Foreign-currency transactions and the recovery of German industry in the aftermath of the First World War: the case of Schering AG

While historians have for a long time recognized the importance of the First World War to the general flow of history, business economists do not fully appreciate the impact of the war on commercial relationships. The First World War transformed the political, economic, and social context, in which business was done, forcing companies to develop new strategies and activities, some of which were almost unimaginable before August 1914. This article focuses on one aspect of doing business: foreign exchange management. It argues that Schering AG and its parent, like many German companies after the First World War, were obliged to refocus their activities around their foreign exchange exposures and that the management of foreign exchange issues contributed to a much tighter relationship between businesses, government, and business associations than had existed before the war and for which some aspects of Germany's system of corporate control were not well adapted to handle.     

The Association Between Activity-Based Costing and Manufacturing Performance

This study examines the association between activity-based costing and manufacturing performance. Results using a cross-sectional sample of manufacturing plants indicates that extensive ABC use is associated with higher quality levels and greater improvements in cycle time and quality, and is indirectly associated with manufacturing cost reductions through quality and cycle time improvements. However, on average, extensive ABC use has no significant association with return on assets. Instead, we find weak evidence that the association between ABC and accounting profitability is contingent on the plant's operational characteristics.     

Social reporting by islamic banks

The last thirty years have witnessed the appearance and rapid expansion of Islamic banking both inside and outside the Islamic world. Islamic banks provide financial products that do not violate Sharia , the Islamic law of human conduct. The Islamic principles upon which the banks claim to operate give an important role to social issues. Applying these principles, we develop a benchmark set of social disclosures appropriate to Islamic banks. These are then compared, using a disclosure index approach, the actual social disclosures contained in the annual reports of twenty-nine Islamic banks (located in sixteen countries) to this benchmark. In addition, content analysis is undertaken to measure the volume of social disclosures. Our analysis suggests that social reporting by Islamic banks falls significantly short of our expectations. The results of the analysis also suggest that banks required to pay the Islamic religious tax Zakah provide more social disclosures than banks not subject to Zakah .     

New Product Development For Service Companies

It is well known that services differ from manufactured goods in a number of significant ways. Services are largely intangible, produced and consumed simultaneously, heterogeneous and perishable. These differences can lead to changes in service management. Christopher J. Easingwood has investigated how new products development practices in service organizations may reflect these differences. He has profiled practices found in a sample of service companies in the United Kingdom on topics ranging from idea generation to post-launch assessment, together with the strategic role and organizational location of new products. A number of special characteristics of the new product activity in services companies are identified. For instance, the number of new product introductions may be restricted due to customer and staff confusion when faced with a proliferation of service products. Test markets are used primarily to ensure the proper functioning of the service rather than to provide a base for a national sales projection. These and other characteristics appear to be appropriate adaptations to the special features of services. They are part of a pattern that shows some of the ways that service companies have adapted the new product development process to meet unique problems in the service environment.     

The Digital Transformation of Search and Recombination in the Innovation Function: Tensions and an Integrative Framework*

Search and recombination are important mechanisms in the creativity phase of innovation. Digital transformation and the resulting pervasive digitalization of the innovation function have often been associated with increasing possibilities for search and recombination. In this paper, by systematically integrating the search and recombination literature with the literature on digitalization, we demonstrate that digitalization may engender new idiosyncratic tensions in the organizational antecedents of search and recombination and, by implication, in their likely outcomes. We propose that, depending on the interactions among the idiosyncratic tensions identified herein, knowledge recombination might spur very different outcomes, including knowledge layering, knowledge integration, knowledge grafting, or even no recombination at all (which we label “search for the sake of search”). These outcomes may not always be the initially planned desired outcomes. Finally, we provide implications of our integrative framework pertaining to product development and to organizing for innovation.     

Perspective: Understanding the Nature and Measurement of the Lead User Construct

The lead user concept has attracted a lot of attention from scholars and practitioners alike. However, different studies apply different conceptualizations and measures of the lead user construct. Such variation in measurement of the construct make it almost impossible to consolidate findings from prior lead user research, which in turn hampers the accumulation of insights on the concept itself. This is also a challenge with respect to managerial practice: due to different interpretations of the concept, managers and R&D staff find it difficult to identify lead users for workshops and cooperation, and companies are often unable to transfer results from lead user projects to new product and business development. As a result, they only rarely repeat their work with lead users. The aim of this article is therefore to provide some thoughts and guidance on the conceptualization and measurement of the lead user construct.     

Merger Review by the Federal Communications Commission: Comcast–NBC Universal

The Communications Act of 1934 created a dual review process in which mergers in the communications industry are reviewed by the Federal Communications Commission (FCC) as well as the antitrust authorities. Commentators have criticized dual review not only as costly and redundant, but also as subject to substantive and procedural abuse. The process of clearing the 2011 Comcast–NBC Universal merger provides a useful case study to examine whether such concerns are justified. A review of the empirical context reveals that the FCC intervened even though the relevant markets were not structured in a way that would ordinarily raise anticompetitive concerns. In addition, the FCC was able to use differences between its review process and that used by the Justice Department to extract concessions from the merging parties that had nothing to do with the merger and which were more properly addressed through general rulemaking. Moreover, the use of voluntary commitments also allowed the FCC to avoid subjecting certain aspects of its decision to public comment and immunized it from having to offer a reasoned explanation or subjecting its decision to judicial review. The aftermath of the merger provides an opportunity to assess whether the FCC’s intervention yielded consumer benefits.     

The Impact of Ambiguity on Managerial Investment and Cash Holdings

Standard finance theory suggests that managers invest in projects that, in expectation, produce returns that justify the use of capital. An underlying assumption is that managers have the information necessary to understand the distributional properties of the pay‐offs underlying the decision. This paper examines firm investment behavior when managers are likely to find it more challenging to develop expectations of pay‐offs, namely during periods of increased macroeconomic ambiguity. In particular, we examine how macroeconomic ambiguity – proxied by the variance premium (Drechsler, 2010 ) and the dispersion in forecasts of corporate profits from the Survey of Professional Forecasters (Anderson et al., 2009 ) – impacts managerial capital investment and cash holdings. Consistent with ambiguity theory, we find that macroeconomic ambiguity is negatively associated with capital investment and positively associated with cash holdings. These results are robust to alternative explanations related to risk, investor sentiment and economic conditions. Moreover, consistent with recent theoretical real options literature, we find that ambiguity reduces the value of investment opportunities, while risk increases the value of such opportunities. Overall, these findings provide initial empirical evidence on the economic distinction between ambiguity and risk with respect to managerial investment and cash holdings.