Flexibility at different stages in the life cycle of projects: An empirical illustration of the “freedom to maneuver”

Many textbooks on project management present illustrations concerning the relative size of project attributes during different project phases. The derived models all have attributes in common, such as uncertainty, significance of decisions, and degree of freedom to maneuver, that are typically high in the beginning of the project and low in the end. At the same time, variables such as the accumulated cost and available information begin at low levels and end up at a high level at the end of the project. Based on empirical data from projects, this paper illustrates and quantifies one of these attributes, the freedom to maneuver, in different project phases.     

Environmental Innovations in Small and Medium Sized Enterprises

Supporting and accelerating the adoption and diffusion of environmental innovations amongst small and medium sized enterprises (SMEs) is a major challenge to environmental policy makers. Research suggests that whilst SMEs possess high flexibility, their innovative capacity may be limited to incremental changes within their existing technology system and network. Twenty case studies examining the innovation adoption process in SMEs in four sectors and in five countries within the ENVIS project (commissioned by the EU) revealed great variety in factors driving this process. Findings indicate that this variation can be attributed to the character of the environmental innovation, the specific business opportunity, the regulatory setting and pressure experienced by the sector. Based on these findings an analytical framework is suggested, whereby the environmental innovative capability of SMEs is conceived as the result of an interplay between the competencies, the network relations and the strategic orientation of the company (the 'dynamic triangle'). This indicates that policy to support SME's adoption of environmental innovations has to take an integrated form, i.e. addressing and developing competence, networks and strategic orientation of SMEs simultaneously whilst remaining systemic and context sensitive.     

Chance Constrained Programming Formulations for Stochastic Characterizations of Efficiency and Dominance in DEA

Pareto-Koopmans efficiency in Data Envelopment Analysis (DEA) is extended to stochastic inputs and outputs via probabilistic input-output vector comparisons in a given empirical production (possibility) set. In contrast to other approaches which have used Chance Constrained Programming formulations in DEA, the emphasis here is on joint chance constraints. An assumption of arbitrary but known probability distributions leads to the P-Model of chance constrained programming. A necessary condition for a DMU to be stochastically efficient and a sufficient condition for a DMU to be non-stochastically efficient are provided. Deterministic equivalents using the zero order decision rules of chance constrained programming and multivariate normal distributions take the form of an extended version of the additive model of DEA. Contacts are also maintained with all of the other presently available deterministic DEA models in the form of easily identified extensions which can be used to formalize the treatment of efficiency when stochastic elements are present.     

Economic and Household Impacts of Projected Policy Changes for the Irish Agri‐food Sector

The policy environment for the Irish agri‐food sector could change rapidly in the coming decade. A potentially positive factor will be the elimination of milk quotas in 2015, although a potentially negative factor will be further trade liberalisation and increased import competition. These changes come on top of the move to decouple direct aids to farmers in 2005 as part of the Mid‐Term Review of the EU's Common Agricultural Policy agreed in 2003. This paper examines these reforms and their impacts on the Irish economy and income distribution using a CGE model particularly rich in detail on the agri‐food sectors, differentiated household groups, and agricultural policy instruments including their links to productive factors and households. The results suggest that the past and projected changes in the policy environment have, in sum, a small positive impact on GDP and household income. However, the gains and losses are unequally distributed across sectors and household groups due to the highly differentiated distribution of support and protection. Although all households generally gain from the sequence of policy reforms in the long run, some experience strong adverse effects from particular reforms and in the medium term.     

Entrepreneurial innovativeness and growth ambitions in thick vs. thin regional innovation systems

Research in economic geography has paid increasing attention to regional innovation systems (RISs) as a potential vehicle for growth and development. Yet despite an increasing amount of research studying RISs in particular and economic regions in general, we have limited knowledge about their influence on entrepreneurs and entrepreneurship. We respond to this knowledge gap and study if entrepreneurs’ localization in thick vs. thin RISs affects their innovativeness and growth ambitions. Thick RISs are predominately urbanized spaces that include organizations of higher-level education, R&D intensive milieus, and an ample industry sector, while thin RISs to a lesser degree encompass these features. Empirically, we analyse 870–917 entrepreneurial firms in Agder of Southern Norway. Based on trade and labour markets, as defined by the EU’s classification of local administrative units (LAU1), we identify two thick and six thin RISs in Agder. Econometric analyses show that entrepreneurs located in thick RISs are more innovative than entrepreneurs located in thin RISs, but there are no significant differences concerning entrepreneurs’ growth ambitions. In light of our findings, we discuss the potential agency role played by entrepreneurial firms at a micro level on path dependent features of RISs at a macro level.     

The Political Economy of Policy Vacuums: The European Commission on Demographic Change

ABSTRACT

Supranational organisations can only confront politico-economic issues that are recognised as important. Typically, issues gain recognition either when they provide an external shock to the system, shaking political actors into action, or when they are framed as important in policy networks concerned with developing the appropriate scientific approach. Ideally political and scientific actors align in creating pressures to recognise the issue as salient and to mobilise organisational responses. Issues differ in their capacity to be driven by both political and scientific pressures, creating crisis management, technocratic, and reform agenda outcomes. Here we explore a further variation, where pressures around an issue are insufficient, creating a policy vacuum. We examine one such policy vacuum in Europe: demographic change. This issue belongs to no particular Directorate-General in the European Commission, but is subject to policy frames from DG EMPL and DG ECFIN. Without sufficient political and scientific pressures, no particular policy position is occupied and advocated despite recognition of the issue’s importance. We discuss the role of policy vacuums and the need for their identification in political economy research.     

Trust relations in management of change

Trust is essential for the success of change, but transformational change challenges trust. This paper analyses how trust dynamics develop over time in two Danish manufacturing firms affected by major change programmes. The results show that change creates uncertainty among employees, thereby provoking intense scrutiny of management intentions and a tendency to make interpretations that exaggerate management intentions—with the end result of reduced trust. Management then react similarly with negative interpretations of employee reactions, creating a vicious cycle of reduced trust. The paper proposes a model for how change and trust interact and suggests a managerial strategy for trust repair: Strong management actions that symbolise integrity, competence and benevolence may counteract reduced trust, but if low trust turns into distrust, the result may be a deadlock that both parties find difficult to break.     

Individual Large Shareholders,Earnings Management,and Capital‐Market Consequences

Using a large hand‐collected sample of all blockholders (ownership ≥ 5%) of S&P 1500 firms for the years 2002–2009, we first document significant individual blockholder effects on earnings management (accrual‐based earnings management, real earnings management, and restatements). This association is driven primarily by these large shareholders influencing rather than selecting firms’ financial reporting practices. Second, the market's reaction to earnings announcements suggests that investors recognize the heterogeneity in blockholders’ influence on earnings management. The results highlight the highly individualized effects of blockholders and a mechanism through which shareholders impact reported earnings.     

New institutional economics: what does it have to offer?

This article discusses the empirical relevance of what is considered two prinicipal contributions to the new institutional economics–the contributions of A. Schotter and O. Williamson – and draw three general conclusions. First, it is argued, on the basis of a comparison of the above mentioned two contributions to new institutional economics, their empirical relevance cannot be discussed in general but must be based on separate analyses of the two contributions and will depend on the institutions which are analysed. Secondly, that it is especially within analyses of consequence and design of institutions that the Williamson-approach to new institutional economics presently has something to offer while there seems to be rather limited possibilities for application of the approach of Schotter. Thirdly, that in their future development, the two contributions can probably both mutually benefit each other and benefit from an integration of elements from other institutional theories.     

Probabilistic Bounds on the Virtual Multipliers in Data Envelopment Analysis: Polyhedral Cone Constraints

The paper is concerned with the incorporation of polyhedral cone constraints on the virtual multipliers in DEA. The incorporation of probabilistic bounds on the virtual multipliers based upon a stochastic benchmark vector is demonstrated. The suggested approach involves a stochastic (chance constrained) programming model with multipliers constrained to the cone spanned by confidence intervals for the components of the stochastic benchmark vector at varying probability levels. Consider a polyhedral assurance region based upon bounded pairwise ratios between multipliers. It is shown that in general it is never possible to identify a center-vector defined as a vector in the interior of the cone with identical angles to all extreme rays spanning the cone. Smooth cones are suggested if an asymmetric variation in the set of feasible relative prices is to be avoided.