Reflections on the roles of governance and leadership in profit-for-purpose companies: A European–United States comparative perspective

The profit-for-purpose movement has gained traction worldwide, with companies designating the second mission dedicated to a social purpose legislatively or by becoming a certified B Corp. This study reflects on the governance structure and associated accountability enacted by legislation in three countries where national legislation exists – the United States, Italy, and France. It also discusses accountability stemming from the B Corp certification. Given the limitations in accountability deriving from a governance structure or the B Lab certification, the paper reflects on the importance of leadership for the successful management of profit-for-purpose ventures and provides exemplars. We conclude by reflecting on the future of profit-for-purpose companies considering the recent environmental, social, and governance (ESG) movement and directions for future research examining key issues for dual-purpose companies.     

The how and why of a firm’s approach to CSR and sustainability: a case study of a large European company

This paper aims to analyse “how” and “why” a company engages in CSR and sustainability. The “how” concerns the features of the firm’s CSR and sustainability approach, defined in terms of a firm’s strategy (implemented issues, initiatives and activities) and organization (organizational structures and roles and managerial systems adopted). The “why” refers to the key determinants, both internal and external, of CSR and sustainability. Finally, how the firm’s CSR and sustainability approach evolves over time and the relation between CSR determinants in various stages of the CSR evolutionary path are also investigated. The research method is based on the longitudinal analysis of a case study concerning a large multinational company operating in the telecommunications industry in Europe. The analysis of the case study shows that sub-cultural differences in the approach to CSR and sustainability may occur across hierarchical levels and functional units. Moreover, embedding CSR and sustainability principles doesn’t follow a linear and continuous process, made by sequential stages. Indeed, it can be characterized by an up and down evolutionary path, based on different stages with a changing emphasis given to CSR and sustainability issues. Finally, we find that the firm CSR and sustainability approach is not an autonomous choice, but it is a consequence of the contingent role played by both the external and the internal drivers and by their relative importance during the company’s CSR history.     

Conquering ‘the tyranny of distance’: Australian–European economic and geopolitical relationships past,present and future

Australia today remains a continent adrift in a rapidly transforming world. It is economically dependent on China, aligned militarily with the US and yet socio-culturally still profoundly European in outlook. In this article, we reflect on the trends, challenges and opportunities that are likely to define and redefine Australia's interaction with Europe at a macro-level. We focus on eight key macro-level themes: historical connections, labour and migration, geopolitics and security, macro-economic relations and prospects, business relations and investment, technology and innovation, entrepreneurship, and environment and sustainability. We find that while Europe and Australia remain poles apart regarding several pressing global matters, from military and security alliances to official policy on climate change, there are also areas in which the potential for closer engagement are increasingly promising, including trilateral trading relationships with Asia, foreign direct investment and business-to-business relations, digital business, innovation and entrepreneurship, and business-driven innovation to combat global warming.     

MRO inventory reduction—challenges and management: a case study of the Tennessee Valley Authority

Emphasis on maintenance, repair, and operations inventory (or MRO inventory) can lead to improved inventory control, reduced operational costs, enhanced productivity, and increased cost accounting accuracy. To review the benefits of MRO inventory reduction, as well as highlight the management challenges associated with the process, a case study of the Tennessee Valley Authority (TVA) is presented. TVA is a not-for-profit electric power generation entity. TVA standardised inventory policies and procedures. Their comprehensive five-year plan included employee training, changes in organisational structure and strategy, reduced MRO inventories and the establishment of new growth drivers. Net inventory reductions of $47 million were realised. Suggestions for future MRO inventory reductions as well as replication of the management involvement and improvement process in other organisations are included.     

Behavioral finance in corporate governance: economics and ethics of the devil’s advocate

The Common Law, parliamentary democracy, and academia all institutionalize dissent to check undue obedience to authority; and corporate governance reformers advocate the same in boardrooms. Many corporate governance disasters could be averted if directors asked hard questions, demanded clear answers, and blew whistles. Work by Milgram suggests humans have an innate predisposition to obey authority. This excessive subservience of agent to principal, here dubbed a “type II agency problem”, explains directors’ eerie submission. Rational explanations are reviewed, but behavioral explanations appear more complete. Experimental work shows this predisposition disrupted by dissenting peers, conflicting authorities, and distant authorities. Thus, independent directors, chairs, and committees excluding CEOs might induce greater rationality and more considered ethics in corporate governance. Empirical evidence of this is scant—perhaps reflecting problems identifying genuinely independent directors.

Fibonacci index and stability number of graphs: a polyhedral study

The Fibonacci index of a graph is the number of its stable sets. This parameter is widely studied and has applications in chemical graph theory. In this paper, we establish tight upper bounds for the Fibonacci index in terms of the stability number and the order of general graphs and connected graphs. Turán graphs frequently appear in extremal graph theory. We show that Turán graphs and a connected variant of them are also extremal for these particular problems. We also make a polyhedral study by establishing all the optimal linear inequalities for the stability number and the Fibonacci index, inside the classes of general and connected graphs of order n.     

Lean and green in the transport and logistics sector – a case study of simultaneous deployment

The transport and logistics sector is of vital importance for the stimulation of trade and hence the economic development of nations. However, over the last few years, this sector has taken central stage in the green agenda due to the negative environmental effects derived from its operations. Several disciplines including operations research and sub-areas of supply chain management such as green supply chains, green logistics and reverse logistics have tried to address this problem. However, despite the work undertaken through these disciplines, theoretical or empirical research into the sequential or simultaneous deployment of the lean and green paradigms, particularly, in the road transport and logistics sector is limited. This paper presents a case study where both paradigms have been combined to improve the transport operations of a world leader logistics organisation in the metropolitan area of Monterrey, Mexico. To do this, a systematic methodology and a novel tool called Sustainable Transportation Value Stream Map (STVSM) were proposed. The results obtained from the case study indicate that the concurrent deployment of the green and lean paradigms through such methodology and the STVSM tool is an effective approach to improve both operational efficiency and environmental performance of road transport operations. The paper can be used as a guiding reference for transport and logistics organisations to undertake improvement projects similar to the one presented in this paper. Additionally, this research also intends to stimulate scholarly research into the application of lean and green paradigms in the transport and logistics sector to expand the limited research pursued in this area.     

Risk assessment based on a STPA–FMEA method: A case study of a sweeping robot

Despite rapid developments in the quality and safety of consumer products, the rise of intelligent household appliances, such as sweeping robots, has introduced new safety concerns. Considering “person–product–environment” elements and the complex systems of emerging consumer products, this study presents a new method of risk assessment for consumer products: systems theoretic process analysis (STPA)–failure mode and effects analysis (FMEA). As a case study, this method is applied to the safety control of a sweeping robot. The results suggest that this method can identify all the possible failure modes and injury scenarios among the product components, and the safety constraints in the hierarchical control structure of the interactive system. Moreover, the STPA–FMEA method combines user and environmental factors with the value of product risk events, based on the risk priority number (RPN). This provides an accurate and orderly system to reduce or eliminate the root causes of accidents and injuries. Finally, analysis of unsafe control behavior and its causes can be used to suggest improved safety constraints, which can effectively reduce the risk of some injury scenarios. This paper presents a new method of risk assessment for consumer products and a general five-level complex index system.     

State ownership and listed firm performance: a universally negative governance relationship?

Our analysis of more than 1,000 Chinese listed firms, 2003–2005, reveals a positive association between state ownership (SO) and firm performance. Arguably, if SO “causes” performance, it must be through the channel of agency cost. Therefore, our paper checks the robustness of this positive SO/performance finding by analyzing the role of agency cost as a mediator. It emerges that SO in the Chinese context may represent a strategic asset rather than an agency burden. However, it is not clear whether this is an outcome driven by efficiency or power.     

Environmental and economic assessment for the optimal configuration of a sustainable solid waste collection system: a ‘kerbside’ case study

The article presents a case study concerning the improvement of the ‘kerbside’ waste collection system, now increasingly implemented in many Italian municipalities, as an alternative to traditional bring collection, with the aim of increasing the quality of waste collection and the collection rate, in order to reduce the final impact on the environment. A planning model for an integrated waste management system based on kerbside collection is presented. A heuristic procedure is also applied in order to obtain some admissible solutions of the real problem in reasonable computational time. The economic and environmental impacts are considered as significant elements for the evaluation and validation of the obtained solutions. Five alternative configurations of kerbside system, diverging in number of sub-area, synchrony of vehicles and directionality of the arcs, are compared in an economic point of view. Finally, Life-Cycle Assessment is used as a tool to compare the overall potential environmental impacts of the alternative of kerbside collection systems and also to compare the kerbside system with the traditional bring one. The different scenarios of kerbside system are comparable in terms of damage on the impact categories, while the bring system is the worst one, in terms of damage on human health, in the consumption of resources and also for the total damage score.     

Opportunism in buyer–supplier exchange: a critical examination of the concept and its implications for theory and practice

Abstract

Claims that opportunism is widespread in the process of buyer–supplier exchange are commonplace, but direct supporting evidence for such claims is largely absent from the relevant literature. This article offers a critique of the treatment of opportunism in supply chains by re-establishing the importance of guile in the concept and investigates existing published, empirical measures of buyer and supplier opportunistic behaviour. This article offers evidence that, despite the frequency with which the concept is discussed in the literature and applied in research and the emphasis given to the risks it generates for management, opportunism with guile between buyers and suppliers appears to be rare in practice. This article is the first critical assessment of the concept’s treatment in the Operations Management field, and it argues that practitioners are currently being poorly advised with respect to the phenomenon, as well as drawing conclusions for both practitioners and researchers that differ radically from the prevailing consensus on the subject.     

Market research with the aid of a smartphone application – a case study

We discuss using the presumed ‘wisdom of the crowd’ to reduce the bullwhip effect in supply chains by enhancing the accuracy of demand forecast. Our case study describes a joint project of a leading European technology company (We chose RAGD as a pseudonym for the company throughout the study.) and the University of Kassel on a smartphone application for end customers to gather early information for this producer’s forecast. Our results confirm the ‘wisdom of the crowd’ hypothesis: A group of experts, in our case technicians who install and maintain RAGD-products, is capable of anticipating market fluctuations six weeks in advance. This only holds true if the ‘crowd’ of technicians is large enough. Our business climate index outperforms the company forecast in the first six months, when on average 22 technicians took part per week. We discuss successes and limitations of the cooperation and provide recommendations for similar projects.     

Special issue on “The role of intellectual capital and integrated reporting in management and governance: a performative perspective”

Journal of Management and Governance -     

Who knows what? Reconfiguring the governance and the capabilities of the supply chain between physical and digital processes in the fashion industry

Abstract

On the basis of an exploratory multiple-case qualitative longitudinal study in the fashion industry, this article describes how digital technologies enabled choices among different types of supply chain governance. In doing so, this study responds to calls for governance-oriented longitudinal explorations and suggests an alternative path of governance choices in which the digital technologies become the platform that allows a dynamic discourse between outsourcer and outsourcee. Our results show that, when firms decide to leverage their performances through the adoption of information technology, they need to define their knowledge transfer capacities in order to adopt the appropriate type of governance model. With this article, we contribute to the global value chain literature adding to the knowledge transfer dimension.     

Corporate social responsibility and corporate governance in Italian SMEs: the experience of some “spirited businesses”

The study proposes to individuate the relationship between social engagement, social statements and governance of SMEs. Does an adhesion to the philosophy and to the practices of CSR, which are reflected in a firm’s mission and accountability, positively influences its governance? If so, is this influence more or less significant for SMEs with respect to large-sized firms? This paper winds itself around these questions and describes the principle findings that have emerged from a qualitative investigation focused on a selected group of “cohesive” Italian SMEs, in which their management complies with both economic and social issues. The empirical study finds that the diffusion of CSR is tied above all to the entrepreneur’s values and orientation and to the company embeddedness to the local socio-economic environment. The concluding reflections trace the features of a territorial model of socially responsible orientation centered on the best practices of SMEs who are excellent examples of “spirited businesses” and are part of a network (which includes institutions, trade associations, non-profit organizations, etc.) that contributes to the diffusion of an orientation towards CSR and to sustainability across the territory.     

Beyond the “silo view” of strategic management and corporate governance: evidence from Fiat,Telecom Italia and Unicredit

While corporate governance and strategic management have for a long time suffered from artificial separation and, therefore, generally been tackled in a secluded manner, their combined organizational impact makes them stringently related to one another in the firms’ evolution. In this paper, we argue that, transcending the “silo view” of corporate governance and strategic management, time has come to acknowledge that, depending on circumstances and time periods, within a firm is possible to detect the relative dominance of corporate governance over strategic management, rather than the leadership of strategic management over corporate governance. Drawing on a contingency approach, we dissect the relationships (and the mechanisms that control it) between the strategic function (i.e., which defines the firms’ strategy and supervisions its implementation) and the governance function (i.e., the congruence assessment between the firm strategy selected and the interests of the ownership and of other relevant stakeholders represented in the board of directors and the effectiveness appraisal of the entrepreneurial action). Then, by performing a thorough retrospective qualitative analysis of three relevant case-histories of Italian firms (Fiat, Telecom Italia and Unicredit) operating in three different industries (automobile, banking and telecommunications), we surmise that, either in corporate governance (board) oriented or in strategic management (CEO) oriented companies, the ‘real’ problems arise when the quality of corporate governance or strategic management is poor. Interestingly, we eventually suggest to adopt a value-based approach to the relationship between corporate governance and strategy that may fruitfully complement the contingency perspective taken at the onset of the work.     

Democracy and Private Property: Governance of a Three-Party Public–Private Partnership

This paper contributes to the study of efficient governance of public–private partnerships (PPPs) through an inductive comparative case study of three riding schools in Sweden. Each school is a three-party PPP between a private firm, a democratic nonprofit association, and a municipality. The results indicate that efficient PPPs mixing private, collective, and communal interests can be established through an adaptive governance strategy. The private firm can shield the democratic association from market influence through adapting to market conditions; the municipality can create a governance strategy; and the democratic association can focus on providing riding services and fostering democratic governance.

Multilocation plant sizing and timing problem: a study of spatial—temporal decomposition procedure

An attempt has been made to develop a spatial-temporal decomposition procedure to solve the multilocation plant sizing and timing problem (MLPSTP). MLPSTP involves the determination of site, location, timing and utilization of the plants to meet the demands of geographically distributed customers. These decisions are assumed to interact through a common objective of minimizing the net present value (NPV) of capital costs and streams of operating and transportation costs. A solution procedure for MLPSTP is proposed using aggregation and disaggregation methodology. In the aggregation phase, MLPSTP is considered to be a single-period problem. This problem is decomposed over different geographical areas to obtain a set of feasible sites and projects. These projects are then sequenced over a finite planning horizon in the disaggregation phase. A multiple criteria based evaluation of spatial decomposition, temporal decomposition, and spatial-temporal decomposition is provided.     

Risk–risk governance in a low-carbon future: Exploring institutional,technological, and behavioral tradeoffs in climate geoengineering pathways

Deliberations are underway to utilize increasingly radical technological options to help address climate change and stabilize the climatic system. Collectively, these options are often referred to as “climate geoengineering.” Deployment of such options, however, can create wicked tradeoffs in governance and require adaptive forms of risk management. In this study, we utilize a large and novel set of qualitative expert interview data to more deeply and systematically explore the types of risk–risk tradeoffs that may emerge from the use of 20 different climate geoengineering options, 10 that focus on carbon dioxide or greenhouse gas removal, and 10 that focus on solar radiation management and reflecting sunlight. We specifically consider: What risks does the deployment of these options entail? What types of tradeoffs may emerge through their deployment? We apply a framework that clusters risk–risk tradeoffs into institutional and governance, technological and environmental, and behavioral and temporal dimensions. In doing so, we offer a more complete inventory of risk–risk tradeoffs than those currently available within the respective risk-assessment, energy-systems, and climate-change literatures, and we also point the way toward future research gaps concerning policy, deployment, and risk management.