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Knowledge, Skills and Productivity in UK Retailing

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In collaboration with Bradford, Leeds and London Metropolitan Universities Knowledge, Skills and Productivity in UK Retailing O. Bozkurt, J. Clegg, I. Grugulis, D ... – PowerPoint PPT presentation

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Title: Knowledge, Skills and Productivity in UK Retailing


1
Knowledge, Skills and Productivity in UK Retailing
In collaboration with Bradford, Leeds and London
Metropolitan Universities
  • O. Bozkurt, J. Clegg, I. Grugulis, D. Anon Higon,
    S. Salis,
  • N. Vasilakos and A. Williams

2
Group 1 Case studies
  • Intra-Company Knowledge Transfers, Skills, and
    Productivity in UK Supermarkets
  • Jeremy Clegg, Irena Grugulis and Odul Bozkurt
  • Bradford and Leeds Universities

3
Primary Research Questions
  • 1-) How do practitioners at various levels in UK
    supermarkets understand and measure
    productivity? How do they conceive of the
    relationship between productivity and
    performance?
  • 2-) According to strategists and managers in UK
    supermarkets, what are the most important drivers
    of and impediments to productivity growth in
    their business today?
  • 3-) What are the routes of dissemination of
    knowledge inside supermarkets, including that
    from foreign parents?
  • 4-) What are the consequences of the efforts to
    improve productivity and performance on the
    organization of work and the knowledge-content
    of jobs in the sector?
  • 5-) Does productivity in the sector rely on and
    bring about a low-skills equilibrium, and what
    might be the larger consequences of this for the
    UK economy?

4
  • In-Depth Case-Study Research in Major UK
    Supermarkets
  • Overall Research Progress
  • We have secured initial access into three major
    supermarket chains, and conducted initial
    interviews with Head Office representatives.
  • Two of these supermarkets are of similar size and
    market share, one of them a foreign-owned
    multinational, the other one a UK-owned
    non-multinational.
  • Fieldwork with the first supermarket chain
    started in July 2006. We have been granted
    extensive access for open-ended research here.
    General agreement has been reached with the
    second supermarket chain for similar level of
    access, and final negotiations are underway on
    confidentiality issues.
  • The third supermarket chain is much smaller in
    terms of size of operations and market share, but
    offers a unique combination of high-quality
    merchandise and service with high employee
    development, so we are interested in pursuing
    this case further after completion of work with
    the first two supermarkets.
  • Contacts have been established in sector forums,
    and multiple interviews have been conducted with
    key informants in the sector employed outside of
    supermarkets.

5
Case Study 1
  • Research Activities
  • Head Office
  • 8 out of planned 10-12 interviews at Head Office
    completed These include interviews with high
    level executives in Business Improvement, Wage
    Planning, Recruitment, Training, Customer Service
    and Loss Prevention areas, as well as an
    expatriate expert from the MNE overseas
    headquarters.
  • 3 day observation at induction event including
    presentations by company CEO and head of Retail
    Operations, Customer Service and other high level
    company executives.
  • Store
  • Store 1, an example of a healthy store, has
    been selected after review of store performance
    indicators and in consultation with Head Office
    contact.
  • Introductory visit to and tour of Store 1
    completed together with Head Office contact.
  • 8 out of 10 planned interviews with managers have
    been completed. We have revised our initial plans
    to now extend the management interviews to 15 out
    of about 20 managers in the average store of the
    chain.
  • Access has been obtained from two Department
    Managers for participant observation to be
    carried out with them as an employee now
    scheduled for November-December 2006. These will
    include at least one stint in a department that
    is a production site.
  • 20 interviews will be carried out with shopfloor
    workers in Store 1 certain groups (workers with
    long tenure, students, foreign-born etc.) have
    already been targeted and initial participants
    identified. Target date for completion of these
    interviews is Christmas 2006.
  • We are looking into the selection of Store 2, an
    example of a difficult store, with different
    performance scores on key indicators. This will
    allow for intra-firm comparison.
  • We have started the transcriptions and initial
    review of interviews carried out thus far.

6
Group 2 WERS dataset
Summary of our sub-project
Allan Williams Sergio Salis London Metropolitan
University
7
Use the WERS 2004 to studythe relationship
between..
1 - Intra-firm knowledge transfers and firm
performance/productivity Cannot be done now,
except for single-establishment (plant) firms
(see point 2). Only 19 single-establishment
firms in retailing (out of 223 identified
retailers), of which only one foreign owned. But
may be possible to study intra-firm knowledge
transfers later if we can link WERS and ARD
(Virtual Lab) in order to identify firms (212
retail establishments agreed to link WERS with
other datasets). 2 - Intra-establishment
knowledge transfers and establishment
performance/productivity Current
focus - We can control for whether establishments
are domestic or foreign owned (47 out of 223
establishments in retailing), and the extent of
the ownership (50, gt 50 or 100). We can
also control for variables reflecting knowledge
transfers from outside the firms (e.g. external
consultancy or professional advice).
8
Intra-establishment knowledge transfers and
performance/productivity Methodology
  • INDIRECTLY (knowledge transfers cannot be
    directly observed) -By assessing whether some
    specific HR practices are strongly correlated
    with productivity/performance.
  • Specific HR practices are those that, in theory,
    facilitate knowledge transfers within the
    establishment, especially knowledge-based
    interactions amongst individuals.
  • Focuscorrelation. Causality could be studied
    (checks are needed!) by using the panel component
    of WERS (1998-2004) or merging WERS 2004 and WERS
    1998.
  • Initially, focus on subjective measures
    (managers perceptions). Objective measures of
    productivity can be derived from the Financial
    Performance Questionnaire of WERS 2004 (available
    for a sub-sample of establishments in the ONS
    Virtual Lab).

9
HR practices enhancing knowledge transfers within
establishments
  • Aim to group according to the following criteria
  • - HR practices likely to increase the number of
    interactions among individuals (typical
    approach).
  • - HR practices favouring bi-directional
    interactions among individuals (e.g. meetings and
    teams, after controlling that no single leader
    monopolises or unilaterally directs these).
  • - HR practices increasing the efficiency of
    interactions among individuals (practices
    decreasing the cost/time needed for
    interactions).
  • - HR practices allowing for the interactions to
    be effective (stress on practices favouring
    absorption capability, i.e. human capital and
    skills).
  • Aim to construct (up to) 4 indicators (one for
    each criterion above if possible) of HR practices
    and regress performance measures against them.

10
Group 3 ARD and AFDI Datasets
The Role of MNEs and FDI spillovers in the UK
retail Sector
Dolores Anon Higon and Nicholas V.
Vasilakos Aston University
11
MNCs in UK Retailing
12
How much better are MNEs?
Source authors calculations using ONS ARD
13
RESULTS
  • On average, MNEs pay higher average salaries
    however, when we differentiate in terms of origin
    of ownership, just foreign MNEs pay higher.
  • These differences might indicate a skill bias
    towards high skilled workers in the labour force
    of foreign MNEs.
  • UK_MNEs hire more employees than foreign MNEs
    all MNEs hire more than local non-MNE firms
  • when controlling for age size just UKMNEs use
    more PT
  • UK_MNEs hire more FT than foreign MNEs all MNEs
    hire more FT than rest of indigenous firms.
  • MNEs are more productive than non-MNEs
    independently of the productivity measure.
  • UK_MNEs are as productive as US_MNEs in terms of
    LP and TFP
  • RoW MNE are not significantly more productive
    than local non_MNE firms, except in terms of LP

14
To what extent FDI benefits local UK retailers?
-Restrict sample to domestic firm -We look at
intra-industry regional spillovers -Traditional
Cobb-Douglas production function, correcting for
endogeneity -Levinsohn Petrin, when
dependent varible is log(TFP) -GMM method, when
dependent variable is log(go) --Control for
absorptive capacity using superlative index of
Caves et al for the TFP (Girma Gorg, 2005)
15
Empirical Results
Source authors calculations using ONS ARD
merged with AFDI
16
Empirical Results
Source authors calculations using ONS ARD
merged with AFDI
17
Results
  • The results using both approaches, find positive
    regional spillovers from FDI to UK retailers
  • The intra-industry results are less clear
  • Results show that single plants are the ones who
    benefit form intra-industry spillovers form FDI.
  • Retailers benefit more from spillovers as closer
    they are from the technological leader

18
Future Plans
  • Write draft paper
  • Look at outward spillovers, given the importance
    of UK_MNEs in retailing
  • Look at the importance of ICT intensity (data on
    investment in software-but not for all firms).
    Split sample according to ICT intensity and see
    if the impact of spillovers differswe have done
    so, but data on software investment is of poor
    quality
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