Differential Pricing in Intermediate Good Markets

This paper studies differential pricing by an upstream monopolist whose cost to supply the intermediate good differs across buyers in the downstream. It is shown that, different from demand‐based price discrimination, cost‐based differential pricing shifts production efficiently. If total output (and consumer welfare) is weakly increased under differential pricing as opposed to uniform pricing, as is true for weakly convex final market demand functions, social welfare is strictly improved. The analysis is extended to the case in which both the upstream monopolist's cost to serve the downstream firms and the downstream firms’ cost to produce the final good differ.     

A competition‐based explanation of collaborative invention within the firm

Existing literature shows that collaborative invention within the firm enhances innovativeness by facilitating knowledge recombination. Despite such benefit, firms vary in their use of collaborative invention when drawing on their individual inventors' knowledge. In addressing this puzzle, we argue that competition from rival products building on similar knowledge compels firms to favor search depth over exploratory search and respond expeditiously, thus reducing a firm's inclination toward collaborative invention. In contrast with prior research's focus on how upstream resources influence a firm's position in downstream markets, this study shows that downstream competition drives heterogeneity across firms in their utilization of upstream resources. Copyright © 2013 John Wiley & Sons, Ltd.     

A bargaining perspective on strategic outsourcing and supply competition

This article considers the outsourcing choice of a downstream firm with its own upstream production resources or assets. The novelty of the approach is to consider the outsourced function as involving resources consistent with the resource‐based view of the firm. From a bargaining perspective, we characterize a downstream firm's decision whether to outsource to an independent or to an established upstream firm. In so doing, the downstream firm faces a trade‐off between lower input costs afforded by independent competition, and higher resource value associated with those who can consolidate upstream capabilities. We show that this trade‐off is resolved in favor of outsourcing to an established firm. Copyright © 2008 John Wiley & Sons, Ltd.     

Information acquisition and optimal project management

This paper provides a rationale for why an organization often generates a bias in favor of a new project even after learning that its profitability will be certainly below more conventional ones. We analyze a principal–agent model with two alternative projects, one of which is to be chosen by the principal. In our model, the profitability of a project is determined by the cost of implementation. All parties are familiar with one of the projects (the known project), and thus the implementation cost of this project is common knowledge. Information on the other project (the new project), however, must be acquired by the agent. We find that the new project may be chosen in the optimal contract even when it turns out to be more costly to implement than the known project, if acquiring information is costly enough and the realized implementation cost of the new project is below a particular level. We also discuss distortion in the new project's output schedule when it is selected.     

Vertical integration and product differentiation

We study a new channel of downstream rent extraction through vertical integration: competition for integration. Innovative downstream firms create value and profit opportunities through product differentiation, which however affects an upstream monopolist’s incentive to vertically integrate. By playing the downstream firms against each other for integration, the upstream firm can extract even more than the additional profits generated by the downstream firms’ differentiation activities. To preempt rent extraction, the downstream firms may then reduce differentiation, which reduces social welfare. We show that this social cost of vertical integration is more likely to arise in innovative and competitive industries, and that the competition for integration channel of downstream rent extraction is robust to upstream competition.     

Holdup,Knowledge Transferability,and Productivity: Theory and Evidence from Knowledge Workers*

This article studies how firing costs affect the productivity of knowledge workers. We develop a holdup model in which workers are essential to knowledge transfer between firms and show that if the worker's knowledge stock is sufficiently transferable to competing firms, an increase in firing costs inhibits the firm's ability to hold up the worker and thereby leads to higher effort. We consider the passage of the wrongful discharge laws in the US as an exogenous increase in firing costs and test our theory using data on patents filed at the United States Patent and Trademark Office (USPTO).     

Subjective Performance Assessment of Innovation Projects*

Performance assessment of innovation projects is a central issue in innovation management research. Using existing literature, a model is developed to assess the performance of new product and new service development projects. In this model, project performance is defined as a combination of a formatively indicated operational performance construct and a reflectively indicated product performance construct. The validity of this model is tested based on a sample of 219 innovation projects assessed by innovation managers. Using only the innovation managers' responses, it is, however, not possible to distinguish between operational and product performance. The impact of common method bias and informant bias is subsequently assessed using a subsample of 128 of these 219 innovation projects that are assessed by the innovation manager and the project leader. These latter results show that operational and product performance are two distinct constructs. In addition, the multitrait–multimethod analyses show that especially the more abstract items of performance, such as the perceptions of quality, captured knowledge, competitive advantage, gained reputation, and customer satisfaction, suffer from random error and informant bias. Project leaders appear to be better informed to assess operational performance, while innovation managers are better in assessing product performance. The paper concludes with a qualitative comparison of several alternative performance models: the project performance model as derived from the literature, a similar (misspecified) reflective performance model, two stand‐alone models in which operational and product performance are assessed separately, and a mixed model that uses a combination of innovation managers' and project managers' data. Based on this comparison, it is advised to use either the stand‐alone models for operational performance and product performance or the mixed model whereby the project leader assesses operational performance and the innovation manager the product performance of an innovation project.     

Do Retailers Really Profit from Ambidextrous Managers? The Impact of Frontline Mechanisms on New and Existing Product Selling Performance

When manufacturers introduce a new product to the market, downstream retail partners are faced with inherent trade‐offs. Retail sales personnel have to support the new product's introduction with substantial sales efforts but also sell the existing products in stock, before storage and devaluation costs spin out of control. This study shows how retail sales managers can guide sales personnel's performance of new and existing product selling, respectively. The authors argue that a manager may prioritize selling new products, existing products, or both (i.e., have an ambidextrous selling orientation). Based on data gathered from sales representatives and company databases of a large European consumer electronics retailer, the authors perform a time‐lagged partial least squares analysis to test empirically their conceptual model. The authors find that ambidextrous sales managers outperform their singular‐oriented counterparts if they properly align their orientation with a frontline management mechanism consisting of task autonomy, performance feedback, and employee age. More specifically, ambidextrous managers promote net profit obtainment if they grant their sales employees task autonomy and give little performance feedback. In addition, a remarkable finding is that older sales agents tend to outperform their younger counterparts when working under an ambidextrous manager. The authors discuss the implications of these findings.     

Job Characteristics and Labor Market Discrimination in Promotions

We extend promotion signaling theory to generate new testable implications concerning racial differences in promotions. In our model, promotions signal worker ability. When tasks differ substantially across job levels, the opportunity cost of not promoting qualified non‐whites/non‐Asians is large, so employers are less likely to inefficiently withhold their promotions. Thus, given prepromotion performance, the extent to which non‐whites/non‐Asians have lower promotion probabilities decreases when tasks vary more across levels. Racial differences in wage increases at promotion diminish when tasks vary more across levels. Evidence from a single firm's personnel records supports the model's predictions concerning promotion probabilities.     

The Effect of Interactional Fairness on the Performance of Cross‐Functional Product Development Teams: A Multilevel Mediated Model*

Cross‐functional product development teams (CFPDTs) are receiving increasing attention as a fundamental mechanism for achieving greater interfunctional integration in the product development process. However, little is known about how team members' interactional fairness perception—fairness perception based on the quality of interpersonal treatment received from the project manager during the new product development process—affects cross‐functional communication and the performance of CFPDTs. This study examines the effects of interactional fairness on both team members' performance and team performance as a whole. It was predicted that interactional fairness in CFPDTs would significantly affect team members' task performance, both task‐ and person‐focused interpersonal citizenship behaviors, as well as team performance. Additionally, commitment would partially mediate the effects of interactional fairness on these performance outcomes. Analyzing survey responses from two student samples of CFPDTs with hierarchical linear modeling techniques, it was demonstrated that team members' task performance, interpersonal citizenship behavior, and team performance are enhanced when team members are dedicated to both the team and the project, and such dedication is fostered when project managers are fair to team members in an interpersonal way.     

The Relationship between Delegation and Incentives Across Occupations: Evidence and Theory

A large literature suggests that incentive pay and delegation of worker authority are positively related. Using data from a large cross section of British establishments, we show that the positive relationship found in the empirical literature masks a stark difference across jobs. Classifying jobs into two categories (complex jobs, including professional, technical and scientific occupations, and simple jobs, consisting of all other non‐managerial occupations) we find a positive relationship for simple jobs and a negative relationship for complex jobs. To explain this negative relationship, we develop a model where stronger incentives distort a worker's decisions towards low risk‐return tasks.     

The Effects of Formal Controls on Supervisee Trust in the Manager in New Product Selling: Evidence from Young and Inexperienced Salespeople in China*

How should sales managers enhance the support and commitment of young, inexperienced salespeople during a new product selling? Some scholars have suggested sales managers should use formal controls (i.e., output and process controls) to develop the salespeople's trust in their benevolence. Drawing on a sample of young, inexperienced salespeople with rather low education selling new products in China's competitive, volatile, and transitional economic environment, the present study investigates the relationship between output and process controls and supervisee trust (i.e., the salesperson's trust in the sales manager). The empirical results of the study suggest that process and output controls have differential effects on supervisee trust. Specifically, the results indicate that process control enhances supervisee trust by itself and also under conditions of intense training for new product selling and when market volatility is perceived as high. However, process control hinders supervisee trust when the manager is long‐term oriented and engages in participative supervision. It was found that output control engenders supervisee trust when the manager is long‐term oriented but hinders supervisee trust when salespeople have undergone intensive training for new product selling. Implications of these results are provided for both researchers and practitioners involved in launching and selling new products.     

The effects of opportunities and founder experience on new firm performance

Much prior research in entrepreneurship has focused on the role of the founder's knowledge in affecting new firm performance. Yet, little is known about how and why the entrepreneurial opportunity itself shapes outcomes in this arena. We begin filling in this critical gap in the literature by examining how the riskiness of the opportunity not only affects start‐up performance, but also conditions the relevance of the founder's distinct knowledge endowments. Analyses of a sample of 451 new firms show that the riskier the opportunity, the greater the performance of the start‐up, above and beyond founder characteristics. Moreover, the value of founder knowledge is relative to the type of opportunity exploited: high‐risk opportunities favor founders with managerial experience, whereas low‐risk opportunities favor founders with industry experience. Copyright © 2014 John Wiley & Sons, Ltd.     

加强制度建设,培养提高项目经理素质

国家推行施工企业项目经理责任制以来，项目经理数量数以万计迅速发展壮大，但是国内外的建筑市场迫切要求项目经理有更高的素质，提高项目经理的综合素质是建筑企业的迫切任务。本论述了施工企业如何加强制度建设，培养提高项目经理的素质。     

Taking worker productivity to a new level? Electronic Monitoring in homecare—the (re)production of unpaid labour

This article explores the use of Electronic Monitoring (EM) in homecare and its impact on the ratio of paid to unpaid working time. It argues that whilst Zero Hours Contracts (ZHCs) blur the distinction between paid and unpaid labour, the introduction of EM can formalise and regulate the demarcation between the two. In the context of local authority commissioning and constrained budgets, the combination of EM and ZHC's may excise so‐called ‘unproductive’ but available labour from homecare. In particular, the minute‐by‐minute commissioning of care that EM facilitates means the cost of homecare is anchored in the time that worker's spend in client's houses, squeezing out paid travel, time between visits, training and supervision. Paid working time is minimised whilst maximising the use of unpaid time with resulting intensification of care labour.     

Optimal Pricing Strategy in the Case of Price Dispersion: New Evidence from the Tokyo Housing Market

We adopt a multistage search model, in which the home seller's reservation price is determined by her or his opportunity cost, search cost, discount rate and additional market parameters. The model indicates that a greater dispersion in offer prices leads to higher reservation and optimal asking prices. A unique dataset from the Tokyo condominium resale market enables us to test those modeled hypotheses. Empirical results indicate that a one percentage point increase in the standard deviation of submarket transaction prices results in a two‐tenths of a percent increase in the initial asking price and in the final transaction price. Increases in the dispersion of market prices enhance the probabilities of a successful transaction and/or an accelerated sale.     

Bias and Error in Mine Project Capital Cost Estimation

Previous analyses of small samples of mining projects have found that feasibility studies tend to underestimate the as-built capital costs of the project. Our review of 63 international mining and smelting projects confirms that as-built capital costs are, on average, 14% higher than as estimated in the bankable feasibility study. There is little attenuation over time of this bias in capital cost estimation, appearing to reflect an absence of learning on the part of the project sponsor or the consulting engineering firm. We argue that this persistence of bias is instead intentional and rational, driven by a scarcity of project financing and the need by project sponsors to inflate the project economics in a bid to secure financing. We find some empirical support for our contention. A second phase of the analysis examines estimation error. Roughly half of all projects' as-built capital costs fall outside of the expected ± 15% of the feasibility study capital cost estimate, even after allowing for intentional estimation bias. Cost overruns of 100% or more happen in roughly 1 out of 13 projects. Smaller projects have less estimation accuracy than large projects. Finally, our analysis of the cost overrun data reveals that a shifted lognormal probability distribution should be used when modeling mining project capital costs in a Monte Carlo analysis.     

Managing complex programs: a review of major research findings

Managing large-scale research and development projects is without question a difficult task. Success is often dependent on the ability of the project manager to successfully cope with a myriad of unpredictable situations. To assist project managers, the authors review several of the most significant recent research studies to identify potentially useful insights for those charged with the administration of complex research and development projects. Specifically, five areas of research are examined, namely, (1) project manager leadership styles; (2) conflict management; (3) decision-making styles; (4) organizational design considerations and project authority; and (5) the relationships of the project team with the parent, client, and other external organizations.     

A NEW APPROACH TO DEPRECIATION MEASUREMENT FOR PUBLIC UTILITIES: COMMENT

This paper examines the use of a simple heuristic for evaluating projects. We posit that ranking projects by IRR and rejecting marginal projects can be superior to a NPV rule if 1) project managers have incentives to overstate cash flow forecasts that occur late in a project's life, 2) project rankings determine project acceptance because not all positive NPV project's are accepted, and 3) a project's IRR is greater than the WACC. In these instances, the IRR heuristic undervalues distant cash flows and thus, reduces project managers' incentives to positively bias forecasts.     

Piecewise procurement of a large-scale project

This paper studies the optimal piecewise procurement of a large-scale project. In the unique Markov Perfect Equilibrium (MPE) of the dynamic procurement game, it is found that (1) unlike the static setting, the procurer's optimal strategy depends on the number of suppliers and more importantly, it is nonmonotonic. As one more supplier participates in the procurement auction, the procurer softens competition in the initial stages by including more cost “types” while increasing competition in the mature stages; (2) this, in turn, implies that existing suppliers might favor participation of additional suppliers; (3) absent scheduling and/or resource constraints, the procurer prefers to procure the project as one piece if the suppliers' technology exhibits constant or increasing returns, and no additional suppliers are enticed to bid; and (4) the optimal dynamic mechanism can be easily implemented via a sequence of dominant strategy auctions of the Vickrey type.