A strategic analysis of incorporating CSR into managerial incentive design

A strategic analysis is conducted to incorporate corporate social responsibility (CSR) considerations into managerial incentive design in a duopoly where each firm comprises an owner and a manager. Consumer surplus is adopted to represent the firms’ CSR concerns and a CSR-related incentive is introduced to accommodate both profit and consumer surplus. Bertrand and Cournot competition modes are discussed with the firms’ products being complementary, independent, or substitutable. We first examine the equilibrium of CSR-related incentive design and, then, analyze how CSR-related incentives affect the firms’ profitability and CSR performance, measured by consumer surplus and social welfare.     

Environmental-regulation pricing strategies for green supply chain management

This paper demonstrates that a proper design of environmental-regulation pricing strategies is able to promote Extended Product Responsibility for green supply chain firms in a competitive market. A differential game model comprising Vidale–Wolfe equation has been established in light of sales competition and recycling dynamics as well as regulation related profit function. Analytic solutions of Markovian Nash equilibriums are provided with the necessary condition derived from Hamilton–Jacobi–Bellman equations. We found that governments should opt to gradually raise regulation standards so that rational manufacturers will gradually improve its product recyclability, and, in turn, Extended Product Responsibility will get promoted.     

On the design of closed-loop networks for product life cycle management: Economic,environmental and geography considerations

The management of the product life cycle needs industrial synergies along large-scale networks to collect, recycle, reuse, and recover the end-of-life products. This paper provides a tool to assess the enabling economic, environmental, and transport geography conditions to design sustainable closed-loop networks for the management of a generic product along its life-cycle. The proposed tool is built through a mixed-integer linear programming (MILP) model for the strategic design of a multi-echelon closed-loop network. The product life cycle is handled via a cascade through seven stages, including raw material suppliers, manufacturing plants, distribution centers, retailers, collection nodes for waste and by-products, recycling centers, and landfills.The model minimizes a cost-based and a carbon-based function to determine the optimal geographic location of the nodes of the network and the allocation of transport flows. The model is applied to a case study inspired by the furniture industry over the Italian geography and a multi-scenario analysis is illustrated. The resulting considerations on the economic, environmental performances of the network couple with the transport geography to provide guidelines for designer, logistics planners and regional geographers toward a circular economy scenario.     

Reprint of “Linking rival and stakeholder pressure to green supply management: Mediating role of top management support”

Drawing upon the Schumpeterian view of competition and stakeholder theory, the purpose of our study is to examine how issues of rivalry and stakeholder pressure motivate firms to implement green supply management practices. We also consider the role of top management support as an important enabler to how firms react to competitive pressures to pursue green supply management practices. Our model is tested using a sample of supply chain professionals. Our results indicate that environmental pressure from rivals and stakeholders influences green supply management implementation through the mediating role of top management support for environmental initiatives.     

Supply chain network design under profit maximization and oligopolistic competition

In this paper, we model the supply chain network design problem with oligopolistic firms who are involved in the competitive production, storage, and distribution of a homogeneous product to multiple demand markets. The profit-maximizing firms select both the capacities associated with the various supply chain network activities as well as the product quantities. We formulate the governing Nash–Cournot equilibrium conditions as a variational inequality problem and identify several special cases of the model, notably, a generalization of a spatial oligopoly and a classical oligopoly problem to include design capacity variables. The proposed computational approach, which is based on projected dynamical systems, fully exploits the network structure of the problems and yields closed form solutions at each iteration. In order to illustrate the modeling framework and the algorithm, we also provide solutions to a spectrum of numerical supply chain network oligopoly design examples.This paper makes a contribution to game theoretic modeling of competitive supply chain network design problems in an oligopolistic setting.     

A workplace choice model accounting for spatial competition and agglomeration effects

This paper develops a new model of workplace choice for the Sydney Greater Metropolitan Area (SGMA) and describes the way in which this model is integrated into a general modelling framework of MetroScan, an improved version of the Transportation and Environment Strategy Impact Simulator Transportation (TRESIS). The developed model accounts for spatial competition of alternative workplaces via accessibility variables measured to attractions of both the same and different types. The new model also has two new refinements. First, a much finer geographical level is used for modelling worker's choice of workplace given the location of firms and the distribution of jobs. Second, an employment agglomeration effect is incorporated by the inclusion of jobs in the industry class relevant to the worker and two accessibility measures. Modelling analysis on data collected from a survey conducted in Sydney in 2013 identifies highly significant spatial competition and employment agglomeration effects explaining workplace choice. The application of this model to analyse policy relating to the redistribution or growth of jobs within a general framework of MetroScan is discussed.     

Thinking through the meteoric rise of Middle-East carriers from Singapore Airlines' vantage point

The rise of Middle East carriers in the past decade has been nothing less than meteoric. Based on the notion of generic strategy, we analysed the potential for competitors of the leading Middle East carriers to respond in terms of market scope and product characteristics, using Singapore Airlines as a reference. We found that it was generally difficult for Singapore Airlines to compete in terms of market scope, and thus it should concentrate on offering different degrees of differentiation in its products. While the latest small, long-haul aircraft could help increase Singapore Airlines' market scope, this impact would be marginal at best. We compared the product offerings and prices for the Business and Economy cabins, and noted the intensive competitive pressures the leading Middle East carriers exerted on Singapore Airlines. Improving specific product qualities such as guaranteeing a horizontally flat bed in Business and the overall quality in Economy helps competitors command higher prices, while other niches are still possible.     

The effects of deregulation, changed customer requirements and new technology on the organisation and spatial patterns of the air freight sector in Europe

Customer requirements, new technologies and the deregulation and liberalisation measures of the last 15 years have had a significant influence on market structures in air freight transport in Europe. The study examines the sector using the concept of global production networks. It describes the reorganisation in various dimensions. Firstly, there is the development from single air freight forwarders to global networks of firms. Secondly, we find a reorganisation of inter-company relations. Thirdly, airlines around the world organise their air traffic as a hub system. This lends added importance to the selected hub airport, and puts pressure on them to enlarge. As spatial consequences there is greater competition among international airports.     

Competition in railway monopolies

The transformation of railways from monopolies to markets open for internal competition is described and explained in a theoretical framework, and a model for the evaluation of the transformation’s impact on efficiency is developed. Using the model in an empirical study of the Swedish railway sector, it is found that external competitive pressure is strong in most supply segments and, focusing on loss of scale advantages, that the transformation will result in significant costs. Comparing the potential for gains by competition against the costs, it is concluded that increased efficiency by internal competition only seems possible to achieve for two train products: domestic combined transport and dedicated trains (both freight services).     

Generic functions of railway stations—A conceptual basis for the development of common system understanding and assessment criteria

The redevelopment of railway stations calls for the integration of many different objectives. Two crucial challenges thereby are the development of a common system understanding among the multiple stakeholders with potentially conflicting interests and the structured definition of comprehensive assessment criteria. Defining the functions of the system railway station, i.e. discussing what the system should do, can support solving these challenges. Based on a review of Swiss railway stations in a transdisciplinary research project applying four focus groups (n=38), 28 expert interviews and two expert workshops, we present a structured framework of five generic functions of railway stations and their interdependencies. The five generic functions are: linking catchment area and transport network, supporting transfer between modes of transport, facilitating commercial use of real estate, providing public space, and contributing to the identity of the surrounding area. Potential conflicts between functions are identified. They concern the competition of multiple functions for space, for customer attention or for revenues as well as increasing system complexities with station size. We illustrate how the framework of functions can be used to foster a common system understanding and to develop assessment criteria. Although elaborated from a Swiss perspective the framework is perceived adaptable to railway stations of other countries.     

Dynamic supply chain network design with capacity planning and multi-period pricing

This paper addresses a new problem in designing and planning a multi-echelon and multi-product supply chain network over a multi-period horizon in which customer zones have price-sensitive demands. Based on price-demand relationships, a generic method is presented to obtain price levels for products and then, a mixed-integer linear programming model is developed. Due to the problem intractability, a simulated annealing algorithm that uses some developed linear relaxation-based heuristics for capacity planning and pricing is presented. Numerical results demonstrate the significance of the model as well as the efficiency of the solution algorithm and linear relaxation-based heuristics.     

The welfare effects of the allocation of airlines to different terminals

Many airports around the world have recently built, rebuilt or are in the process of constructing new terminals. Incumbent airlines and new entrants must be allocated to the new and old facilities. When spaces at airport terminals are directly allocated, the allocation should be done by taking into account the implications for airlines’ competition and social welfare, given the airlines’ network configuration. We use a theoretical model in which two airlines compete in prices with differentiated products for a given network structure. The model shows that, in general, if airlines are allocated to different terminals, the level of competition is reduced, the ticket prices are higher and the consumer surplus and social welfare are lower. Only in some routes, and under certain conditions on the market size, ticket prices may be lower.     

Achieving Competitiveness in Greek Accommodation Establishments during Recession

The article examines the strategies that Greek hotels have implemented to strengthen their competitiveness during recession. The research is based on a nationwide e‐mail survey to hospitality managers/owners. The results reveal that the most important perceived competitiveness factor is cost reduction and implementation of actions against crisis, followed by innovation, human resource management and marketing. The study also proposes actions that can improve the competitiveness of accommodation establishments. The article helps fill the gaps in our understanding of how hospitality firms tackle competition during crises, and suggests managerial policies that can help hospitality firms to strengthen their positioning and competitiveness during crises. Copyright © 2014 John Wiley & Sons, Ltd.     

Robust supply chain strategies for recovering from unanticipated disasters

Recovering from unanticipated disasters is critical in today’s global market. This paper examines the effectiveness of popular recovery strategies used to address unpredictable disasters that derail supply chains. We create a formal model to portray dynamic operational performance among supply chain firms facing disruptions caused by natural and man-made disasters. Our analysis shows that a supply chain recovers best if member firms adopt a radical, rapid, costly recovery strategy that immediately resolves the disruption. This observation is robust to various resource consumption requirements. We apply our methodology in the case of Taiwan’s 2011 food contamination scandal and provide managerial insights.     

The competitive landscape of air transport in Europe

Competition between airlines and airports increased significantly since the deregulation of the intra-European air transport market in 1997. The passenger has a wider choice in terms of routings and departure airports than twenty-five years ago and pays a lower price. In this paper we investigate in which parts of Europe airline and airport competition are most intense and how the competitive landscape has changed since the liberalisation of the intra-European market.Competition levels are modelled for all air transport markets available to consumers in each western-European municipality using a Multinomial Logit (MNL) model. This allows us to determine how competitive the air transport product available to consumers in each of those municipalities truly is and how competition levels have changed. As opposed to most other competition studies we take all viable direct and indirect flight alternatives into account, as well as competing alternatives from nearby (adjacent) airports. This makes it the most extensive analysis of competition in the European aviation industry performed to date.As expected the results show that airline competition, allowing for grouping of the airlines belonging to the same alliance together, has in general increased since the liberalisation of the intra-European market. This can mainly be ascribed to the rise of the low cost business model. The spatial analysis however shows an uneven outcome. Changes in airline competition are most pronounced in areas that were previously not well served, such as the more remote regions in the United Kingdom, Spain and Italy. In Germany airline competition is lagging behind due to the strong dominance of the STAR alliance. In large parts of Scandinavia, but also in parts of France and Spain, airline competition is considerably less. These areas are often served only by a handful of airports and/or airlines, limiting airline choice and therefore competition.     

Rivalry amongst European low cost airlines: Are shareholders enjoying the game?

We develop a model of quantity and price competition for low cost airlines based on announcements of new routes and their impacts on the announcer and on its rival. We find that both firms’ profits may rise or fall as a result of an announcement of new routes, depending on launching costs for the announcer, and on whether market expansion or market substitution is dominant for the rival. We present an empirical study for two European low cost airlines that shows asymmetric behaviour; while EasyJet announcements have positive effects on Ryanair’s share price, the opposite is does not occur. This suggests that an airline’s reputation for reacting in response to rivals’ announcements may affect the stock market and may thus affect announcement behaviour.     

Flows into tourist areas: an econometric approach

The globalisation of the tourism industry has led to a horizontal and vertical penetration of firms, leading to strong competition in all tourist centres. In light of these circumstances there is a need to develop strategies that encourage entrepreneurial actions and help firms to design the most competitive tourism offer possible. For the development of these strategies, the current work attempts to identify the degree of interrelation existing between the different tourist markets. Specifically, the study is based on an analysis of the evolution in the relations between the main tourist‐receiving centres in Spain. It identifies the short‐ and long‐term dynamic relations existing between them, and determines their degree of interdependence and any potential leadership relations between them. The methodology used is the one underlying Cointegration theory and vector autoregressive theory, together with forecast error variance decomposition and the impulse‐response function. Copyright © 2008 John Wiley & Sons, Ltd.     

Impact of introducing eco-innovation measures on productivity in transport sector companies

This paper analyses the impact of factors related to innovation and the environment, among others, on labour productivity in the Spanish transport sector. The methodological approach used in this study was based on the CDM structural model. The main advantage of this model is its capacity to integrate investment in R&D and the generation of knowledge and production innovation. The data used in the estimations were obtained from the Technological Innovation Panel (PITEC) database. PITEC is a panel-type database jointly prepared by the Spanish National Institute of Statistics (INE) and the Spanish Foundation for Science and Technology (FECYT). The econometric results show that reducing the environmental impact has a statistically significant and positive effect at all stages of the innovative process and above all on labour productivity of transport firms, where the improvement of labour productivity can reach 8.35% compared to non-ecoinnovative companies. This finding could alert firms in the transport sector to the need to improve their activities by adopting environmentally proactive attitudes.     

How the presence of low-cost carrier competition scheduling differentiation

This study explores the relation between airline market structure and schedule differentiation. Using a location theory framework applied to product differentiation over the time scale, the analysis relates the level of competition, and the presence of low-cost carriers in non-stop US markets to schedule clustering. As expected from theory, it is found that schedule clustering increases with competition, resulting in reduction in product differentiation. It is also found that this tendency is lower in the presence of low-cost carriers and when there is a strong hub effect where dominant hub airline own, rather than compete with their feeder subsidiaries.     

Inter-organizational relationships and knowledge sharing in green supply chains—Moderating by relational benefits and guanxi

This paper presents a new research model to examine the factors influencing the knowledge sharing and implementation in inter-organizational relationships. In this study, we examine how relational risk affects the willingness to share knowledge and how this association is affected by the tangible relational value (relational benefits) and intangible relational value (guanxi). Data are collected from 436 green manufacturing firms that are among the top 1000 Taiwanese manufacturing firms of 2008 listed by Business Weekly. Relational risk is found to be negatively associated with willingness to share knowledge. Our results show that relational benefits and guanxi between partners improve the negative effect of relational risk on knowledge sharing. The findings of the study provide useful insights into how green supply chain members should reinforce their relational benefits and guanxi activities that would improve their value-based relationships, in order to enhance the environmentally knowledge sharing for the green supply chain as a whole.