Broadening the scope of the resource-based view in marketing: The contingency role of institutional factors

Drawing on the resource-based view (RBV) of the firm and institutional theory, the authors propose and test an integrated model in an industrial marketing context that expands the boundaries of the RBV to incorporate institutional factors pertaining to societal and political issues. The rationale for taking such an integrated approach stems from the knowledge that firm performance can be explained better by incorporating not only the inability of managers to take particular actions but also their reluctance or unwillingness to pursue those behaviors. The authors develop an integrated model that tests (1) the direct effect of marketing institutional factors on the development of marketing RBV factors and (2) the moderating role of marketing institutional factors on the performance effect of marketing RBV factors. The empirical results indicate general support for the hypotheses, and this research provides several implications for broadening the scope of the RBV in marketing by underscoring how fit between marketing resources and the context in which those resources are deployed affects firm performance.     

Beating the odds in the innovation arena: The role of market and technology signals classification and noise

Innovation is a risky business. Notwithstanding the attention in research on the determinants of innovation success, the estimates of the extremely high failure rates (ranging from 40% to 90%) have not come down. As a result, new approaches have to be found to address the issues that prevent organizations from reaching innovation success over a longer period of time. In this study, Signal Detection Theory (SDT) is introduced to show that it may be less important to improve innovation practices in companies, than it is to change the nature of the projects that enter the corporate innovation funnel. In our empirical study of 44 innovation projects in the pharmaceutical and electronics industry, we show that pursuing more noisy signals (uncertain technological and market opportunities) is currently beneficial for innovation success. In general, companies allocate too few resources to noisy innovation opportunities. Interestingly, we find a positive, and not an inverted U-shaped, relationship between noise/signal ratios and innovation success. This indicates that there are almost no companies that take too much risk in the current competitive environment and that many can gain from increasing their noise tolerance. The implications from this study are quite counter-intuitive in a sense that ‘risk’ is not the cause of the innovation problems, but may be a solution.     

Network agility as a trigger for enhancing firm performance: A case study of a high-tech firm implementing the mixed channel strategy

Original equipment manufacturers (OEMs) can reduce labor costs, free up capital investment and enhance firm's agility by full outsourcing of product manufacturing. OEMs can then focus on the most valuable processes, e.g. R&D and marketing. However, contract manufacturers (CMs) may decide to foster their own brand and forge their own relationships with retailers or distribution channels. The conflicts of interest between OEMs and CMs can be reduced by implementing a mixed channel strategy. Label licensing, the most essential component in the implementation, enhances the marketing capability of a CM and allows it to move up the value chain. In this research, a case study involving a supply chain network in the optical storage media industry is used to develop a conceptual model to explain how a mixed channel strategy and superior network agility enhance firm performance. This study argues that information system integration influences firm performance through network agility, and that the mixed channel strategy boosts financial performance. Moreover, the result proposes that network agility is associated with a moderating effect on the relationship between the mixed channel strategy and financial performance.     

The impact of marketing capability, operations capability and diversification strategy on performance: A resource-based view

Using resource-based view (RBV) of the firm as a theoretical backdrop; we aim to find out the relative impact of a firm's functional capabilities (namely, marketing and operations) and diversification strategies (product/service and international diversification) on financial performance. We hypothesize that this linkage depends on the firm's relative efficiency to integrate its resource-capabilities-performance triad. Using archival data of 102 UK based logistics companies, we find marketing capability is the key determinant for superior financial performance. This study highlights that a market-driven firm is likely to have better business performance than a firm focusing solely on operational capabilities. Also, firms are better off when they focus on a narrow portfolio of products/services for the clients and concentrate on a diverse geographical market. Our findings provide a new perspective to model a firm's functional capabilities and diversification strategy on its financial performance and offer a benchmarking tool to improve resource allocation decisions.     

A CRM performance measurement framework: Its development process and application

We suggest a performance measurement framework called a customer relationship management (CRM) scorecard to diagnose and assess a firm's CRM practice. The CRM scorecard was developed through a rigorous and stepwise development process collaborated with a number of firms in a variety of industries. During the development process, we conducted an extensive literature review to build a theoretical causal map, in-depth interviews with practitioners to extract a hierarchical map from industrial perspectives, feasibility tests to check whether or not Key Performance Indicators (KPI) could be measured, and Analytic Hierarchy Process (AHP) analysis to prioritize the evaluation factors on the CRM scorecard. The CRM scorecard contains antecedent/subsequent and objective/perceptual evaluation factors in four different perspectives to comprehensively measure corporate CRM capability and readiness. To illustrate the applicability of the proposed CRM scorecard, we apply the framework to a retail bank in Korea well-known for its exemplary CRM strategy.     

The impact of Universal Service Obligations and International Cross-subsidies on the dispersion of telephone services in developing countries

This paper re-evaluates the telecommunication policies often applied to create regional dispersion of services in developing countries. We observe that failure to consider the complexities of the regional telecommunication systems in creating policies and investment strategies has increased the telecom gap between urban and rural regions worldwide. In particular, the teledensities of rural telecommunications in developing countries have remained very low in spite of support through universal service obligation fees and cross-subsidization from international services. As traditional methods for economic analysis and modeling have failed to identify mechanisms that improve telephone dispersion in these countries, we use a system dynamics modeling approach to deal with complexities of the situation in order to evaluate how Universal Service Obligations (USOs) and International Cross-Subsidy (ICS) policies affect telephone densities. We demonstrate that these policies may be counterproductive due to the structure of the telecom system itself. We also show that, when market-clearing pricing is combined with USOs once the urban telephone density reaches a minimum threshold, the dispersion of rural telecommunications can be considerably improved.     

Financial globalization and stock market risk

This paper examines stock market volatility measured by either “beta-volatility” or by the standard deviation of stock returns over 1995-2007. In our dynamic panel data framework, after controlling for size, turnover, and real output growth, we find some support to increases in financial integration reducing total stock return volatility for representative emerging markets, with almost no impact for industrial economies. Allowing for feedback effects from stock volatility to stock turnover, we obtain a richer interpretation for the broadening of investor basis hypothesis: more integrated financial markets leads to lower stock volatility, yet these are not so strong as found previously and are not accompanied by more turnover.     

Improving accessibility to rural health services: The maximal covering network improvement problem

Accessibility to health facilities is a critical factor in effective health treatment for people in rural areas of lesser-developed countries. In many areas accessibility is diminished by the lack of all-weather roads, making access subject to weather conditions. Location-allocation models have been used to prescribe optimal configurations of health facilities in order to maximize accessibility, but these models are based on the assumption that the underlying transport network is static and always available. Essentially, past work has ignored the potential impacts of improvements to the transport system in modeling access. In this paper we propose a model that treats the opposite side of the location/transport equation; that is, a model that treats existing facility locations as fixed and improves health service accessibility by upgrading links of the transport network to all-weather roads. This new model, called the Maximal Covering Network Improvement Problem (MC-NIP) is formulated as an integer-linear programming problem. An application of the MC-NIP model to the Suhum District of Ghana is presented, which shows that even a modest level of road improvement can lead to substantial increases in all-season access to health service.     

Gradual location set covering with service quality

Location set covering models were first described in the early 1970s. In their simplest form, they minimize the number of facilities necessary to completely cover a set of customers in some given space, where covering means providing service within a predetermined distance. This paper considers extensions of the basic model that soften the covered/not covered dichotomy and replace it with gradual covering. The models discussed in this work include the quality of service as a criterion. The models are formulated and compared with each other with respect to their size and features. A small series of computational tests concludes the paper.