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Organizational theories help better understand how organizations behave in order to achieve their goals assuming different boundary conditions: organizational goals, rationality in human choice behavior, influence of organizational environments, etc. However, we observe that a majority of organizational theories have increasingly emphasized the influence of environmental uncertainties on organizational choice decisions and activities. In this paradigm, interestingly, we can find that different theories explain the same organizational phenomena in various ways with their unique assumptions. These diverse interpretations, on the one hand, may facilitate the accumulation of knowledge to better understand an organizational phenomenon while, on the other hand, they may lead students to face ambiguities in interpreting said phenomenon. This diversity in interpretations is frequently captured in organizational practices literatures. In particular, studies about the impact of human resource (HR) practices on firm performance in strategic human resource management (SHRM) literatures are a good example. A research question in this study is to examine why this phenomenon is prevalent in this field. In order to answer this question, this study seeks to identify the main theoretical arguments and review previous empirical findings on this topic. Then, this study proposes an integrative framework that may more accurately explain the impact of HR practices on firm performance, reconciling conflicting theoretical perspectives. This study argues that while investigating the relationship between HR practices and firm performance, researchers need to consider not only the adoption of HR practices based on rational models but also the institutionalization of HR practices in organizations. After developing a theoretical framework and research hypotheses predicting the effects of progressiveness and institutionalization of HR practices on performance, this study tests the hypotheses using a sample of Korean firms and shows the positive relationship between progressiveness and institutionalization of HR practices and firm performance as well as interaction effects of these two variables on firm performance.

Since 2014 Korea has imposed all listed companies should disclose in their audit reports the number of audit quality control reviewers and review hours they used. This legislation intends to enhance audit quality and the transparency of the financial statements. This study is the first to examine the effects of the hours of audit quality control reviews on the quality of the financial statements. This study investigates the effects of audit quality control review hours on the extent of companies’ real activities of earnings management, which typically are proxied for managements’ opportunistic behaviors of earnings management. The sample of 1055 firm-years over two-year period from 2014 to 2015 were selected. Using the method proposed by Roychowdhury (2006), this study measures real earnings management activities by estimating abnormal cash flow, abnormal production costs and abnormal discretionary expenditures. In the first stage, expected audit hours are estimated using widely known drivers of audit hours. Then in the next stage, audit quality control review hours are regressed on real earnings management activities and the residuals of expected audit hours and some control variables. Findings are as follows: First, audit quality control review hours are more likely to be positive(+) when the extent of a firm’s real earnings management of abnormal operating cash flows and abnormal production costs are high. Second, audit quality control review hours is high when the extent of abnormal discretionary expenditures are high. Third, marginally significant associations between abnormal production costs and audit quality control review hours are found. These results, together, suggest that high audit quality control review hours are more likely associated with high levels of real activities of earnings management. This finding suggests that audit risk is higher for firms with high levels of real activities of earnings management. Audit quality control review appears to partly effectively cope with the possibilities of misrepresentations of the financial statements due to managements’ opportunistic behaviors of earnings manipulations.

This study examines the relation between CEO centrality and earnings management to avoid losses and earnings decreases in Korea. Agency theory suggests that CEO centrality exacerbates agency problem as powerful CEOs tend to be overconfident and choose risky corporate strategies. On the other hands, Stewardship theory asserts that CEO centrality may be ideal for firm value and performance because of the unity of leadership and control it presents. While those two views are predicting contradictory impact of CEO power concentration on earnings management, empirical research examining the association between CEO centrality and earnings management in Korea does not exist, to our knowledge. As such, this study is the first that provides Korean evidence on the relationship between CEO centrality and earnings management. To achieve the afore-mentioned research objective, we examine whether the earnings management to losses and earnings decreases is systematically related with the proxy of CEO centrality using a ordinary logistic regression model and two stage least squares model (2SLS). Proxy for CEO centrality is developed using CEO pay slice suggested by Bebchuk et al.(2011). In particular, the CEO pay slice (CPS) calculated as a ratio of total CEO compensation to the total compensation of all directors in the board, captures the relative importance of CEO within the management team. To identify earnings management to losses and earings decreases, we classify suspected firms that show small positive earnings or small earnings increases according to Burgstahler and Dichev(1997). Our sample is drawn from companies listed on the KRX for which the information of executive compensation is available. Up to 2012, information of individual executive compensation was not mandatory disclosure item in annual reports, but from 2013 Korean listed firms should be required to disclose their executives’ pay information in annual reports if total compensation of an individual executives is more than 500 million won a year, following recent revisions to the capital market act. Thus our sample period covers 3 years from 2013-2015 and the final sample includes 927 firm-years from both manufacturing and non-manufacturing industries. We find a positive and significant relationship between CEO centrality and earnings management to avoid losses but not earnings decreases. This finds is robust to additional test(2SLS). These results indicate that CEO centrality restricts capabilities for monitoring and checking on inefficient managerial decision, which will lead to increased propensity to earnings management, thereby can pass on the economic cost to the outside investors. The contribution of this study is as follows. First, this study provides the first comprehensive Korean evidence of how CEO centrality is related to earnings management. Second, we incorporate recent innovations in measuring corporate governance system into our research design by using CEO pay slice as an empirical proxy of CEO centrality. Third, the results documented in this paper provide significant policy implications regarding the future directions on the regulatory measures to be implemented with the regard to the corporate governance system in the Korean capital market. The evidence obtained herein suggests the need for more rigid screening schemes to control earnings management in a situation when powerful CEO can influence over the board and also for adequate measures to be taken to ensure that the interests of the outside investors are properly protected from dominant CEO’s arbitrariness.

Abusive supervision could be viewed as more than just one form of negative feedback or personal insult, especially to foreign workers. Migrant workers who perceived their supervisors were more abusive are less likely to experience job stability and therefore failed to adapt to the host society. In this regard, this study examined how abusive supervision influences foreign workers’ acculturation i.e. integration along with the mediating role of perceived competence mobilization (PCM) and job embeddedness in the relationship. Valid and reliable self-report evaluation measures were collected from a sample of 225 foreign workers in South Korea. Immigration rules allow them to live in Korea for up to 4 years and 10 months on their first E-9 visa. After which they can get the chance to change this visa into E-7, to live and work in Korea continuously. However, these workers find it difficult to change their visa from E-9 to E-7. Without their employer's help, it becomes extremely difficult because the requirements are quite stringent. Following data collection, the models in the present study were tested by implementing a structural equation modeling (SEM) approach, using maximum likelihood estimation and a covariance matrix based on item parceling as input. The results indicate that the direct path between PCM and acculturation was nonsignificant, and the hypothesized model fit was not substantially improved as compared to the full mediation model. The best-fit model was the full-mediation model that included indirect effects of abusive supervision and a path from PCM to acculturation through job embeddedness. Based on these findings, it is suggested that managers need to pay attention to the role of foreign workers' job embeddedness through perceptions of competence mobilization in their acculturation.

The Fourth Industrial Revolution(or The Industry 4.0) is “a revolutionary change due to artificial intelligence in science, technology, economic activity, social structure, and political form as well as human daily life.” In this paper, we focused on two changes in the automobile industry that will emerge due to the 4th Industrial Revolution. The changes are widespread of smart factories and emerging self-driving cars. The potential of automobile companies that can lead the era of such changes will be ① financial affordability, ② R&D capability, ③ modularization and parts sharing, and ④ national policies. Hyundai Motor Company is compared with Toyota Motor Company in the four aspects. First, the financial strength is compared with the amount of retained earnings of the company, compared with $ 576 million for Hyundai Motor, Toyota has $ 1,574 million. Second, R&D capabilities were measured through R&D achievements. Comparing the number of patents related to self-driving technologies (autonomous driving, driver assistance, telematics) between January 2010 and October 2015, Toyota has overwhelmingly more patents than Hyundai. The number of patents of Toyota is about twice that of Hyundai Motors, excluding the Toyota affiliated Denso. US companies tend to acquire technology through mergers and acquisitions of companies rather than developing their own technologies, and Japanese and Korean companies tend to develop their own technologies. And the most innovative company to develop self-driving cars in German is the parts company, Bosch. It means German auto makers solve the R&D in supply chain. In addition, Toyota has already shifted from development of advanced driver assistance systems to autonomous driving functions. Hyundai Motor is, however, still in the stage of developing advanced driver assistance system technologies and tends to focus on connectivity technologies (telematics). And the initiative to support the Fourth Industry Revolution at the national level of Korea does not seem to be better than Japan. Taken together above mentioned information, Toyota's potential for the Fourth Industrial Revolution is estimated to be two to three times higher than Hyundai Motor's.

We set up a simple international trade model with two countries hosting one imperfectly, competitive firm each. Each firm produces a differentiated product and invests in process R&D which decreases its marginal cost of production. We consider two different international markets. One is the international market without a leader in which two firms simultaneously choose investment in process R&D and output. The other is the international market with a leader in which a leading firm chooses its investment in process R&D and output and then a following firm chooses its investment in process R&D and output. For example, Microsoft in the software industry is a leading firm in the domestic market and the international market. We derive and compare the equilibrium level of process R&D, output, and profit from the international markets without a leader and with one. It is shown that: (i) investment in process R&D and export in each country decrease as trade costs increase in equilibrium, but output for the domestic market increases as trade costs increase if the goods are relatively less differentiated and R&D is relatively less efficient and output for the domestic market decreases as trade costs increase if the goods are relatively more differentiated and R&D is relatively more efficient; (ii) a leading (following) firm invests more (less) in process R&D and produces more (less) output in the international market with a leader than an individual firm in the international market without one if the goods are relatively more differentiated and R&D is relatively less efficient and a leading (following) firm invests less (more) in process R&D and produces less (more) output in the international market with a leader than an individual firm in the international market without one if the goods are relatively less differentiated and R&D is relatively more efficient; (iii) the aggregate level of process R&D is higher in the international market with leader than without one; and (iv) a leading (following) firm has more (less) profit in the international market with a leader than an individual firm in the international market without one if the goods are relatively more differentiated and R&D is relatively less efficient and a leading (following) firm has less (more) profit in the international market with a leader than an individual firm in the international market without one if the goods are relatively less differentiated and R&D is relatively more efficient.

This research aims to measure the efficiency on firms in the industrial complex from 2013 to 2015 and evaluate the factors to make an effect to the efficiency scores, using Data Envelopment Analysis (DEA) and Tobit regression analysis. The major findings of this study are as follows. The results show that the average efficiency score of the firms located in industrial complex is lower than non industrial complex firms and the primary reason to cause their inefficiency is Technical Efficiency (TE) and Pure Technical Efficiency (PTE). Tobit Regression analysis shows that technical efficiency is higher for non industrial complex firms than for industrial complex firms. Therefore, it can be seen that the efficiency of the companies residing in industrial complexes is rather weaker than that of non-industrial complex firms. Analysis by industry, industrial complex firms are inefficient compared to non industrial complex firms in the manufacturing industry and construction industry. In particular, the longer the workforce and the greater the CEO age, the more negative the effect on the efficiency. This suggests that the synergy among companies has weakened as industrial complexes have become obsolete and time-consuming businesses have diversified. in the case of Namdong and Banwol, firms that are engaged in machinery, electricity, and electronics, which are the main flagship industries, have gradually decreased in accordance with the changes in industrial structure. Instead, the number of simple processing companies such as beverages and foodstuffs has increased, and the number of small sized enterprises, such as construction and wholesale/retail businesses, which do not require technology development, is increasing. Indeed, the proportion of companies with less than 50 employees in 2016 exceeded 95% in the case of the southeast and 96% in the case of the Banwol. In addition, the average number of Korean industrial complexes is 16.3%, compared to 10.8% in Namdong and 13.3% in Banwol. This implies that there is a possibility that industrial complex firms lose their competitiveness compared to non-industrial complex firms due to the decrease in the role and effect of industrial complexes, encourage the departure of competent industrial complex firms and leading companies, and accelerate the weakening of competitiveness. This study is the first attempt to analyze efficiency and analyze the determinants of industrial complex firms. In particular, efficiency is compared and distinguished by type of industry and presence of industrial complexes. As a result, it is necessary to review the roles and functions of industrial complexes.

SMEs play a key role for the national competitiveness and innovation. However, SMEs, unlike the major companies, are suffering from the asymmetric information in labour and capital market. In this respect, the government enforces various policies for resolving the asymmetric information. The main purpose of this paper is to quantitatively evaluate the performance improvement of R&D supported firms in the non-electric applications of nuclear science and technology. Despite the fact that the non-electric applications of nuclear science and technology have a large impact on other industries, there is a lack of support for such fields. In other words, there is a need for a variety of policy studies in this area, as the impact of government support in this sector can be relatively large. Methodologically, Propensity Score Matching(PSM) and Difference in Difference(DID) methodologies were applied to solve the selection bias and endogeneity problem between the policy variables and the performance variables. With this methodology, we compared the performance in three dimensions, which include firms’ growth, creation of employment, and innovation performance. According to the result of empirical analysis, it was found that the R&D supported SMEs had significantly improved performance compared to the non-supported companies. First, the government R&D support has shown positive effects on corporate sales growth and asset growth. Especially, the government R&D support has played a role in compensating “the market failure” in the capital and labour market. In addition, it was found that the government R&D support has played a role in increasing the firm’s own R&D expenditure, so called “crowding-in” effect. These results show that the government's R&D support for nuclear non-electric application sector has shown a considerable effect and it is necessary to continue to provide policy support in the future.

This study uses Yetman (2001) and Hoffman (2007)'s regression analysis of the total cost model to estimate the cost ratio figures of civilian demand field and defense field and verifies the relations between the two fields regarding their transfer of production cost. As a result, this study was able to find out the difference between the defense industrial company's reported production cost and estimated production cost in the field of defense. There was positive (+) difference between the two production costs and as the sales of civilian demand field's was of greater importance, this difference gap got wider. Moreover, the study could find a distinct difference in the production cost transfer during the postwar period in 2008, when there was a revision on the production cost's standard guidelines. Defense Industrial Company' excess profitability by shifting common overhead costs from commercial segment to defense segment in the award of cost reimbursement type of defense contracts is a widespread conclusion in prior researches. In this paper, we reviewed cost transfer incentives in defense-contracting Industrial Company and extended the analysis of Yetman (2001) and Hoffman (2007) by applying modified model to Korea Defense Contracts. We formulated three hypotheses to test the relation of cost transfer and excess profitability regarding market openness, auditing system, ranking in defense contracts, and firm types (sole defense contractors, sole commercial contractors, and defense and commercial mixed contractors). But, we could not find any evidence that defense Industrial Company shifted costs from commercial segment to defense segment during the period 2012-2016. The results suggest that the excess profitability of Korea defense Industrial Company may not be from the cost transfer but from other reasons. This study is an extended version of a previous study done on production cost transfer regarding the defense industry. The difference between this study and others is that unlike other previous studies that use profitability, generated cost and labor cost rate to indirectly give grounds on the production cost transfer, it calculates the reported cost's ratio figures which allow a more direct method of analyzing the transfer of the production cost. The verification of the production cost transfer phenomenon has a political significance in that it can improve the government's negotiating power and adduce the basis for bringing about a standard that can efficiently estimate the production cost.

The development speed of technology is fast and diversified, the product life cycle is shortened, and the fusion phenomenon between technologies is promoted. In addition, time and space are integrated and standardized, and the scale of R&D of enterprises towards a vast market has been gradually enlarged. Under these circumstances, companies will collaborate on R&D strategies in order to share high expenses and risks with each other. Therefore, in this research, we analyze how to select these strategies because of the nature of what kind of method to take company's R&D activities in the strategic dimension. In addition, the main objective is to grasp what kind of achievement the strategy is and complementing the strategies. Companies that have process innovation in the field of Korean manufacturing industry are more than companies that carried out product innovation (56%> 42%), For both innovations, the companies that have taken internal R&D and external R&D procurement at the same time accounted for more than half, (product innovation: 70%, process innovation: 64%). The companies taken only external R&D in process innovation Companies are grasped higher than in product innovation. We classified R&D activities of companies into four (No R&D, Internal R&D, External R&D, Joint of internal and external R&D) and present the determinant variables for the choice of R&D activities. The companies whose purpose of product innovation is to expand and develop the market, a large-scale enterprise that emphasizes protection of technology such as patents and utility model rights and provider information have selected the internal and external R&D at the same time. The companies whose aim of innovation is to emphasize on in-house research information and diversity of products in technology-intensive industries and that technology is protected by complex design and confidentiality method take internal R&D only for the purpose of product innovation. Moreover, the companies carrying out external R&D have the lacks in technology and market information. Especially the companies with high export concentration, take internal R&D and external R&D simultaneously, which is indispensable for product innovation. Now consider the determinant variables of R&D activities for process innovation. Emphasis on provider information, the purpose of technological innovation is quality improvement, emphasis on protecting technology and conduct internal and external R&D activities at the same time. Companies that place emphasis on research information inside the company mainly engage in internal R&D activities and companies of affiliated companies in the group are mainly to introduce external R&D. In the complementary measurement of both innovations, In the aspect of outcome in product innovation, the internal R&D (external R&D) in the strategy for the company’s R&D shows the positive complementary with external R&D (internal R&D). In the outcome in the process innovation, however, there is no complementary effect between internal R&D and external R&D.

We investigated the antecedents and consequence of job crafting. The traditional job design, which are characterized by top-down design, the fixed ways of complete job, and little autonomy, is known to have advantage in terms of predictability and reliability but disadvantage in terms of intrinsic motivation and customization the way of completing the job to individual trait and job conditions. Recently, some researcher criticized the traditional top-down job design and suggested new approach, that is, job crafting. Before technologies did not develop like these days, job descriptions could reflect every aspect of what and how to do job. As complexity around job design increase more and more along with technological development and environmental change, the aspects of job which the traditional job design can consider in and the needs for job performers to develop their own way to perform their job. Likewise, job crafting emphasizes the role of job performers’ role to develop and customize the way to compete their job to their own traits and conditions. This characteristic of job crating is expected to have close relationship with intrinsic motivation according to Self-determination theory. In this vein, we developed the model that link job crafting with the studies on job engagement which is also highly related with intrinsic motivation. We expected the autonomy and self-efficacy which are proven to be the antecedents of job engagement as the antecedents and job engagement as the consequence. We collected 477 survey data from the employees working for Korean large sized companies and conducted structural equation model analysis to test hypothesis. As results, autonomy and self-efficacy showed significant effects on job crafting and job crafting also showed significant effect on job engagement. However, none of the two direct paths from two independent variables to job engagement was supported. With these results, we discussed academic and practical implications.

The board of directors plays a significant role in monitoring and advising managers. Board of directors are usually consisted of inside directors and outside directors. Inside directors are defined to be all employee directors, whereas outside directors are defined to be all non-employee directors (Beasley, 1996). Fama and Jensen (1983) argue that outside directors have strong incentive to monitor managers effectively in agency settings and not to collude with top managers to expropriate stockholder wealth. In addition, Weisbach (1988) argues that outside directors pay great attention to firm’s financial performance by replacing poor performing chief executive officers. In this study, we examine the influence of proactive and reactive outside directors’ behavior on banks’ financial performance in the Korean banking industry. We define proactive outside directors’ behavior as the board meeting attendance ratio by outside directors and reactive outside directors’ behavior as the board meeting frequency. We use non-performing loans (so-called bad loans) to measure banks’ financial performance (Barseghyan, 2010) because non-performing loans are the most common proxy to measure banks’ financial performance and the most common reason why banks fail (Beattie et al., 1995). We hypothesize that not all outside directors’ behavior would play a major role in improving banks’ financial performance. Results of this study indicate that only proactive outside directors’ behavior significantly improves banks’ financial performance, whereas reactive outside directors’ behavior does not play a significant role in improving banks’ financial performance. Overall, results of this study suggest that proactive outside directors’ behavior is an important dimension of improving banks’ financial performance, but not reactive board behavior. In addition, this study contributes to bank literature by examining the effect of outside directors’ behavior on non-performing loans.