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A symposium at the European Accounting Association (EAA) Annual Meetings on Friday 23 May 2014 in Tallinn, organised by Accounting in Europe and the EAA's Financial Reporting Standards Committee (FRSC), brought together leading respondents to the Discussion Paper and the International Accounting Standards Board to debate the issues surrounding the new Conceptual Framework. This paper reproduces the presentations from the panellists: Mario Abela, Leader, Research and Development, International Federation of Accountants (IFAC); Richard Barker, Saïd Business School, Oxford University & EAA FRSC; Rasmus Sommer, Senior Technical Manager, European Financial Reporting Advisory Group (EFRAG); and Alan Teixeira, Senior Director – Technical Activities, International Accounting Standards Board (IASB). The panel was chaired by Paul André, ESSEC Business School & Editor Accounting in Europe.
In this essay we respond to Jepperson and Meyer's [2011] critique of "action theories" and methodological individualism in sociology. We highlight fundamental problems with their argument, notably their misconception of methodological individualism(s) and the belief that this explanatory principle ignores – and is somehow invalidated by – the complex, "emergent" and multi-level nature of social phenomena. We focus on the need to specify and understand: 1) component actors and social complexity; 2) theory of action, aggregation, and emergence; 3) self-selection and matching; and 4) process and the context of action. We concurrently critique Jepperson and Meyer's own (implicit but highly problematic and under-specified) theory of action.
Regulations essential for improving labor standards are often ignored to the detriment of workers. In many countries, the agencies charged with enforcement lack resources and are subject to political interference. How can inspectors in flawed bureaucracies overcome these barriers and enforce labor regulations? Based on case studies of subnational variation in Argentina, this article develops a theory to explain enforcement in places with weak and politicized labor inspectorates. The framework focuses on two factors: the strength of linkages between bureaucrats and allied civil society organizations, and the level of administrative resources in the bureaucracy. Linkages facilitate routinized resource sharing and the construction of pro-enforcement coalitions, and administrative resources determine whether bureaucrats use societal resources passively or strategically. By identifying pathways to enforcement that are obscured by dominant approaches to studying labor inspection, this research opens up new possibilities for crafting strategies to improve labor standards.
Financial reporting often creates new realities rather than merely reflecting reality. How, then, would the globalization of International Financial Reporting Standards (IFRS), as a specific mode of presenting reality, affect our markets? Drawing on fair value accounting instead of traditional historical cost accounting, IFRS makes the business realm and society amenable to financialisation. This process of converting real markets into tradable components, particularly by the private sector, may not contribute to sustainable market growth. This paper introduces three case studies to illustrate the significant impact IFRS makes on real sector markets. These consequences would in turn affect financial markets in the long term.
A brisk building boom of hydropower mega-dams is underway from China to Brazil. Whether benefits of new dams will outweigh costs remains unresolved despite contentious debates. We investigate this question with the "outside view" or "reference class forecasting" based on literature on decision-making under uncertainty in psychology. We find overwhelming evidence that budgets are systematically biased below actual costs of large hydropower dams—excluding inflation, substantial debt servicing, environmental, and social costs. Using the largest and most reliable reference data of its kind and multilevel statistical techniques applied to large dams for the first time, we were successful in fitting parsimonious models to predict cost and schedule overruns. The outside view suggests that in most countries large hydropower dams will be too costly in absolute terms and take too long to build to deliver a positive risk-adjusted return unless suitable risk management measures outlined in this paper can be affordably provided. Policymakers, particularly in developing countries, are advised to prefer agile energy alternatives that can be built over shorter time horizons to energy megaprojects.
Inadequate regulation of the financial system is widely thought to have contributed to the financial crisis. The purpose of the book is to articulate a framework within which financial regulation can be analysed in a coherent and comprehensive fashion. The book's approach is distinctive in several respects. First, it views the subject from a multidisciplinary perspective of economics, finance and law. Second, it takes a holistic approach, starting from the premise that financial regulation is best understood in the context of an appreciation of the entire financial system. Third it is international and comparative in nature, contrasting approaches, in particular in the EU and US. The book focuses on underlying policies and the objectives of regulation, using specific regulatory measures as examples. This allows the reader to compare choices in respect of the same policy issue in different regulatory frameworks. This introductory chapter sets out the motivation for the project and outlines the book's analytic framework and contents.
We apply the method of variable feedback to obtain complete
synchronization in a coupled map lattice. The conditions under
which such a synchronization is possible are obtained analytically.
We show that synchronization is robust against noise and
parameter mismatches. This method leads to synchronized state quite rapidly and we discuss its applications for near-real-time multi-channel communications.
This study examines the ways in which fields are structured, and explores the particular dynamics that foster homogeneity and heterogeneity in actors' behaviour. we found that actors' understansing of the field varied along six dimensions. These dimensions were interpreted based upon the actor's perceived position in the field. As a result, actors' reactions to ongoing events varied too. Thus, this paper uncovers various factors shaping homogeneity or, conversely, heterogeneity in actors' understandings of, and subsequent reactions tot ongoing events. In doing so, we contribute to out understanding of what fields are, and how their specific characteristics may affect actors' response.
The United Kingdom's Leasehold Valuation Tribunal hears extension and enfranchisement cases between landlords (freeholders) and tenants (leaseholders). In these cases, the two parties argue about the terms of housing lease extensions of up to 90 years in length, and about enfranchisements to convert leasehold contracts of specific durations to perpetual ownership freeholds. The widely-followed decisions of the leasehold valuation tribunal provide a unique insight into household-level variation in expectations of long-run discount rates and cash-flows, and set bounds on the prices that market participants may be willing to pay for housing over long periods of time. We use the record of decisions since 1995 to extract information about long-run cash-flow and discount rate expectations in this unique setting, which requires no estimation, but has real stakes for the participants in these negotiations. We find evidence that the discount rate associated with these decisions causes values of properties discounted for long periods (above 90 years) to be close to zero.
The European Accounting Association (EAA) Financial Reporting Standards Committee (FRSC) provided a response to the International Accounting Standards Board's (IASB's) 2013 Discussion Paper (DP) on completing and revising its Conceptual Framework. The response consisted of a literature-based discussion of the issues raised in the IASB paper and responses to the questions asked. The following paper has omitted the responses to specific questions but otherwise sets out the arguments made to the IASB, together with introductory material to indicate the context. The FRSC paper follows the order of the IASB DP.
Patient experience surveys are increasingly used to gain information about the quality of healthcare. This paper investigates whether patients who respond before and after reminders to a large national survey of inpatient experience differ in systematic ways in how they evaluate the care they received.
The English national inpatient survey of 2009 obtained data from just under 70,000 patients. We used ordinal logistic regression to analyse their evaluations of the quality of their care in relation to whether or not they had received a reminder before they responded.
33% of patients responded after the first questionnaire, a further 9% after the first reminder, and a further 10% after the second reminder. Evaluations were less positive among people who responded only after a reminder and lower still among those who needed a second reminder.
Quality improvement efforts depend on having accurate data and negative evaluations of care received in healthcare settings are particularly valuable. This study shows that there is a relationship between the time taken to respond and patients' evaluations of the care they received, with early responders being more likely to give positive evaluations. This suggests that bias towards positive evaluations could be introduced if the time allowed for patients to respond is truncated or if reminders are omitted.
Mobile advertising is one of the fastest-growing advertising formats. In 2013, global spending on mobile advertising was approximately $16.7 billion and it is expected to exceed $62.8 billion by 2017. The most prevalent type of mobile advertising is mobile display advertising (MDA), which takes the form of banners on mobile webpages and in mobile applications. This paper examines which product characteristics are likely to be associated with MDA campaigns that are effective in increasing consumers' favorable attitudes towards products and purchase intentions. Using data from a large-scale test-control field experiment covering 54 U.S. MDA campaigns run between 2007 and 2010 and involving 39,946 consumers, we find that MDA campaigns significantly increased consumers' favorable attitudes and purchase intentions only when they advertised products that were higher (versus lower) involvement and utilitarian(versus hedonic). This finding is explained using established theories of information processing and persuasion, and suggests that when MDAs work they do so by triggering consumers to recall and process previously stored product information.
In recent years tax havens and offshore financial centres have come under increasing political pressure to cooperate with other countries in matters of taxation and efforts to crowd back tax evasion and avoidance. As a result many tax havens have signed tax information exchange agreements (TIEAs). In order to comply with OECD standards tax havens are obliged to sign at least 12 TIEAs with other countries. This paper investigates how tax havens have chosen their partner countries. We ask whether they have signed TIEAs with countries to which they have strong economic links or whether they have systematically avoided doing this, so that information exchange remains ineffective. We analyse 565 TIEAs signed by tax havens in the years 2008–2011 and find that on average tax havens have signed more TIEAs with countries to which they have stronger economic links. Our analysis thus suggests that tax havens do not systematically undermine tax information exchange by signing TIEAs with irrelevant countries. However, this does not mean that they exchange information with all important partner countries.
Published as part of the proceedings of the workshop organised by the Directorate General for Economic and Financial Affairs held in Brussels on 23 October 2013 (ECFIN Taxation Workshop: 'The use of tax expenditures in times of fiscal consolidation').
This paper presents new evidence that international investors are compensated for bearing currency risk. We present a new three-factor international capital asset pricing model, comprising a global equity factor denominated in local currencies, and two currency factors, dollar and carry. The model is able to explain a wide cross-section of equity returns from 46 developed and emerging countries from 1976 to the present, is also useful at explaining the risks of international mutual funds and hedge funds, and outperforms standard models proposed in the international asset pricing literature. We rationalize our findings with a simple model of endogenous exchange rate risk in complete markets, and identify the importance of correctly identifying the dynamics of quantities and market prices of risk.
Context is increasingly recognized as a key factor to be considered when addressing healthcare practice. This study describes features of context as they pertain to knowledge use in long-term care (LTC).
As one component of the research program Translating Research in Elder Care, an in-depth qualitative case study was conducted to examine the research question "How does organizational context mediate the use of knowledge in practice in long-term care facilities?" A representative facility was chosen from the province of Saskatchewan, Canada. Data included document review, direct observation of daily care practices, and interviews with direct care, allied provider, and administrative staff.
The Hidden Complexity of Long-Term Care model consists of 8 categories that enmesh to create a context within which knowledge exchange and best practice are executed. These categories range from the most easily identifiable to the least observable: physical environment, resources, ambiguity, flux, relationships, and philosophies. Two categories (experience and confidence, leadership and mentoring) mediate the impact of other contextual factors. Inappropriate physical environments, inadequate resources, ambiguous situations, continual change, multiple relationships, and contradictory philosophies make for a complicated context that impacts care provision.
A hidden complexity underlays healthcare practices in LTC and each care provider must negotiate this complexity when providing care. Attending to this complexity in which care decisions are made will lead to improvements in knowledge exchange mechanisms and best practice uptake in LTC settings.
The default approach for tuning the parameters of a Support Vector Machine (SVM) is a grid search in the parameter space. Different metaheuristics have been recently proposed as a more efficient alternative, but they have only shown to be useful in models with a low number of parameters. Complex models, involving many parameters, can be seen as extensions of simpler and easy-to-tune models, yielding a nested sequence of models of increasing complexity. In this paper we propose an algorithm which successfully exploits this nested property, with two main advantages versus the state of the art. First, our framework is general enough to allow one to address, with the very same method, several popular SVM parameter models encountered in the literature. Second, as algorithmic requirements we only need either an SVM library or any routine for the minimization of convex quadratic functions under linear constraints. In the computational study, we address Multiple Kernel Learning tuning problems for which grid search clearly would be infeasible, while our classification accuracy is comparable to that of ad hoc model-dependent benchmark tuning methods.
Recently, Support Vector Machines with the ramp loss (RLM) have attracted attention from the computational point of view. In this technical note, we propose two heuristics, the first one based on solving the continuous relaxation of a Mixed Integer Nonlinear formulation of the RLM and the second one based on the training of an SVM classifier on a reduced dataset identified by an integer linear problem. Our computational results illustrate the ability of our heuristics to handle datasets of much larger size than those previously addressed in the literature.
We develop a model in which individual and institutional reputation concerns conflict with one another to study why investment bank reputation concerns may have diminished in recent years. Unproven but talented bankers have incentive to signal their ability through actions that may or may not best serve their clients. In the spirit of Kreps (1990), we treat the bank as a hierarchical firm whose only asset is its institutional reputation for curbing behavior that is suboptimal for the client. The conflict between individual and institutional reputation concerns is more likely to resolve in favor of institutional reputation when firms recruit only the most talented people, and less so when unique ability is especially valuable. We discuss how technological change has contributed to a "star" culture that is unfavorable toward preservation of institutional reputation.
Clegg, Flyvbjerg and Haugaard debate the strengths and weaknesses of a Foucauldian-Nietzschean critique of power compared to a tradition exemplified by Lukes and Habermas. Flyvbjerg and Clegg argue that the pursuit of universal normative principles and of rationality without power may lead to oppressive utopian thinking. Drawing on the Aristotelian tradition of phronesis they propose a contextualist form of critique that situates itself in analysis of local practices to render domination transparent and open to change. While Haugaard accepts there cannot be a universal view that transcends the particularities of context, he argues that the phronetic approach is crypto-normative because it implicitly presupposes unacknowledged liberal normative premises; moreover, any use of 'truth' as a criterion follows Enlightenment principles of verification.
This paper studies the adoption and impact of prize-linked savings (PLS) accounts, which offer random, lottery-like payouts to individual account holders in lieu of interest. Using micro-level data from a bank offering these products in South Africa, we show that a PLS product was attractive to a broad group of individuals, across all age, race, and income levels. Financially-constrained individuals and those with no other deposit accounts were particularly likely to open a PLS account. Participants in the PLS program increased their total savings on average by 1% of annual income, a 38% increase from the mean level of savings. Deposits in PLS did not appear to cannibalize same-bank savings in standard savings products. Instead, PLS appears to serve as a substitute for lottery gambling. Exploiting the random assignment of prizes, we also present evidence that prize winners increase their investment in PLS, sometimes by more than the amount of the prize won, and that large prizes generate a local "buzz" which lead to an 11.6% increase in demand for PLS at a winning branch.
Interest in utilizing technology to help older adults remain living at home is growing; however, uptake remains low. We present a conceptual framework for understanding independent living technology innovation within health and social services. Public policy and innovation in the United States, the United Kingdom, and Scandinavia are profiled as case studies. In all profiled countries, independent living technology is more rapidly advancing than associated state policy, regulation, and payment systems. The findings from this comparative analysis reveal areas for further exploration, including policy subsystem environments in which technologies and services are regulated, as well as trends and desires of older adults and their caregivers within particular cultural contexts.
The increased deployment of new technologies such as smart mobile devices and social networks and the growing importance of in-store technological solutions create new opportunities and challenges for retailers. As the line between online and physical channels is blurred, a new approach to channel integration is emerging—the omnichannel, which aims to deliver a seamless customer experience regardless of the channel. This introduction presents the results of focus group discussions on the role of information technology in retail, new business models, and the future role of traditional stores as e-commerce advances. Key issues that emerged from the discussion include the need for channel integration, the impact of mobile technologies, the growing role of social media, the changing role of physical brick-and-mortar stores, the need to respond to diverse customer requirements, the balance between personalization and privacy, and, finally, supply chain redesign. The four papers in this Special Issue explore these themes further.
This paper tests the proposition that voters advance a more liberal agenda in prosperous times and turn more conservative in dire economic times. A reference-dependent utility model suggests that, with income growth, the relative demand for public goods increases and the median voter is more likely to vote Democrat. With slowing income growth, the median voter derives increased marginal utility from personal income—making taxation more painful—and is more likely to vote Republican. Ordinary and instrumented analyses of a new time series for the US median voter are encouraging of this income growth model. This work links voting behavior to economic business cycles and shows that ideological change is endogenous to income growth rates.
A recent genome-wide-association study of educational attainment identified three single-nucleotide polymorphisms (SNPs) whose associations, despite their small effect sizes (each R2 ≈ 0.02%), reached genome-wide significance (p <5 × 10−8) in a large discovery sample and were replicated in an independent sample (p < .05). The study also reported associations between educational attainment and indices of SNPs called "polygenic scores." In three studies, we evaluated the robustness of these findings. Study 1 showed that the associations with all three SNPs were replicated in another large (N = 34,428) independent sample. We also found that the scores remained predictive (R2 ≈ 2%) in regressions with stringent controls for stratification (Study 2) and in new within-family analyses (Study 3). Our results show that large and therefore well-powered genome-wide-association studies can identify replicable genetic associations with behavioural traits. The small effect sizes of individual SNPs are likely to be a major contributing factor explaining the striking contrast between our results and the disappointing replication record of most candidate-gene studies.
Using a discovery and replication sample from a U.S. representative data set, we show that a functional polymorphism on the MAOA gene is associated with credit card borrowing behavior. For the combined sample of approximately 12,000 individuals we find that having one or both MAOA alleles of the less transcriptionally efficient type raises the average likelihood of reporting credit card debt by about 4%. These results suggest that behavioral
models benefit from integrating genetic variation and that economists should consider the welfare consequences of possible discrimination by lenders on the basis of genotype
We estimate the elasticity of corporate taxable income with respect to the statutory corporation tax rate using the population of UK corporation tax returns. We analyze bunching in the distribution of taxable income at kinks in the marginal rate schedule. We decompose this elasticity into an elasticity of total income with respect to the corporation tax rate, and an elasticity of the share of income taken as profit with respect to the difference between the personal and corporate tax rates. This implies a marginal deadweight cost at the £10,000 kink of around 29 percent of tax revenue.
The most significant problems with the existing system for taxing the profit of multinational companies stem from two related sources. First, the underlying '1920s compromise' for allocating the rights to tax profit between countries is both inappropriate and increasingly hard to implement in a modern economic setting. Second, because the system is based on taxing mobile activities, it invites countries to compete with each other to attract economic activity and to favour 'domestic' companies. The OECD Base Erosion and Profit Shifting (BEPS) initiative essentially seeks to close loopholes rather than to re-examine these fundamental problems. As a consequence, it is unlikely to generate a stable long-run tax system. We briefly outline some more fundamental alternative reforms.
The current international tax system based upon the principles of source and residence is no longer suited to a globalised world economy, and the fundamentals of the international tax system need to be re-examined. An R+F based cash-flow tax based on the principle of destination has been proposed as a suitable alternative to taxing corporations in an international setting. The aim of this paper is to discuss the legal and practical issues which would arise in the implementation of such a tax, namely how a destination-based tax could be effectively designed and implemented. For this purpose we draw on experiences with designing VAT systems worldwide. It is proposed that the destination principle should be implemented through use of the customers' location as the main legal proxy. We argue that the country where the customer is located has both the substantive jurisdiction to tax, i.e. the legitimacy to impose tax, and enforcement jurisdiction to tax, i.e. the effective legal and implementing means of collecting the proposed tax. As regards enforcement jurisdiction to tax, we propose that a one-stop-shop system similar to that being experimented in VAT as the most effective means of collecting tax. Other potential implementing issues are addressed, namely deductibility of expenses and tax credits, susceptibility to avoidance and fraud, treatment of financial transactions, and treatment of small businesses. We conclude that, if it were applied in an international cooperation setting, it would indeed be legitimate and administratively possible to implement a destination-based corporate tax.
Using data on European firms, this paper provides evidence that an overproportional fraction of multinational group profits accrues with the corporate headquarters. Quantitatively, the estimates suggest that headquarters are by around 25% more profitable than their foreign subsidiaries, whereas this gap tends to decline over time. The effect turns out to be robust against controlling for observed and unobserved heterogeneity between the entities. Analogous (although quantitatively smaller) effects are found for national groups. We discuss various welfare implications of our findings.
This paper stresses the special role of multinational headquarters in corporate profit shifting strategies. Using a large panel of European firms, we show that multinational enterprises (MNEs) are reluctant to shift profits away from their headquarters even if these are located in high-tax countries. Thus, shifting activities in response to corporate tax rate differentials between parents and subsidiaries are found to be significantly larger if the parent has a lower corporate tax rate than its subsidiary and profit is thus shifted towards the headquarter firm. This result is in line with recent empirical evidence which suggests that MNEs bias the location of profits and highly profitable assets in favor of the headquarter location.
Social compliance programs employed by MNEs face significant challenges in enforcing labor standards across global supply chains. This study examines whether buyers can improve social performance by introducing modern management systems to their suppliers. We analyze an intervention by Nike Inc. to promote the adoption of lean manufacturing in apparel suppliers across eleven developing countries since 2008. Using difference-in-differences estimates from a panel of over 300 factories, we find that lean adoption produced a 15 percentage point reduction in failing labor compliance grades, which are associated with wage and work hours violations. However, we find no effect of the lean program on health, safety, and environmental compliance. This pattern is consistent with the hypothesis that modern manufacturing systems improve labor standards primarily through changes in the relationship between labor and management, rather than increased managerial technical competence.
Why do nondemocratic regimes provide constituency service? This study develops theory based on a national field audit of China's "Mayor's Mailbox," an institution that allows citizens to contact local political officials. Analyzing government responses to over twelve hundred realistic appeals from putative citizens, we find local service institutions in China are comparably responsive to similar institutions in democracies. Two key predictors of institutional quality are economic modernization and the intensity of local social conflict. We explain these findings by proposing a demand-driven theory of nondemocratic constituency service; in order to sustain the informational benefits of citizen participation, service institutions must increase responsiveness according to citizen demand. We then offer supplementary evidence for this theory by analyzing the content of real letters from citizens to local officials in China.
Do ingroup biases distort the behavior of public officials? Recent studies detect large ethnic biases in elite political behavior, but their case selection leaves open the possibility that bias obtains under relatively narrow historical and institutional conditions. We clarify these scope conditions by studying ingroup bias in the radically different political, historical, and ethnic environment of contemporary China. In a national field experiment, local officials were 33% less likely to provide assistance to citizens with ethnic Muslim names than to ethnically-unmarked peers. We find evidence consistent with the ingroup bias interpretation of this finding and detect little role for strategic incentives mediating this effect. This result demonstrates that neither legacies of institutionalized racism nor electoral politics are necessary to produce large ingroup biases in official behavior. It also suggests that ethnically motivated distortions to governance are more prevalent than previously documented.
Despite notable progress in girls' education over the last decade, gender-based differences continue to shape educational outcomes. One of the most overlooked of these differences is the process of maturation itself, including menstruation. This paper presents the findings of a study that assessed the impact of sanitary care on the school attendance of post-pubertal girls, as well as the implications of menarche for their well-being. The study found that the provision of adequate sanitary care represents a relatively unrecognized but potentially fruitful tool in strategies that aim to improve girls' educational outcomes, one that warrants policy consideration among development planners
Within Europe differentiated rates structures date back to the introduction of VAT itself. Evidence as regards the negative consequences of applying multiple rates has been apparent for some decades. In this context, since the late 1980s, there have been several attempts to amend European rates structures under the political guidance of the European Commission. However, the most recent agreed upon amendments to the rates structure have increased the level of differentiation, rather than decreased it, with more goods and services being subject to reduced rates in Europe today than even as recently as ten years ago. This reality seems to be changing in the last few years. Since 2008 a staggering twenty-two of the twenty-eight EU Member State countries have increased their VAT rates, resulting in a broad convergence of VAT standard rates across the EU around the 21% mark. Furthermore, there has also been a decrease in levels of differentiation with a reduction in number of VAT rates applicable in many Member States, as well as various base broadening measures. The latest developments seem to indicate that conditions may be present which allow the reversal of the status quo bias, creating the opportunity for base broadening tax reform. This raises the possibility that European countries might engage in an involuntary process of convergence of VAT bases, fuelled by domestic necessities. A politically achievable blueprint for reform of VAT rate structures in European is presented, which would result in a broader-based, and thus more efficient and neutral, VAT. Moreover, application of this blueprint across EU Member States would have the additional advantage of resulting in further convergence if VAT rate structures in Europe, to replace the long-sought, but so far unattainable, EU harmonisation.
Based on unpublished paper (M. Devereux and R. de la Feria, "Designing and implementing a Destination-Based Corporate Tax").
Presentation based on existing published paper (R. de la Feria and R. Krever, "Ending VAT exemptions: towards a post-modern VAT" in R. de la Feria (ed.), VAT Exemptions: Consequences and Design Alternatives (The Hague: Kluwer Law International, 2013).
Based on unpublished paper (M. Devereux and R. de la Feria, "Designing and implementing a Destination-Based Corporate Tax").
de la Feria, R. and Silva Costa, M., 2013. .
We examine the impact on stock prices of a major upgrade to the New York Stock Exchange's trading environment. The upgrade improved information dissemination on the trading floor and reduced the latency in reporting trades and quotes. The portion of the upgrade that reduced latency for electronic orders had significant impacts on liquidity, turnover, and returns. A portfolio that is long stocks undergoing the upgrade in the first 20 days of the upgrade and short stocks receiving the upgrade later has a return of roughly 3% over the period. The abnormal return was a priced effect of the improved liquidity produced by the upgrade.
In this work, we propose a neural network model of the ventral visual stream for 3D object recognition and classification. The model represents a hierarchy of modules, which resemble the V1–V4 areas and inferior temporal cortex (IT). The architecture of our model is based on the modular network self-organized map (SOM). The model has been trained to perform object recognition and classification tasks that were reported to occur in the ventral visual stream in the brain of macaque monkeys. We show by simulation that the model is capable of classifying artificial three dimensional (3D) objects according to their structural similarity and of achieving view-invariant recognition of the objects
In this paper, we examine teleoperation as a critical aspect of using mobile robotic telepresence systems. Particularly, we propose and advocate using cognitive architectures as means to ease teleoperation for novice users and to enhance social interactions.
This paper examines the impact of tax incentives on corporate research and development (R&D) activity. R&D tax incentives are commonly provided as special tax allowances or tax credits. In recent years, several countries also reduced their income tax rates on R&D output with the purpose to foster R&D activity. Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. We in turn assess the impact of corporate tax incentives on the quality of R&D projects, i.e., their innovativeness and earnings potential. Using rich data on corporate patent applications to the European patent office, we find that a low tax rate on patent income raises the average profitability and innovation level of the projects undertaken in a country. The effect is statistically significant and economically relevant and prevails in a number of sensitivity checks. Generous R&D tax credits and tax allowances are in contrast found to exert a negative impact on project quality.
We show that, in a monetary equilibrium, trade and asset prices depend on both the supply of liquidity by the central bank and the liquidity of assets and commodities. Because money demand is a function of the liquidity of assets and commodities, monetary aggregates provide information on trade inefficiencies and are thus instructive for the conduct of monetary policy. We also show that assets that promise higher payoffs in liquidity constrained states in the future are relatively more expensive. This generates a term premium in the yield curve, even in absence of aggregate real uncertainty. The term premium is also higher than what would be calibrated in a representative agent model because monetary costs affect individual agents' marginal utilities even if aggregate income is unaffected. Our results hold in any monetary economy with heterogeneous agents and short-term liquidity effects, where monetary costs act as transaction costs and the quantity theory of money is verified.
We survey the literature on payout policy, with a particular emphasis on developments in the past two decades. The cross-sectional empirical evidence for the traditional motivations behind firms paying out (agency, signaling, and taxes) is most persuasive with regard to agency considerations. Studies centered on the May 2003 dividend tax cut confirm that differences in the taxation of dividends and capital gains have only a second-order impact on setting payout policy. None of the three traditional explanations can account for secular changes in how payouts have been made over the past 30 years, during which repurchases have replaced dividends as the prime vehicle for corporate payouts. Other payout motivations, such as changes in compensation practices and management incentives, are better able to explain the observed variation in payout patterns over time than the traditional motivations. The most recent evidence suggests that further
insights can be gained from viewing payout decisions as an integral
part of a firm's larger financial ecosystem, with important implications for financing, investment, and risk management.
In this paper I discuss the role of manager as choice architect. The notion of nudging and choice architecture has received significant interest in law, economics and public policy. But the behavioral insights from this literature also have important implications for managers, HR professionals and organizations. In essence, employees are consumers of choice and are constantly confronted with a large array and interface of options, and this interface can be designed so as to maximize individual welfare and organizational outcomes.
I first discuss the theoretical foundations of the nudge idea and then highlight how managers can design effective choice architectures for the management of human capital. By way of illustration, I specifically focus on four practical areas: 1) nudge hiring, 2) nudge training and development, 3) nudge human capital and organization, and 4) nudge strategy and innovation. Throughout the paper I also point out comparative differences in decision making between contexts (e.g., consumer choice versus decision making in organizations), including implied debates, and also highlight novel opportunities for future research in management and strategy. I particularly focus on the possibilities associated with nudges and choice architectures at the nexus of organizations, crowds and aggregate decision making.
The nature of economic opportunity has recently received significant attention in entrepreneurship, organization science and strategy. The notion of boundedly rational search on an (NK) opportunity landscape has been particularly relevant to these conversations and debates. We argue that the focus on bounded rationality and search is highly problematic for the fields of entrepreneurship and strategy and does not allow us to explain the origins of economic novelty. We contrast the NP problem with the frame problem to illustrate our point, and highlight the role of adjacent possibilities and novel affordances. We discuss the entrepreneurial and economic implications of these arguments by building on unique insights from biology, the natural and computational sciences. Copyright © 2014 Strategic Management Society.
Scholars have recently highlighted the promise of open innovation. In this paper, we treat open innovation—in it's different forms and manifestations—as well as internal or closed innovation, as unique governance forms with different benefits and costs. We discuss how each governance form, whether open or closed, is composed of a set of instruments that access (a) different types of communication channels for knowledge sharing, (b) different types of incentives, and (c) different types of property rights for appropriating value from innovation. We focus on the innovation "problem" as the central unit of analysis, arguing for a match between problem types and governance forms, which vary from open to closed and which support alternative forms of solution search. In all, the goal of this paper is to provide a comparative framework for managing innovation, where we delineate and discuss four categories of open innovation governance forms (markets, partnerships, contests and tournaments and user or community innovation) and compare them with each other and with two internal or closed forms of innovation governance (authority and consensus-based hierarchy).
"Over budget, over time, over and over again" appears to be an appropriate slogan for large, complex infrastructure projects. This article explains why cost, benefits, and time forecasts for such projects are systematically over-optimistic in the planning phase. The underlying reasons for forecasting errors are grouped into three categories: delusions or honest mistakes; deceptions or strategic manipulation of information or processes; or bad luck. Delusion and deception have each been addressed in the management literature before, but here they are jointly considered for the first time. They are specifically applied to infrastructure problems in a manner that allows both academics and practitioners to understand and implement the suggested corrective procedures. The article provides a framework for analyzing the relative explanatory power of delusion and deception. It also suggests a simplified framework for analyzing the complex principal-agent relationships that are involved in the approval and construction of large infrastructure projects, which can be used to improve forecasts. Finally, the article illustrates reference class forecasting, an outside view de-biasing technique that has proven successful in overcoming both delusion and deception in private and public investment decisions.
A major source of risk in project management is inaccurate forecasts of project costs, demand, and other impacts. The paper presents a promising new approach to mitigating such risk, based on theories of decision making under uncertainty which won the 2002 Nobel prize in economics. First, the paper documents inaccuracy and risk in project management. Second, it explains inaccuracy in terms of optimism bias and strategic misrepresentation. Third, the theoretical basis is presented for a promising new method called "reference class forecasting," which achieves accuracy by basing forecasts on actual performance in a reference class of comparable projects and thereby bypassing both optimism bias and strategic misrepresentation. Fourth, the paper presents the first instance of practical reference class forecasting, which concerns cost forecasts for large transportation infrastructure projects. Finally, potentials for and barriers to reference class forecasting are assessed.
The aim of the present book is to bring together, for the first time, the key readings in megaproject planning and management. This literature has until now been scattered over a large number of disciplines and publications making it difficult to obtain an overview, in one place, of the history, key issues, and core readings of this emerging field. It is hoped that by providing such an overview the book will help progress the field, academically and professionally. It is also heoped that citizens and communities interested in and affected by megaprojects may find useful insights in the book.
Megaproject Planning and Management: Essential Readings contains the seminal articles from the growing body of research on megaproject planning and management along with an original introduction by the editor, Bent Flyvbjerg. The leading and most cited authority in the field, Flyvbjerg has used crowdsourcing and 25 years of experience to cherry-pick from several hundred articles and books the writings that define the field. This volume will be an indispensable source for those wishing to speak with authority about how megaprojects are prepared, delivered, and fought over. The target audience is students, academics, practitioners, and media pundits alike, as well as communities affected by megaprojects.
Too often politicians try to fumble decisions through, playing havoc with money and trust. Democracy is not about pleasing the electors, but about politicians pushing for the changes needed tomorrow, taking responsibility and the necessary measures to see them through. As contemporary planning increasingly takes part through individual but gigantic projects rather than through a comprehensive, coordinated effort, this is even more important to understand. Fortunately, there are lessons to learn from experience collected through decades of research. Bent Flyvbjerg explains his views on the need for strong strategic governance, an open and honest democracy, and how he sees the role and responsibility of the critical researcher.
This paper explores how theories of the planning fallacy and the outside view may be used to conduct quality control and due diligence in project management. First, a much-neglected issue in project management is identified, namely that the front-end estimates of costs and benefits -- used in the business cases, cost-benefit analyses, and social and environmental impact assessments that typically support decisions on projects -- are typically significantly different from actual ex post costs and benefits, and are therefore poor predictors of the actual value and viability of projects. Second, it is discussed how Kahneman and Tversky's theories of the planning fallacy and the outside view may help explain and remedy this situation through quality control of decisions. Third, it is described what quality control and due diligence are in the context of project management, and an eight-step procedure is outlined for due diligence based on the outside view. Fourth, the procedure is tested on a real-life, multibillion-dollar project, organized as a public-private partnership. Finally, Akerlof and Shiller's recent discussion in economics of "firing the forecaster" is discussed together with its relevance to project management. In sum, the paper demonstrates the need, the theoretical basis, a practical methodology, and a real-life example for how to de-bias project management using quality control and due diligence based on the outside view.
Results from the first statistically significant study of the causes of cost escalation in transport infrastructure projects are presented. The study is based on a sample of 258 rail, bridge, tunnel and road projects worth US$90 billion. The focus is on the dependence of cost escalation on: (1) the length of the project‐implementation phase, (2) the size of the project and (3) the type of project ownership. First, it was found, with very high statistical significance, that cost escalation was strongly dependent on the length of the implementation phase. The policy implications are clear: decision‐makers and planners should be highly concerned about delays and long implementation phases because they translate into risks of substantial cost escalations. Second, projects have grown larger over time, and for bridges and tunnels larger projects have larger percentage cost escalations. Finally, by comparing the cost escalation for three types of project ownership - private, state‐owned enterprise and other public ownership - it was shown that the oft‐seen claim that public ownership is problematic and private ownership effective in curbing cost escalation is an oversimplification. The type of accountability appears to matter more to cost escalation than type of ownership.
This paper takes stock of megaproject management, an emerging and hugely costly field of study. First, it answers the question of how large megaprojects are by measuring them in the units mega, giga, and tera, concluding we are presently entering a new "tera era" of trillion-dollar projects. Second, total global megaproject spending is assessed, at USD 6-9 trillion annually, or 8 percent of total global GDP, which denotes the biggest investment boom in human history. Third, four "sublimes" – political, technological, economic, and aesthetic – are identified to explain the increased size and frequency of megaprojects. Fourth, the "iron law of megaprojects" is laid out and documented: Over budget, over time, over and over again. Moreover, the "break-fix model" of megaproject management is introduced as an explanation of the iron law. Fifth, Albert O. Hirschman's theory of the Hiding Hand is revisited and critiqued as unfounded and corrupting for megaproject thinking in both the academy and policy. Sixth, it is shown how megaprojects are systematically subject to "survival of the unfittest," explaining why the worst projects get built instead of the best. Finally, it is argued that the conventional way of managing megaprojects has reached a "tension point," where tradition is challenged and reform is emerging.
This article asks how planning scholarship may effectively gain impact in planning practice through media exposure. In liberal democracies, the public sphere is dominated by mass media. Therefore, working with such media is a prerequisite for effective public impact of planning research. Using the example of megaproject planning, it is illustrated how so-called "phronetic planning research", which explicitly incorporates in its methodology active and strategic collaboration with media, may be helpful in generating change in planning practice via the public sphere. Main lessons learned are as follows: (1) working with mass media is an extremely cost-effective way to increase the impact of planning scholarship on practice; (2) recent developments in information technology and social media have made impact via mass media even more effective; (3) research on "tension points", that is, points of potential conflict, are particularly interesting to media and the public, and are especially likely to generate change in practice; and (4) tension points bite back; planning researchers should be prepared for, but not afraid of this.
We were recently asked by the Danish Transport Council to undertake a review of plans to study the viability of fixed connections across the Baltic Sea at Fehmarn Belt. Fehmarn Belt is the strait between Denmark and Germany located in the western part of the Baltic Sea between the islands of Lolland Fehmarn. The shortest distance across the Belt is the 18.6 kilometres (approximately 11 miles) between Rødbyhavn in Denmark and Puttgarden in Germany.
Lock-in, the escalating commitment of decision makers to an ineffective course of action, has the potential to explain the large cost overruns in large-scale transportation infrastructure projects. Lock-in can occur both at the decision-making level (before the decision to build) and at the project level (after the decision to build) and can influence the extent of overruns in two ways. The first involves the 'methodology' of calculating cost overruns according to the 'formal decision to build'. Due to lock-in, however, the 'real decision to build' is made much earlier in the decision-making process and the costs estimated at that stage are often much lower than those that are estimated at a later stage in the decision-making process, thus increasing cost overruns. The second way that lock-in can affect cost overruns is through 'practice'. Although decisions about the project (design and implementation) need to be made, lock-in can lead to inefficient decisions that involve higher costs. Sunk costs (in terms of both time and money), the need for justification, escalating commitment, and inflexibility and the closure of alternatives are indicators of lock-in. Two case studies, of the Betuweroute and the High Speed Link-South projects in the Netherlands, demonstrate the presence of lock-in and its influence on the extent of cost overruns at both the decision-making and project levels. This suggests that recognition of lock-in as an explanation for cost overruns contributes significantly to the understanding of the inadequate planning process of projects and allows development of more appropriate means.
This article presents results from the first statistically significant study of traffic forecasts in transportation infrastructure projects. The sample used is the largest of its kind, covering 210 projects in 14 nations worth US$59 billion. The study shows with very high statistical significance that forecasters generally do a poor job of estimating the demand for transportation infrastructure projects. For 9 out of 10 rail projects, passenger forecasts are overestimated; the average overestimation is 106%. For half of all road projects, the difference between actual and forecasted traffic is more than ±20%. The result is substantial financial risks, which are typically ignored or downplayed by planners and decision makers to the detriment of social and economic welfare. The data also show that forecasts have not become more accurate over the 30-year period studied, despite claims to the contrary by forecasters. The causes of inaccuracy in forecasts are different for rail and road projects, with deliberately slanted forecasts playing a larger role for rail than for road. The cure is transparency, accountability, and new forecasting methods. The challenge is to change the governance structures for forecasting and project development. The article shows how planners may help achieve this.
This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.
Twentieth century Japan provides a remarkable laboratory for examining how an externally imposed institutional and regulatory intervention affects the ownership of corporations. In the first half of the century, Japan had weak legal protection but strong institutional arrangements. The institutions were dismantled after the war and replaced by a strong form of legal protection. This inversion resulted in a switch from Japan being a country in which equity markets flourished and ownership was dispersed in the first half of the century to one in which banks and companies dominated with interlocking shareholdings in the second half of the century.
Business taxation is at the heart of the political agenda. The 2014 G20 agenda notes that "in recent years international tax laws have failed to keep pace with changes in the global business environment, particularly with the rapid growth of the global economy, meaning that multinational corporations aren't necessarily taxed the way they should be".
In the UK and elsewhere in Europe, and the USA, austerity has resulted in a heightened focus on collecting revenues from business and there is an active debate on business taxation in the media, legislatures and from NGOs and the public. The OECD Base Erosion and Profit Shifting Action Plan seeks to address these concerns. At the same time, corporation tax rates are falling worldwide and many governments are seeking to keep their tax systems competitive.
Professor Judith Freedman will give a UK and European perspective on the debate and then discuss this, together with the view from Hong Kong and China, with a panel of experts including Professor Richard Cullen, Wilson Chow and Dr Doreen Qiu.
This article argues that statutory general-anti avoidance or anti-abuse provisions (GAARs) are an essential part of a modern tax system, since specific legislation will not catch every abuse. Properly drafted GAARs with appropriate protections can give administrators and courts an important tool to use in cases of egregious abuse, but the use must be within a legitimate framework suitable for the jurisdiction in question. GAARs are not the appropriate mechanism for a fundamental rewriting of domestic or international tax law, but they are a valuable element of the statute book in the fight to combat artificial tax arrangements.
There is a widespread perception, often aired by politicians, the media and NGOs, that multi-national companies are not paying their 'fair share' of tax. The G20 have made the issue of tax base erosion and profit shifting (BEPS) a priority and tasked the OECD with taking action to bring international tax rules into the 21st century. At the same time, governments across the world aim to make their economies more competitive and attractive to inward investors. There is a clear policy tension. In this age of globalisation and digital commerce, how should we determine how much and what kind of tax corporations should pay and where they should pay it? The OECD promises a progress report in September 2014 but some have suggested that this will only result in patching a structurally unsound system. Do we need more radical reform?
The presentation is based on a Centre report which is available online, 'HMRC's relationship with business', draft report, 19/06/2014.
This longitudinal study of professional service firms (PSFs) examines the linkage mechanisms through which high performance work systems (HPWS) influence firm performance. Two intervening mechanisms are theorized and examined. They are: (1) the resources that HPWS create, and (2) the uses to which both HPWS and these resources can be put. The resources we investigate are human, social and organizational capital, all of particular importance in knowledge-based professional service firms. The two uses which the resources facilitate and enable are the exploitation of the firm's current capabilities and client base and the exploration of new alternative opportunities. We thus theorize a linkage model that incorporates HPWS-resources-uses-performance. Results from 93 Irish accounting firms support the mediation mechanisms in our linkage model wherein resources and the uses made of them link HPWS to firm performance. Implications are presented for theory and practice.
– This paper aims to assess Vail Resorts' sustainability activities by applying a well-substantiated framework titled the "Leading the Sustainable Organization" (LSO) model in order to systematically explore their efforts. Anecdotally the sustainability activities and accomplishments of Vail Resorts appear comprehensive and impressive. Corporate sustainability is a complex, multi-functional endeavor, yet guidance on the issue has tended to be single level, single stage and single disciplinary. Our multi-level assessment of Vail Resorts' sustainability activities, including the stakeholder and financial impacts, develops a deeper understanding of sustainability and the effect it can have on profitability and value of a company.
– Vail Resorts' sustainability activities were assessed by applying a well-substantiated framework titled the "Leading the Sustainable Organization" (LSO) model.
– The in-role and extra-role sustainability performance of employees at Vail Resorts demonstrates their engagement with the company's sustainability efforts. Beyond employee sustainability performance, the company-level sustainability performance of Vail Resorts exhibits the payoff of the company's sustainability efforts.
Research limitations/implications
– The LSO model was applied to only one organization. Future application to multiple firms would provide a broader assessment of the state of sustainability in organizations of various sizes and across industries.
Practical implications
– By examining their sustainability activities through the lens of the LSO model, Vail Resorts provides a rich example of best practices relating to a company's pursuit of sustainability efforts and their expected benefits. Vail Resorts' wide-ranging sustainability actions, combined with the LSO model, provide managers with a well-defined road map to lead their own sustainable organization. Vail Resorts' implementation of the various components of the LSO model, and the results achieved, demonstrate that "sustainability is not just doing good, it is also good business."
– Applying the LSO model offers both practicing managers and researchers alike a well-substantiated framework to assess organizational sustainability efforts, in order to identify areas of organizational sustainability strength as well as areas needing improvement.
Qualitative researchers have developed and employed a variety of phenomenological methodologies to examine individuals' experiences. However, there is little guidance to help researchers choose between these variations to meet the specific needs of their studies. The purpose of this article is to illuminate the scope and value of phenomenology by developing a typology that classifies and contrasts five popular phenomenological methodologies. By explicating each methodology's differing assumptions, aims, and analytical steps, the article generates a series of guidelines to inform researchers' selections. Subsequent sections distinguish the family of phenomenological methodologies from other qualitative methodologies, such as narrative analysis and autoethnography. The article then identifies institutional work and organizational identity as topical bodies of research with particular research needs that phenomenology could address.
Human activities increasingly take place in online environments, providing novel opportunities for relating individual behaviors to population-level outcomes. In this paper, we introduce a simple generative model for the collective behavior of millions of social networking site users who are deciding between different software applications. Our model incorporates two distinct mechanisms: one is associated with recent decisions of users, and the other reflects the cumulative popularity of each application. Importantly, although various combinations of the two mechanisms yield long-time behavior that is consistent with data, the only models that reproduce the observed temporal dynamics are those that strongly emphasize the recent popularity of applications over their cumulative popularity. This demonstrates—even when using purely observational data without experimental design—that temporal data-driven modeling can effectively distinguish between competing microscopic mechanisms, allowing us to uncover previously unidentified aspects of collective online behavior.
International monetary relationships have been under strain in recent years. This is largely because adjustment mechanisms are asymmetric; the IMF has no means of putting pressure on countries with large current account surpluses to adjust. But such countries' accompanying capital account outflows have often had disappointing returns. So, we propose a method to impose symmetric constraints on the net capital flows both of deficit and surplus countries.
Governments try to discourage risky health behaviours, yet such behaviours are bewilderingly persistent. We suggest a new conceptual approach to this puzzle. We show that expected utility theory predicts that unhappy people will be attracted to risk-taking. Using US seatbelt data, we document evidence strongly consistent with that prediction. We exploit various methodological approaches, including Bayesian model selection and instrumental variable estimation. Using road accident data, we find strongly corroborative longitudinal evidence. Government policy may thus have to change. It may need to improve the underlying happiness of individuals instead of, or in addition to, its traditional concern with society's risk-taking symptoms.
Leveraged investors may be subject to contagion when sales of repossessed collateral create a downward spiral in fire sales prices, increasing margin requirements and drying up the supply of liquidity. This raises the question whether market integration is desirable when the risk of contagion is significant. While a policy that erects barriers to the free flow of liquidity across countries (fragmentation) can mitigate the incidence of contagion, it creates another problem: Liquidity may remain idle in one country while its neighbour suffers a financial crisis. We conduct a welfare analysis to net out the two effects. We show that, by itself, fragmentation has a negative welfare effect: It can only fend off mild financial crises, at the cost of exposing the country to more severe ones. At the same time, since liquidity is under-provided in a competitive equilibrium, governments should inject more of it, which could involve fragmentation, in some cases. Nevertheless, in the absence of coordination, governments are likely to fragment over and above the social optimum. Such sub-optimal fragmentation is particularly likely when governments become massive suppliers of liquidity. It follows that the recent increase in fragmentation may reflect the implementation of beggar-thy-neighbour policies rather than the proper treatment of market failures.
This research investigates the consequences of physically taking (actively acquiring) vs. receiving (passively acquiring) food items. Specifically, we demonstrate that the act of physically taking food can generate a false impression of choice, an effect we term "embodied illusion of choice." Across two studies, we document the mediating effect of this embodied illusion of choice on food evaluation and actual consumption, and show that these effects are moderated by an individual's need-for-control.
Can a mere gesture lead to intimate product bonding? In this research, we find that affectionate gestures (e.g. hugging, stroking) can serve as routes to object attachment. We suggest that the mere execution of an affectionate gesture can generate emotional attachment, which translates into enhanced product attitudes. However, this effect is contingent on the existence of facilitating conditions via the presence of humanlike characteristics in the target object of the affectionate gesture.
By 2008 Great Britain had one of the most competitive residential electricity markets in the world, with high levels of consumer engagement and competitive retail margins. However rising electricity prices, driven by international gas price rises, have led to a series of increasingly misguided regulatory interventions which are reducing competition, driving up prices, and undermining political support for a competitive residential energy market.
We study the performance of nearly 1,400 U.S. buyout and venture capital funds using a new data set from Burgiss. We find better buyout fund performance than previously documented – performance has consistently exceeded that of public markets. Outperformance versus the S&P 500 averages 20% to 27% over a fund's life and more than 3% annually. Venture capital funds outperformed public equities in the 1990s, but underperformed in the 2000s. Our conclusions are robust to various indices and risk controls. Performance in Cambridge Associates and Preqin is qualitatively similar to that in Burgiss, but is lower in Venture Economics.
This article examines the way in which identity workspaces function to facilitate and stimulate transitions at mid-career. We explore our collective experience as a cohort of a mid-career management academics participating in a 2-year fellowship program, which acted as an identity workspace in which mid-career identity work took place. Using insights from our narratives, interviews, and experiences, we demonstrate how the fellowship provided rites of passage, experimentation, and social defenses, and we analyze our identity work, in relation to mid-career development, disciplinary orientation, and relationships with existing institutions. We conceptualize the identity workspace as a liminal zone in which to experiment with provisional selves, finding that identity workspaces function through alterity as well as identity, and at a communal as well as individual level. The article draws out the challenges for the academic community to facilitate mid-career identity work experienced in this identity workspace within existing institutions.
Environmental mandates, energy security concerns, and societal demands place considerable pressure on automotive manufacturers to develop novel powertrain technologies that reduce energy consumption, and in turn, carbon emissions. The economic case for these novel technologies is far from clear, however, and firms often turn to the respective national governments for R&D aid and demand-side subsidies. Government on the other hand often feels unable to back any single technology for competition regulatory reasons, while at the same time being presented with conflicting messages from industry where to focus its support. This paper reports on an initiative by the U.K. Government that led to the establishment of a permanent forum for government-industry exchange, the Automotive Council U.K., in which the author has participated from the outset. In the course of the Council's work, two "consensus roadmaps" have been developed jointly by industry and the U.K. Government to guide national efforts in the transition for both passenger car and commercial vehicle powertrain technologies toward low-carbon alternatives. This paper discusses the key technological development stages and projections outlined in these technology roadmaps and comments on the general determinants of an effective interaction between government and industry in the light of a technological discontinuity.
Over the past three decades scholars have developed comprehensive insights into the operational and strategic aspect of designing and managing the supply chain. Reviewing this ample body of knowledge however one cannot help but notice a persistent disunion between the "value chain" view that considers aspects of value creation and appropriation, and the operational "supply chain" view that considers strategies and tools for designing and operating efficient inter-firm networks. Commonly these views do not interact: value creation has the aim of capturing the maximum value-added in financial terms, the supply chain view aims for designing operationally efficient supply chains. In contrast to their treatise within the academic literature, from a practical point of view these two aspects are both necessary (and thus in their own right insufficient) components to a firm's supply chain strategy. In this paper we thus turn to an exploratory case study to identify what such a combined view of the value and supply chain would entail. We refer to this purposeful creation as the "value chain architecture" and propose five fundamental decisions that define the latter: (1) the nature of value provision (driven by the core competence of the firm), (2) the operational footprint decisions for manufacturing, sourcing and distribution, (3) the approach to risk management, (4) the order fulfillment strategy (and implicit in that, the type of product customization), and (5) the buffering strategy. We conclude with an exploration of the application and utility of the "value chain architecture" concept in both academia and practice.
This paper investigates the relationship between the two major sources of bank default risk: liquidity risk and credit risk. We use a sample of virtually all U.S. commercial banks during the period 1998 to 2010 to analyze the relationship between these two risk sources on the bank institutional-level and how this relationship influences banks' probabilities of default (PD). Our results show that both risk categories do not have an economically meaningful reciprocal contemporaneous or time-lagged relationship. However, they do influence banks' probability of default. This effect is twofold: whereas both risks separately increase the PD, the influence of their interaction depends on the overall level of bank risk and can either aggravate or mitigate default risk. These results provide new insights into the understanding of bank risk, as developed by the body of literature on bank stability risk in general and credit and liquidity risk in particular. They also serve as an underpinning for recent regulatory efforts aimed at strengthening banks (joint) risk management of liquidity and credit risks, such as the Basel III and Dodd-Frank frameworks.
– This paper identifies challenges the traditional Thai silk industry has faced during its internationalization, and the public and private responses employed to overcome challenges.
– In-depth interviews were conducted with major players along the Thai silk value chain to gain insights into the industry's transformation from a domestic, cottage industry into an international fashion producer.
– Thai silk has created a niche market for high-end, cultural products, thus successfully sidestepping direct competition from emerging low-cost producers. The main innovative strategies employed include introducing new products, upgrading quality, attracting new customers, and collaboration between actors all along the silk value chain.
– This study illustrates how a traditional industry can evolve and successfully adapt to changing consumer demands and competitive landscapes in a globalize economy.
The drafting of macroprudential regulation is largely being driven by the need by policy makers to meet timetables that have been agreed. The legislative drive is taking place without any clear theoretical framework to organise the objectives. In this article we propose two principles that any satisfactory framework ought to respect and then describe one specific model that embodies these principles. We explain the insights from this approach for regulatory design.
Increasing awareness of the intrinsically complex nature of supply networks has brought the field of supply chain management into the domain of network science. However, due to the difficulties of acquiring large-scale and consistent empirical data sets, a more complete picture of a real-world supply network has remained remarkably elusive. In this paper, we present novel data that characterize the Toyota supply network, and identify key structural features using measures from social network analysis and the more recent field of network science. We show that the network structure for the Toyota supply network departs widely from the simplified models on which much previous work is based. Our analysis reveals the heterogeneous composition of the network and identifies key firms. Further analysis reveals the existence of constituent sub-networks, and we show that their structures reflect various factors, such as product categorization, geographical closeness and business alignment. Mapping the topology, geography, and distribution of productive capabilities for this supply network provides a critical first step for developing a more empirically-grounded theory of distributed production.
We demonstrate that personality has a systematic effect on strategic behavior. We focus on two personality traits: anxiousness and aggressiveness, and consider a 2-player entry game, where each player can guarantee a payoff by staying out, a higher payoff if she is the only player to enter, but a lower payoff if both players enter. We find that: anxious players enter less; aggressive players enter more; players are more likely to enter against anxious than non-anxious players; and players are less likely to enter against aggressive than non-aggressive players. We discuss the possible mechanism through which personality affects strategic behavior.
Purpose ‐ The purpose of this paper is to explore the relationship between management controls and the work-life balance (WLB) of junior accountants working in four multinational accounting firms using semi-structured interviews. Design/methodology/approach ‐ The authors interviewed junior accountants, asking them about their firms' time budgeting process, their views on organisational culture and their experience of WLB. Findings ‐ Time budgeting controls and the dominant discourses of "efficiency" and "career" form a web of control within these firms that sustain the long-hours culture. Drawing on the work of Foucault, the authors argue that the web of control is particularly strong because it is not imposed externally by a clearly identifiable source of power. Instead, the interviews revealed how junior accountants actively produce the web of control in order to secure their identity. This is particularly apparent when they speak of their career. Research limitations/implications ‐ This research sheds light on the relationship between management controls and WLB. Management controls are effective in large multinational accounting firms because they work through the emergent identity of young professionals. Originality/value ‐ The link between management control systems and WLB has received little attention from accounting academics. This research offers important insights into the way management control systems and organisational culture may impact the lived experience of WLB within multinational accounting firms.
In this chapter, we examine the scholarly literature on managing social innovation and develop a theoretical framework to advance research in this area. We first discuss the main themes in the social innovation literature, including the social construction of social problems, the social and historical embedding of novel solutions, the structural process in organization of social innovation, and the distribution of benefits as an inherently political and ethically contestable issue. We then develop a framework for studying social innovation that addresses key weaknesses in the existing literature. We propose a theoretical framework that emphasizes the idea of social innovation as a transformational process centered around the recursive relationship between the social construction of social problems and the creation of novel solutions.
The authors work closely with academia and governmental organizations in the UK and abroad to develop new, innovative schemes for social impact investing. Such schemes include considerations for public–private collaborations, legislative actions, and especially in this case, for the leveraged use of public and philanthropic funds in Crowdfunding (CF). The relatively new phenomenon of CF can not only provide necessary funds for the social enterprises, it may also lead to a higher legitimacy of these through early societal interaction and participation. This legitimacy can be understood as a strong positive signal for further investors. Governmental tax-reliefs and guarantees from venture-philanthropic funds provide additional incentives for investment and endorse future scaling by leveraging additional debt-finance from specialized social banks. This case study identifies idiosyncratic hurdles to why an efficient social finance market has yet to be created and examines a schema as a case of how individual players' strengths and weaknesses can be balanced out by a concerted action. The paper discusses the necessary actions, benefits and implications for the involved actors from the public, private and third sector.
An important but largely unexplored issue in the study of strategy-as-discourse is how emotion affects the discursive processes through which strategy is constructed. To address this question, this paper investigates displayed emotions in strategic conversations and explores how the emotional dynamics generated through these displays shape a top management team's strategizing. Using microethnography, we analyse conversations about ten strategic issues raised across seven top management team meetings and identify five different kinds of emotional dynamic, each associated with a different type of strategizing process. The emotional dynamics vary in the sorts of emotions displayed, their sequencing and overall form. The strategizing processes vary in how issues are proposed, discussed, and evaluated, and whether decisions are taken or postponed. We identify team relationship dynamics as a key mechanism linking emotional dynamics and strategizing processes, and issue urgency as another important influence.
A differential between the corporate income tax rate and the personal income tax rates applied to non-corporate income can play an important role in a firm's choice of organizational form. The impact and interdependency of income tax incentives are crucial factors in the design of efficient tax policies. In this paper I exploit the
variation in income taxes across U.S. states in the early 20th century to estimate these sensitivities. The potential endogeneity of state taxes is addressed using an instrumental variables approach. The results demonstrate that the relative taxation of corporate to personal income has a significant impact on the corporate share of economic activities. On average, a ten percentage point increase in the corporate tax rate is associated with a 0.2 to 0.3 percent decrease in the corporate share of economic activities, while a ten percentage point increase in the personal income tax rates applied to non-corporate income raises the corporate share of economic
activities by 0.5 to 0.6 percent.
This paper considers the optimal taxation of transactions services in a dynamic general equilibrium setting, where households use both cash and costly transactions services provided by banks to purchase consumption goods. With a full set of all tax instruments, the optimal tax structure is indeterminate. However, all optimal tax structures distort the relative costs of payment media, by raising the relative cost of deposits to cash. In the simplest optimal tax structure, the Friedman rule holds i.e. cash should be untaxed, and the rate of tax on transactions services can be higher or lower than the consumption tax. When parameters are calibrated to US data, simulations suggest that the transactions services tax should be considerably lower. This is because a transactions tax has a "double distortion": it distorts the choice between payment media, and indirectly taxes consumption. This contrasts with the special case of the cashless economy, when the first distortion is absent: in this case, it is optimal to tax transactions services at the same rate as consumption.
The purpose of this paper is to create a financial fragility model for the Czech financial sector. We adapt the Goodhart-Tsomocos model which is based on general equilibrium with incomplete markets, money and default. The calibration of the model is based on publicly available data from the period 2003-2011. Finally, we perform comparative statics to show how the key variables of the model respond to possible events. The model can be used by government institutions to stress-test the banking sector, as well as by banking and other financial institutions to estimate the development of, inter alia, the default rates of their clients. The model also incorporates default of households and may be used, after further extension, in predicting households' default rates with respect to the behaviour of banks in consequence of changes in macroeconomic parameters of the environment.
Sensemaking is the process through which people work to understand issues or events that are novel, ambiguous, confusing, or in some other way violate expectations. As an activity central to organizing, sensemaking has been the subject of considerable research which has intensified over the last decade. We begin this review with a historical overview of the field, and develop a definition of sensemaking rooted in recurrent themes from the literature. We then review and integrate existing theory and research, focusing on two key bodies of work. The first explores how sensemaking is accomplished, unpacking the sensemaking process by examining how events become triggers for sensemaking, how intersubjective meaning is created, and the role of action in sensemaking. The second body considers how sensemaking enables the accomplishment of other key organizational processes, such organizational change, learning, and creativity and innovation. The final part of the chapter draws on areas of difference and debate highlighted throughout the review to discuss the implications of key tensions in the sensemaking literature, and identifies important theoretical and methodological opportunities for the field.
Managing appointments for service systems with random job durations is a challenging task. We consider a class of appointment planning problems that involve two sets of decisions: job sequencing, i.e., determining the order in which a list of jobs should be performed by the server, and appointment scheduling, i.e., planning the starting times for jobs. These decisions are interconnected because their joint goal is to minimize the expected server idle time and job late-start penalty costs incurred because of randomness in job durations. In this paper, we design new heuristics for sequencing appointments. The idea behind the development of these heuristics is the structural connection between such appointment scheduling problems and stochastic inventory control in serial supply chains. In particular, the decision of determining time allowances as buffers against random job durations is analogous to that of selecting inventory levels as buffers to accommodate random demand in a supply chain; having excess buffers in appointment scheduling and supply chain settings incurs idle time and excess inventory holding costs, respectively, and having inadequate buffers leads to delays of subsequent jobs and backorders, respectively. Recognizing this connection, we propose tractable approximations for the job sequencing problem, obtain several insights, and further develop a very simple sequencing rule of ordering jobs by duration variance to late-start penalty cost ratio. Computational results show that our proposed heuristics produce close-to-optimal job sequences with significantly reduced computation times compared with those produced using an exact mixed-integer stochastic programming formulation based on the sample-average approximation approach.
The benefits of inventory risk pooling are well known and documented. It has been proven in the literature that the expected costs of a centralized system are increasing in the degree of (positive) dependence of demand in an idealized newsvendor setting. Using the supermodular stochastic order to characterize dependence, we study a general two-tiered supply chain structure, in which both demand and supply yields are random, and prove that the expected costs are increasing in the degrees of positive dependence between demand and supply yield loss factors. Furthermore, using a distributionally robust optimization framework, we prove an analogous result for the case where demand and yield distributions are not precisely known.
This paper utilizes a natural experiment to examine the role of the protection of property rights in promoting investment. In order to explore a title-granting scheme in Shenzhen, China, I collect a sample of 83 listed SOE firms, with 32 of them holding about-to-be-entitled lands. Those landholders exhibit both a sharp short-term 7.8% additional increase in stock market price and a long-term 63% extra increase in investment, when compared with non-landholders, despite that there is no pre-event structural difference between the two. These increases in value are a result of having solved hold-up problems rather than a result of increased collateral values because those politically connected SOEs under analysis are financially unconstrained. Cross-sectionally, those firms with weaker pre-event protection against "hold-up" are associated with greater increases in share price and investment. Potentially, solving the hold-up problem of all unentitled land would bring about value of 2.2 Trillion RMB, almost triples Shenzhen's GDP in 2009.
We apply the old concept of financial repression, originally due to Mckinnon (1973) and Shaw (1973), to the Chinese financial system and argue that it might explain the country's current account surplus. In a two-country model, we show that financial repression in one country (China), modeled as a tax on domestic investment, would drive capital out and render its trading partner (US) with tax-arbitrage opportunity that is used to fund the latter's current-account deficit. Calibration demonstrate that the effect is quantitatively significant. In contrast to a common view, this intervention would decrease wages, employment and welfare in the financially-repressed country.
The Kursk, a Russian nuclear-powered submarine sank in the relatively shallow waters of the Barents Sea in August 2000, during a naval exercise. Numerous survivors were reported to be awaiting rescue, and within a week, an international rescue party gathered at the scene, which had possessed between them all that was needed for a successful rescue. Yet they failed to save anybody. Based on the recollections and daily situational reports of Commodore David Russell, who headed the Royal Navy's rescue mission, the case explores how and why this failure—a classic coordination failure—occurred. The Kursk rescue mission also illustrates the challenges of pluralistic risk and disaster management, and asks students to consider how to bring about solutions in the face of pluralistic risk issues, such as the depletion of natural resources and many other disasters, when multiple parties with competing and often conflicting values and expertise have to learn to coordinate and establish a virtual, well-aligned organization.
The Kursk, a Russian nuclear‐powered submarine sank in the relatively shallow waters of the Barents Sea in August 2000, during a naval exercise. Numerous survivors were reported to be awaiting rescue, and within a week, an international rescue party gathered at the scene, which had seemingly possessed all that was needed for a successful rescue. Yet they failed to save anybody. Drawing on the recollections and daily situational reports of Commodore David Russell, who headed the Royal Navy's rescue mission, and on Robert Moore's (2002) award-winning book A Time to Die:The Kursk Disaster, the paper explores how and why this failure—a multiparty coordination failure—occurred. The Kursk rescue mission also illustrates a key issue in multiparty risk and disaster management, namely that the organizational challenge is to enable multiple actors and subunits with competing and often conflicting values and expertise to establish a virtual, well‐aligned organization. Organizational structures that can resolve evaluative dissonance, and processes that enable such a resolution, have been proposed in various literatures. Attempting to synthesize relevant works on pluralistic control and collaborative heterarchies, this paper proposes the foundations of what might be called pluralistic risk management, and it examines its conditions of possibility, in light of the lessons of the Kursk submarine rescue failure
The study explores the influence of the independent and interdependent self-construals on actual purchase behavior and the mediating role of consumer preferences for symbolic and hedonic meanings. Data were collected through a survey of about 1000 respondents. Results indicate that independent consumers draw on the self/hedonic- and status-symbolic resources of clothing in the construction and expression of their identities. Regarding the interdependent consumers, they show no interest in clothing affiliation and status symbolism. The degree of preference for status-symbolic meaning mediates all effects of the independent and interdependent self-construals on actual purchase behavior; self-expressive/hedonic preferences mediate two of the three effects of the independent self on actual purchase behavior when accounting for suppression effects, whereas the expected mediation of preference for affiliation meaning is not supported.
In an earlier series of articles published in this journal, one of the three authors of this article predicted the rise of auction IPOs, possibly to the point of displacing the traditional bookbuilding process for pricing and allocating IPOs, only to find himself forced to explain in later articles the continuing preference of issuers for the conventional IPO process. In a 1999 article, for example, this author cited WR Hambrecht as posing a serious challenge to bookbuilding. And in a 2005 article, shortly after Google used an auction for its IPO, he suggested that the time was ripe for change. In this article the authors revisit the debate, taken up most recently in a 2012 exchange between Congressman Darrell Issa and the SEC. They begin by discussing why bookbuilding persists before focusing on several recent developments that could undermine the case for bookbuilding. The authors point out that bookbuilding rests on banks' discretion in allocating IPO shares and, critically, on both issuers and investors trusting that it will be deployed appropriately. After discussing developments that have undermined trust in the financial markets, the authors suggest that, when combined with recent regulatory changes intended to streamline public offerings by small firms, such changes have created opportunities for auctions to gain traction in the U.S. IPO market.
Regulatory fit, or the match between an individual's regulatory orientation and the strategy used to sustain it, offers a pervasive predictor of customer behavior. Merely reaching a decision in a certain way influences the value of a decision or an outcome. In this research, we conduct a meta-analysis to more fully articulate the role of important conceptual moderators and demonstrate their differential effects on evaluation, behavioral intention, and behavior. In particular, we look at the source of regulatory focus (self-prime, situation-prime, chronic), the orientation (prevention, promotion), how fit is created (sustaining, matching), how fit is constructed (action, observation), and the scope of fit (incidental, integral). We also shed light on the role of several contextual factors.
This article considers a leading form of ethical consumption: fair trade (FT). FT uses a set of standards and – in some cases a certification scheme – to ensure that poor producers and artisans capture a far larger proportion of the value chain than is conventional. This creates a market-driven development tool.
A Creating Economic Space for Social Innovation (CRESSI) policy briefing paper based on CRESSI Deliverable 1.1: Report on Institutions, Social Innovation & System Dynamics from the Perspective of the Marginalised
Organisations today operate in a world fraught with threats, including "script kiddies", hackers, hacktivists and advanced persistent threats. Although these threats can be harmful to an enterprise, a potentially more devastating and anecdotally more likely threat is that of the malicious insider. These trusted individuals have access to valuable company systems and data, and are well placed to undermine security measures and to attack their employers. In this paper, we engage in a critical reflection on the insider threat in order to better understand the nature of attacks, associated human factors, perceptions of threats, and detection approaches. We differentiate our work from other contributions by moving away from a purely academic perspective, and instead focus on distilling industrial reports (i.e., those that capture practitioners' experiences and feedback) and case studies in order to truly appreciate how insider attacks occur in practice and how viable preventative solutions may be developed.
We study the trading behavior of investors in an entire stock market. Using an account level dataset of all trades on the Istanbul Stock Exchange in 2005, we identify investors with similar trading behavior as linked in an empirical investor network (EIN). Consistent with the theory of information networks, we find that central investors earn higher returns and trade earlier than peripheral investors with respect to information events. Overall, our results support the view that information diffusion among the investor population influences trading behavior and returns. (JEL G11, G14)
On December 13, 2013, two days after its IPO, Hilton hotels traded above $22 a share. This meant that the 2007 take-private transaction of Blackstone had produced the largest gain ever in private equity at about $10 billion. In addition, Hilton had become the largest hotel group in the world by number of rooms up from 4th position 6 years previously, when Blackstone bought the company. How can such success occur with a cyclical business during the worst financial crisis since 1929-1933? Somebody definitely deserves a big box of chocolates; but who? The answer is surprising and offers a detailed insight into the life-cycle of real estate private equity transactions.
This article shows that publicly available data on buyout fund returns are sufficient to replicate the recent findings derived from superior but proprietary datasets. The average buyout fund outperforms the S&P 500. However, this study shows that buyout funds mainly invest in small and value companies; and the average buyout fund return is similar to that of small-cap indices and that of the oldest small-cap passive mutual fund ("DFA micro-cap"). If the benchmark is changed to small and value indices, and is levered up, the average buyout fund underperforms by 3.1% p.a.
The empirical world of strategy and organization is populated by living, thinking, feeling persons, but the intellectual history of strategic management theory is one of creeping impersonalism, both in the questions we ask and our answers to them. The past 30 years have seen the field drift steadily away from human-scale problems like goal-setting, problem solving, and decision making, to mass abstractions like strategic factor markets and dynamic capabilities. This essay explores the causes and consequences of impersonalism and calls for a personalist rebalancing in strategic management research. I argue that a return to personalism will bring better theorizing and more rigorous empirical research, while allowing the field to recapture the lost connection between strategy and moral responsibility.
Customers' in-store experiences are having a profound impact on their shopping behavior. In this special issue, two key variables are highlighted: the retail environment and role of nonverbal cues. The eight papers in this special issue present numerous cutting edge issues in these two research domains. Each of these papers and some of their salient contributions are briefly overviewed in this introductory editorial. The goal of this special issue (and the articles in it) is to serve as an impetus for additional research.
Store atmospherics affect consumer behavior. This message has created a revolution in sensory marketing techniques, such that across virtually every product category, retailers and manufacturers seek to influence the consumer's "sensory experience." The key question is how should a company design its multisensory atmospherics in store to ensure that the return on its investment is worthwhile? This paper reviews the scientific evidence related to visual, auditory, tactile, olfactory, and gustatory aspects of the store environment and their influence on the consumer's shopping behavior. The findings emphasize the need for further research to address how the multisensory retail environment shapes customer experience and shopping behavior.
Using a large representative sample of Indian retail equity investors, many of them new to the stock market, we show that both years of investment experience and feedback from investment returns have significant effects on investor behavior, favored stock styles, and performance. We identify two channels of feedback: performance relative to the market, and the directly-experienced returns to behavior and styles of stock. Both of these vary across investors at a point in time because investors are imperfectly diversified and receive idiosyncratic returns. We find that experienced investors generally behave in a manner more consistent with the recommendations of finance theory, although this tendency is weakened by strong investment performance. High trading profits increase turnover, while high returns to equity styles have a short-term negative and a longer-term positive effect on investors' style demands, possibly reflecting the offsetting effects of disposition bias and style chasing. We document high returns on a portfolio of stocks held by experienced investors, and on individual Indian stocks with an experienced and low-turnover investor base.
This paper reports evidence that individual investors in Indian equities hold better performing portfolios as they become more experienced in the equity market. Experienced investors tilt their portfolios profitably towards value stocks and stocks with low turnover, but these tilts do not fully explain their good performance. Experienced investors also tend to have lower turnover and disposition bias. These behaviors, as well as underdiversification, diminish when investors experience poor returns resulting from them, consistent with models of reinforcement learning. Indian stocks held by experienced, well diversified, low-turnover and low-disposition-bias investors deliver higher average returns even controlling for a standard set of stock-level characteristics.
– The purpose of this paper is to explore extant distinctions between plausibility and probability in scenario planning and re-frame the either/or stance in the literature within a broader set of methodological choice possibilities.
– The paper surveys the history of both terms in both the English language and more narrowly within scenario planning, critically assessing the confusions that have arisen. The paper questions the distinctions that have been made and offers a richer set of combinations to open up the methodological space available.
– The paper suggests that the either/or stances that have been dominant in the literature – and even shaped distinctions between different schools of scenario planning – must be surpassed by a richer set of combinations that open up new methodological approaches and possibilities.
Research limitations/implications
– This is a conceptual and exploratory paper. Therefore the findings are propositions and tentative.
Practical implications
– The paper opens up new ways of producing scenarios and may dissolve some of the infertile distinctions that have plagued the field to now.
– The paper dilutes distinctions that have been accepted for decades and opens up new possibilities in the scenarios field, which is growing and is now producing some 2,200 peer-reviewed articles/year in English alone as per the EBSCO database.
Is a well-accepted method widely used by practitioners unproblematic? We here suggest that this is not the case. The 2x2 matrix approach has been stated by researchers to be the 'standard' approach in scenario planning. However, as we show in this paper, interpretations of this method vary significantly, even within the same 'scenario school' – in this case, the intuitive logics - plausibility based scenario tradition. We explore both the highly attractive, apparent simplicity of the method; and its more problematic aspects by contrasting two distinct interpretations used by scenario planners. We articulate the advantages and drawbacks of the 2x2 matrix method according to these two different interpretations. The paper makes two contributions. First, in rendering methodological conundrums explicit, it clarifies choices scenario planners can now explicitly make when choosing a scenario building method. Secondly, by clarifying the choices that the method offers, we contribute to make it more rigorous, debunking some of the purported ease it advertises for the unwary.
Given that the US excels in innovation and venture capital financing, how do young firms scale-up their operations and why do so many manufacturing firms have trouble growing? The authors look at high-tech spinoff companies from MIT in order to see the limitations even these privileged companies face. They identify a "learning by building" process through which firms use prototype manufacturing to develop commercial products. But, even these MIT spinoffs face an "inflection band" in which venture capital is insufficient to scale-up and other funding sources can be scarce, leading firms to move offshore. The authors suggest a public interest in finding ways to help firms scale production in the United States.
Purpose – This paper aims to investigate the effect of several valuable resources (organizational reputation, human resource management (HRM) practices, networks, and vertical integration in production) in explaining the performance of rice-milling firms in Thailand.
Design/methodology/approach – Resource-based view (RBV) theory was used to explain that the particular bundle of firm resources can become the source of sustainable competitive advantage and thereby improve the business's performance. Semi-structured in-depth interviews and questionnaire were used to collect data from Thailand rice exporters. Then regression technique was employed for data analysis.
Findings – Results from a survey of rice mills involved in international export showed that organizational reputation, some HRM practices, and networks were significantly related to firm's performance, but vertical integration was not.
Originality/value – This study supports the basic assertion of RBV theory that a set of firm specific resources could be applied in ways that enhance sustainable competitive advantage.
Background: We previously developed and validated the Oxford NOTECHS rating system for evaluating the non-technical skills of an entire operating theatre team. Experience with the scale identified the need for greater discrimination between levels of performance within the normal range. We report here the development of a modified scale (Oxford NOTECHS II) to facilitate this. The new measure uses an eight-point instead of a four point scale to measure each dimension of non-technical skills, and begins with a default rating of 6 for each element. We evaluated this new scale in 297 operations at five NHS sites in four surgical specialities. Measures of theatre process reliability (glitch count) and compliance with the WHO surgical safety checklist were scored contemporaneously, and relationships with NOTECHS II scores explored.
Results: Mean team Oxford NOTECHS II scores was 73.39 (range 37–92). The means for surgical, anaesthetic and nursing sub-teams were 24.61 (IQR 23, 27); 24.22 (IQR 23, 26) and 24.55 (IQR 23, 26). Oxford NOTECHS II showed good inter-rater reliability between human factors and clinical observers in each of the four domains. Teams with high WHO compliance had higher mean Oxford NOTECHS II scores (74.5) than those with low compliance (71.1) (p = 0.010). We observed only a weak correlation between Oxford NOTECHS II scores and glitch count; r = −0.26 (95% CI −0.36 to −0.15). Oxford NOTECHS II scores did not vary significantly between 5 different hospital sites, but a significant difference was seen between specialities (p = 0.001).
Conclusions: Oxford NOTECHS II provides good discrimination between teams while retaining reliability and correlation with other measures of teamwork performance, and is not confounded by technical performance. It is therefore suitable for combined use with a technical performance scale to provide a global description of operating theatre team performance.
In this paper we study a Bi-Objective Economic Lot-Sizing problem with applications, among others, in green logistics. The first objective aims to minimize the total lot-sizing costs including production and inventory holding costs, while the second one minimizes the maximum production and inventory block expenditure. We derive (almost) tight complexity results for the Pareto efficient outcome problem under non-speculative lot-sizing costs. First, we identify non-trivial problem classes for which this problem is polynomially solvable. Second, if we relax any of the parameter assumptions, we show that (except for one case) finding a single Pareto efficient outcome is an $\mathcal{NP}$-hard task in general. Finally, we shed some light on the task of describing the Pareto frontier.
Consider a firm, called the buyer, that satisfies its demand over two periods by assigning both demands to a supplier via a second-price procurement auction; call this the Standard auction. In the hope of lowering its purchase cost, the firm is considering an alternative procedure in which it will also allow bids on each period individually, where there can be either one or two winners covering the two demands; call this the Multiple Winner auction. Choosing the Multiple Winner auction over the Standard auction can in fact result in a higher cost to the buyer. We provide a bound on how much greater the buyer's cost can be in the Multiple Winner auction and show that this bound is tight. We then sharpen this bound for two scenarios that can arise when the buyer announces his demands close to the beginning of the demand horizon. Under a monotonicity condition, we achieve a further sharpening of the bound in one of the scenarios. Finally, this monotonicity condition allows us to generalize this bound to the T-period case in which bids are allowed on any subset of period demands.
Considering the opportunities and challenges for commercial firms involved with government business process outsourcing.
We show that asset prices behave very differently on days when important macroeconomic news is scheduled for announcement. In addition to significantly higher average returns for risky assets on announcement days, return patterns are much easier to reconcile with standard asset pricing theories, both cross-sectionally and over time. On such days, stock market beta is strongly related to average returns. This positive relation holds for individual stocks, for various test portfolios, and even for bonds and currencies, suggesting that beta is after all an important measure of systematic risk. Furthermore, a robust risk–return trade-off exists on announcement days. Expected variance is positively related to future aggregated quarterly announcement day returns, but not to aggregated non-announcement day returns. We explore the implications of our findings in the context of various asset pricing models.
Taking perspectives from papers published previously in Organization Studies, we argue for progress in strategy-as-practice research through more effective linking of 'local' strategizing activity with 'larger' social phenomena. We introduce a range of theoretical approaches capable of incorporating larger-scale phenomena and countering what we term 'micro-isolationism', the tendency to explain local activities in their own terms. Organizing the theories according to how far they lean towards either tall or flat ontologies, we outline their respective strengths and weaknesses. Against this background, we develop three broad guidelines that can help protect against empirical micro-isolationism and thereby extend the scope of strategy-as-practice research.
Purpose – Increasing complexity, fragmentation, mobility, pace, and technological intermediation of organizational life make "being there" increasingly difficult. Where do ethnographers have to be, when, for how long, and with whom to "be there" and grasp the practices, norms, and values that make the situation meaningful to natives? These novel complexities call for new forms of organizational ethnography. The purpose of this paper is to discuss the above issues.
Design/methodology/approach – In this paper, the authors respond to these calls for innovative ethnographic methods in two ways. First, the paper reports on the practices and ethnographic experiences of conducting a year-long team-based video ethnography of reinsurance trading in London.
Findings – Second, drawing on these experiences, the paper proposes a framework for systematizing new approaches to organizational ethnography and visualizing the ways in which they are "expanding" ethnography as it was traditionally practiced.
Originality/value – The paper contributes to the ethnographic literature in three ways: first, the paper develops a framework for charting new approaches to ethnography and highlight its different dimensions – site, instrument, and fieldworker. Second, the paper outlines the opportunities and challenges associated with these expansions, specifically with regard to research design, analytical rigour, and communication of results. Third, drawing on the previous two contributions, the paper highlights configurations of methodological expansions on the aforementioned dimensions that are more promising than others in leveraging new technologies and approaches to claim new territory for organizational ethnography and enhance its relevance for understanding today's multifarious organizational realities.
Policy Discussion Paper Presented to United Nations (UNEP, UNCTAD and Grp. Frids. Para 47) 58 pages.
This article investigates how engaging in a merger moderates the joint impact of a firm's achievement of dual goals of customer satisfaction and firm efficiency on a firm's long-term financial performance. Many prominent firms grow through mergers. Recent examples in the services context include the merger between Toronto-Dominion Bank and Canada Trust, and the merger between Continental and United Airlines. Our results show that joint achievement of customer satisfaction and efficiency is beneficial in merger contexts, but not in nonmerger contexts. We investigate the moderating role of mergers using a longitudinal panel of 429 observations across multiple firms and industries. These results suggest that merging firms should not take a myopic perspective of only wresting efficiencies (as the finance literature suggests). Rather, merging firms should focus on simultaneously improving customer satisfaction and improving efficiency to maximize long-term firm value.
Strategic human resource management literature emphasizes the potential of pay to secure strategically desirable employee outcomes for the employer. Strategic pay, in contrast with pluralist models of pay determination, assumes an absence of collective bargaining constraints. This article analyses the process of determination of non-unionized managerial, professional and technical pay in seven leading consumer goods firms that claim to use pay as a strategic tool. It demonstrates that implemented pay practice is often remote from what is aspired to strategically. Despite the absence of collective bargaining constraints, there remain unavoidable obstacles to the ability of management to implement pay systems aligned to strategic goals. These constraints impose fundamental limitations on the use of pay as a strategic tool.
We analyze a variant of the Diamond-Dybvig (1983) model of banking in which savers can use a bank to invest in a risky project operated by an entrepreneur. The savers can buy equity in the bank and save via deposits. The bank chooses to invest in a safe asset or to fund the entrepreneur. The bank and the entrepreneur face limited liability and there is a probability of a run which is governed by the bank's leverage and its mix of safe and risky assets. The possibility of the run reduces the incentive to lend and take risk, while limited liability pushes for excessive lending and risk-taking. We explore how capital regulation, liquidity regulation, deposit insurance, loan to value limits, and dividend taxes interact to offset these frictions. We compare agents welfare in the decentralized equilibrium absent regulation with welfare in equilibria that prevail with various regulations that are optimally chosen. In general, regulation can lead to Pareto improvements but fully correcting both distortions requires more than one regulation.
We develop a framework to analyze the multi-level knowledge requirements of complex, major projects in terms of ambidexterity—the ability to exploit (refine existing knowledge) and explore (develop new knowledge). This is an important theme within the wider literature, yet practical operationalization methods for managers and researchers are not evident. We demonstrate the ambidexterity view through an illustrative case study of telecommunications delivery for the London 2012 Olympic Games and show how these concepts can be used to create an effective knowledge strategy. We offer a structure for the analysis of knowledge utilization in projects.
The presentation is based on a book chapter co-authored with Dr Giorgia Maffini, Centre for Business Taxation. The book is to be published by the IBFD in the near future.
To investigate whether the size of the workforce (nurses, doctors and support staff) has an impact on the survival chances of critically ill patients both in the intensive care unit (ICU) and in the hospital.
Investigations of intensive care outcomes suggest that some of the variation in patient survival rates might be related to staffing levels and workload, but the evidence is still equivocal.
Information about patients, including the outcome of care (whether the patient lived or died) came from the Intensive Care National Audit & Research Centre (ICNARC) Case Mix Programme. An Audit Commission survey of ICUs conducted in 1998 gave information about staffing levels. The merged dataset had information on 65 ICUs and 38,168 patients. This is currently the best available dataset for testing the relationship between staffing and outcomes in UK ICUs.
A cross-sectional, retrospective, risk adjusted observational study.
Multivariable, multilevel logistic regression.
Outcome Measures
ICU and in-hospital mortality.
After controlling for patient characteristics and workload we found that higher numbers of nurses per bed (odds ratio: 0.90, 95% confidence interval: [0.83, 0.97]) and higher numbers of consultants (0.85, [0.76, 0.95]) were associated with higher survival rates. Further exploration revealed that the number of nurses had the greatest impact on patients at high risk of death (0.98, [0.96, 0.99]) whereas the effect of medical staffing was unchanged across the range of patient acuity (1.00, [0.97, 1.03]). No relationship between patient outcomes and the number of support staff (administrative, clerical, technical and scientific staff) was found. Distinguishing between direct care and supernumerary nurses and restricting the analysis to patients who had been in the unit for more than 8 h made little difference to the results. Separate analysis of in-unit and in-hospital survival showed that the clinical workforce in intensive care had a greater impact on ICU mortality than on hospital mortality which gives the study additional credibility.
This study supports claims that the availability of medical and nursing staff is associated with the survival of critically ill patients and suggests that future studies should focus on the resources of the health care team. The results emphasise the urgent need for a prospective study of staffing levels and the organisation of care in ICUs.
First published in 1989, this book is based on detailed comparative case studies of eight firms' responses to the recession of the early 1980s, the worst crisis for British manufacturing in the post-war period. Following these companies' progress from 1979 to 1985, Whittington examines the various recession strategies they adopted and the consequences of these for management change and financial performance in the recovery. Drawing on the Realist social theory of Roy Bhaskar, Whittington argues that the class, gender, generation and ethnicity of the decision-makers involved in the eight case studies collectively made an impact on their strategic choices. This is a timely and practical reissue, which will be of value to students, managers and academics concerned with strategic management, developments in organizational theory, and the current economic climate.
This review applauds the initiative to bring together Information Systems Strategy and Strategy-as-Practice research, as in this Special Issue. It highlights especially promising features of each of the empirical articles and develops an agenda for taking some of the themes further. In particular, the review points to opportunities for the intimate comparative investigation of episodes of Information Systems strategizing, for example by videoethnography; focus on the under-examined impacts of new or taken-for-granted Information Systems in strategy, for example big data, social media and Excel; and consideration of the political and discursive competence of Information Systems strategists in action, by comparison with other specialists. This agenda would be effectively advanced by joint work on the part of Information Systems and Strategy-as-Practice researchers.
Establishing territorial embeddedness within host regions in international retail expansion is well known to be important, although the processes underpinning its realization are less explicit. This research analyses some 'emerging practices' of international expansion planning by drawing on interviews across a sample of store development departments. The role of analysts within host regions in evaluating economic, institutional, cultural and social contexts, and appraising the viability of market-entry methods and store formats is explored. The competitive and regulatory dynamism of regions means that behaviour which encourages greater embeddedness following market entry can be particularly helpful in strengthening the marketing and development strategies of international subsidiaries.