New development: Integrating risk management in management control systems—lessons for public sector managers

Exploring multiple dimensions of management control systems (MCS), this article proposes a new framework to integrate risk management with strategy, MCS and performance measurement systems (PMS). Considering the public sector as a focal point, the article points to some enterprise risk management (ERM) issues and argues that ERM-enabled MCS has potential to improve PMS and strategic decision-making, leading to a more proactive risk management framework and a culture that promotes performance driven accountability. Consequently, the article calls for further research towards solving the public sector’s risk management problems, motivating its managers to adopt best practices, and stimulating suitable policy developments.     

Beta Regimes for the Yield Curve

We propose an affine term structure model which accommodatesnonlinearities in the drift and volatility function of the short-terminterest rate. Such nonlinearities are a consequence of discretebeta-distributed regime shifts constructed on multiple thresholds.We derive iterative closed-form formula for the whole yieldcurve dynamics that can be estimated using a linearized Kalmanfilter. Fitting the model on US data, we collect empirical evidenceof its potential in estimating conditional volatility and correlationacross yields.     

Diversification preferences in the theory of choice

Diversification represents the idea of choosing variety over uniformity. Within the theory of choice, desirability of diversification is axiomatized as preference for a convex combination of choices that are equivalently ranked. This corresponds to the notion of risk aversion when one assumes the von Neumann–Morgenstern expected utility model, but the equivalence fails to hold in other models. This paper analyzes axiomatizations of the concept of diversification and their relationship to the related notions of risk aversion and convex preferences within different choice theoretic models. Implications of these notions on portfolio choice are discussed. We cover model-independent diversification preferences, preferences within models of choice under risk, including expected utility theory and the more general rank-dependent expected utility theory, as well as models of choice under uncertainty axiomatized via Choquet expected utility theory. Remarks on interpretations of diversification preferences within models of behavioral choice are given in the conclusion.     

Resource interaction in inter-organizational networks: Foundations, comparison, and a research agenda

The focus of this article is on discussing the foundations, conceptual development, and implications of resource interaction in inter-organizational networks. The article conceptualizes and classifies resources before discussing how resource interfaces enable to utilize, manage, and change resources. In doing so it provides a set of basic principles as to how resources interact at a network level, or how firms combine, develop, mobilize, and manage resources over time. This is in strong contrast to a focus on the acquisition, accumulation, and exchange of resources by the firm. The article further provides a comparison with two other research streams, the Resource-Based view (RBV) and the Service-Dominant logic (S-D logic), in order to better position this perspective on inter-organizational resource interaction. It concludes by discussing an agenda for further research.     

Online Reputation Monitoring: An Exploratory Study on Italian Hotel Managers’ Practices

This study aims to understand current Italian hotel managers’ practices in monitoring online reviews included on travel websites and online travel agencies. Results obtained by a web survey indicate what hotel managers monitor (rating, rankings, guest comments regarding different service elements) and managers’ orientation in replying to customer reviews. Findings may support online reputation management tools providers and consulting firms by highlighting the degree of hoteliers’ interest in UGC monitoring and providing insights on possible factors that differentiate current management practices and should be considered in order to offer technical solutions coherent with the distinctiveness of Italian context.     

Price or quantity setting under uncertain demand and capacity constraints: An examination of the profits

This article considers price formation and quantity setting of a capacity-constrained risk-neutral firm facing uncertain demand. It is shown that the optimal price of a price-setting risk-neutral monopolist decreases with demand uncertainty. With a strictly convex demand function expected profits increase with uncertainty for a quantity-setting monopolist whereas expected profits decrease for a price-setting monopolist. Furthermore, similar results on the effect of uncertainty are derived for a differentiated goods industry.