THE FATAL ERROR OF SOLVENCY II

The introduction of the Solvency II insurance company regulatory regime is based on a flawed application of scientific ideas to areas to which they are simply not applicable. The new regime will endanger the solvency of the insurance industry in the long run.     

How organisations generate and use customer insight

Abstract

The generation and use of customer insight in marketing decisions is poorly understood, partly due to difficulties in obtaining research access and partly because market-based learning theory views knowledge as a fixed asset. However, customer insight takes many forms, arrives at the organisation from increasingly diverse sources and requires more than mere dissemination if it is to be useful. A multiple case study approach is used to explore managerial practices for insight generation and use. Multiple informants from each of four organisations in diverse sectors were interviewed. Findings reveal the importance of value alignment and value monitoring across the insight demand chain, to complement the information processing emphasis of extant research. Within the firm, the study suggests the importance of customer insight conduct practices including insight format, the role of automation and insight shepherding, to complement the much-researched process perspective. The study provides a basis for assessing the effectiveness of insight processes by both practitioners and scholars.     

The Assessment of Information Technology Maturity in Emergency Response Organizations

In emergency response organizations, information technologies are not adequately explored. Sometimes, the mere adoption of new information technologies is not productive, as their efficient use depends on other interrelated technologies and the environment where they are installed. This work describes a model to help organizations understand their capability in respect to the adoption of these technologies. The model also helps the performing of the evaluation from different perspectives, making it suitable to collaborative evaluation. Using the proposed model, an organization can measure its maturity level in different aspects of the evaluation and guide the investment on its capabilities. Part of the model has been developed for emergency response organizations and the information technology dimension of the model has been applied to two fire department installations.     

Evaluation of Collaborative Strategies Used in the Management of Natural Parks in Rio de Janeiro

This paper presents the main conclusions of exploratory research aimed at analyzing the management of eight natural parks in the city of Rio de Janeiro. In view of the participative management guidelines proposed by Law 9985 (“NSCU”), the findings revealed that governmental agencies have, indeed, been making an effort to establish more participative management by means of advisory councils. Despite this, the initiatives have still been partially ineffective. The multiple case studies show that different forms of partnership are sustained with varied organizations; however, factors such as bureaucracy, lack of management autonomy, and the inadequate use of managing tools have hampered the expansion of such collaborative strategies.     

Pricing a CDO on stochastically correlated underlyings

In this paper, we propose a method to price collateralized debt obligations (CDO) within Merton's structural model on underlyings with a stochastic mean-reverting covariance dependence. There are two key elements in our development, first we reduce dimensionality and complexity using principal component analysis on the assets' covariance matrix. Second, we approximate this continuous multidimensional structure using a tree method. Trinomial-tree models can be developed for both the principal components and the eigenvalues assuming the eigenvectors are constant over time and the eigenvalues are stochastic. Our method allows us to compute the joint default probabilities for k defaults of stochastically correlated underlyings and the value of CDOs in a fast manner, without having lost much accuracy. Furthermore we provide a method based on moments to estimate the parameters of the model.     

Market share instability in Brazilian industry: a dynamic panel data analysis

The paper investigates market share instability in the context of Brazilian industry for the 1986–1998 period. The paper proposes the use of panel data unit root tests to access market share instability for a sample of industrial firms from different sectors and therefore generalizes related time series unit root tests proposed by Gallet and List (2001 Gallet, CA and List, JA. 2001. Market share instability: an application of unit root tests for the cigarette industry. Journal of Economics and Business, 53: 473–80.  ). The results mostly indicate that one cannot reject the hypothesis of market share instability and therefore there exist some degree of market rivalry in the Brazilian case.     

A Note on Private Farm Management Consulting Services: The Case of Argentina

The paper discusses the evolution and perspectives of private farm management consulting in Argentina. In the first part, recent developments in consulting services are presented. Because of its importance, particular emphasis is placed in the evolution of consulting work done in the framework of the CREA (Consorcios Regionales de Experimentación Agricola) association of farm producers. Rough estimates show that: (a) private consulting represents 10-15% of total manpower devoted to direct farmer advice, and (b) demand for consulting work has grown considerably faster in areas where farms have mixed (crop-livestock) production systems. The possible incentives for farmers hiring consulting services are summarized. The widespread (in Argentina) opinion that consultants allow higher yields from a given input mix is not fully supported by the empirical data presented in this paper: there is evidence that yield differences found on farms are caused not only by the presence or absence of consultants but also (and perhaps primarily) by differences in land quality. The fact that the average farmer may be (at least on a yield basis) as efficient as the ‘top’ farmers should be further studied, as it has important implications from a policy point of view.     

Errors and weaknesses detected by the European Court of Auditors in the reports on the European Structural Funds 2000–2004

The present paper shows the weaknesses and the errors detected by the European Court of Auditors (ECA) in the reports regarding the Structural Funds (the European Social Fund (ESF); the European Agricultural Guidance and Guarantee Fund, ‘Guidance’ section (EAGGF-Guidance), the European Regional Development Fund (ERDF) and the Financial Instrument for Fisheries Guidance (FIFG)), presented by 15 countries of the European Union from the year 2000 to 2004. We have classified the said countries in four groups, regarding the date of their EU incorporation. The main aim of our work is to highlight the errors made by the Member States on the management and control of the structural funds received from the EU, analysing the likely causes and consequences of such errors.     

Exchange rate volatility in high inflation economies: An econometric study of Poland and Brazil

This paper analyses exchange rate series for Poland and Brazil. The Polish series, related to the period soon after the first liberalizing measures, presents a high volatility which is not accounted for by some selected fundamentals. The Brazilian series, though also keeping evidence of excessive volatility, is cointegrated with fundamentals similar to those of the Polish case. This raises the issue of a learning process taking place during persistent inflations. Unsuccessful one-shot stabilization plans can reinforce this process, leaving a lasting imprint in the excessive volatility pattern. The message seems clear, though maybe not easy to implement: agents take some time to learn to live in non-stable environments; to avoid this by one-shot measures — if unsuccessful — can have a very high cost and pre-empt future corrections.