Implementing Operations Strategy: How Vertical and Horizontal Coordination Interact

We study the implementation of operations strategy at six German manufacturers in mature businesses. Search theory argues that vertical coordination (i.e., unilateral top‐down adjustment of lower‐level search actions) balances stability against the improvement potential enabled by frontline search and also that horizontal coordination (i.e., bilateral adjustment among lower‐level search actions) is required to ensure compatibility among the initiatives generated in various organizational subunits. Much less is known about how vertical and horizontal coordination interact in operations strategy implementation—that is the focus of this study. We first study how horizontal and vertical coordination affect the compatibility and creativity of distributed search, triangulating our cross‐level interviews with data on the manufacturers' productivity gains and their strategic projects. We then examine whether and how vertical and horizontal coordination interact. Our case comparisons suggest that leaving either one of them “loose” and keeping the other one “tight” results in a useful balance between compatibility and creativity; in contrast, tightening both types of coordination suppresses creativity and loosening both types risks incompatibility of initiatives across units. These results lead to a theoretical framework that identifies vertical and horizontal coordination as partial substitutes for operations strategy implementation.     

Alliance: The new strategic focus

Alliance between companies has long been a major corporate strategy. However, the recession and increasing protectionism have combined to raise the costs of doing business which in turn have favoured the increasing use of business alliances. While alliances have proved to be valuable competitive manoeuvres, there are inherent risks in relying on alliances as the sole or the major strategy for a company. This article discusses the key factors behind the change in focus for alliance strategies and identifies the major alliance thrusts being adopted in response to changing conditions.     

Framework for Microbial Food‐Safety Risk Assessments Amenable to Bayesian Modeling

Regulatory agencies often perform microbial risk assessments to evaluate the change in the number of human illnesses as the result of a new policy that reduces the level of contamination in the food supply. These agencies generally have regulatory authority over the production and retail sectors of the farm‐to‐table continuum. Any predicted change in contamination that results from new policy that regulates production practices occurs many steps prior to consumption of the product. This study proposes a framework for conducting microbial food‐safety risk assessments; this framework can be used to quantitatively assess the annual effects of national regulatory policies. Advantages of the framework are that estimates of human illnesses are consistent with national disease surveillance data (which are usually summarized on an annual basis) and some of the modeling steps that occur between production and consumption can be collapsed or eliminated. The framework leads to probabilistic models that include uncertainty and variability in critical input parameters; these models can be solved using a number of different Bayesian methods. The Bayesian synthesis method performs well for this application and generates posterior distributions of parameters that are relevant to assessing the effect of implementing a new policy. An example, based on Campylobacter and chicken, estimates the annual number of illnesses avoided by a hypothetical policy; this output could be used to assess the economic benefits of a new policy. Empirical validation of the policy effect is also examined by estimating the annual change in the numbers of illnesses observed via disease surveillance systems.     

Community entrepreneurship: A framework for social change leadership

This article describes a leadership approach to social change that takes into account actors' differing interests, strategic alliances, and events in a dynamic, interorganizational community setting. The leadership and development concepts are drawn from took place in the Philadelphia area in the mid-1980s. As reflective practitioners, the authors developed and applied a new framework for proactive leadership to achieve social change.     

Conditions for successful strategic alliances in the food industry

This paper focuses on strategic fuzzy alliances (SFAs) and the role of trust in business-to-business relationships. First, a theoretical model of governance choice involving strategic alliances is developed, integrating the Shapiro, Sheppard, and Cheraskin (1992) taxonomy of trust into a neoinstitutional framework. Second, this model, based on transaction theory, is then used to generate necessary and sufficient conditions for trust-based agreements. The third component of this paper is an empirical model, which tests the above theory. Finally, managerial implications from the results are discussed.     

Impact of Demand Uncertainty on Stability of Supplier Alliances in Assembly Models

In their recent paper, Nagarajan and Sošić study an assembly supply chain in which n suppliers sell complementary components to a downstream assembler, who faces a price‐sensitive deterministic demand. Suppliers may form alliances, and each alliance then sells a kit of components to the assembler and determines the price for that kit. The assembler buys the components (kits) from the alliances and sets the selling price of the product. Nagarajan and Sošić consider three modes of competition—supplier Stackelberg, vertical Nash (VN), and assembler Stackelberg models—which correspond to different power structures in the market, and study stable supplier alliances when the assembler faces linear and isoelastic demand. In this paper, we study the impact that demand uncertainty has on stability results obtained in Nagarajan and Sošić. We first analyze models in which all decisions are made before the uncertainty is resolved, and show that the alliance of all suppliers remains stable when demand is isoelastic, or under Stackelberg models when demand is linear. However, demand uncertainty may change stability results when both parties make decisions simultaneously (VN model) and demand is linear. We then extend our results by considering scenarios in which some decisions may be postponed and made after the actual demand is known. When the ordering quantity can be determined after observing the true demand, we show that stable outcomes correspond to those obtained in the deterministic case and uncertainty has no impact on coalition stability; if only the assembler's pricing decision is postponed, we need additional conditions for stability results to carry over in the additive demand model.     

Conceptualizing Effects of Office Information Systems: A Methodology and Application for the Study of Alpha,Beta, and Gamma Changes*

This article applies the concepts of alpha, beta, and gamma changes to test whether the implementation of a new office information system with networking capabilities changes the way organizational members conceptualize office work. The traditional approach (t-test) was used to measure alpha change and indicated little change in how effectively the respondents felt they performed eight generic office activities before implementation (T1) and nine months after implementation (T2). However, considerable change was detected between effectiveness reported at T1 and a retrospective assessment of T1 effectiveness reported at T2 (called “then” assessments). Strong change was also detected between “then” assessments and T2 effectiveness reported at T2, indicating beta change. Multiple hierarchical tests showed that most of the change was actually gamma change; the T2 and the “then” factor structures and covariances differed significantly. This study supports propositions that using computers to accomplish organizational work may be associated with different conceptualizations of work, which may create ambiguity and uncertainty if training and management policies do not respond appropriately. Finally, this study provides an expanded version of a prior solution to detecting alpha, beta, and gamma changes.     

The Impacts of Alliance Purpose and Partner Similarity on Alliance Governance

It is generally recognized that the governance structure of an alliance has an impact on its probability of success. In this study, we examine the choice between two alternative alliance governance structures: equity and non-equity. Drawing from transaction cost economics, two sets of factors, namely alliance purpose (R&D or marketing) and cultural distance between partners, are hypothesized to influence the above choice. We further hypothesize that collaborative R&D alliances, where both parties contribute technical knowledge, are more likely to lead to the formation of equity alliances than non-collaborative research agreements, where only one partner may be doing the research work. Based on a sample of 2407 alliances formed in the global biotechnology industry, we find partial support for the hypothesized relationships. Specifically, we find that collaborative R&D alliances are more likely to be equity alliances, whereas non-collaborative R&D alliances do not have any impact on the choice of the governance form. We also find that alliances formed with a marketing purpose are less likely to be equity alliances. We did not find any relationship between cultural distance and the choice of equity alliances.     

战略联盟的稳定性边界研究

战略联盟的高失败率决定了联盟稳定性研究的重要性.在一个专业化理论框架下,联盟的稳定性是由企业对于专业化水平和协作模式选择的动态决策过程所内生的,联盟的稳定性边界决定于投入联盟的资产专用属性、市场交易的效率和交易价格比以及战略联盟内部的交易效率.     

Strategic alliances in fast-moving markets

The pace of technological change and market shifts is forcing organizations to reconsider their strategies for creating sustainable competitive advantage. Strategic alliances focused on destabilizing market values are currently the most effective source of sustainable competitive advantage. The purpose of this article is to explain how successful strategic alliances can be arranged in fast-moving markets.     

Minimum cost network design in strategic alliances

Strategic alliances are established between firms to improve their competitiveness in markets and generally appear in the form of joint ventures. Such collaborative efforts require centralized planning, and the survival of the alliance largely depends on the success of joint planning processes. In this regard, we investigate the opportunities that centralized collaboration can offer to firms when designing their service networks. Apart from the classical fixed and variable costs associated with the network design, we also consider transaction costs induced by the formation of the alliance, which can broadly be defined as cost components related to the coordination and monitoring of the people, efforts and resources. We concentrate on bilateral alliances and develop alternative models for solving their associated network design problem. We also adopt a state-of-the-art heuristic to solve large-scale instances. Our findings confirm that accounting for the transaction cost in network design is vital for the alliance. These transaction costs can be high enough to even render the collaboration unattractive. Hence, careful data collection and model treatment are required before deciding whether to form an alliance.     

Configuration and Coordination at Subsidiary Level: Foreign Manufacturing Affiliates in the UK

This paper develops Porter's (1986) well-known configuration/coordination paradigm for strategy at corporate level into a model that may be applied to identify and evaluate strategy at subsidiary level. Four strategy types are identified: detached subsidiary (corresponding to Porter's export-based corporate strategy), autarchic subsidiary (corresponding to the country-centred corporate strategy), confederate strategy (corresponding to high foreign investment with extensive coordination), and the strategic auxiliary (purest global strategy). Empirical data were obtained from a postal survey of 500 randomly chosen foreign manufacturing affiliates in the UK, of which 171 responded. The proposed strategy types were identified using cluster analysis and verified using analysis of variance. The four subsidiary strategy types were found to be separated by a number of operational variables including market scope, flows of material inputs and outputs, the nature of manufacturing technology employed and the degree of R&D complexity. The proposed framework was thus found to be useful and robust.     

A Framework and Case Study for Exposure Assessment in the Voluntary Children''s Chemical Evaluation Program

A conceptual framework is presented for conducting exposure assessments under the U.S. EPA's Voluntary Children's Chemical Evaluation Program (VCCEP). The VCCEP is a voluntary program whereby companies that manufacture chemicals of potential concern are asked to conduct hazard, exposure, and risk assessments for the chemicals. The VCCEP is unique in its risk-based, tiered approach, and because it focuses on children and requires a comprehensive consideration of all reasonably foreseeable exposure pathways for a particular chemical. The consideration of all potential exposure pathways for some commonly used chemicals presents a daunting challenge for the exposure assessor. This article presents a framework for managing this complicated process, and illustrates the application of the framework with a hypothetical case study. The framework provides guidance for interpreting multiple sources of exposure information and developing a plausible list of exposure pathways for a chemical. Furthermore, the framework provides a means to process all the available information to eliminate pathways of negligible concern from consideration. Finally, the framework provides guidance for utilizing the tiered approach of VCCEP to efficiently conduct an assessment by first using simple, screening-level approaches and then, if necessary, using more complex, refined exposure assessment methods. The case study provides an illustration of the major concepts.     

A Method for Computing the Fraction of Attributable Risk Related to Climate Damages

The recent decision of the U.S. Supreme Court on the regulation of CO₂ emissions from new motor vehicles^{( 1 )} shows the need for a robust methodology to evaluate the fraction of attributable risk from such emissions. The methodology must enable decisionmakers to reach practically relevant conclusions on the basis of expert assessments the decisionmakers see as an expression of research in progress, rather than as knowledge consolidated beyond any reasonable doubt.^{( 2,3,4 )} This article presents such a methodology and demonstrates its use for the Alpine heat wave of 2003. In a Bayesian setting, different expert assessments on temperature trends and volatility can be formalized as probability distributions, with initial weights (priors) attached to them. By Bayesian learning, these weights can be adjusted in the light of data. The fraction of heat wave risk attributable to anthropogenic climate change can then be computed from the posterior distribution. We show that very different priors consistently lead to the result that anthropogenic climate change has contributed more than 90% to the probability of the Alpine summer heat wave in 2003. The present method can be extended to a wide range of applications where conclusions must be drawn from divergent assessments under uncertainty.     

Probabilistic Framework for the Estimation of the Adult and Child Toxicokinetic Intraspecies Uncertainty Factors

Human health risk assessments use point values to develop risk estimates and thus impart a deterministic character to risk, which, by definition, is a probability phenomenon. The risk estimates are calculated based on individuals and then, using uncertainty factors (UFs), are extrapolated to the population that is characterized by variability. Regulatory agencies have recommended the quantification of the impact of variability in risk assessments through the application of probabilistic methods. In the present study, a framework that deals with the quantitative analysis of uncertainty (U) and variability (V) in target tissue dose in the population was developed by applying probabilistic analysis to physiologically-based toxicokinetic models. The mechanistic parameters that determine kinetics were described with probability density functions (PDFs). Since each PDF depicts the frequency of occurrence of all expected values of each parameter in the population, the combined effects of multiple sources of U/V were accounted for in the estimated distribution of tissue dose in the population, and a unified (adult and child) intraspecies toxicokinetic uncertainty factor UFH-TK was determined. The results show that the proposed framework accounts effectively for U/V in population toxicokinetics. The ratio of the 95th percentile to the 50th percentile of the annual average concentration of the chemical at the target tissue organ (i.e., the UFH-TK) varies with age. The ratio is equivalent to a unified intraspecies toxicokinetic UF, and it is one of the UFs by which the NOAEL can be divided to obtain the RfC/RfD. The 10-fold intraspecies UF is intended to account for uncertainty and variability in toxicokinetics (3.2x) and toxicodynamics (3.2x). This article deals exclusively with toxicokinetic component of UF. The framework provides an alternative to the default methodology and is advantageous in that the evaluation of toxicokinetic variability is based on the distribution of the effective target tissue dose, rather than applied dose. It allows for the replacement of the default adult and children intraspecies UF with toxicokinetic data-derived values and provides accurate chemical-specific estimates for their magnitude. It shows that proper application of probability and toxicokinetic theories can reduce uncertainties when establishing exposure limits for specific compounds and provide better assurance that established limits are adequately protective. It contributes to the development of a probabilistic noncancer risk assessment framework and will ultimately lead to the unification of cancer and noncancer risk assessment methodologies.     

Responsive supply chain: A competitive strategy in a networked economy

Supply chain management (SCM) has been considered as the most popular operations strategy for improving organizational competitiveness in the twenty-first century. In the early 1990s, agile manufacturing (AM) gained momentum and received due attention from both researchers and practitioners. In the mid-1990s, SCM began to attract interest. Both AM and SCM appear to differ in philosophical emphasis, but each complements the other in objectives for improving organizational competitiveness. For example, AM relies more on strategic alliances/partnerships (virtual enterprise environment) to achieve speed and flexibility. But the issues of cost and the integration of suppliers and customers have not been given due consideration in AM. By contrast, cost is given a great deal of attention in SCM, which focuses on the integration of suppliers and customers to achieve an integrated value chain with the help of information technologies and systems. Considering the significance of both AM and SCM for firms to improve their performance, an attempt has been made in this paper to analyze both AM and SCM with the objective of developing a framework for responsive supply chain (RSC). We compare their characteristics and objectives, review the selected literature, and analyze some case experiences on AM and SCM, and develop an integrated framework for a RSC. The proposed framework can be employed as a competitive strategy in a networked economy in which customized products/services are produced with virtual organizations and exchanged using e-commerce.     

Strategies for international growth in the automobile industry

This article examines alternative strategy approaches in respect of companies seeking growth in the international automobile industry. The author examines these approaches within a developed framework which could also prove helpful to planning in other industries.     

Managing Multiple Facets of Risk in New Product Alliances*

The trend of forming alliances to develop new products continues; however, many of these new product alliances fail. As such we explore how key risk types intrinsic in new product alliances, performance, relational, and knowledge appropriation risks, influence alliance success. Further, we theorize that different alliance governance mechanisms can reduce the negative impact of risks on alliance success. To disentangle possible heterogeneous factors across firms that may affect the interplay of risk assessments and the use of governance mechanisms, we employ latent class regression analysis on survey data collected from 128 new product alliance firms and find support for a two‐regime solution. Longer alliance relationships and lower technological turbulence are factors for some firms (regime one), while the opposite are factors for other firms (regime two). These two regimes show different patterns in the interplay of risk assessments and governance for alliance success. Our theory and results support viewing risk as a multiple‐factor concept and by understanding the different impacts of the risk types in new product alliances and how governance mechanisms mitigate such effects, we aid managers' decision making regarding the balance of contractual versus normative governance in new product alliances. Understanding the heterogeneous factors inherent in these complex relationships enables managers to understand the conditions in which various governance mechanisms promote new product alliance success.     

Integrating Person Factors into the OBM Framework

Abstract

A common perspective is that behavior-based and person-based approaches to behavior change represent opposite poles of an intervention continuum. However, an integration of these approaches might not only be possible but necessary to develop optimal behavior-change interventions. A better understanding of person factors may help define the most appropriate intervention for a particular situation. Focusing on person factors such as employee perceptions and personality states will be accepted to the extent we can explain these factors in behavioral terms and demonstrate objective benefits with their application. This article attempts to integrate certain person factors into a behavioral framework for the purpose of both increasing behavioral intervention effectiveness as well as broadening the scope of OBM research.