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on Economics of Strategic Management |
| By: | H. OOGHE; S. DE PRIJCKER |
| Abstract: | This paper describes a typology of failure processes within companies. Based on case studies and considering companies’ ages and management characteristics, we discovered four types of failure processes. The first failure process describes the deterioration of unsuccessful start-up companies leaded by a management with a serious deficiency in managerial and industry- related experience. The second process reveals the collapse after a failing growth of ambitious early- stage companies. Those companies have, after a failed investment, insufficient financial means to adjust their way of doing business to the changes in the environment in order to prevent bankruptcy. Third, we describe the failure process of dazzled established companies, leaded by an overconfident management without a realistic view on the company’s financial situation. Lastly, the bankruptcy of apathetic companies, describes the gradual deterioration of an apathetic established company where management had lost touch with the changing environment. This typology gives new insight into the evolution of financial performance ratios during the years preceding bankruptcy. Furthermore, we found that there is a great difference in the presence and importance of specific causes of bankruptcy between the distinctive failure processes. Errors made by management, errors in corporate policy and changes in the gradual and immediate environments differ considerably between each of the four failure processes. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:06/388&r=cse |
| By: | M. MEULEMAN; S. MANIGART; A. LOCKETT; M. WRIGHT |
| Abstract: | While one stream of research in partner selection has emphasized stability in a firm’s social network, another stream has emphasized the need to expand a firm’s network. In order to reconcile these two perspectives, we explore transaction, partner and macro conditions that lead firms to work with unfamiliar partners. Using a unique hand-collected dataset, results from the formation of private equity investment syndicates demonstrate that firms are more likely to select unfamiliar partners for lower levels of primary and behavioral uncertainty and higher levels of competition. Our findings provide insights in conditions that lead firms to expand their social network. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:06/371&r=cse |
| By: | Fabio Manenti (University of Padua); Paolo Lupi (Autorita' per le garanzie nelle comunicazioni (Italy)) |
| Abstract: | Despite a general trend of lower charges for mobile calls, prices for international roaming calls have remained at levels surprisingly high. The apparent reluctance of European mobile network operators to lower roaming tariffs is generating many antitrust concerns. This paper discusses in a two country - two firm framework, the distortions associated with the functioning of the current system governing wholesale international roaming agreements based on Inter Operator Tariffs (IOTs) and the role played by cross border roaming alliances between foreign operators. We describe how competition between roaming operators at the wholesale level is influenced by the adoption of traffic redirection techniques. The paper shows that when mobile operators act un-cooperatively and traffic redirection techniques allow only partial control on traffic flows, competition between roaming operators may not guarantee a reduction in IOTs and, consequently, on retail tariffs. We propose a simple and effective regulatory price cap mechanism to restore efficiency in the wholesale market. When mobile operators cooperate within a cross border alliance, internal IOTs are set at cost and retail prices are lower. |
| JEL: | L13 L51 L42 L96 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0019&r=cse |
| By: | Paolo Crestanello; Giuseppe Tattara |
| Abstract: | As European firms have faced strong competition from businesses in other industrial economies, in order to reduce production costs and keep prices competitive they have begun outsourcing their production to low wage countries. Although final firms have taken clear advantage from outsourcing abroad and their profit, after delocalization, have systematically increased, the question regarding the possible impoverishment of the outsourcing territory is nonetheless pertinent. The aim of the paper is to analyze the governance of the value chain operating in the traditional sectors of textile, clothing and shoe, pointing particularly to delocalization through sub-contracting. The case studied deals with Veneto firm relations with Romania. As the result of the analyses, the authors are in the opinion that a rapid outsourcing process has profoundly affected the structure of production in both territories in the last decade. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:tth:wpaper:07&r=cse |
| By: | Geuens, M.; Pecheux, C. |
| Abstract: | Three studies are conducted to investigate co-branding in advertising by manipulating product and brand fit. Polarity of brand images (positive or neutral) and the type of ad processing (top-down versus bottom up) were also taken into account. The results show that either product or brand fit is sufficient to produce positive attitudes towards the core brand in case of a high image core brand. However, these results do not hold for core brands with a neutral image. In that case, brands better team up with a brand possessing high product fit and/or a positive image instead of a similar image. |
| Date: | 2006–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2006-17&r=cse |
| By: | Ken Hendricks; Alan Sorensen |
| Abstract: | This paper studies the role of consumer learning in the demand for recorded music by examining the impact of an artist’s new album on sales of past and future albums. Using detailed album sales data for a sample of 355 artists, we show that the release of a new album increases sales of old albums, and the increase is substantial and permanent—especially if the new release is a hit. Various patterns in the data suggest the source of the spillover is information: a new release causes some uninformed consumers to learn about their preferences for the artist’s past albums. These information spillovers suggest that the high concentration of success across artists may partly result from a lack of information, and they have significant implications for investment and the structure of contracts between artists and record labels. |
| JEL: | D83 L15 L82 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12263&r=cse |
| By: | Oded Galor; Stelios Michalopoulos |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2006-12&r=cse |
| By: | Coucke, K.; Sleuwaegen, L. |
| Abstract: | This paper studies the impact of globalisation on the exit behaviour of domestic and foreign firms in the manufacturing industries of Belgium, one of the most open economies in the world. The strongest effects are found to come from rising import growth and rising multinational firms penetration of the industry, which systematically increase the probability of exit of (inefficient) domestic firms. Product differentiation and international (out)sourcing moderate this impact and lower the risk of exit. Controlling for productivity differences across firms, exporting on itself does not lower the probability of exit. Subsidiaries of multinational firms are found to be subject to similar disciplinary forces from import competition as domestic firms but do not show exit to respond to the same passive learning process. |
| Keywords: | Exit, Sourcing, International Competition |
| Date: | 2006–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2006-14&r=cse |
| By: | Leonardo Burlamaqui |
| Abstract: | In the 21 century globalized economy, innovation, antitrust issues and (new) intellectual property rules are in the forefront of every government, large company and policy making debates. This paper aims to be a preliminary effort to contribute for a better understanding of the interactions between Competition policies (rather than antitrust) and Intellectual Property issues under a schumpeterian perspective and, therefore, towards a more coherent framework within which the discussions of both institutional building and policy design towards development can proceed. The policy-institutions resulting from the analyses should be flexible and pragmatic, and should have creative destruction management – or the promotion and regulation of entrepreneurial success – as its main goal. The key insight of the policy prescriptions proposed to deal with the question is the need of a huge dose of “strategic state action” and a high degree of international cooperation. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:tth:wpaper:06&r=cse |
| By: | Debapriya Bhattacharya; Khondaker Golam Moazzem; Kazi Mahmudur Rahman; Syed Saifuddin Hossain |
| Keywords: | Business Competitiveness Environment, Business, Competitiveness Environment, Bangladesh |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:59&r=cse |
| By: | A. DE VOS; A. MEGANCK; D. BUYENS |
| Abstract: | This article examines HR managers’ and employees’ views on the factors affecting employee retention. This is done by integrating findings from the literature on retention management with the theoretical framework of the psychological contract. In a first study a sample of HR managers from a diverse group of public and private firms described the factors they believed to affect employee retention and the retention practices set up in their organization. In a second study, a large and diverse sample of employees reported on the importance attached to five types of employer inducements commonly regarded as retention factors. They also evaluated their employers’ delivery of these inducements and provided information on their loyalty, intentions to stay and job search behaviors. The results of both studies are discussed and implications for HR managers are highlighted. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:06/374&r=cse |
| By: | Erling Barth (Institute for Social Research, University of Oslo and IZA Bonn); Bernt Bratsberg (Frisch Centre for Economic Research and Kansas State University); Torbjørn Hægeland (Statistics Norway and Frisch Centre for Economic Research); Oddbjørn Raaum (Frisch Centre for Economic Research) |
| Abstract: | Using Norwegian establishment surveys from 1997 and 2003, we show that performancerelated pay is more prevalent in firms where workers of the main occupation have a high degree of autonomy in how to organize their work. This observation supports an interpretation of incentive pay as motivated by agency problems. Performance-related pay is also more widespread in large firms. Traditionally, wage setting in the Norwegian labor market has been dominated by negotiations between trade unions and employer associations at the central and local levels, with a fixed hourly wage as a predominant element of the wage scheme. Our results show that performance-related pay is less common in highly unionized firms and in firms where wages are determined through centralized bargaining. Nevertheless, the evidence presented in this paper reveals that performance pay is on the rise in Norway, even after accounting for changes in industry structure, bargaining regime, and union density. Finally, we find that the incidence of performance-related pay relates positively to product-market competition and foreign ownership. |
| Keywords: | performance related pay, agency problems, compensation methods |
| JEL: | J33 M52 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2142&r=cse |
| By: | Stefan Szymanski (Tanaka Business School, Imperial College) |
| Abstract: | In recent years there has been some dispute over the appropriate way to model decision-making in professional sports leagues. In particular, Szymanski and Kesenne (2004), argue that formulating the decision-making problem as a noncooperative game leads to radically different conclusions about the nature of competition in sports leagues. This paper describes a simulation model that van be used in a classroom to demonstrate how competition works in a noncooperative context. The supporting Excel spreadsheet used to conduct the game can be downloaded from the author’s personal webpage http://www3.imperial.ac.uk/people/s.szym anski. |
| JEL: | A20 D43 L83 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0602&r=cse |
| By: | Isabelle Brocas; Juan D. Carillo |
| Abstract: | We model the brain as a multi-agent organization. Based on recent neuroscience evidence, we assume that different systems of the brain have different time-horizons and different access to information. Introducing asymmetric information as a restriction on optimal choices generates endogenous constraints in decision-making. In this game played between brain systems, we show the optimality of a self-disciplining rule of the type “work more today if you want to consume more today” and discuss its behavioral implications for the distribution of consumption over the life-cycle. We also argue that our dual-system theory provides “micro-microfoundations” for discounting and offer testable implications that depart from traditional models with no conflict and exogenous discounting. Last, we analyze a variant in which the agent has salient incentives or biased motivations. The previous rule is then replaced by a simple, non-intrusive precept of the type “consume what you want, just don’t abuse”. |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:scp:wpaper:06-48&r=cse |