Showing papers in "Management Science in 1997"
TL;DR: The authors analyzes four sources of the bullwhip effect: demand signal processing, rationing game, order batching, and price variations, and shows that the distortion tends to increase as one moves upstream.
Abstract: (This article originally appeared in Management Science, April 1997, Volume 43, Number 4, pp. 546-558, published by The Institute of Management Sciences.)
Consider a series of companies in a supply chain, each of whom orders from its immediate upstream member. In this setting, inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions. This paper claims that the information transferred in the form of "orders" tends to be distorted and can misguide upstream members in their inventory and production decisions. In particular, the variance of orders may be larger than that of sales, and distortion tends to increase as one moves upstream-a phenomenon termed "bullwhip effect." This paper analyzes four sources of the bullwhip effect: demand signal processing, rationing game, order batching, and price variations. Actions that can be taken to mitigate the detrimental impact of this distortion are also discussed.
4,124 citations
TL;DR: In this paper, the role of buyer search costs in markets with differentiated product offerings is analyzed in the context of an electronic marketplace, and the allocational efficiencies such a reduction can bring to a differentiated market are formalized.
Abstract: Information systems can serve as intermediaries between the buyers and the sellers in a market creating an "electronic marketplace" that lowers the buyers' cost to acquire information about seller prices and product offerings. As a result, electronic marketplaces reduce the inefficiencies caused by buyer search costs, in the process reducing the ability of sellers to extract monopolistic profits while increasing the ability of markets to optimally allocate productive resources. This article models the role of buyer search costs in markets with differentiated product offerings. The impact of reducing these search costs is analyzed in the context of an electronic marketplace, and the allocational efficiencies such a reduction can bring to a differentiated market are formalized. The resulting implications for the incentives of buyers, sellers, and independent intermediaries to invest in electronic marketplaces are explored. Finally, the possibility to separate price information from product attribute information is introduced, and the implications of designing markets promoting competition along each of these dimensions are discussed.
2,366 citations
TL;DR: In this article, a simple model is developed to explore the interrelationship between processes of organizational level change and population selection forces, and the effect on organizational fitness of the various attributes that constitute an organization's form is interactive.
Abstract: A simple model is developed to explore the interrelationship between processes of organizational level change and population selection forces. A critical property of the model is that the effect on organizational fitness of the various attributes that constitute an organization's form is interactive. As a result of these interaction effects, the fitness landscape is "rugged." An organization's form at founding has a persistent effect on its future form when there are multiple peaks in the fitness landscape, since the particular peak that an organization discovers is influenced by its starting position in the space of alternative organizational forms. Selection pressures influence the distribution of the organizational forms that emerge from the process of local adaptation. The ability of established organizations to respond to changing environments is importantly conditioned by the extent to which elements of organizational form interact in their effect on organizational fitness. Tightly coupled organizations are subject to high rates of failure in changing environments. Furthermore, successful "reorientations" are strongly associated with survival for tightly coupled organizations, but not for more loosely coupled organizations that are able to engage in effective local adaptation.
2,073 citations
TL;DR: In this article, the authors explore the hypotheses that implementing effective total quality management TQM programs improves the operating performance of firms and find strong evidence that firms that have won quality awards outperform the control firms on operating income-based measures.
Abstract: This study explores the hypotheses that implementing effective total quality management TQM programs improves the operating performance of firms. The winning of quality awards is used as a proxy for the effective implementation of TQM programs. Changes in various performance measures for a test sample of quality-award winners are compared against a sample of control firms. Our statistical tests provide strong evidence that firms that have won quality awards outperform the control firms on operating income-based measures. Over a 10-year period, from 6 years before to 3 years after the year of winning the first quality award, the mean median change in the operating income for the test sample is 107% 48% higher than that of the control sample. There is reasonably strong evidence that firms that have won quality awards do better on sales growth than the control firms. Over the 10-year period, the mean median change in sales for the test sample is 64% 24% higher than that of the control sample. We also find weak evidence that firms in our test sample are more successful in controlling costs when compared with the firms in the control sample. In addition, the results indicate that firms in our test sample increased their capital expenditures more than the control sample over the time period prior to winning quality awards. Compared with the control sample, the test sample shows higher growth in both employment and total assets.
934 citations
TL;DR: It is proposed here that organizations will innovate in the presence of knowledge barriers when the burden of organizational learning is effectively lower, either because much of the required know-how already exists within the organization, or because such knowledge can be acquired more easily or more economically.
Abstract: The burden of organizational learning surrounding software process innovations SPIs-and complex organizational technologies in general-creates a "knowledge barrier" that inhibits diffusion. Attewell Attewell, P. 1992. Technology diffusion and organizational learning the case of business computing. Organ. Sci.31 1-19. has suggested that many organizations will defer adoption until knowledge barriers have been sufficiently lowered; however, this leaves open the question of which organizations should be more likely to innovate, even in face of high knowledge barriers. It is proposed here that organizations will innovate in the presence of knowledge barriers when the burden of organizational learning is effectively lower, either because much of the required know-how already exists within the organization, or because such knowledge can be acquired more easily or more economically. Specifically, it is hypothesized that organizations will have a greater propensity to initiate and sustain the assimilation of SPIs when they have a greater scale of activities over which learning costs can be spread learning-related scale, more extensive existing knowledge related to the focal innovation related knowledge, and a greater diversity of technical knowledge and activities diversity. An empirical study using data on the assimilation of object-oriented programming languages OOPLs by 608 information technology organizations strongly confirmed the importance of the three hypothesized factors in explaining the assimilation of OOPLs.
852 citations
TL;DR: In this article, the authors develop a simple model that captures the costs and benefits associated with this redesign strategy and apply this simple model to analyze some special cases that are motivated by real examples to formalize three different product/process redesign approaches (standardization, modular design, and process restructu...
Abstract: Expanding product variety and high customer service provision are both major challenges for manufacturers to compete in the global market. In addition to many ongoing programs, such as lead-time reduction, redesigning products and processes so as to delay the point of product differentiation is becoming an emerging means to address these challenges. Such a strategy calls for redesigning products and processes so that the stages of the production process in which a common process is used are prolonged. This product/process redesign will defer the point of differentiation (i.e., defer the stage after which the products assume their unique identities). In this paper, we develop a simple model that captures the costs and benefits associated with this redesign strategy. We apply this simple model to analyze some special cases that are motivated by real examples. These special cases enable us to formalize three different product/process redesign approaches (standardization, modular design, and process restructu...
650 citations
TL;DR: In this article, the authors propose a way of assessing a person's inherent risk preference that factors out individual and situational differences in risk perception, leaving open the possibility of stable cross-situational risk preference as a personality trait.
Abstract: This paper provides empirical evidence that distinguishes between alternative conceptualizations of the risky decision making process. Two studies investigate whether cross-situational differences in choice behavior should be interpreted in the expected utility framework as differences in risk attitude (as measured by risk-averse vs. risk-seeking utility functions) or as differences in the perception of the relative riskiness of choice alternatives as permitted by risk-return interpretations of utility functions, leaving open the possibility of stable cross-situational risk preference as a personality trait. To this end, we propose a way of assessing a person's inherent risk preference that factors out individual and situational differences in risk perception. We document that a definition of risk aversion and risk seeking as the preference for options perceived to be more risky or less risky, respectively, provides the cross-situational stability to a person's risk preference that has eluded more traditi...
634 citations
TL;DR: A model-based framework to manage the overlapping of coupled product development activities and identifies conditions under which various types of overlapping are appropriate for a pair of coupled activities is presented.
Abstract: Intense competition in many industries forces manufacturing firms to develop new, higher quality products at an increasingly rapid pace. Overlapping product development activities is an important component of concurrent product development that can help firms develop products faster. However, since product development activities may be coupled in complex ways, overlapping interrelated activities can present many difficulties. Without careful management of the overlapped product development process, the development effort and cost may increase, and product quality may worsen. This paper goes beyond the common recommendation to simply overlap activities as much as possible. We present a model-based framework to manage the overlapping of coupled product development activities. The model and framework identify conditions under which various types of overlapping are appropriate for a pair of coupled activities. We illustrate the model and framework with industrial applications involving the development of electronic pagers and automobile doors.
625 citations
TL;DR: Brynjolfsson et al. as discussed by the authors used the CES-translog production function to estimate the role of differences among firms in IT-related output and substitution elasticities.
Abstract: Fueled by its constant technological and price improvements, information technology IT is displacing other inputs in the production of goods and services. By 1994, IT accounts for over 15% of fixed investments by the U.S. private sector, and the ratio of new IT investments to labor costs is approaching 5% 1990 dollar basis. The ability to take advantage of improvements in IT is determined in part by the substitutability of IT for other factors of production.
This paper builds on the empirical framework of Brynjolfsson and Hitt Brynjolfsson, E., L. Hitt. 1995. Information technology as a factor of production the role of differences among firms. Econom. Innovations and New Tech.3 183-199. and extends it to jointly estimate output and substitution elasticities using the CES-translog production function. Our primary source of IT-related data is the IDG/Computerworld annual survey data on IS spending by large U.S. firms, for the period 1988 to 1992, previously analyzed by Brynjolfsson and Hitt [Brynjolfsson, E., L. Hitt. 1995. Information technology as a factor of production the role of differences among firms. Econom. Innovations and New Tech.3 183-199.], [Brynjolfsson, E., L. Hitt. 1996. Paradox lost? Firm-level evidence on the returns to information systems spending. Management Sci.424 541-558.] and Lichtenberg Lichtenberg, F. R. 1995. The output contributions of computer equipment and personnel a firm level analysis. Econom. Innovations and New Tech.3 201-217..
A key result is that IT capital is a net substitute for both ordinary capital and labor, suggesting that the factor share of IT in production will grow to more significant levels over time. We confirm earlier findings of positive returns to IT investment for this data set. Further, we find excess returns on IT investment relative to labor input and some evidence of excess returns relative to ordinary capital. Taken together, these results shed new light on the productivity paradox of IT and on the growth of information intensity across the economy as firms take advantage of the continuing improvements in IT.
538 citations
TL;DR: In this article, the authors study how a manufacturer-retailer channel impacts choices of production and marketing variables under QR in the apparel industry, and suggest actions such as service level, wholesale price and volume commitments that can be used to make QR profitable for both members of the channel.
Abstract: Quick Response QR is a movement in the apparel industry to shorten lead time. Under QR, the retailer has the ability to adjust orders based on better demand information. We study how a manufacturer-retailer channel impacts choices of production and marketing variables under QR in the apparel industry. Specifically, we build formal models of the inventory decisions of manufacturers and retailers both before and after QR. Our models allow us to address who wins and who loses under QR, and suggest actions such as service level, wholesale price and volume commitments that can be used to make QR profitable for both members of the channel, i.e., Pareto improving. Detailed discussions with a major retailer, and information from industry sources provide supporting evidence for the structure and conclusions of the model.
536 citations
TL;DR: In this paper, a series of companies in a supply chain are modeled as a set of supply chains, and the authors consider the problem of finding the optimal supply chain for each of them.
Abstract: (This article originally appeared in Management Science, April 1997, Volume 43, Number 4, pp. 546-558, published by The Institute of Management Sciences.) Consider a series of companies in a supply...
TL;DR: In this article, the authors considered Just-in-Time JIT to be an overall organizational phenomenon and developed and tested a model that includes both JIT practices and the infrastructure practices hypothesized to provide an environment in which JIT practice perform more effectively.
Abstract: We consider Just-in-Time JIT to be an overall organizational phenomenon. Accordingly, we developed and tested a model that includes both JIT practices and the infrastructure practices hypothesized to provide an environment in which JIT practices perform more effectively. Canonical correlation analysis was used to test five hypotheses. The results indicated that: 1 there was not a significant relationship between the use of JIT practices, alone, and manufacturing performance, 2 there was a very strong relationship between JIT practices and infrastructure practices; 3 the combination of JIT management and infrastructure practice was related to manufacturing performance; 4 infrastructure, by itself, is sufficient to explain manufacturing performance; and 5 manufacturing performance was related to competitive advantage. These findings provide support for the notion that JIT is an overall organizational phenomenon, rather than limited to strictly shop floor practices, and that at least part of its effect on manufacturing performance may be through providing a set of improvement targets and discipline for the entire organization. In addition, the analysis highlights the areas of infrastructure practice most relevant for future research.
TL;DR: In this paper, a backup agreement between a catalog company and manufacturers is proposed to provide upstream sourcing flexibility for fashion merchandise, where the catalog company can order up to this backup quantity for the original purchase cost and receive quick delivery but will pay a penalty cost for any of the backup units it does not buy.
Abstract: We focus on backup agreements between a catalog company and manufacturers-a scheme to provide upstream sourcing flexibility for fashion merchandise. A backup agreement states that if the catalog company commits to a number of units for the season, the manufacturer holds back a constant fraction of the commitment and delivers the remaining units before the start of the fashion season. After observing early demand, the catalog company can order up to this backup quantity for the original purchase cost and receive quick delivery but will pay a penalty cost for any of the backup units it does not buy. In representative contracts with five companies, the fraction held as backup varies from 20% to 33% and the penalty ranges from 0 to 20% of cost. We model this inventory problem and derive the optimal solution. We provide results from a retrospective parallel test of the model against buyer decisions in 1993 based on a data set from the women's fashion department at a catalog company Catco. The results indicate that backup arrangements can have a substantial impact on expected profits and may result in an increase in the committed quantity. Also, these arrangements may maintain the manufacturer's expected profit for a wide range of parameters.
TL;DR: This paper presents a model describing sequential iteration, one of the fundamental solution processes experienced in complex engineering design projects, and is able to compute the expected duration of the iterative solution process, and to suggest an initial ordering of the coupled design tasks to minimize theexpected duration.
Abstract: This paper presents a model describing sequential iteration, one of the fundamental solution processes experienced in complex engineering design projects. The model is based upon the design structure matrix representation and assumes that each individual design activity is of deterministic duration with probabilistic repetition, where the repeat probabilities are defined by the strength of the task coupling. Using the model, we are able to compute the expected duration of the iterative solution process, and to suggest an initial ordering of the coupled design tasks to minimize the expected duration. We conclude the paper with a discussion of limitations and several extensions to the sequential iteration model.
TL;DR: In this article, the authors present a continuous time model where a seller faces a stochastic arrival of customers with different valuations of the product and characterize the optimal pricing policies as functions of time and inventory.
Abstract: This paper studies intertemporal pricing policies when selling seasonal products in retail stores. We first present a continuous time model where a seller faces a stochastic arrival of customers with different valuations of the product. For this model, we characterize the optimal pricing policies as functions of time and inventory. We use this model as a benchmark against which we compare more realistic models that consider periodic pricing reviews. We show that the structure of the optimal pricing policies in this case is consistent with the procedures observed in practice; retail stores successively discount the product during the season and promote a liquidation sale at the end of the planning horizon. We also show that the loss experienced when implementing periodic pricing reviews instead of continuous policies is small when the appropriate number of reviews is chosen. Several interesting economic insights emerge from our analysis. For example, uncertainty in the demand for new products leads to higher prices, larger discounts, and more unsold inventory. Finally, we study the effect of announced discount policies on prices and profits. We show that stores that have adopted this type of strategy usually set prices such that with high probability the merchandise is sold during the first periods and the largest discounts rarely take place.
TL;DR: In this paper, a conceptual framework linking the hue, chroma, and value of the colors in an ad to consumers' feelings and attitudes is proposed and tested, and the results support the hypotheses that ads containing colors with a higher level of value lead to greater liking for the ad, and this effect is mediated by the greater feelings of relaxation elicited by the higher value color.
Abstract: In designing print ads, one of the decisions the advertiser must make is which colors to use as executional cues in the ad. Typically, color decisions are based on intuition and anecdotal evidence. To provide guidelines for these decisions, this research proposes and tests a conceptual framework linking the hue, chroma, and value of the colors in an ad to consumers' feelings and attitudes. In an experimental study, the three dimensions of color used in an ad are manipulated using a between-subjects design. The results support the hypotheses that ads containing colors with a higher level of value lead to greater liking for the ad, and this effect is mediated by the greater feelings of relaxation elicited by the higher value color. Feelings play an equally important role in the effect of chroma. Consistent with the hypotheses, higher levels of chroma elicit greater feelings of excitement, which in turn increase ad likeability. A follow-up study found that although managers often select higher value and higher chroma colors, in a large number of cases they do not. The findings of both studies are integrated in our discussion of the importance of value and chroma in increasing the range of options available to a manager faced with the selection of colors in an ad.
TL;DR: In this paper, the stock rationing problem of a single-item, make-to-stock production system with several demand classes and lost sales was considered, and it was shown that the optimal policy can be characterized by a sequence of monotone rationing levels.
Abstract: This paper considers the stock rationing problem of a single-item, make-to-stock production system with several demand classes and lost sales. For the case of Poisson demands and exponential production times, we show that the optimal policy can be characterized by a sequence of monotone stock rationing levels. For each demand class, there exists a stock rationing level at or below which it is optimal to start rejecting the demand of this class in anticipation of future arrival of higher priority demands. A simple queueing model is analyzed to compute the operating cost of a rationing policy. In a numerical study, we compare the optimal rationing policy with a first-come first-served policy to investigate the benefit of stock rationing under different operating conditions of the system.
TL;DR: In this article, the authors developed a detailed simulation model of Analog, including operations, financial and cost accounting, product development, human resources, the competitive environment, and the financial markets.
Abstract: Recent evidence suggests the connection between quality improvement and financial results may be weak. Consider the case of Analog Devices, Inc., a leading manufacturer of integrated circuits. Analog's TQM program was a dramatic success. Yield doubled, cycle time was cut in half, and product defects fell by a factor of ten. However, financial performance worsened. To explore the apparent paradox we develop a detailed simulation model of Analog, including operations, financial and cost accounting, product development, human resources, the competitive environment, and the financial markets. We used econometric estimation, interviews, observation, and archival data to specify and estimate the model. We find that improvement programs like TQM can present firms with a tradeoff between short and long run effects. In the long run TQM can increase productivity, raise quality, and lower costs. In the short run, these improvements can interact with prevailing accounting systems and organizational routines to create excess capacity, financial stress, and pressure for layoffs that undercut commitment to continuous improvement. We explore policies to promote sustained improvement in financial as well as nonfinancial measures of performance.
TL;DR: In this article, the concepts of alertness and responsiveness are introduced as key capabilities for firms in fast-moving, information-intensive environments such as global currency trading, and hypotheses drawn from the resource-based view of the firm, from network theory, and from Austrian economics are tested on objective cross-section and time-series data for the population of 4,088 banks engaged in foreign exchange trading on the Reuters dealing system.
Abstract: This paper introduces the concepts of alertness and responsiveness as key capabilities for firms in fast-moving, information-intensive environments such as global currency trading. Hypotheses drawn from the resource-based view of the firm, from network theory, and from Austrian economics are tested on objective cross-section and time-series data for the population of 4,088 banks engaged in foreign-exchange trading on the Reuters dealing system. Results strongly support the hypotheses that banks that are alert, i.e., use their information networks in ways that expand the range of information they are exposed to, and responsive-those that act quickly in volatile markets-tend to exercise greater market influence in this industry.
TL;DR: In this article, the authors provide exploratory evidence on the cross-sectional association between process management techniques and two profit measures: return on assets and return on sales, using a sample of firms in two industries automotive and computer and four countries Canada, Germany, Japan, and United States.
Abstract: This paper provides exploratory evidence on the cross-sectional association between process management techniques and two profit measures: return on assets and return on sales. Using a sample of firms in two industries automotive and computer and four countries Canada, Germany, Japan, and the United States, we find that certain process management techniques improve profitability while others have little effect on financial performance. In particular, long-term partnerships with suppliers and customers are associated with higher performance in both industries. The value of other techniques such as statistical process control, process capability studies, and cycle time analysis, on the other hand, appears to vary by industry, reflecting differences in the stages of the two industries' process management practices. Finally, computer organizations following an innovation-oriented strategy earned significantly higher accounting returns regardless of the process management techniques employed, suggesting that these techniques have only a second-order effect on performance in this industry.
TL;DR: The paper proposes methods to measure the performance of research and development in new product development and finds that the methods can help management assess the technological and market leverage achieved from the firm's present and past product platforms.
Abstract: The paper proposes methods to measure the performance of research and development in new product development. We frame these measures in the context of evolving product families in the technology-based firm. Our goal is to more clearly understand the dynamics of platform renewal and derivative product generation and their consequences for long-term success. We explore the utility of the proposed methods with data gathered from a large measurement systems manufacturer. We find that the methods and measures can help management assess the technological and market leverage achieved from the firm's present and past product platforms. This provides a foundation for transforming single-product, single-period planning processes into a multi-product, multi-period form that embraces the product family and the renewal of product architecture. The research also shows the need to integrate data from engineering, manufacturing, and sales organizations to produce information for managing the growth of the firm's product...
TL;DR: The paper explores consistencies and contrasts within and across the three cases to analyze the factors underlying effective shop-floor problem-solving and concludes that when process standardization is understood as marking the beginning and not the end of further improvement efforts, the normal inertial tendencies of organizations with respect to adaptive learning can be partially overcome.
Abstract: This paper uses case studies of shop-floor problem-solving at three automotive assembly plants to examine organizational influences on process quality improvement. Three complex quality problems-water leaks, paint defects, and electrical defects-were chosen because they are universally found in assembly plants, have multiple sources, and can only be resolved with high levels of interaction and coordination among individuals in multiple departments or functional groups. The case studies focus particularly on the early stages of the problem-solving process-problem definition, problem analysis, and the generation of solutions-emphasizing how each plant tries to identify the "root cause" of defects.
The paper then explores consistencies and contrasts within and across the three cases to analyze the factors underlying effective shop-floor problem-solving. Central to this analysis is the idea that successful process quality improvement depends heavily on how the organization influences the cognitive processes of its members. Problem-solving processes benefit from rich data that capture multiple perspectives on a problem, problem categories that are "fuzzy", and organizational structures that facilitate the development of a common language for discussing problems. Also, when problems are framed as opportunities for learning, the combination of positive attributions that boost motivation and the suppression of threat effects can improve the effectiveness of improvement activities. Finally, when process standardization is understood as marking the beginning and not the end of further improvement efforts, the normal inertial tendencies of organizations with respect to adaptive learning can be partially overcome.
TL;DR: This paper reports on new insights derived from computational results obtained with an updated version of the branch-and-bound procedure previously developed by Demeulemeester and Herroelen, which fully exploits the advantages of 32-bit programming provided by recent compilers running on platforms such as Windows NT and OS/2®: flat memory, increased addressable memory, and fast program execution.
Abstract: This paper reports on new insights derived from computational results obtained with an updated version of the branch-and-bound procedure previously developed by Demeulemeester and Herroelen Demeulemeester, E., W. Herroelen. 1992. A branch-and-bound procedure for the multiple resource-constrained project scheduling problem. Management Sci.38 1803-1818. for solving the resource-constrained project scheduling problem RCPSP. The new code fully exploits the advantages of 32-bit programming provided by recent compilers running on platforms such as Windows NT® and OS/2®: flat memory, increased addressable memory, and fast program execution. We study the impact of three important variables on the computation time for the RCPSP: addressable computer memory, the search strategy depth-first, best-first, or hybrid, and the introduction of a stronger lower bound. We compare the results obtained by a truncated branch-and-bound procedure with the results generated by the minimum slack time heuristic and report on the dependency of its solution quality on the allotted CPU time.
TL;DR: In this paper, the impact of not meeting promised new product introduction dates on the market value of a firm was empirically estimated. But the impact on the average change in market value was not quantified.
Abstract: This paper empirically estimates the impact of not meeting promised new product introduction dates on the market value of the firm. We estimate the average "abnormal" change in the market value for a sample of 101 firms around the date when information about delaying the introduction of new products is publicly announced. On average, delay announcements decrease the market value of the firm by 5.25%. The average dollar change in the market value in 1991 dollars is $-119.3 million. The evidence suggests that there are significant penalties for not introducing new products on time.
To provide further insight, regression analyses are used to identify factors that influence the direction and magnitude of the change in market value. We find that the competitiveness of the industry in which the firm operates, the size of the firm, and the firm's degree of diversification are statistically significant predictors for the change in the market value of firms that announce delays in the introduction of new products.
TL;DR: This work examines the optical character recognition and barcode sorting technologies in the mail sorting process at the United States Postal Service to assess the impact of IT information technology on both process output and quality.
Abstract: Our work represents one of the first attempts to assess the impact of IT information technology on both process output and quality. We examine the optical character recognition and barcode sorting technologies in the mail sorting process at the United States Postal Service. Our analysis is at the application level, and thus does not involve the aggregation of IT impact over multiple processes. We use data from 46 mail processing centers over 3 years to study the IT impact. We also use a set of factors in our model to account for differences in input characteristics. Our results show that mail sorting output significantly increases with higher use of IT. In addition, IT improves quality which in turn enhances output. We also find that input characteristics exert considerable influence in determining the output and quality of the mail sorting operation. For example, while absenteeism tends to decrease output and quality due to its disruptive consequences, a higher fraction of barcoded mail seems to enhance both performance measures.
Journal Article•
TL;DR: Theory de la creation de connaissances and apprentissage organisationnel is described in this paper. But the creation of connaisseurs is not a simple process.
Abstract: Creation de connaissances et apprentissage organisationnel - Introduction a la connaissance dans les organisations - Connaissances et management - Theorie de la creation de connaissances organisationnelles - La creation de connaissances dans la pratique - Le processus de management milieu-haut-bas - Une nouvelle structure organisationnelle - La creation de connaissances globales - Implications manageriales et theoriques - Creation de connaissances et apprentissages organisationnels dans une variete de contextes
TL;DR: In this article, the authors developed a product life cycle model that studies a set of strategic choices facing manufacturers as they design the joint product/service bundle for a product which may require maintenance and repair support after its sale.
Abstract: In this paper we develop a product life-cycle model that studies a set of strategic choices facing manufacturers as they design the joint product/service bundle for a product which may require maintenance and repair support after its sale. The choice parameters of interest include the product price, the quality of after-sales service and the price to be charged for the after-sales service. We adopt a competitive, game-theoretic as opposed to single-firm optimization framework, where there is competition for the provision of after-sales service between the manufacturer and an independent service operator. The product price and the service quality/price are characterized by an equilibrium to a sequential game. The resulting outcome is applied to support the valuation of alternative product designs in explicit consideration of the tradeoff between profit from product sale and from the provision of after-sales service. The model can also be used to evaluate the asset value of a firm's customer base.
TL;DR: Konno and Yamazaki as mentioned in this paper proposed the mean absolute deviation MAD model as an alternative to the mean variance MV model, which retains all the positive features of the MV model and does not require the covariance matrix.
Abstract: Konno and Yamazaki Konno, H., K. Yamazaki. 1992. Mean-absolute deviation portfolio optimization model and its applications to Tokyo stock market. Management Sci.39 519-531. propose the mean absolute deviation MAD model as an alternative to the mean variance MV model. They claim it retains all the positive features of the MV model, saves the investor computing time, and does not require the covariance matrix. This paper shows that ignoring the covariance matrix results in greater estimation risk that outweighs the benefits. In both models, estimation error is more severe in small samples small observations relative to the number of assets and for investors with high risk tolerance. The MV model's lower estimation risk is most striking in small samples and for investors with a low risk tolerance.
TL;DR: In this article, the authors investigate the relationship between the level of a firm's technological innovativeness and its pattern of partnership agreements and show that the protection of tacit technological knowledge from potential opportunism is of importance to technologically innovative firms.
Abstract: In this paper we investigate the relationship between the level of a firm's technological innovativeness and its pattern of partnership agreements i.e., relative number of partnership agreements of one type versus another. We argue that the protection of tacit technological knowledge from potential opportunism is of importance to technologically innovative firms, and as a result they tend to have a relatively larger number of partnership agreements which generally minimize the transfer of tacit technological knowledge. Specifically, they tend to have a greater number of marketing agreements than joint ventures and a greater number of licensing agreements than joint ventures. This argument is tested using data from manufacturing firms in the electrical and electronics machinery sector who invest in R&D, and our results hold for our focal firm's agreements with both domestic and foreign partners. We discuss the strategic and policy implications from this research. In particular, the empirical results suggest that technologically innovative firms already have relatively more agreements which are likely to preempt transfer of their tacit technological knowledge to their foreign partners. Thus, recent suggestions of more active government regulation in the area of intellectual property may be unwarranted.
TL;DR: In this paper, the authors present a Negotiation Support System (NEGOTIATION ASSISTANT) that enables negotiators to analyze their own preferences and provides a structured negotiation process to help parties move toward optimal trades.
Abstract: Multiissue negotiations present opportunities for tradeoffs that create gains for one or more parties without causing any party to be worse off. The literature suggests that parties are often unable to identify and capitalize on such trades. We present a Negotiation Support System, called NEGOTIATION ASSISTANT, that enables negotiators to analyze their own preferences and provides a structured negotiation process to help parties move toward optimal trades. The underlying model is based on a multiattribute representation of preferences and communications over a computer network where offers and counteroffers are evaluated according to one's own preferences. The parties can send and receive both formal offers and informal messages. If and when agreement is reached, the computer evaluates the agreement and suggests improvements based on the criteria of Pareto-superiority. In this paper, we motivate the system, present its analytical foundations, discuss its design and development, and provide an experimental...