Uncovered interest parity: it works, but not for long

If an investor borrows in a low interest currency and invests in a high interest currency, the interest differential accrues in a lumpy manner, formally just like the dividend payments on a stock. The investor will receive the interest differential discretely at the point when a position is rolled over from one day to the next. A position that is not held open overnight receives no interest differential because intradaily interest rates are zero. Using a large data set of intradaily exchange rate data, we run uncovered interest parity (UIP) regressions over different short time intervals taking careful account of the settlement rules in the spot foreign exchange market. We find results that are supportive of the uncovered interest parity hypothesis over very short windows of data that span the time of the discrete interest payment. However, adding even a few hours to the span of the window destroys the positive uncovered interest parity results.     

The replacement decision: Getting it right

Replacing assets is one of the most important and frequently made decisions in business. A review of the finance literature shows that treatment of this subject diverges widely. More importantly, the net present value decision model most often described discounts only the differences between cash flows and terminal (salvage) values of the replace and do-not-replace alternatives. It tacitly assumes that the risk and inflation factors associated with these values are the same. As a result, for reasons that are counterintuitive in part, it may select the wrong alternative. Through use of a case example, this article demonstrates why the currently popular approach presents difficulties. Further, it provides a model designed to overcome the problems by making each alternative's cash flow and terminal value visible, and assigning appropriate risk and inflation discount factors to each.     

Impact of movie-watching on cross-selling revenue in shopping malls: Implications for post-pandemic recovery

The COVID-19 pandemic has prompted consumers to postpone in-store purchases and shift to online shopping, decreasing overall retail spending. As the global lockdown eases and shoppers return to offline stores and malls, shopping malls seek to facilitate in-store consumer experiences at entertainment facilities. Given the importance of entertainment facilities to the cross-selling revenue of shopping malls, we investigate the relationship between consumers' movie-watching and subsequent (hedonistic) grocery purchases. Our analysis of a panel database that includes transaction details at the consumer level shows that movie-watching is negatively correlated with consumer spending. Furthermore, consumers’ psychological states induced by content and contextual factors moderate the negative effect of movie-watching; after watching a fantasy (as compared to thriller) genre or watching a movie in a less crowded theater, consumers are more likely to make hedonic purchases at the supermarket. These findings provide theoretical and managerial implications for retail operators exploring cross-selling opportunities post-pandemic.     

On monopoly in business ethics: Can philosophy do it all?

Arguing that the grounding of philosophical ethics is more complex than De George's reference to reason and human experience reflects, and that religious ethics is less doctrinaire and less given to indoctrination than De George suggests, Camenisch maintains that De George has portrayed an artifically wide gap between the two fields. Rejecting De George's typology of religious ethics as unhelpful, Camenisch suggests that the crucial distinction between philosophical and religious/theological ethics is the community or lived nature of the latter. The implications of this dimension of religious ethics for business ethics is briefly explored in relation to the use of cases, the role of the lives of moral exemplars, corporate responsibility, and obligations to future generations, to indicate not that religious ethics generates answers different from those of philosophy, but that it provides a different perspective on some central moral matters. Paul F. Camenisch is Professor of Religious Studies at DePaul University. He has published numerous articles in professional journals and is the author of Grounding Professional Ethics in a Pluralistic Society (1983).     

Monetary policy and exchange rate overshooting: Dornbusch was right after all

Dornbusch's exchange rate overshooting hypothesis is a central building block in international macroeconomics. Yet, empirical studies of monetary policy have typically found exchange rate effects that are inconsistent with overshooting. This puzzling result has been viewed by some researchers as a “stylized fact” to be reckoned with in policy modelling. However, many of these studies, in particular those using vector autoregressive (VARs) approaches, have disregarded the strong contemporaneous interaction between monetary policy and exchange rate movements by placing zero restrictions on them. In contrast, we achieve identification by imposing a long-run neutrality restriction on the real exchange rate, thereby allowing for contemporaneous interaction between the interest rate and the exchange rate. In a study of four open economies, we find that the puzzles disappear. In particular, a contractionary monetary policy shock has a strong effect on the exchange rate, which appreciates on impact. The maximum effect occurs within 1-2 quarters, and the exchange rate thereafter gradually depreciates to baseline, consistent with the Dornbusch overshooting hypothesis and with few exceptions consistent with uncovered interest parity (UIP).     

Innovation and efficiency: It is possible to have it all

A firm that simultaneously engages in a high degree of both innovation and efficiency follows an approach that is often referred to as an ambidextrous strategy. Surprisingly, relatively few firms are able to balance these two emphases. Internal battles for resources often tip the scales in favor of efficiency over innovation, or vice versa. Management gurus frequently warn that simultaneously pursuing both can set the firm up for mediocre performance, yet the turbulent nature of today’s markets and cut-throat competition create a renewed need for firms to reconsider this dual approach for longer-term success. Unfortunately, practical insights from empirical studies regarding performance benefits and implementation issues are still scant. Perhaps this is one reason why few firms are successful in both efficiency and innovation. In this article, we provide evidence—using a cross-industry survey of senior marketing managers in publicly-traded U.S. firms—that firms which successfully employ an ambidextrous strategy outperform those which overemphasize either efficiency or innovation. Furthermore, we highlight marketing’s role as an example of the often overlooked need for successful functional implementation. Finally, we provide useful methods for managers to answer three key questions: (1) Is my firm ambidextrous?; (2) Should my firm be ambidextrous?; and, if so (3) How can my firm become ambidextrous?     

Success factors in a CRM strategy: technology is not all

Organisations today need to create, maintain and reinforce relationships with customers. Customer Relationship Management (CRM) seems to have helped firms to better understand their relationships. However, past studies have looked at technology and customer orientations (COs) as key factors. This paper aims to analyse the simultaneous effect of Market Orientation (MO) (rather than CO), Knowledge Management (KM) and other organisational factors in order to explain how to implement a successful CRM. Findings suggest that MO and KM may influence CRM success. Data also suggest that particular organisational factors such as employees, leadership and specific know-how may be key factors in determining the success of CRM. For efficiency resource management, this paper recommends to focus not as much in technology, but on programmes for selection, training and motivation of employees which may enhance CRM objectives. Companies may also pursue a higher customer value by putting in place and reinforcing KM schemes in specific know-hows about CRM.     

To be，or not to be

中国参加G6可以更加直接地维护谈判利益,更好地培养和锻炼谈判队伍,但同时让步的压力也相应加大,要考虑的利益也更加复杂。     

Organizing for disaster: Lessons from the military

Recent global events have highlighted the need for disaster planning by leaders in all types of organizations, civilian and military included. This article illustrates, from both academic and personal viewpoints, lessons learned during relief operations for the 2005 earthquake in Pakistan. Having participated in this effort, I detail guidance for designing resilient and robust organizational structures that can deal with the uncertainties of a disaster environment. For example, organizations frequently form temporary command centers to improve information flow in a crisis. Consequently, managers are advised to create temporary organizational structures with a common cognitive map to improve sense-making for employees during turbulent times. Other lessons presented include the establishment of a nuanced priority system for assessing potential courses of action, and the need to eliminate bureaucratic barriers to action to improve the speed of response when lives are at stake. This article concludes by pointing out that proper organizational structures need to be considered prior to disaster in order for organizations to be effective and efficient during the course of a mitigation effort.     

别让奥运豪赌变成一日光头

前一段时间，赶上不少学府的EMBA毕业，于是不少平时不够显山露水的富人开始借机发力，有的包场子，有的包费用，有的包人员，有的干脆把父母老婆孩子亲戚员工统统请来，个个花枝招展狠狠的过了把瘾，想临别之际好好树立一把江湖地位。不过，大多结果不理想，出得门来，同学评价依旧，毕竞剃一次光头，不代表你从此就是得道高僧了。     

Building customer loyalty in retailing: not all levers are created equal

This research examines the determinants in building and maintaining customer loyalty in grocery retailing. The first part introduces a distinction between traditional, ‘mass’ levers such as range and price, and relational, ‘targeted’ levers based on individual customer information. The second part focuses on the role ofthese two sets of levers for differentiation, that is, to what extent they are perceived by customers as distinctive to a retailer. For the first time, parallel analysis of retailers and consumers is used to obtain a dual perspective on loyalty drivers. Most supermarket chains in Italy today are found to invest marketing resources in the ‘mass’ levers of range and price. They are also starting to use other levers for differentiation, although effectiveness of their attempts varies a great deal and the perception of diversity by customers varies a lot from one banner to another. We also find that relational levers cannot be separated from traditional levers to sustain loyalty, but they clearly play a secondary role. Investment in targeted marketing is no substitute for that in traditional mass loyalty tools such as range and price.     

吴瑜章,简朴中的不平凡

透过洁净的玻璃窗，远远感受北京冬日的阳光，温暖而柔和，很容易让人忘却室外的严寒。