Real Options Analysis for “Green Trading”: The Case of Greenhouse Gases

To address the issue of reducing emissions of greenhouse gases, organizations are involved with emergent markets for trading emission permits. Investment in equipment that reduces emissions may generate emission credits for sale in the market. This article applies real options analysis to actual case study information from British Petroleum-Amoco of a particular project that would generate emissions credits. We conclude that unless permits have a faster price rise than is generally anticipated, certain projects are not economically feasible. The policy implication is that planners may need to set more stringent regulations to bring about their desired result. Additionally, real options analysis in this market based regulatory policy is an especially important tool for the energy industry, which is disproportionately impacted by greenhouse gases policies.     

The Evolution of “Competition”: Lessons for 21st Century Telecommunications Policy

For over a century, assessments of competition or the lack thereof have been central to how public policy treats the telecommunications industry. This centrality continues today. Yet, numerous foundational questions about this concept persist. In this paper, we chronicle how the definition of “competition” has evolved in economics and has been applied in the communications arena. The academic literature on competition hits an important inflection point in the mid-20th century with the development of “workable competition”: a term that is equated to “effective competition.” We find that while the concept of “effective competition” is central to policy formation at the FCC, the Commission’s own applications of “effective competition” are inconsistent. Given the centrality of this concept, and its inconsistent applications to date, we draw upon the seminal contributions to the development of the notion of “effective competition” to offer a modern definition suitable for application in 21st century communications markets.     

“Excellent” systems analysis: The Singapore context

Within the broad context of Singapore's IT2000 Project, an exploratory research project was conducted as part of an on-going program to identify the perceptions of what constitutes the qualities of an excellent systems analyst. A grounded theory approach (theory building) was adopted using Kelly's RepGrid technique to conduct interviews with stakeholders in the systems analyst's performance in a large organization based in Singapore. In reviewing the constructs which emerged from the stakeholder interviews, 12 universal Themes were identified, such as Attitude, Knowledge, Communicate, including a number of sub-Themes. Each stakeholder group had its own interpretation of the relative importance of each Theme. These results have implications for the selection, training and development of systems analysts. Suggestions are made for further research to compare the cross-cultural perceptions of excellent systems analysts, as well as the testing of specific hypotheses derived from the results of this research project.Dr M. Gordon Hunter is with the Faculty of Management, The University of Lethbridge, 4401 University Drive, Lethbridge, Alberta, T1K 3M4 CANADA, tel: (403) 329-2672; fax: (403) 329-2038; e-mail: HUNTMG@CETUS.MNGT.ULETH.CA. Dr John Beck is with the Division of Human Resource and Quality Management, School of Accountancy and Business, Nanyang Technological University, Nanyang Avenue, Singapore 2263.     

“Vertical coopetition”: The key account perspective

Why do key accounts combine opposing types of relationship with their suppliers? The author has chosen to term this new hybrid form of supplier relationship management, which combines cooperation and price-competitive transactions and reflects the tension between value creation and value appropriation, “vertical coopetition.” She investigates the use of this concept in the context of an in-depth qualitative study, involving, firstly, an exploratory field study and, secondly, four case studies involving leading industrial MNCs. The results indicate that “vertical coopetition” occurs in two forms: when the price-competitive approach is predominant but some cooperation features are still to be found; and when cooperation is predominant, but appeals to competition are still made. Mutually opposed aspects of each form are linked and explained by three pivotal mechanisms, which the author calls, “strengthening”, “correction” and “commuting”. Finally, the study reveals that, increasingly, the key account's brands or Business Unit value¹ are explanatory forces of “vertical coopetition”.     

“Data localization”: The internet in the balance

There is a steady global trend towards “Data Localization,” laws by which data is required to be maintained and processed within the geographic boundaries of its state of origin. This development has raised concerns about its possible adverse impacts on emerging data-intensive technologies such as Cloud services/E-commerce, Big Data, Artificial Intelligence and the Internet of Things (collectively, the Embedded Infosphere). The inability to reach an international agreement on rules for cross-border data flows may have significant adverse consequences for all future users of the Internet.The basis of Data Localization is grounded in two distinct but inter-related policy models: Data Sovereignty and Trans-Border Data Flows. These two concepts have different origins. “Data Sovereignty” is derived from the historic power of a state of absolute and exclusive control within its geographic borders. Policies behind TBDFs arose in Europe following World War II, primarily motivated by Nazi use of early proto-computers to help round up Jews and others. As they have evolved, TBDF policies have been directed primarily at protecting personal data and privacy.This article first examines the issues of: 1) “Information Sovereignty” and 2) TBDFs. It then describes the arguments for and against “Data Localization,” offers some examples of strong localization policies (Russia, China), and summarizes contesting policy proposals. It then contextualizes TBDF with issues of human rights (free flow of information) and privacy.While the utility of an international agreement on TBDFs is clear, the differences in approaches are tenacious. For the free-market developed world (e.g, EU, OECD), the path forward seems to lead through policy convergence to compatible rules, with differentiated levels of data protection and accountability. It is far from clear whether these rules will address, in a mandatory way, issues of the “free flow” of information in the human rights sense. At the same time, there are countries (e.g., BRICS), representing a majority of the world's population, in which political and cultural resistance will produce stringent Cyber Sovereignty and Data Localization policies with few if any human rights components.The article concludes that the more the Internet is “localized”, the more attenuated its benefits will become. The negative consequences of Data Localization will become increasingly obvious as new, data-intensive technologies become ubiquitous, creating a condition of “Data Dependence”. It is projected that in the future the nations with the least amount of Data Localization and the most open flow of information will be the most successful in benefiting from new data-intensive embedded, networked technologies. This will most likely be characterized by values adopted as policies and practices in the EU.     

Transcending Paradox: The Chinese “Middle Way” Perspective

Western thought is noted for its strengths in categorization and analysis; Eastern, or Chinese thought, is noted for its integrative and encompassing nature. This article seeks to bridge the two. Specifically, it aims to enrich Western thinking and the existing body of paradox literature by proposing the idea of paradoxical integration, a concept derived from the Chinese middle way philosophy. Paradoxical integration, the notion that two opposites (such as self and other) may be interdependent in nature and together constitute a totality (integration), is introduced as one means of transcending paradox and the conventional Western conceptualization of exclusive opposites. It suggests how we can apply the concept of interdependent opposites in a both/and framework to foster reconciliation of the apparent polarities of such dichotomies as competition and cooperation. The article concludes with a discussion of the broad implications of the concept of paradoxical integration upon both academic research and business practice.An erratum to this article can be found at     

Flexible spectrum management for mobile broadband services: How does it vary across advanced and emerging markets?

Demand for wireless data and Internet services are expected to grow exponentially, both in advanced and emerging markets in the near future. While advanced countries have often used centralized planning and coordination methodology to forecast and allocate the associated spectrum blocks to wireless operators for meeting the demand, it is often ad-hoc in emerging markets dictated by market forces. In this paper, Finland and India are taken to represent advanced and emerging markets, respectively. Different policy options and the policy environment in these two countries for spectrum management are explored. A causal model is constructed to represent the different variables that affect spectrum management practices and possible paths forward in these two extreme cases are highlighted. Using the causal model structure, it is hypothesized that (i) the matured markets such as Finland that practice centralized and harmonized spectrum planning are likely to continue their ex-ante policies and opt for the release of digital dividend spectrum and use of spectrally efficient technologies; (ii) the emerging market in India that is characterized by a market oriented ex-poste regulation is a good candidate to introduce secondary markets including flexible opportunistic spectrum access as exemplified by the wide spread adoption of multi-SIM handsets and the practice of national roaming by 3G service providers. Introductions of policies and regulations in these markets to break away from the extant paths are also highlighted.     

Building innovative organizations in China: The “execution+” organization

This paper explores how to build innovative organizations in China. Using grounded inductive theory building with ten case studies of commercial organizations in China’s information and communication technology (ICT) industries, we find that because China is entrenched in the paradigm of execution and its two-tier talent structure lacks a competent pool of middle-level talent, it calls for a new organizational form: “execution+.” The key to building “execution+” organization lies in building a competent middle tier by taking advantage of apprenticeship type of training. Our findings have implications for theories of organization design and organizational learning.     

The Consequences of “Consideration Payments”: Lessons from Radio Payola

The prohibition of radio payola in 1960 gives us an opportunity to examine the effect that “consideration payments” had on the record labels that used them and on overall product variety. Using a historical Billboard chart data, we find that the prohibition of payola reduced musical variety and overall record sales, but may have helped increase access for smaller record labels. These findings support the theory that payola payments, which may impose a non-trivial financial burden on the record label, serve to reduce the radio station’s risk.     

The deterrence effect of Guanxi on opportunism: The moderating effects of “three institutional pillars”

Marketing channel members are subject to opportunism, and guanxi (i.e., interpersonal ties) is a useful mechanism to deter it. This article argues that the effect of guanxi on opportunism depends on the institutional environments in which firms are embedded in. Drawing on institutional theory and guanxi literature, we investigated the effects of the “Three pillars” of institutional environments. Specifically, we examined whether legal effectiveness, Confucianism, and organizational culture incongruence moderate the impact of guanxi on exchange partners' opportunism. We collected survey data from both sales managers and salespersons in 268 manufacturing firms and merged the dataset with secondary data that measure institutional factors. The results show that guanxi deters opportunism more effectively when legal effectiveness is high, where Confucianism is more prominent, and when exchange firms' organizational cultures are more incongruent. This study provides implications for marketing channel members on how to use personal ties under different institutional conditions.     

Editorial board page for “The Engineering Economist”, Volume 48, Number 4

This is a scanned image of the original Editorial Board page(s) for this issue     

The discursive strategy of legitimacy management: A comparative case study of Google and Apple’s crisis communication statements

Asia Pacific Journal of Management - This case study assesses how firms deployed language tactically to cope with crisis events. By applying the Systemic Functional Grammar (SFG) approach, we...     

Strategic Behavior and International Benchmarking for Monopoly Price Regulation: The Case of Mexico

This paper looks into various models that address strategic behavior in the supply of gas by the Mexican monopoly Pemex. The paper has three very strong technical results. First, the netback pricing rule for the price of domestic natural gas (based on a Houston benchmark price) leads to discontinuities in Pemex’s revenue function. Second, having Pemex pay for the gas it uses and the gas it flares increases the value of the Lagrange multiplier associated with the gas processing constraint. Third, if the gas processing constraint is binding, having Pemex pay for the gas it uses and flares does not change the short run optimal solution for the optimization problem, so it will have no impact on short-run behavior. These results imply three clear policy recommendations. The first is that the arbitrage point be fixed by the amount of gas Pemex has the potential to supply in the absence of processing and gathering constraints. The second is that Pemex be charged for the gas it uses in production and the gas it flares. The third is that investment in gas processing and pipeline should be in a separate account from other Pemex investment.     

比亚迪:“攻”为“守”

在战略上进行调整之后的比亚迪,在战术选择上,却依然选择了进攻。进攻即为最好的防守,这就是比亚迪的生存之道。这样来看,战术上的降价行为与其宣布的战略调整并不矛盾。