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Chapter 1: MARKETING
1.1 Introduction
1.2 Market Segmentation
Modeling Coexisting Business Scenarios with Time-Series Panel Data: A Dynamicsbased Segmentation Approach
International Journal of Research in Marketing, Volume 29, Issue 2, June 2012, Pages
134–147
Catarina Sismeiro, Natalie Mizik, Randolph E. Bucklin
http://www.sciencedirect.com/science/article/pii/S0167811612000080?v=s5
Abstract
At a given point in time, individual consumers may be in different stages of the product
adoption or consumption cycle. As a result, different types of behavioral patterns may
coexist within a single product market. Existing segmentation approaches typically do not
address long-term dynamics in customer response and do not adequately capture this
phenomenon. We develop an approach for modeling the coexistence of multiple dynamic
behavioral patterns (business scenarios) within a single product market. We apply this
approach to physician panel data on drug prescriptions and direct-to-physician
promotions. We find markedly different responses across physician segments. For firms
that track customer-level marketing activity and sales over time, market segmentation
based on dynamic scenarios can provide a new tool for efficient targeting. The proposed
approach is straightforward to implement and is scalable to very large samples and
continuous testing.
Keywords
 Sales Force;
 Segmentation;
 Marketing-Mix Effectiveness;
 Econometric Methods;
 Time-series Modeling
The effect of the marketing–R&D interface on new product performance: The critical
role of resources and scope
International Journal of Research in Marketing, Volume 25, Issue 1, March 2008, Pages
56–68
Mark A.A.M. Leenders, Berend Wierenga
http://www.sciencedirect.com/science/article/pii/S0167811607000705
Abstract
Although the integration of marketing with R&D is widely recognized as a critical factor
for a new product's success, this study shows that not all companies benefit equally from
more integration. Using data from the worldwide pharmaceutical industry, the authors
show that integration is particularly effective in conjunction with high levels of new
product development resources. In addition, the effect of the interaction between
integration and new product development resources is stronger for companies with a
narrow strategic scope. So, although broadly focused companies often have an advantage
with respect to innovation because they can more easily leverage resources to different
markets, our results indicate that narrowly focused companies can compensate for this by
developing and integrating their marketing–R&D interface.
Keywords
 R&D–marketing integration;
 NPD resources;
 Strategic scope;
 Performance
Market Segmentation Strategy, Competitive Advantage, and Public Policy: Grounding
Segmentation Strategy in Resource-Advantage Theory
Australasian Marketing Journal (AMJ), Volume 12, Issue 1, 2004, Pages 7-25
Shelby D. Hunt, Dennis B. Arnett
http://www.sciencedirect.com/science/article/pii/S144135820470083X
Abstract
Market segmentation is one of the most widely accepted concepts in marketing. Its
fundamental thesis is that, to achieve competitive advantage and, thereby, superior
financial performance, firms should (1) identify segments of demand, (2) target specific
segments, and (3) develop specific marketing “mixes” for each targeted market segment.
However, understanding the competitive circumstance in which segmentation strategy
will work requires an understanding of the process of competition. That is, segmentation
must be grounded in competition theory. This article examines the nature of market
segmentation strategy and identifies the characteristics that a theory of competition must
possess if it is to provide a theoretical foundation for it. The criteria are argued to be that
a grounding theory must (1) provide for the existence of demand heterogeneity, (2)
justify why firms would choose to produce and market a variety of market offerings, and
(3) explicate a mechanism by which a market segmentation strategy can lead to superior
financial performance. This article argues that resource-advantage theory, a process
theory of competition, meets these criteria and, therefore, provides a theoretical
foundation for market segmentation strategy. Furthermore, it argues that the use of
market segmentation promotes public welfare by prompting the innovations that foster
firm-level, industry-level, and societal-level productivity.
Keywords
Segmentation; Competitive advantages; Resource-Advantage theory
1.2.1 Economic Utility
Why we buy what we buy: A theory of consumption values
Journal of Business Research, Volume 22, Issue 2, March 1991, Pages 159-170
Jagdish N. Sheth, Bruce I. Newman, Barbara L. Gross
http://www.sciencedirect.com/science/article/pii/0148296391900508
Abstract
This article presents a theory developed to explain why consumers make the choices they
do. The theory identifies five consumption values influencing consumer choice behavior.
Three representative applications of the theory are illustrated pertaining to choices
involving cigarette smoking. The illustrations examined include the choice to buy or not
buy (or to use or not use) cigarettes, the choice of one type of cigarette over another, and
the choice of one cigarette brand over another. Results of the operationalization of the
theory suggest that it may be used to predict consumption behavior, as well as to describe
and explain it
1.3 The Marketing Mix
Marketing mix response to entry in segmented markets
International Journal of Research in Marketing, Volume 18, Issues 1–2, June 2001,
Pages 53-66
Thomas S Gruca, D Sudharshan, K.Ravi Kumar
http://www.sciencedirect.com/science/article/pii/S0167811601000301
Abstract
We extend the analysis of response to entry to a more realistic situation where discrete
market segments allocate their demand over a set of available brands in the market. We
find that the direction and magnitude of the optimal changes in price and marketing
spending depend on the location of the incumbent relative to the entrant and the
competitive interdependence of the incumbents as determined by the degree of overlap
among the segment's choice sets.
Keywords
 Response to entry;
 Segmented markets;
 Demand
The 4S Web-Marketing Mix model
Electronic Commerce Research and Applications, Volume 1, Issue 1, Spring 2002, Pages
57-76
Efthymios Constantinides
http://www.sciencedirect.com/science/article/pii/S1567422302000066
Abstract
This paper reviews the criticism on the 4Ps Marketing Mix framework, the most popular
tool of traditional marketing management, and categorizes the main objections of using
the model as the foundation of physical marketing. It argues that applying the traditional
approach, based on the 4Ps paradigm, is also a poor choice in the case of virtual
marketing and identifies two main limitations of the framework in online environments:
the drastically diminished role of the Ps and the lack of any strategic elements in the
model. Next to identifying the critical factors of the Web marketing, the paper argues that
the basis for successful E-Commerce is the full integration of the virtual activities into the
company’s physical strategy, marketing plan and organisational processes. The four S
elements of the Web-Marketing Mix framework present a sound and functional
conceptual basis for designing, developing and commercialising Business-to-Consumer
online projects. The model was originally developed for educational purposes and has
been tested and refined by means of field projects; two of them are presented as case
studies in the paper.
Keywords
E-Commerce strategy; E-Commerce marketing; Web Marketing Mix; 4S model
The return of the fifth marketing mix P
International Journal of Hospitality Management, Volume 30, Issue 4, December 2011,
Pages 763-764
Abraham Pizam
http://www.sciencedirect.com/science/article/pii/S0278431911000818
Since McCarthy (1964) introduced the concept of the marketing mix and its four P's
(Product, Price, Promotion and Place), the notion, existence and usefulness of the above
four elements have become an important bedrock in the modern marketing theory.
Despite this, a growing number of theorists have questioned the universality of these four
elements and claimed that the four P's were product oriented and thus not applicable to
other settings such as consumer marketing, industrial marketing, relationship marketing,
retail marketing and service marketing. Therefore they proposed various modifications to
the mix by adding, eliminating or substituting some of the elements (Constantinides,
2006).
Managing the Marketing Mix
Eyecare Business, 2001, Pages 123-164
Gary L. Moss, Peter G. Shaw-McMinn
http://www.sciencedirect.com/science/article/pii/B9780750672382500106
The contemporary value chain concept in eyecare has its foundation in the principles
described by Michael Porter in Competitive Advantage, his classic text on business
strategy.1 The value chain consists of the systems and operations that a practice uses to
deliver premium value to its customers. The goal is to offer a level of performance that
ultimately translates into superior revenues and profit. The value chain process starts
when the ECP acquires the resources necessary to deliver what is promised (inbound
logistics). Next, the ECP develops specific “operations” (practice work processes) that
will deliver the products and services to patients (outbound logistics) in a cost-saving
manner.1 These two steps are combined with the marketing and sales function to make
potential patients aware of the superior value the practice offers. The final result is a
patient perception that focuses on high-quality service to “keep them happy.” The value
in this model is either the worth of the services patients purchase or the price they are
willing to pay for what they receive.1 The implication for eyecare is that, to earn patient
loyalty, the ECP must provide value above and beyond what patients expect. This chapter
demonstrates how the marketing function enhances the value chain within the eyecare
setting and introduces the basic tools available to assist the ECP in marketing endeavors.
Chapter 2: ECONOMICS
2.1 Introduction
2.2 Markets
2.2.1 Supply and Demand
Changing patterns in global lead supply and demand
Journal of Power Sources, Volume 116, Issues 1–2, 1 July 2003, Pages 23-31
H. Roberts
http://www.sciencedirect.com/science/article/pii/S0378775302007012
Abstract
The past decade has seen some very significant changes in the supply and the demand for
lead. One of the most obvious developments is the emergence of China—both as the
world’s largest producer of primary lead and as a very significant consumer. Perhaps less
obvious have been the increasing role of secondary lead in meeting demand for refined
metal and the rapid growth in demand for industrial batteries, which have helped to
sustain an annual average growth rate in Western World consumption of 3.4% between
1993 and 2000. Patchy knowledge about the lead industry in China has made it difficult
to anticipate developments there and has created uncertainty in the global market. This
uncertainty, and lead’s poor environmental image, largely undeserved as it may be today,
has meant few companies outside the lead business want to be seen participating in it.
This is just one factor accounting for the very limited increase in lead mine production
for the foreseeable future. With around 75% of lead now being used in batteries and a
very high global scrap recycling rate, it is probable that most, if not all, growth in lead
demand can be met without an overall increase in mine production. The challenge for the
lead industry will be to ensure that sufficient recycling capacity is in place in the right
parts of the world to process an increasing quantity of battery and other lead-bearing
scrap. Huge investment in the world’s telecommunications infrastructure and IT networks
in the second half of the 1990s created a major market for industrial lead-acid batteries.
With the collapse of the market for telecommunications equipment in 2001, lead
consumption has fallen sharply and has revealed the extent to which demand growth in
recent years has been dependent on this sector.
Keywords
 Lead supply and demand;
 Primary;
 Recycling;
 Secondary;
 Lead-acid batteries
Hepatitis C vaccine: supply and demand
The Lancet Infectious Diseases, Volume 8, Issue 6, June 2008, Pages 379-386
G Thomas Strickland, Samer S El-Kamary, Paul Klenerman, Alfredo Nicosia
http://www.sciencedirect.com/science/article/pii/S1473309908701269
Summary
Despite difficulties associated with extreme variability and mutability of hepatitis C virus
(HCV), several vaccines that prevent initial infection or viral persistence, or that clear
viraemia in individuals with chronic HCV infections, are currently in development. At
least one vaccine that may prevent chronic persistent infections will soon be available for
testing. We review the widespread importance of HCV infection and disease, the immune
response to HCV and correlates of protection, prevention strategies and vaccine
candidates, and groups that will need the vaccine and provide suitable populations for
assessing vaccine safety and efficacy. The evaluation of prophylactic vaccines is
particularly problematic since distribution must focus upon individuals at high risk of
exposure—for example, intravenous drug users and health-care providers in areas with
high HCV prevalence. Although there is a huge need for therapeutic vaccines, further
immunological hurdles must be cleared before one becomes available
A supply and demand based volatility model for energy prices
Energy Economics, Volume 31, Issue 5, September 2009, Pages 736-747
Takashi Kanamura
http://www.sciencedirect.com/science/article/pii/S0140988309000589
Abstract
This paper proposes a new volatility model for energy prices using the supply–demand
relationship, which we call a supply and demand based volatility model. We show that
the supply curve shape in the model determines the characteristics of the volatility in
energy prices. It is found that the inverse Box–Cox transformation supply curve
reflecting energy markets causes the inverse leverage effect, i.e., positive correlation
between energy prices and volatility. The model is also used to show that an existing
(G)ARCH-M model has the foundations on the supply–demand relationship.
Additionally, we conduct the empirical studies analyzing the volatility in the U.S. natural
gas prices.
Keywords
 Energy prices;
 Volatility;



Supply curve;
Inverse leverage effect;
Volatility-in-mean effect
2.2.2 Elasticity
Demand for international telecommunication time-varying price elasticity
Journal of Econometrics, Volume 70, Issue 1, January 1996, Pages 243–260
Peter Hackl, Anders H. Westlund
http://www.sciencedirect.com/science/article/pii/0304407694016917
Abstract
In this empirical study, the price elasticity of the demand for telecommunication between
Sweden and three destination countries, Germany (FRG), United Kingdom, and USA,
was investigated. Within the constant parameter framework the structural relations
identified to explain the telecommunication demand are similar for the three countries.
The short- and long-term price elasticities of the demand derived from the models are in
the range that is reported in other empirical studies. However, recursive estimation and
the analysis of recursive residuals support theoretical assumptions of time variability of
price elasticity. Kalman filtering in various versions, differing in the way of determining
the hyperparameters, as well as moving local regression analysis are applied to estimate
the trajectories of the price elasticity.
Keywords
 Telecommunication demand;
 Price elasticity;
 Structural change;
 Kalman filtering;
 Moving local regression
Simple structural econometrics of price elasticity
Economics Letters, Volume 86, Issue 1, January 2005, Pages 1-6
Catherine Cazals, Frédérique Fève, Patrick Fève, Jean-Pierre Florens
http://www.sciencedirect.com/science/article/pii/S0165176504001739
Abstract
This paper delivers a methodology for the identification of the price elasticity of demand.
The approach relies on a structural model of consumer behavior wherein demand and
expenditure depend on a heterogeneity factor. We show that the structural parameters are
not identified in the one-period case. Conversely, in a two-period case, the structural
parameters, and thus the price elasticity of demand, are identified for each period.
Keywords
 Structural model;
 Heterogeneity factor;
 Price elasticity
“Does subsidy work? Price elasticity of demand for influenza vaccination among the
elderly in Japan
Health Policy, Volume 91, Issue 3, August 2009, Pages 269-276
Masahide Kondo, Shu-ling Hoshi, Ichiro Okubo
http://www.sciencedirect.com/science/article/pii/S0168851008002947
Abstract
Objectives
Subsidy for influenza vaccination is often provided to the elderly in order to encourage
them to receive a flu shot in developed countries. However, its effect on uptake rate, i.e.,
price elasticity of demand, has not been well studied.
Methods
Japan's decentralised vaccination programme allows observation of various pairs in price
and uptake rate of flu shots among the elderly by the municipality from 2001/2002 to
2004/2005 season. We combine our sample survey data (n = 281), which monitor price,
subsidy and uptake rate, with published data on local characteristics in order to estimate
price elasticity of demand with panel model.
Results
We find price elasticity of demand for influenza vaccine: nearly zero in nationwide,
nearly zero in urban area, and −1.07 in rural area.
Conclusions
The results question the rationale for subsidy, especially in urban area. There are cases
where maintaining or increasing the level of subsidy is not an efficient allocation of finite
health care resources. When organising a vaccination programme, health manager should
be careful about the balance between subsidy and other efforts in order to encourage the
shots with price elasticity in mind.
Keywords
Demand; Price elasticity; Elderly; Influenza; Subsidy; Vaccination
Price and income elasticities of demand for air transportation: Empirical evidence from
US airfreight industry
Journal of Air Transport Management, Pages 18-19
Junwook Chi, Jungho
http://www.sciencedirect.com/science/article/pii/S0969699711000950Baek
Abstract
This paper examines the demand for airfreight in the US as a function of real income and
the price of airfreight between 1996 and 2010. Results show that a unique long-run
equilibrium relationship exists between the volume of the US airfreight and the selected
variables. The estimated long-run price and income elasticities indicate that US airfreight
industry is price and income elastic. It is also found that income is a more powerful
determinant of the long-run behavior of US airfreight industry than airfreight price
Highlights
► We examine the demand for airfreight in the US as a function of real income and the
price of airfreight. ► A unique long-run equilibrium relationship exists between the
volume of the US airfreight and the selected variables. ► US income is found to be a
more powerful determinant of the long-run behavior of the airfreight industry.
Keywords
 Airfreight transportation;
 Airfreight demand analysis
2.3 Gross Domestic Product
Renewable energy: An efficient mechanism to improve GDP
Energy Policy, Volume 36, Issue 8, August 2008, Pages 3045-3052
Taichen Chien, Jin-Li Hu
http://www.sciencedirect.com/science/article/pii/S0301421508001894
Abstract
This article analyzes the effects of renewable energy on GDP for 116 economies in 2003
through Structural Equation Modeling (SEM) approach. In order to decipher the
mechanism of how the use of renewables improves macroeconomic efficiency, we
decompose GDP by the “expenditure approach”. Although previous theory predicts
positive effects of renewables on capital formation and trade balance, the SEM results
show that renewables have a significant positive influence on capital formation only. The
result that renewables do not have a significant impact on trade balance implies that
renewables do not have an import substitution effect. Thus, we confirm the positive
relationship between renewable energy and GDP through the path of increasing capital
formation, but not for the path of increasing trade balance.
Keywords
 Structural Equation Modeling (SEM);
 Technical efficiency;
 Renewable energy
Real GDP, real domestic income, and terms-of-trade changes
Journal of International Economics, Volume 62, Issue 1, January 2004, Pages 83–106
Ulrich Kohli
http://www.sciencedirect.com/science/article/pii/S0022199603000977
Abstract
Real GDP tends to underestimate the increase in real domestic income and welfare when
the terms of trade improve. An improvement in the terms of trade is similar to a
technological progress, but when computing real GDP, the national accounts treat the
former as a price phenomenon and the latter as a real event. Calculations for 26 countries
show that the divergence can add up to more than 10% of GDP in less than two decades.
Our analysis has a solid theoretical foundation, being based on the GNP/GDP function
approach to modeling the production sector of an open economy.
Keywords
Real GDP; GDP deflator; Terms of trade; Real income; Economic growth
The GDP paradox
Journal of Economic Psychology, Volume 30, Issue 2, April 2009, Pages 117-135
Jeroen C.J.M. van den Bergh
http://www.sciencedirect.com/science/article/pii/S0167487008001141
Abstract
Despite all theoretically and empirically motivated criticism of GDP as a social welfare
and progress indicator, its role in economics, public policy, politics and society continues
to be influential. To resolve this paradox, one has to recognize that many economists
accept the criticism of the GDP indicator but deny its relevance. This paper evaluates the
reasons for denial. This entails five steps: (1) a brief review is offered of the extensive
literature showing that GDP per capita (growth) is far from a robust indicator of social
welfare (progress); (2) the influence of GDP information on economic decisions by firms,
consumers, investors and governments is examined; (3) behavioural explanations for a
widespread belief in the relevance of GDP are discussed; (4) the customary arguments in
favour of the GDP indicator are analysed; and (5) proposed alternatives to GDP are
evaluated. The paper ends with outlining the implications of giving less attention to GDP
information in policy and politics. It is argued that removal of the information failure
which GDP represents, in monitoring economic progress and guiding public policy, will
lead to decisions and developments being more in line with improving human well-being.
Moreover, ignoring GDP information is consistent with a perfectly neutral stance
regarding economic (GDP) growth. Indeed, an unconditional anti- or pro-growth
imperative acts as an unnecessary constraint on our search for human progress.
Keywords
Bounded rationality; Information failure; Lock-in; Policy indicators; Economic impact of
GDP information
What does the yield curve tell us about GDP growth?
Journal of Econometrics, Volume 131, Issues 1–2, March–April 2006, Pages 359-403
Andrew Ang, Monika Piazzesi, Min Wei
http://www.sciencedirect.com/science/article/pii/S0304407605000163
Abstract
A lot, including a few things you may not expect. Previous studies find that the term
spread forecasts GDP but these regressions are unconstrained and do not model regressor
endogeneity. We build a dynamic model for GDP growth and yields that completely
characterizes expectations of GDP. The model does not permit arbitrage. Contrary to
previous findings, we predict that the short rate has more predictive power than any term
spread. We confirm this finding by forecasting GDP out-of-sample. The model also
recommends the use of lagged GDP and the longest maturity yield to measure slope.
Greater efficiency enables the yield-curve model to produce superior out-of-sample GDP
forecasts than unconstrained OLS regressions at all horizons.
Keywords
Term structure; Forecasting; Financial markets and the macroeconomy; Monetary policy
Estimation of direct and indirect impact of oil price on growth
Economics Letters, Volume 73, Issue 2, November 2001, Pages 147-153
Tilak Abeysinghe
http://www.sciencedirect.com/science/article/pii/S0165176501004761
Abstract
Using a new methodology, this paper measures the direct and indirect effects of oil prices
on GDP growth of 12 economies. Because of the indirect effect, which is transmitted
through a trade matrix, even the net oil exporters like Indonesia and Malaysia cannot
escape the negative influence of high oil prices.
Keywords
VARX model; Trade matrix; Direct and indirect effects
2.4 Inflation
Memories of high inflation
European Journal of Political Economy, Volume 28, Issue 2, June 2012, Pages 174-191
Michael Ehrmann, Panagiota Tzamourani
http://www.sciencedirect.com/science/article/pii/S0176268011001479
Abstract
Inflation has been well contained over the last decades in most industrialized countries.
This implies, however, that memories of high inflation are likely to fade, because over
time larger parts of the population have never experienced high inflation, whereas those
who have might forget. This paper tests whether memories of high inflation affect agents'
preferences about the importance attached to price stability, using a large database
covering over 50,000 survey responses from 23 countries over the years 1981–2000. It
finds that memories of hyperinflation are there to last, whereas those of less drastic
inflation experiences tend to erode after around 10 years. The recent decline in the
importance attached to price stability does therefore most likely reflect mitigated inflation
concerns in an environment of low and stable inflation, but also the consequences of
fading memories of high inflation. The longer central banks have successfully delivered
price stability, the more important it is for them to engage in a pro-active communication,
especially with the younger generations, about the merits of low and stable inflation.
Highlights
► Having experienced high inflation affects agents' inflation aversion. ► Memories of
hyperinflation have a lasting effect on inflation aversion. ► Whereas memories of less
drastic inflation erode after around 10 years. ► With low inflation over the last decades,
inflation aversion might thus decline. ► This makes central bank communication about
merits of price stability essential.
Keywords
Inflation aversion; Inflation memories; Hyperinflation; World Values Survey
Why inflation targeting central banks seem to follow a standard Taylor rule
Economics Letters, Volume 115, Issue 1, April 2012, Pages 28-30
Stefan Kühn, Joan Muysken
http://www.sciencedirect.com/science/article/pii/S0165176511005106
Abstract
Central banks only caring about inflation stability seem to follow a standard Taylor rule.
The alleged reaction to the output gap could be a reaction of the nominal interest rate to
variations in the natural real rate of interest.
Highlights
► The output gap is relevant in the Taylor rule even for inflation targeting central banks.
► The interest rate rule should use the natural real interest rate (NRRI) and natural
output. ► We establish a theoretical link between the natural output and NRRI. ► This
link can cause weight on the output gap in regression when NRRI is not known.
Keywords
Taylor rule; New Keynesian; Endogenous growth
Jointly evaluating the Federal Reserve’s forecasts of GDP growth and inflation
International Journal of Forecasting, Volume 28, Issue 2, April–June 2012, Pages 309314
Tara M. Sinclair, Edward N. Gamber, Herman Stekler, Elizabeth Reid
http://www.sciencedirect.com/science/article/pii/S0169207011000938
Abstract
In this paper we jointly evaluate the Federal Reserve staff forecasts of U.S. real output
growth and the inflation rate, assuming that the forecasts are to be used as inputs for the
Taylor rule. Our simple methodology generates “policy forecast errors” which have a
direct interpretation for the impact of forecast errors on the target interest rate given by
the Taylor rule. Without interest rate smoothing, we find that, on average, the Taylor rule
target interest rate would have been approximately a full percentage point away from the
intended target because of errors in forecasting output growth and inflation. Our results
are robust to changes in the forecast horizon and to changes in the weights on the
variables in the policy rule.
Keywords
Multivariate forecasts; Taylor rule; Monetary policy; Loss function; Policy forecast
errors; Greenbook
Are the Fed’s inflation forecasts still superior to the private sector’s?
Journal of Macroeconomics, Volume 31, Issue 2, June 2009, Pages 240-251
Edward N. Gamber, Julie K. Smith
http://www.sciencedirect.com/science/article/pii/S0164070408000621
Abstract
We examine the relative improvement in forecasting accuracy of the Federal Reserve
(Greenbook forecasts) and private-sector forecasts (the Survey of Professional
Forecasters and Blue Chip Economic Indicators)for inflation. Previous research by
Romer and Romer [Romer, Christina, David, Romer, 2000. Federal reserve information
and the behavior of interest rates. American Economic Review 90, 429–457], and Sims
[Sims, Christopher, 2002. The role of models and probabilities in the monetary policy
process. Brookings Papers on Economic Activity 2, 1–62] shows that the Fed is more
accurate than the private sector at forecasting inflation. In a separate line of research,
Atkeson and Ohanian [Andrew, Atkeson, Ohanian, Lee E., 2001. Are Phillips curves
useful for forecasting inflation? Federal Reserve Bank of Minneapolis Quarterly Review
25, 2–11] and Stock and Watson [Stock, James, Watson, Mark, 2007. Why has U.S.
inflation become harder to forecast? Journal of Money, Credit and Banking 39] document
changes in the forecastability of inflation since the Great Moderation. These works
suggest that the reduced inflation variability associated with the Great Moderation was
mostly due to a decline in the variability of the predictable component inflation. We
hypothesize that the decline in the variability of the predictable component of inflation
has evened the playing field between the Fed and the private sector and therefore led to a
narrowing, if not disappearance, of the Fed’s relative forecasting advantage. We find that
the Fed’s forecast errors remain significantly smaller than the private sector’s but the gap
has narrowed considerable since the mid-1980s, especially after 1994.
Keywords
Forecasting inflation; Survey of Professional Forecasters; Blue Chip forecasts;
Greenbook forecasts; Naïve forecasts
2.5 Exchange Rates
2.5.1 Measuring Exchange Rates
The high-frequency response of exchange rates to monetary policy actions and statements
Journal of Banking & Finance, Volume 35, Issue 2, February 2011, Pages 478-489
Carlo Rosa
http://www.sciencedirect.com/science/article/pii/S0378426610003407
Abstract
This paper investigates the impact of US monetary policy on the level and volatility of
exchange rates using an event study with intraday data for five currencies (the US dollar
exchange rate versus the euro, the Canadian dollar, the British pound, the Swiss franc,
and the Japanese yen). I construct two indicators of news about monetary policy
stemming separately from policy decisions and from balance of risk statements.
Estimation results show that both policy decisions and communication have economically
large and highly significant effects on the exchange rates, with the surprise component of
statements accounting for most of the explainable variation in exchange rate returns in
response to monetary policy. This paper also shows that exchange rates tend to absorb
FOMC monetary surprises within 30–40 min from the announcement release.
Keywords
High-frequency exchange rates; US Federal Reserve; Central bank communication;
Monetary policy shocks; News shocks
Elections, exchange rates and reform in Latin America
Journal of Development Economics, Volume 92, Issue 2, July 2010, Pages 166-174
Rodolfo Cermeño, Robin Grier, Kevin Grier
http://www.sciencedirect.com/science/article/pii/S0304387809000297
Abstract
In this paper, we study the link between real exchange rate (RER) depreciation and
elections in Latin America. Our contribution is threefold. First, we employ a statistical
model that takes into account the pervasive conditional heteroskedasticity found in
financial data and includes a wide range of macroeconomic variables as regressors.
Second, we test whether the wave of central bank reform that swept the region has had
any effect on the existence or strength of the electoral cycle in exchange rates. Third, we
test an additional hypothesis, namely, that financial liberalization may also be an
important variable explaining changes in electoral effects on the real exchange rate. In a
panel of 9 Latin American countries with available macroeconomic data and a history of
exogenous election dates, we confirm the previous findings that real depreciation
intensifies after elections even when modeling the significant conditional
heteroskedasticity in these data. We also show, for the first time in the literature, that
post-election exchange rates are significantly less predictable. We go on to test whether
central bank reform has influenced the way in which elections affect the RER in Latin
America. If reform has been effective at reducing political manipulation of the exchange
rate, then any relationship we see between elections and the RER before central bank
reform should be mitigated in the post-reform era. We find that the relationship
disappears after reform and that post-reform real exchange rates are also significantly less
volatile. Finally, we show that financial liberalization seems to have a stronger effect on
the conditional variance of the RER than does central bank reform, but reform has a
stronger impact on the conditional mean.
Keywords
Latin America; Elections; Exchange rates; Central Bank Reform; Conditional
Heteroskedasticity; Financial liberalization
Asset prices, exchange rates and the current account
European Economic Review, Volume 54, Issue 5, July 2010, Pages 643-658
Marcel Fratzscher, Luciana Juvenal, Lucio Sarno
http://www.sciencedirect.com/science/article/pii/S0014292109001263
Abstract
This paper analyses the role of asset prices in comparison to other factors, in particular
exchange rates, as a driver of the US trade balance. It employs a Bayesian structural VAR
model that requires imposing only a minimum of economically meaningful sign
restrictions. We find that equity market shocks and housing price shocks have been major
determinants of the US current account in the past, accounting for up to 30% of the
movements of the US trade balance at a horizon of 20 quarters. By contrast, shocks to the
real exchange rate have been less relevant, explaining about 9% and exerting a more
temporary effect on the US trade balance. Our findings suggest that large exchange rate
movements may not necessarily be the key element of an adjustment of today's large
current account imbalances, and that in particular relative global asset price changes
could be a potent source of adjustment.
Keywords
Current account; Global imbalances; Exchange rates; Bayesian VAR
How do exchange rates co-move? A study on the currencies of five inflation-targeting
countries
Journal of Banking & Finance, Volume 35, Issue 2, February 2011, Pages 418–429
Xiao-Ming Li
http://www.sciencedirect.com/science/article/pii/S0378426610003286
Abstract
This paper does three things. First, it explores the type of asymmetry in exchange rate
correlation for five inflation-targeting countries. We show their currencies co-move more
closely with the currencies of some influential foreign countries during joint
appreciations than joint depreciations against a world currency. Second, it establishes
empirically the linkage between interest rate differentials and exchange rate correlation.
We find evidence that both widening and narrowing interest rate differentials will reduce
the correlation. Third, it proposes a new version of the asymmetric dynamic conditional
correlation model. The model proves to be capable of providing great insight into the two
issues investigated.
Keywords
Exchange rate correlation; Interest rate differentials; ADCCE model; Inflation-targeting
countries
2.5.2 Exchange Rate Systems
Fixed exchange rates and trade
Journal of International Economics, Volume 70, Issue 2, December 2006, Pages 359–
383
Michael W. Klein, Jay C. Shambaugh
http://www.sciencedirect.com/science/article/pii/S0022199606000250
Abstract
A classic argument for a fixed exchange rate is its promotion of trade. Empirical support
for this, however, is mixed. While one branch of research consistently shows a small
negative effect of exchange rate volatility on trade, another, more recent, branch presents
evidence of a large positive impact of currency unions on trade. This paper helps resolve
this disconnect. Our results, which use a new data-based classification of fixed exchange
rate regimes, show a large, significant effect of a fixed exchange rate on bilateral trade
between a base country and a country that pegs to it. These results suggest an
economically relevant role for exchange rate regimes in trade determination since a
significant amount of world trade is conducted between countries with fixed exchange
rates.
Keywords
 Exchange rate regimes;
 Gravity model;
 Trade;
 Fixed exchange rate
Exchange rate regime preferences of the international sector. Firm-level evidence
Economics Letters, Volume 116, Issue 1, July 2012, Pages 26–30
José Fernández-Albertos
http://www.sciencedirect.com/science/article/pii/S0165176512000031
Abstract
This paper argues that fixed exchange rate regimes are preferred by the international
sector only if they are adopted in economies endowed with anti-inflationary policy-
making institutions (i.e., independent central banks). Cross-national firm-level data gives
strong support to this claim.
Highlights
► Internationally-oriented firms’ exchange rate preferences vary across countries. ►
Fixed regimes are preferable only if the level of the exchange rate is competitive. ►
These firms’ preference for pegs is greater when central banks are independent.
Keywords
Exchange rate regime; Political economy; International sector; Central bank
independence; Firm surveys
How successful is the G7 in managing exchange rates?
Journal of International Economics, Volume 79, Issue 1, September 2009, Pages 78–88
Marcel Fratzscher
http://www.sciencedirect.com/science/article/pii/S0022199609000828
Abstract
The paper assesses the extent to which the Group of Seven (G7) has been successful in its
management of major currencies since the 1970s. Using an event-study approach, the
paper finds evidence that the G7 has been overall effective in moving the US dollar, yen
and euro in the intended direction at horizons of up to three months after G7 meetings,
but not at longer horizons. While the success of the G7 is partly dependent on the market
environment, it is also to a significant degree endogenous to the policy process itself. In
particular the reputation and credibility of the G7, as well as its ability to communicate a
consensus among individual G7 members, are important determinants for the G7's ability
to manage major currencies. The paper concludes by analyzing the factors that help the
G7 build reputation and consensus, and by discussing the implications for global
economic governance.
Keywords
 Group of Seven;
 G7;
 Exchange rate;
 Communication;
 Policy;
 Adjustment;
 Success;
 Event-study methodology;
 US dollar;
 Yen;
 Euro
2.5.3 Purchasing Power Parity
Competitiveness of nations: A knowledge discovery examination
European Journal of Operational Research, Volume 166, Issue 1, 1 October 2005, Pages
185-211
Stelios H. Zanakis, Irma Becerra-Fernandez
http://www.sciencedirect.com/science/article/pii/S0377221704002917
Abstract
This paper presents the insights gained from the use of data mining and multivariate
statistical techniques to identify important factors associated with a country's
competitiveness and the development of knowledge discovery in databases (KDD)
models to predict it. In addition to stepwise regression and weighted non-linear
programming techniques, intelligent learning techniques (artificial neural networks), and
inferential techniques (classification and regression trees), were applied to a dataset of 43
countries from the World Competitiveness Yearbook (WCY). The dataset included 55
variables on economic, internationalization, governmental, financial, infrastructure,
management, science and technology, as well as demographic and cultural
characteristics. Exploratory data analysis and parameter calibration of the intelligent
method architectures preceded the development and evaluation of reasonably accurate
models (mean absolute error <5.5%), and subsequent out-of-sample validations. The
strengths and weaknesses of each of the KDD techniques were assessed, along with their
relative performance and the primary input variables influencing a country's
competitiveness. Our analysis reveals that the primary drivers of competitiveness are
lower country risk rating and higher computer usage, in entrepreneurial urbanized
societies with less male dominance and basic infrastructure, with higher gross domestic
investment, savings and private consumption, more imports of goods and services than
exports, increased purchase power parity GDP, larger and more productive but not less
expensive labor force, and higher R&D expenditures. Without diminishing the role and
importance of WCY reports, our approach can be useful to estimate the competitiveness
of many countries not included in WCY, while our findings may benefit policy makers
and international agencies to expand their own abilities, insights and establish priorities
for improving country competitiveness.
Keywords
Data mining; Knowledge discovery; Statistics; Competitiveness; Country comparisons
Primary Kidney Disease and Post–Renal Transplantation Hospitalization Costs
Transplantation Proceedings, Volume 39, Issue 4, May 2007, Pages 962-965
K. Ghoddousi, M.K. Ramezani, S. Assari, M.M. Lankarani, M. Amini, H. Khedmat, M.T.
Hollisaaz
http://www.sciencedirect.com/science/article/pii/S0041134507002680
Abstract
Background and aim
This study sought to assess posttransplantation hospitalizations costs in diabetic and
nondiabetic subjects to see whether diabetes mellitus (DM) as a primary cause of endstage renal disease (ESRD) increased posttransplantation hospitalization costs.
Methods
From 2000 to 2005, the hospitalization costs of 387 consecutive rehospitalizations of
kidney recipients were retrospectively compared for two groups: patients with ESRD due
to DM (n = 71) and those with ESRD of non-DM etiologies (n = 316). The
hospitalization costs included the costs of hotel, medications, surgical procedures,
paraclinical tests, imaging tests, health personnel time, special services (ie, patient
transportation by ambulance), and miscellaneous costs. Societal perspective was used
with costs expressed in PPP$ purchase power parity dollars (PPP$) estimated to be equal
to 272 Iranian rials.
Results
Compared with the non-DM group, DM patients experienced significantly higher median
costs both in total (1262 vs 870 PPP$, P = .001) and in cost components related to hotel
(384 vs 215 PPP$, P = .001), health personnel time (235 vs 115 PPP$, P < .001),
paraclinical tests (177 vs 149 PPP$, P = .012), and special services (100 vs 74 PPP$, P =
.041). The mean of age was higher (P < .001), and the transplantation hospitalization time
interval was also shorter in the DM group (median: 2.7 vs 12, P = .025).
Conclusions
Considering DM as a leading cause of ESRD and its increasing prevalence in some
countries, the association between hospitalization costs of posttransplant patients and DM
may be of great economic importance to many transplantation centers.
Cost is an important issue for transplantation centers, especially in developing countries
where health care systems face greater economic pressures due to restrictions in financial
resources. [1], [2], [3] and [4] Financial resource restrictions in many transplant centers
make identification of the principal determinants of cost a necessity in resource
management.5 Controlling costs and resource utilization associated with renal
transplantation is an important goal in health care management.6 In this regard,
posttransplantation rehospitalizations are known to be the main contributors to health
care utilization after kidney transplantation.7
There is a large pool of evidence indicating that the patients with end-stage renal disease
(ESRD) due to diabetes mellitus (DM) are at greater risk for some complications [8], [9]
and [10] and more likely to be hospitalized [11], [12], [13] and [14] following renal
transplantation compared with other posttransplantation patients. However, to the
authors’ knowledge, no study has yet addressed the question “Does primary kidney
disease (ie, ESRD etiology) affect posttransplantation health care costs?” This study
sought to compare the cost of posttransplantation rehospitalizations in patients with
ESRD due to DM versus non-DM etiologies.
A century of purchasing power parity confirmed: The role of nonlinearity
Journal of International Money and Finance, Volume 29, Issue 7, November 2010, Pages
1398–1405
Hyeongwoo Kim, Young-Kyu Moh
http://www.sciencedirect.com/science/article/pii/S0261560610000483
Abstract
Taylor (2002) claims that Purchasing Power Parity (PPP) has held over the 20th century
based on strong evidence of stationary for century-long real exchange rates for 20
countries. Lopez et al. (2005), however, found much weaker evidence of PPP with
alternative lag selection methods. We reevaluate Taylor’s claim by implementing a
recently developed nonlinear unit root test by Park and Shintani (2005). We find strong
evidence of nonlinear mean-reversion in real exchange rates that confirms Taylor’s claim.
We also find a possible misspecification problem in using the ESTAR model that may
not be detected with Taylor-approximation based tests.
Keywords
 Purchasing power parity;
 Transition autoregressive process;
 Inf-t unit root test
2.5.4 Governmental Role and Implications of Exchange Rate Changes
Government expenditure and equilibrium real exchange rates
Journal of International Money and Finance, Volume 21, Issue 5, October 2002, Pages
667–692
Ronald J. Balvers, Jeffrey H. Bergstrand
http://www.sciencedirect.com/science/article/pii/S0261560602000153
Abstract
Government expenditures (financed by lump-sum taxes) influence real exchange rates
potentially via a resource-withdrawal channel and a consumption-tilting channel. Recent
theoretical and empirical studies have considered only the effects of government
spending through the resource-withdrawal channel. We solve for the theoretical
relationships among the real exchange rate, relative private consumption, relative
government consumption, and tradables and nontradables production in a two-country
general equilibrium model and then estimate the model’s structural equations. The results
suggest that government expenditures influence real exchange rates approximately
equally via the resource-withdrawal and consumption-tilting channels and that
government and private consumption are complements in utility.
Keywords
 Real exchange rates;
 Government expenditure
Switching to floating exchange rates, devaluations, and stock returns in MENA countries
International Review of Financial Analysis, Volume 21, January 2012, Pages 119-127
Georgios Chortareas, Andrea Cipollini, Mohamed Abdelaziz Eissa
http://www.sciencedirect.com/science/article/pii/S1057521911000846
Abstract
We test for the impact of the announcements of floating and/or devaluating the exchange
rate on stock returns in three MENA countries after the financial crises they experienced.
We, first, use an event-study methodology to test for event-induced abnormal volatility of
stock returns in Egypt, Morocco and Turkey. We, then, use three different methodologies
to test for abnormal returns: a traditional approach and two approaches that control for
event-induced volatility. We find clear evidence of abnormal volatility and abnormal
returns due to the floating of the Egyptian and Turkish exchange rates in 2003 and 2001,
respectively. In contrast, our results do not show that the devaluation of the Moroccan
currency in 2001 resulted in abnormal volatility and/or abnormal returns.
Keywords
Exchange rate; Stock returns; Returns volatility; MENA region; Event study; Financial
crisis
2.6 Innovation and Economics
Analysis of technological innovation from business economics and management
Technovation, Volume 26, Issue 3, March 2006, Pages 300-311
Jesús Galende
http://www.sciencedirect.com/science/article/pii/S0166497205000763
Abstract
This paper identifies and analyses the main contributions to the analysis of firms'
innovative activities of five approaches related to business economics and management:
industrial organization, transaction costs economy, positive agency theory, resourcebased view and evolutionary theory. Complementarity can be noted among these
approaches. They can all be applied for analysing a specific aspect of innovative activity.
However, the contributions of evolutionary theory seem to comprise the most
comprehensive approach for studying the firm's innovative process from an internal point
of view and dealing with its complex characteristics.
Keywords
Innovation; Innovative process; Industrial organization; Transaction costs; Agency
theory; Resources and capabilities; Evolutionary theory
Beyond Schumpeter: Nonlinear economics and the evolution of the U.S. innovation
system
Journal of Socio-Economics, Volume 27, Issue 1, 1998, Pages 97–115
Gregory A. Daneke
http://www.sciencedirect.com/science/article/pii/S1053535799800791
Abstract
To the extent that the U.S. has a national innovation system (actually systems), it is in the
midst of a dramatic transformation. Essentially, international competition and internal
political machinations are causing a shift away from a Schumpeterian system of
entrepreneurial capitalism toward a more mercantilistic system. Industrial structures and
government policies alike are beginning to mirror their global counterparts. Meanwhile,
strategic analyses, both at the level of the firm and the nation state, remain mired in the
methods of the past industrial epoch. This conceptual overview contends that the
emerging science of nonlinear or advanced systems (chaos and complexity theories)
provides a useful addendum to Schumpeter's perspectives. Moreover, tools and strategies
derived from nonlinear or advanced systems are better suited to both understanding and
managing this transformation.
The elixir (or burden) of youth? Exploring differences in innovation between start-ups
and established firms
Research Policy, Volume 41, Issue 2, March 2012, Pages 319-333
Paola Criscuolo, Nicos Nicolaou, Ammon Salter
http://www.sciencedirect.com/science/article/pii/S004873331100223X
Abstract
Despite the widely acknowledged role of start-ups in economic development, little is
known about their innovative activities compared with those of established firms.
Drawing on a sample of 12,209 UK firms, we differentiate between services and
manufacturing firms and, using a matching estimator approach, demonstrate that start-ups
differ significantly from established firms in their innovation activities. We find that in
services, being a start-up increases the likelihood of product innovations. However, in
manufacturing, we find no significant differences in the likelihood of product innovation
between start-ups and established firms. When examining the returns to innovation, we
find that start-ups have a significant advantage both in services and in manufacturing. We
explore the implications of these results for theory and policy.
Keywords
Entrepreneurship; Service innovation; Innovative performance; Start-ups; Appropriability
regimes
The two sides of proximity in industrial clusters: The trade-off between process and
product innovation
Journal of Urban Economics, Volume 63, Issue 1, January 2008, Pages 146–162
Jean-Marc Callois
http://www.sciencedirect.com/science/article/pii/S0094119007000071
Abstract
According to the literature on industrial districts, the proximity of small firms operating
in a similar sector can lead to several positive externalities, which enhance collective
efficiency. We investigate this assumption by building a microeconomic model in which
a set of small firms trades off two opposite effects. First, the closer they are to each other,
the more they can share fixed costs or pool risks, and the more they can innovate on more
efficient processes. Second, the closer they are, the less diverse is their cognitive
environment, and the less they innovate on products. We find that there is a “bell-shaped
relationship” between proximity and the firms' performance. Moreover, equilibrium
configurations tend to produce too much proximity from the consumers' and the workers'
point of view, but too few proximity from the firms' point of view.
Keywords
 Industrial districts;
 Clusters;
 Industrial organization;
 Process innovation;
 Product innovation
Chapter 3: STRATEGY
3.1 Introduction
On what should firms focus in transitional economies? A study of the contingent value of
strategic orientations in China
International Journal of Research in Marketing, Volume 24, Issue 1, March 2007, Pages
3-15
Gerald Yong Gao, Kevin Zheng Zhou, Chi Kin (Bennett) Yim
http://www.sciencedirect.com/science/article/pii/S0167811606000826
Abstract
This study examines the roles of strategic orientations (i.e., customer, competitor, and
technology) in a transitional economy, China. On the basis of a cross-industry sample of
408 brands, we find that the effects of customer and technology orientations on business
performance are contingent on the competitive environment. Specifically, as market
demand becomes increasingly uncertain, the effect of a customer orientation on
performance turns from positive to negative. Meanwhile, the impact of a technology
orientation on performance changes from negative to positive with an increasing level of
technological turbulence. However, a competitor orientation has a positive and robust
effect on business performance, regardless of whether competition is low or intense.
Keywords
 Strategic orientation;
 Competitive environment;
 Business performance;

China
Corporate strategy's task is to build financial value
Creating Value: Successful Business Strategies (Second Edition), 2001, Pages 231-248
Shiv S. Mathur, Alfred Kenyon
http://www.sciencedirect.com/science/article/pii/B9780750653633500224
This chapter begins the examination of corporate strategy by looking at its nature and
purpose.
The object of all business strategy is to add financial value to the business. Chapter 2
clarified that this is long-term financial value: the qualification ‘long-term’ is therefore
always implied when financial value is referred to as the object of business strategy.
Earlier chapters have made the following points:
 Competitive strategy designs and creates individual profitable offerings.
 Corporate strategy assembles, maintains and upgrades a profitable cluster of
individual offerings for the company.
 Each offering needs to be evaluated separately for its competitive positioning.
However, as offering F often affects the viability of offerings G, H etc., decisions
must in such cases be made collectively about that group of offerings.
 In that very process corporate strategy enables offerings to share resources and other
inputs so as to reduce unit costs.
The battle of the blue laser DVDs: The significance of corporate strategy in standards
battles
Technovation, Volume 32, Issue 2, February 2012, Pages 90-98
Scott R. Gallagher
http://www.sciencedirect.com/science/article/pii/S0166497211001489
Abstract
Markets and industries that require their products to interconnect or utilize important
complements are becoming increasingly common. From communication networks to
social web sites, network effects have shown themselves to be powerful forces. However,
the same feedback effects that make these industries so interesting also makes them
difficult to study as often, without an accepted standard, the industry never germinates
and grows. This paper takes and refines an existing model for competition in these types
of industries and applies it to the recently concluded contest between Sony's Blu-ray and
Toshiba's HD-DVD in blue laser DVDs.
Analysis of this standards battle suggests some interesting findings. First, in this case
corporate strategy provided a decisive advantage to the Blu-ray alliance led by Sony.
Sony appears to have “won” the battle in the U.S. by exploiting a superior corporate
strategy to not only provide complementary products as called for by the traditional
model (e.g. Hill, 1997) but also by utilizing its technology as a component in an ancillary
product, its Playstation 3. Second, a heuristic is proposed for considering indirect
network effects to complement “Metcalf's Law” for direct network effects. Finally, Sony
paid a high a price to “win” this standards battle.
3.2 Business Portfolio Model
Portfolio management of R&D projects: implications for innovation management
Technovation, Volume 21, Issue 7, July 2001, Pages 423-435
Juliana Hsuan Mikkola
http://www.sciencedirect.com/science/article/pii/S0166497200000626
Abstract
Globalization of markets and new business practices are prompting high-tech firms to
reconsider their competitive strategy. The increasing complexity of technologies in
addition to shorter product life cycles are also forcing firms to rely on R&D as a source
of strategy. More importantly, firms are inclined to evaluate their technologies from a
portfolio's perspective in which a set or a sub-set of R&D projects is evaluated together,
in relation to each other. Portfolio techniques can help strategic managers in evaluating
whether a portfolio of products is adequate from the perspective of long-term corporate
growth and profitability. Obviously, when R&D projects are evaluated relative to one
another, technical capability management of such projects must be carried out
concurrently. In this paper, R&D Project Portfolio Matrix is used as a tool for analyzing a
portfolio of R&D projects by linking competitive advantages of a firm to benefits these
projects may provide to customers. Examples of batteries for electric vehicles (EV) and
hybrid electric vehicles (HEV) are provided to illustrate how such a matrix is used, and
some of the implications for innovation management of such projects.
Keywords
Portfolio management; R&D; Innovation; Competitive advantage; Automotive industry
A commonsense approach to portfolio planning
Long Range Planning, Volume 15, Issue 2, April 1982, Pages 77–92
Robert E. Linneman, Michael J. Thomas
http://www.sciencedirect.com/science/article/pii/0024630182901224
Abstract
For the diversified firm, business portfolio planning offers a way of determining its
individual businesses' roles and developing a synergistic corporate strategy. In practice,
however, the common tools of portfolio planning—the growth/share and market
attractiveness/business position matrices—present problems in that often neither of the
matrices is precisely suitable for a given individual business. This article makes use of
modifications of the growth/share and market attractiveness/business position matrices in
order to make them more operational. The authors believe that a step-by-step ‘shirtsleeve’ approach to portfolio planning can make this type of analysis accessible and
invaluable to a small diversified firm, as well as providing insights to larger corporations
with formal planning departments.
∗At the time of writing this paper he was a visiting Professor of Marketing at Temple
University. The authors would like to acknowledge the valuable assistance given by John
D. Kennell, Director of Planning, Sun Gas Company.
Strategic Market Position and R&D Capability in Global Manufacturing Industries:
Implications for Organizational Learning and Organizational Memory
Industrial Marketing Management, Volume 29, Issue 6, November 2000, Pages 565-574
Bryan A Lukas, Simon J Bell
http://www.sciencedirect.com/science/article/pii/S0019850100001292
Abstract
This study explores the relationship between R&D capabilities and strategic market
positions in the global manufacturing industry. The findings from a study of 106 U.S.
manufacturers with international business operations show that: (1) organizations with
high business growth have an above average R&D capability to generate new product
ideas from R&D, regardless of their level of market share; (2) organizations with high
market share have an above average capability to launch line extensions, regardless of
their level of business growth; and (3) organizations with both high levels of business
growth and market share have an above average capability to generate new product ideas
from R&D and an above average capability to launch line extensions. Implications for
organizational learning and organizational memory are discussed
3.3 Five-forces Model
The economic role of the emergency department in the health care continuum: Applying
Michael Porter’s five forces model to emergency medicine
The Journal of Emergency Medicine, Volume 30, Issue 4, May 2006, Pages 447-453
Jesse M. Pines
http://www.sciencedirect.com/science/article/pii/S0736467906000631
Abstract
Emergency Medicine plays a vital role in the health care continuum in the United States.
Michael Porters’ five forces model of industry analysis provides an insight into the
economics of emergency care by showing how the forces of supplier power, buyer
power, threat of substitution, barriers to entry, and internal rivalry affect Emergency
Medicine. Illustrating these relationships provides a view into the complexities of the
emergency care industry and offers opportunities for Emergency Departments, groups of
physicians, and the individual emergency physician to maximize the relationship with
other market players.
Keywords
economics; emergency medicine; Porter; industry analysis; competition
Amex’s strategies for launching the smart card innovation
Technovation, Volume 24, Issue 10, October 2004, Pages 773-777
J. Wonglimpiyarat
http://www.sciencedirect.com/science/article/pii/S0166497202001815
Abstract
The objective of this paper is to analyze Amex’s pursuit of strategies in launching the
smart card innovation. The study is based on Five Forces Model in Porter, M. (1980)
Competitive Strategy. The Free Press, New York, and the Core Competences Building
and the Dynamic Capabilities Model in Industrial and Corporate Change 3(3) (1994) 537.
The study aims to understand why Amex has to go into a new smart card product. The
strategic implications of this paper is that Amex attempts to use past core competences in
the travel business in order to build up its new competences — smart card-based
products. However, there are problems (e.g. unsettled standardization and electronic
forgery) that Amex has to overcome in order to compete with capability products.
Keywords
Strategy; Competences; Competitive advantage; Standards; Competition
An analytic network process approach to operationalization of five forces model
Applied Mathematical Modelling, Volume 36, Issue 4, April 2012, Pages 1783-1795
Hakyeon Lee, Moon-Soo Kim, Yongtae Park
http://www.sciencedirect.com/science/article/pii/S0307904X11005555
Abstract
The five forces model has been one of the most influential frameworks for strategic
management. In contrast to its importance as a centerpiece of textbooks, however, it has
attracted less attention from both academic researchers and practicing managers. This is
due to its innate weakness, difficulty in operationalization. The vital requisites for
operationalizing the five forces model are to deal with it as a complex system composed
of interrelated forces and their sub-forces, and to prioritize them with consideration of
their interdependency. The tenet of this study is the requisites can be achieved through
the analytic network process (ANP). The ANP, which is a generalization of the analytic
hierarchy process (AHP), produces priorities of elements in a complex network model
with consideration of interdependency among elements. The five forces model is
transformed into a network model of the ANP. The ANP procedure is then carried out to
obtain the priority weights of the forces. Combining the derived weights and ratings on
the forces produces the state-of-industry-competition index (SICI) values that represent
the overall competitive condition of a given industry. The working of the proposed
approach is provided with the help of a case study example of the Web portal Industry of
Korea. The proposed ANP approach is expected to expand the five forces model into a
workable system of analysis by improving its analytical power.
Keywords
Analytic network process; Five forces model; Industry analysis; Strategic framework
3.4 Resource Based View of the Firm
Human resources and the resource based view of the firm
Journal of Management, Volume 27, Issue 6, November–December 2001, Pages 701-721
Patrick M. Wright, Benjamin B. Dunford, Scott A. Snell
http://www.sciencedirect.com/science/article/pii/S0149206301001209
Abstract
The resource-based view (RBV) of the firm has influenced the field of strategic human
resource management (SHRM) in a number of ways. This paper explores the impact of
the RBV on the theoretical and empirical development of SHRM. It explores how the
fields of strategy and SHRM are beginning to converge around a number of issues, and
proposes a number of implications of this convergence
The resource-based view and transnational technology strategy
The Journal of High Technology Management Research, Volume 11, Issue 1, Spring
2000, Pages 59-74
John W Medcof
http://www.sciencedirect.com/science/article/pii/S1047831000000213
Abstract
Despite its considerable appeal, the Resource Based View of the firm as currently
articulated is inadequate for the job of explaining transnational technology strategy,
although it does explain some phenomena. Its explanatory power can be significantly
increased through the inclusion of a resource portfolio perspective and by the
acknowledgement that imitation as well as the pursuit of the unique can be a viable
resource strategy.
Technological overlap and interfirm cooperation: implications for the resource-based
view of the firm
Research Policy, Volume 27, Issue 5, September 1998, Pages 507-523
David C. Mowery, Joanne E. Oxley, Brian S. Silverman
http://www.sciencedirect.com/science/article/pii/S0048733398000663
Abstract
The resource-based view of the firm, with its focus on firm-specific `capabilities', has
attracted considerable attention in recent work by management scholars, but has not
sparked much empirical analysis. This paper relies on the resource-based view to
examine partner choice in interfirm collaborations, emphasizing the role of partners'
technological capabilities. Patent citation data are used to measure `technological overlap'
between firms before and after alliance formation. Our results provide support for the
resource-based view of the firm. Partner selection can be predicted by measures of
technological overlap and, once formed, alliances appear to affect firms' technological
portfolios in ways predicted by the resource-based view.
Keywords
Alliances; Collaboration; Capabilities; Patents; Resource-based
3.5 Delta Model
The Delta Model — discovering new sources of profitability in a networked economy
European Management Journal, Volume 19, Issue 4, August 2001, Pages 379-391
Arnoldo Hax, Dean Wilde II
http://www.sciencedirect.com/science/article/pii/S026323730100041X
Abstract
The Delta Model presents a new approach and a new discipline to strategic management.
There are four unique contributions: The Triangle (a new set of strategic options); The
Adaptive Processes (linking strategy and expectation); The Metrics (aligning Aggregate
and Granular Metrics to strategy); Experimentation and Feedback (experimenting in
business transformation and monitoring performance). Finally, Michael Porter's Five
Forces Model is re-interpreted through the Delta Model.
Keywords
Delta model; Corporate strategy; Business transformation; Internal strategy; Five Forces
Model; Strategic options
Rivalry through alliances:: Competitive Strategy in the Global Telecommunications
Market
European Management Journal, Volume 19, Issue 3, June 2001, Pages 317-331
Sylvia Chan-Olmsted, Mark Jamison
http://www.sciencedirect.com/science/article/pii/S0263237301000287
Abstract
This article is the first and the qualitative section of a two-part strategy research project
which examines the state of the global telecommunications market and assesses the
business factors and environmental variables such as country/regional economic profiles,
political systems and regional alliances, that influence strategic directions of firms in the
converging global telecommunications market. The article specifically investigates the
forces contributing to the globalization of telecommunications services, major
telecommunications strategies and strategic alliances in the global market, and factors
that may have contributed to the outcome of these alliances.
Keywords
Telecommunications; Alliances; Globalization; Competitive advantage
Chapter 4: MANAGEMENT AND LEADERSHIP
4.1 Introduction
4.2 Team Structure
Effects of team knowledge management on the creativity and financial performance of
organizational teams
Organizational Behavior and Human Decision Processes, Volume 118, Issue 1, May
2012, Pages 4-13
Sun Young Sung, Jin Nam Choi
http://www.sciencedirect.com/science/article/pii/S0749597812000179
Abstract
An increasing number of organizations are turning to teams for innovation and creativity.
The present study investigated the effects of team knowledge management (TKM) on the
creativity and financial performance of organizational teams. Our analysis of data
collected from 65 sales teams, across 35 branches of a Korean insurance company,
showed that team knowledge utilization (but not team knowledge stock) was positively
related to team creativity, which in turn predicted team financial performance over the 6month period. The positive effects of knowledge utilization were stronger when team
leaders had a systematic cognitive style and when teams were exposed to high
environmental uncertainty. Furthermore, the systematic cognitive style of leaders had a
positive main effect on team creativity and positively moderated the relationship between
team knowledge stock and team creativity. The implications of these findings were
considered, and some possible directions for future research were suggested.
Staffing approach and conditions for collective learning in project teams: The case of
new product development projects
International Journal of Project Management, Volume 25, Issue 4, May 2007, Pages
413-422
Laurent Bourgeon
http://www.sciencedirect.com/science/article/pii/S0263786307000312
Abstract
In the contemporary competitive environment, it becomes crucial for companies to
master, promote and keep the collective learning developed during new products
development projects. This research discusses the extent to which the approach of
staffing the new products development projects’ teams and the logic of career
development of project managers have an influence on the collective learning conditions
during these projects. After having pointed out the main dimensions of learning in new
product development projects and the main dimensions of the logic of project managers’
career development, the empirical data analysis of this research demonstrates that job
rotation in projects for functional staff, as an approach of staffing the projects’ teams,
makes up favourable conditions for collective learning during the projects.
Keywords
Career development; Collective learning; Project manager; Project team; Staffing
An integrated method for collaborative R&D project selection: Supporting innovative
research teams
Expert Systems with Applications, Volume 38, Issue 5, May 2011, Pages 5532-5543
Bo Feng, Jian Ma, Zhi-Ping Fan
http://www.sciencedirect.com/science/article/pii/S0957417410012273
Abstract
Collaborative R&D projects that are applied by innovative research teams (CIRT
projects) are supported by government funding agencies in a number of countries due to
the complexity and multidiscipline research of innovation. Government funding agencies
invest heavily to CIRT projects every year. Thus, it is important to select the desired
CIRT projects to avoid undesirable budget consumed. The purpose of this paper is to
propose an integrated method for CIRT project selection. In this method, competitiveness
and collaboration of candidate innovative research teams (IRTs) are used to assess and
select projects. The criteria for competitiveness and collaboration are finalized in light of
literature review as well as real situations. A formal decision procedure that aggregates
competitiveness and collaboration performances of CIRTs is then presented. It integrates
analytic hierarchy process (AHP), scoring method and weighted geometric averaging
method. Some sample data from the National Natural Science Foundation of China
(NSFC) is used to illustrate the potential application of the proposed method.
Smaller teams–better teamwork: How to keep project teams small
Business Horizons, Volume 48, Issue 3, May–June 2005, Pages 209–214
Martin Hoegl
http://www.sciencedirect.com/science/article/pii/S0007681304001120
Abstract
Scholars and practitioners have long suggested that smaller teams perform better
teamwork, yet it is surprising to find that many organizations are using teams of 10 and
more members. This paper explains how large team size affects teamwork. Moreover, it
suggests four ways to keep teams small: (1) Create a multiteam project; (2) create a core
team and an extended team; (3) outsource tasks and define team-external contributions;
and (4) keep members on the team only for specific project phases.
Keywords
Team size; Teamwork; Work organization; Team productivity
Knowledge creation in multidisciplinary project teams: an empirical study of the
processes and their dynamic interrelationships
International Journal of Project Management, Volume 21, Issue 7, October 2003, Pages
479-486
Patrick S.W. Fong
http://www.sciencedirect.com/science/article/pii/S0263786303000474
Abstract
This paper reviews key literature on team processes and knowledge creation.
Specifically, it assesses and synthesises relevant theories and thoughts to develop a
conceptual model of the knowledge creation process. Empirical evidence, collected from
two projects—an infrastructure development project and a residential development
project—is also exploited as a means of building a conceptual model of knowledge
creation. This paper explains the processes of knowledge creation within the context of
multidisciplinary project teams. It also considers the dynamic interrelationships between
the proposed processes. The paper provides a framework not only for future research to
systematically examine and test knowledge creation processes within different team
situations, but also to allow management to continuously anticipate knowledge creation
activities within their own organisations. This research contributes to studies of
organisational knowledge and knowledge creation by providing an explorative account
that synthesises the existing literature with empirical evidence. Secondly, this research
contributes to the theoretical development of knowledge creation by focusing on its
processes rather than just on its outcomes and implications, which have been the main
concern of other researchers. Finally, the development of a multidisciplinary knowledge
creation theory contributes to the consolidation of the various dimensions of knowledgerelated activities that have in the past been treated in isolation.
Keywords
Knowledge creation; Multidisciplinary project teams; Processes; Dynamic
interrelationships
How NASA Builds Teams: Mission Critical Soft Skills for Scientists, Engineers, and
Project Teams
Space Policy, Volume 26, Issue 1, February 2010, Pages 67-68
Mirela Schwarz, Lorraine Warren
http://www.sciencedirect.com/science/article/pii/S0265964609001283
The author of this book, Charles J. Pellerin has an impressive background at NASA, as
the former director of the Astrophysics Division. Here, we learn, he oversaw a budget of
$750 million, and was involved in the launch of a dozen satellites, including the Hubble
Space Telescope in 1990. As we all now know, Hubble was launched with a flawed
mirror which eventually had to be repaired in space. The technical cause of the problem
was a faulty calculation by a NASA contractor, but NASA's Failure Review Board finally
concluded that a leadership problem was at the heart of the failure. The Board told
Congress that NASA's management of its contractor had been so hostile that they were
reluctant to report technical problems. Although Pellerin was asked to lead the team that
successfully repaired Hubble, it is clear that he was deeply affected by being associated
with the original failure. Many of the methods that he used to mount the successful
mission to repair Hubble are at the heart of this book, which was written to overcome the
problem of ignoring social contexts
4.3.1 Motivation
Combining creativity and control: Understanding individual motivation in large-scale
collaborative creativity
Accounting, Organizations and Society, Volume 36, Issue 2, February 2011, Pages 63-85
Paul S. Adler, Clara Xiaoling Chen
http://www.sciencedirect.com/science/article/pii/S0361368211000055
Abstract
Recent research has shown that management control systems (MCS) can improve
performance in contexts characterized by high levels of task uncertainty. This seems to
conflict with a second stream of research, which argues that MCSs risk undermining the
intrinsic motivation needed for effective performance in such settings. To solve this
puzzle, we build on theories of perceived locus of causality and self-construal and
develop an integrative model summarized in 15 propositions. To explicate our proposed
solution and to show its robustness, we focus on the class of activities we call large-scale
collaborative creativity (LSCC) – contexts where individuals face a dual challenge of
demonstrating creativity and embracing the formal controls that coordinate their creative
activities with others’. We argue that LSCC requires the simultaneous activation of
intrinsic and identified forms of motivation, and simultaneously independent and
interdependent self-construals. Against some scholarship that argues or assumes that such
simultaneous combinations are infeasible, we argue that they can be fostered through
appropriate attraction–selection–attrition policies and management control systems
design. We also show how our propositions can enrich our understanding of motivation
in other settings, where creativity and/or coordination demands are less pressing
Profiling work motivation of project workers
International Journal of Project Management, Volume 28, Issue 2, February 2010, Pages
158-165
Ravikiran Dwivedula, Christophe N. Bredillet
http://www.sciencedirect.com/science/article/pii/S0263786309000957
Abstract
The purpose of this study is to understand the constructs of work motivation in projectbased organizations. We first juxtapose work motivation in traditional and project-based
organizations to put forward an operational definition of work motivation for our study.
We then present the research methodology where we profile work motivation as
perceived by project workers using principal component analysis. We obtain a five factor
structure of work motivation. Finally, we discuss these results by putting them within the
project management perspective and suggest managerial implications.
Keywords
Motivation; Managing individual; Project management
The performance implications of ambivalent initiative: The interplay of autonomous and
controlled motivations
Organizational Behavior and Human Decision Processes, Volume 116, Issue 2,
November 2011, Pages 241-251
Adam M. Grant, Samir Nurmohamed, Susan J. Ashford, Kathryn Dekas
http://www.sciencedirect.com/science/article/pii/S0749597811000458
Abstract
Although initiative is thought to contribute to higher performance, researchers have
called for a more comprehensive understanding of the contingencies for this relationship.
Building on self-determination theory, we propose that initiative is more likely to predict
performance when individuals experience autonomous and not controlled motivation.
Across two studies, we find support for a hypothesized three-way interaction between
initiative, autonomous motivation, and controlled motivation in predicting individual
performance. In Study 1, the personal initiative reported by job applicants was most
positively related to the number of job offers that they received several months later when
they experienced high autonomous motivation and low controlled motivation. In Study 2,
the objective initiative taken by call center employees was most positively related to the
revenue that they generated in subsequent months when they reported high autonomous
motivation and low controlled motivation. We discuss theoretical implications for
motivation, initiative, proactivity, and performance.
Keywords
Initiative; Autonomous motivation; Controlled motivation; Self-determination theory;
Performance; Proactive behavior
Management by motivation
Engineering Management International, Volume 1, Issue 1, July 1981, Pages 63-71
Tems O.J. Ananaba
http://www.sciencedirect.com/science/article/pii/0167541981900107
Abstract
A review of the development of motivational theory leading up to the current concepts
has been presented. This was thought to be important, not only for the insights it provided
into human behavior, but also because it provides some idea of how we arrived at current
concepts of motivational theory.
Although not considered to be motivational theory, the scientific management approach
that Frederick W. Taylor proposed in 1911 resulted in greater productivity. However, this
approach eventually resulted in widespread job dissatisfaction, which was attributed to
the dehumanization of work brought about by separating the thinking process of the
worker from the doing part. The problems created by dehumanizing work set the stage
for the human relations theorists.
A series of studies conducted between 1924 and 1944 by Elton Mayo of Harvard
University concluded that many of the problems confronting managers at that time
resulted from the fact that the work environment and the human organism were not well
matched. Mayo felt that the problems could be lessened by modifying the work
environment so that it would more closely conform to human needs.
A very important study was conducted in 1957 by Frederick Herzberg while he was
associated with Psychological Service of Pittsburgh. This Study attempted to discover
factors that led to job satisfaction. It is particularly significant because it has been verified
by at least ten subsequent studies.
Douglas Murray McGregor (1960) has developed two theories of management that he
labels Theory X and Theory Y. Management must be of the Theory Y type for innovation
to occur. This type of management sets the stage for the theory of Herzberg to be put into
effect.
Managers’ theories of subordinates: A cross-cultural examination of manager perceptions
of motivation and appraisal of performance
Organizational Behavior and Human Decision Processes, Volume 93, Issue 1, January
2004, Pages 47-61
Sanford E. DeVoe, Sheena S. Iyengar
http://www.sciencedirect.com/science/article/pii/S0749597803001031
Abstract
The present study sought to examine the relationship between managers’ perceptions of
employee motivation and performance appraisal by surveying managers and employees
in three distinct cultural regions (North America, Asia, and Latin America) within a
single global organization. Three distinct cultural patterns emerged in the theories
managers’ held about their subordinates. While North American managers perceived
their employees as being more extrinsically than intrinsically motivated, perceptions of
intrinsic motivation proved to be a more robust predictor of performance appraisal. Asian
managers exhibited a holistic tendency in that they perceived their subordinates as
equally motivated by intrinsic and extrinsic factors, and their perceptions of both
motivations proved to be comparable predictors of performance appraisal. Latin
American managers perceived their employees as being more intrinsically than
extrinsically motivated, and accordingly, only their perceptions of intrinsic motivation
proved to be significantly correlated with performance appraisal. In contrast to the
cultural variations exhibited in manager perceptions, employees consistently reported
themselves as being more motivated by intrinsic than extrinsic incentives. Explanations
for the distinct cultural patterns that emerged and their implications for the study of
culture and organizational behavior are discussed.
Keywords
Culture; Extrinsic/intrinsic motivation; Holism; Performance appraisal; Person perception
4.4 Change Management
Change management practices: Impact on perceived change results
Journal of Business Research, Volume 64, Issue 3, March 2011, Pages 266–272
Andrés B. Raineri
http://www.sciencedirect.com/science/article/pii/S0148296309002999
Abstract
Management literature frequently proposes the use of a set of managerial practices in
order to facilitate the management of organizational change processes. This paper
analyses differences in perception in the use of such practices, between change strategists
and change receptors, and the impact these practices have on the outcomes of
organizational change programs and on organizational results, in a sample of 90
organizations in Chile. Results show that, for the same change processes, change
strategists report a higher use of change management practices than change receptors.
Results also show that, during organizational change processes, firms use more
frequently practices related to the change preparation stage in comparison to practices
related to the change implementation stage. Finally, results show that, after controlling
for organizational size, change program intensity, and service versus manufacturing
industries, the use of change management practices has a significant impact on the
accomplishment of the change program objectives and deadlines, but results do not show
an impact on perceived organizational outcomes (changes in sales, financial results of the
firm, operational productivity, and employee performance).
Keywords
Organizational change; Change management practices
Ambidexterity as a dynamic capability: Resolving the innovator's dilemma
Research in Organizational Behavior, Volume 28, 2008, Pages 185-206
Charles A. O’Reilly III, Michael L. Tushman
http://www.sciencedirect.com/science/article/pii/S0191308508000105
Abstract
How do organizations survive in the face of change? Underlying this question is a rich
debate about whether organizations can adapt—and if so how. One perspective,
organizational ecology, presents evidence suggesting that most organizations are largely
inert and ultimately fail. A second perspective argues that some firms do learn and adapt
to shifting environmental contexts. Recently, this latter view has coalesced around two
themes. The first, based on research in strategy suggests that dynamic capabilities, the
ability of a firm to reconfigure assets and existing capabilities, explains long-term
competitive advantage. The second, based on organizational design, argues that
ambidexterity, the ability of a firm to simultaneously explore and exploit, enables a firm
to adapt over time. In this paper, we review and integrate these comparatively new
research streams and identify a set of propositions that suggest how ambidexterity acts as
a dynamic capability. We suggest that efficiency and innovation need not be strategic
tradeoffs and highlight the substantive role of senior teams in building dynamic
capabilities.
Chapter 5: PORTFOLIO MANAGEMENT
5.1 Introduction
5.4 Models of Portfolio Management
5.4.1 Decision Analysis
Combining decision analysis and portfolio management to improve project selection in
the exploration and production firm
Journal of Petroleum Science and Engineering, Volume 44, Issues 1–2, 31 October 2004,
Pages 55-65
Michael R. Walls
http://www.sciencedirect.com/science/article/pii/S092041050400035X
Abstract
Recent advances in modern finance theory and decision science are being utilized in a
more systematic fashion by the upstream petroleum industry. Corporate planning groups
as well as business units in oil companies are increasingly applying techniques such as
decision analysis, simulation, portfolio management, and real options analysis to improve
the overall decision making and capital allocation process.
An important element of improving the practice of risk management in the E&P setting is
to ensure the proper integration of these analytical techniques in order to leverage their
overall capabilities. The Markowitz optimization approach to portfolio analysis, for
example, provides the E&P decision maker an efficient set of portfolios, based on
minimizing risk subject to a particular return. However, without some guidance as to
what level of risk-taking is appropriate for the E&P firm, the portfolio analysis alone
does not provide managerial guidance about which of these efficient portfolios is best for
the firm. There are, however, important attributes of the decision analysis paradigm that
link directly to choices made by the firm regarding modern portfolio analysis. Preference
analysis, an important element of a comprehensive decision analysis, provides us a
mechanism for measuring and applying a corporate risk-taking policy. Knowing the
firm's attitude about taking financial risk is important in terms of selecting the appropriate
portfolio of activities. These linkages between decision analysis and portfolio
management can improve the overall decision process, and ultimately, firm performance.
Keywords
Petroleum risk; Portfolio management; Decision analysis; Preference theory
A decision analysis of anesthesia management for cataract surgery
American Journal of Ophthalmology, Volume 132, Issue 4, October 2001, Pages 528-536
Sherman W Reeves, David S Friedman, Lee A Fleisher, Lisa H Lubomski, Oliver D
Schein, Eric B Bass
http://www.sciencedirect.com/science/article/pii/S000293940101159X
Abstract
PURPOSE: To compare the trade-offs in cost and preference of various anesthesia
management strategies for cataract surgery.
METHODS: Six strategies, differing in sedation, local anesthetic, and monitoring
approach, were chosen for comparison. For each strategy, potential complications, and
conversions to different anesthesia approaches were modeled. A panel of physicians and
anesthetists, well versed in the literature and practice of the anesthesia management of
cataract surgery, assigned preference values to the strategies and potential outcomes (0 to
1 scale). Probability estimates were obtained from a study of 19,557 cataract surgeries
and from the panel. Cost estimates were derived from several sources. The model was
analyzed to determine the strategies associated with the highest expected preference and
lowest expected cost.
RESULTS: The strategy associated with the highest net preference was intravenous
sedation with block anesthesia and an anesthesiologist present throughout the case. The
expected net preference for this strategy was 19% greater than the net preference for the
next most preferred strategy, oral sedation with block anesthesia and an anesthesiologist
on call (0.88 versus 0.74), but the expected anesthesia costs per case were much greater
($324 versus $42). Results were sensitive to plausible variation in the preference values
assigned to the six initial management strategies and to the cost of topical versus block
anesthesia.
CONCLUSION: This analysis emphasizes that cost and preference are important
considerations when choosing an anesthesia management strategy for cataract surgery.
For some surgeries, substantial cost savings may be available for a small change in
preference.
A wide variety of local anesthetic, sedation, and monitoring options is available for
cataract surgery. However, little is known about the trade-offs in cost and preference
among commonly used management strategies. Other than reports of pain associated with
different anesthesia approaches, a recent synthesis of the literature on the anesthesia
management of cataract surgery found a scarcity of data concerning the incorporation of
patient preferences into management choices.1 While the vast majority of cataract
surgeries in the United States are performed with an anesthesiologist or anesthetist
present to administer sedation and monitor vital signs,2 preference for this sedation and
monitoring approach is largely unknown. Furthermore, substantial international variation
in local anesthetic, sedation, and monitoring strategies exists,2 raising questions
regarding the relative costs and benefits of various anesthesia management decisions.
With more than 1 million cataract surgeries performed annually in the United States at a
cost of approximately $3.4 billion to the Medicare program each year, [3] and [4] the
choice of anesthesia management strategy has significant clinical and financial
implications.
In this study, we conducted a decision analysis to compare the expected costs and
benefits of several anesthesia management strategies for cataract surgery. The anesthesia
strategies we compared differed in sedation approach (oral or intravenous sedation), local
anesthetic technique (topical or ocular block), and monitoring approach (one anesthesia
provider present throughout the case, one anesthesia provider covering multiple cases
simultaneously, or no anesthesia provider available at all).
This study was conducted using a decision analysis design. Decision analysis is an
explicit analytic tool designed to facilitate complex clinical, therapeutic, or diagnostic
decisions in which many variables must be considered simultaneously. [5], [6] and [7] A
decision model generally takes the form of a tree, where limbs represent alternative
management strategies, and branches represent potential outcomes of each strategy. The
probability of each potential outcome, as well as some quantifiable measure of the value
associated with that outcome, are then added to the tree. The model is analyzed by
multiplying the value unit of each outcome by the probability of that outcome’s
occurrence. The sum of these products for each strategy limb represents that strategy’s
net value. This net value is then compared with the net values of all the other strategies to
see which strategy is optimal.
A proposed Multi Criteria Analysis decision support tool for international environmental
policy issues: a pilot application to emissions control in the international aviation sector
Environmental Science & Policy, Volume 10, Issues 7–8, November–December 2007,
Pages 645–653
Diana S. Solomon, Kenneth F.D. Hughey
http://www.sciencedirect.com/science/article/pii/S1462901107000755
Abstract
Policy making at the level of international environmental problems appears to lack a
transparent, multi criteria based, decision support ‘tool’. This is due mainly to the highly
political, volatile, and contextual nature of issues at this level. The environmental
problem of how to regulate emissions from international civil aviation due to their
transboundary nature, and the participation of international and domestic players, makes
it a ‘wicked’ international environmental problem where policy making has proved
problematic. This problem has been used as the basis for developing and pilot testing a
tool for contributing to international policymaking, the Multi Criteria Decision Support
System (MCDSS). This tool is based on simplifying and integrating key components of
Multi Criteria Analysis with a Decision Support System. A preliminary application of the
tool explored three options for progressing the reduction of aviation emissions. Testing
was based on the allocation of weights to environmental, social, economic and
institutional categories, which were each then internally weighted to reflect key criteria in
the policy process. Finally, likely performances of each option, against the criteria, were
evaluated against Likert scale measures. The outputs from each of these steps were
combined to generate a summed best policy option. Conclusions have been drawn and
they indicate that the tool is potentially useful especially in the initial stages of policy
development. The MCDSS is not an alternative to the international policy process, but
rather complements, and makes explicit key tradeoffs in, that process.
Keywords
International environmental policy; Multi Criteria Analysis; Decision Support System;
Global aviation emissions
5.4.2 Real Options
Real Option Analysis on Coal-to-oil Project
Energy Procedia, Volume 5, 2011, Pages 48-52
TENG Yingyue, HAN Liping, LI Changqing, ZHAO hongmei
http://www.sciencedirect.com/science/article/pii/S1876610211009453
Abstract
As Coal-to-liquid project is in face of lot uncertainties largely due to the wide fluctuation
of oil industry, it is unableto evaluate this project accurately via the traditional NPV
analysis method. The paper tries to app ly real optionsanalysis approach to evaluate this
Coal-to-liquid project, simulate the fluctuation of oil price by a designed softwareand
also compare the operating value and the value of waiting to invest in this Coal-to-liquid
project.
Keywords
Coal-to-liquid Project; Real Options; Operation value; The value of waiting to invest.
Management of information technology investment: A framework based on a Real
Options and Mean–Variance theory perspective
Technovation, Volume 28, Issue 3, March 2008, Pages 122-134
Liang-Chuan Wu, Chorng-Shyong Ong
http://www.sciencedirect.com/science/article/pii/S0166497207000715
Abstract
The selection of appropriate technology projects has been one of the most significant
business challenges of the last decade. Information technology projects, in particular,
represent the largest capital expenditure items for most US firms, yet many projects have
been unsuccessful. Because of the importance of such investments, there is an urgent
need for a framework to analyze them. In this paper, Real Options analysis in conjunction
with classical financial theory, namely, the Mean–Variance (MV) model, is used to
provide new perspectives on project selection. We develop a quadripartite framework and
subsume the risks within its dimensions. Furthermore, we map the corresponding options
in each of the quadrants. The framework offers an easy, but comprehensive, way for
managers to evaluate potential projects. In addition, we conduct a case study to
demonstrate how practitioners can apply the framework. This paper contributes to the
technology management field by defining the risk dimensions of technology investments,
and providing insights based on interdisciplinary financial theories.
Keywords
Framework; Project selection; Mean–Variance model; Real Options; Risk
In search of innovative techniques to evaluate pharmaceutical R&D projects
Technovation, Volume 23, Issue 4, April 2003, Pages 291-296
William F. Jacob, Young Hoon Kwak
http://www.sciencedirect.com/science/article/pii/S016649720100116X
Abstract
This paper is a conceptual paper that examines a new integrative evaluation approach for
pharmaceutical R&D projects. It describes recent changes in the health care economy and
the underlying scientific and technological revolution that has markedly altered the
business environment in which the pharmaceutical industry operates. Changes in cost and
technology resulting from managed care organizations, marketing, generic drugs, new
drug development risk, and scientific and technological evolution forced us to think of a
new way to evaluate R&D projects in the early phase of the project. These changes have
placed increased emphasis on the need for improvements in technology management
methodologies. A real options approach, especially when combined with other project
risk management processes, offers a significant improvement in project selection and
review, and resource allocation decisions.
Keywords
R&D; Project management; Real option models; Risk management
5.4.3 Multi-attribute Utility Analysis
Applying multi-attribute analysis to contractor selection decisions
European Journal of Purchasing & Supply Management, Volume 1, Issue 3, September
1994, Pages 139-148
Gary D Holt, Paul O Olomolaiye, Frank C Harris
http://www.sciencedirect.com/science/article/pii/0969701294900035
Abstract
Contractor selection is made onerous by the existence of many decision parameters and
several outcome options. Notwithstanding these difficulties, the multi-attribute analysis
(MAA) technique facilitates this decision task in being able to evaluate alternatives and
indicate optimum choice. Several variations of MAA are presented and the fundamental
advantages and disadvantages associated with each are highlighted. An overview of a
three-tier MAA procedure designed to encompass the entire selection process culminates
in a worked example of contractor evaluation utilizing a computer spreadsheet approach.
While the procedure is presented in a construction contracting context, the methodologies
cited are of potential benefit in a wide selection of purchasing scenarios.
Keywords
decision making; modelling; contractor selection; multi-attribute analysis; selection
criteria; utility
A decision support system for multiattribute utility evaluation based on imprecise
assignments
Decision Support Systems, Volume 36, Issue 1, September 2003, Pages 65–79
Antonio Jiménez, Sixto Rıó s-Insua, Alfonso Mateos
http://www.sciencedirect.com/science/article/pii/S0167923602001379
Abstract
This paper describes a decision support system based on an additive or multiplicative
multiattribute utility model for identifying the optimal strategy. This is intended to allay
many of the operational difficulties involved in assessing and using multiattribute utility
functions. The system admits imprecise assignments for weights and utilities and
uncertainty in the multiattribute strategies, which can be defined in terms of ranges for
each attribute instead of single values. Inputs can be subjected to different sensitivity
analyses, permitting users to test the robustness of the ranking of the strategies and gain
insight into and confidence about the final solution. An application of the system to the
restoration of a contaminated lake is illustrated throughout the paper.
Keywords
Decision support system; Multiattribute utility functions; Imprecision; Sensitivity
analysis
A generic multi-attribute analysis system
Computers & Operations Research, Volume 33, Issue 4, April 2006, Pages 1081–1101
Antonio Jiménez, Sixto Ríos-Insua, Alfonso Mateos
http://www.sciencedirect.com/science/article/pii/S0305054804002266
Abstract
This paper describes a generic decision support system based on an additive
multiattribute utility model that is intended to allay many of the operational difficulties
involved in the multicriteria decision-making process. The system accounts for
uncertainty about the alternative consequences and admits incomplete information about
the decision-makers’ preferences, which leads to classes of utility functions and weight
intervals. The additive model is used to assess, on the one hand, average overall utilities,
on which the ranking of alternatives is based and, on the other, minimum and maximum
overall utilities, which give further insight into the robustness of this ranking. When the
information obtained is not meaningful enough so as to definitively recommend an
alternative, an iteration process can be carried out by tightening the imprecise parameters
and assessing the non-dominated and potentially optimal alternatives or using Monte
Carlo simulation techniques to determine useful information about dominance among the
alternatives.
Keywords
Decision support system; Additive multiattribute utility function; Incomplete
information; Monte Carlo simulation techniques
5.4.4 Modern Portfolio Theory
Managing the retail format portfolio: An application of modern portfolio theory
Journal of Retailing and Consumer Services, Volume 17, Issue 1, January 2010, Pages
19-28
James R. Brown
http://www.sciencedirect.com/science/article/pii/S0969698909000721
Abstract
We apply modern financial portfolio theory (MPT) to managing portfolios of retail
formats. The objective of MPT is to maximize overall portfolio return for a given level of
portfolio risk. We applied MPT to three prominent hotel firms to determine the ideal mix
of formats in their hotel brand portfolios, using revenue per available room (RevPAR) as
a proxy for return on investment. We found that all three firms could improve their
returns and reduce their risk by reallocating the number of hotel rooms (i.e., scarce
resources) across their different retail formats.
Keywords
Retail formats; Modern portfolio theory; Linear programming; Customer satisfaction;
Hotels
Portfolio Theory and Cost-Effectiveness Analysis: A Further Discussion
Value in Health, Volume 7, Issue 5, September–October 2004, Pages 595-601
Pedram Sendi, Maiwenn J. Al, Frans F.H. Rutten
http://www.sciencedirect.com/science/article/pii/S1098301510602239
Abstract
Objectives
Portfolio theory has been suggested as a means to improve the risk–return characteristics
of investments in health-care programs through diversification when costs and effects are
uncertain. This approach is based on the assumption that the investment proportions are
not subject to uncertainty and that the budget can be invested in toto in health-care
programs.
Methods
In the present paper we develop an algorithm that accounts for the fact that investment
proportions in health-care programs may be uncertain (due to the uncertainty associated
with costs) and limited (due to the size of the programs). The initial budget allocation
across programs may therefore be revised at the end of the investment period to cover the
extra costs of some programs with the leftover budget of other programs in the portfolio.
Results
Once the total budget is equivalent to or exceeds the expected costs of the programs in
the portfolio, the initial budget allocation policy does not impact the risk–return
characteristics of the combined portfolio, i.e., there is no benefit from diversification
anymore.
Conclusion
The applicability of portfolio methods to improve the risk–return characteristics of
investments in health care is limited to situations where the available budget is much
smaller than the expected costs of the programs to be funded.
Keywords
cost-effectiveness analysis; diversification; portfolio theory; risk–return characteristics
5.4.5 Portfolio Optimization Theory
Portfolio analysis and the product life cycle
Long Range Planning, Volume 15, Issue 6, December 1982, Pages 74-83
Hiram C. Barksdale, Clyde E. Harris Jr.
http://www.sciencedirect.com/science/article/pii/0024630182900103
Abstract
This paper explains how the product life cycle and Boston Consulting Group's portfolio
matrix can be combined to provide a more comprehensive framework for strategic
analysis. The integrated model is more powerful than either concept taken separately
because it provides an exhaustive system for classifying a diverse assortment of business
units or product/market categories
The mean–variance cardinality constrained portfolio optimization problem: An
experimental evaluation of five multiobjective evolutionary algorithms
Expert Systems with Applications, Volume 38, Issue 11, October 2011, Pages 1420814217
K.P. Anagnostopoulos, G. Mamanis
http://www.sciencedirect.com/science/article/pii/S0957417411007603
Abstract
This paper compares the effectiveness of five state-of-the-art multiobjective evolutionary
algorithms (MOEAs) together with a steady state evolutionary algorithm on the mean–
variance cardinality constrained portfolio optimization problem (MVCCPO). The main
computational challenges of the model are due to the presence of a nonlinear objective
function and the discrete constraints. The MOEAs considered are the Niched Pareto
genetic algorithm 2 (NPGA2), non-dominated sorting genetic algorithm II (NSGA-II),
Pareto envelope-based selection algorithm (PESA), strength Pareto evolutionary
algorithm 2 (SPEA2), and e-multiobjective evolutionary algorithm (e-MOEA). The
computational comparison was performed using formal metrics proposed by the
evolutionary multiobjective optimization community on publicly available data sets
which contain up to 2196 assets.
Chapter 6: FINANCE AND ACCOUNTING
6.1 Introduction
Tracking the numbers: Across accounting and finance, organizations and markets
Accounting, Organizations and Society, Volume 34, Issue 5, July 2009, Pages 619-637
Hendrik Vollmer, Andrea Mennicken, Alex Preda
http://www.sciencedirect.com/science/article/pii/S0361368208000615
Abstract
This introductory essay reviews recent advances in the emergent field of social studies of
finance (SSF) and, subsequently, sets out to illustrate how a closer engagement with SSF
might benefit research interests in accounting and vice versa. Finally, it provides a sketch
of how mutual engagements across the fields might be intensified in what is identified as
an emerging accounting and finance track in the discourse of social science. The
prospects of a broader field of research exploring the use of financial numbers across
social settings, markets, organizations and cultures are projected, and the possibility of
articulating a strong sociological programme of research is considered.
Over the last three decades, Accounting, Organizations and Society has been offering a
broad platform for interdisciplinary, accounting-related scholarship. Regularly, this
journal has been welcoming scholars from neighbouring fields to get involved in
extending the perspectives of accounting research towards a wider and comparative
understanding of how various forms of calculative practices affect, and interrelate with,
the social settings in which they operate. One interesting new field of study which has
taken shape outside accounting research is the field of social studies of finance
(henceforth SSF). This field, now emerging at intersections of economic sociology,
science and technology studies, cultural anthropology, and cultural geography, has much
to offer to researchers interested in the practices, agencies, programmes and technologies
of calculation. This introductory essay to the special AOS section will provide a
preliminary tour of SSF, explore its intersections with accounting research and test some
common ground on which research interests shared across SSF and accounting might be
brought to co-operate.
What unifies social studies of finance and those of accounting as “social and institutional
practice” (Hopwood & Miller, 1994) is their engagement with social settings
characterised by a high frequency of circulating numbers. A remarkable number of
researchers have by now become involved in investigating how the use of numbers and a
range of different social settings co-develop, change or persist. Yet, SSF and
sociologically oriented accounting research have developed as distinct fields with
relatively little interchange. Probably the most palpable difference between SSF and
interdisciplinary research in accounting is that the latter has largely focussed on aspects
of calculative practices subject to formal organization. Accounting studies have been
extending traditional preoccupations with business enterprises towards the employment
of numbers in programmes and technologies of government (Miller & Rose, 1990), and
the respective roles of accounting professionals (for an overview see e.g. Cooper &
Robson, 2006) across the sectors and topologies of a “shifting sphere of the economic”
(Hopwood, 1992), moved, moulded and put in place by embedding calculative practices
in different kinds of organizations. SSF have, on the other hand, mainly been exploring
the construction of markets and market cultures ( [Abolafia, 1996], [Abolafia, 1998] and
[Knorr Cetina and Brügger, 2002]) and the roles of calculative models and technologies
(“market devices”) in the framing of social and socio-technical interaction in market
settings ( [Callon, 1998a], [Callon et al., 2007], [MacKenzie and Millo, 2003], [Muniesa,
2003] and [Preda, 2006]).
On an institutional level, accounting research has, even in its most socially theorized
forms, been developing mainly within the boundaries of the accounting discipline and its
academic establishments. Researchers involved in SSF appear to be mostly associated
with sociology and anthropology units of universities. One might hypothesize that such
differences in institutional environments, in line with contrasting professional affiliations,
may have been constituting major reasons why correspondence across SSF and
interdisciplinary accounting research has remained quite limited. The review elements of
this introductory essay would like to indicate why this presents an unfortunate and at least
unnecessary state of comparative neglect. Without claiming to be comprehensive either in
reviewing or in diagnosing symptomatic shortcomings of an unevenly distributed
academic attention, we would above all like to demonstrate the potential of a shared field
of research concerned with the circulation of financial numbers across the diverse settings
of social life, and we would like to suggest that there is indeed strong potential in a
common academic track which social studies of finance and accounting might
collectively explore.
Finding a particularly appropriate label for a field opening up for researchers from
different scientific disciplines is not easy. Speaking of interdisciplinary finance and
accounting studies would perhaps appropriately mirror the self-designation of that
particular research tradition – science and technology studies – from which both SSF and
social research in accounting have been gaining major theoretical inspirations. Yet
opening up interdisciplinarily might not only bring together unaccustomed cohabitants, it
might also make it difficult to institutionalize an effective research agenda. In order to
articulate itself as a specialized track of scientific discourse, a prospective field of
accounting and finance studies might then perhaps need an impulse similar to the one
science and technology studies received from David Bloor’s formulation of the strong
programme in the sociology of knowledge in the 1970s (Bloor 1992 [originally 1976]). In
closing this introductory essay, we would like to put the question to the readers of this
special section what a strong programme of research in finance and accounting studies
might look like, encouraging the elaboration of research agendas seeking to transcend
boundaries in and between the two fields.
A methodology for analysing and evaluating narratives in annual reports: a
comprehensive descriptive profile and metrics for disclosure quality attributes
Accounting Forum, Volume 28, Issue 3, September 2004, Pages 205-236
Vivien Beattie, Bill McInnes, Stella Fearnley
http://www.sciencedirect.com/science/article/pii/S0155998204000390
Abstract
There is a consensus that the business reporting model needs to expand to serve the
changing information needs of the market and provide the information required for
enhanced corporate transparency and accountability. Worldwide, regulators view
narrative disclosures as the key to achieving the desired step-change in the quality of
corporate reporting. In recent years, accounting researchers have increasingly focused
their efforts on investigating disclosure and it is now recognised that there is an urgent
need to develop disclosure metrics to facilitate research into voluntary disclosure and
quality [Core, J. E. (2001). A review of the empirical disclosure literature. Journal of
Accounting and Economics, 31(3), 441–456]. This paper responds to this call and
contributes in two principal ways. First, the paper introduces to the academic literature a
comprehensive four-dimensional framework for the holistic content analysis of
accounting narratives and presents a computer-assisted methodology for implementing
this framework. This procedure provides a rich descriptive profile of a company's
narrative disclosures based on the coding of topic and three type attributes. Second, the
paper explores the complex concept of quality, and the problematic nature of quality
measurement. It makes a preliminary attempt to identify some of the attributes of quality
(such as relative amount of disclosure and topic spread), suggests observable proxies for
these and offers a tentative summary measure of disclosure quality.
Keywords
Business reporting; Disclosure; Disclosure quality; Narratives; Annual reports; Content
analysis; Forward-looking information; Non-financial information; Qualitative
information
Financial accounting information and corporate governance
Journal of Accounting and Economics, Volume 32, Issues 1–3, December 2001, Pages
237-333
Robert M. Bushman, Abbie J. Smith
http://www.sciencedirect.com/science/article/pii/S0165410101000271
Abstract
This paper reviews and proposes additional research concerning the role of publicly
reported financial accounting information in the governance processes of corporations.
We first discuss research on the use of financial accounting in managerial incentive plans
and explore future research directions. We then propose that governance research be
extended to explore more comprehensively the use of financial accounting information in
additional corporate control mechanisms, and suggest opportunities for expanding such
research. We also propose cross-country research to investigate more directly the effects
of financial accounting information on economic performance through its role in
governance and more generally.
Keywords
Financial accounting; Corporate governance; Agency; Moral hazard; Compensation
Experimental research in financial accounting
Accounting, Organizations and Society, Volume 27, Issue 8, November 2002, Pages 775810
Robert Libby, Robert Bloomfield, Mark W Nelson
http://www.sciencedirect.com/science/article/pii/S0361368201000113
Abstract
This paper uses recent experimental studies of financial accounting to illustrate our view
of how such experiments can be conducted successfully. Rather than provide an
exhaustive review of the literature, we focus on how particular examples illustrate
successful use of experiments to determine how, when and (ultimately) why important
features of financial accounting settings influence behavior. We first describe how
changes in views of market efficiency, reliance on the experimentalist’s comparative
advantage, new theories, and a focus on key institutional features have allowed
researchers to overcome the criticisms of earlier financial accounting experiments. We
then describe how specific streams of experimental financial accounting research have
addressed questions about financial communication between managers, auditors,
information intermediaries, and investors, and indicate how future research can extend
those streams. We focus particularly on (1) how managers and auditors report
information; (2) how users of financial information interpret those reports; (3) how
individual decisions affect market behavior; and (4) how strategic interactions between
information reporters and users can affect market outcomes. Our examples include and
integrate experiments that fall into both the “behavioral” and “experimental economics”
literatures in accounting. Finally, we discuss how experiments can be designed to be both
effective and efficient
Financial accounting and corporate governance: a discussion
Journal of Accounting and Economics, Volume 32, Issues 1–3, December 2001, Pages
335–347
Richard G. Sloan
http://www.sciencedirect.com/science/article/pii/S0165410101000398
Abstract
Bushman and Smith (2001, this issue) provide a useful review of research on the role of
accounting in management compensation contracts and an appealing future research
agenda that builds on recent research using a cross-country approach. This paper rounds
out their discussion by highlighting some limitations of their research agenda, providing a
critical review of the contributions of accounting scholars to governance research and
highlighting research opportunities on the role of financial accounting in governance
mechanisms other than managerial incentive contracts.
Keywords
Corporate governance; Accounting; Contracting
Chapter 7: PRODUCT DEVELOPMENT
7.1 Introduction
7.2 Product Life Cycle
Innovation diffusion and new product growth models: A critical review and research
directions
International Journal of Research in Marketing, Volume 27, Issue 2, June 2010, Pages
91-106
Renana Peres, Eitan Muller, Vijay Mahajan
http://www.sciencedirect.com/science/article/pii/S0167811610000236
Abstract
Diffusion processes of new products and services have become increasingly complex and
multifaceted in recent years. Consumers today are exposed to a wide range of influences
that include word-of-mouth communications, network externalities, and social signals.
Diffusion modeling, the research field in marketing that seeks to understand the spread of
innovations throughout their life cycle, has adapted to describe and model these
influences.
We discuss efforts to model these influences between and across markets and brands. In
the context of a single market, we focus on social networks, network externalities,
takeoffs and saddles, and technology generations. In the context of cross-markets and
brands, we discuss cross-country influences, differences in growth across countries, and
effects of competition on growth.
On the basis of our review, we suggest that the diffusion framework, if it is to remain a
state-of-the-art paradigm for market evolution, must broaden in scope from focusing on
interpersonal communications to encompass the following definition: Innovation
diffusion is the process of the market penetration of new products and services that is
driven by social influences, which include all interdependencies among consumers that
affect various market players with or without their explicit knowledge.
Although diffusion modeling has been researched extensively for the past 40 years, we
believe that this field of study has much more to offer in terms of describing and
incorporating current market trends, which include the opening up of markets in
emerging economies, web-based services, online social networks, and complex product–
service structures.
Keywords
Diffusion; Innovations; New product; Review; Social network; Individual level
modeling; Agent based modeling; Multinational diffusion; Competition; Brand; Network
externalities; Takeoff; Saddle; Technology generations
Repositioning drugs to enhance a product's lifecycle
Drug Discovery Today: Therapeutic Strategies, Volume 8, Issues 3–4, Winter 2011,
Pages 97-101
Ken Phelps
http://www.sciencedirect.com/science/article/pii/S1740677311000350
The high cost of R&D combined with the tiny percentage of drugs that actually achieve
regulatory approval has created an environment in which pharmaceutical companies are
utilizing previously conducted research and other techniques to expedite the approval
process, improve the chance of approval and buy additional years of marketing
exclusivity by repositioning drugs with new indications, formulations or methods of
administration.
Product life cycle cost analysis: the impact of customer profiling, competitive advantage,
and quality of IS information
Management Accounting Research, Volume 15, Issue 4, December 2004, Pages 401-414
Alan S. Dunk
http://www.sciencedirect.com/science/article/pii/S1044500504000174
Abstract
Life cycle cost analysis is considered in the literature to be of increasing importance to
firms as international competition intensifies and technological change continues. The
literature increasingly emphasizes that rapid technological change and shortened life
cycles have made product life cycle cost analysis critical to organizations. Although
significant benefits are attributed to life cycle cost analysis, there is little evidence
regarding the extent of its application in organizational settings. Moreover, there is scant
systematic evidence available with respect to the array of factors that may influence its
use. However, a review of the literature suggests that customer profiling, competitive
advantage, and quality of information system information are three factors potentially
impacting the extent to which life cycle cost analysis is used in firms. The results of the
study illustrate first, the degree to which product life cycle cost analysis is used across a
random sample of organizations. Second, that all three independent variables play a
positive role in affecting the extent to which product life cycle costing is used in firms.
Keywords
Product life cycle; Customer profiling; Competitive advantage; Quality of IS information
Cross-bidding impact throughout the product life cycle
Economics Letters, Volume 113, Issue 1, October 2011, Pages 80-83
Juan-Francisco Pages, Asuncion Mochon
http://www.sciencedirect.com/science/article/pii/S016517651100228X
Abstract
Two products at different points of the product life cycle have been chosen to analyse the
effect of cross-bidding in competing auctions. The findings indicate that this strategy can
have a different impact depending on the phase of the cycle.
Highlights
► The presence of cross-bidding and sniping strategy has been confirmed. ► Crossbidders are better off than non-cross-bidders. ► Cross-bidding has a different impact
depending on the phase of the product life cycle.
Keywords
Online auctions; Cross-bidding; Competing auctions; Product life cycle
7.3 Disruption (Disruptive Innovation)
Study on Chinese and European automotive R&D – comparison of low cost innovation
versus system innovation
Procedia - Social and Behavioral Sciences, Volume 25, 2011, Pages 214-226
Benjamin Thoma, David O'Sullivan
http://www.sciencedirect.com/science/article/pii/S187704281102369X
Abstract
Chinese carmakers are leapfrogging innovation by levering electric vehicle propulsion
technologies and providing low cost solutions. This has become a severe threat for
mature global players. On the other hand, European premium carmakers have been able
to increase their penetration in emerging markets. Even though premium cars yield higher
costs of innovation and offer few possibilities to achieve scale effects, sales have
skyrocketed to a record high in 2011. In both cases, manufacturers who can innovate best
will emerge as winners in lucrative and expanding markets - regardless of origin or
innovation approach. The aim of this paper is to outline disruptive innovation patterns of
the Chinese automotive industry and to showcase the system integration capabilities of
European carmakers. The paper commences with “the China Price” advantage that plays
a vital role for Chinese carmakers to leapfrog technology gaps. It allows offering
innovation at low cost. Also, the local electric vehicle supply chain, government
supportiveness and behavior of emerging consumer groups drive growth for new
technologies such as electric vehicles in China. Next, the European car industry is
characterized with the evolution of key innovations coming to a large extend from
German premium carmakers. Consequently, the paper shows how their global success
and innovation dominance in the premium segment can be linked to their integrated R&D
approach. This comprises system development, modularity concepts, in-house R&D
value chain, rigorous planning processes and so forth. In summary, the paper analyses
key trends in innovation patterns from the Chinese and European car industry.
Furthermore, it shows related market drivers such as regulatory development and
consumer behavior. At last, a generic model for new product development is used to
compare automotive R&D approaches between China and Europe. The authors conclude
with their findings on comparing low cost innovation versus system innovation based on
Chinese and European automotive R&D.
Keywords
New product development; low cost cars; disruptive innovation; China price; electric
vehicle; system innovation
Disruptive technology roadmaps
Technological Forecasting and Social Change, Volume 71, Issues 1–2, January–
February 2004, Pages 141–159
Ronald N. Kostoff, Robert Boylan, Gene R. Simons
http://www.sciencedirect.com/science/article/pii/S0040162503000489
Abstract
Disruptive technologies create growth in the industries they penetrate or create entirely
new industries through the introduction of products and services that are dramatically
cheaper, better, and more convenient. These disruptive technologies often disrupt
workforce participation by allowing technologically unsophisticated individuals to enter
and become competitive in the industrial workforce. Disruptive technologies offer a
revolutionary change in the conduct of processes or operations.
Disruptive technologies can evolve from the confluence of seemingly diverse
technologies or can be a result of an entirely new technological investigation. Existing
planning processes are notoriously poor in identifying the mix of sometimes highly
disparate technologies required to address the multiple performance objectives of a
particular niche in the market. For a number of reasons, especially the inability to look
beyond short-term profitability, and the risk/return tradeoff of longer term projects, it is
suggested that current strategic planning and management processes promote sustaining
technologies at the expense of disruptive technologies.
We propose a systematic approach to identify disruptive technologies that is realistic and
operable and takes advantage of the text mining literature. This literature-based discovery
process is especially useful in identifying potential disruptive technologies that may
require the input from many diverse technological and management areas. We believe
that this process holds great potential for identifying projects with a higher probability of
downstream success. Further, we suggest a process to take the identified potential
disruptive technology from the “idea stage” through to the development of a potentially
feasible product for the market. This second stage makes use of workshops and
roadmapping to codify the ideas of technological and management experts, who were
identified in the literature-based discovery stage. Our goal is to describe and explain the
pragmatic steps suggested by our innovative and practical process.
The proposed process could identify technologies whose eventual development and
application to specific problems would generate innovative products. The goal is to
isolate technologies that have the potential to redefine an industry, or alternatively, have
the potential to create an entirely new industrial setting. Use the text-mining component
of literature-based discovery to identify both the technical disciplines that are likely
candidates for disruptive technological products, and experts in these critical technical
and managerial disciplines. While we know that this is but one way to investigate nascent
disruptive technologies we feel it is imperative that the representatives of these
potentially critical technical disciplines are included in the roadmap development
process, either as implementers or as consultants.
Every firm is looking for “the next great thing”. Literature-based discovery offers a
starting point for identifying at least a portion of the major contributory technical and
managerial disciplines necessary for potential disruptive technologies and discontinuous
innovations. Combining literature-based discovery with a practical workshop/roadmap
process dramatically enhances the likelihood of success.
Keywords
Text mining; Literature-based discovery; Innovation; Workshops; Roadmaps; Disruptive
technologies; Interdisciplinary; Multidisciplinary; Clustering
A bridge over troubled waters: Bridging organisations and entrepreneurial opportunities
in emerging sectors
Research Policy, Volume 36, Issue 9, November 2007, Pages 1314-1334
Jonathan Sapsed, Andrew Grantham, Robert DeFillippi
http://www.sciencedirect.com/science/article/pii/S0048733307001205
Abstract
Bridging institutions or organisations are regarded as having positive effects in the
Sectoral Systems of Innovation (SSI) literature, particularly in compensating for
weaknesses in these systems. Yet, we know little about the organisational practices that
make their role effective, or the types of innovation paths that they may facilitate within a
system. This paper shows how bridging organisations may promote neglected areas of
creativity and potential disruptive innovation. These blocked opportunities tend to
emerge at the boundaries of SSI: where old sectors overlap and new trajectories form. We
draw on the social networks, entrepreneurship and disruptive innovation literature and
analyse an intervention in the UK electronic games industry: the evaluation of business
propositions exploiting new gaming platforms such as mobile telephones, DVD and film.
Using an innovative co-productive research design, the study shows how the
effectiveness of bridging organisation activity depends on key design choices and
brokerage capabilities.
Keywords
Sectoral systems of innovation; Entrepreneurship; Disruptive innovation; Brokerage;
Video games industry
7.4 Adoption and Diffusion
Use of experience curves to analyse the prospects for diffusion and adoption of
renewable energy technology
Energy Policy, Volume 25, Issue 13, November 1997, Pages 1099-1107
Lena Neij
http://www.sciencedirect.com/science/article/pii/S0301421597001353
Abstract
Experience curves are used to analyse the prospects for diffusion and adoption of
renewable energy technologies, with special emphasis on wind turbines and photovoltaic
(PV) modules. The analysis shows that the possibility of cost reductions of renewable
energy technologies is greater than for conventional energy technologies. However, large
investments are necessary to make wind turbines and PV modules economically
competitive with conventional power plants. The results indicate that the prospects for
diffusion and adoption of wind turbines and PV modules will increase if policy
instruments are used to bring about diffusion.
Keywords
Experience curves; PV modules; Wind turbines
A time delay model for the diffusion of a new technology
Nonlinear Analysis: Real World Applications, Volume 13, Issue 2, April 2012, Pages
643-649
Viviana Fanelli, Lucia Maddalena
http://www.sciencedirect.com/science/article/pii/S1468121811002045
Abstract
In this paper, we propose a mathematical model with time delay to describe the process
of diffusion of a new technology. This model is suitable for modeling diffusion processes
of all those technologies that require great initial investments and public subsidies, such
as technologies used for producing renewable energy. We consider external factors, such
as the government policy and the production costs, that influence the decision of adoption
of the new technology. We also consider the internal influence from adopters. The
adoption process is described by a delay differential equation. The time delay represents
the evaluation stage at which the potential consumers decide whether to adopt the new
technology or not. A qualitative analysis is carried out in order to assess the stability of
the equilibrium for certain parameters and to find the final level of adopters.
Keywords
Delay differential equation; Innovation diffusion; Asymptotic behavior
Slowing the adoption and diffusion process to enhance brand repositioning: The
consumer driven repositioning of Dunlop Volley
Business Horizons, Volume 48, Issue 5, September–October 2005, Pages 385-391
Michael Beverland, Michael Ewing
http://www.sciencedirect.com/science/article/pii/S0007681305000029
Abstract
What should you do when your brand becomes ‘hot’ overnight among influential
endorsers? Do you exploit this sudden rise in popularity and mainstream the brand, or do
you attempt to slow the diffusion process and seek to understand how to market to these
consumers? Drawing on the case of Dunlop Volley in Australia, we argue that
mainstreaming the brand by targeting later adopters results in a short-term fashion cycle
rather than creating long-term brand value. Since these brands are ‘discovered’ by
consumers, marketers must first understand the value system underlying this adoption
and then fit the marketing program to these values. In the case of Dunlop Volley, slowing
diffusion rates was achieved through four tactics: the rejection of hard sell marketing,
appearing authentic, targeting alternative distribution channels and delaying launch to the
mainstream audience. These activities ensured the ongoing credibility of the brand with
endorsers and helped revitalize a long-thought ‘dead’ brand.
Keywords
Brand turnaround; Positioning; Adoption and diffusion
7.5 Discontinuities in the Product Life Cycle
Important research questions in technology and innovation
Industrial Marketing Management, Volume 37, Issue 6, August 2008, Pages 629-632
Gerard J. Tellis
http://www.sciencedirect.com/science/article/pii/S0019850108000928
1. Introduction
Consumers today have a better standard of living than consumers had a decade ago and
much better off than consumers had a hundred years ago. That improvement is due to
technological innovation. The landscape of firms in high tech markets steadily changes.
Firms that stand still face the danger of decline and extinction. Firms that innovate grow
to dominate their markets. The force that facilitates this change is technological
innovation. Today, as in prior eras, the wealth of nations is driven not so much by their
possession of raw materials, but by how they or the firms within their borders translate
those resources into superior products and services through technological innovation.
Thus, technological innovation is a critical driver of the improvement in consumers'
living standards, the survival, growth, and success of firms, and the wealth of nations.
Understanding innovation is of great importance because of its huge impact at these three
levels of consumers, firms, and nations.
Researchers in a vast number of disciplines have studied various aspects of technological
innovation. However, those in marketing have a unique advantage. Adopting a consumer
orientation helps in understanding technological evolution because all innovations
ultimately aim to produce better products for consumer welfare. Thus researchers in
marketing have a unique vantage point in researching and understanding this
phenomenon. This essay aims to point out some important research questions in
technological innovation from a marketing perspective.
Profiling technology diffusion categories: Empirical test of two models
Journal of Business Research, Volume 31, Issues 2–3, October–November 1994, Pages
155-162
James R. Taylor, Eric G. Moore, Edwin J. Amonsen
http://www.sciencedirect.com/science/article/pii/0148296394900795
Abstract
The authors provide an empirical test of two models which predict the technological
adoption categories of small businesses for Hewlett Packard laser printers. The two
models tested were a psychographic model as proposed in the book, Crossing the Chasm,
and a more traditional benefit-price model. The adoption categories were defined by the
sequence of laser printer model changes from 1985 to 1990. The results suggest that the
benefits model predicts the buyer adoption better than the psychographics model. The
study represents an exploratory phase of a future conclusive research project.
7.6 Dominant Design
A new approach for understanding dominant design: The case of the ink-jet printer
Journal of Engineering and Technology Management, Volume 25, Issue 3, September
2008, Pages 137-156
Neil Clymer, Shigeru Asaba
http://www.sciencedirect.com/science/article/pii/S0923474808000234
Abstract
We study dominant design strategies concerning the allocation of technological resources
for ink-jet printers. We find that the dominant design for each firm can be quantitatively
represented by the number of ink-jet patents in nine categories of a matrix that
distinguishes patents according to method of implementation and type of module.
Further, we find that annual firm ink-jet revenue from 1990 through 2000 is positively
correlated with a balanced dispersion of patents across the nine categories. Results
suggest that higher revenues will accrue to firms in integrated industries when resources
are balanced among important sub-technologies in the dominant design.
Keywords
Dominant design; Ink-jet printing; Patents; Technology strategy
Modelling and forecasting the diffusion of innovation – A 25-year review
International Journal of Forecasting, Volume 22, Issue 3, 2006, Pages 519-545
Nigel Meade, Towhidul Islam
http://www.sciencedirect.com/science/article/pii/S0169207006000197
Abstract
The wealth of research into modelling and forecasting the diffusion of innovations is
impressive and confirms its continuing importance as a research topic. The main models
of innovation diffusion were established by 1970. (Although the title implies that 1980 is
the starting point of the review, we allowed ourselves to relax this constraint when
necessary.) Modelling developments in the period 1970 onwards have been in modifying
the existing models by adding greater flexibility in various ways. The objective here is to
review the research in these different directions, with an emphasis on their contribution to
improving on forecasting accuracy, or adding insight to the problem of forecasting.
The main categories of these modifications are: the introduction of marketing variables in
the parameterisation of the models; generalising the models to consider innovations at
different stages of diffusions in different countries; and generalising the models to
consider the diffusion of successive generations of technology.
We find that, in terms of practical impact, the main application areas are the introduction
of consumer durables and telecommunications.
In spite of (or perhaps because of) the efforts of many authors, few research questions
have been finally resolved. For example, although there is some convergence of ideas of
the most appropriate way to include marketing mix-variables into the Bass model, there
are several viable alternative models.
Future directions of research are likely to include forecasting new product diffusion with
little or no data, forecasting with multinational models, and forecasting with multigeneration models; work in normative modelling in this area has already been published.
Keywords
Diffusion models; Technology forecasting; Telecommunications forecasting; Marketing
Chapter 8: OPERATIONS
8.1 Introduction
8.2 Total Quality Management
The benefits of total quality management
Computerized Medical Imaging and Graphics, Volume 25, Issue 2, March 2001, Pages
217–220H.P.A Geraedts, R Montenarie, P.P van Rijk
http://www.sciencedirect.com/science/article/pii/S0895611100000525
Abstract
In this article, we will review the implementation of the ISO 9000 quality system in the
Department of Nuclear Medicine. We will also discuss the benefits of working with the
ISO 9000 standards and explain why we have shifted our focus from ISO 9000 towards
the EFQM model. After an introduction concerning Total Quality Management and the
EFQM model, we will describe how we have used the EFQM model to date and how we
intend to implement TQM in the future.
Keywords
Quality management; Nuclear medicine; EFQM; ISO 9000 certification; Implementation
Total quality management and corporate culture: constructs of organisational excellence
Technovation, Volume 24, Issue 8, August 2004, Pages 643-650
Z. Irani, A. Beskese, P.E.D. Love
http://www.sciencedirect.com/science/article/pii/S0166497202001281
Abstract
There is a need for an appropriate culture to support the scope of Total Quality
Management (TQM). Customer focus, systems approach, teamwork, involved
management and continuous improvement are the aspects of TQM that facilitate
improved organisational success, growth, and competitiveness. Many companies are now
complementing continuous improvement with innovation, which is seen as the successful
exploitation of new ideas. A clear synergy appears between these two corporate success
factors as they are often integrated under an appropriate corporate culture for
exploitation. The results of this can support substantial improvements in business
performance and competitiveness of the company. With this in mind, this paper discusses
the concept of corporate culture, places this social construct within the arena of TQM,
and highlights the relationships that exist among culture, quality, and competitiveness
using a case study.
Keywords
Corporate culture; TQM; Continuous improvement; Case study
Facilitating implementation of total quality management through information technology
Information & Management, Volume 36, Issue 6, December 1999, Pages 287-299
Grace Au, Ivan Choi
http://www.sciencedirect.com/science/article/pii/S0378720699000300
Abstract
There is growing interest in the service industries in the adoption of quality management
programs to improve their operational efficiency and market competitiveness. Deming’s
total quality management (TQM) philosophy is one of the well-known ones. The TQM
emphasizes continuous improvement through statistical control and the continuous
training of people in the principles of quality management. One of the main
implementation issues is the large volume of data that must be statistically analysed.
Although recent researches have reported on how TQM is applied in various industries,
few have discussed the importance of information technology in ensuring a successful
TQM program. This paper reports on the application of information technology in the
TQM process and how it can support management decisions. A case example is included
to support these views.
Keywords
Total quality management; Quality control information system; Statistical process
control; Continuous improvement
8.3 Variability
Quality and variability in diagnostic radiology Original Research Article
Journal of the American College of Radiology, Volume 1, Issue 2, February 2004, Pages
127-132
Hillel R. Alpert, Bruce J. Hillman
http://www.sciencedirect.com/science/article/pii/S1546144003000267
Abstract
Achieving and delivering optimal quality of care in radiology requires continual selfexamination by the profession, particularly with regard to technical, interpretive, and
communication skills. The importance of empirical data pertaining to quality and
variability in radiology, the underlying causes of error, and the sources of variability are
discussed. Key measures (e.g., receiver operating characteristics, κ) and approaches
(professional audits and peer reviews, surveys, inspections, and risk management
programs) used in improvement efforts are reviewed, and data from key studies are
highlighted. Diagnostic errors are important because of their connection to outcomes and
the wide variability observed with modalities such as chest radiography and
mammography.
Keywords
Quality of health care; physicians’ practice patterns; medical errors; diagnostic imaging
Classifying variability modeling techniques
Information and Software Technology, Volume 49, Issue 7, July 2007, Pages 717-739
Marco Sinnema, Sybren Deelstra
http://www.sciencedirect.com/science/article/pii/S0950584906001042
Abstract
Variability modeling is important for managing variability in software product families,
especially during product derivation. In the past few years, several variability modeling
techniques have been developed, each using its own concepts to model the variability
provided by a product family. The publications regarding these techniques were written
from different viewpoints, use different examples, and rely on a different technical
background. This paper sheds light on the similarities and differences between six
variability modeling techniques, by exemplifying the techniques with one running
example, and classifying them using a framework of key characteristics for variability
modeling. It furthermore discusses the relation between differences among those
techniques, and the scope, size, and application domain of product families.
Keywords
Classification; Software product family; Variability management; Variability modeling
8.4 Continuous Improvement
8.4.1 Lean Manufacturing
The Benefits of Lean Manufacturing: What Lean Thinking has to Offer the Process
Industries
Chemical Engineering Research and Design, Volume 83, Issue 6, June 2005, Pages 662673
T. Melton
http://www.sciencedirect.com/science/article/pii/S0263876205727465
How many people in the manufacturing industry can truly say that they have not heard of
LEAN? Not many. Yet how many of these believe in lean, have implemented lean, are
the passionate change agents who have convinced senior stakeholders than lean is the
way forward for their company? Less. Much Less. Lean is a revolution—it isn’t just
about using tools, or changing a few steps in our manufacturing processes—it's about the
complete change of our businesses—how the supply chain operates, how the directors
direct, how the managers manage, how employees—people—go about their daily work.
Everything. So what is this revolution, and how is it impacting the process industries?
The background of lean thinking is based in the history of Japanese manufacturing
techniques which have now been applied world-wide within many types of industry.
Keywords
lean manufacturing; waste; value; flow; value stream; bottleneck
Advancing lean manufacturing, the role of IT
Computers in Industry, Volume 60, Issue 4, May 2009, Pages 235-236
Jan Riezebos, Warse Klingenberg
http://www.sciencedirect.com/science/article/pii/S0166361509000219
Abstract
This introduction to the special issue discusses the changing role of information
technology (IT) in advancing lean production. Lean principles and techniques have been
applied in a wide variety of organisations, from make-to-stock to engineer-to-order
industries, and even in typical service sectors, such as healthcare. In order to apply lean
principles in various areas, variants were developed of well-known techniques, such as
Kanban, Kaizen, SMED, and 5S. IT is used to develop such variants. Over the years, the
role and use of IT in the application of the lean principles has changed. In this
introduction, we discuss the main findings of the papers that were selected for publication
in this special issue.
Keywords
Information technology; Lean production
8.4.2 Plan-Do-Study-Act Cycle
Using a Plan-Do-Study-Act Cycle to Introduce a New OR Service Line Original
Research Article
AORN, Volume 92, Issue 3, September 2010, Pages 335-343
Don K. Nakayama, Timothy N. Bushey, Irene Hubbard, Dawn Cole, Amanda Brown,
Timothy M. Grant, Issam J. Shaker
http://www.sciencedirect.com/science/article/pii/S0001209210006976
Abstract
In 2008, a multidisciplinary team at the Medical Center of Georgia, Macon, began a oneyear Plan-Do-Study-Act (PDSA) cycle to implement a high-quality pediatric surgery
service line. The PDSA team defined goals, objectives, and measurable performance
metrics and then reviewed cases and aggregated data monthly to identify and improve
clinical, process, instrument, and supply problems as well as patient transfer issues. The
PDSA cycle led to improvements in team performance, communication, and patient
transfer and decreased the number of problems associated with instruments, supplies,
equipment, and surgeon tardiness.
Keywords
plan-do-study-act; surgical team performance; system-based practice; quality
improvement; pediatric surgery
Basics of Quality Improvement in Health Care
Mayo Clinic Proceedings, Volume 82, Issue 6, June 2007, Pages 735-739
Prathibha Varkey, M. Katherine Reller, Roger K. Resar
http://www.sciencedirect.com/science/article/pii/S0025619611611944
With the rapid expansion of knowledge and technology and a health care system that
performs far below acceptable levels for ensuring patient safety and needs, front-line
health care professionals must understand the basics of quality improvement
methodologies and terminology. The goals of this review are to provide clinicians with
sufficient information to understand the fundamentals of quality improvement, provide a
starting point for improvement projects, and stimulate further inquiry into the quality
improvement methodologies currently being used in health care. Key quality
improvement concepts and methodologies, including plan-do-study-act, six-sigma, and
lean strategies, are discussed, and the differences between quality improvement and
quality-of-care research are explored.
Keywords
CQI, continuous quality improvement; DPMO, defects per million opportunities; PDSA,
plan-do-study-act; QI, quality improvement; TPS, Toyota Production System; VSM,
value stream mapping
8.4.3 Six Sigma
What is Six Sigma?
Reinforced Plastics, Volume 48, Issue 7, July–August 2004, Pages 46-49
Jennifer Markarian
http://www.sciencedirect.com/science/article/pii/S0034361704003777
Six Sigma is both a philosophy and a methodology that improves quality by analysing
data with statistics to find the root cause of quality problems and to implement controls.
Although Six Sigma is typically first implemented to improve manufacturing, the method
can also be used in other business processes, such as product design and supply chain
management. Jennifer Markarian reports on how Six Sigma can benefit both big and
small companies.
Design for Six Sigma through collaborative multiobjective optimization
Computers & Industrial Engineering, Volume 60, Issue 1, February 2011, Pages 43-55
Chantal Baril, Soumaya Yacout, Bernard Clément
http://www.sciencedirect.com/science/article/pii/S0360835210002627
Abstract
This paper presents a global methodology for designing product for Six Sigma. First, we
combine a feasibility-modeling technique with an interactive multiobjective algorithm
taking into account the decision maker’s preferences (IMOP) to generate several Paretooptimal solutions that maintain a probability of constraint satisfaction. These solutions
are called reliable Pareto-optimal solutions.The solutions found by the algorithm fulfill as
much as possible the decision makers’ requirements. Second, we develop a procedure for
choosing a solution for implementation from among the reliable Pareto-optimal solutions
generated by the algorithm. This procedure is based on the robust design and philosophy
of Six Sigma. Finally, the critical characteristics are identified to help the managers
develop the manufacturing system and its related control plans in order to achieve quality
products. The proposed methodology is applied to vehicle crash-worthiness design
optimization for side impact with structural weight and front door velocity under side
impact as objectives.
Keywords
Collaborative multiobjective optimization; Six Sigma; Robustness; Reliability
8.5 Supply Chain Coordination: Information Sharing
Dynamic capabilities and operational capabilities: A knowledge management perspective
Journal of Business Research, Volume 60, Issue 5, May 2007, Pages 426-437
Gabriel Cepeda, Dusya Vera
http://www.sciencedirect.com/science/article/pii/S014829630700032X
Abstract
This paper contributes to the clarification of the link between operational (how you earn
your living) capabilities and dynamic (how you change your operational routines)
capabilities. In doing so, the article builds on a knowledge management (KM) perspective
to capture KM processes behind the development and utilization of dynamic capabilities
and to examine their impact on operational capabilities. Empirical evidence is provided
by performing survey research with a sample of 107 firms in the information technology
and communication industry in Spain. The article includes conclusions and practical steps
for managers with an interest in KM practices supporting dynamic capabilities.
Keywords
Knowledge management; Dynamic capabilities; Operational capabilities; Organizational
knowledge
Information sharing in supply chains
Omega, Volume 33, Issue 5, October 2005, Pages 419-423
P. Fiala
http://www.sciencedirect.com/science/article/pii/S030504830400101X
Abstract
Supply chain is defined as a system of suppliers, manufacturers, distributors, retailers and
customers where material, financial and information flows connect participants in both
directions. Most supply chains are composed of independent agents with individual
preferences. It is expected that no single agent has the power to optimise the supply
chain. Supply chain management is now seen as a governing element in strategy and as
an effective way of creating value for customers. The so-called bullwhip effect,
describing growing variation upstream in a supply chain, is probably the most famous
demonstration that decentralised decision making can lead to poor supply chain
performance. Information asymmetry is one of the most powerful sources of the bullwhip
effect. Information sharing of customer demand has an impact on the bullwhip effect.
Information technology has lead to centralised information, shorter lead times and
smaller batch sizes. The analysis of causes of the bullwhip effect has lead to suggestions
for reducing the bullwhip effect in supply chains by strategic partnership. Supply chain
partnership leads to increased information flows, reduced uncertainty, and a more
profitable supply chain. The cooperation is based on contacts and formal agreements.
Information exchange is very important issue for coordinating actions of units. New
business practices and information technology make the coordination even closer.
Information sharing and strategic partnerships of units can be modelled by different
network structures.
Keywords
Supply chain; System dynamics; Bullwhip effect; Information sharing; Cooperation
Chapter 9: BUSINESS LAW
9.1 Contracts
China's new Labour Contract Law: No harm to employment?
China Economic Review, Volume 20, Issue 3, September 2009, Pages 558-572
Yu-Fu Chen, Michael Funke
http://www.sciencedirect.com/science/article/pii/S1043951X09000352
Abstract
In January 2008, China adopted a new labour contract law. This new law represents the
most significant reform to the legislation on employment relations in mainland China in
more than a decade. The paper provides a theoretical framework on the inter-linkages
between labour market regulation, option value and the choice and timing of
employment. All in all, the paper demonstrates that the Labour Contract Law in its own
right will have only small impacts upon employment in the fast-growing Chinese
economy. Rather, possibly induced increasing unit labour costs may adversely affect
employment.
Keywords
China; Labour Contract Law; Real options; Employment
Having the cake and eating it too: efficient penalty clauses in Common and Civil contract
law
International Review of Law and Economics, Volume 22, Issue 4, December 2002, Pages
381-406
Aristides N Hatzis
http://www.sciencedirect.com/science/article/pii/S0144818802001114
Abstract
In this paper we examine one of the areas where there is a marked difference between
Civil and Common contract law, that of the enforcement of liquidated damages and more
particularly of penalty clauses. Common law judges are quite reluctant to enforce
liquidated damages, especially if they believe that they include penalty clauses which are
not enforceable. On the contrary, in almost all European contract laws liquidated
damages are readily enforced, as are penalty clauses when they are not manifestly
excessive. Although most law and economics scholars have criticized Common law
courts for the non-enforcement of penalty clauses, there is a sizable minority of scholars
who have defended the Common law “non-enforcement” policy on the ground that
penalty clauses are inefficient because they hinder efficient breach. However, and despite
the merits of the arguments advanced by advocates of the non-enforcement of penalty
clauses, we believe that Common law’s rejection of penalty clauses is inefficient. We
further show that the Civil law solution to the problem is not only comparatively more
efficient, but that it can also appease the worries of those scholars who are afraid that
efficient breaches will be deterred. The solution that Civil law systems give to the
problem manages to enforce the parties’ wishes and to avoid deterring efficient breaches.
However, we point out that in order for the Civil law systems to take advantage of this
superiority, the interpretation of their Civil Codes should be guided by economic analysis
and the respect to the wishes of the contracting parties.
Keywords
Liquidated damages; Penalty clauses; Civil law; Common law; Efficient breach
Effective incomplete contracts and milestones in market-distant R&D collaboration
Research Policy, Volume 41, Issue 2, March 2012, Pages 346-357
Martin Kloyer, Joachim Scholderer
http://www.sciencedirect.com/science/article/pii/S0048733311002198
Abstract
R&D outsourcing is often conducted during the early, market-distant stages of the
innovation process. However, the main obstacle to this potentially efficient interfirm
specialization is the high danger of moral hazard. Most organizational mechanisms fail to
control that type of opportunism because of information asymmetries, even ex post. In
the theory of incomplete contracts, this problem is mitigated by assigning the control
rights to the supplier. To date, empirical studies have mainly investigated the interfirm
distribution of the control rights. However, we do not know yet which concrete control
right is crucial with regard to supplier opportunism, which is the decisive dependent
variable. Our study addresses this research gap. For the first time, we extend the
empirical focus from biotechnology and pharmaceutical firm alliances to a cross-industry
sample of 113 collaboration cases. The results show the effectiveness of contracts that ex
ante assign patent ownership rights to the supplier. The findings are also relevant for
management practice because the majority of practitioners do not use this contract type
yet, although there is no sign of an effective alternative.
9.2 Torts
Tort law and probabilistic litigation: How to apply multipliers to address the problem of
negative value suits
International Review of Law and Economics, Volume 30, Issue 3, September 2010, Pages
236–243
Jef De Mot, Ben Depoorter
http://www.sciencedirect.com/science/article/pii/S0144818810000128
Abstract
This article advances a proposal that increases access to justice for valuable lawsuits that
are currently discouraged by litigation costs. Our proposal converts claims with negative
expected values into positive expected value claims by implementing a novel system
involving flexible conditional multipliers. Our proposal has two components. First, under
the proposed system a plaintiff is allowed to select a damage multiplier that determines
the amount of damages the plaintiff receives if the litigation is successful. Second, courts
select cases for litigation randomly with a probability inverse to the multiplier selected by
the plaintiff.
Keywords
Litigation; Procedure; Tort law
Causality and causation in tort law
International Review of Law and Economics, Volume 24, Issue 4, December 2004, Pages
507-523
Robert Young, Michael Faure, Paul Fenn
http://www.sciencedirect.com/science/article/pii/S0144818805000086
Abstract
This paper considers alternative approaches to dealing with causal uncertainty in strict
liability tort regimes. Beginning from the philosophical literature on causing, a distinction
is made between the scientific idea of causality and the legal idea of causation. This
distinction is generalized to a context of causal uncertainty and associated probabilities
are constructed. It is shown that a rule of proportional liability whereby the tortfeasor
pays damages in proportion to the probability in causation of them having caused the
damage would be socially efficient. This contrasts with the implied use of the probability
in causality by the courts and in the law and economics literature on causal uncertainty.
Keywords
Causality; Causation; Tort law
9.2.1 Product Liability
Product liability, entry incentives and market structure
International Review of Law and Economics, Volume 20, Issue 2, June 2000, Pages 269283
Stephen F. Hamilton, David L. Sunding
http://www.sciencedirect.com/science/article/pii/S0144818800000296
Abstract
The article characterizes the entry incentives provided by increases in product liability
under various forms of competition. It is demonstrated that the entry of small, high-cost
firms is likely to occur in imperfectly competitive markets when the average damage
increases with industry output. Special cases are considered, including Cournot–Nash
oligopoly and dominant firm-competitive fringe
A note on the optimality of (even more) incomplete strict liability
International Review of Law and Economics, Volume 31, Issue 2, June 2011, Pages 77–
82
Florian Baumann, Tim Friehe, Kristoffel Grechenig
http://www.sciencedirect.com/science/article/pii/S0144818811000068
Abstract
This paper starts from the premise that liability is incomplete and establishes that firms
may nevertheless invest excessively in care. This may justify a (further) reduction in the
level of liability from a social standpoint, thereby arguing against seeking to approach
full compensation as close as possible. In our framework, firms are liable under product
liability, but also invest in care to prevent consumers’ switching to competitors. Affecting
the partition of consumers by means of care-taking is not desirable from a social
standpoint. Consequently, it may be optimal to reduce liability below a given level of
incomplete compensation in order to adjust firms’ care incentives.
Research highlights
► Liability is often incomplete. ► Nevertheless, firms may invest excessively in care
due to market forces. ► Thus, it may be socially optimal to further reduce the level of
liability.
Keywords
Tort law; Product liability; Care level; Incomplete compensation; Market forces
Liability and information transmission: The advantage of negligence based rules
Economics Letters, Volume 92, Issue 1, July 2006, Pages 63–67
Eberhard Feess, Ansgar Wohlschlegel
http://www.sciencedirect.com/science/article/pii/S0165176506000437
Abstract
It is usually taken for granted that strict liability is superior to negligence for unilateral
accidents. We show that the contrary holds if some potential injurers and the court have
inferior information about expected accident costs, as negligence standards may serve as
an information transmission device.
Keywords
Liability rules; Negligence; Rational expectations
9.3 Intellectual Property
Intellectual property protection and innovation: an inverted-U relationship
Economics Letters, Volume 109, Issue 2, November 2010, Pages 99–101
Yuichi Furukawa
http://www.sciencedirect.com/science/article/pii/S0165176510003010
Abstract
This paper shows in an endogenous growth model without scale effects that the
relationship between intellectual property protection and innovation can be inverted-Ushaped. The inverted-U relationship emerges from an interaction between learning-driven
and R&D-driven technological advances.
Keywords
Patent; Learning; Growth; Scale effect; R&D
Business enterprise R&D, technological change, and intellectual property protection
Economics Letters, Volume 96, Issue 1, July 2007, Pages 120–126
Sunil Kanwar
http://www.sciencedirect.com/science/article/pii/S0165176506004423
Abstract
Very little empirical evidence exists on the relationship between intellectual property
rights and innovation. Existing studies tend to be indirect and do not consider the
influence of IPRs on innovation per se; nor do they adequately allow for the endogeneity
of IPRs. Correcting for these omissions, we show that the strength of intellectual property
protection has a strong positive influence on innovation.
Keywords
Innovation; IPRs; Endogeneity
Intellectual property protection related to technology in China
Technological Forecasting and Social Change, Volume 72, Issue 3, March 2005, Pages
339-348
Wenqi Liu
http://www.sciencedirect.com/science/article/pii/S0040162504001131
Abstract
The state of protection for technology in China is widely criticized from the point of view
of incompleteness of the legal system as a whole. Much research dwells on the gap
between the Chinese legal system and that in industrialized countries or international
agreements. In comparison with the developed countries, China lacks core technologies.
While holders of such technologies encounter serious problems in China, the Chinese
government is not in an enviable position either. Due to the internal impetus and external
pressure on China to strengthen protection for technology, China has made a giant stride
and made a substantial progress in legislation, enforcement and other areas. However,
designing an appropriate system for technology protection is so complex that China will
unavoidably face many challenges. The reforms to be carried out in China will be based
on the balance between economic and political consideration.
Keywords
Technology; Protection; Development
9.4 Employment Law
Analysis of employment protection laws and unemployment benefits
Economics Letters, Volume 99, Issue 1, April 2008, Pages 144-146
Yoon-Kyung Chung, Jinook Jeong
http://www.sciencedirect.com/science/article/pii/S016517650700239X
Abtract
This paper presents an empirical model that analyzes the relationship between
Employment protection legislation and unemployment benefits. We emphasize the
censoring and arbitrary weights problems and propose an alternative method that resolves
both problems simultaneously.
Keywords
Employment protection legislation; Unemployment benefits; Censoring problem; Weight
estimation
Employment laws in developing countries
Journal of Comparative Economics, Volume 37, Issue 1, March 2009, Pages 3–13
Simeon Djankov, Rita Ramalho
http://www.sciencedirect.com/science/article/pii/S0147596708000887
We survey the research on the effect of employment laws in developing countries, using
papers published since 2004. The survey is further supported by cross-country correlation
analyses. Both exercises show that developing countries with rigid employment laws tend
to have larger informal sectors and higher unemployment, especially among young
workers. A number of countries, especially in Eastern Europe and West Africa, have
recently undergone significant reforms to make employment laws more flexible.
Conversely, several countries in Latin America have made employment laws more rigid.
These reforms are larger in magnitude than any reforms in developed countries and their
study can produce new insights on the benefits of labor regulation.
Keywords
Employment laws; Development; India; Latin America
9.4.1 Employment at Will
Evolution of employment structures and regional specialisation in the EU
Economic Systems, Volume 28, Issue 1, March 2004, Pages 35-59
Enrico Marelli
http://www.sciencedirect.com/science/article/pii/S0939362504000214
Abstract
This paper investigates the differentiated employment structures of the European regions,
their evolution over time and their implications for economic growth. The analysis
focuses on the distribution of employment between the main productive sectors over the
period 1983–1997 in 145 regions of the EU. Some clusters of regions which are
structurally similar are identified. Finally, in order to show the importance of the
economic structure for long-run growth, the productive structures are related to
convergence in per-capita incomes. The main results show that convergence and
persistence in employment structures may coexist; structural differences are greater
within rather than between countries; and, finally, convergence in incomes is improved
by the homogenisation of productive structures, although the industrial sector maintains a
key role in the growth processes.
Keywords
Regional structure; Regional specialisation; Employment dynamics; European
integration; Convergence
Great Expectations: Law, Employment Contracts, and Labor Market Performance
Handbook of Labor Economics, Volume 4, Part B, 2011, Pages 1591-1696
W. Bentley MacLeod
http://www.sciencedirect.com/science/article/pii/S0169721811024166
Abstract
This chapter reviews the literature on employment and labor law. The goal of the review
is to understand why every jurisdiction in the world has extensive employment law,
particularly employment protection law, while most economic analysis of the law
suggests that less employment protection would enhance welfare. The review has three
parts. The first part discusses the structure of the common law and the evolution of
employment protection law. The second part discusses the economic theory of contract.
Finally, the empirical literature on employment and labor law is reviewed. I conclude that
many aspects of employment law are consistent with the economic theory of contract—
namely, that contracts are written and enforced to enhance ex ante match efficiency in the
presence of asymmetric information and relationship specific investments. In contrast,
empirical labor market research focuses upon ex post match efficiency in the face of an
exogenous productivity shock. Hence, in order to understand the form and structure of
existing employment law we need better empirical tools to assess the ex ante benefits of
employment contracts.
Keywords
Employment law; Labor law; Employment contract; Employment contract Law and
economics
Novelty and new firm performance: The case of employment systems in knowledgeintensive service organizations
Journal of Business Venturing, Volume 24, Issue 4, July 2009, Pages 338-359
Jennifer E. Jennings, P. Devereaux Jennings, Royston Greenwood
http://www.sciencedirect.com/science/article/pii/S088390260800030X
Abstract
This paper investigates a question at the core of entrepreneurship research: how does
novelty affect new venture performance? We address this question for a type of factormarket innovation deemed critical in the contemporary economy: novelty in employment
systems. Our longitudinal study of new firms in a knowledge-intensive service industry
shows that the relationship between employment-system novelty and organizational
productivity is curvilinear and U-shaped. We also find suggestive evidence that new
firms with employment systems exhibiting discrepant degrees of novelty (i.e.,
combinations of highly conforming and highly novel practices) are less productive than
those with coherent employment systems.
Keywords
Novelty; Human resource management; New firm performance; Legal profession
9.4.2 Workers’ Compensation
Behavioral economic engineering
Journal of Economic Psychology, Volume 33, Issue 3, June 2012, Pages 665-676
Gary E. Bolton, Axel Ockenfels
http://www.sciencedirect.com/science/article/pii/S0167487011001413
Abstract
Economic engineering is the science of designing real-world institutions and mechanisms
that align individual incentives and behavior with the underlying goals. This paper
discusses why behavioral economic engineering is a promising research field, how
behavioral phenomena may affect economic engineering, and the role of theory and
laboratory experiments for behavioral economic engineering in practice. We provide
examples, many from our own work.
Keywords
Economic engineering; Behavioral economics; Experimental economics
Medical costs in workers' compensation insurance: comment
Journal of Health Economics, Volume 16, Issue 5, October 1997, Pages 619-622
J.Paul Leigh, Michael M. Ward
http://www.sciencedirect.com/science/article/pii/S0167629697815585
Abstract
Professors Baker and Krueger ignore some costs associated with workers' compensation.
Because of these costs, the contention that physicians willfully exploit the workers'
compensation system for their own gain is questioned.
Keywords
Compensating wage; Market structure
Knocking at the wrong door: Insured workers' inadequate psychiatric care and workers'
compensation claims
International Journal of Law and Psychiatry, Volume 30, Issues 4–5, July–October 2007,
Pages 416-426
Robert M. Hamm, David M. Reiss, Robindra K. Paul, Harold J. Bursztajn
http://www.sciencedirect.com/science/article/pii/S0160252707000519
Abstract
Objective
To describe the prevalence of inadequately evaluated and treated psychopathology among
insured workers making workers' compensation claims for psychiatric disability whose
cases were reviewed by one forensic psychiatrist. To assess the relationship of inadequate
evaluation and treatment to the outcomes of these workers' compensation claims.
Methods
Records of a series of 185 workers' compensation cases reviewed in 1998 and 1999 by a
California forensic psychiatrist were abstracted. Patient factors (gender, Axis II
pathology, psychosocial circumstances, substance abuse), case factors (psychiatric injury
secondary to physical injury, or secondary to psychological stresses), type of provider
(mental health, or other), adequacy of evaluation and treatment, forensic psychiatrist's
recommendation, and claim outcome were categorized. The relationships between case
characteristics, adequacy of care, and claim outcome were described.
Results
22% of cases had adequate evaluation, 48% superficial, and 30% had no evaluation. 11%
had adequate treatment, 67% superficial, and 22% had no treatment. Compared to claims
for psychiatric disability related to a physical injury, claims related to psychosocial
stresses more often had superficial diagnostic evaluations and treatments. Those with
superficial treatment were less likely to have their claim granted (19.3%) than those with
no treatment (47.5%) or those with adequate treatment (36.8%). Success of claim was not
related to provider type.
Conclusions
The majority of the studied workers with employer-provided health insurance who sought
workers' compensation for disability due to mental illness did so inappropriately, in that
the workplace did not cause the psychopathology. Their seeking workers' compensation
was plausibly due to the observed inadequate evaluation and treatment available through
their employer-provided health insurance. The adequacy of their care influenced the
likelihood their claim would be granted. The relations observed here merit further
research to establish their generality and to determine their causes.
Keywords
Workers compensation; Psychiatric injury; Workplace; Psychiatric evaluation; Mental
health parity; Health insurance; Managed care; Disability
Incentive effects of workers' compensation insurance
Journal of Public Economics, Volume 41, Issue 1, February 1990, Pages 73-99
Alan B. Krueger
http://www.sciencedirect.com/science/article/pii/004727279290057M
Abstract
This paper uses micro-level data from the Current Population Survey to estimate the
determinants of participation in state workers' compensation programs in the United
States. The principal finding is that higher workers' compensation benefits are associated
with greater participation in the workers' compensation program, after accounting for a
variety of covariates. In addition, the waiting period is found to have a substantial
negative effect on program participation. Finally, time-series estimates based on the
cross-sectional model show that the growth in workers' compensation claims in the 1970s
corresponds reasonably well with the growth in real benefits in this time period.
The consequences of labor market flexibility: Panel evidence based on survey data
European Economic Review, Volume 49, Issue 5, July 2005, Pages 1225-1259
Rafael Di Tella, Robert MacCulloch
http://www.sciencedirect.com/science/article/pii/S0014292103001429
Abstract
We introduce a new data set on hiring and firing restrictions for 21 OECD countries for
the period 1984–1990. The data are based on surveys of business people in the countries
covered, so the indices we use are subjective in nature. Controlling for country and time
fixed effects, and using dynamic panel data techniques, we find evidence that increasing
the flexibility of the labor market increases both the employment rate and the rate of
participation in the labor force. A conservative estimate suggests that if France were to
make its labor markets as flexible as those in the US, its employment rate would increase
1.6 percentage points, or 14% of the employment gap between the two countries. The
estimated effects are larger in the female than in the male labor market, although both
groups seem to have similar long-run coefficients. There is also some evidence that more
flexibility leads to lower unemployment rates and to lower rates of long-term
unemployment. We also find evidence consistent with the hypothesis that inflexible labor
markets produce “jobless recoveries” and introduce more unemployment persistence.
Keywords
Job security provisions; Subjective data; Employment; Unemployment