nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2007‒07‒13
eight papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Process Based Management and the Central Role of Dialogical Collective Activity in Organizational Learning. The Case of Work Safety in the Building Industry By Lorino, Philippe
  2. Inequality and Inefficiency in Joint Projects By Debraj Ray; Jean-Marie Baland; Olivier Dagnelie
  3. Competence-based Competence Management: a Pragmatic and Interpretive Approach. The Case of a Telecommunications Company By Lorino, Philippe
  4. Cost-benefit rules for transport projects when labor supply is endogenous and taxes are distortionary By Fosgerau, Mogens; Pilegaard, Ninette
  5. Coupling Performance Measurement and Collective Activity: The Semiotic Function of Management Systems. A Case Study By Lorino, Philippe; Gehrke, Ingmar
  6. Private Investment, Portfolio Choice and Financialization of Real Sectors in Emerging Markets By Demir, Firat
  7. Building a Better Rat Trap: Technological Innovation, Human Capital and the Irula By Siri Terjesen
  8. Understanding the Regional Contribution of Higher Education Institutions: A Literature Review By Peter Arbo; Paul Benneworth

  1. By: Lorino, Philippe (ESSEC Business School)
    Abstract: The notion of “process”, which describes the cooperation of heterogeneous practices and competences for a given output, has gained a major position in managerial practices for the last twenty years. This paper presents three ideas about organizational dynamics and processes and tests their applicability in the case of work safety improvement in a building company. The first idea is that the success of the process notion shows the central role of “conjoint” (as opposed to “common”) collective activity in organizational learning. Conjoint collective activity is dialogical (“acts speak”) and mediated by the utilization of semiotic systems (languages and technical and managerial tools). The second idea is that organizational learning is neither based on the actors’ individual subjectivity nor on the technological and objective artefacts engaged in the processes, but rather on the reflexive understanding and ongoing redesign of processes by the process actors themselves, in the frame of a reflexive inquiry, a “collective activity about collective activity” which is triggered and kept in motion by axiological judgments (process evaluation). The third idea is that the possibilities to configure processes in a given organization are multiple. The reflexive inquiry enacts a specific social, spatial and time configuration of the process, its “chronotope” in Bakhtin’s vocabulary, which plays a major role in the way actors can make sense of their collective activity and transform it. A longitudinal case study about work safety on the building yards shows that it is difficult to “control out” risk at work once designs have been established, in the frame of the “project execution” process, but it is easier to “design out” risk, when the actors of the process collectively design and redesign their collective activity, from the very first phases of a building project to the end. Therefore a major way to improve safety consists in extending the chronotope of the collective activity under consideration, overcoming the traditional separation between “design / planning” and “execution”. The conclusion summarizes the main theoretical, epistemological and practical issues involved in this research about conjoint collective activity.
    Keywords: Business Process; Chronotope; Collective Activity; Collective Sense Making; Dialogism; Inquiry; Process-based Management; Safety Management
    JEL: Z00
    Date: 2007–05
  2. By: Debraj Ray (NYU - New York University - [New York University], IAE - Instituto de Analisis Economico - [Consejo Superior de Investigaciones Cientificas]); Jean-Marie Baland (CRED - Centre de Recherche en Economie du Developpement - [University of Namur]); Olivier Dagnelie (CRED - Centre de Recherche en Economie du Developpement - [University of Namur])
    Abstract: A group of agents voluntarily participates in a joint project, in which efforts are not perfectly substitutable. The output is divided according to some given vector of shares. A share vector is unimprovable if no other share vector yields a higher sum of payoffs. When the elasticity of substitution across efforts is two or lower, only the perfectly equal share vector is unimprovable, and all other vectors can be improved via Lorenz domination. For higher elasticities of substitution, perfect equality is no longer unimprovable. Our results throw light on the connections between inequality and collective action.
    Keywords: Inequality, Collective Action, Substitutability
    Date: 2007–07–09
  3. By: Lorino, Philippe (ESSEC Business School)
    Abstract: In this research we explore the issue of “competence management”, as usually defined in the corporate vocabulary, mostly in the human resource (HR) function, and more particularly of “strategic competence management” (long run management of competences which are critical to achieve strategic goals). We try to show that competence management is a dynamic organizational competence. We analyze it in the case of a large European telecommunications company, France Télécom, in the years 2001-2003. The telecommunications sector is characterized by quick changes in technology, markets and industrial structures, and therefore a high level of uncertainty. It is also a high tech activity, based upon continuously evolving personal skills which require long education and training times. There is an apparent contradiction between uncertainty, which makes planning difficult, and the necessity to plan new competence development with long response times. This contradiction cannot be solved if competences are defined in a static way, as structural attributes of actual or potential employees or groups of employees. The strategic competence management issue must be considered rather in the frame of a dynamic, process-based view, which involves an on-going collective and reflexive activity of actors themselves to define and manage their competences. We tested process-based competence management in the case of two telecommunication domains: high bit-rate ADSL telecommunications and Internet services to small and medium businesses. The reflexive and collective competence management process had to be instrumented with instruments which did not aim at an accurate representation of competences as objects, but rather tried to offer a meaningful support for actors’ continuous (re)interpretation of present and future work situations in terms of critical competences. As a conclusion we extend the example of competence management instruments to the general issue of management instruments, in the context of uncertain and dynamic environments. Information-based theories of instruments view instruments as specular representations of situations, which allow optimal or satisficing problem-solving procedures. But when business environments continuously evolve and resist prediction, we must move towards an interpretive view of management instruments as meaningful signs, which help actors to make sense of the situations in which they are involved. Their relevance is not an absolute ontological truth but the practical effectiveness of their context-situated utilization and interpretation. A semiotic and pragmatist theory of activity and instruments can then be proposed.
    Keywords: Business Process; Competence; Competence Management; Interpretation; Management Instruments; Pragmatism; Semiotics; Telecommunications
    JEL: Z00
    Date: 2007–05
  4. By: Fosgerau, Mogens; Pilegaard, Ninette
    Abstract: We embed a stylized traffic model within a general equilibrium model in which labor supply is endogenous and income taxes are distortionary. Within this framework we derive simple rules for performing a cost-benefit analysis that can be applied knowing only the output of the traffic model and a factor that accounts for the labor market distortion in a consistent manner. Thus the rules that we derive should be applicable in the large number of cost-benefit analyses that are performed based on the output of traffic models. Such analyses are routinely performed and guide the allocation of a large share of public investment in many countries of the world as well as the assessment of policies such as road user charging. We find that the rules for leisure transport are exactly the same as in a conventional CBA that includes the marginal cost of public funds. For business travel and commuting we find new rules as a result of the assumption that transport costs have the same distortionary effect as income taxes.
    Keywords: Cost-benefit; Transport; General Equilibrium
    JEL: R42 H40
    Date: 2007–06–18
  5. By: Lorino, Philippe (ESSEC Business School); Gehrke, Ingmar (ESSEC Business School)
    Abstract: Theories about management instruments often enter dualistic debates between structure and agency: do instruments determine the forms of collective activity (CA), or do actors shape instruments to their requirements, or are instruments and concrete activity decoupled, as some trends of new institutionalist theory assume? Attempts to overcome the dualistic opposition between structure and activity stem from diverse sources: actors’ networks theory, structuration theory, pragmatism, theory of activity, semiotics. Performance measurement and management systems can be defined as structural instruments engaged in CA. As such they constrain the activity, but they do not determine it. Reciprocally, they are modified by the way CA uses them and makes sense of them. The central thesis of this paper will be that it is impossible to study the role of performance measurement as a common language in organizations independently from the design of the CA in which it is engaged. There is a not deterministic coupling between structure (i.e. management technical tools) and CA (i.e. business processes). The transformation of CA entails a transformation in the meaning of the “performance” concept, in the type of measurement required and in the performance management practices. The relationship between performance measurement and CA is studied here in the production division of a large electricity utility in France. The research extended over several years and took place when two new management systems were simultaneously implemented: a new management accounting system and an integrated management information system (ERP), both in the purchasing process. The new management accounting system was designed by the purchasing department; the new management information system was designed by the operational departments. Whereas the coherence between both projects could have been given by their common subordination to the rebuilding of CA (the purchasing process), their disconnection from concrete CA opened the possibility of serious dissonances between them. <p> Both the new performance management system and the new ERP met difficulties to provide common languages, since the dimension of CA was taken for granted and consequently partly ignored in the engineering of both systems. When CA incurs radical transformations, actors’direct discursive exchanges about it, “collective activity about collective activity”, become necessary to ensure a flexible and not deterministic coupling between CA and new management systems. This reflexive and collective analysis of the process by actors themselves requires the establishment of “communities of process”, which can jointly redesign the CA and its performance measurement system. We conclude that performance measurement can be a common language as far as there is a clear and shared understanding of how CA should concretely take place and should be assigned to the different categories of actors.
    Keywords: Business Process; Collective Activity; Community of Process; Management Instruments; Performance Measurement; Semiotics; Theory of Activity
    JEL: Z00
    Date: 2007–05
  6. By: Demir, Firat
    Abstract: Using micro level panel data, we analyze the impacts of rates of return gap between fixed and financial investments under uncertainty on real investment performance in three emerging markets, Argentina, Mexico and Turkey. Employing a portfolio choice model to explain the low fixed investment rates in developing countries during the 1990s, we suggest that rather than investing on risky and irreversible long term fixed investment projects, firms may choose to invest on reversible short term financial investments depending on respective rates of returns and uncertainty in the economy. The empirical results show that increasing rates of return gap and uncertainty have an economically and statistically significant fixed investment reducing effects in all three countries while the opposite is true with respect to financial investments.
    Keywords: Private Investment; Portfolio Choice; Uncertainty; Financialization
    JEL: C33 D21 O16 G11 E22
    Date: 2007
  7. By: Siri Terjesen (Brisbane Graduate School of Business, Australia; Max Planck Institute of Economics, Germany)
    Abstract: This case follows Sethu Sethunarayanan, Director of the non-profit Center for the Development of Disadvantaged People (CDDP), which is dedicated to the improvement of the Irula tribe in rural villages of southeast India. The Irulas specialize in catching rats, an activity which provides the bulk of their income and food. Following a routine visit to a local village, Sethu recognized an opportunity for a "better rat trap" to aid the Irula rat catchers. With feedback from rat catchers, Sethu developed an innovative new trap. His innovation won the prestigious Global Development Marketplace award from the World Bank which provided the funding necessary to commercialize the new technology. The venture’s implementation involved site visits to identify beneficiaries, health checks and treatment, preparatory workshops, factory establishment, factory training, production, women's micro-credit collectives, distribution and project evaluation. The case focuses on the relationship between human capital and technological entrepreneurship, considering the knowledge and skills required to commercialize technology for the rural poor and the positive impact on this greatly disadvantaged population.
    Keywords: Human Capital, India, Innovation, Irula, Social Entrepreneurship, Technological Entrepreneurship, World Bank
    Date: 2007–07–05
  8. By: Peter Arbo; Paul Benneworth
    Abstract: The contribution of higher education institutions to regional development is a theme that has attracted growing attention in recent years. Knowledge institutions are increasingly expected not only to conduct education and research, but also to play an active role in the economic, social and cultural development of their regions. The extent to which higher education institutions are able to play this role depends on a number of circumstances: the characteristics of the institutions, the regions in which they are located and the policy frameworks are all significant. At the same time, there are signs of more fundamental conceptual and strategic confusion. The discussions in this domain are frequently characterised by slogans and popular metaphors. This literature review was prepared to support the OECD project entitled 'Supporting the Contribution of Higher Education Institutions to Regional Development', which was conducted by the OECD Programme on Institutional Management in Higher Education (IMHE) in collaboration with the Directorate of Public Governance and Territorial Development. Drawing mainly from a selection of European and North American publications, the report takes an overall view on the development of higher education institutions in the regional context. It focuses on the evolution and discourses of higher education and research, the regional aspects of higher education policies, the various functions and roles that the institutions play, measures taken to link the universities with their regional partners, and the conditions which favour or hamper stronger regional engagement. <BR>La contribution de l'enseignement supérieur au développement régional suscite depuis plusieurs années un intérêt toujours croissant. De plus en plus, on attend des institutions en charge du savoir non seulement qu'elles mènent les activités liées à l'enseignement et à la recherche, mais aussi qu'elles prennent une part active au développement économique, social et culturel de leur région. La marge de manoeuvre dont disposent les établissements d'enseignement supérieur pour remplir ce rôle varie selon certains facteurs : les caractéristiques de l'établissement, la région et le cadre politique dans lesquels il s'inscrit sont autant de critères significatifs. Par ailleurs, on identifie également les signes d'une confusion conceptuelle et stratégique plus profonde, les débats sur ce sujet étant souvent caractérisés par les slogans et les métaphores populaires. Cette analyse bibliographique a été préparée en soutien au projet de l'OCDE intitulé « Appuyer la contribution des institutions d'enseignement supérieur au développement régional », mené par le Programme de l'OCDE sur la gestion des établissements d'enseignement supérieur (IMHE) en coopération avec la Direction de la gouvernance publique et du développement territorial. À partir d'une sélection de publications principalement européennes et nord-américaines, ce rapport adopte une vue d'ensemble sur le développement des établissements d'enseignement supérieur dans le contexte régional. Il cible notamment l'évolution et les débats dans l'enseignement supérieur et la recherche, le volet régional des politiques d'enseignement supérieur, les divers fonctions et rôles que remplissent les établissements, les mesures prises pour relier les universités à leurs partenaires régionaux, ainsi que les conditions qui favorisent ou freinent un engagement régional plus marqué.
    Date: 2007–07–09

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