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Investigates what approaches to quality lead to best quality and financial performance across different regions of the world. Reports a survey of 977 firms in Asia/South Pacific, Europe, and North America. Fifty-two items that suggest how a firm might improve quality were factor analysed and grouped into 11 factors, each factor a broader approach to quality improvement than any one item. Actual quality was measured eight different ways. Each approach to quality improvement (factor) was correlated to each quality measure, as well as to several financial measures. The results suggest that a company’s approach to quality correlates to actual quality and to a lesser extent to financial performance. The major factors found to influence actual quality were the organization’s knowledge of quality management, its degree of customer focus, and management involvement. When the task was to predict performance outcomes in any region, the specific factors that best predict performance were found to vary from region to region. That is, there were specific models within a region that better predicted performance than the model which predicted performance across all regions.
We provide a theoretical framework to analyse the response of life time maximizing consumers to intertemporal prices of non-durable goods and durable goods when the borrowing limit depends on the market value of the stock of durables owned by the consumer. We use pseudo panel data on purchases of non-durables and durable goods (cars) and demographic characteristics from the UK Family Expenditure Survey, as well as estimates of the durable stock constructed using the UK National Travel Survey, to estimate the equations derived in the first part of the paper. We evaluate the shadow prices of these restrictions, which were significantly positive for younger consumers in the mid-seventies and immediately prior to the 1982 financial liberalisation.
Describes an exploratory investigation conducted to examine factors affecting the initial and sustained transfer of interpersonal skills training to the workplace. Demonstrates the ongoing role of trainee motivation in the immediate and longer term transfer of learned skills to work. Suggests that initial transfer of skills is an important prerequisite of subsequent skill application in the workplace. Concludes that factors which promote initial transfer of training, such as the perceived relevance/usefulness of the course, appear to have an indirect effect on later use of trained skills. Also concludes that, in the long term, individuals with more autonomy in their jobs are more likely to apply learned skills, perhaps because they are more able to create opportunities for using trained skills at work. This may be especially true for those with high levels of motivation. Discusses the implications of these findings both for individuals learning new skills, and for organizations optimizing the utility of their training provision.
Virtually all countries are undergoing deregulation and privatisation of their telecommunications sectors. Yet
despite the globalisation of markets, technological borrowing, and great similarities in public sector legacies
across countries, the outcomes of deregulation and restructuring are not converging to a single point. Rather,
the differences in national and sub-national industrial relations institutions have allowed key stakeholders to
shape new market rules, or re-regulate the market in ways that privilege some actors more than others. The
new rules, in turn, more or less constrain managerial prerogative and lead to substantially different outcomes
for key stakeholders, including firms, unions, workers, managers, and consumers. This article uses evidence
from British Telecom, Deutsche Telekom, AT&T, and the Regional Bell Operating Companies in the United
States to elaborate this thesis.
The project of this special issue emerged from the following observation. While an increasing number of organization scholars from around the world have been struggling with issues of agency and structure since the 1970s, their works are still hardly perceived as contributions towards a common endeavour. There are several reasons for this lack of collective visibility.
The aims of this paper are, first, to construct a consistent comparative set of data on the sources of finance for investment over the period 1970–94 for the United Kingdom, the United States, Germany and Japan, and, second, to challenge conventional views of the international differences in financing patterns. We find that there is little evidence to support the view that Germany is a “bank-financed” system nor that the United Kingdom or the United States are “market financed”. Whilst bank finance is more important in Japan, there has been a steady decline in the proportion of investment financed by banks over the last 25 years.
Detailed case study material illustrates why the performance of two British national champions (British Airways and British Telecom respectively) was superior to that of their German counterparts (Lufthansa and Deutsche Telekom): beyond just the effects of privatisation, both the airline and telecommunications industries have been characterised by substantial technological and market change which has altered the parameters of competitive strategy. Under these new dynamic environmental conditions, the British institutional structure has out-performed the “denser” network of relationships within Germany.
This paper seeks to develop a theory of Anglo-Saxon competitive advantage that is not predicated only on the allocative efficiency of free markets, but precisely on the notions of "adaptive efficiency" or "dynamic efficiency" of non-market organisational activities. In other words, the hypothesis is that under specified types of industry conditions, the adaptive or dynamic efficiency of Anglo-Saxon firms may be superior to that of firms in Northern Europe's "industry-coordination" economies.
We examine the debate that has developed, in response to claims of the emergence of a "new paradigm" in medical practice. The paradigm, christened evidence-based medicine (EBM) by its developers at McMaster University in Canada, emphasises the need for more rigorous use of the findings and advice which flow from clinical research. This paper outlines the views published in the medical press on the relative merits of adopting an evidence-based approach to clinical decision-making. It then presents what we call "a view from the trenches " - the views and opinions of a sample of some 300 practising clinicians, in both primary and secondary care, with regard to evidence-based medicine. A number of the reservations about evidence-based medicine, as expressed both in print and in the course of our interviews, are examined from the perspective of the management of change literature. In so doing, it highlights a number of barriers to the diffusion of a new paradigm and suggests possible strategies for overcoming them.
This study reviews the past role of regional health authorities in the British NHS and gives details of the recent changes to regions associated with the functions and responsibilities paper. It goes on to give details of the research project in which we are currently involved and reports on our interim findings (as of April 1996). In a final discussion section, it reflects on those findings in terms of the evolving problems of influence and control in a national service operating in a devolved quasi-market. The choice in the regional role is potentially beneficial because in a major change, where there are many unknowns, it gives an opportunity to learn from diverse experience about what works well, for already there are examples of an initiative by one or two regions being copied by the remainder and of a region being asked to take a national lead in a particular area.
A combination of privatization and public-sector expenditure constraints has given rise to a substantial reduction in public-sector investment. Private ownership offers incentives for efficiency in capital investment and forms of equity finance which are particularly needed in developing countries. To avoid distortions between public and private-sector investment, similar investment criteria should be employed in the two sectors. In particular, risk characteristics and premiums should be the same for equivalent projects. However, in those areas where public ownership is most relevant, namely natural monopolies, regulation is required and the private sector will not in general employ appropriate investment criteria. Furthermore, the private-sector cost of capital may be in excess of that of the public sector for distribution and interconnectedness reasons. Careful consideration needs to be given to institutional design to ensure that the private-sector potential is fully realized and to achieve efficiency in public-sector investment where it is required. The paper points to a form of public ownership which has strikingly similar properties to regulated ownership and allows appropriate choices of investment to be implemented.
The random sine-Gordon chain experiences a sharp crossover to an ordered state associated with the activation of a soliton gas. The spatial coherence of the stationary regimes has three well-defined scaling behaviors. At larger scales there is no correlation, reflecting the independence between the different local structures in the chain. In this paper we introduce a different potential that produces solitons that exhibit long-range interactions. We show that a gas of such solitons can extend self-affinity to all scales.
This paper examines a set of financial policies, called financial restraint, that address financial market stability and growth in an initial environment of low financial deepening.
Unlike with financial repression, where the government extracts rents from the private sector, financial restraint calls for the government to create rent opportunities in the private sector. These rent opportunities induce outcomes that are more efficient than either financial repression or laissez-faire policies. It is argued that deposit rate controls and restrictions on competition create franchise value in financial markets that curtails moral hazard behavior among financial intermediaries. Lending rate controls may also increase the efficiency of intermediation by reducing agency cost in loan markets.
The introduction of competition into utilities is currently being pursued in the many countries, including the UK. Competition can take various forms, such as competition for outputs, inputs, franchises, and outright takeovers. Attention is currently focused on output competition, whereby customers are being given a choice of final supplier in many industries. We consider the implications of the introduction of such competition, including the effects on industrial structure and contracts, cross-subsidies and distributional concerns, and uncertainty and stranded contracts. We also analyse the transitional problems encountered as competition is introduced and suggest that the UK regulators and government have, in some key respects, failed to define a clear and consistent policy.
Draws on the experiences of eight employers at different stages of their use of competencies. The practices of the five organizations using competencies for the performance review of their managers have been evaluated in detail by seeking feedback from 184 employees. The findings, illustrated by quotes from users, may serve to remind employers that competencies only exist because of their employees and their willingness to make them work.
The extent to which skill and competency-based systems used by work organizations in the United Kingdom may contribute to maintenance of the pay gap between men and women was examined through a review of the following: pertinent literature from the United Kingdom and United States; 15 published case studies; current Institute for Employment Studies research on assessment/measurement of competencies; and information from a workshop at which practitioners in large public and private organizations discussed issues in using skill- and competency-based pay and training systems. Among the study's main findings were the following: (1) women are more likely than men to undervalue the skill levels of their jobs; (2) although men and women managers do not differ greatly in the competencies they possess, women are consistently rated lower on leadership ability by managers; (3) the process of translating skills/competencies to individual performance criteria is complex and liable to gender bias; (4) performance appraisal remains the main method for assessing performance; and (5) skill-based pay is less likely to cover female employees. Areas for further research were also identified.
Manufacturing technology developments need to be aligned with business needs. A UK government scheme to facilitate this linkage was carried out by contracted consultants in a series of companies. The initial task was to conduct a market needs review, so that the appropriate manufacturing developments to support those needs could be made. The authors 'shadowed' several of these company initiatives, and four typical cases are described to illustrate the type of work done by consultants in such situations. In each case different types of inadequacy made it difficult to link the market review to technology development needs. These types of inadequacy are discussed, and some possible explanations are suggested.
The attempt to improve the corporate strategy development process has fostered a range of approaches which have enjoyed different levels of support and popularity over time. One of the most popular is the SWOT analysis. This article reports on an in-depth review of its use by consuitants who included this as part of their approach to understanding a business from a corporate perspective and as part of the Department of Trade and Industry's Manufacturing Planning and Implementation Scheme. Of the 50 companies reviewed within the scheme, over 20 companies used a SWOT involving 14 consulting companies. All the applications showed similar characteristics-long lists (over 40 factors on average), general (often meaningless) descriptions, a failure to prioritize and no attempt to verify any points. But the most worrying general characteristic was that no-one subsequently used the outputs within the later stages of the strategy process. The continued use of the SWOT analysis, therefore, needs to be questioned.
Emphasizes the need for thorough market analysis in the development of a manufacturing strategy, and reports on evidence which indicates that UK companies are failing in the task of analysis. Draws on case examples from the government-inspired manufacturing, planning and implementation scheme (its projects were in two parts ™ market review and selection of appropriate technologies) in studying methods used, the outcomes and the role of the analytical co-ordinators (operations-management academics). Discusses market-review activities, e.g. customer surveys, and their weaknesses in terms of coverage, verification, segmentation and definition.
The 'new institutionalism' had led to increasing emphasis on the 'embed dedness' of organizations in local social systems. In this journal, Sorge (1991) and Whitley (1994) have shown, in particular, how the dominant forms of organization within countries or sectors are shaped by distinct national sys tems. The liability of these institutionalist approaches, however, is a focus on broad comparisons that gives little access to the diversity that is often observ able on the ground. Examining nine Taiwanese computer firms during the 1980s and early 1990s, this paper demonstrates that their strategies followed no singular system logic, displaying instead a wide scope for strategic divers ity. The paper argues that this kind of diversity can be explained not by rejecting institutionalism, but by recognizing the plural systems — business, technology and political — in which the dis-embedded actors of modernity now engage. Such a pluralistic approach has the potential to extend institu tionalist analysis beyond the broadly comparative to the strategies of individual firms.
Sets out how and why Surrey County Council (UK) has restructured its employment relationship with its employees, focusing on the changes made to the psychological contract. Describes how the views of staff were sought and a consensus built about the employees' expectations of the Council in terms of pay, career development, communication and job security, among other things. Sets out the new deal between the organization and employees which involves a move away from traditional assumptions about the nature of work in local government, most notably in the area of job security.
How are key decisions made in British symphony orchestras? What formal and informal decision-making systems exist? How do they vary between orchestras? In particular, what is the role of musicians in important artistic and commercial matters and how satisfied are they with the decision- making processes in their organizations?
These are the questions underlying a study of decision making and change in symphony orchestras which I am conducting at the Institute of Work Psychology at the University of Sheffield, England. Organizational research on orchestras, in particular British orchestras, is relatively rare. One notable exception is the major comparative study of 78 United States, United Kingdom, and German symphony orchestras which was carried out by J. Richard Hackman, Jutta Allmendinger, and Erin Lehman.1 In an interview published in the April 1996 issue of Harmony, Hackman identified such factors as adequate financial resources and good leadership as critical to an orchestra’s effectiveness, both as to its artistic performance and in terms of member job satisfaction.2 However, little research exists which examines, in depth and over time, the day-to-day functioning of such organizations, especially considering the parts played by musicians when they are not on the stage.
My research involves a study of the decision-making and related organizational change processes of three British symphony orchestras. To date, I have followed these orchestras over the period of a year. The study is ongoing and since detailed data analysis is currently in progress, this report presents only an overview of preliminary findings. The report describes the three different types of symphony orchestras which exist in Great Britain and, outlining the research methods adopted to study them, examines the decision-making systems in place in one orchestra from each category. I anticipate that the results of my completed research will be available later this year and will be published by the Symphony Orchestra Institute.
This paper summarizes the conventional wisdom concerning differences between financial systems. It argues that many of them do not stand up to close scrutiny. Instead, it suggests that the main differences concern the concentration and nature of ownership. Systems with high concentrations of ownership (frequently in the hands of families and other companies) may encourage more direct monitoring and control, greater stability in decision-taking, and greater commitment to other stakeholders than systems with more dispersed ownership. On the other hand, they are more subject to the private benefits of control and less flexible in responding to external factors. Different systems may, therefore, be suited to different types of corporate activity. Instead of seeking to impose uniform forms of corporate governance, the paper concludes that regulation should be permissive in allowing companies to choose their preferred forms of ownership and control.
Corporate governance has become a subject of active academic and policy debate throughout the world. In the United Kingdom and the United States of America, there is much discussion of the deﬁciencies of the market system in delivering effective governance. In continental Europe, there is a concern that existing systems of governance are stiﬂing innovation and growth. In Eastern Europe, privatization has given way to questions about the form
in which private enterprises should be governed. China is experimenting with methods of corporate governance which attempt to blend some of the features of market systems with state ownership of enterprises. Despite the intense debate, evidence on the effects of different governance systems is still sparse. Corporate governance has become a subject on which opinion has drowned fact. The purpose of this paper is to review what is known about the relation of corporate governance and corporate performance.
Analyzes the dimensionality of the British Organizational Commitment Scale (BOCS). Effect of employee perceptions of company prospects and career opportunities on commitment dimension; Presence of three principal dimensions and a possible fourth dimension; Relation of improved company prospects to the loyalty dimension of the BOCS; Explanations for this phenomenon..
Findings from a major study of changing employment practices in UK banking are presented and discussed. Case studies are used to explore different patterns of reaction to a fast and radically changing business environment. Important questions are addressed, including the nature of the changes to human resource management practices, the extent and depth of these changes and, most importantly, the degree to which the different banks are following similar or divergent paths. Explanations for the findings under each of these headings are offered.
An expanded scope for supply chain management research is advocated, which accounts for the social function and the political and economic implications of supply chain developments. It is argued that the research agenda must not be driven by the notion of efficiency alone, but should also be developed around the concept of the just supply chain.
This article describes a case study undertaken as part of a wider project concerning the emergence of collaborative customer-supplier relationships in the United Kingdom, and looks at the Rover Group automobile manufacturer and component supplier TRW. It illustrates how effective integration at the operating level does not of itself remove other areas of potential conflict, particularly in the area of costs and pricing. This may mean that the rhetoric of “partnerships” may require some degree of decoding. However, the case also illustrates that such issues can be overcome with appropriate managerial attention.
This paper critically appraises the supply chain concept, analysing the implications of the idea from the perspective of both individual firms and society and the economy at large. The discussion is centered around three hypotheses which concern markets, consumption, and industrial infrastructure. The paper concludes with some tentative suggestions for research and policy, and a proposition to extend the scope and responsibility of research in supply chain management.
This paper models an economy in which managers, whose efforts affect firm performance, are able to make "inside" trades on claims whose value is also dependent on firm performance. Managers are able to trade only on "good news," that is, on returns above market expectations. Further, managers cannot trade at all unless permission for such trading is granted by shareholders. Insider trading is in derivative securities and thus does not adversely affect the firm's cost of raising funds. In this setting, it is shown that a prohibition on insider trading may still generate welfare improvement over a regime that allows shareholders to determine insider trading policy. This result obtains because insider trading, although improving managerial effort incentives for any fixed compensation level, also improves the bargaining position of shareholders relative to managers. This reduces the willingness of shareholders to provide expensive effort-assuring managerial compensation packages.
This article features a review of the book "The Theory of Corporate Finance" by Michael J. Brennan.
In this paper we develop a framework for examining the effectiveness of boards in controlling self-interested managerial behavior. We show that, even if outside directors are uninformed and are unable to monitor management, they are crucial to implementing efficient corporate policies. Outside directors are effective when they possess sufficient votes to block management proposals and are able to coordinate their actions. In some cases, outside directors can be effective even if they receive no performance-contingent compensation from the firm. Finally, even when insiders have identical interests, efficiency can be increased by including multiple insiders on the board.
This paper examines whether golden parachute adoptions in the banking industry during the eighties aligned the interests of CEOs with those of regulators and or shareholders. Our results provide evidence supporting concerns expressed by regulators: that boards of directors behaved opportunistically by adopting golden parachutes prior to large bank failures in order to exploit the FDIC guarantee. Parachute adoption was correlated with poor performance ex ante and ex post. Moreover, adoption of parachutes virtually ceased when the FDIC guarantee was withdrawn by FDICIA.
In an asymmetric information framework, a number of authors have demonstrated the existence and uniqueness of short-term debt pooling equilibria in the absence of dissipative costs. We show that short-term debt pooling is robust to a broad range of deviations from stationarity and intertemporal independence. However, with intertemporal dependence, separating equilibria exist in which short-term debt signals favourable information. Non-stationary allows for separating equilibria in which long-term debt signals favourable information. A range of deviations from stationarity and intertemporal independence also support long-term debt pooling equilibria.
Securities trading has generated some of the most sensational scandals in the popular business press. In one of the most publicized cases of insider trading, in the late 1980s Michael R. Milken and Ivan F. Boesky were sentenced to stiff prison terms and payment of enormous damage assessments and punitive penalties. However, at least among economists and legal scholars, insider trading remains a controversial economic transaction. A substantial body of academic and legal scholarship questions whether insider trading is even harmful, much less worthy of legal actions. ; The authors of this article explore the sources of the insider trading controversy and suggest a road map for blending the divergent scholarly opinions into a policy framework for regulating insider trading. They conclude that the divergence of opinion can be attributed primarily to disagreement over which effects of insider trading will have the most significant impacts on economic well-being. The voluminous literature suggests that designing effective policy on insider trading requires a detailed assessment of the structure of the economy, some sensitivity to cultural attitudes toward the appropriateness of such trading activity, and careful consideration of the enforcement costs associated with regulating trade.
This article compares the predictions of finite-shareholder models of conditional and unconditional takeover offers with the outcomes of laboratory experiments. In addition to differentiating between types of offers, the experimental designs span small and large firms as well as different levels of offer premiums. It is found that in unconditional offers to large groups of subjects (28--40), the symmetric Nash equilibrium predicts observed tendering frequencies quite accurately. For other experimental designs, the results are mixed. The analysis of shareholder tendering strategies from the experiment yields insights into (i) the effects of takeover offer designs, (ii) the appropriateness of finite-shareholder models for research, and (iii) the costs of free riding when shareholders are nonatomistic.
The purpose of the this paper is to study the design of securities when a firm must raise external capital from an asymmetrically informed capital market and when the firm has operating discretion in the management of the capital raised that embodies the essence of the asset substitution problem. It is shown that in this setting, if the operating discretion is sufficiently broad, there is no dissipation of value from asset substitution and hence no agency costs of this incentive problem, but the security design problem is severely constrained. Optimal operating policy decisions result in limiting security designs essentially to convex claims on firm cash flow. In this context, both equity and levered equity (the residual claim being inside debt) are natural candidates for optimal security designs. We characterize the private productivity information of the firm that yields equity as an optimal security design. This characterization involves an intuitive comparison of indices of mispricing gains of equity vis-a-vis those of levered equity. The relevant conditions are satisfied in a varietyof contexts, but they are not universal. We then pursue further the security designs that minimize mispricing and we show that in this context the optimal security designs are scaled versions of levered equity, which includes the conditions under which equity is optimal as a limiting case. This gives theoretical foundation for the use of inside debt in managing the asset substitution problem even when there are no agency costs of asset substitution.
In this article, the authors show that the evolution of managerial entrenchment can distort investment horizons. Both myopic and hypermetropic distortions can arise. The direction of these distortions is determined by the locus of control and their pervasiveness by the degree of management entrenchment. Myopic distortions occur when shareholders directly determine investment policy. Hypermetropic distortions occur when management sets investment policy. The inherent hypermetropic bias of managers is mitigated by front-loaded compensation packages and pension plans tied to short-run performance. These distortions in investment horizons may have implications for the allocation of corporate control.
In modern societies personal limited liability is the norm, given such conditions as finite wealth and the elimination of debtors’ prisons. In fact, over the last few centuries, many societies have taken this principle further by passing laws that allow investors in banks and other business enterprises to limit their losses to either their initial investment (pure corporate limited liability) or some multiple of their initial capital contribution. This latter liability structure might call for an additional infusion of funds on the part of investors up to some maximum (say, two times the investment) should an enterprise fail to meet its obligations from available resources. Bank shareholders, for example, were once routinely required to post at least some additional funds in the event of a bank failure. This practice ceased only after the substitution of public capital, in the form of government deposit insurance, for the private capital formerly used to support the system. Overall, changes in liability provisions, by many accounts, have been among the major influences on both the level and distribution of contemporary economic output as well as the allocation of financial resources in today’s financial markets.
This article reviews a large and growing literature on
the role of personal and corporate limited liability in the
economy. As early as Adam Smith’s ( 1994) criticism of the emerging joint stock corporations of the eighteenth century and Walter Bagehot’s ( 1991) analysis of the reasons for and consequences of the incorporation of the Bank of England in the seventeenth century, economists have been aware that liability structures, almost by definition, influence decisions made by households, businesses, and government agencies. This review attempts to provide a more thorough understanding of incentive structures under alternative liability regimes and, in doing so, should help policymakers better understand the possibly unintended effects of certain policies and programs.
The Female Economy: The Millinery and Dressmaking Traders, 1860-1930 by Wendy Gamber is reviewed.
This paper investigates linkages between information technology (IT) and firm performance. Although showing recent signs of advance, the existing IT literature still relies heavily on case studies, anecdotes, and consultants' frameworks, with little solid empirical work or synthesis of findings. This paper examines the IT literature, develops an integrative, resource-based theoretical framework, and presents results from a new empirical study in the retail industry. The findings show that ITs alone have not produced sustainable performance advantages in the retail industry, but that some firms have gained advantages by using ITs to leverage intangible, complementary human and business resources such as flexible culture, strategic planning-IT integration, and supplier relationships. The results support the resource-based approach, and help to explain why some firms outperform others using the same ITs, and why successful IT users often fail to sustain IT-based competitive advantages.
Argues that global networked environments, such as the Internet and those of online service providers such as AOL and CompuServe, provide not only challenging philosophical dilemmas - where nowhere is anywhere - but more practical economic and operational difficulties for retailers and marketers, used to conventional distribution networks in physical space; notes that retailers’ reach can potentially and very easily outweigh their grasp. Reports that a number of western European and North American retailers have been wrestling with the need to establish a presence on the various internetworking services, where the cultural rules of the game are very different, in the context of the threat to established channels. Based on research undertaken among European retailers within the Oxford Institute of Retail Management, develops some thinking on the implications of a virtual geography of demand and supply; in particular, reviews the attraction of new channels to market, seeks to understand current European practice and provides a series of frameworks for evaluating opportunities for electronic commerce.
The Generalized Assignment Problem (GAP) is the problem of finding the minimal cost assignment of jobs to machines such that each job is assigned to exactly one machine, subject to capacity restrictions on the machines. We propose a class of greedy algorithms for the GAP. A family of weight functions is defined to measure a pseudo-cost of assigning a job to a machine. This weight function in turn is used to measure the desirability of assigning each job to each of the machines. The greedy algorithm then schedules jobs according to a decreasing order of desirability. A relationship with the partial solution given by the LP-relaxation of the GAP is found, and we derive conditions under which the algorithm is asymptotically optimal in a probabilistic sense.
In the last decades there has been an increasing interest in environmental topics. This interest has been reflected in modeling the location of obnoxious facilities, as shown by the number of important papers published in this field. However, a very common drawback of the existing literature is that, as soon as environmental aspects are taken into account, economical considerations (e.g. transportation costs) are ignored, leading to models with dubious practical interest. In this paper we take into account both the environmental impact and the transportation costs caused by the location of an obnoxious facility, and propose a solution method the well-known BSSS, with a new bounding scheme which exploits the structure of the problem.
We investigate the concepts of ‘activist macroeconomic policy’ and ‘stabilization’ within an optimal taxation framework when insurance markets are incomplete.
The literature on financial imperfections and business cycles has focused onpropagation mechanisms. In this paper we model a purereversion mechanism, such that the economy may converge to a two-period equilibrium cycle. This mechanism confirms that financial imperfections may have a dramatic amplification effect. Unlike in some related models, contracts are complete. Indexation is not assumed away. The welfare properties of a possible stabilizing policy are analyzed. The model itself is a dynamic extension of the well-known Stiglitz-Weiss model of lending under moral hazard. Although stylized the model still captures some important features of credit cycles.
Supplements the (A) case.
In June 1996, executives of the multinational mining company RTZ-CRA contemplate bidding to acquire the Antamina copper and zinc mine in Peru. The Antamina project is being offered for sale by auction as part of the privatization of Peru's state mining company. RTZ-CRA has to determine what the mine is worth and decide whether and how it should bid in the upcoming auction. The bidding rules put in place by the Peruvian government dictate that each company's bid contain two components: an up-front cash amount and an amount the bidder will invest to develop the property if development is warranted after further exploration is completed.
A paper describes the problems faced by reorganizers of distressed railroads in the late 19th century and how they were addressed by a combination of judicial intervention and financial innovations. In particular, the judicial innovations of supersenior financing, the equity receivership process, and the setting of upset values permitted firms to raise funds. The private financial innovations of deferred coupon debt, contingent charge securities, and voting trusts made subsequent default less likely. The private innovations can be interpreted as responses to both the distress of the railroads as well as the intervention by the courts that emasculated prior debt contracts.
Provides background information on copper and zinc markets as of mid-1996. Discusses supply and demand conditions, forecasts of the spot prices of the metals, and contracts for future delivery (forwards, futures, and options).
This study uses a new database to describe the composition and compensation of boards of directors of U.S. open-end mutual funds. We use these data to examine the relation between board structure and the fees charged by a fund to its shareholders. We find that shareholder fees are lower when fund boards are smaller, have a greater fraction of independent directors, and are composed of directors who sit on a large fraction of the fund sponsor's other boards. We find some evidence that funds whose independent directors are paid relatively higher directors' fees approve higher shareholder fees.
This paper examines the relationship between one form of manufacturing flexibility-process range-and structure, infrastructure, and managerial policy at the plant level. The paper provides evidence of the strength of the links between manufacturing flexibility and such factors as scale, technology vintage, computer integration, and workforce management. Data from 54 plants in the fine-paper industry are presented, and a model of the determinants of short-term flexibility is developed. The plants examined differed by a factor of 20 in their ability to accommodate large process variation. The evidence suggests that flexibility is strongly negatively related to scale and degree of computer integration, yet positively related to newer vintages of mechanical technology and workforce experience. Some results differ significantly from the prevailing view of the industry, in particular, that newer plants are less flexible. The paper shows that newer machine technology is more flexible once other factors are controlled for. In the longer term, the results show that management has a significant impact on the improvement of flexibility in operations, regardless of the technology and infrastructure in place. Plant network managers' views of flexibility are important. The data suggest that inflexible plants may be inflexible partly as a result of their being considered inflexible by network managers, and never being assigned the product range needed to improve the capability.
In recent years, corporate managers have recognized how manufacturing capabilities contribute to a company's overall strategic strength. But many of them identify those capabilities only by accident - as a result of chance conversations with plant managers or operations specialists. Consequently, they often do not have the information necessary to cultivate, shape, and exploit their company's manufacturing capabilities. But as plants develop, they need guidance to build capabilities that meet current and future needs. Plant tours can be a powerful way to provide plants with that kind of direction. Almost everyone who leads, works for, or interacts with a manufacturing company can benefit from seeing a factory firsthand, David Upton and Stephen Macadam advise. For example, plant visits allow senior executives to understand a site's performance potential, to assess a competitor, or to rally the frontline workforce. Shop floor operators can assess another plant's operations and apply what they've learned in their own factories. But even people who know that plant tours are valuable can find putting them to effective use difficult. First, unclear objectives often turn touring into tourism. Second, many people lack an organizing framework with which to structure observations and accelerate learning. Upton and Macadam show visitors how to set clear objectives and apply an organizing framework in order to make sense of what they see and hear on a plant tour. In this way, visitors will develop a deep understanding of the plant's manufacturing capabilities - and how best to exploit them.
Draws on data collected from two studies conducted by London Business School examining world-class production management practices to ascertain what proportion of European best manufacturing practice comprises Japanese approaches such as lean production, re-engineering, just-in-time and total quality management, and how successfully Japanese approaches can be adopted by Western companies. Compares the different approaches of companies in Japan and the West, revealing for instance that Japanese companies concentrate heavily on preventive maintenance, and studies 750 companies based in the UK, Germany, The Netherlands and Finland, to assess the effectiveness of their adoption of Japanese best practice. Finds that very few companies have achieved Japanese best practice, the most successful being those companies with Japanese parents, and suggests that companies need to undertake improvement programmes so that they can define what is best practice and how well they are performing. Discusses different agendas for change according to different levels of performance and best practice, and argues that best practice cannot be transferred without adaptation to an organization's own corporate culture, requiring the skills of facilitators, teamwork, a kaizen philosophy and discipline.
This article reports on the latest in a series of international comparisons of management practices and performance outcomes of industries in various countries. Here, it is the service industries in the UK and the US which come under the microscope. Among the companies surveyed, there were more world-class performers in the US than the UK, but also more low performers. The concluding part of the article is diagnostic – the authors also suggest measures which could improve performance.
Voss et al investigate the link between benchmarking and operational performance using a sample of over 600 European manufacturing sites. Benchmarking is linked to the identification and adoption of improved operational practices, an increased understanding of competitive positioning, and the larger context of the learning organization. Benchmarking may indeed contribute to improved operational performance, first through improving the firm's understanding of its competitive position and its strengths and weaknesses, and second through providing a systematic process for effecting change. Learning organizations were more likely to benchmark than other firms.