Information technology, transaction costs and the decision to 'make or buy'

Information and communication technology (ICT) has a wide ranging impact on business. One of the effects is on the 'make or buy decision'. This is analysed from the perspective of transactzon cost economm (TCE). On the one hand ICT reduces transaction costs by reducing search costs, by facilitating monitoring and control of performance and by yielding a greater flexibility of production, which reduces the transaction specificity of assets. These efiects, favour the decision to 'buy'. On the other hand, ICT reduces economies of scale, in some areas of production, which makes outside production i n a specializedfirm less attractive. Also, ICT may be used to impose switching costs between suppliers and buyers, thereby miszng transaction costs. But such ploys appear to be feasible only temporarily, with a pressure from users and competitors towards standardization and open systems. Thus the effects of ICT are diverse, but on the whole it tends to favour the option to contract out.     

EQUIVALENCE SCALE SENSITIVITY OF POVERTY STATISTICS FOR THE MEMBER STATES OF THE EUROPEAN COMMUNITY

Using microdata from Household Budget Surveys of the Member States of the European Community, this paper examines the sensitivity of poverty statistics with respect to the choice of the equivalence scale. The results show that the ranking of the countries with respect to the overall poverty incidence is hardly affected when different equivalence scales are used. However, the composition of the poor population shows considerable changes when e.g. subjective equivalence scales are used instead of the OECD equivalence scale. The poverty incidence among specific household groups, such as single elderly and households with children, is particularly sensitive to the choice of the equivalence scale.     

The sociologist as social architect: A new task for macro-sociology?

The theme of voluntarism and determinism is revisited, here in the context of forecasting for futurists. Although fraught with danger the use of scenarios is vital in a world of rapid change, in which people are more than ever aware of the choices open to them and the ways they are able to determine their own future. The author proposes that a merger between the approaches of the sociologist and the futurist could aid our understanding of social futures. The outcome is a ‘design sociology’ based on six key concepts.     

Job Mobility in Europe,Japan and the United States

Evidence about job mobility outside the United States is scarce and difficult to compare cross‐nationally because of non‐uniform data. We document job mobility patterns of college graduates in their first three years in the labour market, using unique uniform data covering 11 European countries and Japan. Using the National Longitudinal Survey of Youth, we replicate the information in this survey to compare the results with the United States. We find that (a) US graduates hold more jobs than European graduates, (b) contrasting conventional wisdom, job mobility in Japan is only somewhat lower than the European average, and (c) there are large differences in job mobility within Europe.     

Does increased hedging lead to decreased price efficiency? The case of VIX ETPs and VIX futures

We examine the impact of the introduction of VIX exchange‐traded products (ETPs) on the information content and pricing efficiency of VIX futures. We document that trades in VIX futures have become less informative and that pricing errors exhibit more persistence after the introduction of VIX ETPs. In addition, we observe that the price process of the VIX futures has become noisier over time. These findings suggest that the introduction of the VIX ETPs had a prominent effect on the properties and dynamics of the VIX futures.     

The Rising Costs of Fossil-Fuel Extraction: An Energy Crisis That Will Not Go Away

In biophysical terms, such as energy return on investment (EROI), energy sources for the global economy have grown more expensive over the last few decades. This trend is likely to be more pronounced in the near-term future as conventional oil and gas are depleted and difficult-to-extract unconventional oil and gas become a larger part of the fossil-fuel supply. On the one hand, this will lead to “energy sprawl”—the growth of the energy sector, as this sector consumes a much larger portion of the energy it extracts—leaving less energy surplus for other sectors. On the other hand, we will see an unsustainable imbalance between the fuel prices that fossil-fuel companies will need to meet their costs and the fuel prices that the larger economy can afford to pay. This article reviews the historical role of inexpensive energy in economic growth, discusses the declining availability of conventional oil resources, and examines the increasing reliance on expensive, unconventional petroleum resources such as shale oil in the United States.     

Transforming under deep uncertainty: A strategic perspective on risk management

Companies increasingly face the need for transformation in today’s rapidly changing business environment, characterized by major shifts in technology, regulation, and customer behavior. A lack of strategic risk insight and foresight leaves many incumbents insufficiently prepared in the face of such deep uncertainty. We argue that traditional risk management falls short because it predominantly focuses on strategy execution while leaving strategy formulation largely untouched. Moreover, an administrative-heavy risk management process can create strategic inertia and a misleading sense of control. In today’s dynamic business context, companies must not only increase the speed and impact of their strategy execution but also continuously explore the development of new strategies in response to disruptive events or emerging opportunities. Our research shows how leading companies develop a strategic risk management (SRM) capability to increase their resilience and agility in response to deep uncertainty. SRM takes a strategic, forward-looking perspective and focuses on strengthening processes, people, and practices for purposefully integrating risk into the strategy formulation process. This article offers a framework with three proven configurations of content and timing integration, risk management roles, and leading practices that enable effective SRM.