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.     

Procyclicality and the new Basel Accord - banks’ choice of loan rating system

Summary. The Basel Committee on Banking Supervision is proposing to introduce, in 2006, new risk-based requirements for internationally active (and other significant) banks. These will replace the relatively risk-invariant requirements in the current Accord. The new requirements for the largest bank will be based on bank ratings of the probability of default of the borrowers. There is evidence that the choice of loan ratings which are conditional on the point in the economic cycle could lead to sharp increases in capital requirements in recessions. This makes the question of which rating schemes banks will use very important. The paper uses a general equilibrium model of the financial system to explore whether banks would choose to use a countercyclical, procyclical or neutral rating scheme. The results indicate that banks would not choose a stable rating approach, which has important policy implications for the design of the Accord. It makes it important that banks are given incentives to adopt more stable rating schemes. This consideration has been reflected in the Committees latest proposals, in October 2002.Received: 25 October 2003, Revised: 27 April 2004, JEL Classification Numbers: D58, E44, G28. Correspondence to: Dimitrios P. TsomocosThe authors are grateful to Pamela Nickell for carrying out some of the calculations and Nicola Anderson, Charles Goodhart, Andy Haldane, Glenn Hoggarth, Nobu Kiyotaki, William Klein, Alistair Milne, William Perraudin, Hyun Shin, Paul Tucker, seminar participants at the Bank of England XI European Workshop on General Equilibrium Theory, Federal Reserve Bank of Boston, INSEAD, LSE, the University of Oxford and especially H.M. Polemarchakis for helpful comments and remarks. However, all remaining errors are ours. The views expressed here are those of the authors and do not necessarily reflect those of the Bank of England, and the Bank of Spain.     

The Relationship between Waste Paper and Other Inputs in the Swedish Paper Industry

A number of life-cycle assessment studies havecompared the environmental impacts of materialrecycling and incineration of waste paper. Theyhave shown that, in most cases, a recyclingscenario results in lower total energy use, butgreater use of fossil fuels. If waste paper andfossil fuels are complements, parts of theenvironmental argument for recycling isabolished. This paper estimates a cost functionfor the Swedish paper industry. If the costshares are co-integrated, an error correctionmodel will be used to model the dynamics.Short- and long-run elasticities are thencalculated to address the relationship betweenwaste paper and the other inputs: capital,labor, purchased pulp, fiber, fossil fuels andelectricity. Contrary to the life-cycleassessment studies, the results show that wastepaper and fossil fuels are substitutes, andthat waste paper and electricity arecomplements.     

Aging faster in office? the effect of extended service in political office on longevity

Politicians’ health problems are often publicly related to occupational stress. We investigate the effect of serving longer time in office on US governors’ life expectancy. Results indicate that health problems are relevant for the decision to continue a political career. We find no evidence that serving longer in political office is detrimental to health.     

Self-Reporting and Ex Post Asymmetric Information

We consider a model of optimal law enforcement where sanctions are reduced for self-reporting individuals. Violators get private signals about their individual probabilities of apprehension after they committed a crime. Since violators will self-report if and only if the signal is above a specific threshold, the possibility of self-reporting has an option value that leads to a higher crime rate if the authority's effort remains unchanged. We demonstrate that self-reporting nevertheless increases social welfare even under the restriction that the crime rate must not be higher than without self-reporting. Received June 15, 2001; revised version received December 19, 2001     

Risky Rescues and the Duty to Blow the Whistle

This article argues that whilst the idea of whistleblowing as a positive duty to do good or to prevent harm may be defendable, legislating that duty is not feasible. We develop our argument by identifying rights and duties involved in whistleblowing as two clusters: one of justice and one of benevolence. Legislative arguments have evolved to cover the justice issues and the tendency exists of extending rights and duties into the realm of benevolence. This article considers the problematic assumptions and implications of whistleblowing as a positive duty, by examining the extent to which the Good Samaritan argument holds with regard to whistleblowing. We argue that three criteria necessary for whistleblowing as a legally enforceable positive duty are not met, namely that we need to be able to (1) specify who should know what, (2) minimize the risk to the whistleblower and (3) adequately deal with mistaken concerns being raised.     

Acceptance of recommendations to buy in online retailing

Nowadays, many online shops try to improve their customer service by personalization. Personal welcomings, individual assistance as well as recommendations to inform and buy are getting an integral part of the customer communication. These new elements are assumed to increase the retailer's share of wallet and – ideally at the same time – the customer's satisfaction with the online shop. However, till date only few studies have analyzed which external factors influence the customer's acceptance of such assistance. This paper closes this gap by an experiment, where a modified Technology Acceptance Model is used for measuring the customer's acceptance. Volunteers are offered an online shopping experience with individually generated recommendations to buy. The results show a high acceptance of the generated recommendations and how close this acceptance is connected to the quality and shopping relevance of the recommendations. Even though the results are limited to the specific recommendation types used, they give important implications for an adequate design of modern online shops.     

Measurement of the Standard Proximity of Adapted Standard Business Software

In order to optimize the economical use of SAP software systems and to increase the cost effectiveness of the SAP investment, the available SAP standard system should be implemented in the best possible way. While standard functionality has no negative effects on maintenance and operating cost, modification of the standard has the potential to drive costs (Markus et al. 2000). An integrated methodology and an efficient instrument for the operational and strategic evaluation of this topic are crucial for an efficient application of SAP standard software. This article describes a new technical measurement methodology based on key performance indicators. This measurement methodology allows for measuring the standard proximity (i. e. proximity of used functionality to standard functionality) in SAP systems thereby creating transparency regarding the use of the available standard and non-standard functions. The methodology is evaluated in the context of a case study within the BMW Group. From the results of the measurement, actions are derived which foster the standard utilization and thus the efficiency of an SAP system.

The Effects of Analogous Food Color on Perceived Flavor: A Factorial Investigation

We extend research testing the effects of food color on flavor perception to analogous color. Analogous colors are those found next to each other on the color wheel. Subjects were assigned the task of tasting and evaluating a fruit-flavored beverage. Actual fruit flavor at two levels and beverage color at three levels were manipulated in a full factorial, between-subjects design. Thus each subject tasted and evaluated a single color/flavor combination. Results show that the small differences in food color represented by analogous color are sufficiently distinct and meaningful to consumers to significantly affect their ability to correctly identify the flavor of color-associated foods, as well as to form distinct flavor profiles and particular preferences—much as the grosser distinctions represented by complementary food color have been shown to do previously.