Showing papers in "ERIM report series research in management Erasmus Research Institute of Management in 2005"

Reflexivity in Teams: A Measure and Correlates

Abstract: textReflexivity -the extent to which teams reflect upon and modify their functioning- has been identified as a possible key factor in the effectiveness of work teams. The aim of the present study was to develop a questionnaire to measure (aspects of) reflexivity, with a focus on team reflection. The questionnaire was tested in two different samples, namely a first sample of 59 teams from fourteen different organizations (Study 1) and a confirmation sample of 59 school management teams (Study 2). In both samples, two factors of reflection were identified. These were labeled evaluation/learning and discussing processes/principles. Scale statistics showed good psychometric properties for the scales in both studies. We conclude that the scales form a parsimonious and valid instrument to assess reflexivity in teams.

Social Identity and Social Exchange: Identification, Support, and Withdrawal from the Job

Abstract: textIntegrating insights from the social exchange perspective and the social identity perspective on the psychological relationship between the individual and the organization, we propose that evaluations of the support received from the organization and its representatives, and organizational identification interact in predicting withdrawal from the job. Specifically, the relationship of support with withdrawal is proposed to be weaker the stronger employees identify with the organization. This prediction was confirmed in two samples focusing on different operationalizations of support and withdrawal. Sample 1 concerned the interaction of organizational support and organizational identification in predicting turnover intentions, Sample 2 concerned the prediction of absenteeism from supervisor support and organizational identification. We conclude that the present study yields promising first evidence that may lay the basis for further integration of social exchange and social identity analyses of organizational behavior.

Managing Potential and Realized Absorptive Capacity: How do Organizational Antecedents matter?

Abstract: textThis study explores how organizational antecedents affect potential and realized absorptive capacity. Our study identifies differential effects for both components of absorptive capacity. Results indicate that organizational mechanisms associated with coordination capabilities (i.e. cross-functional interfaces, participation in decision-making, and job rotation) primarily enhance a unit’s potential absorptive capacity. Organizational mechanisms associated with socialization capabilities (i.e. connectedness and socialization tactics) primarily increase a unit’s realized absorptive capacity. Our findings reveal why units may have difficulties in managing levels of potential and realized absorptive capacity and vary in their ability to create value from their absorptive capacity.

Agent Technology supports Inter-Organizational Planning in the Port

Abstract: textThe Port of Rotterdam is a key container transshipment hub for Europe Inland container shipping is important to connect the hinterland (40% market share) Barges visit several terminals per round-trip through the Port, thus requiring a proper planning support – to avoid planning problems such as double-bookings A pilot version of an inter-organizational system has been build, titled APPROACH This paper describes an industry workshop where a gamesetting was used to evaluate the current manual planning practices with the APPROACH outcome – and delivered interesting findings; both for actual implementation of the system as well as it unveiled issues for further research

Testing for Stochastic Dominance Efficiency

Abstract: textWe propose a new test of the stochastic dominance efficiency of a given portfolio over a class of portfolios. We establish its null and alternative asymptotic properties, and define a method for consistently estimating critical values. We present some numerical evidence that our tests work well in moderate sized samples.

When are CRM Systems Successful? The Perspective of the User and of the Organization

Abstract: textThe individual impact of CRM systems is strongly related to impact at the organizational level. Fit with the task of the user is key. CRM systems are successful in organizations that reward customer-centric behavior and that have an analytical decision style. Acceptance of a CRM system should be monitored over time.

On the design of artificial stock markets

Abstract: Artificial stock markets are designed with the aim to study and understand market dynamics by representing (part of) real stock markets. Since there is a large variety of real stock markets with several partially observable elements and hidden processes, artificial markets differ regarding their structure and implementation. In this paper we analyze to what degree current artificial stock markets reflect the workings of real stock markets. In order to conduct this analysis we set up a list of factors which influence market dynamics and are as a consequence important to consider for designing market models. We differentiate two categories of factors: general, well-defined aspects that characterize the organization of a market and hidden aspects that characterize the functioning of the markets and the behaviour of the traders.

Determining Number of Zones in a Pick-and-pack Orderpicking System

Abstract: textIn this study we consider a pick-to-pack orderpicking system, in which batches of orders are picked simultaneously from different(work) zones by a group of order pickers. After picking, the orders are transported by a conveyor to the next station for packing. Our aim is to determine the optimal number of zones such that the overall (picking and packing) time to finish a batch is minimized. We solve this problem by optimally assigning items to pick routes in each zone. We illustrate the method with data taken from a distribution center of one of the largest online retailers in the Netherlands.

Operations research in passenger railway transportation

Abstract: In this paper, we give an overview of state-of-the-art Operations Research models and techniques used in passenger railway transportation. For each planning phase (strategic, tactical and operational), we describe the planning problems arising there and discuss some models and algorithms to solve them. We do not only consider classical, well-known topics such as timetabling, rolling stock scheduling and crew scheduling, but we also discuss some recently developed topics as shunting and reliability of timetables. Finally, we focus on several practical aspects for each of these problems at the largest Dutch railway operator, NS Reizigers.

Diffusion of Mobile Phones in China

Abstract: textDiffusion of mobile communication has induced great societal changes in China. Factors at global market, communications industry and end-user market levels are driving the adoption at a high rate. Firstly, China’s economic emergence together with e.g. accession to WTO has led to foreign investment increase in telecom and communications industry. Secondly, a parallel deregulation and reengineering of the telecom industry ensured an introduction of competition in the domestic terminals market and facilitated manufacturing in China. Finally, overall growth in China has increased purchasing power enabling consumers to adopt new technologies. At the market level, challenges and future growth depends on a favorable business environment both for local and multinationals organizations, operators and service providers, and most importantly to the distribution channels (retailers and resellers). Market mechanisms such as improvement in payment methods, regulations for content providers, branded and low-end mobile phones marketing, applications and support in Chinese language are required for a systematic and not just sporadic adoption of mobile devices. Product development and innovation, improvement in distribution infrastructure, mobile services operators skill enhancement are some measures that can growth of mobile communication and increase in average consumer spending.

Lagrangian duality and cone convexlike functions

Abstract: textIn this paper we will show that the closely K-convexlike vector-valued functions with K Rm a nonempty convex cone and related classes of vector-valued functions discussed in the literature arise naturally within the theory of biconjugate functions applied to the Lagrangian perturbation scheme in finite dimensional optimization. For these classes of vectorvalued functions an equivalent characterization of the dual objective function associated with the Lagrangian is derived by means of a dual representation of the relative interior of a convex cone. It turns out that these characterizations are strongly related to the closely convexlike and Ky-Fan convex bifunctions occurring within minimax problems. Also it is shown for a general class of finite dimensional optimization problems that strong Lagrangian duality holds in case a vector-valued function related to the functions in this optimization problem is closely K-convexlike and satisfies some additional regularity condition.

Exploring retailers' sensitivity to local sustainability policies

Abstract: textLocal governments in Western Europe increasingly use city time-access regulations to improve social sustainibility. These regulations significantly influence the distribution process of retail chain organizations. This paper studies the impact of governmental timewindow pressure on retailers’ logistical concept and consequential financial and environmental distribution performance. We determine which dimensions in the retailer’s logistical concept determine its cost and emission sensitivity to increasing time-window pressure. Our research is based on a multiple case study of fourteen Dutch retail cases in different sectors and with different store formulas. The retailers provided all organizational, flow and cost data of their secondary distribution (between distribution center and stores). We use these data to calculate the impacts of different time-window pressure scenarios, including the current situation, using vehicle routing software. It appears that cost increases are moderate, when few cities are affected. However, as more cities are affected, costs increase considerably, particularly if time-window lengths become shorter. Time-windows harmonized between cities, lead to less negative effects. We find various dimensions that contribute to reducing the retailer’s sensitivity to timewindow pressure. We formulate conclusions hypothesizing the links between timewindow pressure, its effects, and the dimensions that determine these effects.

A Portrait of Hedge Fund Investors: Flows, Performance and Smart Money

Abstract: textWe explore the flow-performance interrelation by explicitly separating the investment and divestment decisions of hedge fund investors. The results show that different determinants and evaluation horizons underlie both decisions. While money inflows are sensitive to past long-run performance, outflows exhibit an immediate and sustained response to past performance in the short run. As a consequence, the shape of the flow-performance relation differs depending on the time horizon being analyzed. We find a weaker flow-performance relation for winning funds at quarterly horizons compared to annual horizons, which may explain why quarterly persistence in hedge fund performance is not competed away. Indeed, we also find evidence that most investors are unable to exploit the persistence of the winners. Conversely, investors are fast and successful in deallocating from the persistent losers, ensuring a disciplining mechanism for lowquality funds. Further, our findings do not support the existence of smart money.

Reciprocity of Knowledge Flows in Internal Network Forms of Organizing

Abstract: textFundamental changes in the competitive landscape triggered many firms to leverage and build competencies by focusing on transition processes towards internal network forms of organizing. These forms ameliorate exploration through knowledge creation and transfer. Internal networks are characterized by horizontal knowledge flows that supplement and supplant the vertical knowledge flows that characterize other organization forms like the functional and multi-divisional forms. As these horizontal knowledge flows facilitate knowledge integration, internal networks have an advantage over other organization forms in leveraging and building competencies. One characteristic that makes these horizontal knowledge flows work is the reciprocity ensuing them. Reciprocity relates to the interdependence and coordination modes that characterize internal networks. As reciprocity is influenced by managerial coordination, by the intention to deploy knowledge, and by goal attainment, creating and maintaining reciprocity of knowledge flows can be considered as a managerial competence. In this paper, the attributes of organization form that impact the reciprocity in a firm are explored from structural, managerial and knowledge perspectives. Hypotheses are developed which suggest that specialization and the use of formal meetings restrict reciprocity, whereas job rotation, the number of employees with a coordination function, and teams have a positive effect on the level of reciprocity. These hypotheses are tested by means of a questionnaire administered in a business unit of a multinational financial services firm. Reciprocity of knowledge flows was found to be dependent on the characteristics mentioned above in a predicted way. Since none of the hypotheses needed to be rejected, the evidence suggests that reciprocity is a fundamental feature of internal networks and the horizontal knowledge flows that characterize them. This suggests reciprocity to be an important managerial competence.

A modular agent-based environment for studying stock markets

Abstract: Artificial stock markets are built with diffuse priors in mind regarding trading strategies and price formation mechanisms. Diffuse priors are a natural consequence of the unknown relation between the various elements that drive market dynamics and the large variety of market organizations, findings, however, might hold only within the specific market settings. In this paper we propose a framework for building agent-based artificial stock markets. We present the mechanism of the framework based on a previously identified list of organizational and behavioural aspects. Within the framework experiments with arbitrary many trading strategies, acting in various market organizations can be conducted in a flexible way, without changing its architecture. In this way experiments of other artificial stock markets, as well as theoretical models can be replicated and their findings compared. Comparisons of the different experimental results might indicate whether findings are due to traders’ behaviour or to the chosen market structure and could suggest how to improve market quality.

Strategies for Dealing with Drift during Implementation of ERP Systems

Abstract: textResearch on the relationship between Information Technology (IT) and organizations emphasizes the complexity of adaptation processes and the potential of drifting. Drifting means that an organization encounters unexpected circumstances that show the incompleteness and possible failure of an initial technological design without organizations having yet feasible alternatives. This conceptual and empirical paper investigates the origins and nature of drifting, and strategies for dealing with drift. Three strategies have been proposed to deal with drifting: control, incremental, and drift containment. We explore the third option that seems most realistic and relevant from an organizational point of view. We empirically investigated how drift containment could be accomplished in practice in a multi-site ERP implementation project. Our results suggest three phases of dealing with drift. Organizations must first recognize when drifting occurs. Next, they must develop a dual focus. On one hand, they must differentiate between a project’s overarching objectives (which remain relatively stable). On the other hand, they attend to and resolve their operational drifting experience. The dual focus thus means that while organizations stay focused on their objectives, they address the causes of drifting. During the final phase, lessons learnt during drifting resolution must be shared and applied to accelerate accomplishment of project objectives. Implications for research and practice are elaborated.

Boards in Agricultural Cooperatives: Competence, Authority, and Incentives

Abstract: textThis article addresses three observations regarding the board of directors in agricultural cooperatives. First, many scholars and practitioners worry about the competency of the member dominated board of directors in agricultural cooperatives. Second, it is sometimes stated that cooperatives seem to behave like ordinary enterprises. Finally, it is argued that cooperatives may have advantages compared to firms with publicly exchanged shares. These observations are analyzed from various contract theoretic perspectives.

How Knowledge Accumulation changed the Competitive Advantage of Strategy Consulting Firms

Abstract: textResearch evidence confirms that the accumulation of knowledge contributes to the competitive advantage of firms. In the strategy consulting industry, one of the most knowledge-intensive professional services industries, however, established firms that exploited their knowledge accumulation by adding exploitative consulting practices have found their performance has deteriorated. To investigate this phenomenon, this paper will describe how the increasing share of exploitative practices in the strategy consulting industry has attracted both established ICT-related consulting firms and new entrants, and enabled clients to expand their problem-solving abilities. We will argue that these developments in terms of competitiveness and client competencies have reduced the attractiveness of exploitative practices for established strategy consulting firms. To analyse these developments and to provide strategic options for the established strategy consulting firms, a conceptual framework will be proposed. Based on this framework, three strategic option are identified: ‘Follow the herd’, ‘Become ambidextrous’ and ‘Back to the original focus.’ In summarizing our argument, we highlight the pros and cons of these options and the implications for top management.

Appropriability in Services

Abstract: Services constitute a major part of the economy, and, contrary to popular believe, service firms do innovate. In this paper I take a closer look at one aspect of innovation in services: appropriability. I discuss the different elements that are possibly of importance for appropriability, and discuss one element in more detail. Reputation has been argued to be decisive when service firms try to appropriate the benefits of their innovative activity. In this paper, some suggestions are brought forward that will be useful in thinking systematically about reputationshaping mechanisms.

New’ Performance Measures: Determinants of Their Use and Their Impact on Performance

Abstract: textThis study investigates the extent to which Dutch organizations use ‘new’ performance measures to deal with the perceived inadequacies of traditional accounting performance measures. In addition, the determinants of the use of these ‘new’ performance measures are documented; finally, the alignment hypothesis is tested. Using survey data from Dutch firms, I find that non-financial measures appear to be used most often in addition to more traditional performance measures; economic value measures and subjective measures appear to be used to a lesser extent. Second, the results indicate that the importance of the shareholder value goal and size are positively related to the use of economic value measures. The importance of the shareholder value goal, a growth mission, task culture and size are all positively associated with the use of non-financial measures. The (relative) use of subjective measures is negatively related to size. Finally, I find no support for the alignment hypothesis that a mismatch between the firm’s strategic and contextual characteristics and its performance measurement system adversely affect performance.

Faculty Retention factors at European Business Schools. How Deans and Faculty Perceptions Differ.

Abstract: textDevelopments in the management education environment present business schools with several challenges. Among these, perhaps the most important to address relates to a mission-critical resource for business schools: faculty retention. In this paper, we position and examine this problem within the context of business schools. We present the results of a research project on faculty retention that was conducted in 2003-2004 among European business school faculty and deans. The results identify the most important factors for faculty retention and suggest that there are perception gaps between faculty and deans on these factors that could lead to distorted decision-making and suboptimal resource allocation.

Linear Parametric Sensitivity Analysis of the Constraint Coefficient Matrix in Linear Programs

Abstract: Sensitivity analysis is used to quantify the impact of changes in the initial data of linear programs on the optimal value. In particular, parametric sensitivity analysis involves a perturbation analysis in which the effects of small changes of some or all of the initial data on an optimal solution are investigated, and the optimal solution is studied on a so-called critical range of the initial data, in which certain properties such as the optimal basis in linear programming are not changed. Linear one-parameter perturbations of the objective function or of the so-called ”right-hand side” of linear programs and their effect on the optimal value is very well known and can be found in most college textbooks on Management Science or Operations Research. In contrast, no explicit formulas have been established that describe the behavior of the optimal value under linear one-parameter perturbations of the constraint coefficient matrix. In this paper, such explicit formulas are derived in terms of local expressions of the optimal value function and intervals on which these expressions are valid. We illustrate this result using two simple examples.

Collective Consuming: Consumers as Subcontractors on Electronic Markets

Abstract: In this article, contrary to popular belief, it is argued on the basis of Transaction Cost Economics that consumers will become dependent subcontractors on electronic markets. Consumers invest time and effort building up a relation with a producer or e-tailer; an investment that is idiosyncratic. The producer or e-tailer only needs to invest in generic assets that enable him to automate the process of collecting and processing customer information she needs to differentiate products and discriminate prices. As subcontractors consumers face high switching costs and are thus dependent on producers or e-tailers. Virtual communities of consumers that organize countervailing power will not mitigate this tendency.

A Hierarchical Bayes Error Correction Model to Explain Dynamic Effects of Price Changes

Abstract: textThe authors put forward a sales response model to explain the differences in immediate and dynamic effects of promotional prices and regular prices on sales. The model consists of a vector autoregression rewritten in error-correction format which allows to disentangle the immediate effects from the dynamic effects. In a second level of the model, the immediate price elasticities, the cumulative promotional price elasticity and the long-run regular price elasticity are correlated with various brand-speciffic and category-speciffic characteristics. The model is applied to seven years of data on weekly sales of 100 different brands in 25 product categories. We find many significant moderating effects on the elasticity of price promotions. Brands in categories that are characterized by high price differentiation and that constitute a lower share of budget are less sensitive to price discounts. Deep price discounts turn out to increase the immediate price sensitivity of customers. We also find significant effects for the cumulative elasticity. The immediate effect of a regular price change is often close to zero. The long-run effect of such a decrease usually amounts to an increase in sales. This is especially true in categories characterized by a large price dispersion, frequent price promotions and hedonic, non-perishable products.

How Domestic is the Fama and French Three-Factor Model? An Application to the Euro Area

Abstract: textThe euro area has faced a high number of monetary and policy changes in the recent past as a consequence of the European integration process and, naturally, these developments have important implications for portfolio diversification and asset pricing. Therefore, this paper concentrates on the performance of a specific asset pricing model: the Fama and French threefactor model. Griffin (2002) shows that the Fama and French factors are country specific for the U.S., the U.K, Canada, and Japan. We apply the same methodology to the euro area countries and find that even in this very integrated area the domestic three-factor model outperforms the euro area three-factor model. However, the relative performance of the euro area wide model is increasing, especially for countries with a high number of listed stocks. This could be interpreted as evidence of a higher level of equity market integration caused by lower investment barriers and a changing point of view of institutional investors. Furthermore, we extend the methodology and also test an industry-specific three-factor model. Our findings suggest that lower pricing can be acquired using an industry-specific model relative to the euro area three-factor model.

Intra- and Inter-Channel Competition in Local-Service Sectors

Abstract: textAlthough economically very important, local-service sectors have received little attention in the extensive literature on competitive interactions. Detailed data gathering in these sectors is hard, not only because of the multitude of local players, but also because key service dimensions are hard to quantify. Using empirical entry models, we show how to infer information on these sectors’ degree of intra- and inter-channel competition from the observed entry decisions in different local markets. The approach also controls for relevant socio-demographic characteristics of the trading area that may affect performance. We apply the proposed empirical entry model to the video-rental market. Additional entries of video stores are found to significantly increase the level of intra-channel competition. Unlike the predictions of many normative economic models, we find this increase to be larger when the entry occurs in a duopoly than in a monopoly, a pattern consistent with recent experimental research on collusive behavior in oligopolies. We also find evidence of inter-channel cannibalization from the upstream channel (movie theatres), but not from the downstream channel (premium cable). Finally, various socio-demographic characteristics of the trading zone, such as income and household size, are found to also have a significant impact on store performance.

The Influence of Employee Communication on Strategic Business Alignment

Abstract: textOver the last years, it has become increasingly important for companies to create strategic business alignment (SBA), i.e., the degree to which employees understand, support, and are able to execute the companies’ strategic initiatives. This study provides insights into the way companies can create SBA through employee communication. Specifically, we examined the influence of different dimensions of employee communication on employee attitudes toward their company’s strategic initiatives, and on employee behavior regarding the strategic initiatives. The results show that especially management communication, communication about strategic initiatives, and the communication climate within an organization are of vital importance to stimulate SBA.

Continuous versus Step-Level Public Good Games

Abstract: textWe will firstly outline the rationale of a public good game and explain the distinction between a continuous public good game and a threshold public good game. As a vast majority of experimental research in social psychology on public good games has used threshold public good games, we will then outline the structure of a dilemma game with a provision point. Our point is that dilemma games with a provision point violate two important assumptions commonly held for public good games: a) there is always a conflict between the group’s interest and the individual’s interest; and b) an individual is always better off defecting. A threshold dilemma game is a dilemma with a coordination game embedded in it. Hence it provides focal point solutions and may as a consequence leave less room for other factors to affect behavior. Moreover, games with a provision point might yield different results than games without a provision point. We will argue that above that threshold dilemma games do not provide good models of many the public goods problems that are encountered in real life. We will propose that a public good game with a tilted S function provides a more appropriate model of real life dilemmas while fulfilling the defining properties of public good games.

Why consumers buy lottery tickets when the sun goes down on them. The depleting nature of weather-induced bad moods

Abstract: textWe propose that weather conditions can influence consumers’ engagement in lottery play. A longitudinal study on the extent of lottery play in Belgium shows that lottery expenditures are indeed higher after reduced exposure to sunshine, even after controlling for people’s inertia, time-varying characteristics of the game, and deterministic seasonal components. The results of a first laboratory study are consistent with these findings, and establish a link between lottery play and negative mood. Subsequent experiments provide evidence that depletion due to active mood regulation attempts, rather than mood repair, is the underlying process for the link between bad weather and lottery play.

Privacy metrics and boundaries

Abstract: This paper aims at defining a set of privacy metrics (quantitative and qualitative) in the case of the relation between a privacy protector ,and an information gatherer .The aims with such metrics are : -to allow to assess and compare different user scenarios and their differences ;for examples of scenarios see [4]; -to define a notion of privacy boundary, and design it to encompass the set of information , behaviours , actions and processes which the privacy protector can accept to expose to an information gathering under an agreement with said party ; everything outside the boundary is not acceptable and justifies not entering into the agreement ; -to characterize the contribution of privacy enhancing technologies (PET). A full case is given with the qualitative and quantitative privacy metrics determination and envelope, i.e. a Cisco Inc. privacy agreement.