Strategic integration in industrial distribution channels: Managing the interfirm relationship as a strategic asset

This study investigates the strategic role of interfirm relationships through the concept of strategic integration. Following the conceptual development of strategic integration, the author reports a study of its antecedents and performance outcomes. Uncertainty was expected to have contextual effects in the development and outcomes of strategic integration in industrial distribution channels. A survey of industrial equipment distributors revealed that dependence, flexibility, continuity expectations, and relationship age encouraged the distributor's strategic integration of its supplier relationship. In addition, strategic integration enhanced distributor financial performance. However, uncertainty did not play a role in the distributors' strategic integration of their supplier relationships nor its effect on performance. Jean L. Johnson is an associate professor in the Department of Marketing, Washington State University     

Are risk‐averse agents more optimistic? A Bayesian estimation approach

Our aim is to analyze the link between optimism and risk aversion in a subjective expected utility setting and to estimate the average level of optimism when weighted by risk tolerance. Its estimation leads to a non‐trivial statistical problem. We start from a large lottery survey (1536 individuals). We assume that individuals have true unobservable characteristics. We adopt a Bayesian approach and use a hybrid MCMC approximation method to numerically estimate the distributions of the unobservable characteristics. We find that individuals are on average pessimistic and that pessimism and risk tolerance are positively correlated. Copyright © 2008 John Wiley & Sons, Ltd.     

Sustainable development and research and development intensity in U.S. manufacturing firms

Across manufacturing sectors, mounting regulatory pressures motivate the adoption of innovative sustainable practices to help address and improve environmental performance. Sustainable practices, however, face many challenges to minimize negative environmental impacts while conserving energy and natural resources. This study seeks to understand the effect of research and development intensity on dimensions of environmental performance in manufacturing firms. Using data from U.S. corporations over the period from 1991 through 2015, we find that sustainable practices are associated with a higher level of negative environmental ratings. In addition, the level of environmental concerns tends to decrease with firm investments in research and development intensity over time. These findings suggest that bigger firms are likely to report a higher level of environmental concerns due to their experimentation with sustainable practices. These firms are also likely to reduce negative environmental ratings over time and realize economies of scale with sustainable manufacturing.     

Does pre‐packed bankruptcy create value? An empirical study of postbankruptcy employment retention in The Netherlands

In recent years, there has been growing interest in whether pre‐packed bankruptcy can be a mechanism through which firms facing imminent insolvency can preserve value. Although an extensive body of literature exists on “pre‐packs,” whether such techniques really preserve value remains ambiguous. By analysing bankruptcy proceedings filed with Dutch courts in the period 2012–2018 through the lenses of real options and debt overhang theory, we examined employment retention postbankruptcy as a consequence of the type of bankruptcy proceeding (pre‐packed bankruptcy and conventional bankruptcy) and the severity of prebankruptcy financial distress. The results show that in the Netherlands, a pre‐packed bankruptcy, when compared with a conventional bankruptcy proceeding, positively impacts employment retention rates after bankruptcy. The severity of financial distress before bankruptcy does not affect employment retention rates postbankruptcy. This implies that despite the amount of resource slack, the preservation of employee value is better served under a pre‐packed bankruptcy than a conventional bankruptcy proceeding. This finding is important for insolvency practice, as up to 22 June 2017, employee rights in the Netherlands (including redundancy) were not considered to be automatically transferred to the firm acquiring the bankrupt debtor's assets when a pre‐packed bankruptcy was applied. Implications for insolvency regulation and practice are discussed.     

Intertemporal price discrimination with two products

We study the two‐product monopoly profit maximization problem for a seller who can commit to a dynamic pricing strategy. We show that if consumers' valuations are not strongly ordered, then optimality for the seller can require intertemporal price discrimination: the seller offers a choice between supplying a complete bundle now, or delaying the supply of a component of that bundle until a later date. For general valuations, we establish a sufficient condition for such dynamic pricing to be more profitable than mixed bundling. So we show that the established no‐discrimination‐across‐time result does not extend to two‐product sellers under standard taste distributions.     

Takeover deterrents and cross partial ownership: The case of golden shares

We analyse takeovers in an industry with bilateral capital‐linked firms in cross partial ownership (CPO). Before merger, CPO reduces the profitability of involved firms, confirming the “outsider effect.” However, the impact of CPO upon merger profitability is two‐sided in a Cournot setting. CPO, by cointegrating profits, increases output collusion leading to anticompetitive effects with facilitated mergers in most cases. Nonetheless, a protective threshold exists for which CPO arrangements can reduce the incentives for hostile takeovers. This has potentially significant regulatory implications. An illustrative example showcases the potential relevance of CPO as a defence against hostile takeovers across different industries.     

The Missing Link Between the Theory and Empirics of Path Dependence: Conceptual Clarification,Testability Issue,and Methodological Implications

Path dependence is a central construct in organizational research, used to describe a mechanism that connects the past and the future in an abstract way. However, across institutional, technology, and strategy literatures, it remains unclear why path dependence sometimes occurs and sometimes not, why it sometimes lead to inefficient outcomes and sometimes not, how it differs from mere increasing returns, and how scholars can empirically support their claims on path dependence. Hence, path dependence is not yet a theory since it does not causally relate identified variables in a systematized manner. Instead, the existing literature tends to conflate path dependence as a process (i.e. history unfolding in a self‐reinforcing manner) and as an outcome (i.e. a persisting state of the world with specific properties, called ‘lock‐in’). This paper contributes theoretically and methodologically to tackling these issues by: (1) providing a formal definition of path dependence that disentangles process and outcome, and identifies the necessary conditions for path dependence; (2) distinguishing clearly between path dependence and other ‘history matters’ kinds of mechanisms; and (3) specifying the missing link between theoretical and empirical path dependence. In particular, we suggest moving away from historical case studies of supposedly path‐dependent processes to focus on more controlled research designs such as simulations, experiments, and counterfactual investigation.     

Ethical issues in contemporary human resource development

Training and development activities are perhaps the aspects of HRM that are least likely to come under ethical scrutiny. However, despite an espousal of ethical humanism, and various attempts to develop professional standards, training and development activities can be vulnerable to unethical practice.