Dr Paul Brown

Agarwal, R., Green, R., Brown, P.J., Tan, H. & Randhawa, K. 2013, 'Determinants of quality management practices: An empirical study of New Zealand manufacturing firms', International Journal Of Production Economics, vol. 142, no. 1, pp. 130-145.
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A large body of research in recent years has resulted in the accumulation of knowledge about better (worse) management practices for manufacturing firms. Given the wide dissemination of knowledge about practices such as Lean Manufacturing, the importance of goal-setting, performance management systems, employee promotion and reward structures, it is unclear why some firms do not adopt these broad-based management practices. If there are management practices that have the potential to universally increase productivity of manufacturing firms, their lack of adoption by all firms in such markets remains a pertinent question. New Zealand is a small open economy facing competitive pressure from both its geographical distance from large markets and its minimum wage, which is above key international competitors. In this context we use a novel survey tool designed by Bloom and Van Reenen (2007) and McKinsey & Co. to construct a Management Practices Score (MPS) based on 18 management practices from 152 medium- and large-sized New Zealand manufacturing firms. We find that the MPS is positively associated with various firm productivity performance indicators, particularly profit per employee and firm sales, indicating that the MPS captures relevant information about management practices. We find that firm size, ownership structure, and the level of education among both managers and non-managers positively impacts management performance. Unlike the findings in earlier international research, we find that competition does not have an association with management practices. The findings here contribute to understanding why best management practices are not universally adopted by manufacturing firms.

Bailey, P., Brown, P.J., Potter, M. & Wells, P.A. 2008, 'A practical comparison of firm valuation models: cash flow, dividend and income', Journal of the Securities Institute of Australia, vol. Winter, no. 2, pp. 22-28.
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Our research, based on a sample of listed Australian firms, indicates that the residual income model provides better estimates of firm value than two other commonly used models. It also provides advantages in that there is less need to forecast returns as far into the future and, with this model, a terminal value based upon a constant future return (or relatively low growth rates) can be used. This obviates the need to estimate an expected long-term growth rate, which is always problematic.

Bairstow, G.C., Brown, P.J. & Lanis, R. 2008, 'The impact incentive types on organisational performance in anglo cultures: a reply to Drake, Haka and Ravenscroft (1999)', Accounting and Finance Association of Australia and New Zealand Conference, Sydney, Australia, July 2008 in 2008 AFAANZ/IAAER Conference website papers, ed Hay, D; Moroney, R, AFAANZ, Sydney, Australia, pp. 1-48.
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Experimental research suffers from biases introduced by experiment design choices, such as the choice of alternative incentive and reward structures. We propose that framing rewards in a broader typology when researchers make decision about which reward structures to use in an experiment will minimise the potential for a false choice bias. To highlight this problem we replicate Drake, Haka and Ravenscroft+s (1999) incentive structure experiment using a simpler, more theory driven design. Drake et al (1999) propose that organisational performance maybe be better if group compensation is given in preference to individualistic compensation, within the context of an information rich environment (using activity based costing). In particular, Drake et al (1999) apply an experimental research design to test that proposition using U.S. MBA students. Their results suggest that, ceteris paribus, given a group in preference to an individualistic incentive scheme, innovation, efficiency and profitability may improve. We argue that this conclusion is inconsistent with the incentive structure choices faced by managers, the societal values of the U.S., culture and agency theories in general. A possible explanation for Drake et al+s (1999) result is the use of a tournament incentive scheme as the basis for individual compensation. As such, we replicate the Drake et al (1999) experiment using Australian university students and an individual profit incentive scheme as the basis for individual compensation. Our results, in contrast to Drake et al. (1999), indicate that given an individual in preference to group incentive scheme, task performance improves in an information rich environment. This experiment highlights the false choice bias that reduces the generalizability of experimental research in general and highlights the value of propositions couched in a broader reward typology.

Brown, P.J., Matolcsy, Z.P. & Wells, P.A. 2007, 'Economic determinants of group versus individual compensation schemes for senior executives', Accounting and Finance Association of Australia and New Zealand Conference, Gold Coast, Australia, July 2007 in 2007 AFAANZ Conference, ed Stewart, J; Hay, D, AFAANZ, Gold Coast, Australia, pp. 1-66.
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This paper investigates firm characteristics associated with the choice of individual versus group compensation schemes for senior executives below the CEO level. We define individual compensation schemes where senior executives are compensated independently from other senior executives, where incentive compensation is linked to individual performance. In contrast, group compensation schemes are defined where senior executive compensation is jointly determined with other senior executives, with compensation linked to common incentives. This paper is motivated by limited evidence on compensation schemes for senior executives+ beyond the CEO, limiting critical evaluation of senior executives+ compensation. Preliminary evidence using Australian data provides support that individual compensation schemes are adopted by firms where individual senior executive inputs (effort) and outputs are separable and observable. We also find support that group compensation schemes are adopted where there are efficiencies from senior executive co-operation and interdependencies between executives, such as in integrated firms. The empirical evidence suggest that there are important differences between how firms set changes in total compensation as apposed to the mix of long and short term incentive components. The findings contribute to the ongoing debate surrounding the determination of appropriate corporate governance mechanisms in the presence of agency conflicts, and especially executive compensation schemes.

Green, R., Agarwal, R., Van Reenen, J., Bloom, N., mathews, j., Boedker, C., Sampson, D., Gollan, P., Toner, P., Tan, H. & Brown, P.J. 2009, 'Management Matters in Australia: Just how productive are we?', Department of Industry, Innovation, Science and Research, Canberra, Australia, pp. 1-42.
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This unique research project for the Department of Innovation, Industry, Science and Research benchmarks management practices in Australian manufacturing firms against the global best. The project was undertaken by a research team from the University of Technology Sydney, Macquarie Graduate School of Management and the Society of Knowledge Economics, and is part of a world-wide study led by the London School of Economics, Stanford University and McKinsey & Co. The findings suggest that while some of our firms are as good as any in the world, we still have a substantial `tail+ of firms that are mediocre, especially in their approach to people management. This is a key differentiating factor between Australia and better performing, more innovative countries.