Customer equity: a creative tool for SMEs in the services industry

The creative use of “Customer Equity” (CE) can be of interest to SMEs in the services industry.CE concerns:

• “Customer Acquisition”: Which customer or prospect should be acquired for present profit and future retention?
• “Customer Retention”: How can customers be made customers for life?
• “Add-on Selling”: Why selling more to existing customers is more profitable than the quest for new business.

The SME can furthermore apply two boosters to its CE policy:

• “Strategic Alliances”: When interdependence is smarter than independence.
• “External Economy of Scale”: Competition: if you cannot beat them, join them.

     

Commentary: Relative Presence of Business-to-Business Research in the Marketing Literature: Review and Future Directions

In this commentary we reaffirm the position taken by LaPlaca and Katrichis (2009 LaPlaca, P. J. and Katrichis, J. M. 2009. Relative presence of business-to-business research in the marketing literature. Journal of Business-to-Business Marketing, 16(1–2) [Google Scholar]) that there is an underrepresentation of business marketing research in the marketing literature. Our comments highlight the sector size of business marketing in the economy, document the degree of difference on the inherent nature of business versus consumer marketing, compare the relative representation of business versus consumer emphasis in the marketing literature with other subfields, and close by suggesting means for enhancing business marketing research.     

Action Research As an Ethics Praxis Method

Action research is combined research and practical action where the researcher joins with and acts with practitioners to help improve practice and theory building. Action research can be a form of Aristotelian critical, ethical praxis that developmentally changes the action researcher and the external world. Bernstein’s (Praxis and action, 1971) and Eikeland’s (The ways of Aristotle, 2008) interpretations of Aristotelian ethics praxis are considered. The Argyris et al. (Action science: concepts, methods, and skills for research and intervention, 1985) “action-science” and the van de Ven (Engaged scholarship: A guide for organizational and research knowledge, 2007) “engaged scholarship” forms of action research with their differently nuanced interpretations of Aristotelian philosophy as foundations for action research are considered and compared as examples of action research as an ethics praxis method with respect to (1) a key similarity with respect to joining of critical ethics and actionable knowledge; (2) another key similarity with respect to action research practice that can developmentally change the action researcher and the external world; and (3) a key difference with respect to academic literature versus practitioner-based theory building is also considered (Nielsen J Bus Ethics 93:401–406, 2010a). Examples in the cases of the political economist and action researcher, Hirschmann’s “Exit,Voice, Loyalty” approach and Greenleaf’s “Servant Leadership” approach to action research as forms of Aristotelian critical, ethical praxis are analyzed.     

Meeting the Needs of Global Companies Through Improved International Business Curriculum

The global workplace requires specific knowledge, skills, and abilities on the part of workers. There is a growing body of research indicating a gap between the global industry demand for skills and the higher education system's ability to supply that demand. Leveraging the work from Yu, Guan, Yang, and Chiao (2005 Yu, C. J., Guan, J., Yang, K. and Chiao, Y. 2005. Developing the skills for international business management: The implications of the Management Education Opportunity Grid. Journal of Teaching in International Business, 16(4): 5–26. [Taylor &; Francis Online] , [Google Scholar]) and Prestwich and Ho-Kim (2007 Prestwich, R. and Ho-Kim, T. 2007. Knowledge, skills and abilities of international business majors: What we teach them versus what companies need to know. Journal of Teaching in International Business, 19(1): 29–55. [Taylor &; Francis Online] , [Google Scholar]), this study investigated this gap. The sample included global leaders of Fortune 500 companies. Exploratory in nature, the primary purpose of this study was to understand the needs of global business organizations that form the hiring market for international business graduates. The findings highlight the gap between the topics being taught by educators and the skills actually needed by the target international businesses. This information is relevant to the challenges facing global businesses as well as higher education institutions and provides insights into improvements for the good of both industries and especially the students aiming for careers in global organizations.     

Environment,corporate entrepreneurship,and financial performance: A taxonomic approach

This study examined the association between a firm's external environment, corporate entrepreneurship, and financial performance. The study emphasized three propositions: (1) perceived—rather than objective-characteristics of the environment significantly influenced entrepreneurship activities; (2) a multidimensional definition of a firm's environment was essential to unravel the interplay between the environment, orporate entrepreneurship activities, and financial performance; and (3) a taxonomic approach had the advantage of accounting for the interrelationships among the dimensions of the environment in classifying firms.Using data from 102 companies in six4-digit industrial classification codes (SIC),cluster analysis was used to distinguish four environmental settings: “dynamic growth,” “hostile and rivalrous but technologically rich,” “hospitable, product-driven growth,” and “static and impoverished” environments. These four environments varied in their characteristics.The four empirically derived environment clusters were then used to examine variations in corporate entrepreneurship—operationalized as corporate innovation and venturing, and corporate renewal activities. The first dimension—corporate innovation and venturing—had four components: new business creation, new product introduction, percent of revenue from new products, and technological entrepreneurship. The renewal dimension had three components: mission reformulation, reorganization, and system-wide change. The data were used to test six hypotheses:

• 1.H1: In dynamic or growth environments, companies will emphasize new business creation and innovation.
• 2.H2: Environmental hostility is positively associated with the redefinition of business through venturing activities.
• 3.H3: Hospitable business environments are positively associated with business venturing and renewal activities.
• 4.H4: Static environments are inversely associated with corporate venturing and renewal activities.
• 5.H5: Corporate entrepreneurship activities are positively associated with company financial performance.
• 6.H6: Corporate entrepreneurship activities emphasised in HI through H4 will be significantly and positively associated with company financial performance in their respective environmental clusters.

The results provided general support for the six hypotheses. They showed that: (1) each environmental cluster had a distinct combination of activities relating to corporate innovation and venturing, and renewal; (2) corporate entrepreneurship activities varied in their associations with measures of company growth and profitability; and (3) the associations between corporate entrepreneurship and company financial performance varied among the four environment clusters. The results from this study can help executives in selecting specific entrepreneurial activities that match the demands of success in their business environment to improve their company's performance.     

Prices of high-tech products,mismeasurement, and the pace of innovation

Introduction

Two recent papers have made compelling cases that mismeasurement of prices of high-tech products cannot explain the slow pace of labor productivity growth that has prevailed since the mid-2000s. Does that result indicate that mismeasurement of high-tech products has limited implications for patterns of economic growth? The answer in this paper is “no.”.

Results

We demonstrate that the understatement of price declines for high-tech products in official measures has a dramatic effect on the pattern of multifactor productivity (MFP) growth across sectors. In particular, we show that correcting this mismeasurement implies faster MFP growth in high-tech sectors and slower MFP advance outside the high-tech sector. If MFP growth is taken as a rough proxy for the pace of innovation, our results suggest that innovation in the tech sector has been more rapid than the rate that would be inferred from official statistics (and less rapid outside high-tech).

Conclusion

These results deepen the productivity puzzle. If the pace of innovation in high-tech sectors has been more rapid than indicated by official statistics, then it is perhaps even more puzzling that overall labor productivity growth has been so sluggish in recent years.

     

Strategy constraints of Polish foreign-trade organizations

This paper presents reflections on the survey of the general managers of Polish foreign-trade organizations (FTOs). The study focuses on business deals with Western partners and the associated problems. The relative inefficiency of Polish FTOs is due to:

• 1.1. Poor working relations between the FTOs and the Polish manufacturing sector;
• 2.2. Inadequate knowledge of modern marketing techniques;
• 3.3. The lack of clear-cut strategies regarding how to develop foreign markets; and
• 4.4. Rigidity of national planning and management systems in Poland.

As far as organizational solutions to correct the deficiencies are concerned, the experience of foreign branches of FTOs and the modifications of their cooperative links with the Polish manufacturing sector appear to be the most promising.     

Commentary: Relative Presence of Business-to-Business Research in Retailing Literature

Our objective in this article is to correct the record on the contribution of the Journal of Retailing to business-to-business (B2B) research in marketing. In particular, we refute the assertion of LaPlaca and Katrichis (2009 LaPlaca, P. J. and Katrichis, J. M. 2009. Relative presence of business-to-business research in the marketing literature. Journal of Business-to-Business Marketing.,  [Google Scholar]) that the Journal of Retailing “does not regularly publish research concerning business-to-business marketing.” Our analysis of recently published (2002–2008) articles in the Journal of Retailing shows that less than 19% are devoted to B2C or C2C topics. Our comparison of the Journal of Retailing's relative emphasis on nine B2B content areas indicates parity with other marketing journals for some topics and a lesser emphasis for others. The key B2B topics of marketing strategy and channels of distribution appear relatively more frequently in the Journal of Retailing than they do in other marketing journals reviewed by LaPlaca and Katrichis (2009 LaPlaca, P. J. and Katrichis, J. M. 2009. Relative presence of business-to-business research in the marketing literature. Journal of Business-to-Business Marketing.,  [Google Scholar]). Hence, any estimate of the contribution of B2B research to marketing knowledge that dismisses the impact of the Journal of Retailing contains a downward bias.     

Orientation Toward International Business Relations and the Influence of Values of Middle Eastern Business Elite

This research maps out a framework for the application of the value structure of Jordanian business elites, relying on Schwartz's (1992 Schwartz, S. H. 1992. “Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries”. In Advances in experimental social psychology, Edited by: Zanna, M. Vol. 25, 1–65. New York, NY: Academic Press. [Crossref] , [Google Scholar]) theory of the contents and structure of values. The results suggest that Jordanian managers attribute the highest importance to achievement and security values and the lowest importance to tradition and hedonism. Moreover, the study explores the relationship between different value types and the willingness of Jordanian decision makers to conduct business with individuals from other countries. Finally, the sample suggests differences in values related to willingness for business collaboration among various countries, as a function of perceived cultural context.     

Small Business–Bank Relationships and the Role of Internet Banking

In the aftermath of the Cruickshank Report (2000) Cruickshank, D. 2000. “Competition in UK banking (A Report to the Chancellor of the Exchequer)”. London: The Stationery Office.  [Google Scholar] and the Competition Commission's investigation (2002) Competition Commission Report. 2002. “The supply of banking services to SMEs”. HM Treasury, available at http://www.hm-treasury.gov.uk (accessed 2 December 2002) [Google Scholar] into SME–bank relationships, this paper examines the current state of the small business–bank relationship and ascertains whether the Internet could be used to improve the quality of the relationship. It utilises a qualitative research method, which consisted of 24 interviews with small business owners and relationship managers in banks. The interviews, inter alia, address the following main research questions: what are the needs and expectations of small business owners from their relationships with banks? What do small businesses think about the overall quality of service provided by banks in the relationship context? What was the delivery preference of small businesses and banks in the relationship? What did small business owners and banks think had been the main effects of e-banking on relationship management. The paper incorporates a discussion of the main findings and makes pragmatic policy and practice recommendations based on the results.     

A Measure for Companies' Customer Portfolio Management

Purpose/Contribution: Customer portfolio management (CPM) is one of the key areas of customer-relationship and network management in business markets. However, there is scant research about the implementation of this concept in business. This article contributes to this conceptually rich but empirically nascent field of CPM research by (1) conceptualizing customer portfolio management, (2) forming a measure for it, (3) validating the suggested measure, and (4) suggesting implications for future research and management.

Methodology: A CPM construct is proposed based on the synthesizing of the theory and the findings from a qualitative field study of companies' management practices. The suggested construct is formative and consists of the following four dimensions: analysis efforts, analysis design, responsiveness efforts, and responsiveness design. Hence, this conceptualization takes into account both the strength and style of companies' CPM practices. The measure is validated following Diamantopoulos and Winklhofer's (2001) Diamantopoulos, A. and Winklhofer, H. 2001. Index construction with formative indicators: An alternative to scale development. Journal of Marketing Research, 38(2): 269–277. [Crossref], [Web of Science ®] , [Google Scholar] guidelines for developing formative measures. Together with the content validity established in the conceptual phase of the research, the results from a cross-industry survey of 212 companies give support to the construct validity of the suggested CPM measure. Partial least squares modeling is applied in validating the measure.

Implications: This study gives an extensive, up-to-date review of customer portfolio management and provides measures for future research on companies' CPM practices and performance. Further, the theory and the field study highlighted several central topics that should be addressed in future CPM studies. The resulting managerial implications derive from the discussion on the key aspects of developing CPM practices in business.     

Ethical Outcomes and Business Ethics: Toward Improving Business Ethics Education

Unethical conduct has reached crisis proportions in business (Walker et al., Wall Str J East Edn, 258(37):A1–A10, 2011) and on today’s college campuses (Burke et al., CPA J, 77(5):58–65, 2007). Despite the evidence that suggests that more than half of business students admit to dishonest practices (McCabe et al. 2006), only about 5 % of business school deans surveyed believe that dishonesty is a problem at their schools (Brown et al., Coll Stud J A, 44(2):299–308, 2010). In addition, the AACSB which establishes standards for accredited business schools has resisted the urging of deans and business experts to require business schools to teach an ethics class, and fewer than one-third of businesses schools now teach a business ethics course at the graduate or undergraduate levels (Swanson and Fisher, Advancing Business Ethics Education, 2008). In this paper we briefly introduce the status of business ethics education and report the results of a survey of business students, deans of the top business schools, and business ethics subject matter experts about ten ethical outcomes. We then offer five specific recommendations to encourage business ethics faculty and decision makers to improve the teaching of business ethics.     

Business Cases and Corporate Engagement with Sustainability: Differentiating Ethical Motivations

This paper explores links between different ethical motivations and kinds of corporate social responsibility (CSR) activities to distinguish between different types of business cases with regard to sustainability. The design of CSR and corporate sustainability can be based on different ethical foundations and motivations. This paper draws on the framework of Roberts (Organization 10:249–265, 2003) which distinguishes four different ethical management versions of CSR. The first two ethical motivations are driven either by a reactionary concern for the short-term financial interests of the business, or reputational, driven by a narcissistic concern to protect the firm’s image. The third responsible motivation works from the inside-out and seeks to embed social and environmental concerns within the firm’s performance management systems, and the fourth, a collaborative motivation, works to bring the outside in and seeks to go beyond the boundaries of the firm to create a dialogue with those who are vulnerable to the unintended consequences of corporate conduct. Management activities based on these different ethical motivations to CSR and sustainability result in different operational activities for corporations working towards sustainability and thus have very different effects on how the company’s economic performance is influenced. Assuming that corporate managers are concerned about creating business cases for their companies to survive and prosper in the long term, this paper raises the question of how different ethical motivations for designing CSR and corporate sustainability relate to the creation of different business cases. The paper concludes by distinguishing four different kinds of business cases with regard to sustainability: reactionary and reputational business cases of sustainability, and responsible and collaborative business cases for sustainability.