Luxury products for the circular economy? A case study of Bang & Olufsen

This paper examines whether luxury products can support a circular economy. This is done through a literature review of luxury products and the links to circular economy, as well as a case study of Bang & Olufsen (B&O). The literature review revealed links between some of the core characteristics of luxury products and the circular economy. This included aspects such as the high quality, durability, service schemes, extended warranties, and large aftermarkets. The case study supports the links between the inner circles in the circular economy (maintenance, repair, and reuse) and some of the core characteristics of luxury products. B&O produces products with a long lifespan, has extended warranties, repair and service schemes, spare part availability for 8 years, an aftermarket, and leasing schemes. B&O also does reconditioning of components for its repair loop, conducts dismantling tests, marks plastic parts, and has a negative list that excludes certain hazardous components.     

Small business survival and inheritance: evidence from Germany

This paper investigates whether small businesses face financial constraints that affect their survival. A model of moral hazard is developed in which financial constraints arise endogenously. The model predicts that higher private assets relax financial constraints and have a positive effect on the firm’s probability of survival. The empirical analysis confirms that the entrepreneur has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs who switch from self-employment into wage employment.

Naturgefahrenmodellierung in internen Risikomodellen – Unverzichtbares Rüstzeug für Strategieentscheidungen des Managements der Zukunft

Management requires internal models, which will usually span a period of several years (such as five), for analysing the financial situation of the insurance company and supporting strategic value- and risk-based company management. Catastrophe risks play an important role in risk management as a substantial share of the company’s entire risk capital is committed to natural catastrophes. So the article aims to compare two approaches in modelling storm loss in the context of applicability in strategic management. Concretely modelling deductibles in storm insurance is shown using the mathematical statistical approach. A case study will analyse various strategies and their effects on the insurance company’s single and multi-year risk-return position using example data where risk is dominated by catastrophes in order to give a concrete idea for the use of multi-period internal models in the context of management.     

Der Einsatz interner Modelle beim mehrj?hrigen Enterprise Risk Management

Increasing natural catastrophes, recent dynamics in capital markets, and fundamental changes in regulatory requirements (e.g., Solvency II for European Union member countries) have placed increasing challenges in management of insurance companies. While in the Solvency II framework the time horizon is one year, the strategic risk-return profile of the insurer should be set according to multi-year calculations. The aim of this paper is to introduce a multi-year risk-capital concept. This multi-year approach can help management to answer the following essential question: ??How many future years with extreme catastrophes or adverse capital market developments can the company withstand at a certain confidence level without external capital supply??? In the context of multi-year enterprise risk management a capital allocation method is needed in order (1) to set risk limitations for different segments, for example different lines of business and different years, and (2) to quantify the effect of management strategies on risk-adjusted performance indicators, defined per segment. We define a capital allocation method in the multi-year context and illustrate the use of the multi-year risk-capital concept within a simulation study.     

Information Cascades in the Labor Market

A model of herding behavior in the labor market is presented where employers receive signals with limited precision about the workers types, and can observe previous employers decisions. Both the employer and the worker can influence the signal probabilities. In particular, the employer tries to increase the precision of the signal about the workers type whereas the worker wants to get a good signal, independent of her type. In a two-period model, we derive conditions for an equilibrium in which only down-cascades occur, i.e., the second employer does not hire a worker with a bad history even if he receives a favorable private signal about the workers type, but he follows his own signal if the workers history is good.     

Welche Rolle können Biokraftstoffe im Verkehrssektor spielen?

Biofuels have been the only alternative fuel which has substantially contributed to supplying transport with energy. Biofuels enjoyed broad support, but now they have come under criticism. In order to obtain answers to the question of what role biofuels could play in the future fuel mix, the following aspects are analysed: competing uses of scarce biomass and biofuels; sustainability of biofuels, standards and certification schemes; types and availability of biofuels; potentials for bioenergy and biofuels; and the technical compatibility of biofuels with vehicles. Finally, preconditions and necessary policy measures for the increased deployment of sustainable biofuels are examined.     

Regulierung der EU-Finanzmärkte

In the course of the recent financial, economic and debt crisis significant regulatory efforts have been taken to make financial markets more resilient. Not all of these regulations are effective. For example, it is hard to imagine that the Single Resolution Mechanism (SRM) and the Bank Recovery and Resolution Directive (BRRD) are applicable to the largest of European banks, because the required minimum coverage of losses by shareholders and debtors would most likely trigger a systemic crisis. Furthermore, the many roles of the ECB may lead to severe conflicts of interest. It should be also reconsidered whether the planned Capital Market Union’s focus on the securitisation of loans and the promotion of direct investments by savers in the capital market makes sense.     

How to communicate sustainable tourism products to customers: results from a choice experiment

This multiphase and empirical study explores the best communication style for reaching different international tourism markets and provides an understanding of how purchase decisions could be better influenced in travel brochures. A pre-test experiment evaluated the perceived emotionality and rationality of communication elements in a fictional travel brochure designed for a typical beach holiday but managed according to sustainability principles. In phase two, a choice experiment was conducted to test how Swiss, German, British and US travellers could be influenced by varying visual and textual communication elements in the fictional brochure (based on Mexico for US respondents and Menorca for all others). The choice experiment produced 3006 responses from an online survey in the four countries. Results confirm a general preference for emotionally laden communication styles for sustainable tourism products, while respondents were indifferent to the emotionality of standard product feature communications. Respondents did not show a preference for the inclusion of a graph explaining the product's sustainability attributes.     

Virtuous circle: Human capital and human resource management in social enterprises

The majority of the extant research on human resource management (HRM) draws conclusions based on evidence from for-profit organizations. In response to calls for the exploration of HRM in different contexts, this study focuses on understanding HRM in the context of social enterprises. The unique context of social enterprises and their unique workforce raise questions about the direct applicability of frameworks developed from examining HRM in for-profit organizations. The narratives provided by 20 CEOs, HR directors, and managers of social enterprises in the United Kingdom highlight the importance of “ethics of care” as the core of the HRM-related decisions in the “third sector.” In addition, we identify five distinct workforce categories and propose a typology of differentiated HRM systems that enable social enterprises to achieve their dual mission. Finally, we propose a “virtuous circle” model, highlighting “ethics of care” as the main driver for organizational outcomes, using differentiated HRM systems that better serve their needs.     

The impact of the financial system’s structure on firms’ financial constraints

We estimate firms’ cash flow sensitivity of cash to empirically test how the financial system’s structure and level of development influence their financial constraints. For this purpose we merge Almeida et al.’s work, a path-breaking design for evaluating a firm’s financial constraints, with that of Levine, who paved the way for comparative analysis of financial systems around the world. We conjecture that a country’s financial system, both in terms of its structure and its level of development, should influence the cash flow sensitivity of cash of constrained firms but leave unconstrained firms unaffected. We test our hypothesis with a large international sample of 30,000 firm-years from 1989 to 2006. Our findings reveal that both the structure of the financial system and its level of development matter. Bank-based financial systems provide constrained firms with easier access to external financing.