Signaling to Partially Informed Investors in the Newsvendor Model

We analyze a signaling game between the manager of a firm and an investor in the firm. The manager has private information about the firm's demand and cares about the short‐term stock price assigned by the investor. Previous research has shown that under continuous decision choices and the Intuitive Criterion refinement, the least‐cost separating equilibrium will result, in which a low‐quality firm chooses its optimal capacity and a high‐quality firm over‐invests in order to signal its quality to investors. We build on this research by showing the existence of pooling outcomes in which low‐quality firms over‐invest and high‐quality firms under‐invest so as to provide identical signals to investors. The pooling equilibrium is practically appealing because it yields a Pareto improvement compared to the least‐cost separating equilibrium. Distinguishing features of our analysis are that: (i) we allow the capacity decision to have either discrete or continuous support, and (ii) we allow beliefs to be refined based on either the Undefeated refinement or the Intuitive Criterion refinement. We find that the newsvendor model parameters impact the likelihood of a pooling outcome, and this impact changes in both sign and magnitude depending on which refinement is used.     

Culture and Crisis Communication: Nestle India's Maggi Noodles Case

Extant theoretical paradigms in the field of crisis communication are organization-centric and do not adequately recognize the role of culture. The purpose of this essay is to analyze a crisis faced by Nestle India using the framework of global public relations which defines culture broadly to include political, economic, media, societal, and activist cultures. Our analysis revealed that a multinational corporation with over a century of presence in the country struggled to align itself to the complexities of the cultures of the host country. In the case of Nestle India, whereas environmental variables such as political economy and Westernization of urban India boosted the growth of its instant noodles, the multinational also struggled to cope with the rise of media corporatization, activist pressure and the vagaries of regulatory enforcement not to speak of cultural nationalism. It is evident that Nestlé's crisis response was governed more by its traditional corporate culture than by an ability to keep pace with the changing demands of its environment, leading to the amplification of an issue into a crisis. The study concludes that multinationals that ignore culture will be forced to pay a heavy price both in terms of reputation and the bottom line.     

Assessing dust exposure in an integrated iron and steel manufacturing plant in South India

A study to monitor and estimate respirable particulate matter (RPM), toxic trace metal concentrations in the work environment was carried out in different sections of an integrated steel manufacturing industry. The average RPM concentration observed varied according to the section blast furnace was 2.41 mg/m;{3}; energy optimization furnace, 1.87 mg/m;{3}; sintering plant, 0.98 mg/m;{3}; continuous casting machine, 1.93 mg/m;{3}. The average trace metal concentration estimated from the RPM samples like iron, manganese, lead and chromium did not exceed ACGIH prescribed levels.     

The Situational Theory of Publics in a Different Cultural Setting: Consumer Publics in Singapore

In an ever-globalizing world, it behooves one to ask whether, and if so to what extent, the theoretical constructs developed primarily in Western democracies are applicable elsewhere. This study used the Situational theory of publics to assess the communication behaviors of a sample of Singaporeans vis-à-vis the level of customer service in the retail sector. The study surveyed 242 retail customers and conducted 3 focus groups of retail consumers. Results revealed that the situational theory was quite useful in identifying the communication behaviors of consumer publics in Singapore. A majority of the respondents perceived high problem recognition but also displayed constrained behavior in responding to the problem. Only a few respondents exhibited activist behavior as described in the theory. Cultural factors such as deference to authority and collectivism played a significant role in the constrained behaviors of the respondents. We contend that the referent criterion, abandoned for over 2 decades, helps include culture as an independent variable in the theory.     

Modeling of Distributed Generators Resilience Considering Lifeline Dependencies During Extreme Events

This article derives distributed generators resilience models considering lifeline dependencies during extreme events. The effects on power resilience of storage capacity, fuel delays, and fuel order placements are analyzed. Results indicate that storage capacity has an important role in improving overall power supply resilience as seen by loads. In addition, the presented models provide a quantifiable approach in evaluating fuel delivery resilience. The models facilitate studying fuel scheduling policies and local fuel storage sizing for specified resilience requirements. It is observed that tank autonomy greatly affects the flexibility in employing scheduling policies supplying fuel to generators. Resilience dependence on buffer autonomy is high during the first few days of extreme events, and this could have considerable effects on managing evacuations and rescue operations.     

Corporate social responsibility among SMEs in Italy

Much of the scholarly discussion on CSR has focused on large corporations even though small and medium enterprises (SMEs) constitute the bulk of businesses in many countries of the world. According to the Organization for Economic Co-operation and Development (OECD), 99.9% of the corporations in Italy are SMEs employing fewer than 250 people. This study sought to explore the CSR among SMEs including whether they practice CSR as a strategic function, who the main stakeholders were for their CSR activities, the drivers of CSR, and the motivations to engage in CSR. Data were collected from three sources: a survey of executives of a sample of 105 SMEs; qualitative in-depth interviews of the owner–managers of five SMEs and élite interviews with opinion leaders. The sample organizations practiced CSR mainly through informal, internally oriented and relational methods with very little, if any, managerial and strategic approach. A large number of sample organizations viewed employees as the most important stakeholders for CSR communication whereas customers, suppliers, and business partners trailed far behind. Interestingly, the media, government, NGOs, and unions were relegated to the bottom of the list. Networks of personal relationships (including that of owner–managers and top executives) were frequently used to conduct CSR activities.     

The Effect of Product Variety and Inventory Levels on Retail Store Sales: A Longitudinal Study

We examine the effects of product variety and inventory levels on store sales. Using 4 years of data from stores of a large retailer, we show that increases in product variety and inventory levels are both associated with higher sales. We also show that increasing product variety and inventory levels has an indirect negative effect on store sales through their impact on phantom products—products that are physically present at the store, but only in storage areas where customers cannot find or purchase them. Our study highlights a consequence of increased product variety and inventory levels that has previously been overlooked in studies of retail product variety and inventory management. It also quantifies the impact of phantom products on store sales. In addition, our study provides empirical evidence to support earlier claims that higher product variety and inventory levels lead to an increase in defect rate. We discuss the implications of our findings for retail inventory and assortment planning and for the design of retail stores.     

Introduction to this special section: The impact of globalization on public relations

Globalization has thrust public relations into the limelight providing new opportunities while posing immense challenges as well. Whereas globalization has impacted the public relations industry in many ways, public relations also has contributed to the spread of globalization. Using the global diffusion of the top 10 public relations agencies, this article argues that public relations is often erroneously perceived as only involving corporate activities. The body of knowledge is almost completely silent on the use of public relations for altruistic and information campaigns. This special issue presents some of the papers presented at the 14th International Public Relations Symposium (also popularly known as Bledcom 2007) whose theme was “The Impact of Globalization on Public Relations”.     

Effect of Quality Management Systems and Total Quality Management on Productivity Before and After: Empirical Evidence from the Indian Auto Component Industry

We study the linkages between firm‐level quality initiatives such as quality management systems (QMS) and total quality management (TQM) and output productivity in the Indian auto component industry. We use externally validated quality certification and quality awards as proxies for QMS and TQM, respectively, as it is difficult to directly measure the QMS and TQM efforts of firms. We use an unbalanced panel of 220 firms and a balanced panel of 73 firms from the Indian auto component industry over the period 1993–2006 to study these links. Both parametric as well as non‐parametric approaches are used, as appropriate, to measure the rate of change in productivity and the impact of quality initiatives on productivity change during this period. We determine the proportion of productivity resulting from technical change and relative efficiency change, thus providing insights into the structure of productivity improvements. We find that TQM efforts resulted in a high rate of productivity change (11%) in the award‐winning firms after the award. On the other hand, pre‐certification productivity change due to QMS was 5% and post‐certification change was 3.6%. In the periods prior to certification, productivity change was driven mainly by technical change; whereas the source of productivity change after certification is mixed. However, prior to awards, productivity change was driven mainly by relative efficiency change, whereas post‐award productivity change was due to technical change. The results suggest that management focus on attaining certification did generate conceptual learning (linked to technical change) during the period leading to certification, but these effects were not significant after certification. The results also suggest that the TQM programs generated significant productivity gains in the long run, although setting the associated systems in place did not result in significant productivity change prior to winning awards. Thus, the study provides direct but nuanced evidence linking quality certification as well as the adoption of TQM programs to the associated conceptual and operational learning processes and their impact on the change in productivity.