Hungary Shares in Capitalism

Hungary has long been to the fore in East European attempts to introduce elements of the market into communist economies. Peter Falush, a Hungarian economist now working in London, discusses the latest step towards capitalism, the guarded encouragement of a capital market.     

The Applicability of information-revealing incentive schemes in economic organizations

The applicability in centrally planned economies of bonus functions that are designed to encourage subordinates to report information honestly is evaluated. If central planners seek Pareto-efficient outcomes, a unique bonus function and therefore a unique distribution of managerial incomes results. Hence, income distribution considerations must be embodied directly in the objective function. However, once such a change in the objective function is introduced, an optimal bonus function can no longer be found.     

The restaurant — a place for quality control and product maintenance?

The development of an awareness of quality control and product maintenance within the restaurant business should be regarded as an important facet of, not only the product-mix, but also of the marketing-mix strategy. From the management's point of view the development of a standard quality product that is precisely costed and documented has financial, organisational and marketing implications; from the employees' point of view, it has participatory and productivity implications; but, most importantly, from the customer's point of view, the sustained attainment of his perception of quality expectations should result in greater customer satisfaction, fewer complaints and a higher level of repeat and recommended business.     

THE ECONOMICS OF INSURING CROPS AGAINST DROUGHT

The necessary conditions for the existence of a financially viable crop insurance scheme against drought are examined. A supply and demand model for crop insurance is developed which identifies the parameters that are critical to the efficiency of such a scheme. The values of these parameters are estimated by using data from the Australian wheat industry. It is found that crop insurance against drought would appear to be unattractive from an efficiency point of view.     

Office productivity: the impacts of staffing, intellectual specialization and technology

This paper reports on a series of 20 case studies of office productivity and office technology in major US corporations. The case studies were carried out between the mid-1980s and he early 1990s, and involved over 1700 employees in 95 distinct offices. These studies were shaped by a new conceptual model of the office which focuses on the inteleectual content, rather than the physical attributes, of office work. Our major finding is a significan lack of intellectual specialization among managers and professionals. That is, managers and professionals devote a relatively small fraction of their work time to management and professional level work, and a relatively large fraction of their time to support and non-productive tasks. In addition, we found significant staffing imbalances throughout our cases: in nearly every office, there were more manaers and professionals, and fewer support workers, than were required to perform the work cost-effectively. Out analysis suggests that a typical organization could reduce its annual office payroll costs by 15% by recalibrating its staffing mix and increasing the intellectual specialization of its office workers. Further, we find that the apparent failure of massive corporate investments in office technology to achieve commensurate in white-collar productivity is likely to be due, in large decisions. The paper offers a specific methodology for measuring and tracking office productivity, for developing a coherent office productivity strategy, and for improving office staffing and technology decisions.