Procurement strategies in the presence of the spot market—an analytical framework

This paper investigates a problem in which a buyer can procure from a regular supplier as well as from a supplier in a spot market, possibly formed over the Internet. The contract with the regular supplier specifies a predetermined order volume and price, while the spot market has unlimited supply but a varying spot price. We analyse this problem from a buyer/supplier perspective, and an analytical model is developed to analyse two distinctive procurement strategies: the pure procurement system (PS) and the mixed procurement system of regular supplier with a supplier in spot markets (MS). Without loss of generality, we obtained a closed-forms solution that enabled us to provide numerical analysis on the procurement strategies, and allowed us to compare further the different characteristics between PS and MS. The results of our analysis demonstrate that the use of spot market could effectively mitigate the risk associated with demand uncertainty facing the buyer. The results also show that adopting MS can generate a higher buyer's profit than the PS, and significant supply-chain profit improvements can indeed be achieved through buyer/supplier coordination. Furthermore, spot price volatility leads to the facilitation of the use of spot markets, improving the buyer and the supply-chain profitability.     

Should the physician executive be the physician's advocate?

Medical staff commonly want to know if a prospective physician executive will serve as their advocate to management. A successful physician executive must like and respect physicians. But the question of advocacy must be answered thoughtfully, because the candidate must not imply that he or she will defend any action by any physician. A three-part conditional response is advisable.     

Does a Store Brand Always Hurt the Manufacturer of a Competing National Brand?

It is generally believed that store brands hurt the manufacturers of competing national brands while benefiting retailers. In this study, we challenge this notion by studying the impacts of a store brand when it is introduced by a power retailer. We show that a store brand may benefit the manufacturer when the interaction between the manufacturer and retailer is modeled as a retailer‐led Stackelberg game. This phenomenon occurs because the store brand changes the nature of the strategic interaction between the manufacturer and retailer in our model. In particular, while the interaction is always vertical strategic substitutability without a store brand, it may become vertical strategic independence with one. With the store brand, the demand for the national brand becomes larger, and the wholesale price for the national brand may increase, both of which benefit the manufacturer. Finally, the store brand may lessen the double marginalization problem of the supply chain for the national brand in the retailer‐led Stackelberg game, but does so in an unconventional way: The reduction in the double marginalization effect may come from a lowered retail markup instead of a lowered wholesale price. Our results reconcile some discrepancies between theoretical predictions and empirical findings regarding the impacts of store brands on manufacturers.     

What do we loose when machines take the decisions?

This paper concerns the technical issues raised when humans are replaced by artificial intelligence (AI) in organisational decision making, or decision making in general. Such automation of human tasks and decision making can of course be beneficial through saving human resources, and through (ideally) leading to better solutions and decisions. However, to guarantee better decisions, the current AI techniques still have some way to go in most areas, and many of the techniques also suffer from weaknesses such as lack of transparency and explainability. The goal of the paper is not to argue against using any kind of AI in organisational decision making. AI techniques have a lot to offer, and can for instance assess a lot more possible decisions—and much faster—than any human can. The purpose is just to point to the weaknesses that AI techniques still have, and that one should be aware of when considering to implement AI to automate human decisions. Significant current AI research goes into reducing its limitations and weaknesses, but this is likely to become a fairly long-term effort. People and organisations might be tempted to fully automate certain crucial aspects of decision making without waiting for these limitations and weaknesses to be reduced—or, even worse, not even being aware of those weaknesses and what is lost in the automatisation process.

     

Will you be ready when the pink slip arrives?

Are you prepared to ride the waves of change? Will you be ready when the pink slip arrives? Health care executives who can jump a little higher and run a little faster will go further in the draft. Those of you who are prepared for change will always be appealing to recruiters and prospective employers. How can you ride these turbulent waves and not capsize? This article explores some suggestions for positioning yourself: Proper positioning with the inevitable changes in mind will help you move your career in a forward direction.     

Something Old,Something New?: Competing Logics and the Hybrid Nature of New Corporate Professions

The professionalization of certain management occupations, such as project management and human resource management, has been neglected in recent debates on professions, which instead focus upon the deregulation of collegial professions or the failure or unwillingness of new expert occupations to professionalize. Project management represents one of a handful of ‘management professions’ which confound this interpretation, explicitly pursuing a ‘corporate professionalization’ project with some degree of success. This paper focuses on the strategic activities of the principal British professional association in this field, the Association for Project Management (APM), as it negotiates a path between exploiting established sources of legitimacy and exploring a novel conception of professionalism. In the process, the association manipulates collegial and corporate logics of professionalism, in terms of its relationships with key stakeholders, its global orientation, its knowledge base and strategies of occupational closure. Drawing on interviews with APM officials and broader documentary analysis, we analyse the conditions which have produced this hybrid model of professionalism, highlighting the pragmatic management of tensions through the combination of distinct, even contradictory, professionalization logics.     

Evaluating the Evaluators: Should Investors Trust Corporate Governance Metrics Ratings?

Companies are under increasing pressure to have their corporate governance rated by an independent corporate governance metrics firm, such as Institutional Shareholder Services (ISS) or Governance Metrics International (GMI). These rating firms claim to be able to determine how effective and responsive a company’s board is. Institutional investors have begun using these board governance ratings when deciding which firms to include in their stock portfolios. This paper considers whether investors, many of whom claim to be socially responsible, should be relying upon board governance metrics. We find that these metrics are not good indicators of either the quality of a firm’s earnings or of its ethics.     

Correction to: What do we lose when machines take the decisions?

Journal of Management and Governance - In the original publication, the word “lose” has been inadvertently published as “loose”. All occurrences of “loose”...     

Should You Order the Feedback Sandwich? Efficacy of Feedback Sequence and Timing

This study sought to investigate the efficacy of feedback sequence—namely, the feedback sandwich—and timing on performance. Undergraduate participants performed simulated office tasks, each associated with a feedback sequence (positive–corrective–positive, positive–positive–corrective, corrective–positive–positive, and no feedback), presented in a counterbalanced fashion. Half of the participants received individual verbal feedback delivered privately by the researcher immediately after each session, and the remaining participants received the same type of feedback immediately before each session. The aggregate data suggested no feedback was the most efficacious for participants who experienced feedback prior to performance, and the corrective–positive–positive sequence was the most efficacious for participants who received feedback following performance. Differences in feedback timing were not significant except for the no feedback condition. These results document that the feedback sandwich was not the most efficacious sequence, despite claims to the contrary.     

Corporate social responsibility in the board room – when do directors pay attention?

When do board directors pay attention to corporate social responsibility (CSR) issues? Board directors have traditionally focused on maximizing shareholder profit and viewed corporate governance narrowly as a way to meet this goal. They have paid little or no attention to CSR issues because they see CSR as a contrast to profit maximization. We argue in this article that companies can no longer ignore CSR. We propose that three conditions must be met in order for boards to pay attention toCSR. First, the board must have a mindset that considers CSR as contributing value to the firm. Second, the board must have relevant competences that enable members to understand CSR issues. Third, compensation of top-level management should reflect CSR performance. The first two conditions are directly linked to human resource development because, in order to embrace the specific challenges that CSR possesses, board members must develop an understanding of the CSR field and related challenges and opportunities for the company.     

Functional leadership in interteam contexts: Understanding ‘what’ in the context of why? where? when? and who?

Research on team leadership has primarily focused on leadership processes targeted within teams, in support of team objectives. Yet, teams are open systems that interact with other teams to achieve proximal as well as distal goals. This review clarifies that defining ‘what’ constitutes functionally effective leadership in interteam contexts requires greater precision with regard to where (within teams, across teams) and why (team goals, system goals) leadership processes are enacted, as well as greater consideration of when and among whom leadership processes arise. We begin by synthesizing findings from empirical studies published over the past 30 years that shed light on questions of what, where, why, when, and who related to interteam leadership and end by providing three overarching recommendations for how research should proceed in order to provide a more comprehensive picture of leadership in interteam contexts.     

Should You Buy Your Customer's Values? On the Transfer of Moral Values in Industrial Purchasing

This article discusses a transfer of moral values between purchasing and supplying organisation in the manufacturing sector. In the first part, the relevant literature is discussed to glean criteria, which could facilitate such a transfer. Given a scarcity of research into ethics in purchasing, the literature review is extended into related fields, such as total quality management, environmental purchasing in retailing and minority vendor programmes in the U.S. In the second part, the question is raised whether such a transfer can at all lay claim to being of moral value. The process is screened against established ethical theories, which are found to support it. Finally, the financial impact of such a policy on the supplier is considered. This revised version was published online in July 2006 with corrections to the Cover Date.     

Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?

Risk analysts frequently view the regulation of risks as being largely a matter of decision theory. According to this view, risk analysis methods provide information on the likelihood and severity of various possible outcomes; this information should then be assessed using a decision‐theoretic approach (such as cost/benefit analysis) to determine whether the risks are acceptable, and whether additional regulation is warranted. However, this view ignores the fact that in many industries (particularly industries that are technologically sophisticated and employ specialized risk and safety experts), risk analyses may be done by regulated firms, not by the regulator. Moreover, those firms may have more knowledge about the levels of safety at their own facilities than the regulator does. This creates a situation in which the regulated firm has both the opportunity—and often also the motive—to provide inaccurate (in particular, favorably biased) risk information to the regulator, and hence the regulator has reason to doubt the accuracy of the risk information provided by regulated parties. Researchers have argued that decision theory is capable of dealing with many such strategic interactions as well as game theory can. This is especially true in two‐player, two‐stage games in which the follower has a unique best strategy in response to the leader's strategy, as appears to be the case in the situation analyzed in this article. However, even in such cases, we agree with Cox that game‐theoretic methods and concepts can still be useful. In particular, the tools of mechanism design, and especially the revelation principle, can simplify the analysis of such games because the revelation principle provides rigorous assurance that it is sufficient to analyze only games in which licensees truthfully report their risk levels, making the problem more manageable. Without that, it would generally be necessary to consider much more complicated forms of strategic behavior (including deception), to identify optimal regulatory strategies. Therefore, we believe that the types of regulatory interactions analyzed in this article are better modeled using game theory rather than decision theory. In particular, the goals of this article are to review the relevant literature in game theory and regulatory economics (to stimulate interest in this area among risk analysts), and to present illustrative results showing how the application of game theory can provide useful insights into the theory and practice of risk‐informed regulation.     

He who pays the piper calls the tune? Setting the stage for an informed discourse on third-party funding of academic business research

Review of Managerial Science - Third-party funding of academic research has grown rapidly in its scope and impact. However, several forces demand greater attention to potential opportunities,...     

Can job insecurity be managed? Evaluating an organizational-level intervention addressing the negative effects of restructuring

Although downsizing and reorganisation are recognised as serious threats to the psychological well-being of employees, intervention strategies for addressing these events are limited. This study evaluated the effects of a participatory organisational-level intervention in which employees and managers chose to address the psychosocial consequences, specifically job insecurity, of restructuring. The intervention was conducted among postal service letter carriers in Denmark and was evaluated based on quantitative and qualitative data. Using interviews (N?=?24) and observations, the programme theory of the intervention and to what extent the intervention had been implemented were assessed. Using survey data (N?=?238), repeated measures ANOVAs were conducted to test for differences in the development of job insecurity between the intervention group and a comparison group. The results indicate that the intervention group had a significantly smaller increase in one dimension of job insecurity as compared to the comparison group. Therefore, we conclude that employees’ experiencing of job insecurity, which typically follows in the wake of restructuring, can be addressed by planned efforts at the workplace level.     

Physician and nonphysician managers as decision makers: are the differences justified or just an illusion?

If the cost of health care is to be curtailed, it is necessary to understand physician behavior and decision making. Not only is physician decision making critical from a clinical perspective, but, as the number of physician executives increases, they must be able to integrate their clinical expertise and management skills into the business context. This article explores differences in decision making methods between physician and nonphysician managers.     

Becoming the best: by beating or ignoring the best? Toward an expanded view of the role of managerial selection in complex and turbulent environments

This paper explores how the rules that guide search affect organizational adaptation in complex and turbulent environments. Our consideration of such rules extends beyond search scope—i.e., exploitation of current technologies vs. exploration of new technologies—to include focus on competition. We consider two types of competitive focus—i.e., external, where the choice of focal technology to be improved is influenced by information about other organizations and internal, where it is not influenced by others. We refer to this expanded set of rules as managerial selection and vary it to explore how it affects organizational adaptation. Employing an agent based simulation model, built on the framework of NKC fitness landscapes, we consider multiple types of interdependencies within and between technologies and across competitors. We show that in the presence of these multiple interdependencies, the ability of organizations to adapt is conditioned as much or more by the focus of search than by its scope. In particular, we observe that in simple and stable environments, organizational adaptation is enhanced by an external focus but in complex and turbulent environments, such external focus is counterproductive.