligns public pension benefits with overlapping fields of law, placing them on a firm conceptual foundation. The minimalist approach also has the advantage over approaches that are insufficiently attentive to scarce government resources or employee old-age security. By protecting pension benefits early and incrementally, it advances a middle path with fairer, more coherent results. In the present post-pandemic era of hard choices, minimalism provides an equilibrium between the over and under-protection of pension benefits.
T. Leigh Anenson, Professor of Business Law, University of Maryland and Hannah R. Weiser, Assistant Professor of Law, Bentley University
Seductive Language for Narcissists in Job Postings
Management Science
Prior research indicates that narcissistic executives engage in earnings management and other negative organizational behaviors, and many studies ponder why firms hire such individuals, especially into corporate accounting positions. Utilizing a selection of terms from real-world job postings that we characterize as either describing a “Rule-Bender” or “Rule-Follower" candidate, we first conduct several validation studies which reveal that these terms vary predictably across types of job postings, that people generally agree with our categorization of these terms, and that Rule-Benders are viewed as possessing worse managerial skills but a higher proclivity for unethical behavior. We then demonstrate that narcissistic job seekers are more attracted to job postings that describe the ideal candidate using Rule-Bender terms for both general positions (Experiment 1) and senior accounting positions (Experiment 2). Finally, we examine firm characteristics that might lead professional recruiters to incorporate Rule-Bender language into Chief Accounting Officer job postings and find that Rule-Bender terms are preferred for higher-growth, higher-innovation firms (Experiment 3), and when more aggressive reporting would benefit the firm (Experiment 4). Our results suggest that recruiters’ language choices can attract Rule-Bending narcissists to firms, perhaps even in unintended circumstances.
Jonathan Gay (University of Mississippi), Scott Jackson (University of South Carolina), Nick Seybert (University of Maryland)
The Theory-Based View and Strategic Pivots: The Effects of Theorization and Experimentation on the Type and Nature of Pivots
Strategy Science
We examine how formalization in cognitive processes (theorization) and evidence evaluation (experimentation) influence the type (frequency and radicalness) and nature (impetus, clarity, and coherence) of entrepreneurial pivots. We use a mixed-method research design to analyze rich data from over 1,600 interviews with 261 entrepreneurs within a randomized control trial in London. A quantitative analysis that complements human-coded and machine learning-coded measures reveals that conditional on pivoting, theorization and experimentation are complementary in their association with making single radical pivots. The extensive qualitative-case comparison further elucidates interactions between theorization and experimentation that generate differences in the nature of pivots that range from purposeful (clear and coherent rationale deriving from articulated theory and experimentation), postulatory (informed by articulated theory but not incorporating nuances or surprises generated from experimentation), and remedial (stemming from adjustments to preformed theories that drew on prior experiences) to reactive (driven by environmental stimuli absent a clear theory of value). These insights contribute to the theory-driven strategic decision-making literature and offer practical insights for entrepreneurs, incubators, and policymakers on the benefits of a scientific approach to entrepreneurship.
Valentine, Jacob (Doctoral Candidate, University of Maryland); Novelli, Elena (Professor, Bayes Business School); Agarwal, Rajshree (Lamone Professor of Strategy and Entrepreneurship, University of Maryland)