Note on “The Backroom Effect in Retail Operations”

Eroglu et al. (2013) study a retailer with limited shelf capacity and a backroom. They study a continuous review (r, q) ordering policy with a known order quantity, q. Assuming that backorders can be satisfied from the backroom inventory (if available), they find the expression for the optimal reorder level, r. Our work builds on Eroglu et al. (2013). We correct an erroneous derivation of the expected overflow term, as well as derive an exact expression for the expected cost function, and hence optimal reorder level, instead of the approximate one used by Eroglu et al. (2013).     

Note on “many-sided shadow prices”

It has been previously shown, with the aid of a simple example, that linear programmes may have two different non-negative marginal values at the optimum if the solution is degenerate. It is demonstrated in this note that other marginal values exist which may take negative values.     

Response to “Revisiting ISO 14000 Diffusion: A New ”Look“ at the Drivers of Certification”

In Corbett and Kirsch (2001), we used a simple regression in an exploratory investigation of drivers of global diffusion of ISO 14000 certification. We found that ISO 9000 certification levels, environmental treaties ratified, and exports as a proportion of GDP were the main significant variables, where the environmental measure may be moderated by GDP per capita. In his replication study, Vastag (2004, in this issue) analyzes the same data using more visual techniques, specifically regression trees, and finds support for the significance of ISO 9000 certification levels and environmental treaties ratified, but not for export‐propensity. Vastag raises a number of relevant methodological issues, to which we add some perspectives here.     

Comment on “Commitment vs. Flexibility”

This comment corrects two results in the 2006 Econometrica paper by Amador, Werning, and Angeletos (AWA), that features a model in which individuals face a trade‐off between flexibility and commitment. First, in contrast to Proposition 1 in AWA, we show that money‐burning can be part of the ex ante optimal contract when there are two states. Second, in contrast to Proposition 2 in AWA, we show that money‐burning can be imposed at the top (in the highest liquidity shock state), even when there is a continuum of states. We provide corrected versions of the above results.     

有限关注视角下的股市流动性反转效应研究

股票市场流动性从正常到缺失转变是历次金融危机的重要表现,投资者关注是信息传递到股市引发流动性变化的前提,本文以中国股票市场为研究对象,从投资者有限关注角度分析市场流动性的反转问题。研究发现,在牛市、熊市和震荡盘整不同市场周期下投资者关注度与股市流动性之间存在非对称关系,通过门限模型进一步分析其背后的原因是市场状态对投资者关注行为的调节作用,当市场状态未超过门限值时,投资者关注度与股市流动性呈正向关系,超过门限值时二者关系转变为负向。本文丰富了行为金融领域的相关理论,为投资者和相关管理部门的决策依据提供新的视角。     

A Reply to Williamson's “Outsourcing …”

A recent article by Oliver Williamson essentially comprises a critique of supply chain management (SCM) from the perspective of his own field, transaction‐cost economics. Here is one reader's response. SCM can indeed be faulted for inflated rhetoric, among other sins. I believe, however, that the two fields have much to learn from each other.     

The global “war for talent”

In this paper we examine the “global war for talent,” the factors that impact it, and organizations' responses to it. Using a comprehensive search of more than 400 contemporary academic and business press articles, the paper reviews relevant research and reassesses the “talent war.” We posit that the dominant approaches to the “talent war” based on a scarcity state of mind and action, often characterized by a tactical and exclusive top talent or “star” focus, are being challenged by the emergence of a more evolutionary paradigm. This new paradigm adopts more strategic, innovative, cooperative and generative approaches which we describe as creative ‘talent solutions.’ The paper also highlights implications for future research, teaching and development in the field.     

Remitting Behaviour of “Temporary” and “Permanent” Migrants: The Case of Greeks in Germany and Australia

This paper makes the point that migrants have different motives for sending remittances and remittance receivers have different claims on migrants' income, depending on whether people move to accumulate capital to improve their living at home after they return — temporary migration — or to start a new life in a foreign country — permanent migration. This hypothesis is empirically tested with data from Greek–German and Greek–Australian migration. The findings attest to the fact that German remittances constitute obligatory income streams to close family at home, while Australian remittances are gifts. Some quantitative estimates of the relative impact of individual factors on remittances are also obtained. Some hints are also given for a changing remitting behaviour of Greek migrants in Germany, along with the changing character of migration in that country.     

Employment Protection and Labour Market Segmentation: the Fiftieth Anniversary of the “Cassa Integrazione Guadagni”

Abstract. This paper analyzes the evolution of the Cassa integrazione guadagni (CIG), according to 7 different theoretical models, which offer a classification for the different cases of application that have developed since its introduction, as well as for the many policy targets pursued by the Public Authorities. Then an assessment of the economic role of CIG is attempted, divided into three separate sections. The first is aimed at evaluating the economic long-term effect on macro performance, where the crucial balance is between a “crowding-out effect” on private investment and a “profit-maintenance effect” by lowering the effective wage rate. The second section approaches the employment consequences of the CIG by examining a second crucial balance: that between the protection granted to the employed and the obstacles raised for the employment of the non-employed (above all, freezing workers' turnover). This issue is tackled too in terms of the insider-outsider theory, showing the possible relevance of CIG in segmenting the labour market and keeping the wage rate dynamics. Finally the paper briefly examines the profound revision of the CIG recently approved by the Italian Parliament, aimed at avoiding excessive costs while enhancing labour mobility.     

The influence of “country of origin” on multinational corporation global strategy: A conceptual framework

This article examines the proposition that MNCs from a particular country are likely to exhibit profile similarities that are distinct from those of MNCs emanating from another country due to differences in home country factors. We call this “country of origin effect” (COE). A generalized framework is presented briefly explaining the nature of relationships among various COE elements that influence MNC strategy. A number of research propositions are offered that postulate the presumed effect of COE elements on MNC strategy and competitive behavior. Finally, suggestions are made as to the implications of this avenue of enquiry for further research as well as guide for management action.     

On “Black Swans” and “Perfect Storms”: Risk Analysis and Management When Statistics Are Not Enough

Two images, “black swans” and “perfect storms,” have struck the public's imagination and are used—at times indiscriminately—to describe the unthinkable or the extremely unlikely. These metaphors have been used as excuses to wait for an accident to happen before taking risk management measures, both in industry and government. These two images represent two distinct types of uncertainties (epistemic and aleatory). Existing statistics are often insufficient to support risk management because the sample may be too small and the system may have changed. Rationality as defined by the von Neumann axioms leads to a combination of both types of uncertainties into a single probability measure—Bayesian probability—and accounts only for risk aversion. Yet, the decisionmaker may also want to be ambiguity averse. This article presents an engineering risk analysis perspective on the problem, using all available information in support of proactive risk management decisions and considering both types of uncertainty. These measures involve monitoring of signals, precursors, and near‐misses, as well as reinforcement of the system and a thoughtful response strategy. It also involves careful examination of organizational factors such as the incentive system, which shape human performance and affect the risk of errors. In all cases, including rare events, risk quantification does not allow “prediction” of accidents and catastrophes. Instead, it is meant to support effective risk management rather than simply reacting to the latest events and headlines.     

TOWARD A “NEW ARCHITECTURE” FOR POM

The field of POM is steadily expanding its scope. This allows us to pursue interesting new fields of inquiry and makes us ever more relevant to the needs of practitioners. But it also increases the risk that over time our efforts will become fragmented and unfocused, causing us to slowly lose our sense of community and break up into separate camps. In this paper I ask, “What kind of new organizing framework, or ‘architecture,’ will allow us to maintain our sense of community as our interests diverge?” I describe the experience of one academic organization that faced a similar problem several years ago and how the situation was resolved. This experience leads us to propose a possible solution to Pom's emerging problem: engage with real operations managers and focus our efforts on helping them deal with the actual problems they are facing in today's complex and fast‐changing world.     

Cognitive Limitations and Investment “Myopia”*

Optimization of investment decisions in an uncertain and dynamically evolving environment is difficult due to the limitations of the decision-maker's cognitive capacity. Thus, actual investment decisions may deviate from the dynamically optimal decision rule. This paper investigates how a potential investment rule bias affects the expected payoff from a project that has an uncertain development time and an uncertain completion cost. The result shows that the presence of a potential bias in the adopted decision rule dissipates project value and that the dissipating effect is greater for a longer term project if the completion cost is an increasing function of the time to completion.     

MANUFACTURING STRATEGY ON THE “S” CURVE

The concept and techniques of “manufacturing strategy” offer managers the opportunity to use their production function as a strategic weapon in competition, an apparently attractive objective. Yet after about 25 years, the use of manufacturing in corporate strategy (MCS) as a management practice is not widespread. In contrast, however, in academic literature it appears to be flourishing and rapidly growing in popularity. This paper seeks to answer this apparent paradox, beginning with the history of MCS as it was developed as a theory of design to enable a manufacturing system to be focused on a key competitive task. Common criticisms of MCS, such as “tradeoffs,” “focus” and “undynamic,” are examined and refuted as valid reasons for its only modest usage. Instead, three “new” problems in the MCS concept and its techniques are suggested as genuine needs for the completion of the theory and for its becoming more universally understood and used by industrial managers.