nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2007‒06‒23
five papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Formulating an open source business model requires community segmentation and targeted marketing By Alberto Onetti; Hal Steger
  2. Spin-offs and the market for ideas By Satyajit Chatterjee; Esteban Rossi-Hansberg
  3. Board structures around the world: An experimental investigation By Ann B. Gillette; Thomas H. Noe; Michael J. Rebello
  4. Power to the People: Evidence from a Randomized Field Experiment of a Community-Based Monitoring Project in Uganda By Björkman, Martina; Svensson, Jakob
  5. Evaluation of the Active Labor Market Program "Beautiful Serbia" By Holger Bonin; Ulf Rinne

  1. By: Alberto Onetti (Department of Economics, University of Insubria, Italy); Hal Steger (VP Marketing, Funambol Inc. (Redwood City, CA, USA))
    Abstract: From a commercial open source company's point of view, open source is ideally the ultimate in “grass roots" marketing where people learn by word-of-mouth about the project and where they volunteer their time and effort, resulting in a vibrant community that benefits the company in many ways. This enables an open source company to enjoy major advantages that do not normally accrue to proprietary software companies e.g. they do not need to spend resources on traditional marketing activities and furthermore, having this community support can help ensure the longevity of the project and company. While this ideal may apply to a handful of open source projects, where they achieve a large critical mass of a community which lends itself to a natural form of monetization, for the vast majority of open source companies, it is not the case of “build it and they will come”. Instead, most open source companies need to understand who comprises their community so they can formulate a viable business model. In particular, they need to understand that communities are comprised of heterogeneous types of people, each of which have their own interests, motivation, needs and ability to be monetized. Open source companies need to identify the subgroups in their community, decide which ones to deliberately focus on, and choose the best way to leverage them. This is indispensable for determining how best to monetize the interest in their software, ideally without ruffling the community spirit that differentiates their software from proprietary offerings. And this is where “old fashioned” marketing can help. This means understanding your user base and what makes them tick, determining their needs, and formulating products and services that people are willing to pay for. The sooner an open source company understands that it needs to practice traditional marketing techniques such as segmentation and target marketing, the faster they will hit on the business model formula that enables their company to succeed. These techniques need to be adapted for the open source world, which requires the blending of traditional marketing techniques and community relations. The risk of treating one's community in an undifferentiated manner and applying a generic, formulaic business model is that a company will fail to generate significant revenue as well as alienate a community that could abandon them. As a community is perhaps the most distinctive asset of an open source company, losing its community is tantamount to death. If the community is not properly nurtured and leveraged, an open source company's potential will not be realized. This paper aims at describing, through case study research, a generic approach for how commercial open source companies can segment their community to aid in their formulation of a business model and marketing plans to reach their potential. It is for anyone who works in an open source company or project who is trying to determine a viable business model. The paper is structured in three parts: the first part outlines the research question and methodology. The second part proposes a way that an open source company can segment its community. The final part analyzes the Funambol experience, describing how the company segmented its community and created open source programs to nurture and leverage it.
    Date: 2007–06
  2. By: Satyajit Chatterjee; Esteban Rossi-Hansberg
    Abstract: The authors propose a theory of firm dynamics in which workers have ideas for new projects that can be sold in a market to existing firms or implemented in new firms: spin-offs. Workers have private information about the quality of their ideas. Because of an adverse selection problem, workers can sell their ideas to existing firms only at a price that is not contingent on their information. The authors show that the option to spin off in the future is valuable so only workers with very good ideas decide to spin off and set up a new firm. Since entrepreneurs of existing firms pay a price for the ideas sold in the market that implies zero expected profits for them, firms’ project selection is independent of their size, which, under some assumptions, leads to scale-independent growth. The entry and growth process of firms in this economy leads to an invariant distribution that resembles the one in the U.S. economy.
    Date: 2007
  3. By: Ann B. Gillette; Thomas H. Noe; Michael J. Rebello
    Abstract: We model and experimentally examine the board structure–performance relationship. We examine single-tiered boards, two-tiered boards, insider-controlled boards, and outsider-controlled boards. We find that even insider-controlled boards frequently adopt institutionally preferred rather than self-interested policies. Two-tiered boards adopt institutionally preferred policies more frequently, but tend to destroy value by being too conservative, frequently rejecting good projects. Outsidercontrolled single-tiered boards, both when they have multiple insiders and only a single insider, adopt institutionally preferred policies most frequently. In those board designs where the efficient Nash equilibrium produces strictly higher payoffs to all agents than the coalition-proof equilibria, agents tend to select the efficient Nash equilibria.
  4. By: Björkman, Martina; Svensson, Jakob
    Abstract: Strengthening the relationship of accountability between health service providers and citizens is by many people viewed as critical for improving access to and quality of health care. How this is to be achieved, and whether it works, however, remain open questions. This paper presents a randomized field experiment on increasing community-based monitoring. As communities began to more extensively monitor the provider, both the quality and quantity of health service provision improved. One year into the program, we find large increases in utilization, significant weight-for-age z-scores gains of infants, and markedly lower deaths among children. The findings on staff behaviour suggest that the improvements in quality and quantity of health service delivery resulted from an increased effort by the staff to serve the community. Overall, the results suggest that community monitoring can play an important role in improving service delivery when traditional top-down supervision is ineffective.
    Keywords: Accountability; Field experiment; Health; Monitoring
    JEL: D78 I12 O15
    Date: 2007–06
  5. By: Holger Bonin (IZA); Ulf Rinne (IZA)
    Abstract: Final report on behalf of the United Nations Development Program (UNDP) Serbia and Montenegro
    Date: 2006–02

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