Product Differentiation for Software-as-a-Service Providers

The market for the new provisioning type Software-as-a-Service (SaaS) has reached a significant size and still shows enormous growth rates. By varying size of SaaS products, providers can improve their market position and profits by successfully acting in the tension area of customer acquisition, pricing and costs. We first elaborate differences concerning product differentiation between classic software provisioning models and SaaS. Then, we introduce a micro-economic based decision model to maximize the return of a provider by finding an optimal granularity, i.e. by varying the size of services. This paper makes two contributions in this context: (1) it provides a conceptual foundation for product differentiation within the scope of SaaS and (2) it presents the first implementation of variable reproduction costs for web based software offers. The model is illustrated by a real world case with data from a SaaS provider.     

Can Japan Make a Comeback?

Since the beginning of the 1990s Japan has experienced economic stagnation. The economy had been allowed to overheat in the 1980s and a bubble had been built up. When this burst, there was massive asset‐deflation, which led to a banking crisis. The bad debts were not faced up to effectively. Japanese banks could not achieve high enough margins to recapitalise themselves, and the government was for a long time reluctant to intervene effectively. The shock made economic agents more pessimistic, which led to an imbalance between savings and investment‐demand. Excess savings were placed abroad and used to finance a domestic fiscal deficit, but this was not enough to close the gap and sustain growth. To be able to run a large current account surplus the yen needed to depreciate, but this was not achieved due to expectations about a future appreciation. The strategy to get out of the liquidity trap would include credible inflation targeting and yen depreciation. Monetary policy should have an inflation target well above zero per cent. Such macroeconomic measures need to be complemented by structural reforms such as deregulation of financial services, competition policy and reallocation of public investments. The Japanese development model with close connections between firms and banks needs to be reformed. Japan should be able to achieve stable growth again, but since the catch‐up phase is over one would not expect growth in Japan to be higher than in other developed countries, even if Japan undertakes the needed reforms.     

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Ohne Zusammenfassung     

Organizing Flexibility: The Flexible Firm in a New Century

Research on organizational flexibility should examine the linkages between numerical and functional flexibility. Unfortunately, studies of each type of flexibility generally neglect the other. Moreover, the most popular conception of the interplay between these two forms of flexibility — the core–periphery model — is incomplete in important ways. I discuss evidence and limitations of the core–periphery model of the flexible firm, and outline some promising attempts to conceptualize how organizations may combine functional and numerical flexibility. I focus mainly on the USA and the UK, though I also review evidence and issues involved in cross‐national differences in organizational flexibility.     

INVESTIGATING ALTERNATIVE APPROACHES TO HARMONISE MULTI-REGIONAL INPUT–OUTPUT DATA

Over recent years a small number of global multi-regional input–output (MRIO) databases were developed to describe the entire global economy at high sector detail. We investigate the differences that arise out of applying different construction procedures for two global MRIO databases: The EXIOBASE database, developed as part of the EU FP6 & 7 programs and the Eora database developed at the University of Sydney. The procedures used in EXIOBASE involve a high degree of interrogation and adjustment throughout the construction of the data set, whilst the Eora MRIO relies on single-step mathematical programming techniques and high-performance computing. We unravel the effect of the different approaches taken to develop the databases by undertaking a number of combinatorial experiments in which we exchange parts of the construction process between the EXIOBASE and Eora build pipelines. We conclude that Eora's highly automated data reconciliation approach produces MRIO databases that are of comparable quality to those constructed with EXIOBASE's multi-step approach. However, the reliability and robustness of the resulting MRIO database largely depend on the level of detail and reliability of the underlying raw data.     

Modeling Farm Households' Price Responses in the Presence of Transaction Costs and Heterogeneity in Labor Markets

We develop a farm household model to analyze price responses of farm households. This model incorporates various types of transaction costs as well as labor heterogeneity. Nonproportional variable transaction costs or labor heterogeneity imply that production and consumption decisions become nonseparable, even when the household buys or sells labor. An empirical model is estimated using data from Midwest Poland. The results show that nonproportional variable transaction costs and labor heterogeneity significantly influence household behavior. Not all price elasticities, however, change significantly if these are neglected.     

Epilogue: Popperian Perspectives on Transaction Cost Economics and Future Directions of Empirical Research

The 2009 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel Prize to Oliver Williamson was not a surprise to scholars in business research. Transaction cost economics (TCE) has been among the most important streams of empirical investigation in business research during the last four decades. TCE has formed, developed and changed business research across disciplines during this era. Williamson, (1999:1092) himself noted that “I have no hesitation, however, in declaring that transaction cost economics is an empirical success story.” The Nobel Prize is a milestone event in business research, and the use of the criterion of falsification in this essay provides a compass to navigate future efforts. We present potential avenues of TCE research based on a Popperian lens focused on research discussed throughout this milestone issue of the Journal of Retailing.