Preserving Value through Adaptation to Climate Change

Corporate “mitigation” efforts to limit greenhouse gases alone will not be sufficient to protect companies against future environmental impacts. For most companies intent on preserving their operating efficiency and value, “adaptation”—the process of changing behavior in response to actual or expected climate change impacts—is emerging as a critical partner to mitigation efforts aimed at reducing the accumulation of greenhouse gases in the atmosphere. The recent growth in the expected costs associated with the risk of climate change emphasizes the importance of developing new technology and redesigning infrastructure and other assets that will enable companies to respond to such change without excessive reductions in profitability. The nature and extent of adaptation in each situation will depend on the costs involved relative to the benefits of adopting different adaptation strategies to achieve a target level of resilience. Companies that choose to adapt and do so effectively are expected to benefit from an improvement in their net risk‐return profile. Consistent with this expectation, the authors found that a sample of companies from the European energy sector that adapted to the 2005 EU climate change mandate by diversifying their fuel sources (mainly away from coal) experienced reductions in both risk and return while non‐adapting firms experienced roughly the same returns, but at the cost of higher risk. The benefit of adapting is thus seen as showing up not in higher returns per se, but in higher risk‐adjusted returns.     

Improving forecasting for telemarketing centers by ARIMA modeling with intervention

In this study we analyze existing and improved methods for forecasting incoming calls to telemarketing centers for the purposes of planning and budgeting. We analyze the use of additive and multiplicative versions of Holt–Winters (HW) exponentially weighted moving average models and compare it to Box–Jenkins (ARIMA) modeling with intervention analysis. We determine the forecasting accuracy of HW and ARIMA models for samples of telemarketing data. Although there is much evidence in recent literature that “simple models” such as Holt–Winters perform as well as or better than more complex models, we find that ARIMA models with intervention analysis perform better for the time series studied.     

Technology Acquisition in Family and Nonfamily Firms: A Longitudinal Analysis of Spanish Manufacturing Firms

Technology acquisition from external sources has been identified as a critical competence for sustained success in innovation, and research has paid a good deal of attention to studying its advantages, drawbacks, determinants, and outcomes. Traditionally, research has modeled the choice to acquire technology from outside a firm's boundaries as the result of a trade‐off between the benefits of external acquisition (e.g., higher return on investment, lower costs, increased flexibility, access to specialized skill sets, and creativity) and its drawbacks (e.g., opening the market to new entrants, risk of imitation of core competencies, and reduced value appropriability). Yet, this view does not capture the behavioral considerations that may potentially encourage or discourage managers from sourcing technology outside the firm's boundaries. This behavioral aspect is especially important if one wants to understand the conduct in external technology acquisition of family firms, which are found to favor strategic actions that preserve the controlling families' control and authority over business, even at the cost of giving up potential economic benefits. Thus, external technology acquisition is likely to be interpreted differently in family and nonfamily firms. Despite its importance, how the involvement of a controlling family affects decisions in technology and innovation management and specifically external technology acquisition is an overlooked topic in extant research and requires further theoretical and empirical examination. This study attempts to fill these gaps by extending the tenets of the behavioral agency model and prior research pointing to particularistic decision‐making in family firms to uncover the behavioral drivers of external technology acquisition in family and nonfamily firms. Theory is developed that relates performance risk, family management, and the contingent effect of the degree of technology protection on external technology acquisition, and the hypotheses are tested with longitudinal data on 1540 private Spanish manufacturing firms. The analyses show that managers are more likely to acquire technology from external sources through research and development contracting when firm performance falls below managers' aspirations. Family firms are generally more reluctant to acquire external technology, and the effect of negative aspiration performance gaps becomes less relevant as family management is higher, which is attributed to family managers' attempts to avoid losing control over the trajectory that technology follows over time. However, family firms become more favorable to considering the adoption of an open approach to technology development when some protection mechanisms (specifically, the filing of patents on the firm proprietary technologies) increase the managers' perceptions of control over the technology trajectory. As such, this study makes a contribution to the understanding of the behavioral factors driving external technology acquisition, and it offers important insights regarding technology strategy in family firms.     

Consumer clothing disposal behaviour: a comparative study

Fast fashion retailing is leading consumers towards an increased rate of purchasing and the trend to keep clothing for an ever shorter time with the resulting rise in clothing disposal. The aim of this paper is to empirically explore antecedents of two methods of sustainable clothing disposal behaviour in two countries: donating to charities and giving away to family and friends. Using data from females located in Australia and Chile, the authors test the proposed model with structural equation modelling (SEM). The results of this study show that consumer recycling behaviour is a strong and direct driver of donating to charity. In addition, results find that consumer awareness of the environment and consumer age affect donating behaviour. The findings have value for fast fashion retailers, marketers, environmental activists, ecological researchers, charity institutions and public policy makers.     

Credit constraints, entrepreneurial talent, and economic development

In this paper, we formalize the view that economic development requires high rates of productive entrepreneurship, and this requires an efficient matching between entrepreneurial talent and production technologies. We first explore the role of financial development in promoting such efficient allocation of talent, which results in higher production, job creation, and social mobility. We then show how different levels of financial development may endogenously arise in a setting in which financial constraints depend on individual incentives to misbehave, these incentives depend on how many jobs are available, and this in turn depends on the level of financial development. Such complementarity between labor market and financial market development may generate highly divergent development paths even for countries with very similar initial conditions.     

Purchasing professional services: A transaction cost view of the antecedents and consequences of purchasing formalization

Professional services represent an increasing share of expenditures in contemporary organizations. While these services are often of strategic importance, they are also perceived as being difficult to purchase and use, which creates challenges for the purchasing process. In order to address these challenges, organizations are increasingly engaging in systematic efforts to improve their ability to purchase professional services. These efforts focus on formalizing the purchasing process by introducing policies, guidelines, and other measures for the hiring of service suppliers. Based on a transaction cost economic framework, the current paper investigates the nature, antecedents and consequences of formalization initiatives in the purchasing of professional services. The results from a cross-sectional study of 76 large Swedish organizations show that the formalization of purchasing professional services takes two different forms: the formulation of policies and the establishment of preferred supplier agreements. The former is driven by company size, whereas the latter is driven by the frequency of purchase transactions. Only the establishment of policies, however, is found to be positively related to organizations' perceived ability to purchase professional services.     

Costco and the Aussie Shopper: a case study of the market entry of an international retailer

Retailing is a globalised industry, yet retailers must respond to local shopping habits if they are to be perceived as legitimate by the host country customers. However, some retailers may be unable or unwilling to respond to all customer requirements. Costco, the membership warehouse club retailer, has been successful in its international expansion efforts, establishing its first Australian store in Melbourne in 2009. In the first 12 months of operation, the store became one of Costco's top five stores in the world. We investigated this success by focussing on the customer and used institutional theory to analyse what concessions were made by the customer and the company. Data were collected from consumer interviews, site visits and secondary media and industry sources. Analysis revealed negotiations based on the rejection, acceptance or adaptation of the regulative, normative and cultural cognitive aspects of the Australian shopper and the Costco business model. Customers made concessions to accommodate the new business model, and Costco responded to entrenched Australian shopping habits. This case is the first to explore the outcome of retail internationalisation from the customers' perspective, revealing the concept of mutual concessions. The interaction and subsequent adaptation by both customer and retailer have resulted in the institutionalisation of new shopping norms in the host country and success for the international retailer.     

Ecological risk assessment of pesticides in the EU: what factors and groups influence policy changes?

For the last couple of years, European environmental risk assessment (ERA) regulations have undergone significant changes. The new 1107/2009 directive which came into effect in 2011 has triggered an on-going debate on defining specific protection goals for ERA. During this period, we conducted a study on policy change among the most influential ERA stakeholders from Europe. We interviewed 43, purposively sampled, participants from the European safety authorities, plant protection product industry and academia. Transcribed interviews underwent thematic analysis conducted separately by two coders. As we followed the advocacy coalition framework, our findings focus on stakeholders’ processes, interrelations and values behind the ERA policy change. The main challenges emerging from our analysis turned out to be the slow uptake of scientific developments into ERA and very broadly defined protection goals. The use of safety factors and cut-off criteria left risk assessors with many uncertainties. With ERA in its current form it turned out to be impossible to determine whether the current scheme is over- or under-protective. Still, the study shows that the problem of over- or under-protectiveness lies deep in the perception of stakeholders and depends greatly on their priorities. Academics strive for better ecological relevance as a priority. They have concerns that ERA is oversimplified. Regulators worry that ERA relies too much on risk mitigation and is possibly not protective enough, but at the same time, the majority believes that the assessment is well established and straightforward to follow. Industry representatives would like to see ERA based more on probabilistic risk assessment. Recent changes, according to risk assessment and management practitioners have led to an inevitable increase in complexity, which is not perceived as a positive thing, and does not necessarily translate into better risk assessment.