Supplier Partnerships and the Small, High-Growth Firm: Selecting for Success

Strategic partnerships are commonplace in today's global economy. Effective use of partnerships are viewed increasingly as an important issue facing small, growth-oriented firms. A key debate is how small firms should manage supplier partnerships. Contrasting the debate about the extent to which small firms are inertial versus adaptive, the impact of growth on value chain partnerships with suppliers was investigated. Data collected from 91 pharmaceutical-related firms is used to test the proposition that firm growth is related positively to maintaining or to expanding relationships with suppliers, not to terminating partnerships. The paper further posits that this relationship between firm growth and the amount purchased from a supplier is moderated by the perceived effectiveness of the value-chain partnerships such that when effectiveness is higher, the relationship between sales growth and the amount purchased from a value-chain partner is stronger. The propositions, which are tested with regression analysis, are supported partially.     

On the Ethics Behind “Business Ethics”

Ethics in business and economics is often attacked for being too superficial. By elaborating the conclusions of two such critics of business ethics and welfare economics respectively, this article will draw the attention to the “ethics behind” these apparently well-intended, but not always convincing constructions, by help of the “fundamental ethics” of Emmanuel Levinas. To Levinas, responsibility is more basic than language, and thus also more basic than all social constructions. Co-operation relations in organizations, markets and value networks are generated from personal relations and personal responsibilities. It is not sufficient to integrate ethics in an impersonal, rational system, neither in business organizations nor in the world economy. Ethics has its source not in rationality, but in the personal.     

LOGISTICS SALIENCE IN A CHANGING ENVIRONMENT

The primary purpose of this paper was to empirically explore some of the reasons that logistics has become more important, or salient, in comparison to other functions within the firm. A survey of 296 managers across multiple industries in the U.S. found logistics becomes more important within the firm when the industry increases in uncertainty, when there is an emphasis on time‐based competition, when there is greater adoption of information technology, and when there is an emphasis on cross‐functional integration.     

THE SQUARED ORNSTEIN-UHLENBECK MARKET

We study a complete market containing J assets, each asset contributing to the production of a single commodity at a rate that is a solution to the squared Ornstein-Uhlenbeck (Cox-Ingersoll-Ross) SDE. The assets are owned by K agents with CRRA utility functions, who follow feasible consumption/investment regimes so as to maximize their expected time-additive utility from consumption. We compute the equilibrium for this economy and determine the state-price density process from market clearing. Reducing to a single (representative) agent, and exploiting the relation between the squared-OU and squared-Bessel SDEs, we obtain closed-form expressions for the values of bonds, assets, and options on the total asset value. Typical model parameters are estimated by fitting bond price data, and we use these parameters to price the assets and options numerically. Implications for the total asset price itself as a diffusion are discussed. We also estimate implied volatility surfaces for options and bond yields.     

Book Review

Books reviewed:
Ira A. Jackson and Jane Nelson, Profits with Principles: Seven Strategies for Delivering Values with Values .     

Food Choice in an Interdisciplinary Context

Reform of agricultural policies, notably the continuing elimination of production‐enhancing subsidies, makes it possible for policies to respond to social issues such as the rural environment and health in future. In this paper, we draw on a Rural Economy and Land Use (RELU) research project which is examining the potential for the development of healthy food chains and the implications for human health and the environment. One of the key issues to be addressed is consumers’ willingness to pay for the nutritionally enhanced food products from these new chains, but it is evident that only a partial understanding can be gained from a traditional economics approach. In the paper, we discuss how economists are beginning to incorporate views from other disciplines into their models of consumer choice.     

Urban Influence on Costs of Production in the Corn Belt

This article determines the relative technical efficiency of rural- and urban-influenced crop/livestock enterprises in the Corn Belt. Farmers in urban-influenced locations are less technically efficient than farmers in rural locations. During 1998–2000, stochastic production frontier procedures indicate that a 10% increase in urban influence leads to a close to 4% decrease in technical efficiency. The most successful urban-influenced farms have controlled costs as effectively as rural farms. They have tended to de-emphasize that nondairy livestock activities—particularly beef and hogs—do not rely extensively on off-farm income, and have relatively large, less residential/lifestyle operations compared to less successful urban-influenced farmers. However, our statistical analysis clearly bears out the refrain in popular literature that urban proximity raises the cost for, and decreases the viability of, traditional farms.     

International briefing 16: training and development in the Republic of Ireland

This paper explores the landscape of training and development in the Republic of Ireland, a country with an impressive economic record in recent years. Both the Irish economic context and business context are explored. The national system for training and development and the surrounding policy and strategy context are set down. Survey data are drawn upon to examine the nature of training and development at organizational level. Here influence on training and development, levels of expenditure, the number of days per employee category and the dominant methods employed training and development are all discussed. Finally the academic study of training and development in the Republic of Ireland is examined.