The Maximum Prospective Value Criterion

In this paper the authors analyze the logic of the capital budgeting decision in two different settings. First it is assumed that the decision-maker has complete information about both his current and future investment opportunities in which case the decision problem reduces basically to a computing problem. Second it is assumed that the decision maker has complete information about his current investment opportunities and a knowledge of his expectations about future investment opportunities.

The authors analyze the logic underlying the selection of the capital growth (discount) rate that should be used in determining whether a marginal increment of investment should be accepted or rejected. If the marginal increment were rejected, the unused cash would typically be invested temporarily in a highly liquid investment at a relatively low interest rate with the prospect that a better than marginal investment would absorb the funds at the next decision time.

The analysis led to the formulation of a capital-budgeting decision criterion, called the Maximum Prospective Value Criterion, which is presented in this article. As its name implies, the criterion is designed to select the set of investments that has the maximum prospective value, given the decision-maker's expectations about his future investment opportunities. This criterion relates the capital-budgeting decision to the opportunity-cost and marginal-analysis concepts of classical economics. The present-worth criterion of engineering economy is shown to be a special case of the Maximum Prospective Value Criterion, and the minimum at tractive rate of return of engineering economy when properly selected appears to be closely related to the capital growth rate on the marginal increment of investment.     

Tell me a story: The role of narrative transportation and the C-suite in B2B advertising

This research investigates stories about buyer-seller experiences in B2B advertising. In two studies, the authors explore the impact of stories and narrative transportation in advertising on decision makers’ attitudinal responses. In Study 1, findings from a Fortune 100 company’s buyer panel indicate that stories told using narrative advertising were positively related to the decision maker’s trust in the supplier, ability to form personal connections with the supplier and the tendency to advocate for the supplier. Moreover, the organizational status of the decision maker (C-suite versus non-C-suite executives) was examined. Results demonstrate that the effect of these relationships were stronger for C-level decision makers than non-C-level decision makers. In Study 2, depth interviews were conducted with C-level decision makers. Findings reinforce results from Study 1 and provide additional insight into C-level decision makers’ perspectives on stories and narrative transportation. Implications for how stories about buyer-seller relationships can benefit organizational decision making are discussed.     

The Dual Transformation of Workplace Dispute Resolution

This study examines the impact on grievance rates of variation in the structure of nonunion dispute resolution procedures and in systems of work organization. Nonunion dispute resolution procedures that feature nonmanagerial decision makers had higher grievance rates than nonunion procedures with managerial decision makers. Grievance rates also were lower in workplaces that had adopted self-managed teams.     

Supply source selection criteria: The impact of supplier performance on distributor performance

In drawing attention to certain important gaps in the purchasing literature, the study reports on a systematic examination of supplier performance in purchasing decision criteria of U.K. distributor firms of information technology (IT) products. An attempt is made to explore the presence of dimensions underlying supplier performance in buying decision elements and identify potential differences in distributor performance with regard to supplier performance in important purchasing decision criteria. Based on a survey sample of 237 distributors, the results suggest significant differences between highly performing and poorly performing distributors in relation to their suppliers' performance in four buying decision criterion dimensions: reliability, competitive pricing, service support, and technological capability. The implications of the findings for business practitioners are highlighted, and directions for future research are identified.     

Clinging to Slim Chances: The Dynamics of Anticipating Regret When Developing New Products

This paper focuses on the effects of anticipated regret during large‐scale investment projects—namely new product development. Anticipated regret means worrying about the future, and decision‐makers experience it prior to both making a decision and knowing the outcome of that decision. It is forward‐looking while actual regret is backward‐looking. Decision‐makers must make project continuation/termination decisions with conflicting pressures. If they continue it, they might receive disconfirming information in the future and therefore regret their decision. If they stop it, they also might regret that decision later, too, if they subsequently conclude it was an error to do so. We term these conflicting pressures anticipated “keep” and “drop” regret, respectively. In the main study, nearly 300 individuals completed a decision‐making exercise in which a failing new product development project was evaluated, and various factors were measured, including both types of anticipated regret at multiple points in the project. The results show that decision‐makers anticipate regret when making project continuation decisions, and anticipated keep and drop regret exert pressures that differ in direction and magnitude. Most interestingly, anticipated drop regret does not diminish as the failing project progresses whereas anticipated keep regret increases as more negative information is received over the course of the project. A second, smaller study was conducted using a different population, and the results of the main study were replicated in this supplemental study, thereby adding confidence in these findings.     

The Decentralization of Decision Making and Employee Involvement within the Workplace: Evidence from Four Establishment Datasets

Participatory work practices, like teams, quality circles and joint consultative committees (JCCs) can, but do not necessarily, decentralize decision making and increase worker autonomy. We use broad, cross‐sectional establishment data from the European Union and three Commonwealth countries to measure the extent of decision making by workers across these countries, and to analyse how this measure varies with the use of participatory practices. Within Europe, workers in Sweden, Germany, France, the Netherlands and Ireland are most likely to be given the authority to make decisions. In Spain, Portugal and Italy, decentralized decision making is more unusual. While decision making is generally higher in establishments with teams, JCCs and quality circles, this result does not hold across all countries. Even where the relationships are significant, use of participatory practices explains a surprisingly small amount of the overall variation in decision making.     

风险贴现率法在工程项目风险决策分析中的运用

风险贴现率法是风险决策分析中常用的方法。章根据工程项目的特点，论述了在工程项目决策中引入风险贴现率法的可能性，以及针对实际情况调整风险贴现率的几种方法，同时也指出了风险贴现率法的局限性。     

The make or buy decision

The make or buy decision is one which is frequently faced. The factors to be considered are many and various, and in some cases interactive, and because of the many departments involved there is danger that the decision will end up being taken on an ad hoc basis. This situation can be prevented by reformulating the policy statements in the form of a logic diagram which ensures that the same questions are answered in the same sequence by all departments. This approach has been put to practical test and found to be very useful in a variety of ways. This paper describes the method and illustrates its use by reference to three examples.     

The Magnesium Industry in Transition

Dow Chemical dominated the magnesium industry for decades but ultimately exited in 1998. This article considers the evolution of the industry and Dow's decision to divest.     

The best laid schemes o'TQM: strategy, politics and power

This article explores management's strategic decision making in relation to Total Quality Management (TQM). It demonstrates that management's strategies are fraught with politics and power relations, which influence the 'choice' of strategy and the way in which such strategies are 'implemented'. Hence, management's strategic decision making may not be planned and rational, and their behaviour is often contradictory which may undermine TQM or render its outcomes uncertain and contestable.     

基于个体差异的报童群体决策研究

通过实验研究群体决策和大五人格对报童订购的影响。研究表明大五人格中开放性维度能很好地预测个体和群体决策者的订购行为。在个体实验中，开放性越高的个体更不易产生锚定效应，其他四种人格特性与锚定偏差无显著关系；在群体实验中，群体的开放性得分均值、群体中高开放性成员所占的比例与锚定偏差呈负相关关系。通过比较两种实验结果，发现群体锚定倾向明显小于个体锚定倾向，而群体决策并没有优于个体决策。该研究结果对企业人员招聘、构建决策团队及降低决策偏差有一定参考价值。     

The product-elimination decision and strategies

This study identified the elimination strategies used by companies to implement the elimination decision, which includes the following options: (1) phase out immediately; (2) phase out slowly; (3) drop the product from the standard range and reintriduce it as a “special” sell out. The study also determined that the “phase out slowly” strategy is generally preferred and that “stock on hand” and “replacement product development” are two of the main factors influencing the formulation of phase out plans. A systematized model for the implementation of the product elimination decision based on the findings of the study is described.     

实物期权定量分析方法在风险投资决策中的应用

在风险投资项目中，不确定性对风险项目投资评价、决策起到了决定性的作用。运用实物期权原理分析了不确定性对风险投资项目评价和决策的影响，通过风险中性概率方法将这些影响予以定量化，并进一步对实际投资行为作出解释。     

The multinationalisation of South African telecommunications firms into Africa

The study investigates the main factors considered by telecommunications firms when making a decision to undertake Foreign Direct Investment (FDI) into Sub-Saharan Africa (SSA). This encompasses the reasons for investing, the methods of entry into the identified market and the factors influencing their decision. The methodology employs a survey questionnaire which was sent to telecommunication firms representing 80% of the revenue generated by this sector in SSA. The research reveals that market size, regulatory environment and government policy are the three most important factors influencing the decision to undertake FDI. Furthermore, the main reasons for deciding to enter SSA are for market and profit growth due to saturation in their existing markets, as well as for diversification of risk. They demonstrate the key competencies that South Africa Multinational Enterprises (MNEs) have in navigating the complexities of doing business in institutional voids. The liability of being from the relatively small emerging market of South Africa and operating in a country of institutional uncertainty has allowed South African companies to internationalise into markets that other MNEs will not venture into and thus turn a liability into an advantage.     

The impact of market freedom on the adoption of third-party electronic marketplaces: A fuzzy AHP analysis

Electronic-marketplace (EM) is an innovative model for interfirm transactions that are undertaken via the Internet. However, in view of higher investment costs and other associated risks, many small and medium-sized enterprises (SMEs), instead of establishing their own EMs, turn to adopt third-party-hosted EMs. In literature, most relevant studies to the adoption of the third-party-hosted EM were conducted on the research contexts of free market. Industries under the protection of government policies may have limited degree of market freedom, different from industries without these protection policies. Thus, this study intends to compare the decision choice of EM adoption between industries with various degree of market freedom. The decision choice of EM adoption consisted of many strategic factors that were constructed in terms of a three-layer hierarchical structure proposed in this paper. A fuzzy analytic hierarchical process (Fuzzy AHP) was utilized to estimate the relative importance of these individual strategic factors involved in the decision-making process of adopting third-party EMs. The research findings indicated there were some similarities and differences in the decision choice between the two industries of interest. The variety of market freedom can account for the differences in the decision choice of EM adoption. In addition to enhancing our understanding of the EM adoption decision of participative companies, the research findings also provide insightful information to third-party EM providers so that they may improve the effectiveness and efficiency of resource allocation.     

A strategic approach to industrial product pricing: The pricing plan

Price planning is one of the most overlooked areas in industrial marketing. Traditionally, emphasis is placed on product development, advertising strategy, and distribution channel formation before any consideration is given to pricing. The result is that industrial pricing decisions are made quickly without the necessary market and cost factors included in the final decision. The pricing decision is at the core of every business plan and impacts directly on the critical components of a company's marketing strategy. In this article, the importance of price planning in industrial marketing is discussed including the major components needed to make an industrial pricing strategy successful.     

Persuasion in Corporate Idea Contests: The Moderating Role of Content Scarcity on Decision‐Making

Organizations increasingly use corporate online ideation platforms to foster individual innovativeness. Recent research, however, has shown the downside of such contests—the selection of ideas is not entirely rational. Analyzing the impact of content scarcity, which occurs when ideators provide very little issue‐relevant information when submitting ideas, contributes to this new literature stream. The main argument is that evaluators increasingly rely on heuristics based on issue‐irrelevant information when content scarcity obstructs reflective decision‐making. The default‐interventionist model of decision‐making in combination with the Yale attitude change approach allows us to examine the mechanisms evaluators apply when content scarcity occurs. The hypotheses are tested on an extensive data set of 3025 ideas. The results show that content scarcity affects the evaluators' decision‐making process by preventing them from intervening their first intuitive decision. The scarcer the content of the submitted idea, the stronger the persuasiveness of issue‐irrelevant aspects that affect idea selection: aspects of the ideator, message, and community.     

Toward an integrated theory of the firm: The interplay between internal organization and vertical integration

Research summary : Two central issues in strategic management are the determination of a firm's internal delegation and its vertical boundaries. Despite the importance of these issues, there is scant analysis concerning their interaction. Using a comprehensive database of the construction industry, we show that vertical integration positively influences the centralization decision and that the main mechanism driving this relationship is an improvement in the hierarchically coordinated adaptation of firm activities when complexity and uncertainty are high. We also observe that centralization is negatively related to the extent of relational contracts between principals and agents, and positively related to an exogenous increase in the cost of employee layoffs. Our results suggest that managers cannot consider firm boundaries and internal organization to be independent decisions. Managerial summary : We ask whether a firm's decision about vertically integrating or outsourcing its activities affects the choice of centralizing or delegating its internal decision‐making process. Our statistical analysis shows that firms with more vertical integration tend to centralize the decision‐making process and that firms that outsource more tend to decentralize more. Why? Vertical integration enables the use of centralized authority to coordinate activities that interact intensively. Accordingly, we found that the positive influence of vertical integration on centralization is especially significant in more complex and uncertain environments, when the need for coordination is higher. Thus, our results suggest that managers should choose vertical integration considering its effect on internal decision‐making processes, particularly when coordination is important. Copyright © 2015 John Wiley & Sons, Ltd.     

The role of fairness in alliance formation

We report on data from a revelatory qualitative case study of a failed attempt to form an international joint venture (IJV) agreement. We analyze issues related to distributive, procedural, interpersonal, and informational fairness and the roles of their occurrence in the course of the formation stage of an IJV. We find that perceptions of fairness types shape the partners' decision making logics (a property rights logic, a control rights logic, and a relational quality logic), which in turn influence the partners' evaluations of efficiency and equity of the proposed alliance and their decision on whether or not to form it. We develop propositions around this argument. Copyright © 2010 John Wiley & Sons, Ltd.     

Analysis on product rollover strategies: The innovation level perspective

We focus on the firm's decision on product rollover strategies from the view of innovation level. Consider an innovative firm produces and sells durable goods to strategic consumers over two periods. In period one, the firm offers a product with a low innovation level. During that period, the firm continues to innovate such that a product with a high innovation level can be offered in period two. The analysis is separated into two parts: minor-to-moderate innovation and major innovation. We find that the rollover decision is considerably different when the innovation is minor-to-moderate from when the innovation is major. In the former case, the optimality of each rollover strategy is fully determined by the innovation level of the product introduced in period two and the customers' discounter factor; whereas in the latter case, the single rollover strategy always dominates the dual rollover strategy. Moreover, the firm's pricing policy under single rollover is strongly dependent on the innovation level of the product introduced in period two. Whereas under dual rollover, the firm's pricing decision is independent of the innovation level. Finally, it is to be noted that the findings in this research are mainly contingent on the model framework.