The Management of Innovation in Project-Based Firms

How relevant are traditional innovation ideas for project-based firms? This paper asks if project-based firms provide a context supportive of innovation or indeed if they view it as useful. Based on research in firms from a variety of sectors, including telecommunications, information systems, computers, financial services and engineering, procurement and construction, the paper reveals that the very project control systems around which the firms operate serve to stifle innovation. Project-based firms—regardless of sector—prioritise efficient management of projects, tolerating the use of slack resources only when absolutely necessary. Finally innovation is not seen as universally useful, but primarily as costly and dangerous. It concludes that the space at which ‘innovation’ and ‘projects’ comes together is still dominated by ideas on how to correctly manage projects, rather than how to effectively manage innovation. Innovation of ideas on managing innovation projects may be merited.     

Biopharmaceutical and chemical firms’ R&D disclosure,and cost of equity: The impact of the regulatory regime

Based on the proprietary costs theory, this paper aims to survey whether the regulatory regime (mandatory versus voluntary) of research and development (R&D) narrative disclosures impacts, by the means of a reduced information asymmetry, on the cost of equity capital. In order to construct a disclosure index to investigate the extent and the comprehensiveness of R&D information, the methodology adopted was the content analysis of 77 biopharmaceutical and chemical listed companies’ management reports from eight Western European countries across the period 2005–2009. Hence, we obtained an (unbalanced) panel data of 309 observations. The cost of capital has subsequently been regressed on the disclosure index. Results confirm a larger amount of R&D disclosures whereas information is more regulated, but they do not confirm an inverse relation with the cost of capital.     

COMPUTER-INTEGRATED MANUFACTURING: A TAXONOMY OF INTEGRATION AND RESEARCH ISSUES

The past decade has seen an upsurgence in the number of manufacturing companies that are attempting to transform into computer-integrated enterprises. However, much of the computer-based integration efforts in these manufacturing organizations have been limited in scope and localized within certain areas of the organization (particularly, technology-intensive areas such as the shop floor). Such compartmentalized and myopic approaches to the development of computer-integrated manufacturing (CIM) systems undermine the ability of these systems to reach their fullest potential. CIM is much larger in scope and can impact an organization along various dimensions and at various levels. The fact that no completely integrated manufacturing enterprise has been developed to date can be attributed, in part, to a lack of understanding of the scope and implications of CIM. The purpose of this paper is, therefore, twofold. First, the paper presents a meta-schema (called TRIAD) for multidimensional and multilevel integration of a manufacturing system. Second, on the basis of the proposed meta-schema, the paper develops a taxonomical framework for defining key integration issues in CIM system design and discusses critical research needs that exist in this area. It is hoped that this paper will serve as a road map for research efforts that will enable the emergence of comprehensive CIM systems.     

Globalisation, International Configurations and Strategic Implications: The Case of Retailing

In contrast to the old debate between national and more globally orientated strategies, recent typologies, as outlined by Calori and others in a recent issue of this journal, have begun to uncover subtler international strategies applicable to less patently global industries. This article investigates whether such typologies can be adapted to a service sector such as retailing and analyses performance differences across the whole set of these new categorisations, segregating some of the main sectors. Focusing on clothing where scale economies were lower, we present a case study demonstrating how this approach can still yield strategic insights and recommendations at an early stage in internationalisation, even for players located in more peripheral locations such as Norway. We confirm ‘continental leadership’ strategies (under consideration) can be associated with slightly better profitability for retailers more generally; but we warn that this is riskier for clothing retailers, for whom market share emerges as a less critical driver. The most profitable retail strategy configuration is the bold ‘global shaper’ strategy. However, taking into account the case company’s resource position within the clothing sector, our approach recommends consideration of the ‘quasi-global’ strategic configuration, associated with an improvement of just under 2% return on investment. This perspective also aids ‘strategic benchmarking’ (illustrated against high performers H&M and Zara), setting an agenda for operational improvements.     

An investigation into the use of OPT production scheduling

The paper is a case study describing the experience of a single company which uses OPT software for production scheduling. The company produces a range of over 500 different items. Optimized Production Technology (OPT) is a proprietary computer software. Although the OPT software requires a similar database to MRP systems and addresses the same problems, OPT is a finite scheduler, unlike MRP which assumes (unrealistically) infinite capacity. The paper defines the underlying terminology and explains the major features of the algorithm underpinning the software. Details of the scheduling frequency, scheduling routine and reports are described. Practical implications observed are the necessity of short process routes and a multi-skilled workforce (somewhat like the case of JIT cells). Benefits of using the system are discussed.     

Economic view of CIM system architecture

The synergistic advantage of systems integration for Computer Integrated Manufacturing (CIM) has been a powerful thrust behind the productivity advancement in recent decades. However, the dependency among components, the intangible benefits and complexity of the system have been a barrier for system developers and the business community. This paper reports a systematic approach to assess economic merits of the CIM system. It projects CIM system designs on a multiple layer architecture with consideration of project life cycle. It introduces a modelling formalism to present a structured view of the economic aspect of the CIM system. The multiple criteria's aspect of CIM justification was treated with the AHP (Analytical Hierarchy Process) method. The complexity of various cost factors is reduced through application of the ABC (Activity Based Costing) method. The benefits of low level activities, both tangible and intangible, are then hierarchically aggregated into higher level system objectives. It also provides the necessary linkages between the economic and other views. A simple example was used to illustrate the approach.     

Reducing delivery times for OKP products

The management of the manufacture of ‘one-of-a-kind’ products (OKP) is a neglected field in production management. The key to an improvement in productivity and profitability in this field appears to depend mainly on a reduction in the delivery times for products, which in turn requires a reduction in material throughput times, and in design and production planning lead times. This paper looks at some of the ways which can be used to reduce OKP delivery times.     

Invoking Cleopatra to examine the shifting ground of leadership

This essay argues that the understanding of leadership is not independent of the power relations within a given cultural context. These shape how ‘leadership’ comes to be ‘known’ — defined and identified. Drawing from cultural studies, it examines the interacting dynamics of power, difference and context in shaping our knowledge of leadership. So whereas we currently identify leadership in Cleopatra, this is due to shifts in the contemporary ground of knowledge that constitutes ‘leadership’. Specifically, the essay focuses on manifestations of gendered power that elicited changes in her appraisals. The analysis examines historical writing (Plutarch), literature (Shakespeare), art (Egyptian Revival) and film (Hollywood) to illustrate gendered paradoxes — criteria that had traditionally defined ‘leaders’ from ‘followers’, but which have become ambiguous. These include queen–lover (embodiment), public–domestic (sphere of work and influence), sage–child (intellect), white–black (racialized identity) and Rome–Egypt (international leadership). In closing, the essay reflects on the implications for leadership studies.     

Inter-Organizational Learning and Strategic Renewal in SMEs: Extending the 4I Framework

This article explores how mature SMEs which lack internal resources access external knowledge to facilitate strategic renewal. Organizational learning, in contrast to entrepreneurial learning, recognizes that owner-managers must distribute knowledge throughout the firm to achieve competitive benefits. Three case studies demonstrate how external ‘knowledge providers’ (customers, suppliers and educational institutions) help institutionalize ‘new’ knowledge. Initially, learning from inter-organizational relationships requires owner-managers to be proactive in accessing and extending appropriate inter-organizational relationships. Second, external organizations can play an active role by ‘intertwining’ knowledge to support the development of processes, systems and routines that distribute and institutionalize learning throughout the organization. The three cases have practical implications for owner-managers and add to academic knowledge via the extension of Crossan et al's 4I model of organizational learning.     

Minimizing tardiness on a single processor with sequence-dependent setup times: a simulated annealing approach

In today's fast-paced Just-In-Time and mass customization manufacturing in a sequence-dependent setup environment, the challenge of making production schedules to meet due-date requirements is becoming a more complex problem. Unfortunately, much of the research on operations scheduling problems has either ignored setup times or assumed that setup times on each machine are independent of the job sequence. This paper considers the problem of minimizing tardiness, a common measure of due-date performance, in a sequence-dependent setup environment. Simulated annealing was used to solve the sequencing problem, and its performance was compared with random search. Our experimental results show that the algorithm can find a good solution fairly quickly, and thus can rework schedules frequently to react to variations in the schedule. The algorithm is invaluable for ‘on-line’ production scheduling and ‘last-minute’ changes to production schedule. The results of this research also suggest ways in which more complex and realistic job shop environments, such as multiple machines with a higher number of jobs in the sequence, and other scheduling objectives can be modeled. This research also investigates computational aspects of simulated annealing in solving complex scheduling problems.     

Planning,information technology and the post-industrial society

In the course of attending exhibitions and conferences dealing with online systems and data bases and software packages, the author has collected information on the new technology of interest to the planner. He finds that in some cases design systems are being developed with no clear idea of planners' needs or of the planning function. He believes that it is necessary to establish a dialogue with the systems designer and information scientist to ensure that they are informed about the planning process, as otherwise the current breed of planners, and planning organizations, could be made obsolete and a new planner, au fait with the developing software, would take over the role.     

New directions for an organised health care system in Germany: The concept of managed care

Against the background of continually rising public sector health costs in Germany, Michael Müller and Klaus Uedelhofen discuss the merits of ‘Managed Care’, a philosophy of organised health care, having its origins in the US in the early 1970s. Managed care is based on networking all separate groups within the healthcare system, standardising the services and performance, and distributing or sharing risks between all parties involved. Advantages, beyond cost reductions, include quality assurance, greater transparency, the establishment of therapy standards and increased responsibility by patients. The outlook for managed care in Germany looks optimistic.     

Peripheral Vision: Sensing and Acting on Weak Signals: Making Meaning out of Apparent Noise: The Need for a New Managerial Framework

Doing business in the face of constant change requires a shift from a ‘make-and-sell’ to a ‘sense-and-respond’ framework. This in turn requires four new competencies which require intense attention to what would have been considered the periphery of the traditional make-and-sell company—the customers and environment. The paper concludes by saying it is important to invest in expanding an organisation’s peripheral vision because it will make meaning out of apparent noise; it will extend the number and types of signals that can be sensed; it will drive the development of an ability to transform new signals into meaning; and it enables role-specific management.     

A review of quantitative approaches in just-in-time manufacturing

The objectives of this survey are four-fold: (1) to describe the principle of just-in-time production, (2) to provide an overview of the problems and research issues in scheduling, lot sizing and determining the number of kanbans, (3) to describe prior studies which use quantitative approaches to study JIT production and its variant systems including simulation, stochastic process, and mathematical programming, and (4) to identify fertile opportunities for further research in the quantitative analysis of JIT production.     

Economies of scope in research and teaching: A non-parametric investigation

We propose a non-parametric methodology to study the presence of economies of scope between teaching and research (i.e., the teaching–research nexus). In particular, the paper advocates a conditional version of the ‘benefit-of-the-doubt’ approach to estimate the relationship between professors’ overall academic output, measured by a composite measure of multi-dimensional and importance-adjusted scores of teaching effectiveness and research productivity, and the time devoted to teaching and to research. The methodology is illustrated with a dataset of professors working at a Business & Administration department of a university college where the time allocation of teaching and research was assigned exogenously. The outcome of the analysis indicates the presence of limited scope economies for professors with an extensive research time.     

The impact of human resource management on organisational performance: Theory and research

This article by Jean-Marie Hiltrop, considers some of the models which have studied the link between HRM and organisational performance. As yet, there is little real evidence, but it is growing and indicates that corporate HRM policies and practices - including ‘best’ practices - are associated with high (financial) performance, and can encourage employee behaviour and attitudes towards strengthening the competitive strategy of an organisation. But such ‘best’ practices can vary widely and even contradict each other. Questions are raised in the article about these ‘best’ practices.The first part of the article looks at the relevant theoretical models, and the second part reviews the findings of recent empirical studies which have evaluated the effects of distinctive HR practices on organisational outcomes.     

Risk and value at risk

Increasingly complicated tools known as financial derivatives have been introduced in recent times to manage the market risk arising from floating exchange rates. The rapid development of the derivatives markets has in turn introduced new risks into the business of finance - witness the highly-publicised trading losses at Metallgesellschaft and Procter and Gamble. A principal method for measuring and reporting market risk in the portfolios of banks and their clients is ‘value at risk’ (VaR).Fred Stambaugh explains the concept of ‘value at risk’ and describes three principal approaches to calculating it - correlation matrix, historical simulation and Monte Carlo simulation; they are alternatives, not competitors. As well as setting out their uses, he considers those situations that go beyond ‘value at risk’, i.e. dire events that lie beyond the confidence level of VaR. Techniques for portfolio stress testing are discussed.     

Building a short-term production planning system for flexible manufacturing systems: an integration viewpoint

From the viewpoint of integration, the production objective of flexible manufacturing systems (FMS) should follow results of MRP/CRP. Thus, the planning goal of short-term production planning (STPP) is to satisfy quantity and due date requirements determined by MRP/CRP. The STPP of FMS should cover part type selection, production ratio, process selection, process ratio, resource allocation, machine grouping, routing mix and loading problems.

A STPP system is built to solve the STPP problem of an FMS having multiple machine types, each with multiple m.'ichinc units. This system adopts a variable-period flexible planning approach, using part mix and process selection flexibilities to solve STPP problems. It also provides flexibilities in its operations sequence and in the machine routing to the dynamic operation planning system.     

Can a Previous Alliance Between an Acquirer and a Target Affect Acquisition Performance?

Throughout the 1990s, organizations have been combining resources through acquisitions and alliances in record numbers. An acquirer’s previous alliance with a target may give an acquirer target-specific information and experience that may be an advantage-producing resource in selection, valuation and integration of the target. This study investigates whether a previous alliance between an acquirer and a target affects post-acquisition performance and finds that a previous alliance between an acquirer and a target correlates positively with acquisition performance. Acquirers’ previous R&D, technology transfer, manufacturing and marketing alliances with targets benefit acquisition performance more than their previous licensing alliances with targets. Furthermore, target-specific learning effects are strongest and most beneficial to acquisition performance in acquirers’ previous technology transfer and manufacturing alliances with targets.     

A production management information model for discrete manufacturing

The Manufacturing Systems Integration (MSI) project at the National Institute of Standards and Technology is developing a system architecture that incorporates an integrated production planning and control environment. The development of this architecture includes the definition of information models describing the information which needs to be shared among production management systems (production planning, scheduling and control systems) in order to achieve the integration of manufacturing systems. This paper presents the production management information model within the MSI project. The main focus of the model is to identify and characterize the relationships between orders and workpieces, to identify the information necessary to achieve workpiece tracking and to identify the information necessary to achieve resource requirements specifications for process plans.