Time-Based Management of the New Product Development Process

This study explored the problem of compressing new product development by focusing on the specific phases of the innovation process. These phases manifest significant qualitative differences that require attention for understanding the complexities of accelerating new product development. Based on data from 35 high-technology companies, Necmi Karagozoglu and Warren Brown identified several different acceleration methods. Results revealed unexpected and at times inconsistent insights than those reflected in the case study and anecdotally based literature, and implied also that some of the well documented approaches to successful new product development need to be replaced with their time-based versions.     

Pricing Eurodollar futures options using the BDT term structure model: The effect of yield curve smoothing

This article focuses on pricing Eurodollar futures options using the single‐factor Black, Derman, and Toy (1990) term structure model with particular emphasis on yield curve smoothing. Of the various approaches, the maximum smoothness forward rate approach developed by Adams and van Deventer (1994), cubic yield spline, and linear interpolation are used to produce finely spaced binomial trees. We compare the pricing accuracy associated with the use of yield curve smoothing techniques within the BDT framework. The findings provide the first supporting evidence that using a forward rate curve with maximum smoothness together with a time‐varying volatility structure improves best the performance of the BDT model. The empirical results are found to be robust across factors affecting the option price such as time‐to‐expiration, moneyness, and trading volume. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20:293–306, 2000     

The Split of the S&P 500 Futures Contract: Effects on Liquidity and Market Dynamics

The Chicago Mercantile Exchange reduced the size of its S&P 500 futures contract when it reduced the multiplier from 500 to 250 and increased the minimum tick from 0.05 to 0.10 on November 3, 1997. This is a rare major change in a very successful contract's specifications. We analyze effects of this change on liquidity and market dynamics in both a univariate and a multivariate context. The main contribution of this study is the use of multiple intervention analysis with various dynamic response functions to examine the effects of the split while taking into account several other major market events surrounding it. A multivariate analysis is also used to test the impact of the split using a structural model of liquidity and market dynamics. Empirical findings offer limited support for the hypotheses that smaller contract size resulted in smoother trading, and that more public customers trade the S&P 500 futures contract following its split. We observe a reduction in the average transaction size as well as a temporary narrowing of the bid-ask spreads, but no significant change in volatility that can be attributed to the split. We do not find any significant and lasting impact on other liquidity and market variables.     

Changing the Size of a Futures Contract: Liquidity and Microstructure Effects

We analyze the relation between contract size and liquidity using data from the respecification of Sydney Future Exchange's (SFE) Share Price Index (SPI) and 90-day Bank Accepted Bill (BAB) futures contracts. Respecification of SPI and BAB contracts presents a unique opportunity to investigate the effects of a change in futures contract size. SFE decreased the size of SPI futures by a factor of four while increasing its minimum tick. The BAB contract was doubled in size with the minimum tick size left unchanged. We find, after controlling for market factors, that the respecification of the SPI futures resulted in higher trading volume, while that of BAB futures decreased trading volume. The results regarding spreads are ambiguous. Based on two cases investigated, we conclude that decreasing the futures contract size was effective in terms of enhancing liquidity while increasing the size resulted in a reduction in liquidity.     

Why and how do founding entrepreneurs bond with their ventures? Neural correlates of entrepreneurial and parental bonding

This paper investigates why and how founding entrepreneurs bond with their ventures. We develop and test theory about the nature of bonding in a functional magnetic resonance imaging (fMRI) study of 42 subjects (21 entrepreneurs and 21 parents). We find that entrepreneurs and parents show similar signs of affective bonding, that self-confidence plays a role in bonding style, and that the degree to which entrepreneurs include their ventures in the self and to which parents include their child in the self influences their ability to make critical assessments. Our findings suggest that bonding is similar for entrepreneurs and parents and that venture stimuli influence reward systems, self-regulatory functions, and mental factors that are associated with judgment.     

Explicit versus Implicit Contracts: The Case of DIFF and CROSS Futures

This paper investigates the potential success of an explicit futures contract when an implicit one, which can duplicate it, exists. It is hypothesized that the success of the explicit futures contract depends on its value added being greater than that of its implicit counterpart given that sufficient hedging demand exists for it. Following a discussion of value added analysis, hedging effectiveness of the Euro-rate Differential (DIFF), the Currency Cross-rate (CROSS) futures contracts, and their implicit counterparts are calculated and tests of relative hedging effectiveness of these contracts are performed. Test results support the hypothesis of the paper and their implications for new futures contract development are discussed.     

Corporate environmental behaviour – a comparison between Nordic and US firms

The green challenge will be one of the key strategic issues facing businesses in the coming decades. Some argue that it is important for mankind as a whole. In this article the opinions of Nordic and US managers on environmental matters are investigated and compared. A questionnaire was sent to senior managers mainly in four industries: forest and paper, electronics, telecommunications and the printing industry. The results show that US managers perceive government laws and actions to be more stringent than Nordic managers do and the time to adapt was felt to be too short. There were no differences between the two regions in the degree of pro‐activeness and environmental innovation. However US managers reported a shortage of skilled labour. Managers both in the Nordic countries and the USA considered themselves to be ahead of their competitors in environmental actions. Nordic managers were much more positive toward the competitive effects and profitability of environmental measures than their US counterparts. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment     

Adaptive Responses by Conservative and Entrepreneurial Firms

Over time, most corporate managements face the necessity of adapting their organizations to new environments. The style of such adaptation depends both on the original strategy of the company and its new objectives and environment. Necmi Karagozoglu and Warren Brown report the results of research which explores the changes in the organization's rate of innovation in response to environmental shifts. The changes in the innovative behavior of conservative firms (which emphasize stability, standardized products and cost-minimization strategies) are contrasted with that of entrepreneurial firms (which emphasize flexibility, rapid product change and state-of-the-art product features). Organizational competence and management's willingness to change are some of the key independent variables used in the project. The data are from a study of 56 manufacturing companies representing 26 industries.